Q4 2024 Regional Management Corp Earnings Call

[music].

Operator: Greetings, and welcome to the Regional Management Fourth Quarter 2024 Conference. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation.

Greetings and welcome to the regional management fourth quarter 2024 conference call. At this time, all participants are in a listen only mode.

Question and answer session will follow the formal presentation.

Operator: You may be placing the question queue at any time by pressing star 1 on your telephone If anyone should require operator assistance, please press star zero on your screen. As a reminder, this conference is being recorded.

He will replace in the question queue at any time by pressing star one on your telephone keypad.

If anyone should require operator assistance. Please press star zero on your telephone keypad.

Speaker Change: As a reminder, this conference is being recorded it's now my pleasure to turn the call over to Garrett Edson with ICR. Please go ahead Gary.

Garrett Edson: It's now my pleasure to turn the call over to Garrett Edson with ICR. Please go ahead.

Garrett Edson: Thank you, and good afternoon. By now, everyone should have access to our earnings announcement and supplemental presentation, which were released prior to this call and may be found on our website at regionalmanagement.com.

Speaker Change: And good afternoon by now everyone should have access to our earnings announcement and supplemental presentation, which were released prior to this call may be found on our website at regional management Dot com before we begin our formal remarks I will direct you to page two of our supplemental presentation, which contains important disclosures concerning forward looking statements and the use of non-GAAP financial measures harder.

Garrett Edson: Before we begin our formal remarks, I will direct you to page two of our supplemental presentation, which contains important disclosures concerning forward-looking statements and the use of non-GAAP financial measures. Part of our discussion today may include forward-looking statements which are based on management's current expectations, estimates, and projections about the company's future financial performance and business prospects. These forward-looking statements speak only as of today and are subject to various assumptions, risks, uncertainties, and other factors that are difficult to predict, and that could cause actual results to differ materially from those expressed or implied in the forward-looking statements.

Speaker Change: Our discussion today may include forward looking statements, which are based on management's current expectations estimates and projections about the company's future financial performance and business prospects.

Speaker Change: Looking statements speak only as of today are subject to various assumptions risks uncertainties and other factors that are difficult to predict and that could cause actual results to differ materially from those expressed or implied in the forward looking statements. These statements are not guarantees of future performance and therefore, you should not place undue reliance upon them.

Garrett Edson: These statements are not guarantees of future performance, and therefore, you should not place undue reliance upon them.

Garrett Edson: We refer all of you to our press release, presentation, or recent filings with the SEC for a more detailed discussion of our forward-looking statements and the risks and uncertainties that could impact our future operating results and financial conditions. Also, our discussion today may include references to certain non-GAAP measures. Reconciliation of these measures to the most comparable GAAP measures can be found within our earnings announcement or earnings presentation and posted on our website at regionalmanagement.com.

Speaker Change: We refer all of you to our press release presentation and recent filings with the SEC for a more detailed discussion of our forward looking statements and the risks and uncertainties that could impact our future operating results and financial condition.

Speaker Change: Also our discussion today may include references to certain non-GAAP measures reconciliation of these measures to the most comparable GAAP measures can be found within our earnings announcement, our earnings presentation and posted on our website at regional management Dot Com I would now like to introduce Rob Beck, President and CEO of regional Management Corp. Thanks.

Rob Beck: I would now like to introduce Rob Beck, President and CEO of Regional Management Corp. Thanks, Garrett, and welcome to our fourth quarter 2024 earnings call. I'm joined today by Harpreet Rana, our Chief Financial and Administrative Officer. On this call, we'll cover our fourth quarter financial and operating results, provide an update on our portfolio credit performance and growth, and share our expectations for 2025. We're very pleased with how our team and company performed in the fourth quarter. We generated strong bottom line results of $9.9 million of net income and $0.98 of diluted earnings per share. These results were better than our guidance and a sharp improvement from the prior year period net loss of $7.6 million.

Rob Beck: Thanks, Garrett and welcome to our fourth quarter 2024 earnings call I'm joined today by Harper, our Chief financial and administrative officer on this call will cover our fourth quarter financial and operating results provide an update on our portfolio of credit performance and growth and share our expectations for 2025.

We're very pleased with how our team and company performed in the fourth quarter, we generated strong bottomline results of $9 9 million of net income and 98 of diluted earnings per share.

Rob Beck: These results were better than our guidance and a sharp improvement from the prior year period net loss of $7 6 million.

Rob Beck: As a reminder, in the fourth quarter of 2023, we incurred restructuring expenses and closed a special delinquent loan sale that had the effect of pulling forward net credit losses and revenue reversals from the first quarter of 2024 to the fourth quarter of 2023. We didn't experience similar events in the fourth quarter of 2024, so there will be noise in some of our year-over-year comparisons, which we'll highlight for you. Loan demand remained strong in the fourth quarter. We began to ramp up our portfolio growth and increase our investment spend in the quarter, including by opening four new branches.

Rob Beck: As a reminder, in the fourth quarter of 2023, we incurred restructuring expenses and closed a special delinquent loan sale that had the effect of pulling forward net credit losses and revenue reversals from the first quarter of 2024 to the fourth quarter of 2023.

Rob Beck: We didn't experience similar events in the fourth quarter of 2024, so there will be noise and some of our year over year comparisons, which will highlight for you.

