ThZeal - The Zeal

10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2025


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period ended

Commission File Number: 001-35477

Regional Management Corp.

(Exact name of registrant as specified in its charter)


Delaware	57-0847115
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

979 Batesville Road, Suite B Greer, South Carolina	29651
(Address of principal executive offices)	(Zip Code)

(864) 448-7000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

     Title of Each Class
 
     Trading Symbol
 
     Name of Each Exchange on Which Registered

     Common Stock, $0.10 par value

     RM

     New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☒

Non-accelerated filer	☐	Smaller reporting company	☐

		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of July 30, 2025, the registrant had outstanding 9,799,066 shares of Common Stock, $0.10 par value.

Regional Management Corp.

QUARTERLY Report on Form 10-Q

Fiscal Quarter Ended June 30, 2025

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	Page
GLOSSARY	3
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets Dated June 30, 2025 and December 31, 2024	4
Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2025 and 2024	5
Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended June 30, 2025 and 2024	6
Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2025 and 2024	8
Notes to Consolidated Financial Statements	10
Note 1. Nature of Business	10
Note 2. Basis of Presentation and Significant Accounting Policies	10
Note 3. Finance Receivables, Credit Quality Information, and Allowance for Credit Losses	13
Note 4. Restricted Available-for-Sale Investments	20
Note 5. Variable Interest Entities	21
Note 6. Debt	22
Note 7. Stockholders’ Equity	23
Note 8. Disclosure About Fair Value of Financial Instruments	24
Note 9. Income Taxes	25
Note 10. Earnings Per Share	25
Note 11. Share-Based Compensation	25
Note 12. Commitments and Contingencies	29
Note 13. Segment Reporting	29
Note 14. Subsequent Events	30
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	31
Item 3. Quantitative and Qualitative Disclosures About Market Risk	45
Item 4. Controls and Procedures	46
PART II – OTHER INFORMATION
Item 1. Legal Proceedings	47
Item 1A. Risk Factors	47
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	47
Item 5. Other Information	47
Item 6. Exhibits	48
SIGNATURE

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GLOSSARY

Terms and abbreviations used in this report are defined below:


Term or Abbreviation		Definition
2015 Plan		2015 Long-Term Incentive Plan
2024 Plan		2024 Long-Term Incentive Plan
AFS		available-for-sale
ASU		Accounting Standards Update
Board		the Company's Board of Directors
B(W)		comparatively better shown as positives, comparatively worse shown as negatives
CODM		Chief Operating Decision Maker
Company		Regional Management Corp.
Cost of funds		annualized (as applicable) interest expense as a percentage of average net finance receivables
Debt balance		the balance for each respective debt agreement, composed of principal balance and accrued interest
Delinquency rate		delinquent loans outstanding as a percentage of ending net finance receivables
Efficiency ratio		annualized (as applicable) general and administrative expenses as a percentage of total revenue
Exchange Act		the Securities Exchange Act of 1934, as amended
FASB		Financial Accounting Standard Board
FICO		Fair Isaac Corporation
Funded debt-to-equity ratio		debt divided by total stockholders' equity
GAAP		U.S. Generally Accepted Accounting Principles
Inc (Dec)		comparative increases shown as positives, comparative decreases shown as negatives
Issuance Trust		the Company's indirect SPE through which private offerings and sales consisting of the issuance of classes of fixed-rate, asset-backed notes are completed
KTIP		key team member incentive program
LGD		loss given default
LTIP		long-term incentive program
Net credit loss rate		annualized (as applicable) net credit losses as a percentage of average net finance receivables
NQSO		nonqualified stock option
Operating expense ratio		annualized (as applicable) general and administrative expenses as a percentage of average net finance receivables
PD		probability of default
PRSU		performance restricted stock unit
QoQ		quarter-over-quarter
RMIT		Regional Management Issuance Trust
RMR		Regional Management Receivables
RMR III		Regional Management Receivables III, LLC
RMR IV		Regional Management Receivables IV, LLC
RMR V		Regional Management Receivables V, LLC
RMR VI		Regional Management Receivables VI, LLC
RMR VII		Regional Management Receivables VII, LLC
RSA		restricted stock award
RSU		restricted stock unit
SEC		Securities and Exchange Commission
SOFR		secured overnight financing rate
SPE		wholly owned, bankruptcy-remote, special purpose entity
Stockholders' equity ratio		total stockholders' equity as a percentage of total assets
VIE		variable interest entity
YoY		year-over-year

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Part I – financial information

ITEM 1. FINANCIAL STATEMENTS.

Regional Management Corp. and Subsidiaries

Consolidated Balance Sheets

(in thousands, except par value amounts)


	(Unaudited)
	June 30, 2025			December 31, 2024
Assets
Cash	$	4,272		$	3,951
Net finance receivables		1,960,364			1,892,535
Unearned insurance premiums		(49,046	)		(48,068	)
Allowance for credit losses		(202,800	)		(199,500	)
Net finance receivables, less unearned insurance premiums and allowance for credit losses		1,708,518			1,644,967
Restricted cash		117,658			131,684
Lease assets		42,665			38,442
Intangible assets		28,810			24,524
Restricted AFS investments		22,122			21,712
Property and equipment		13,328			13,677
Deferred tax assets, net		8,367			9,286
Other assets		21,391			20,866
Total assets	$	1,967,131		$	1,909,109
Liabilities and Stockholders’ Equity
Liabilities:
Debt	$	1,509,133		$	1,478,336
Unamortized debt issuance costs		(6,862	)		(6,338	)
Net debt		1,502,271			1,471,998
Lease liabilities		44,768			40,579
Other liabilities		57,141			39,454
Total liabilities		1,604,180			1,552,031
Commitments and contingencies (Note 12)
Stockholders’ equity:
Preferred stock ($0.10 par value, 100,000 shares authorized, none issued or outstanding)		—			—
Common stock ($0.10 par value, 1,000,000 shares authorized, 15,225 shares issued and 9,962 shares outstanding at June 30, 2025 and 14,921 shares issued and 10,010 shares outstanding at December 31, 2024)		1,522			1,492
Additional paid-in capital		137,129			130,725
Retained earnings		389,557			378,482
Accumulated other comprehensive income (loss)		(2	)		62
Treasury stock (5,263 shares at June 30, 2025 and 4,911 shares at December 31, 2024)		(165,255	)		(153,683	)
Total stockholders’ equity		362,951			357,078
Total liabilities and stockholders’ equity	$	1,967,131		$	1,909,109

See accompanying notes to consolidated financial statements.

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Regional Management Corp. and Subsidiaries

Consolidated Statements of Comprehensive Income

(Unaudited)

(in thousands, except per share amounts)


	Three Months Ended June 30,						Six Months Ended June 30,
	2025			2024			2025			2024
Revenue
Interest and fee income	$	140,695		$	127,898		$	277,248		$	256,716
Insurance income, net		11,499			10,507			22,796			21,481
Other income		5,248			4,620			10,365			9,136
Total revenue		157,442			143,025			310,409			287,333

Expenses
Provision for credit losses		60,587			53,802			118,579			100,225

Personnel		38,584			37,097			79,726			74,917
Occupancy		6,911			6,149			13,817			12,524
Marketing		5,059			4,836			10,465			9,151
Other		12,391			12,054			24,980			23,992
Total general and administrative expenses		62,945			60,136			128,988			120,584

Interest expense		20,426			17,865			40,197			35,369
Income before income taxes		13,484			11,222			22,645			31,155
Income taxes		3,344			2,777			5,498			7,505

Net income	$	10,140		$	8,445		$	17,147		$	23,650
Net income per common share:
Basic	$	1.07		$	0.88		$	1.79		$	2.47
Diluted	$	1.03		$	0.86		$	1.73		$	2.41
Weighted-average common shares outstanding:
Basic		9,504			9,613			9,556			9,591
Diluted		9,843			9,863			9,934			9,805

Other comprehensive income (loss), net of tax
Unrealized income (loss) on restricted AFS investments		214			228			(82	)		423
Income taxes on unrealized items		(45	)		(48	)		18			(90	)
Other comprehensive income (loss), net of tax		169			180			(64	)		333
Total comprehensive income	$	10,309		$	8,625		$	17,083		$	23,983

See accompanying notes to consolidated financial statements.

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Regional Management Corp. and Subsidiaries

Consolidated Statements of Stockholders’ Equity

(Unaudited)

(in thousands)


	As of and for the Three Months Ended June 30, 2025
											Accumulated
	Common Stock				Additional Paid-In			Retained			Other Comprehensive			Treasury
	Shares		Amount		Capital			Earnings			Income (Loss)			Stock			Total
Beginning balance		15,187	$	1,519	$	134,206		$	382,532		$	(171	)	$	(160,210	)	$	357,876
Cash dividends		—		—		—			(3,115	)		—			—			(3,115	)
Issuance of restricted stock awards		38		3		(3	)		—			—			—			—
Repurchase of common stock		—		—		—			—			—			(5,045	)		(5,045	)
Shares withheld related to net share settlement		—		—		(8	)		—			—			—			(8	)
Share-based compensation		—		—		2,934			—			—			—			2,934
Net income		—		—		—			10,140			—			—			10,140
Other comprehensive income		—		—		—			—			169			—			169
Ending balance		15,225	$	1,522	$	137,129		$	389,557		$	(2	)	$	(165,255	)	$	362,951


	As of and for the Three Months Ended June 30, 2024
													Accumulated
	Common Stock						Additional Paid-In			Retained			Other Comprehensive			Treasury
	Shares			Amount			Capital			Earnings			Income (Loss)			Stock			Total
Beginning balance	$	14,675		$	1,468		$	123,563		$	361,791		$	(219	)	$	(150,143	)	$	336,460
Cash dividends		—			—			—			(3,020	)		—			—			(3,020	)
Issuance of restricted stock awards		304			30			(30	)		—			—			—			—
Shares withheld related to net share settlement		(17	)		(2	)		(428	)		—			—			—			(430	)
Share-based compensation		—			—			3,268			—			—			—			3,268
Net income		—			—			—			8,445			—			—			8,445
Other comprehensive income		—			—			—			—			180			—			180
Ending balance		14,962		$	1,496		$	126,373		$	367,216		$	(39	)	$	(150,143	)	$	344,903

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	As of and for the Six Months Ended June 30, 2025
													Accumulated
	Common Stock						Additional Paid-In			Retained			Other Comprehensive			Treasury
	Shares			Amount			Capital			Earnings			Income (Loss)			Stock			Total
Beginning balance		14,921		$	1,492		$	130,725		$	378,482		$	62		$	(153,683	)	$	357,078
Cash dividends		—			—			—			(6,072	)		—			—			(6,072	)
Issuance of restricted stock awards		295			29			(29	)		—			—			—			—
Exercise of stock options		23			2			—			—			—			—			2
Repurchase of common stock		—			—			—			—			—			(11,572	)		(11,572	)
Shares withheld related to net share settlement		(14	)		(1	)		(89	)		—			—			—			(90	)
Share-based compensation		—			—			6,522			—			—			—			6,522
Net income		—			—			—			17,147			—			—			17,147
Other comprehensive loss		—			—			—			—			(64	)		—			(64	)
Ending balance		15,225		$	1,522		$	137,129		$	389,557		$	(2	)	$	(165,255	)	$	362,951


	As of and for the Six Months Ended June 30, 2024
													Accumulated
	Common Stock						Additional Paid-In			Retained			Other Comprehensive			Treasury
	Shares			Amount			Capital			Earnings			Income (Loss)			Stock			Total
Beginning balance		14,566		$	1,457		$	121,752		$	349,579		$	(372	)	$	(150,143	)	$	322,273
Cash dividends		—			—			—			(6,013	)		—			—			(6,013	)
Issuance of restricted stock awards		414			41			(41	)		—			—			—			—
Shares withheld related to net share settlement		(18	)		(2	)		(438	)		—			—			—			(440	)
Share-based compensation		—			—			5,100			—			—			—			5,100
Net income		—			—			—			23,650			—			—			23,650
Other comprehensive income		—			—			—			—			333			—			333
Ending balance		14,962		$	1,496		$	126,373		$	367,216		$	(39	)	$	(150,143	)	$	344,903

See accompanying notes to consolidated financial statements.

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Regional Management Corp. and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)


	Six Months Ended June 30,
	2025			2024
Cash flows from operating activities:
Net income	$	17,147		$	23,650
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses		118,579			100,225
Depreciation and amortization		7,498			6,881
Amortization of deferred origination fees and costs		(8,122	)		(7,577	)
Loss on disposal of intangibles, property, and equipment		176			285
Share-based compensation		6,299			5,100
Deferred income taxes, net		937			1,175
Changes in operating assets and liabilities:
Increase (decrease) in unearned insurance premiums		978			(1,811	)
Increase in lease assets		(4,223	)		(841	)
Decrease in other assets		986			8,706
Decrease in other liabilities		(2,121	)		(6,537	)
Increase in lease liabilities		4,189			710
Net cash provided by operating activities		142,323			129,966
Cash flows from investing activities:
Originations of finance receivables		(907,533	)		(754,018	)
Repayments of finance receivables		731,281			656,435
Purchases of intangible assets		(6,294	)		(5,626	)
Purchases of property and equipment		(2,293	)		(2,235	)
Purchases of restricted AFS investments		—			(3,832	)
Proceeds from maturities of restricted AFS investments		19,460			24,715
Net cash used in investing activities		(165,379	)		(84,561	)
Cash flows from financing activities:
Advances on revolving credit facilities		834,309			766,117
Payments on revolving credit facilities		(901,923	)		(843,994	)
Advances on securitizations		265,000			187,305
Payments on securitizations		(166,587	)		(130,612	)
Payments for debt issuance costs		(3,562	)		(3,048	)
Taxes paid related to net share settlement of equity awards		(417	)		(286	)
Cash dividends		(5,995	)		(6,346	)
Repurchases of common stock		(11,474	)		—
Net cash provided by (used in) financing activities		9,351			(30,864	)
Net change in cash and restricted cash		(13,705	)		14,541
Cash and restricted cash at beginning of period		135,635			128,673
Cash and restricted cash at end of period	$	121,930		$	143,214
Supplemental cash flow information:
Interest paid	$	37,356		$	33,074
Income taxes paid (refunded)	$	6,314		$	(90	)
Operating leases paid	$	6,340		$	5,641
Non-cash lease assets obtained in exchange for operating lease liabilities	$	9,218		$	5,278
Non-cash restricted AFS investments acquired but not settled	$	19,910		$	—

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The following table reconciles cash and restricted cash from the Consolidated Balance Sheets to the statements above:


	June 30, 2025		December 31, 2024		June 30, 2024
Cash	$	4,272	$	3,951	$	4,323
Restricted cash		117,658		131,684		138,891
Total	$	121,930	$	135,635	$	143,214

See accompanying notes to consolidated financial statements.

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Regional Management Corp. and Subsidiaries

Notes to Consolidated Financial Statements

Note 1. Nature of Business

The Company was incorporated and began operations in 1987. The Company is engaged in the consumer finance business, offering large loans, small loans, and related payment and collateral protection insurance products. As of June 30, 2025, the Company operated under the name “Regional Finance” online and in branch locations in 19 states across the United States.

The Company’s large loan receivables are direct loans to customers, some of which are convenience check receivables and the vast majority of which are secured by non-essential household goods, automobiles, and/or other vehicles. Convenience checks are direct loans originated by mailing checks to customers based on a pre-screening process that includes a review of the prospective customer’s credit profile provided by national credit reporting bureaus or data aggregators. A recipient of a convenience check is able to enter into a loan by endorsing and depositing or cashing the check. The Company’s small loan portfolio is comprised of branch small loan receivables and convenience check receivables. Branch small loan receivables are direct loans to customers and are secured by non-essential household goods and, in some instances, an automobile.