Rob Beck: Loan demand remained strong in the fourth quarter, we began to ramp up our portfolio growth and increase our investment spend in the quarter, including by opening four new branches. We will also open another eight new branches in the first quarter to drive future growth.

Rob Beck: We'll also open another eight new branches in the first quarter to drive future growth. We grew our portfolio by $73 million sequentially in the fourth quarter to nearly $1.9 billion, an all-time high for our company. The portfolio generated record quarterly revenue of $155 million, up 9.3% from the fourth quarter of 2023, or 7.8% when adjusted for the impact of the prior year's loans. Our fourth quarter total revenue yield was 33.4 percent, up 110 basis points from the prior year period, or 80 basis points after adjusting for the 2023 month. Our total revenue yield in the fourth quarter was the highest it's been in two years.

Rob Beck: We grew our portfolio by 73 million sequentially in the fourth quarter to nearly $1 9 billion, an all time high for our company.

Rob Beck: The portfolio generated record quarterly revenue of 155 million up nine 3% from the fourth quarter of 2023 or seven 8% when adjusted for the impact of the prior year's loan sale.

Rob Beck: Our fourth quarter total revenue yield was 33, 4% up 110 basis points from the prior year period or 80 basis points. After adjusting for the 2023 bond sale.

Rob Beck: Total revenue yield in the fourth quarter was the highest it's been in two years.

Rob Beck: As we've discussed in prior quarters, we've improved our yields from increased pricing, a mixed shift to higher margin loans, and improving credit performance. At the same time, we held G&A expenses in check as we grow while continuing to invest in our strategic initiatives, and we're leveraging our improved scale to increase our return. Our fourth quarter G&A expenses were roughly flat to the fourth quarter of 2023, and our operating expense ratio was 14 percent, an 80 basis points improvement from the prior year period, or 30 basis points better when adjusting for the fourth quarter 2023 restructuring.

Rob Beck: As we've discussed in prior quarters, we've improved our yields from increased pricing our mix shifts to higher margin loans and improving credit performance.

Rob Beck: At the same time, we held G&A expenses in check as we grow while continuing to invest in our strategic initiatives and we're leveraging our improved scale to increase our returns.

Rob Beck: Our fourth quarter G&A expenses were roughly flat to the fourth quarter of 2023 and our <unk>.

Rob Beck: Operating expense ratio was 14%, an 80 basis points improvement from the prior year period.

Rob Beck: 30 basis points better when adjusting for the fourth quarter 2023 restructuring.

Rob Beck: We also continue to carefully manage our portfolio credit quality and performance in the fourth quarter. Credit performance continues to improve thanks to tighter underwriting in our front book, which represented 89% of our portfolio at year-end. The loans in our front book are performing in line with our expectations and are delivering at lower loss levels than our stress-backed books. We ended the fourth quarter with a 30-plus day delinquency rate of 7.7%, up 80 basis points from the end of 2023, but 10 basis points better year over year when adjusting for the fourth quarter 2023 loan sale.

Rob Beck: We also continued to carefully manage our portfolio credit quality and performance in the fourth quarter credit performance continues to improve thanks to tighter underwriting in our front book, which represented 89% of our portfolio at year end loans in our front book are performing in line with our expectations and are delivering at lower lawful Apis that are stressed back book vintage.

Rob Beck: Yes.

Rob Beck: We ended the fourth quarter with a 30 plus day delinquency rate of seven 7% up 80 basis points from the end of 2023, but 10 basis points better year over year, when adjusting for the fourth quarter 2023 loan sale.

Rob Beck: Our fourth quarter net credit loss rate was 10.8%, which was 430 basis points better than our prior year period, or 110 basis points better after adjusting for the prior year's loan sale. Our growth in our higher margin portfolio increased both our delinquency and net credit loss rates by 20 basis points in the fourth quarter. Also, as a reminder, our slower pace of portfolio growth in 2024 negatively impacted our delinquency rate and NCO rate as the denominator of both ratios has grown more slowly than in prior years. On a growth-adjusted basis, we are very pleased with the improvement in our delinquency at NCLRan.

Fourth quarter net credit loss rate was 10, 8%, which was 430 basis points better than our prior year period.

Rob Beck: Or 110 basis points better after adjusting for the prior year's long sale.

Rob Beck: Our growth in our higher margin portfolio will increase both our delinquency and credit loss rates by 20 basis points in the fourth quarter.

Rob Beck: Also as a reminder, our slower pace of portfolio growth in 2024 negatively impacted our delinquency rate and NCL rate as the denominator of both ratios has grown more slowly than in prior years.

Rob Beck: On a growth adjusted basis, we are very pleased with the improvement in our delinquency and NCL rates.

Rob Beck: By managing credit tightly and growing our high-quality, auto-secured books, we're experiencing better credit performance despite having leaned into growth in our higher-margin, greater-than-36% APR loan portfolio, which grew from 16% of our portfolio to 19% of our portfolio year-over-year. As we've discussed in the past, our net credit loss rates peaked in 2023, and we've experienced gradual improvement since then. We expect continued improvement in portfolio quality and credit loss performance in 2025, assuming inflation continues to moderate and economic conditions remain stable, including low unemployment and continued real wage growth. The fourth quarter capped a strong 2024 in which we improved our results from the prior year on nearly all lines.

Rob Beck: By managing credit tightly and growing in a high quality auto secured books were experienced better credit performance, despite having leaned into growth in our higher margin greater than 36% APR loan portfolio, which grew from 16% of our portfolio to 19% of our portfolio year over year.

Rob Beck: As we've discussed in the past our net credit loss rates peaked in 2023, and we've experienced gradual improvement since then.

Rob Beck: We expect continued improvement in portfolio quality and credit loss performance in 2025.

Rob Beck: Inflation continues to moderate and economic conditions remain stable, including low unemployment and continued real wage growth.

Rob Beck: The fourth quarter capped a strong 2024 in which we improved our results from the prior year on nearly all lines we.

Rob Beck: We grew our loan portfolio by $120 million in 2024, and that in turn drove our revenue higher. Our 2024 revenue was up 7% compared to 2023, and our total revenue yields improved by 70 basis points year-over-year from increased pricing, portfolio mix shift, and improved credit performance. Our net credit loss rate improved by 120 basis points in 2024 and our operating expense ratio improved by 40 basis points year over year. Importantly, our net income more than doubled from 2023 and our return on assets improved to 2.3% in 2024 from just under 1% in 2023. While economic conditions prevented our bottom line results and returns from fully normalizing in 2024, we're pleased with how we've navigated the inflationary environment over the past couple of years.

Rob Beck: Our loan portfolio by $120 million in 2024.

Rob Beck: That in turn drove our revenue higher.

Rob Beck: Our 2024 revenue was up 7% compared to 2023, and our total revenue yields improved by 70 basis points year over year from increased pricing portfolio mix shifts and improved credit performance.

Rob Beck: Our net credit loss rate improved by 120 basis points in 2024, and our operating expense ratio improved by 40 basis points year over year and.

Rob Beck: Importantly, our net income more than doubled from 2023 and our return on assets improved to two 3% in 2024 from just under 1% in 2023.

Rob Beck: While economic conditions prevented our bottomline results and returns from fully normalizing in 2024, we're pleased with.

Rob Beck: Due to the inflationary environment over the past couple of years. We're also encouraged by the signs of strength that we're observing in the subprime consumer and the economy and that strength is reflected in our improving credit performance over the long term, we expect that our returns will continue to normalize with the benefits of a stable macroeconomic environment further scale through disciplined.

Rob Beck: We're also encouraged by the signs of strength that we're observing in the subprime consumer and the economy. And that strength is reflected in our improving credit performance. Over the long term, we expect that our returns will continue to normalize with the benefits of a stable macroeconomic environment, further scale through disciplined portfolio growth, a well-balanced product mix, and prudent expense management. During our past couple of earnings calls, I spoke with you about our portfolio mix, our higher margin loan business, our auto secured book, and how we think about constructing our portfolio as we grow.

Rob Beck: Portfolio growth.

Rob Beck: Well balanced product mix and prudent expense management.

Rob Beck: During our past couple of earnings calls I spoke with you about our portfolio mix, our higher margin loan business, our auto secured book and how we think about constructing our portfolio as we grow this quarter as we enter a period with a more constructive economic environment and an expectation of stronger portfolio.

Rob Beck: This quarter, as we enter a period with a more constructive economic environment and an expectation of stronger portfolio growth, I want to spend a few minutes discussing the impact of growth on our bottom line and how we think strategically about the balance between portfolio growth and net income in the short and long term. Portfolio growth, of course, impacts all lines of our income statement. It's the fuel that generates our revenue growth. It increases our provision for loan losses and net credit losses, no matter the quality of new loans added. It requires us to increase our G&E investment, and it creates the denominator effect on both our operating expense ratio and net credit loss rate.

Rob Beck: I want to spend a few minutes discussing the impact of growth on our bottom line and how we think strategically about the balance between portfolio growth and net income in the short and long term.

Rob Beck: Portfolio growth of course impacts all lines of our income statement, it's the fuel that generates our revenue growth it increases our provision for loan losses, and net credit losses, no matter the quality of new loans added it requires us to increase our G&A investment and it creates the denominator effect on both our operating expense ratio and net credit loss.

Rob Beck: Right.

Rob Beck: It drives up our interest expense, including our average interest rate, as we use more costly funding to grow the portfolio. Some of these growth impacts are beneficial to our income statement and performance metrics, while others are detrimental, and the severity of the impacts varies across lines and time. As we develop our short- and long-term plans, we balance these dynamics to optimize short- and long-term returns to our investors. Looking back to the five years prior to 2020, we grew our portfolio at an average of more than 15% per year and over 19% in 2019 prior to the pandemic.

Rob Beck: It drives up our interest expense, including our average interest rate as we use more costly funding to grow the portfolio.

Rob Beck: Some of these growth impacts are beneficial to our income statement and performance metrics, while others are detrimental and the severity of the impact varies across lines and time periods as we develop our short and long term plans, we balance these dynamics to optimize short and long term returns to our investors.

Rob Beck: Looking back to the five years prior to 2020, we grew our portfolio and an average of more than 15% per year and over 19% in 2019 prior to the pandemic after holding our portfolio flat in 2020 due to Covid. We grew our portfolio an average of roughly 22% per year in 2021 and 2022.