The Company’s loan volume and contractual delinquency follow seasonal trends. Demand for the Company’s loans is typically highest during the second, third, and fourth quarters, which the Company believes is largely due to customers borrowing money for vacation, back-to-school, and holiday spending. Loan demand has generally been the lowest during the first quarter, which the Company believes is largely due to the timing of income tax refunds. Delinquencies generally reach their lowest point in the first half of the year and rise in the second half of the year. Changes in quarterly growth or liquidation could result in larger allowance for credit loss releases in periods of portfolio liquidation and larger provisions for credit losses in periods of portfolio growth. Consequently, the Company experiences seasonal fluctuations in its operating results. However, changes in macroeconomic factors, including inflation, higher interest rates, and geopolitical conflict, have impacted the Company’s typical seasonal trends for loan volume and delinquency.

Note 2. Basis of Presentation and Significant Accounting Policies

Basis of presentation: The consolidated financial statements of the Company have been prepared in accordance with SEC regulations and GAAP for interim financial information and, accordingly, do not include all information and note disclosures required by GAAP for complete financial statements. The interim financial statements in this Quarterly Report on Form 10-Q have not been audited by an independent registered public accounting firm in accordance with standards of the Public Company Accounting Oversight Board (United States), but in the opinion of management, the interim financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the Company’s financial position, results of operations, and cash flows in accordance with GAAP. These consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, as filed with the SEC.

Significant accounting policies: The following is a description of significant accounting policies used in preparing the financial statements. The accounting and reporting policies of the Company are in accordance with GAAP.

Principles of consolidation: The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The Company operates through a separate wholly owned subsidiary in each state. The Company also consolidates VIEs when it is considered to be the primary beneficiary of the VIE because it has (i) power over the significant activities of the VIE and (ii) the obligation to absorb losses or the right to receive returns that could be significant to the VIE.

Variable interest entities: The Company transfers pools of loans to SPEs to secure debt for general funding purposes. These entities have the limited purpose of acquiring finance receivables, in addition to holding and making payments on the related debts. Assets transferred to each SPE are legally isolated from the Company and its affiliates, as well as the claims of the Company’s and its affiliates’ creditors. Further, the assets of each SPE are owned by such SPE and are not available to satisfy the debts or other obligations of the Company or any of its affiliates. The Company continues to service the finance receivables transferred to the SPEs. The lenders and investors in the debt issued by the SPEs generally only have recourse to the assets of the SPEs and do not have recourse to the general credit of the Company.

The SPEs’ debt arrangements are structured to provide credit enhancements to the lenders and investors, which may include overcollateralization, subordination of interests, excess spread, and reserve funds. These enhancements, along with the isolated finance receivables pools, increase the creditworthiness of the SPEs above that of the Company as a whole. This increases the

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marketability of the Company’s collateral for borrowing purposes, leading to more favorable borrowing terms, improved interest rate risk management, and additional flexibility to grow the business.

The SPEs are considered VIEs under GAAP and are consolidated into the financial statements of their primary beneficiary. The Company is considered to be the primary beneficiary of the SPEs because it has (i) power over the significant activities through its role as servicer of the finance receivables under each debt arrangement, (ii) the obligation to absorb losses that could be significant through note investment, if applicable, and (iii) the obligation to absorb losses or the right to receive returns that could be significant through the Company’s interest in the monthly residual cash flows of the SPEs.

Consolidation of VIEs results in these transactions being accounted for as secured borrowings; therefore, the pooled receivables and the related debts remain on the consolidated balance sheet of the Company. Each debt is secured solely by the assets of the VIEs and not by any other assets of the Company. The assets of the VIEs are the only source of funds for repayment on each debt, and restricted cash held by the VIEs can only be used to support payments on the debt. The Company recognizes revenue and provision for credit losses on the finance receivables of the VIEs and interest expense on the related secured debt.

Use of estimates: The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and disclosure of contingent assets and liabilities for the periods indicated in the financial statements. Actual results could differ from those estimates.

Estimates that are susceptible to change relate to the determination of the allowance for credit losses, the valuation of deferred tax assets and liabilities, and the fair value of financial instruments.

Recent accounting pronouncements: In December 2023, the FASB issued ASU 2023-09, enhancing the transparency and decision usefulness of income tax disclosures. The amendment, among other things, improves transparency of income tax disclosures by requiring more consistent categories and greater disaggregation of information in rate reconciliations, and disaggregation of income taxes paid by jurisdiction. The amendments in this update are effective for annual periods beginning after December 15, 2024, and early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The income tax guidance should be applied on a prospective basis, however, retrospective application is permitted. The Company is currently evaluating the impact of this update on its consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, enhancing the disclosures about a company’s expenses. The amendment, among other things, improves these disclosures by requiring disaggregated expense information about a company’s expense types. The amendments in this update are effective for annual periods beginning after December 15, 2026, and early adoption is permitted. The enhanced expense guidance can be applied on either a prospective (for financial statements issued during reporting periods after the effective date of this ASU) or retrospective (to any or all prior periods presented) basis. The Company is currently evaluating the impact of this update on its consolidated financial statements.

Net finance receivables: Generally, the Company classifies finance receivables as held for investment based on management’s intent at the time of origination. The Company determines classification on a receivable-by-receivable basis. The Company classifies finance receivables as held for investment due to its ability and intent to hold them until their contractual maturities. Net finance receivables consist of the Company’s installment loans. The Company carries net finance receivables at amortized cost, which includes remaining principal balance, accrued interest, and net unamortized deferred origination costs and unamortized fees.

Loan renewals are a significant piece of new volume and are considered a terminal event of the previous loan. The Company may renew delinquent secured or unsecured loan accounts if the customer meets the Company’s underwriting criteria and it does not appear the cause of past delinquency will affect the customer’s ability to repay the renewed loan.

Finance receivable origination fees and costs: Non-refundable fees received and direct costs (personnel and digital loan origination costs) incurred for the origination of finance receivables are deferred and recognized to interest income over their contractual lives using the constant yield method. Unamortized amounts are recognized in interest income at the time that finance receivables are paid in full, renewed, or charged off.

Nonaccrual status: Accrual of interest income on finance receivables is suspended when an account becomes 90 days delinquent. If the account is charged off, the accrued interest income is reversed as a reduction of interest and fee income. Interest received on such loans is accounted for on the cash-basis method, until qualifying for return to accrual. Under the cash-basis method, interest income is recorded when the payment is received. Loans resume accruing interest when the past due status is brought below 90 days. The Company made a policy election to not record an allowance for credit losses related to accrued interest because it has nonaccrual and charge-off policies that result in the timely suspension and reversal of accrued interest.

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Allowance for credit losses: The allowance for credit losses is based on historical credit experience, current conditions, and reasonable and supportable economic forecasts. The historical loss experience is adjusted for quantitative and qualitative factors that are not fully reflected in the historical data. In determining its estimate of expected credit losses, the Company evaluates information related to credit metrics, changes in its lending strategies and underwriting practices, and the current and forecasted direction of the economic and business environment. These metrics include, but are not limited to, loan portfolio mix and growth, unemployment, credit loss trends, delinquency trends, changes in underwriting, and operational risks.

The Company selected a PD / LGD model to estimate its base allowance for credit losses, in which the estimated loss is equal to the product of PD and LGD. Historical net finance receivables are tracked over the term of the pools to identify the incidences of loss (PDs) and the average severity of losses (LGDs).

To enhance the precision of the allowance for credit loss estimate, the Company evaluates its finance receivable portfolio on a pool basis and segments each pool of finance receivables with similar credit risk characteristics. As part of its evaluation, the Company considers loan portfolio characteristics such as product type, loan size, loan term, internal or external credit scores, delinquency status, geographical location, and vintage. Based on analysis of historical loss experience, the Company selected the following segmentation: product type, FICO score, and delinquency status.

As finance receivables are originated, provisions for credit losses are recorded in amounts sufficient to maintain an allowance for credit losses at an adequate level to provide for estimated losses over the contractual life of the finance receivables (considering the effect of prepayments). Subsequent changes to the contractual terms that are a result of re-underwriting are not included in the finance receivable’s contractual life (considering the effect of prepayments). The Company uses its segmentation loss experience to forecast expected credit losses. Historical information about losses generally provides a basis for the estimate of expected credit losses. The Company also considers the need to adjust historical information to reflect the extent to which current conditions differ from the conditions that existed for the period over which historical information was evaluated. These adjustments to historical loss information may be qualitative or quantitative in nature.

Reasonable and supportable macroeconomic forecasts are required for the Company’s allowance for credit loss model. The Company engaged a major rating service to assist with compiling a reasonable and supportable forecast. The Company reviews macroeconomic forecasts to use in its allowance for credit losses. The Company adjusts the historical loss experience by relevant qualitative factors for these expectations. The Company does not require reversion adjustments, as the contractual lives of its portfolio are shorter than its available forecast periods.

The Company charges credit losses against the allowance for all products when an account reaches 180 days contractually delinquent, subject to certain exceptions. The Company’s customer accounts without a lien on a vehicle in a confirmed bankruptcy are charged off in the month following the bankruptcy notification or at 60 days contractually delinquent, subject to certain exceptions. Deceased borrower accounts are charged off in the month following the proper notification of passing, with the exception of borrowers with credit life insurance. Subsequent recoveries of amounts charged off, if any, are credited to the allowance.

Restricted cash: Restricted cash includes cash and cash equivalents for which the Company’s ability to withdraw funds is contractually limited. The Company’s restricted cash consists of cash reserves that are maintained as collateral for potential credit life insurance claims and cash restricted for debt servicing of the Company’s revolving warehouse credit facilities and securitizations.

Restricted AFS investments: The Company classifies its investments in debt securities that were purchased with the Company’s restricted cash as restricted AFS investments and carries the investments at fair value. Unrealized gains and losses, net of taxes, are excluded from earnings and reported in other comprehensive income or loss until realized. The unrealized gains and losses, net of taxes, are recorded on the consolidated balance sheet in accumulated other comprehensive income or loss in stockholders’ equity. Realized gains and losses from the sale of AFS investments are specifically identified and reclassified from accumulated other comprehensive income or loss and included within earnings on the consolidated statement of income.

Share-based compensation: The Company measures compensation cost for share-based awards at estimated fair value and recognizes compensation expense over the service period for awards expected to vest. The Company uses the closing stock price on the date of grant as the fair value of RSAs, performance-contingent RSUs, and service-based RSUs. The fair value of NQSOs is determined using the Black-Scholes valuation model, and the fair value of PRSUs is determined using the Monte Carlo valuation model. When applicable, the Black-Scholes and Monte Carlo models require the input of assumptions, including expected volatility, expected dividends, expected term, risk-free interest rate, and a discount associated with post-vest holding restrictions, changes to which can affect the fair value estimate. Expected volatility is based on the Company’s historical stock price volatility. Expected dividends are calculated using the expected dividend yield (annualized dividends divided by the grant date stock price). The

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expected term is calculated by using the simplified method (average of the vesting and original contractual terms) due to insufficient historical data to estimate the expected term. The risk-free rate is based on the zero-coupon U.S. Treasury bond rate over the expected term of the awards. The estimated discount associated with post-vest holding restrictions is calculated using a blend of the Finnerty and Chaffe models. In addition, the estimation of share-based awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from current estimates, such amounts will be recorded as a cumulative adjustment in the period estimates are revised.

Note 3. Finance Receivables, Credit Quality Information, and Allowance for Credit Losses

Net finance receivables for the periods indicated consisted of the following:


Dollars in thousands	June 30, 2025		December 31, 2024
Large loans	$	1,413,367	$	1,336,780
Small loans		546,997		555,755
Total	$	1,960,364	$	1,892,535

Net finance receivables included net deferred origination fees and costs of $15.2 million and $15.7 million as of June 30, 2025 and December 31, 2024, respectively.

The credit quality of the Company’s finance receivable portfolio is dependent on the Company’s ability to enforce sound underwriting standards, maintain diligent servicing of the portfolio, and respond to changing economic conditions as it manages and grows its portfolio. The allowance for credit losses uses FICO scores and delinquency as key data points in estimating the allowance. The Company uses six FICO band categories to assess FICO scores. The first three FICO band categories include subprime FICO scores below 620. The fourth and fifth FICO band categories include near-prime FICO scores ranging from 620 to 659. The sixth FICO band category includes prime FICO scores of 660 or higher.

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Net finance receivables by product, FICO band at origination, and origination year as of June 30, 2025 are as follows:


	Net Finance Receivables by Origination Year
Dollars in thousands	2025		2024		2023		2022		2021		Prior		Total Net Finance Receivables
Large Loans:
FICO Band
1	$	61,849	$	60,486	$	24,169	$	7,961	$	2,431	$	638	$	157,534
2		38,023		36,680		11,593		3,600		797		115		90,808
3		61,290		60,591		21,942		9,639		1,882		125		155,469
4		79,418		83,951		32,797		15,329		2,866		198		214,559
5		88,855		94,212		36,521		17,245		4,217		263		241,313
6		207,548		209,574		90,782		37,461		7,810		509		553,684
Total	$	536,983	$	545,494	$	217,804	$	91,235	$	20,003	$	1,848	$	1,413,367
Small Loans:
FICO Band
1	$	52,150	$	31,629	$	4,873	$	685	$	110	$	27	$	89,474
2		22,163		15,521		2,246		233		13		2		40,178
3		35,051		24,944		3,323		310		25		3		63,656
4		39,704		32,516		4,373		339		23		7		76,962
5		41,023		39,326		5,980		343		20		2		86,694
6		87,545		89,649		12,302		509		22		6		190,033
Total	$	277,636	$	233,585	$	33,097	$	2,419	$	213	$	47	$	546,997
Total Loans:
FICO Band
1	$	113,999	$	92,115	$	29,042	$	8,646	$	2,541	$	665	$	247,008
2		60,186		52,201		13,839		3,833		810		117		130,986
3		96,341		85,535		25,265		9,949		1,907		128		219,125
4		119,122		116,467		37,170		15,668		2,889		205		291,521
5		129,878		133,538		42,501		17,588		4,237		265		328,007
6		295,093		299,223		103,084		37,970		7,832		515		743,717
Total	$	814,619	$	779,079	$	250,901	$	93,654	$	20,216	$	1,895	$	1,960,364

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Net finance receivables by product, FICO band at origination, and origination year as of December 31, 2024 are as follows:


	Net Finance Receivables by Origination Year
Dollars in thousands	2024		2023		2022		2021		2020		Prior		Total Net Finance Receivables
Large Loans:
FICO Band
1	$	86,776	$	37,750	$	12,457	$	3,950	$	793	$	373	$	142,099
2		55,211		19,464		6,171		1,602		173		92		82,713
3		90,642		35,777		16,579		4,224		339		59		147,620
4		125,867		52,564		25,521		6,140		570		100		210,762
5		137,243		58,604		28,564		8,148		784		36		233,379
6		300,714		140,149		62,303		15,514		1,464		63		520,207
Total	$	796,453	$	344,308	$	151,595	$	39,578	$	4,123	$	723	$	1,336,780
Small Loans:
FICO Band
1	$	67,809	$	11,905	$	1,737	$	257	$	40	$	28	$	81,776
2		32,851		5,799		755		61		4		2		39,472
3		52,846		9,456		1,061		76		4		2		63,445
4		67,200		12,903		1,161		94		9		7		81,374
5		75,458		16,882		1,500		69		3		3		93,915
6		160,551		32,671		2,462		80		5		4		195,773
Total	$	456,715	$	89,616	$	8,676	$	637	$	65	$	46	$	555,755
Total Loans:
FICO Band
1	$	154,585	$	49,655	$	14,194	$	4,207	$	833	$	401	$	223,875
2		88,062		25,263		6,926		1,663		177		94		122,185
3		143,488		45,233		17,640		4,300		343		61		211,065
4		193,067		65,467		26,682		6,234		579		107		292,136
5		212,701		75,486		30,064		8,217		787		39		327,294
6		461,265		172,820		64,765		15,594		1,469		67		715,980
Total	$	1,253,168	$	433,924	$	160,271	$	40,215	$	4,188	$	769	$	1,892,535