Rob Beck: After holding our portfolio flat in 2020 due to COVID, we grew our portfolio at an average of roughly 22% per year in 2021 and 2022, while at the same time benefiting from a highly constructive credit environment supported by government stimulus. However, over the past two years, we substantially slowed our portfolio growth to 4% in 2023 and 7% in 2024 due to inflationary economic conditions and the corresponding impact on credit performance. Now, for the first time since we adopted the CECL reserve model in 2020, we've entered a year where we expect to accelerate our growth in a more normalized credit environment.

Rob Beck: While at the same time benefiting from a highly constructive credit environment supported by government stimulus. However over the past few years, we substantially slowed our portfolio growth to 4% in 2023 and 7% in 2024 due to inflationary economic conditions and a corresponding impact on <unk>.

Rob Beck: Performance.

Rob Beck: Now for the first time since we adopted the seasonal reserve model in 2020, we've entered a year, where we expect to accelerate our growth and a more normalized credit environment as.

Rob Beck: As you know, under the CECL model, we're required to reserve for expected lifetime losses at the origination of each loan, while the revenue benefits are recognized over the life of the loan. For example, in the fourth quarter, we grew our portfolio by $73 million sequentially, requiring a $7.7 million provision for credit losses, and it created an after-tax drag of $6 million on our fourth quarter netting. Our return to faster growth in 2025 will likewise create an immediate drag on 2025 net income due to the associated expenses of provisioning for lifetime credit losses at origination, but it will create benefits over the long term as loan growth drives increased revenue and bottom line return.

Rob Beck: As you know under the FIFA model, where required reserve for expected lifetime losses at the origination of each well.

Rob Beck: While the revenue benefits are recognized over the life of a loan.

Rob Beck: For example in the fourth quarter, we grew our portfolio by $73 million sequentially, requiring a $7 7 million provision for credit losses, and accreted in after tax drag of $6 million on our fourth quarter net income.

Rob Beck: Returns of faster growth in 2020, following likewise create an immediate drag on 2025 net income due to the associated expenses are provisioning for lifetime credit losses at origination, but it will create benefits over the long term as loan growth drives increased revenue and bottom line returns.

Rob Beck: As we determine our growth rate, we not only consider the health of the consumer, the strength of the economy, and the credit performance of our portfolio, we also balance our need to continue to deliver short-term results for our investors while also generating the portfolio growth that will fuel our success and normalization of returns over the long term. The faster we grow in 2025, the more provision we must occur, and the larger the drag on our 2025 net income, but that portfolio growth will be beneficial to the bottom line and our returns in 2026 and beyond.

Rob Beck: As we determine our growth rate, we not only consider the health of the consumer the strength of the economy and the credit performance of our portfolio. We also balance our need to continue to deliver short term results for our investors. While also generating portfolio growth that will fuel our success and normalization of returns over long term.

Rob Beck: The faster we grow in 2025, the more provisioning, we must occur and the larger the drag on our 2025 net income, but that portfolio growth will be beneficial to the bottom line and our returns in 2026 and beyond.

Rob Beck: As a result of these dynamics, we internally measure success by our growth in both net income and in pre-provisioned net income, which we define as net income excluding the tax-affected impact of the provision for credit losses, but including the impact of recognized net credit losses. Assuming no change in our expectations for the economy, we're committed both to a minimum of 10% portfolio growth and a meaningful improvement to our net income results in 2025. We're increasing our pace of growth due to our confidence in our credit performance, improving consumer health, and strengthening macroeconomic conditions, including lower inflation, real wage growth, low unemployment, and a large number of open jobs, particularly for our customer set.

As a result of these dynamics, we internally measure success by our growth in both net income and pre provision net income, which we define as net income excluding the tax affected impact of the provision for credit losses, but including the impact of recognized net credit losses.

Rob Beck: Assuming no change in our expectations for the economy, we're committed both to a minimum of 10% portfolio growth and a meaningful improvement to our net income results in 2025 were.

Rob Beck: We're increasing our pace of growth due to our confidence in our credit performance, improving consumer health and strengthening macroeconomic conditions, including lower inflation real wage growth low unemployment and a large number of open jobs, particularly for our customer set.

Rob Beck: While we feel we're capable of growing our bottom line by 30% or more in 2025, we believe that doing so would require slower portfolio growth that doesn't appropriately balance near-term results with our long-term aspirations. While we've clearly established our internal targets for 2025 portfolio growth and net income based on our short and long-term strategic priorities, where we ultimately land on portfolio growth and net income in 2025 will depend on our continued assessment of the health of the customer, the economy, and Credit Performance over short and long term.

Rob Beck: While we feel we're capable of growing our bottom line by 30% or more in 2025, we believe that doing so would require slower portfolio growth that doesn't appropriately balance near term results with our long term aspirations.

Rob Beck: While we've clearly established our internal targets for 2025 portfolio growth and net income based on our short and long term strategic priorities, where we ultimately land on portfolio growth and net income in 2025 will depend on our continued assessment of the health of the customer the economy.

Rob Beck: And credit performance, both short and long terms for now beyond our expectation of minimum portfolio growth of 10% in 2025, we won't be sharing full year 2025 guidance, but we wanted to provide you with this overview of how we think strategically about growth and how we manage the business this year and beyond.

Rob Beck: For now, beyond our expectation of minimum portfolio growth at 10% in 2025, we won't be sharing full year 2025 guidance. But we wanted to provide you with this overview of how we think strategically about growth and how we will manage the business this year and beyond.

Rob Beck: As always, I'd like to thank the regional team for its hard work and dedication. The team skillfully managed through a difficult economic environment in 2023 and 2024, providing valuable financial products and service to our customers while anticipating, preparing for, and reacting to conditions that have been particularly challenging for our consumer. The team's talent, commitment, and superior execution have positioned us well to return to faster growth in 2025, something we're very much looking forward to.

Rob Beck: As always I'd like to thank the Regal team for its hard work and dedication the team's skillfully manage through a difficult economic environment in 2023, and 2020 for providing valuable financial products and service to our customers, while anticipating preparing for and reacting to conditions that have been particularly challenging for our consumer base.

Rob Beck: The team's talent commitment and superior execution have positioned us well to return to faster growth in 2025, something we're very much looking forward to.

Harpreet Rana: I'll now turn the call over to Hart, who will provide more detail on our fourth quarter results and guidance for the first quarter. Thank you, Rob, and hello, everyone.

Hart: I'll now turn the call over to Hart, who will provide more detail on our fourth quarter results and guidance for the first quarter. Thank.

Hart: Thank you Robin Hello, everyone I'll now take you through our fourth quarter results in more detail and provide you with an outlook for the first quarter of 2025.

Harpreet Rana: I'll now take you through our fourth quarter results in more detail and provide you with an outlook for the first quarter of 2025. On page 5 of the supplemental presentation, we provide our fourth quarter financial highlights. As Rob noted, we posted net income of $9.9 million and diluted earnings per share of $0.98, once again exceeding our expectations and our fourth quarter 2023 results. These results were supported by our solid portfolio and revenue growth, healthy credit profile, expense discipline, and a strong balance sheet. Turning to page 6, we continue to grow our portfolio during the quarter, with origination focused on our higher margin auto-secured segments.

Hart: Page five of the supplemental presentation, we provide our fourth quarter financial highlights.

Hart: As Rob noted, we posted net income of $9 9 million and diluted earnings per share of <unk> 98, once again exceeding our expectation and our fourth quarter 2023 with all these.

Hart: These results were supported by our solid portfolio and revenue growth healthy credit profile expense discipline, and a strong balance sheet.

Hart: Turning to page six we continue to grow our portfolio during the quarter with the origination focus on our higher margin auto secured signal.

Harpreet Rana: From a risk standpoint, we continue to originate roughly 60% of our loans to applicants in our top two risk ranks. Total originations reached record levels and were up 17% year-over-year. Branch, digital, and direct mail originations were up 15%, 35%, and 15% respectively from the prior year period. As we move through 2025, we'll be accelerating our pace of growth due to our confidence in our credit performance, improving consumer health, and a stronger macro environment. Page 7 displays our portfolio growth and product mix for the fourth quarter. We closed the quarter with record net finance receivables of $1.9 billion, up $73 million sequentially.

Hart: Wish standpoint, we continue to originate roughly 60% of our loan applicants in our top two brief questions.

Hart: Total originations reached record level and we're off.

Hart: 17% year over year branch digital and direct mail originations dropped, 15%, 35% and 15% respectively from the prior year period.

Hart: As we move through 2025 will be accelerating our pace of growth due to our confidence and our credit performance, improving Tuesday myself I'm, a stronger macro environment page.

Hart: Page seven displays our portfolio growth and product mix for the fourth quarter, we closed the quarter with record net finance receivables of $1 9 billion up $73 million sequentially.

Harpreet Rana: Our auto-secured portfolio grew 34% in 2024 and now represents 10.9% of our total portfolio, up from 8.7% at the end of 2023. Our small loan portfolio increased 12% year-over-year, and at the end of the quarter, approximately 19% of our portfolio carried an APR greater than 36%, up from 16% a year ago, reflecting a 26% balance increase in 2024. As Rob has consistently noted, we've purposefully leaned into growth of higher margin small loans in recent quarters, and we expect to continue growing our small loan book in a measured way in future quarters. This portfolio drives higher revenue yields, which offset moderately higher funding costs, and the returns exceed our hurdles despite higher expected net credit losses on the segment.

Hart: The auto secured portfolio grew 34% in 2024 and now represent 10, 9% of our total portfolio up from eight 7% at the end of 2023.

Small loan portfolio increased 12% year over year and at the end of the quarter approximately 19% of our portfolio carried an APR greater than 36% up from 16, presenting or ago, reflecting a 26% balance increase in 2024.

Hart: As Robyn consistently noted we purposefully leaned into growth of higher margin small loans in recent quarters, and we expect to continue growing our small loan book in a measured way in future quarters.

Hart: Portfolio drives higher revenue yield, which offset moderately higher funding cost and the returns exceed our hurdle. Despite higher expected net credit losses on that segment. As previously indicated we continue to mitigate the impact of the segment on our overall credit performance by growing our auto secured book, which remains the best performing segment.

Harpreet Rana: As previously indicated, we continue to mitigate the impact of this segment on our overall credit performance by growing our auto secured book, which remains the best performing segment in our portfolio. At the end of the year, the auto secured portfolio had a 30 plus day delinquency rate at 2.6% and the lowest credit losses of all of our products.