Credit losses by product and origination year for the periods indicated are as follows:


	Six Months Ended June 30, 2025
Dollars in thousands	2025		2024		2023		2022		2021		Prior		Total Credit Losses
Large loans	$	222	$	32,547	$	25,552	$	9,316	$	2,348	$	410	$	70,395
Small loans		297		37,573		12,583		1,283		87		19		51,842
Total	$	519	$	70,120	$	38,135	$	10,599	$	2,435	$	429	$	122,237


	Six Months Ended June 30, 2024
Dollars in thousands	2024		2023		2022		2021		2020		Prior		Total Credit Losses
Large loans	$	280	$	33,165	$	25,664	$	7,228	$	1,012	$	319	$	67,668
Small loans		364		30,172		8,707		828		45		22		40,138
Total	$	644	$	63,337	$	34,371	$	8,056	$	1,057	$	341	$	107,806

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The contractual delinquency of the net finance receivables portfolio by product and aging for the periods indicated are as follows:


	June 30, 2025
	Large					Small					Total
Dollars in thousands	$		%			$		%			$		%
Current	$	1,225,581		86.7	%	$	446,446		81.7	%	$	1,672,027		85.3	%
1 to 29 days past due		111,096		7.9	%		47,855		8.7	%		158,951		8.1	%
Delinquent accounts:
30 to 59 days		21,441		1.5	%		13,921		2.6	%		35,362		1.8	%
60 to 89 days		17,247		1.2	%		11,702		2.1	%		28,949		1.5	%
90 to 119 days		13,501		1.0	%		8,847		1.6	%		22,348		1.1	%
120 to 149 days		12,826		0.9	%		8,799		1.6	%		21,625		1.1	%
150 to 179 days		11,675		0.8	%		9,427		1.7	%		21,102		1.1	%
Total delinquency	$	76,690		5.4	%	$	52,696		9.6	%	$	129,386		6.6	%
Total net finance receivables	$	1,413,367		100.0	%	$	546,997		100.0	%	$	1,960,364		100.0	%
Net finance receivables in nonaccrual status	$	46,034		3.3	%	$	30,491		5.6	%	$	76,525		3.9	%


	December 31, 2024
	Large					Small					Total
Dollars in thousands	$		%			$		%			$		%
Current	$	1,139,070		85.2	%	$	451,311		81.2	%	$	1,590,381		84.0	%
1 to 29 days past due		109,656		8.2	%		46,656		8.4	%		156,312		8.3	%
Delinquent accounts:
30 to 59 days		22,909		1.7	%		14,039		2.5	%		36,948		1.9	%
60 to 89 days		21,493		1.6	%		13,749		2.5	%		35,242		1.9	%
90 to 119 days		16,609		1.3	%		11,476		2.1	%		28,085		1.5	%
120 to 149 days		14,357		1.1	%		9,630		1.7	%		23,987		1.3	%
150 to 179 days		12,686		0.9	%		8,894		1.6	%		21,580		1.1	%
Total delinquency	$	88,054		6.6	%	$	57,788		10.4	%	$	145,842		7.7	%
Total net finance receivables	$	1,336,780		100.0	%	$	555,755		100.0	%	$	1,892,535		100.0	%
Net finance receivables in nonaccrual status	$	54,228		4.1	%	$	34,602		6.2	%	$	88,830		4.7	%

The accrual of interest income on finance receivables is suspended when an account becomes 90 days delinquent. If a loan is charged off, the accrued interest is reversed as a reduction of interest and fee income. During the three months ended June 30, 2025 and 2024, the Company reversed $7.1 million and $6.5 million of accrued interest as reductions of interest and fee income, respectively. The Company reversed $14.4 million and $11.6 million of accrued interest as reductions of interest and fee income for the six months ended June 30, 2025 and 2024, respectively.

The following are reconciliations of the allowance for credit losses by product for the periods indicated:


	As of and For the Three Months Ended June 30, 2025
Dollars in thousands	Large			Small			Total
Beginning balance	$	134,411		$	64,689		$	199,100
Provision for credit losses		36,068			24,519			60,587
Credit losses		(34,640	)		(25,888	)		(60,528	)
Recoveries		2,271			1,370			3,641
Ending balance	$	138,110		$	64,690		$	202,800
Net finance receivables	$	1,413,367		$	546,997		$	1,960,364
Allowance as percentage of net finance receivables		9.8	%		11.8	%		10.3	%

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	As of and For the Three Months Ended June 30, 2024
Dollars in thousands	Large			Small			Total
Beginning balance	$	126,528		$	60,572		$	187,100
Provision for credit losses		31,493			22,309			53,802
Credit losses		(35,957	)		(22,656	)		(58,613	)
Recoveries		1,914			1,197			3,111
Ending balance	$	123,978		$	61,422		$	185,400
Net finance receivables	$	1,266,032		$	507,711		$	1,773,743
Allowance as percentage of net finance receivables		9.8	%		12.1	%		10.5	%


	As of and For the Six Months Ended June 30, 2025
Dollars in thousands	Large			Small			Total
Beginning balance	$	133,506		$	65,994		$	199,500
Provision for credit losses		70,689			47,890			118,579
Credit losses		(70,395	)		(51,842	)		(122,237	)
Recoveries		4,310			2,648			6,958
Ending balance	$	138,110		$	64,690		$	202,800
Net finance receivables	$	1,413,367		$	546,997		$	1,960,364
Allowance as percentage of net finance receivables		9.8	%		11.8	%		10.3	%


	As of and For the Six Months Ended June 30, 2024
Dollars in thousands	Large			Small			Total
Beginning balance	$	127,992		$	59,408		$	187,400
Provision for credit losses		60,148			40,077			100,225
Credit losses		(67,668	)		(40,138	)		(107,806	)
Recoveries		3,506			2,075			5,581
Ending balance	$	123,978		$	61,422		$	185,400
Net finance receivables	$	1,266,032		$	507,711		$	1,773,743
Allowance as percentage of net finance receivables		9.8	%		12.1	%		10.5	%

The Company uses certain loan modification programs for borrowers experiencing financial difficulties as a loss mitigation strategy to improve collectability of the loans and assist customers through financial setbacks. The programs consist of offering payment deferrals, refinancing, and, in limited instances, settlements. Customers may also pursue financial assistance through external sources, such as filing for bankruptcy protection. Modification programs available to our customers are described in more detail below:

•

Customers with temporary hardships may be offered payment deferrals related to past due payments. Such deferrals extend the customer’s maturity date and are generally considered insignificant delays, unless the deferral exceeds three deferrals in a rolling twelve-month period.

•

Customers with delinquent loans who meet certain criteria are eligible to receive a reduced interest rate and/or term extension, making the monthly payments more affordable.

•

The Company may also agree to settle a past-due loan by accepting less than the full principal balance owed, in certain limited cases, once it is determined that collection of the entire outstanding balance is unlikely.

•

Customers who receive bankruptcy protection may receive principal forgiveness, interest rate reductions, and/or term extensions.

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The information relating to modifications made to borrowers experiencing financial difficulty and their related percentage of applicable net finance receivables for the periods indicated are as follows:


	As of and for the Three Months Ended June 30, 2025
	Large					Small					Total
Dollars in thousands	$		%			$		%			$		%
Interest rate reduction	$	4,484		0.3	%	$	1,391		0.3	%	$	5,875		0.3	%
Interest rate reduction & term extension		1,831		0.1	%		425		0.1	%		2,256		0.1	%
Term extension		924		0.1	%		125		—			1,049		0.1	%
Principal forgiveness, interest rate reduction, & term extension		242		—			6		—			248		—
Total	$	7,481		0.5	%	$	1,947		0.4	%	$	9,428		0.5	%


	As of and for the Three Months Ended June 30, 2024
	Large					Small					Total
Dollars in thousands	$		%			$		%			$		%
Interest rate reduction	$	651		0.1	%	$	179		—		$	830		—
Interest rate reduction & term extension		2,635		0.2	%		461		0.1	%		3,096		0.2	%
Term extension		2,117		0.2	%		438		0.1	%		2,555		0.1	%
Principal forgiveness, interest rate reduction, & term extension		162		—			7		—			169		—
Total	$	5,565		0.4	%	$	1,085		0.2	%	$	6,650		0.4	%


	As of and for the Six Months Ended June 30, 2025
	Large					Small					Total
Dollars in thousands	$		%			$		%			$		%
Interest rate reduction	$	9,536		0.7	%	$	3,134		0.6	%	$	12,670		0.6	%
Interest rate reduction & term extension		4,111		0.3	%		868		0.2	%		4,979		0.3	%
Term extension		1,008		0.1	%		187		—			1,195		0.1	%
Principal forgiveness, interest rate reduction, & term extension		406		—			16		—			422		—
Total	$	15,061		1.1	%	$	4,205		0.8	%	$	19,266		1.0	%


	As of and for the Six Months Ended June 30, 2024
	Large					Small					Total
Dollars in thousands	$		%			$		%			$		%
Interest rate reduction	$	699		0.1	%	$	181		—		$	880		—
Interest rate reduction & term extension		6,111		0.5	%		1,051		0.2	%		7,162		0.4	%
Term extension		2,496		0.2	%		538		0.1	%		3,034		0.2	%
Principal forgiveness, interest rate reduction, & term extension		287		—			19		—			306		—
Total	$	9,593		0.8	%	$	1,789		0.4	%	$	11,382		0.6	%

The financial effects of the modifications made to borrowers experiencing financial difficulty for the periods indicated are as follows:


	Three Months Ended June 30, 2025
Loan Modification	Product	Financial Effect
Interest rate reduction	Large loans	Reduced the weighted-average contractual interest rate by 18.4%.
	Small loans	Reduced the weighted-average contractual interest rate by 28.8%.
Term extension	Large loans	Added a weighted-average 1.3 years to the life of loans.
	Small loans	Added a weighted-average 1.3 years to the life of loans.
Principal forgiveness	Large loans	Reduced the amortized cost basis of the loans by $0.3 million.
	Small loans	Reduced the amortized cost basis of the loans by $0.1 million.

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	Three Months Ended June 30, 2024
Loan Modification	Product	Financial Effect
Interest rate reduction	Large loans	Reduced the weighted-average contractual interest rate by 9.6%.
	Small loans	Reduced the weighted-average contractual interest rate by 17.6%.
Term extension	Large loans	Added a weighted-average 1.1 years to the life of loans.
	Small loans	Added a weighted-average 1.0 years to the life of loans.
Principal forgiveness	Large loans	Reduced the amortized cost basis of the loans by $0.3 million.
	Small loans	Reduced the amortized cost basis of the loans by $0.1 million.


	Six Months Ended June 30, 2025
Loan Modification	Product	Financial Effect
Interest rate reduction	Large loans	Reduced the weighted-average contractual interest rate by 18.4%.
	Small loans	Reduced the weighted-average contractual interest rate by 29.3%.
Term extension	Large loans	Added a weighted-average 1.4 years to the life of loans.
	Small loans	Added a weighted-average 1.3 years to the life of loans.
Principal forgiveness	Large loans	Reduced the amortized cost basis of the loans by $0.6 million.
	Small loans	Reduced the amortized cost basis of the loans by $0.2 million.


	Six Months Ended June 30, 2024
Loan Modification	Product	Financial Effect
Interest rate reduction	Large loans	Reduced the weighted-average contractual interest rate by 8.4%.
	Small loans	Reduced the weighted-average contractual interest rate by 15.5%.
Term extension	Large loans	Added a weighted-average 1.3 years to the life of loans.
	Small loans	Added a weighted-average 1.2 years to the life of loans.
Principal forgiveness	Large loans	Reduced the amortized cost basis of the loans by $0.6 million.
	Small loans	Reduced the amortized cost basis of the loans by $0.3 million.

The following tables provide the amortized cost basis for modifications made to borrowers experiencing financial difficulty within the previous twelve months that subsequently defaulted. The Company defines payment default as 90 days past due for this disclosure. The respective amounts for each modification for the periods indicated are as follows:


	As of and for the Three Months Ended June 30, 2025
Dollars in thousands	Large		Small		Total
Interest rate reduction	$	1,924	$	852	$	2,776
Interest rate reduction & term extension		678		152		830
Term extension		68		18		86
Principal forgiveness, interest rate reduction, & term extension		63		—		63
Total	$	2,733	$	1,022	$	3,755


	As of and for the Three Months Ended June 30, 2024
Dollars in thousands	Large		Small		Total
Interest rate reduction & term extension	$	1,141	$	235	$	1,376
Term extension		45		15		60
Principal forgiveness, interest rate reduction, & term extension		26		—		26
Total	$	1,212	$	250	$	1,462


	As of and for the Six Months Ended June 30, 2025
Dollars in thousands	Large		Small		Total
Interest rate reduction	$	2,396	$	977	$	3,373
Interest rate reduction & term extension		863		176		1,039
Term extension		106		24		130
Principal forgiveness, interest rate reduction, & term extension		81		—		81
Total	$	3,446	$	1,177	$	4,623

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	As of and for the Six Months Ended June 30, 2024
Dollars in thousands	Large		Small		Total
Interest rate reduction & term extension	$	1,453	$	278	$	1,731
Term extension		53		16		69
Principal forgiveness, interest rate reduction, & term extension		27		4		31
Total	$	1,533	$	298	$	1,831

The contractual delinquencies of loans that were modified to borrowers experiencing financial difficulty within the previous twelve months for the periods indicated are as follows:


	June 30, 2025
Dollars in thousands	Large		Small		Total
Current	$	16,807	$	3,944	$	20,751
30 - 89 days past due		3,035		1,084		4,119
90+ days past due		1,845		823		2,668
Total (1)	$	21,687	$	5,851	$	27,538

(1) Excludes modified finance receivables that subsequently charged off of $2.4 million and $0.8 million in large and small loans, respectively.


	June 30, 2024
Dollars in thousands	Large		Small		Total
Current	$	12,113	$	2,071	$	14,184
30 - 89 days past due		2,000		387		2,387
90+ days past due		1,066		253		1,319
Total (1)	$	15,179	$	2,711	$	17,890

(1) Excludes modified finance receivables that subsequently charged off of $1.5 million and $0.3 million in large and small loans, respectively.

Note 4. Restricted Available-for-Sale Investments

The following tables reconcile the amortized cost, gross unrealized gains and losses included in accumulated other comprehensive income or loss, and estimated fair value of the Company’s restricted AFS investments as of the periods indicated:


	June 30, 2025
Dollars in thousands	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Restricted investments	$	22,124	$	—	$	(2	)	$	22,122


	December 31, 2024
Dollars in thousands	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Restricted investments	$	21,633	$	92	$	(13	)	$	21,712

The following tables include the gross unrealized losses and estimated fair values of restricted AFS investments that were in a continuous unrealized loss position, for which no allowance for credit loss has been recorded, as of the periods indicated:


	June 30, 2025
	Less than 12 Months					12 Months or Longer				Total
Dollars in thousands	Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses
Restricted investments	$	2,212	$	(2	)	$	—	$	—	$	2,212	$	(2	)

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	December 31, 2024
	Less than 12 Months					12 Months or Longer				Total
Dollars in thousands	Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses
Restricted investments	$	2,205	$	(13	)	$	—	$	—	$	2,205	$	(13	)

The restricted AFS investments consist of U.S. Treasuries which are measured at fair value and include accrued interest receivables of $13 thousand as of both June 30, 2025 and December 31, 2024. The investments consist of highly rated securities backed by the U.S. federal government. As a result, the Company has not recorded an allowance for credit losses related to the restricted AFS investments.