Hart: And our portfolio at.

Hart: At the end of the year the auto secured portfolio had a 30 plus day delinquency rate at 2.6% and the lowest credit losses of all of our products.

Harpreet Rana: Looking ahead to the first quarter, while we expect to originate higher loan volumes than in the prior year, the first quarter is always our softest originations quarter because of the seasonal impact of tax refunds. We anticipate our ending net receivables to be roughly flat to down $5 million sequentially in the first quarter, compared to a $27 million sequential runoff in the first quarter of 2024, with the exact level of ending receivables dependent on the strength of the 2025 tax season. This is an improvement from our normal first quarter liquidation levels, thanks to growth in newly opened branches and our efforts to lean back into growth across our network.

Looking ahead to the first quarter, while we expect to originate higher loan volume and in the prior year. The first quarter is always our softest originations.

Hart: Originations quarter because of the seasonal impact of tax refund.

Hart: Peter ending net receivables to be roughly flat to down 5 million sequentially in the first quarter compared to a $27 million sequential run off in the first quarter of 2024 with the exact level of ending with paperboy dependent on the strength of the 2025 tax season.

Hart: This is an improvement from our normal first quarter liquidation level, thanks to growth in newly opened branches and our efforts to lean back into growth across our network. We expect our average net receivables to be up roughly $35 million sequentially.

Harpreet Rana: We expect our average net receivables to be up roughly $35 million sequentially. In the balance of the year, we will take further advantage of high levels of consumer demand to drive quality portfolio growth, particularly in our auto-secured and higher margin portfolios, a continuation of our barbell strategy. However, we'll remain selective in approving borrowers while continuing to monitor the economy and as always, we'll focus on originating loans that maximize our margins and bottom line results. Turning to page 8, total revenues grew to a record $155 million in the fourth quarter, up 9% from the prior year period.

Hart: And the balance of the year, we will take further advantage of high level consumer demand to drive quality portfolio growth, particularly in our auto secured in higher margin portfolios, a continuation of a barbell strategy.

Hart: However, we will remain selective in approving borrowers while continuing to monitor the economy and as always we'll focus on originating loans that maximize our margins and bottom line results.

Hart: Turning to page eight total revenue grew to a record of 155 million in the fourth quarter up 9% from the prior year period, our total revenue yield and interest and feel were 33, 4% and 29, 8%, respectively up 110 basis points and 100 basis points year over year, respectively. The increase in yeah.

Harpreet Rana: Our total revenue yield and interest and fee yield were 33.4% and 29.8% respectively, up 110 basis points and 100 basis points year-over-year respectively. The increase in yields is due to a mix of pricing changes, growth in our higher margin small loan business, improved credit performance, the impact of the special loan sale in the prior year period, and the release of credit insurance reserves in the fourth quarter. In the first quarter, we expect total revenue yield to decline by roughly 90 basis points sequentially, consistent with seasonal patterns. Moving to page 9, our portfolio continues to perform well.

Hart: Due to a mix of pricing changes growth in our higher margin small long business improved credit performance.

Hart: Impact of the special loan sale in the prior year period, and the release of credit insurance reserves in the fourth quarter and the first quarter. We expect total revenue to decline by roughly 90 basis points sequentially consistent with seasonal pattern.

Hart: Moving to page nine our portfolio continues to perform well our 30 plus day delinquency rates as of quarter end was seven 7% up 80 basis points year over year, but 10 basis points better than the prior year period, when adjusting for the special loan sale in the fourth quarter of 2023.

Harpreet Rana: Our 30-plus day delinquency rate says a quarter end with 7.7%, up 80 basis points year over year, but 10 basis points better than the prior year period when adjusting for the special loan sale in the fourth quarter of 2023. Our net credit losses of $50.2 million were better than our outlook, and our annualized net credit loss rate of 10.8%, with 430 basis points better than last year, in large part due to the loan sale in the fourth quarter of 2023. Adjusting for the loan sale, our net credit loss rate was 110 basis points better year over year as the credit performance of our portfolio has improved materially.

Hart: Our net credit losses of 52 million were better than our outlook and our annualized net credit loss rate of 10, 8% with 430 basis points better than last year in large part due to the loan sale in the fourth quarter of 2023.

Hart: Adjusting for the loan sale, our net credit loss rate was 110 basis points better year over year as the credit performance of our portfolio has improved materially. We also estimate that the growth in our portfolio of loans, having greater than 36% APR, it's negatively impacted both our delinquency rate and our net credit loss rate by 20 basis points.

Harpreet Rana: We also estimate that the growth in our portfolio of loans having greater than 36% APR has negatively impacted both our delinquency rate and our net credit loss rate by 20 basis points year over year. However, the higher yields on this portfolio more than make up for the credit drag resulting in overall improved margins. Page 10 provides additional information on the performance of our front book and back book portfolios. The front book ended the quarter at 89% of our total book, compared to 86% at the end of the third quarter. The front book carries a 7.2% delinquency rate, compared to 11.9% on the back book.

Hart: The year over year, however, the higher yield on this portfolio more than make up for the credit drag resulting in overall improved margin.

Hart: Page 10 provides additional information on the performance of our front book and back off the portfolio.

Hart: <unk> ended the quarter at 89% of our total book compared to 86% at the end of the third quarter.