The following table includes the amortized cost and estimated fair values of restricted AFS investments by contractual maturity as of the period indicated:


	June 30, 2025
Dollars in thousands	Amortized Cost		Estimated Fair Value
Due in one year	$	19,910	$	19,910
Due within one year to five years		2,214		2,212
Due within five years to ten years		—		—
Due after ten years		—		—
Total	$	22,124	$	22,122

The Company had no gross realized gains or losses during the three and six months ended June 30, 2025 and 2024, respectively. For additional information on the Company's restricted AFS investments, see Note 8, "Disclosure About Fair Value of Financial Instruments."

Note 5. Variable Interest Entities

As part of its overall funding strategy, the Company has transferred certain finance receivables to affiliated VIEs for asset-backed financing transactions, including securitizations. The Company’s revolving warehouse credit facilities and securitizations are issued by the Company’s SPEs, which are considered VIEs under GAAP and are consolidated into the financial statements of their primary beneficiary.

These debts are supported by the expected cash flows from the underlying collateralized finance receivables. Collections on these finance receivables are remitted to restricted cash collection accounts, which totaled $83.6 million and $117.1 million as of June 30, 2025 and December 31, 2024, respectively. Cash inflows from the finance receivables are distributed to the lenders/investors, the service providers, and/or the residual interest that the Company owns in accordance with a monthly contractual priority of payments. The SPEs pay a servicing fee to the Company, which is eliminated in consolidation. Distributions from the SPEs to the Company are permitted under the debt arrangements.

At each sale of receivables from the Company’s affiliates to the SPEs, the Company makes certain representations and warranties about the quality and nature of the collateralized receivables. The debt arrangements require the Company to repurchase the receivables in certain circumstances, including circumstances in which the representations and warranties made by the Company concerning the quality and characteristics of the receivables are inaccurate. Assets transferred to each SPE are legally isolated from the Company and its affiliates, as well as the claims of the Company’s and its affiliates’ creditors. Further, the assets of each SPE are owned by such SPE and are not available to satisfy the debts or other obligations of the Company or any of its affiliates.

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The following table presents the assets and liabilities of our consolidated VIEs:


Dollars in thousands	June 30, 2025			December 31, 2024
Assets
Cash	$	381		$	378
Net finance receivables		1,461,658			1,317,604
Allowance for credit losses		(148,872	)		(136,850	)
Restricted cash		96,958			130,970
Other assets		3,194			3,078
Total assets	$	1,413,319		$	1,315,180
Liabilities
Net debt	$	1,336,929		$	1,253,096
Other liabilities		21			19
Total liabilities	$	1,336,950		$	1,253,115

Note 6. Debt

The following is a summary of the Company’s debt as of the periods indicated:


	June 30, 2025							December 31, 2024
Dollars in thousands	Debt		Unamortized Debt Issuance Costs (1)			Net Debt		Debt		Unamortized Debt Issuance Costs (1)			Net Debt
Revolving credit facilities	$	247,914	$	(184	)	$	247,730	$	315,904	$	(437	)	$	315,467
Securitizations		1,261,219		(6,678	)		1,254,541		1,162,432		(5,901	)		1,156,531
Total	$	1,509,133	$	(6,862	)	$	1,502,271	$	1,478,336	$	(6,338	)	$	1,471,998
Unused amount of revolving credit facilities (subject to borrowing base)	$	533,778						$	466,164

(1) Unamortized debt issuance costs related to the revolving warehouse credit facilities are presented within other assets in the consolidated balance sheets. These credit facilities had $2.5 million and $2.2 million in such costs as of June 30, 2025 and December 31, 2024, respectively.

Revolving credit facilities: The Company’s revolving credit facilities are secured by substantially all of the Company’s finance receivables and equity interests of the majority of its subsidiaries. The Company pays unused commitment fees on its revolving credit facilities, generally based upon the average outstanding balance. As of June 30, 2025, the Company held $4.3 million in unrestricted cash. The Company had $117.3 million of immediate available liquidity to draw down cash under the senior revolving credit facility and had no immediate availability to draw down cash under any of its revolving warehouse credit facilities as of June 30, 2025; however, each of the Company’s revolving warehouse credit facilities holds restricted cash reserves to satisfy provisions of its respective credit agreement.

The following table includes the key terms under each of the Company’s revolving credit facilities as of June 30, 2025:


Dollars in thousands	Total Credit Facility		Debt Balance		Restricted Cash Reserves		Advance Rate Cap	Current Advance Rate	Unused Commitment Fee	Revolving Period End Date	Maturity Date
Senior	$	355,000	$	165,526	$	—	83%	67%	0.5% - 1.0%	N/A	Sep 2025
RMR IV warehouse (1)		125,000		11,981		151	79%	79%	0.5%	May 2026	May 2027
RMR V warehouse		100,000		21,296		132	80%	80%	0.4% - 0.7%	Nov 2026	Nov 2027
RMR VI warehouse		75,000		27,813		184	75%	75%	0.5%	Feb 2027	Feb 2028
RMR VII warehouse		125,000		21,298		139	76%	76%	0.4% - 0.7%	N/A	Oct 2026
Total	$	780,000	$	247,914	$	606

(1) Following a May 2025 amendment, the revolving period end date is now May 2026 (previously May 2025), the maturity date is now May 2027 (previously May 2026), and the unused commitment fee is now 0.5% (previously ranging between 0.4% - 0.7%).

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Borrowings under the revolving credit facilities bear interest, payable monthly, at a rate equal to the sum of any applicable floor, benchmark adjustment, margin, and the market rate of each respective rate type that was effective as of June 30, 2025 (as follows):


	Floor	Benchmark Adjustment	Margin	Rate Type	Effective Interest Rate
Senior	0.5%	0.1%	3.0%	1-month SOFR	7.4%
RMR IV warehouse (1)	—	—	2.3%	1-month SOFR	6.6%
RMR V warehouse	—	—	2.1%	Conduit	6.7%
RMR VI warehouse	—	—	2.1%	1-month SOFR	6.4%
RMR VII warehouse	—	—	2.4%	1-month SOFR	6.7%

(1) Following a May 2025 amendment, the benchmark adjustment has been removed (previously 0.1%), and the margin is now 2.3% (previously 2.8%).

Securitizations: From time to time, the Company and its SPE, RMR III, complete private offerings and sales of asset-backed notes through the Company’s Issuance Trusts. The asset-backed notes are secured by finance receivables and other related assets that RMR III purchased from the Company, which RMR III then sells and transfers to the Issuance Trusts. The Issuance Trusts hold restricted cash reserves to satisfy provisions of the transaction documents. Borrowings under the securitizations bear interest, payable monthly, and principal repayments begin the month subsequent to the end of the revolving period. Prior to maturity, the Company may redeem the notes in full, but not in part, at its option on securitization-specific, designated dates. No payments of principal of the notes will be made during the revolving periods.

The following table includes the key terms under each of the Company’s securitizations as of June 30, 2025:


Dollars in thousands	Issue Date	Issue Amount		Debt Balance		Restricted Cash Reserves		Effective Interest Rate	Revolving Period End Date	Maturity Date
RMIT 2021-1	Feb 2021	$	248,700	$	54,385	$	2,604	3.5%	Feb 2024	Mar 2031
RMIT 2021-2	Jul 2021		200,000		200,192		2,083	2.3%	Jul 2026	Aug 2033
RMIT 2021-3	Oct 2021		125,000		125,202		1,471	3.9%	Sep 2026	Oct 2033
RMIT 2022-1	Feb 2022		250,000		177,511		2,646	3.8%	Feb 2025	Mar 2032
RMIT 2024-1	Jun 2024		187,305		187,787		1,078	6.2%	May 2027	Jul 2036
RMIT 2024-2	Nov 2024		250,000		250,557		1,418	5.3%	Nov 2026	Dec 2033
RMIT 2025-1	Mar 2025		265,000		265,585		1,489	5.3%	Mar 2027	Apr 2034
Total		$	1,526,005	$	1,261,219	$	12,789

The Company’s debt arrangements are subject to certain covenants, including monthly and annual reporting, maintenance of specified interest coverage and debt ratios, restrictions on distributions, limitations on other indebtedness, and certain other restrictions. As of June 30, 2025, the Company was in compliance with all debt covenants.

Note 7. Stockholders’ Equity

Stock repurchase program: In December 2024, the Company announced that the Board had authorized a $30 million stock repurchase program. The authorization was effective immediately and extends through December 31, 2026. As of June 30, 2025, under this repurchase program, the Company had repurchased 0.5 million shares of common stock at a total cost of $15.1 million, including commissions and estimated excise taxes.

Quarterly cash dividend: The Board may in its discretion declare and pay cash dividends on the Company’s common stock. The following table presents the dividends declared per share of common stock for the periods indicated:


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Dividends declared per common share	$	0.30	$	0.30	$	0.60	$	0.60

See Note 14, “Subsequent Events,” for information regarding the Company’s cash dividend following the end of the fiscal quarter.

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Note 8. Disclosure About Fair Value of Financial Instruments

The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value:

Cash and restricted cash: Cash and restricted cash is recorded at cost, which approximates fair value due to its highly liquid nature.

Restricted AFS investments: The fair value of U.S. Treasury securities is priced using an external pricing service which the Company corroborates using a secondary external vendor. For additional information on the Company's restricted AFS investments, see Note 4, "Restricted Available-for-Sale Investments."

Net finance receivables: The Company determines the fair value of net finance receivables using a discounted cash flows methodology. The application of this methodology requires the Company to make certain estimates and judgments. These estimates and judgments include, but are not limited to, prepayment rates, default rates, loss severity, and risk-adjusted discount rates.

Debt: The Company estimates the fair value of debt using estimated credit marks based on an index of similar financial instruments (credit facilities) and projected cash flows from the underlying collateralized finance receivables (securitizations), each discounted using a risk-adjusted discount rate.

Certain of the Company’s assets estimated fair value are classified and disclosed in one of the following three categories:

Level 1 – Quoted market prices in active markets for identical assets or liabilities.

Level 2 – Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

Level 3 – Unobservable inputs that are not corroborated by market data.

In determining the appropriate levels, the Company performs an analysis of the assets and liabilities that are estimated at fair value. At each reporting period, all assets and liabilities for which the fair value measurement is based on significant unobservable inputs are classified as Level 3.

The following table includes the carrying amounts and estimated fair values of financial assets and liabilities disclosed but not carried at fair value:


	June 30, 2025				December 31, 2024
Dollars in thousands	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Assets
Level 1
Cash	$	4,272	$	4,272	$	3,951	$	3,951
Restricted cash		117,658		117,658		131,684		131,684
Level 3
Net finance receivables, less unearned insurance premiums and allowance for credit losses		1,708,518		1,742,718		1,644,967		1,695,325
Liabilities
Level 3
Debt		1,509,133		1,481,788		1,478,336		1,428,607

The following table includes the carrying amounts and estimated fair values of amounts the Company measures at fair value on a recurring basis:


	June 30, 2025				December 31, 2024
Dollars in thousands	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Assets
Level 2
Restricted AFS investments	$	22,122	$	22,122	$	21,712	$	21,712

As of the periods indicated above, there were no financial assets or liabilities measured at fair value on a non-recurring basis.

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Note 9. Income Taxes

The Company records interim provisions for income taxes based on an estimated annual effective tax rate. The Company recognizes discrete tax benefits or deficiencies in the income tax line of the consolidated statements of income. Generally, these discrete benefits or deficiencies are primarily the result of exercises or vestings of share-based awards.

The following table summarizes the components of income taxes for the periods indicated:


	Three Months Ended June 30,					Six Months Ended June 30,
Dollars in thousands	2025		2024			2025			2024
Provision for corporate taxes	$	3,322	$	2,814		$	5,548		$	7,600
Discrete tax (benefits) deficiencies		22		(37	)		(50	)		(95	)
Total	$	3,344	$	2,777		$	5,498		$	7,505

Note 10. Earnings Per Share

The following schedule reconciles the computation of basic and diluted earnings per share for the periods indicated:


	Three Months Ended June 30,				Six Months Ended June 30,
Dollars in thousands, except per share amounts	2025		2024		2025		2024
Numerator:
Net income	$	10,140	$	8,445	$	17,147	$	23,650
Denominator:
Weighted-average shares outstanding for basic earnings per share		9,504		9,613		9,556		9,591
Effect of dilutive securities		339		250		378		214
Weighted-average shares adjusted for dilutive securities		9,843		9,863		9,934		9,805
Earnings per share:
Basic	$	1.07	$	0.88	$	1.79	$	2.47
Diluted	$	1.03	$	0.86	$	1.73	$	2.41

The Company excluded outstanding shares of common stock totaling 0.1 million and 0.4 million for the three months ended June 30, 2025 and 2024, respectively, and 0.1 million and 0.4 million for the six months ended June 30, 2025 and 2024, respectively, from the computation of diluted earnings per share because they were anti-dilutive.

Note 11. Share-Based Compensation

The Company previously adopted the 2015 Plan (including re-approval as amended and restated in April 2017 and May 2021). On May 16, 2024, the stockholders of the Company approved the 2024 Plan. As of June 30, 2025, subject to adjustments as provided in the 2024 Plan, the maximum aggregate number of shares of the Company’s common stock that could be issued under the 2024 Plan could not exceed the sum of (i) 381,000 shares plus (ii) any shares remaining available for the grant of awards as of May 16, 2024 under the 2015 Plan, plus (iii) any shares subject to an award granted under the 2015 Plan which award is forfeited, cash-settled, cancelled, terminated, expires, or lapses for any reason after May 16, 2024 without the issuance of shares or pursuant to which such shares are forfeited (subject to adjustment for anti-dilution purposes as provided in the 2024 Plan). Of the amount described in the preceding sentence, no more than 381,000 shares may be issued under the 2024 Plan pursuant to the grant of incentive stock options (subject to adjustment for anti-dilution purposes). As of May 16, 2024, there were 1.0 million shares available for grant under the 2024 Plan, inclusive of shares previously available for grant under the 2015 Plan that were rolled over to the 2024 Plan. No further grants will be made under the 2015 Plan. However, awards that are outstanding under the 2015 Plan will continue in accordance with their respective terms. As of June 30, 2025, there were 0.2 million shares available for grant under the 2024 Plan.

For the three months ended June 30, 2025 and 2024, the Company recorded share-based compensation expense of $2.8 million and $3.3 million, respectively. The Company recorded $6.3 million and $5.1 million in share-based compensation expense for the six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025, unrecognized share-based compensation expense to be recognized over future periods approximated $17.0 million. This amount will be recognized as expense over a weighted-average period of 1.9 years. Share-based compensation expenses are recognized on a straight-line basis over the requisite service period of the agreement. All share-based compensation is classified as equity awards. During the three and six months ended June 30, 2025, share-based compensation of $0.1 million and $0.2 million was capitalized as software, respectively. There was no capitalization of share-based compensation during the three and six months ended June 30, 2024.

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The Company allows for the settlement of share-based awards on a net share basis. With net share settlement, the employee does not surrender any cash or shares upon the exercise of stock options or the vesting of stock awards or stock units. Rather, the Company withholds the number of shares with a value equivalent to the option exercise price (for stock options) and the statutory tax withholding (for all share-based awards). Net share settlements have the effect of reducing the number of shares that would have otherwise been issued as a result of exercise or vesting.

Long-term incentive program: The Company issues PRSUs, service-based RSUs, and RSAs to certain members of senior management under the Company’s LTIP. Recurring annual grants are made at the discretion of the Board. The annual grants are subject to cliff- and graded-vesting, generally concluding at the end of the third calendar year and subject to continued employment or as otherwise provided in the underlying award agreements. Vested PRSUs are subject to an additional one-year holding period following the vesting date. The actual value of the PRSUs that may be earned can range from 0% to 150% of target based on relative total shareholder return, plus an additive 20% based on pre-provision return on assets over the performance period, resulting in a maximum payout of 170%.

PRSUs granted prior to 2025 may earn 0% to 150% of target based on positive or negative cumulative total shareholder return concluding at the end of the third calendar year.

Key team member incentive program: The Company also has a KTIP for certain other members of senior management. Recurring annual participation in the program is at the discretion of the Board and executive management. The annual grants are subject to graded-vesting, generally concluding at the end of the third calendar year and subject to continued employment or as otherwise provided in the underlying award agreements.

Prior to 2024, the annual grant was subject to performance over a one-year period. Payout under the program ranged from 0% to 150% of target based on the achievement of five Company performance metrics and individual performance goals (subject to continued employment and certain other terms and conditions of the program). If earned, an RSA was issued following the one-year performance period that vested ratably over a subsequent two-year period (subject to continued employment or as otherwise provided in the underlying award agreement).

Inducement and retention program: From time to time, the Company issues stock awards and other long-term incentive awards in conjunction with employment offers to select new employees and retention grants to select existing employees. The Company issues these awards to attract and retain talent and to provide market competitive compensation. The grants have various vesting terms, including fully-vested awards at the grant date, cliff-vesting, and graded-vesting over periods of up to five years (subject to continued employment or as otherwise provided in the underlying award agreements).

Non-employee director compensation program: The Company awards its non-employee directors a cash retainer and shares of restricted common stock. The RSAs are granted on the fifth business day following the Company’s annual meeting of stockholders and fully vest upon the earlier of the first anniversary of the grant date or the completion of the directors’ annual service to the Company (so long as the period between the date of the annual stockholders’ meeting related to the grant date and the date of the next annual stockholders’ meeting is not less than 50 weeks).

The following are the terms and amounts of the awards issued under the Company’s share-based incentive programs:

Non-qualified stock options: The exercise price of all stock options is equal to the Company’s closing stock price on the date of grant. Stock options are subject to various vesting terms, including graded- and cliff-vesting over periods of up to five years. In addition, stock options vest and become exercisable in full or in part under certain circumstances, including following the occurrence of a change of control (as defined in the option award agreements). Participants who are awarded options must exercise their options within a maximum of ten years of the grant date.

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The following table summarizes the stock option activity for the six months ended June 30, 2025:


Dollars and shares in thousands, except per share amounts	Number of Shares			Weighted-Average Exercise Price Per Share		Weighted-Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Options outstanding at beginning of period		444		$	23.65
Granted		—			—
Exercised		(23	)		18.13
Forfeited		—			—
Expired		—			—
Options outstanding at end of period		421		$	23.94		4.1	$	2,383
Options exercisable at end of period		421		$	23.94		4.1	$	2,383

The following table provides additional stock option information for the periods indicated:


	Three Months Ended June 30,				Six Months Ended June 30,
Dollars in thousands, except per share amounts	2025		2024		2025		2024
Weighted-average grant date fair value per share	$	—	$	—	$	—	$	—
Intrinsic value of options exercised	$	—	$	—	$	401	$	—
Fair value of stock options that vested	$	—	$	—	$	—	$	—

Performance restricted stock units: Compensation expense for PRSUs is based on the fair value of the award estimated on the grant date using the Monte Carlo valuation model. The following are the weighted-average assumptions for the PRSU grants for the periods indicated:


	Six Months Ended June 30,
	2025			2024
Expected volatility		42.0	%		42.5	%
Expected dividends		—			2.3	%
Risk-free rate		4.0	%		5.2	%
Discount for post-vesting restrictions		11.8	%		9.2	%

The following table summarizes PRSU activity for the six months ended June 30, 2025:


Dollars and units in thousands, except per unit amounts	Units			Weighted-Average Grant Date Fair Value Per Unit
Non-vested units at beginning of period		311		$	33.93
Granted		135			25.90
Achieved performance adjustment		(24	)		52.07
Vested		(43	)		52.07
Forfeited		—			—
Non-vested units at end of period		379		$	27.86

The following table provides additional PRSU information for the periods indicated:


	Three Months Ended June 30,				Six Months Ended June 30,
Dollars in thousands, except per unit amounts	2025		2024		2025		2024
Weighted-average grant date fair value per unit	$	—	$	26.21	$	25.90	$	26.21
Fair value of PRSUs that vested	$	—	$	—	$	2,237	$	—

Performance-contingent restricted stock units: Compensation expense for performance-contingent RSUs was based on the Company’s closing stock price on the date of grant and the probability that certain financial goals would be achieved over the performance period. Compensation expense was estimated based on expected performance and was adjusted at each reporting period.

There was no performance-contingent RSU balance or activity for the six months ended June 30, 2025.

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The following table provides additional performance-contingent RSU information for the periods indicated:


	Three Months Ended June 30,				Six Months Ended June 30,
Dollars in thousands, except per unit amounts	2025		2024		2025		2024
Weighted-average grant date fair value per unit	$	—	$	—	$	—	$	—
Fair value of RSUs that vested	$	—	$	1,371	$	—	$	1,371

Restricted stock units: The fair value and compensation expense of the primary portion of the Company’s service-based RSUs are calculated using the Company’s closing stock price on the date of grant. These RSUs include RSUs granted pursuant to the Company’s LTIP.

The following table summarizes service-based RSU activity for the six months ended June 30, 2025:


Dollars and units in thousands, except per unit amounts	Units		Weighted-Average Grant Date Fair Value Per Unit
Non-vested units at beginning of period		35	$	28.20
Granted		51		29.74
Vested		—		—
Forfeited		—		—
Non-vested units at end of period		86	$	29.10

The following table provides additional service-based RSU information for the periods indicated:


	Three Months Ended June 30,				Six Months Ended June 30,
Dollars in thousands, except per unit amounts	2025		2024		2025		2024
Weighted-average grant date fair value per unit	$	—	$	28.20	$	29.74	$	28.20
Fair value of RSUs that vested	$	—	$	—	$	—	$	—

Restricted stock awards: The fair value and compensation expense of the primary portion of the Company’s RSAs are calculated using the Company’s closing stock price on the date of grant. These RSAs include director awards, inducement awards, RSAs granted pursuant to the Company’s LTIP, and, beginning in 2024, RSAs granted pursuant to the Company’s KTIP.

Prior to 2024, the Company’s KTIP was administered as a performance-based program. The fair value and compensation expense of RSAs granted pursuant to the Company’s performance-based KTIP was calculated using the Company’s closing stock price on the date of grant and the probability that certain financial goals would be achieved over the performance period. Compensation expense was estimated based on expected performance and was adjusted at each reporting period.

The following table summarizes RSA activity for the six months ended June 30, 2025:


Dollars and shares in thousands, except per share amounts	Shares			Weighted-Average Grant Date Fair Value Per Share
Non-vested shares at beginning of period		334		$	28.80
Granted		258			29.22
Vested		(37	)		27.24
Forfeited		(6	)		29.02
Non-vested shares at end of period		549		$	29.10

The following table provides additional RSA information for the periods indicated:


	Three Months Ended June 30,				Six Months Ended June 30,
Dollars in thousands, except per share amounts	2025		2024		2025		2024
Weighted-average grant date fair value per share	$	26.52	$	28.04	$	29.22	$	28.51
Fair value of RSAs that vested	$	981	$	932	$	999	$	990

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Note 12. Commitments and Contingencies

In the normal course of business, the Company has been named as a defendant in legal actions in connection with its activities. Some of the actual or threatened legal actions include claims for compensatory damages or claims for indeterminate amounts of damages. The Company contests liability and the amount of damages, as appropriate, in each pending matter.

Where available information indicates that it is probable that a liability has been incurred and the Company can reasonably estimate the amount of that loss, the Company accrues the estimated loss by a charge to net income.

However, in many legal actions, it is inherently difficult to determine whether any loss is probable, or even reasonably possible, or to estimate the amount of loss. This is particularly true for actions that are in their early stages of development or where plaintiffs seek indeterminate damages. In addition, even where a loss is reasonably possible or an exposure to loss exists in excess of the liability already accrued, it is not always possible to reasonably estimate the size of the possible loss or range of loss. Before a loss, additional loss, range of loss, or range of additional loss can be reasonably estimated for any given action, numerous issues may need to be resolved, including through lengthy discovery, following determination of important factual matters, and/or by addressing novel or unsettled legal questions.

For certain other legal actions, the Company can estimate reasonably possible losses, additional losses, ranges of loss, or ranges of additional loss in excess of amounts accrued, but the Company does not believe, based on current knowledge and after consultation with counsel, that such losses will have a material adverse effect on the consolidated financial statements.

While the Company will continue to identify legal actions where it believes a material loss to be reasonably possible and reasonably estimable, there can be no assurance that material losses will not be incurred from claims that the Company has not yet been notified of or are not yet determined to be probable, or reasonably possible and reasonable to estimate.

The Company expenses legal costs as they are incurred.

Note 13. Segment Reporting

The Company has one reportable segment: consumer finance. Consolidated net income is the measure used by the CODM in evaluating the segment profit or loss of the Company. The CODM either reviews or is otherwise regularly provided with amounts for the following measures in the Company’s financial results for the periods indicated:


	Three Months Ended June 30,				Six Months Ended June 30,
Dollars in thousands	2025		2024		2025		2024
Interest income	$	130,244	$	118,658	$	257,013	$	238,554
Fee income		10,451		9,240		20,235		18,162
Insurance income, net		11,499		10,507		22,796		21,481
Other income		5,248		4,620		10,365		9,136
Provision for credit losses		60,587		53,802		118,579		100,225
Share-based compensation expense		2,798		3,268		6,299		5,100
Depreciation and amortization expense		2,397		2,287		4,697		4,533
Interest expense		20,426		17,865		40,197		35,369
Income tax expense		3,344		2,777		5,498		7,505

As part of the CODM’s review and evaluation process for allocating resources, the CODM is provided with consolidated expenses and total assets as noted on the face of the Company’s Consolidated Statements of Comprehensive Income and Consolidated Balance Sheets, respectively.

The Company’s balance sheet expenditures for long-lived assets either reviewed by the CODM or otherwise regularly provided to the CODM are included in the Company’s Consolidated Statements of Cash Flows. These expenditures are represented as “Purchases of intangible assets,” “Purchases of property and equipment,” and “Operating leases paid” within the referenced statements.

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Note 14. Subsequent Events

Quarterly cash dividend: In July 2025, the Company announced that the Board declared a quarterly cash dividend of $0.30 per share. The dividend will be paid on September 10, 2025 to shareholders of record at the close of business on August 20, 2025. The declaration, amount, and payment of any future cash dividends on shares of the Company’s common stock will be at the discretion of the Board.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion and analysis should be read in conjunction with, and is qualified in its entirety by reference to, our unaudited consolidated financial statements and the related notes that appear elsewhere in this Quarterly Report on Form 10-Q. These discussions contain forward-looking statements that reflect our current expectations and that include, but are not limited to, statements concerning our strategies, future operations, future financial position, future revenues, projected costs, expectations regarding demand and acceptance for our financial products, growth opportunities and trends in the market in which we operate, prospects, and plans and objectives of management. The words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “predicts,” “will,” “would,” “should,” “could,” “potential,” “continue,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements involve risks and uncertainties that could cause actual results, events, and/or performance to differ materially from the plans, intentions, and expectations disclosed in the forward-looking statements. Such risks and uncertainties include, without limitation, the risks set forth in our filings with the SEC, including our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (which was filed with the SEC on February 21, 2025), our Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2025 (which was filed with the SEC on May 2, 2025), and this Quarterly Report on Form 10-Q. The forward-looking information we have provided in this Quarterly Report on Form 10-Q pursuant to the safe harbor established under the Private Securities Litigation Reform Act of 1995 should be evaluated in the context of these factors. Forward-looking statements speak only as of the date they were made, and we undertake no obligation to update or revise such statements, except as required by the federal securities laws.

Overview

We are a diversified consumer finance company that provides installment loan products primarily to customers with limited access to consumer credit from banks, thrifts, credit card companies, and other lenders. As of June 30, 2025, we operate under the name “Regional Finance” online and in 352 branch locations in 19 states across the United States, serving 579,100 active accounts. Most of our loan products are secured, and each is structured on a fixed-rate, fixed-term basis with fully amortizing equal monthly installment payments, repayable at any time without penalty. We source our loans through our omni-channel platform, which includes our branches, centrally-managed direct mail campaigns, digital partners, and our consumer website. We operate an integrated branch model in which nearly all loans, regardless of origination channel, are serviced through our branch network with the support of centralized sales, underwriting, service, collections, and administrative teams. This model provides us with frequent contact with our customers, which we believe improves our credit performance and customer loyalty. Our goal is to consistently grow our finance receivables and to soundly manage our portfolio risk, while providing our customers with attractive and easy-to-understand loan products that serve their varied financial needs.

Our products include:

•

Large Loans (>$2,500) – As of June 30, 2025, we had 268.5 thousand large installment loans outstanding, representing $1.4 billion in net finance receivables. This included 72.8 thousand large loan convenience checks, representing $209.6 million in net finance receivables.

•

Small Loans (≤$2,500) – As of June 30, 2025, we had 310.7 thousand small installment loans outstanding, representing $547.0 million in net finance receivables. This included 167.1 thousand small loan convenience checks, representing $259.9 million in net finance receivables.

•

Optional Insurance Products – We offer optional payment and collateral protection insurance to our direct loan customers.

Large and small installment loans are our core products and will be the drivers of future growth. Our primary sources of revenue are interest and fee income from our loan products, of which interest and fees relating to large and small installment loans are the largest component. In addition to interest and fee income from loans, we earn revenue from optional insurance products purchased by customers of our direct loan products.

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Outlook

We continually assess the macroeconomic environment in which we operate in order to adapt appropriately and timely to current market conditions. Macroeconomic factors, including, but not limited to, inflationary pressures, higher interest rates, tariffs, and impacts from current geopolitical events outside the U.S., may affect our business, liquidity, financial condition, and results of operations.

We continue to execute our barbell strategy of growth in our higher-margin loan portfolio while balancing the associated risk with growth in our high-quality, auto-secured loan portfolio. Our portfolio of loans with an annual percentage rate greater than 36% grew by $49.8 million to 18.1% of the portfolio, while our auto-secured loan portfolio grew by $66.2 million to 12.5% of the portfolio.

Our allowance for credit losses was 10.3% of net finance receivables as of June 30, 2025. Going forward, macroeconomic conditions may necessitate changes to the macroeconomic assumptions within our forecast and to our credit loss performance outlook, either of which could lead to further changes in our allowance for credit losses, reserve rate, and provision for credit losses expense.

We have proactively diversified our funding over the past few years and continue to maintain a strong liquidity profile. As of June 30, 2025, we had $121.6 million of available liquidity, comprised of unrestricted cash on hand and immediate availability to draw down cash from our revolving credit facilities. In addition, we had $533.8 million of unused capacity on our revolving credit facilities (subject to the borrowing base) as of June 30, 2025. We believe our liquidity position provides substantial runway to support the fundamental operations of our business and to fund future growth.