Hart: That carries a seven 2% delinquency rate compared to 11, 9% on the back book.

Harpreet Rana: The back book accounted for 14% of our 30-plus-day delinquency and contributed 40 basis points to our total portfolio delinquency rate, despite representing only 9% of the portfolio at quarter end. The back book contributed 60 basis points to our total portfolio net credit loss rate, and our front book and back book reserve rates are 10.2% and 14.1% respectively. We continue to be pleased with the way that our front book is performing. Compared to the back book, the front book continues to season at a lower level of loss despite the growth in our higher-rate small loan business, which will benefit our 2025 results.

Hart: <unk> accounted for 14% of our 30, plus day delinquency and contributed 40 basis points of our total portfolio delinquency rate, despite representing only 9% of the portfolio at quite around it.

Hart: The backflip contributed 60 basis points for a total portfolio net credit loss rate and our front book and back book Reserve rates are 10, 2% and 14, 1% respectively.

Hart: We continue to be pleased with the way that our front book is performing compared to the back book Front book continues to season at a lower level of loss. Despite the growth in our higher rate small loan business, which will benefit 2025 results. Overall, we continue to see the benefits about prudent underwriting and our credit metrics.

Harpreet Rana: Overall, we continue to see the benefits of our prudent underwriting in our credit metrics. In the first quarter, we expect our delinquency rate to improve due to the seasonal benefit of payments generated by tax refunds. Depending upon the strength of the tax season, we anticipate that our net credit losses will be approximately $60 million in the first quarter, or a net credit loss rate of approximately 12.7%. As a reminder, our net credit loss rate in the first quarter of 2024 included 270 basis points of benefit from the fourth quarter 2023 loan sale, but we will not experience a similar benefit in the first quarter of this year.

Hart: In the fourth quarter, we expect delinquency rate increase due to the seasonal benefit of payments generated by tax refund depend.

Hart: Depending upon the strength of the tax season, we anticipate that our net credit losses will be approximately 60 million in the first quarter or a net credit loss rate of approximately 7%.

Hart: As a reminder, our net credit loss rate in the first quarter of 2024 included 270 basis points of benefit from our fourth quarter 2023 loan sale, but we will not experience a similar benefit in the first quarter of this year.

Harpreet Rana: Adjusted for the loan sale benefit in the first quarter of 2024, we expect that our net credit loss rate in the first quarter of this year will be 60 basis points better year over year. Turning to page 11, our fourth quarter allowance for credit losses reserve rate decreased slightly to 10.5%. Our strong receivables growth required us to increase our reserves by $7.4 million in the quarter as we reserved for our lifetime losses upon origination. As of quarter end, the allowance was $199.5 million and assumed a 2025 year-end unemployment rate of 5.1%. Within the quarter-end allowance, we maintained a reserve of $1.8 million for 10 basis points for losses associated with Hurricane Helene that should roll through in the second quarter of 2025.

Hart: Adjusted for the loan sale benefit in the first quarter of 2024, we expect that our net credit loss rate in the first quarter of this year will be 60 basis points better year over year.

Hart: Turning to page 11, our fourth quarter allowance for credit losses reserve rate decreased slightly to 10, 5%.

Hart: Our strong receivables growth required us to increase our reserves by $7 4 million in the quarter and we reserve for a lifetime losses upon origination.

Hart: As of quarter end, the allowance was $199 5 million and assumed a 2025 year end unemployment rate of five 1%.

Hart: Within the quarter end allowance, we maintained a reserve of $1 8 million or 10 basis points for losses associated with Hurricane Helene that should roll through in the second quarter of 2025 looking to the first quarter subject to economic conditions and portfolio performance. We expect our loan loss reserve rate remained flat at 10.

Harpreet Rana: Looking to the first quarter, subject to economic conditions and portfolio performance, we expect our loan loss reserve rate to remain flat at 10.5% at the end of the quarter.

Hart: 5% at the end of the quarter.

Harpreet Rana: Flipping to page 12, we continue to closely manage our spending while still investing in our growth, capabilities, and strategic initiatives. Our G&A expenses of $64.6 million in the fourth quarter were down modestly year over year, and were better than our outlook due in part to continued aggressive management of our personnel expenses. Our annualized operating expense ratio was 14% in the fourth quarter, 80 basis points better than the prior year period, or 30 basis points better when adjusting for the fourth quarter 2023 restructuring. On a normalized basis, revenue growth outpaced GMA expense growth by 5.8 times.

Hart: Flipping to page 12, we continue to closely manage our spending while still investing in our growth capabilities and strategic initiative, our G&A expenses of $64 6 million in the fourth quarter were down modestly year over year and were better than our outlook due in part to continued aggressive management of our personnel expense.

Hart: Our annualized operating expense ratio was 14% in the fourth quarter 80 basis points better than the prior year period, or 30 basis points better when adjusting for the fourth quarter of 2023 restructuring.

Hart: On a normalized basis revenue growth outpaced G&A expense growth by five eight times and.

Harpreet Rana: In the first quarter, we expect G&A expenses to increase to roughly $65 to $65.5 million. The increase in G&A expense is attributable to further investments and growth in our strategic initiatives, including the opening of an additional eight branches in the first quarter and increased expenses from servicing a larger number of accounts. We also continue to invest in technology and data initiatives to benefit future performance. Moving forward, we'll continue to meticulously manage expenses while also investing in our core business in ways that will improve our operating efficiency over time and ensure our long-term success and profitability.