Factors Affecting Our Results of Operations

Our business is impacted by several factors affecting our revenues, costs, and results of operations, including the following:

Quarterly Information and Seasonality. Our loan volume and contractual delinquency follow seasonal trends. Demand for our loans is typically highest during the second, third, and fourth quarters, which we believe is largely due to customers borrowing money for vacation, back-to-school, and holiday spending. Loan demand has generally been the lowest during the first quarter, which we believe is largely due to the timing of income tax refunds. Delinquencies generally reach their lowest point in the first half of the year and rise in the second half of the year. Changes in quarterly growth or liquidation could result in larger allowance for credit loss releases in periods of portfolio liquidation and larger provisions for credit losses in periods of portfolio growth. Consequently, we experience seasonal fluctuations in our operating results. However, changes in macroeconomic factors, including inflation, higher interest rates, and geopolitical conflict, have impacted our typical seasonal trends for loan volume and delinquency.

Growth in Loan Portfolio. The revenue that we generate from interest and fees is largely driven by the balance of loans that we originate. We source our loans through our branches, centrally-managed direct mail program, digital partners, and our consumer website. The majority of our loans, regardless of origination channel, are serviced through our branches. Increasing the number of loans per branch and growing our state footprint allows us to increase the number of customers we are able to serve. We continue to assess our branch network for clear opportunities to add branches in new and existing states where it is favorable for us to conduct business or consolidate operations into larger branches within close geographic proximity. This branch optimization is consistent with our omni-channel strategy and builds upon our recent successes in entering new states with a lighter branch footprint, while still providing customers with best-in-class service. As we consider our growth rate, we not only consider the health of the consumer, the strength of the economy, and the credit performance of our portfolio, but we also balance our commitment to deliver strong short-term results for investors while also generating the portfolio growth that will fuel our success and returns over the long-term. As we grow our portfolio, we are required to reserve for expected lifetime credit losses at the origination of each loan, which reduces net income. The related revenue benefits are recognized over the life of each loan.

Product Mix. We are exposed to different credit risks and charge different interest rates and fees with respect to the various types of loans we offer. Our product mix also varies to some extent by state, and we may further diversify our product mix in the future. The interest rates and fees vary from state to state, depending on the competitive environment and relevant laws and regulations.

Asset Quality and Allowance for Credit Losses. Our results of operations are highly dependent upon the credit quality of our loan portfolio. The credit quality of our loan portfolio is the result of our ability to enforce sound underwriting standards, maintain diligent servicing of the portfolio, and respond to changing economic conditions as we grow our loan portfolio.

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The primary underlying factors driving the provision for credit losses for each loan type are our underwriting standards, delinquency trends, the general economic conditions in the areas in which we conduct business, loan portfolio growth, and the effectiveness of our servicing and collection efforts. We monitor these factors, and the amount and past due status of all loans, to identify trends that might require us to modify the allowance for credit losses.

Interest Rates. Our costs of funds are affected by changes in interest rates, as the interest rates that we pay on certain of our credit facilities are variable. As a component of our strategy to manage the interest rate risk associated with future interest payments on our variable-rate debt, a majority of our funding was held at a fixed rate as of June 30, 2025, representing 84% of our total debt.

Operating Costs. Our financial results are impacted by the costs of operations and head office functions. Those costs are included in general and administrative expenses within our consolidated statements of comprehensive income.

Components of Results of Operations

Interest and Fee Income. Our interest and fee income consists primarily of interest earned on outstanding loans. Accrual of interest income on finance receivables is suspended when an account becomes 90 days delinquent. If the account is charged off, the accrued interest income is reversed as a reduction of interest and fee income.

Most states allow certain fees in connection with lending activities, such as loan origination fees, acquisition fees, and maintenance fees. Some states allow for higher fees while keeping interest rates lower. Loan fees are additional charges to the customer and generally are included in the annual percentage rate shown in the Truth in Lending disclosure that we make to our customers. The fees may or may not be refundable to the customer in the event of an early payoff, depending on state law. Fees are recognized as income over the life of the loan on the constant yield method.

Insurance Income, Net. Our insurance operations are a material part of our overall business and are integral to our lending activities. Insurance income, net consists primarily of earned premiums, net of certain direct costs, from the sale of various optional payment and collateral protection insurance products offered to customers who obtain loans directly from us. Insurance income, net also includes the earned premiums and direct costs associated with the non-file insurance that we purchase to protect us from credit losses where, following an event of default, we are unable to take possession of personal property collateral because our security interest is not perfected. We do not sell insurance to non-borrowers. Direct costs included in insurance income, net are claims paid, claims reserves, ceding fees, and premium taxes paid. We do not allocate to insurance income, net, any other head office or branch administrative costs associated with management of insurance operations, management of our captive insurance company, marketing and selling insurance products, legal and compliance review, or internal audits.

Other Income. Our other income consists of late charges assessed on customers who fail to make a payment within a specified number of days following the due date of the payment, interest income from restricted cash, commissions earned from the sale of club membership products, and investment income from restricted AFS securities.

Provision for Credit Losses. Provisions for credit losses are charged to income in amounts that we estimate as sufficient to maintain an allowance for credit losses at an adequate level to provide for lifetime expected credit losses on the related finance receivable portfolio. We reserve for expected lifetime credit losses at origination of each loan, while the revenue benefits are recognized over the life of the loan. Credit loss experience, current conditions, reasonable and supportable economic forecasts, delinquency of finance receivables, loan portfolio growth, the value of underlying collateral, and management’s judgment are factors used in assessing the overall adequacy of the allowance and the resulting provision for credit losses. Substantial adjustments to the allowance may be necessary if there are significant changes in forecasted economic conditions or loan portfolio performance.

General and Administrative Expenses. Our financial results are impacted by the costs of operations and head office functions. Those costs are included in general and administrative expenses within our consolidated statements of comprehensive income. Our general and administrative expenses are comprised of four categories: personnel, occupancy, marketing, and other.

Our personnel expenses are the largest component of our general and administrative expenses and consist primarily of the salaries and wages, overtime, contract labor, relocation costs, incentives, benefits, and related payroll taxes associated with all of our operations and head office employees.

Our occupancy expenses consist primarily of the cost of renting our facilities, all of which are leased, and the utility, depreciation of leasehold improvements and furniture and fixtures, communication services, data processing, and other non-personnel costs associated with operating our business.

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Our marketing expenses consist primarily of costs associated with our direct mail campaigns (including postage and costs associated with selecting recipients), digital marketing, maintaining our consumer website, and local marketing by branches. These costs are expensed as incurred.

Other expenses consist primarily of legal, compliance, audit, and consulting costs, as well as software maintenance and support, non-employee director compensation, electronic payment processing costs, bank service charges, office supplies, credit bureau charges, and the amortization of software, software licenses, and implementation costs. We frequently experience fluctuations in other expenses as we grow our loan portfolio and expand our market footprint.

For a discussion regarding how risks and uncertainties associated with the current regulatory environment may impact our future expenses, net income, and overall financial condition, see Part II, Item 1A, “Risk Factors.”

Interest Expense. Our interest expense consists primarily of paid and accrued interest for debt, unused line fees, and amortization of debt issuance costs on debt.

Income Taxes. Income taxes consist of state and federal income taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The change in deferred tax assets and liabilities is recognized in the period in which the change occurs, and the effects of future tax rate changes are recognized in the period in which the enactment of new rates occurs.

Results of Operations

The following table summarizes our results of operations, both in dollars and as a percentage of average net finance receivables (annualized):


	2Q 25					2Q 24					YTD 25					YTD 24
Dollars in thousands	Amount		% of Average Net Finance Receivables			Amount		% of Average Net Finance Receivables			Amount		% of Average Net Finance Receivables			Amount		% of Average Net Finance Receivables
Revenue
Interest and fee income	$	140,695		29.4	%	$	127,898		29.3	%	$	277,248		29.2	%	$	256,716		29.3	%
Insurance income, net		11,499		2.4	%		10,507		2.4	%		22,796		2.4	%		21,481		2.4	%
Other income		5,248		1.1	%		4,620		1.0	%		10,365		1.1	%		9,136		1.1	%
Total revenue		157,442		32.9	%		143,025		32.7	%		310,409		32.7	%		287,333		32.8	%
Expenses
Provision for credit losses		60,587		12.7	%		53,802		12.3	%		118,579		12.5	%		100,225		11.4	%

Personnel		38,584		8.1	%		37,097		8.5	%		79,726		8.4	%		74,917		8.5	%
Occupancy		6,911		1.4	%		6,149		1.4	%		13,817		1.5	%		12,524		1.4	%
Marketing		5,059		1.1	%		4,836		1.1	%		10,465		1.1	%		9,151		1.0	%
Other		12,391		2.6	%		12,054		2.8	%		24,980		2.6	%		23,992		2.9	%
Total general and administrative		62,945		13.2	%		60,136		13.8	%		128,988		13.6	%		120,584		13.8	%

Interest expense		20,426		4.2	%		17,865		4.0	%		40,197		4.2	%		35,369		4.0	%
Income before income taxes		13,484		2.8	%		11,222		2.6	%		22,645		2.4	%		31,155		3.6	%
Income taxes		3,344		0.7	%		2,777		0.7	%		5,498		0.6	%		7,505		0.9	%
Net income	$	10,140		2.1	%	$	8,445		1.9	%	$	17,147		1.8	%	$	23,650		2.7	%

Information explaining the changes in our results of operations from year-to-year is provided in the following pages.

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The following tables summarize the quarterly trends of our financial results:


	Income Statement Quarterly Trend
In thousands, except per share amounts	2Q 24			3Q 24			4Q 24			1Q 25			2Q 25			QoQ $ B(W)			YoY $ B(W)
Revenue
Interest and fee income	$	127,898		$	133,932		$	138,246		$	136,553		$	140,695		$	4,142		$	12,797
Insurance income, net		10,507			7,422			11,792			11,297			11,499			202			992
Other income		4,620			4,984			4,794			5,117			5,248			131			628
Total revenue		143,025			146,338			154,832			152,967			157,442			4,475			14,417
Expenses
Provision for credit losses		53,802			54,349			57,626			57,992			60,587			(2,595	)		(6,785	)

Personnel		37,097			38,323			40,549			41,142			38,584			2,558			(1,487	)
Occupancy		6,149			6,551			6,748			6,906			6,911			(5	)		(762	)
Marketing		4,836			5,078			4,777			5,406			5,059			347			(223	)
Other		12,054			12,516			12,572			12,589			12,391			198			(337	)
Total general and administrative		60,136			62,468			64,646			66,043			62,945			3,098			(2,809	)

Interest expense		17,865			19,356			19,805			19,771			20,426			(655	)		(2,561	)
Income before income taxes		11,222			10,165			12,755			9,161			13,484			4,323			2,262
Income taxes		2,777			2,502			2,841			2,154			3,344			(1,190	)		(567	)
Net income	$	8,445		$	7,663		$	9,914		$	7,007		$	10,140		$	3,133		$	1,695
Net income per common share:
Basic	$	0.88		$	0.79		$	1.02		$	0.73		$	1.07		$	0.34		$	0.19
Diluted	$	0.86		$	0.76		$	0.98		$	0.70		$	1.03		$	0.33		$	0.17
Weighted-average shares outstanding:
Basic		9,613			9,683			9,691			9,610			9,504			106			109
Diluted		9,863			10,090			10,128			10,025			9,843			182			20

	Balance Sheet & Other Key Metrics Quarterly Trends
	2Q 24			3Q 24			4Q 24			1Q 25			2Q 25			QoQ $ Inc (Dec)			YoY $ Inc (Dec)
Total assets	$	1,789,052		$	1,821,831		$	1,909,109		$	1,900,683		$	1,967,131		$	66,448		$	178,079
Net finance receivables	$	1,773,743		$	1,819,756		$	1,892,535		$	1,890,351		$	1,960,364		$	70,013		$	186,621
Allowance for credit losses	$	185,400		$	192,100		$	199,500		$	199,100		$	202,800		$	3,700		$	17,400
Debt	$	1,378,449		$	1,395,892		$	1,478,336		$	1,477,860		$	1,509,133		$	31,273		$	130,684
Interest and fee yield (annualized)		29.3	%		29.9	%		29.8	%		28.9	%		29.4	%		0.5	%		0.1	%
Efficiency ratio		42.0	%		42.7	%		41.8	%		43.2	%		40.0	%		(3.2	)%		(2.0	)%
Operating expense ratio		13.8	%		13.9	%		14.0	%		14.0	%		13.2	%		(0.8	)%		(0.6	)%
Delinquency rate		6.9	%		6.9	%		7.7	%		7.1	%		6.6	%		(0.5	)%		(0.3	)%
Net credit loss rate		12.7	%		10.6	%		10.8	%		12.4	%		11.9	%		(0.5	)%		(0.8	)%
Book value per share	$	33.96		$	34.72		$	35.67		$	35.48		$	36.43		$	0.95		$	2.47

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Comparison of June 30, 2025, versus June 30, 2024

The following discussion and table describe the changes in finance receivables by product type:

•

Large Loans (>$2,500) – Large loans outstanding increased by $147.3 million, or 11.6%, to over $1.4 billion as of the period ending June 30, 2025, compared to the period ended June 30, 2024. The increase was due to growth in our auto-secured loan portfolio, the growth of receivables in branches opened during 2024 and 2025, and the transition of small loan customers to large loans.

•

Small Loans (≤$2,500) – Small loans outstanding increased by $39.3 million, or 7.7%, to $547.0 million at June 30, 2025, from $507.7 million at June 30, 2024. The increase was due to marketing, growth in our higher-margin loan portfolio, and growth of receivables in branches opened during 2024 and 2025, partially offset by the transition of small loan customers to large loans.


	Net Finance Receivables by Product
Dollars in thousands	2Q 25		2Q 24		YoY $ Inc (Dec)		YoY % Inc (Dec)
Large loans	$	1,413,367	$	1,266,032	$	147,335		11.6	%
Small loans		546,997		507,711		39,286		7.7	%
Total	$	1,960,364	$	1,773,743	$	186,621		10.5	%
Number of branches		352		343		9		2.6	%
Net finance receivables per branch	$	5,569	$	5,171	$	398		7.7	%

Comparison of the Three Months Ended June 30, 2025, versus the Three Months Ended June 30, 2024

Net Income. Net income increased $1.7 million, or 20.1%, to $10.1 million during the three months ended June 30, 2025, from $8.4 million during the prior-year period. The change in net income is explained in greater detail below.

Revenue. Total revenue increased $14.4 million, or 10.1%, to $157.4 million during the three months ended June 30, 2025, from $143.0 million during the prior-year period. The components of revenue are explained in greater detail below.

Interest and Fee Income. Interest and fee income increased $12.8 million, or 10.0%, to $140.7 million during the three months ended June 30, 2025, from $127.9 million during the prior-year period. The increase was primarily due to a 9.4% increase in average net finance receivables and a 0.1% increase in annualized average yield. The increase in yield was primarily due to improved credit performance.

The following table sets forth the average net finance receivables balance and average yield for our loan products:


	Average Net Finance Receivables for the Three Months Ended							Average Yields for the Three Months Ended (1)
Dollars in thousands	2Q 25		2Q 24		YoY % Inc (Dec)			2Q 25			2Q 24			YoY Inc (Dec)
Large loans	$	1,372,783	$	1,255,729		9.3	%		26.6	%		26.1	%		0.5	%
Small loans		540,106		493,048		9.5	%		36.5	%		37.2	%		(0.7	)%
Total	$	1,912,889	$	1,748,777		9.4	%		29.4	%		29.3	%		0.1	%

(1) Annualized interest and fee income as a percentage of average net finance receivables.

Total originations increased to $510.3 million during the three months ended June 30, 2025, from $426.1 million during the prior-year period. The following table represents the principal balance of loans originated and refinanced:


	Loans Originated for the Three Months Ended
Dollars in thousands	2Q 25		2Q 24		YoY $ Inc (Dec)		YoY % Inc (Dec)
Large loans	$	336,473	$	254,779	$	81,694		32.1	%
Small loans		173,856		171,282		2,574		1.5	%
Total	$	510,329	$	426,061	$	84,268		19.8	%

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The following table summarizes the components of the increase in interest and fee income:


	Components of Increase in Interest and Fee Income 2Q 25 Compared to 2Q 24 Increase (Decrease)
Dollars in thousands	Volume			Rate			Volume & Rate			Net
Large loans	$	7,644		$	1,654		$	154		$	9,452
Small loans		4,380			(945	)		(90	)		3,345
Product mix		(22	)		17			5			—
Total	$	12,002		$	726		$	69		$	12,797

Insurance Income, Net. Insurance income, net increased $1.0 million, or 9.4% to $11.5 million during the three months ended June 30, 2025, from $10.5 million during the prior-year period. During both the three months ended June 30, 2025 and 2024, personal property insurance premiums represented the largest component of aggregate earned insurance premiums. During both the three months ended June 30, 2025 and 2024, life insurance claims expense represented the largest component of direct insurance expenses.

The following table summarizes the components of insurance income, net:


	Insurance Premiums and Direct Expenses for the Three Months Ended
Dollars in thousands	2Q 25			2Q 24			YoY $ B(W)		YoY % B(W)
Earned premiums	$	14,278		$	13,901		$	377		2.7	%
Claims, reserves, and certain direct expenses		(2,779	)		(3,394	)		615		18.1	%
Insurance income, net	$	11,499		$	10,507		$	992		9.4	%

Earned premiums increased by $0.4 million, and claims, reserves, and certain direct expenses decreased by $0.6 million, in each case compared to the prior-year period. The increase in insurance premiums was primarily due to an increase in personal property insurance premiums. The decrease in claims, reserves, and direct expenses was primarily due to a release in personal property insurance reserves related to hurricane activity in the prior-year.

Other Income. Other income increased $0.6 million, or 13.6%, to $5.2 million during the three months ended June 30, 2025, from $4.6 million during the prior-year period, primarily due to an increase in sales of our club membership products of $0.6 million.

Provision for Credit Losses. Our provision for credit losses increased $6.8 million, or 12.6%, to $60.6 million during the three months ended June 30, 2025, from $53.8 million during the prior-year period. The increase was due to an increase in net credit losses of $1.4 million and the change in provision expense of $5.4 million, in each case compared to the prior-year period. The increase in the provision for credit losses is explained in greater detail below.

Allowance for Credit Losses. We evaluate delinquency and losses in each of our loan products in establishing the allowance for credit losses. During the three months ended June 30, 2025 and 2024, the allowance for credit losses included a build of $3.7 million and a release of $1.7 million, respectively. The allowance for credit losses as a percentage of net finance receivables decreased to 10.3% as of June 30, 2025, from 10.5% as of June 30, 2024 from a release of remaining hurricane reserves as related losses impacted net credit losses in the current quarter.

Net Credit Losses. Net credit losses increased $1.4 million, or 2.5%, to $56.9 million during the three months ended June 30, 2025, from $55.5 million during the prior-year period. The net credit loss rate was 11.9% during the three months ended June 30, 2025, compared to 12.7% during the prior-year period. This 80 basis point improvement was due to credit tightening and effective portfolio management.

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Delinquency Performance. Our delinquency rate improved to 6.6% as of June 30, 2025, from 6.9% during the prior-year period, reflecting the overall improved credit quality and performance of our portfolio.

The following tables include delinquency balances by aging category and by product:


	Contractual Delinquency by Aging
Dollars in thousands	2Q 25				2Q 24
Current	$	1,672,027	85.3	%	$	1,497,219	84.4	%
1 to 29 days past due		158,951	8.1	%		153,788	8.7	%
Delinquent accounts:
30 to 59 days		35,362	1.8	%		34,924	1.9	%
60 to 89 days		28,949	1.5	%		27,689	1.6	%
90 to 119 days		22,348	1.1	%		21,607	1.2	%
120 to 149 days		21,625	1.1	%		19,333	1.1	%
150 to 179 days		21,102	1.1	%		19,183	1.1	%
Total delinquency	$	129,386	6.6	%	$	122,736	6.9	%
Total net finance receivables	$	1,960,364	100.0	%	$	1,773,743	100.0	%


	Contractual Delinquency by Product
Dollars in thousands	2Q 25				2Q 24
Large loans	$	76,690	5.4	%	$	76,432	6.0	%
Small loans		52,696	9.6	%		46,304	9.1	%
Total	$	129,386	6.6	%	$	122,736	6.9	%

General and Administrative Expenses. Our general and administrative expenses increased $2.8 million, or 4.7%, to $62.9 million during the three months ended June 30, 2025, from $60.1 million during the prior-year period. The absolute dollar increase in general and administrative expenses is explained in greater detail below.

Personnel. The largest component of general and administrative expenses was personnel expense, which increased $1.5 million, or 4.0%, to $38.6 million during the three months ended June 30, 2025, from $37.1 million during the prior-year period. The increase was driven by increased labor costs of $2.2 million to support growth, including staffing 17 new branches since the prior-year period. This increase was partially offset by higher capitalized loan origination costs, which reduce personnel expenses, of $0.7 million.

Occupancy. Occupancy expenses increased $0.8 million, or 12.4%, to $6.9 million during the three months ended June 30, 2025, from $6.1 million during the prior-year period primarily due to increased rent expense of $0.6 million, inclusive of expenses associated with opening 17 new branches since the prior-year period.

Marketing. Marketing expenses increased $0.2 million, or 4.6%, to $5.1 million during the three months ended June 30, 2025, from $4.8 million during the prior-year period due to increased digital marketing and direct mail activity of $0.2 million to support growth in our legacy and new branch markets.

Other Expenses. Other expenses increased $0.3 million, or 2.8%, to $12.4 million during the three months ended June 30, 2025, from $12.1 million during the prior-year period. We often experience increases in other expenses including legal expenses, bank fees, and certain professional expenses as we grow our loan portfolio and expand our market footprint.

Operating Expense Ratio. Our operating expense ratio decreased by 0.6% to 13.2% during the three months ended June 30, 2025, from 13.8% during the prior-year period.

Interest Expense. Interest expense increased $2.6 million, or 14.3%, to $20.4 million during the three months ended June 30, 2025, from $17.9 million during the prior-year period. The increase was primarily due to an increase in our cost of funds as well as an increase in the average balance of our debt facilities. Our cost of funds increased 0.2% to 4.2% during the three months ended June 30, 2025, from 4.0% during the prior-year period. The average balance of our debt facilities increased to $1.5 billion during the three months ended June 30, 2025, from $1.4 billion during the prior-year period.

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Income Taxes. Income taxes increased $0.6 million, or 20.4%, to $3.3 million during the three months ended June 30, 2025, from $2.8 million during the prior-year period. The increase was primarily due to a $2.3 million increase in income before income taxes compared to the prior-year period. Our effective tax rates were 24.8% and 24.7% for the three months ended June 30, 2025 and 2024, respectively.

Comparison of the Six Months Ended June 30, 2025, versus the Six Months Ended June 30, 2024

Net Income. Net income decreased $6.5 million, or 27.5%, to $17.1 million during the six months ended June 30, 2025, from $23.7 million during the prior-year period. The change in net income is explained in greater detail below.

Revenue. Total revenue increased $23.1 million, or 8.0%, to $310.4 million during the six months ended June 30, 2025, from $287.3 million during the prior-year period. The components of revenue are explained in greater detail below.

Interest and Fee Income. Interest and fee income increased $20.5 million, or 8.0%, to $277.2 million during the six months ended June 30, 2025, from $256.7 million during the prior-year period. The increase was primarily due to an 8.4% increase in average net finance receivables. Annualized average yield decreased by 0.1% primarily due to the estimated 30 basis point benefit in the prior-year period related to the fourth quarter 2023 loan sale, partially offset by improved credit performance. The six months ended June 30, 2024 included reductions in revenue reversals of an estimated $1.7 million attributable to the fourth quarter 2023 loan sale.

The following table sets forth the average net finance receivables balance and average yield for our loan products:


	Average Net Finance Receivables for the Six Months Ended							Average Yields for the Six Months Ended (1)
Dollars in thousands	YTD 25		YTD 24		YoY % Inc (Dec)			YTD 25			YTD 24			YoY Inc (Dec)
Large loans	$	1,356,543	$	1,259,611		7.7	%		26.4	%		26.1	%		0.3	%
Small loans		544,520		494,149		10.2	%		36.2	%		37.5	%		(1.3	)%
Total	$	1,901,063	$	1,753,760		8.4	%		29.2	%		29.3	%		(0.1	)%

(1) Annualized interest and fee income as a percentage of average net finance receivables.

Total originations increased to $902.4 million during the six months ended June 30, 2025, from $752.4 million during the prior-year period. The following table represents the principal balance of loans originated and refinanced:


	Loans Originated for the Six Months Ended
Dollars in thousands	YTD 25		YTD 24		YoY $ Inc (Dec)		YoY % Inc (Dec)
Large loans	$	578,282	$	439,853	$	138,429		31.5	%
Small loans		324,167		312,563		11,604		3.7	%
Total	$	902,449	$	752,416	$	150,033		19.9	%

The following table summarizes the components of the increase in interest and fee income:


	Components of Increase in Interest and Fee Income YTD 25 Compared to YTD 24 Increase (Decrease)
Dollars in thousands	Volume			Rate			Volume & Rate			Net
Large loans	$	12,633		$	1,864		$	143		$	14,640
Small loans		9,435			(3,215	)		(328	)		5,892
Product mix		(506	)		401			105			—
Total	$	21,562		$	(950	)	$	(80	)	$	20,532

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Insurance Income, Net. Insurance income, net increased $1.3 million, or 6.1% to $22.8 million during the six months ended June 30, 2025, from $21.5 million during the prior-year period. During both the six months ended June 30, 2025 and 2024, personal property insurance premiums represented the largest component of aggregate earned insurance premiums. During both the six months ended June 30, 2025 and 2024, life insurance claims expense represented the largest component of direct insurance expenses.

The following table summarizes the components of insurance income, net:


	Insurance Premiums and Direct Expenses for the Six Months Ended
Dollars in thousands	YTD 25			YTD 24			YoY $ B(W)		YoY % B(W)
Earned premiums	$	28,641		$	28,400		$	241		0.8	%
Claims, reserves, and certain direct expenses		(5,845	)		(6,919	)		1,074		15.5	%
Insurance income, net	$	22,796		$	21,481		$	1,315		6.1	%

Earned premiums increased by $0.2 million, and claims, reserves, and certain direct expenses decreased by $1.1 million, in each case compared to the prior-year period. The increase in insurance premiums was primarily due to increases in personal property insurance premiums and life insurance premiums. The decrease in claims, reserves, and direct expenses was primarily due to a release in personal property insurance reserves related to hurricane activity in the prior-year.

Other Income. Other income increased $1.2 million, or 13.5%, to $10.4 million during the six months ended June 30, 2025, from $9.1 million during the prior-year period, primarily due to an increase in sales of our club membership products of $1.0 million, higher late charges of $0.6 million associated with portfolio growth and higher investment income from securities of $0.1 million, partially offset by a decrease in interest income of $0.6 million from lower restricted cash requirements.

Provision for Credit Losses. Our provision for credit losses increased $18.4 million, or 18.3%, to $118.6 million during the six months ended June 30, 2025, from $100.2 million during the prior-year period. The increase was due to an increase in net credit losses of $13.1 million and the change in provision expense of $5.3 million, in each case compared to the prior-year period. The increase in the provision for credit losses is explained in greater detail below.

Allowance for Credit Losses. We evaluate delinquency and losses in each of our loan products in establishing the allowance for credit losses. During the six months ended June 30, 2025 and 2024, the allowance for credit losses included a build of $3.3 million and a release of $2.0 million, respectively. The allowance for credit losses as a percentage of net finance receivables decreased to 10.3% as of June 30, 2025, from 10.5% as of June 30, 2024 due to a release of remaining hurricane reserves as related losses impacted net credit losses in the current year.

Net Credit Losses. Net credit losses increased $13.1 million, or 12.8%, to $115.3 million during the six months ended June 30, 2025, from $102.2 million during the prior-year period. Our net credit losses during the prior-year period were inclusive of an estimated $12.2 million benefit from accelerated charge-offs in the fourth quarter of 2023 attributable to the fourth quarter 2023 loan sale. The net credit loss rate was 12.1% during the six months ended June 30, 2025, compared to 11.7% during the prior-year period. Our net credit loss ratio during the six months ended June 30, 2024 was inclusive of an estimated 130 basis point benefit related to the fourth quarter 2023 loan sale.

General and Administrative Expenses. Our general and administrative expenses increased $8.4 million, or 7.0%, to $129.0 million during the six months ended June 30, 2025, from $120.6 million during the prior-year period. The absolute dollar increase in general and administrative expenses is explained in greater detail below.

Personnel. The largest component of general and administrative expenses was personnel expense, which increased $4.8 million, or 6.4%, to $79.7 million during the six months ended June 30, 2025, from $74.9 million during the prior-year period. The increase was primarily driven by an increase in labor costs of $3.8 million, including staffing 17 new branches since the prior-year period, and increased incentive costs of $1.9 million due to a change in expense timing. This increase was partially offset by higher capitalized loan origination costs, which reduce personnel expenses, of $1.3 million.

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Occupancy. Occupancy expenses increased $1.3 million, or 10.3%, to $13.8 million during the six months ended June 30, 2025, from $12.5 million during the prior-year period primarily due to increased rent expense of $1.0 million, inclusive of rent expenses associated with opening 17 new branches since the prior-year period.

Marketing. Marketing expenses increased $1.3 million, or 14.4%, to $10.5 million during the six months ended June 30, 2025, from $9.2 million during the prior-year period due to increased activity in our direct mail campaigns of $1.1 million to support growth in our legacy and new branch markets, and increased digital marketing activity of $0.2 million.

Other Expenses. Other expenses increased $1.0 million, or 4.1%, to $25.0 million during the six months ended June 30, 2025, from $24.0 million during the prior-year period. The increase was primarily due to increased collection expenses of $0.5 million and increased credit bureau fees of $0.4 million.

Operating Expense Ratio. Our operating expense ratio decreased by 0.2% to 13.6% during the six months ended June 30, 2025, from 13.8% during the prior-year period.

Interest Expense. Interest expense increased $4.8 million, or 13.7%, to $40.2 million during the six months ended June 30, 2025, from $35.4 million during the prior-year period. The increase was primarily due to an increase in our cost of funds as well as an increase in the average balance of our debt facilities. Our cost of funds increased 0.2% to 4.2% during the six months ended June 30, 2025, from 4.0% during the prior-year period. The average balance of our debt facilities increased to $1.5 billion during the six months ended June 30, 2025, from $1.4 billion during the prior-year period.

Income Taxes. Income taxes decreased $2.0 million, or 26.7%, to $5.5 million during the six months ended June 30, 2025, from $7.5 million during the prior-year period. The decrease was primarily due to a $8.5 million decrease in income before income taxes compared to the prior-year period. Our effective tax rates were 24.3% and 24.1% for the six months ended June 30, 2025 and 2024, respectively.

Liquidity and Capital Resources

Our primary cash needs relate to the funding of our lending activities and, to a lesser extent, expenditures relating to improving our technology infrastructure and expanding and maintaining our branch locations. We have historically financed, and plan to continue to finance, our short-term and long-term operating liquidity and capital needs through a combination of cash flows from operations and borrowings under our debt facilities, including our senior revolving credit facility, revolving warehouse credit facilities, and asset-backed securitization transactions, all of which are described below. We continue to seek ways to diversify our funding sources. As of June 30, 2025, our funded debt-to-equity ratio was 4.2 to 1.0 and stockholders’ equity ratio was 18.5%, compared to 4.1 to 1.0 and 18.7%, respectively, as of December 31, 2024.

Cash and cash equivalents increased to $4.3 million as of June 30, 2025, from $4.0 million as of the prior year-end. We had immediate availability to draw down cash from our revolving credit facilities of $117.3 million and $132.9 million as of June 30, 2025 and the prior year-end, respectively. Our unused capacity on our revolving credit facilities (subject to the borrowing base) was $533.8 million and $466.2 million as of June 30, 2025, and the prior year-end, respectively. Our debt balance was $1.5 billion for both June 30, 2025 and the prior year-end.

Based upon anticipated cash flows, we believe that cash flows from operations and our various financing alternatives will provide sufficient financing for debt maturities and operations over the next twelve months, as well as into the future.

From time to time, we have extended the maturity date of and increased the borrowing limits under our senior revolving credit facility. While we have successfully obtained such extensions and increases in the past, there can be no assurance that we will be able to do so if and when needed in the future. As of June 30, 2025 the revolving period maturities of our securitizations and warehouse credit facilities (each as described below within “Financing Arrangements and Restricted Cash Reserve Accounts”) ranged from May 2026 to May 2027, with the exception of securitizations RMIT 2021-1 and RMIT 2022-1, for which the revolving periods ended in February 2024 and February 2025, respectively. We had not exercised our right to redeem the notes of either of these two securitizations as of June 30, 2025. There can be no assurance that we will be able to secure an extension of the warehouse credit facilities or close additional securitization transactions if and when needed in the future.

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Dividends and Stock Repurchases.

The Board may in its discretion declare and pay cash dividends on our common stock. The following table sets forth the dividends declared and paid for the six months ended June 30, 2025:


Period	Declaration Date	Record Date	Payment Date	Dividends Declared Per Common Share		Dividends Paid (in thousands)
1Q 25	February 5, 2025	February 20, 2025	March 13, 2025	$	0.30	$	3,152
2Q 25	April 30, 2025	May 21, 2025	June 11, 2025		0.30		2,843
Total				$	0.60	$	5,995

See Note 14, “Subsequent Events” of the Notes to Consolidated Financial Statements in Part I, Item 1, “Financial Statements,” for information regarding our cash dividend following the end of the quarter.

While we intend to pay our quarterly dividend for the foreseeable future, all subsequent dividends will be reviewed and declared at the discretion of the Board and will depend on many factors, including our financial condition, earnings, cash flows, capital requirements, level of indebtedness, statutory and contractual restrictions applicable to the payment of dividends, and other considerations that the Board deems relevant. Our dividend payments may change from time to time, and the Board may choose not to continue to declare dividends in the future.

In December 2024, we announced that the Board had authorized a $30.0 million stock repurchase program. The authorization was effective immediately and extends through December 31, 2026. As of June 30, 2025, we had repurchased 0.5 million shares of common stock under this plan at a total cost of $15.1 million, including commissions and estimated excise taxes.

Cash Flow.

Operating Activities. Net cash provided by operating activities during the six months ended June 30, 2025 was $142.3 million, compared to $130.0 million during the prior-year period, a net increase of $12.4 million. The increase in net cash provided was primarily due to the growth of our loan portfolio.

Investing Activities. Investing activities consist of originations and repayments of finance receivables, purchases of intangible assets, and purchases of property and equipment for new and existing branches. Net cash used in investing activities during the six months ended June 30, 2025 was $165.4 million, compared to $84.6 million during the prior-year period, a net increase in cash used of $80.8 million. The increase in net cash used was primarily driven by increased originations as we grow our loan portfolio, partially offset by increased repayments of finance receivables.

Financing Activities. Financing activities consist of borrowings and payments on our outstanding indebtedness. Net cash provided by financing activities during the six months ended June 30, 2025 was $9.4 million, compared to $30.9 million used in financing activities during the prior-year period, a net increase in cash provided of $40.2 million. The net increase in cash provided was primarily due to an increase in the net advances on debt instruments of $52.0 million related to increased originations, partially offset by an increase in the repurchases of common stock of $11.5 million.

Financing Arrangements and Restricted Cash Reserve Accounts.

As of June 30, 2025, we had five credit facilities outstanding and, from time to time, we engage in the private offering and sale of asset-backed notes. As part of our overall funding strategy, we have transferred certain finance receivables to affiliated VIEs for asset-backed financing transactions. Our debt arrangements described below, other than our senior revolving credit facility, are issued by each of our RMR and RMIT SPEs, which are considered VIEs under GAAP. These debts are supported by the expected cash flows from the underlying collateralized finance receivables. Collections on these finance receivables are remitted to restricted cash collection accounts, which totaled $83.6 million and $117.1 million as of June 30, 2025 and December 31, 2024, respectively. Our debt arrangements also contain various debt covenants. We were in compliance with all such debt covenants as of June 30, 2025.

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Revolving Credit Facilities. The following is a summary of our revolving credit facilities as of June 30, 2025:


Dollars in thousands	Capacity		Debt Balance		Effective Interest Rate	Restricted Cash Reserves		Restricted Cash Collection		Maturity Date
Senior	$	355,000	$	165,526	7.4%	$	—	$	—	Sep 2025
RMR IV warehouse	$	125,000	$	11,981	6.6%	$	151	$	802	May 2027
RMR V warehouse	$	100,000	$	21,296	6.7%	$	132	$	1,700	Nov 2027
RMR VI warehouse	$	75,000	$	27,813	6.4%	$	184	$	2,307	Feb 2028
RMR VII warehouse	$	125,000	$	21,298	6.7%	$	139	$	1,794	Oct 2026

Securitizations. The following is a summary of our securitizations as of June 30, 2025:


Dollars in thousands	Issue Amount		Debt Balance		Effective Interest Rate	Restricted Cash Reserves		Restricted Cash Collection		Revolving Period Maturity	Final Maturity Date
RMIT 2021-1	$	248,700	$	54,385	3.5%	$	2,604	$	5,848	Feb 2024	Mar 2031
RMIT 2021-2	$	200,000	$	200,192	2.3%	$	2,083	$	16,304	Jul 2026	Aug 2033
RMIT 2021-3	$	125,000	$	125,202	3.9%	$	1,471	$	15,675	Sep 2026	Oct 2033
RMIT 2022-1	$	250,000	$	177,511	3.8%	$	2,646	$	16,297	Feb 2025	Mar 2032
RMIT 2024-1	$	187,305	$	187,787	6.2%	$	1,078	$	7,224	May 2027	July 2036
RMIT 2024-2	$	250,000	$	250,557	5.3%	$	1,418	$	7,944	Nov 2026	Dec 2033
RMIT 2025-1	$	265,000	$	265,585	5.3%	$	1,489	$	7,668	Mar 2027	Apr 2034

RMC Reinsurance. Our wholly owned subsidiary, RMC Reinsurance, Ltd., is required to maintain reserves against life insurance policies ceded to it, as determined by the ceding company. These reserves are comprised of restricted cash and restricted AFS investments, net of payables for purchased securities not yet settled. As of June 30, 2025, the reserves totaled $22.9 million.

Critical Accounting Policies and Estimates

Management’s discussion and analysis of financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with GAAP and conform to general practices within the consumer finance industry. The preparation of these financial statements requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and disclosure of contingent assets and liabilities for the periods indicated in the financial statements. Management bases estimates on historical experience and other assumptions it believes to be reasonable under the circumstances and evaluates these estimates on an ongoing basis. Actual results may differ from these estimates under different assumptions or conditions.

Allowance for Credit Losses.

The allowance for credit losses is based on historical credit experience, current conditions, and reasonable and supportable economic forecasts. The historical loss experience is adjusted for quantitative and qualitative factors that are not fully reflected in the historical data. In determining our estimate of expected credit losses, we evaluate information related to credit metrics, changes in our lending strategies and underwriting practices, and the current and forecasted direction of the economic and business environment. These metrics include, but are not limited to, loan portfolio mix and growth, unemployment, credit loss trends, delinquency trends, changes in underwriting, and operational risks.

We selected a PD / LGD model to estimate our base allowance for credit losses, in which the estimated loss is equal to the product of PD and LGD. Historical net finance receivables are tracked over the term of the pools to identify the incidences of loss (PDs) and the average severity of losses (LGDs).

To enhance the precision of the allowance for credit loss estimate, we evaluate our finance receivable portfolio on a pool basis and segment each pool of finance receivables with similar credit risk characteristics. As part of our evaluation, we consider loan portfolio characteristics such as product type, loan size, loan term, internal or external credit scores, delinquency status, geographical location, and vintage. Based on analysis of historical loss experience, we selected the following segmentation: product type, FICO score, and delinquency status.

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expected credit losses. Historical information about losses generally provides a basis for the estimate of expected credit losses. We also consider the need to adjust historical information to reflect the extent to which current conditions differ from the conditions that existed for the period over which historical information was evaluated. These adjustments to historical loss information may be qualitative or quantitative in nature.

Macroeconomic forecasts are required for our allowance for credit loss model and require significant judgment and estimation uncertainty. We consider key economic factors, most notably unemployment rates, to incorporate into our estimate of the allowance for credit losses. We engaged a major rating service provider to assist with compiling a reasonable and supportable forecast which we use to support the adjustments of our historical loss experience.

Due to the judgment and uncertainty in estimating the expected credit losses, we may experience changes to the macroeconomic assumptions within our forecast, as well as changes to our credit loss performance outlook, both of which could lead to further changes in our allowance for credit losses, allowance as a percentage of net finance receivables, and provision for credit losses. Potential macroeconomic changes have created conditions that increase the level of uncertainty associated with our estimate of the amount and timing of future credit losses from our loan portfolio.

Macroeconomic Sensitivity. To demonstrate the sensitivity of forecasting macroeconomic conditions, we stressed our macroeconomic model with 10% increased weighting towards slower near-term growth that would have increased our reserves as of June 30, 2025 by $2.0 million.

The macroeconomic scenarios are highly influenced by timing, severity, and duration of changes in the underlying economic factors. This makes it difficult to estimate how potential changes in economic factors affect the estimated credit losses. Therefore, this hypothetical analysis is not intended to represent our expectation of changes in our estimate of expected credit losses due to a change in the macroeconomic environment, nor does it consider management’s judgment of other quantitative and qualitative information which could increase or decrease the estimate.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Interest Rate Risk

Interest rate risk arises from the possibility that changes in interest rates will affect our results of operations and financial condition. We originate finance receivables either at prevailing market rates or at statutory limits. Our finance receivables are structured on a fixed-rate, fixed-term basis. Accordingly, subject to statutory limits, our ability to react to changes in prevailing market rates is dependent upon the speed at which our customers pay off or renew loans in our existing loan portfolio, which allows us to originate new loans at prevailing market rates. Because our large loans have longer maturities than our small loans and typically renew at a slower rate than our small loans, our reaction time to changes may be affected as our large loans change as a percentage of our portfolio.

We also are exposed to changes in interest rates as a result of certain borrowing activities. As of June 30, 2025, the interest rates on 84% of our debt (the securitizations) were fixed. We maintain liquidity and fund our business operations in part through variable-rate borrowings under a senior revolving credit facility and multiple revolving warehouse credit facilities. As of June 30, 2025, the balances and key terms of the credit facilities’ interest rate risk were as follows:


Revolving Credit Facility	Debt Balance (in thousands)		Interest Payment Frequency	Floor	Margin	Rate Type	Effective Interest Rate
Senior	$	165,526	Monthly	0.5%	3.0%	1-month SOFR	7.4%
RMR IV warehouse		11,981	Monthly	—	2.3%	1-month SOFR	6.6%
RMR V warehouse		21,296	Monthly	—	2.1%	Conduit	6.7%
RMR VI warehouse		27,813	Monthly	—	2.1%	1-month SOFR	6.4%
RMR VII warehouse		21,298	Monthly	—	2.4%	1-month SOFR	6.7%
Total	$	247,914

Based on the underlying rates and the outstanding balances as of June 30, 2025, an increase of 100 basis points in the rates of our revolving credit facilities would result in approximately $2.5 million of increased interest expense on an annual basis, in the aggregate, under these borrowings.

The nature and amount of our debt may vary as a result of future business requirements, market conditions, and other factors.

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ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2025. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Based on the evaluation of our disclosure controls and procedures as of June 30, 2025, our chief executive officer and chief financial officer concluded that, as of such date, our disclosure controls and procedures were effective. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost–benefit relationship of possible controls and procedures.

Changes in Internal Control

There were no changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the period covered by this Quarterly Report on Form 10-Q that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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Part II – Other information

ITEM 1. LEGAL PROCEEDINGS.

The Company is involved in various legal proceedings and related actions that have arisen in the ordinary course of its business that have not been fully adjudicated. The Company’s management does not believe that these matters, when ultimately concluded and determined, will have a material adverse effect on its financial condition, liquidity, or results of operations.

ITEM 1A. RISK FACTORS.

There have been no material changes to our risk factors from those included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 other than the risk factor set forth in Part II, Item 1A, “Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025. In addition to the other information set forth in this report and in our other reports and statements that we file with the SEC, you should carefully consider the factors discussed in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (which was filed with the SEC on February 21, 2025), which could materially affect our business, financial condition, and/or future operating results. The risks described in our Annual Report on Form 10-K are not the only risks facing our company. Additional risks and uncertainties not currently known to the Company or that the Company currently deems to be immaterial also may materially and adversely affect the Company’s business, financial condition, and/or operating results.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

The following table provides information regarding our share repurchase transactions (excluding both commissions and estimated excise taxes) during the three months ended June 30, 2025:


	Issuer Purchases of Equity Securities
Period	Total Number of Shares Purchased		Weighted-Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Program		Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (1)
April 1, 2025 — April 30, 2025		164,692	$	30.36		164,692	$	15,000,010
May 1, 2025 — May 31, 2025		—		—		—	$	15,000,010
June 1, 2025 — June 30, 2025		—		—		—	$	15,000,010
Total		164,692	$	30.36		164,692

(1) On December 2, 2024, we announced that our Board had authorized the repurchase of up to $30.0 million of our outstanding shares of common stock. The authorization was effective immediately and extends through December 31, 2026.

ITEM 5. OTHER INFORMATION.

During the three months ended June 30, 2025, none of the Company’s officers or directors adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as such terms are defined in Item 408(a) of Regulation S-K.

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ITEM 6. EXHIBITS.

      
     Incorporated by Reference

     Exhibit
Number

     Exhibit Description

     Filed
Herewith 

     Form 

     File
Number 

     Exhibit 

     Filing Date

     10.1

     Amendment No. 6 to Credit Agreement dated as of May 19, 2025, by and among Regional Management Corp., as servicer, Regional Management Receivables IV, LLC, as borrower, the lenders parties thereto, and Wells Fargo Bank, as administrative agent

     8-K

     001-35477

     10.1

     05/21/2025

     31.1

     Rule 13a-14(a) / 15(d)-14(a) Certification of Principal Executive Officer 

     X

     31.2

     Rule 13a-14(a) / 15(d)-14(a) Certification of Principal Financial Officer

     X

     32.1

     Section 1350 Certifications 

     X

     101.INS

     XBRL Instance Document—the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

     101.SCH

     Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents

     104

     Cover Page Interactive Data File—the cover page XBRL tags are embedded within the Inline XBRL document contained in Exhibit 101

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	REGIONAL MANAGEMENT CORP.

Date: August 1, 2025	By:	/s/ Harpreet Rana
		Harpreet Rana, Executive Vice President and Chief Financial and Administrative Officer
		(Principal Financial Officer and Duly Authorized Officer)