Hart: In the first quarter, we expect G&A expenses to increase to roughly 65 to $65 5 million the increase in G&A expenses attributable to further investments in growth and our strategic initiatives, including the opening of an additional eight branches in the first quarter and increased expenses from servicing a larger number of accounts.

Hart: We also continue to invest in technology and data initiatives to benefit future performance moving forward, we'll continue to meticulously manage expenses, while also investing in our core business in ways that will improve our operating efficiency over time and ensure our long term success and profitability.

Harpreet Rana: Turning to pages 13 and 14, our interest expense for the fourth quarter was $19.8 million, or 4.2% of average net receivables on an annualized basis, better than our outlook on lower average debt and lower rates. In November, we closed a $250 million asset-backed securitization transaction at a weighted average coupon of 5.34%, an 85 basis point improvement over our prior ABS bill. The Class A notes of the securitization received a top rating of AAA from Standard & Poor's and Morningstar DBRF, and we experienced significant demand across all classes of notes, including from new investors, again demonstrating the strength of our ABS platform.

Hart: Turning to pages 13, and 14, our interest expense for the fourth quarter was $19 8 million or four 2% of average net receivables on an annualized basis better than our outlook on lower average debt and lower rates in November we closed the $250 million asset backed securitization transaction.

Hart: At a weighted average coupon of five 3% and 85 basis point improvement over our prior ABS deal the class a notes in the securitization.

Hart: Operating a AAA from standard and Poors and Morningstar D var, and we experienced significant demand across all classes of note, including some new investors again, demonstrating the strength of our ABS platforms.

Harpreet Rana: As of December 31st, 79% of our debt is fixed rate with a weighted average coupon of 4.1% and a weighted average revolving duration of 1.3 years. In the first quarter, we expect interest expense to be approximately $20 to $20.5 million, or 4.2% to 4.3% of our average net receivables. As our lower fixed rate funding matures and we continue to grow using variable rate debt, our interest expense will increase as a percentage of average net receivables. In addition, our balance sheet remains strong, and we continue to maintain ample liquidity to fund our growth. We have nearly $200 million of lifetime loan loss reserves as well as $357 million of stockholders' equity, or approximately $35.67 in book value per share.

Hart: As of December 31st 79% of our debt is fixed rate with a weighted average coupon of four 1% and a weighted average revolving duration of 1.3 years.

Hart: In the first quarter, we expect interest expense to be approximately $20 million to $25 million or four 2% to four quite 3% of our average net receivables.

Hart: Lower fixed rate funding matures and we continue to grow using variable rate debt. Our interest expense will increase as a percentage of average net receivables.

Hart: In addition, our balance sheet remains strong and we continue to maintain ample liquidity to fund our growth we have nearly $200 million of lifetime loan loss reserve as well as $357 million of stockholders' equity or approximately $35 and 67.

Harpreet Rana: We will continue to maintain a strong balance sheet with ample liquidity and borrowing capacity, diversified and staggered funding sources, and a sensible interest rate management strategy. In terms of income taxes, we incurred an effective tax rate of 22.3% in the fourth quarter, and for the first quarter of 2025, we expect an effective tax rate of roughly 24.5% prior to discrete items. On the bottom line, we expect that our first quarter net income will be roughly $7 million. As a reminder, last year's first quarter net income benefited by $2.6 million from the fourth quarter 2023 special loan sale, or $3.4 million on a pre-tax basis.

Hart: Value for sure we will continue to maintain a strong balance sheet with ample liquidity and borrowing capacity diversified and staggered funding sources on a festival interest rate management strategy.

Hart: In terms of income taxes, we incurred an effective tax rate of 22, 3% in the fourth quarter and for the first quarter of 2025, we expect an effective tax rate.

Hart: 24, 5% prior to discrete items.

Hart: On the bottom line, we expect that our first quarter net income will be roughly $7 million. As a reminder, last year's first quarter net income benefited by $2 6 million from the fourth quarter 2023 special loan sale or $3 4 million on a pretax basis.

Harpreet Rana: Of the $3.4 million pre-tax benefit, $1.5 million was attributable to lower credit costs, and $1.9 million was attributable to higher revenue from lower revenue reversals. As we've discussed, we won't experience a similar benefit in the first quarter of this year because we didn't close a similar special loan sale in the fourth quarter of 2024. In addition, this year's first quarter net income will reflect our efforts to lean back into growth. Consistent with the first quarter guidance that I provided earlier, we expect first quarter 2025 revenue to be up year-over-year on higher average net receivables, despite the loan sale benefit in the prior year period.

Hart: Of the $3 4 million pretax benefit one 5 million was attributable to lower credit costs and $1 9 million was attributable to higher revenue from lower revenue reversal as.

Hart: As we've discussed we won't experience a similar benefit in the first quarter of this year, because we didnt close a similar special loan sale in the fourth quarter of 2024.

Hart: In addition, this year's first quarter net income will reflect our efforts to lean back into growth.

Hart: Consistent with our first quarter guidance that I provided earlier, we expect first quarter 2025 revenue to be up year over year on higher average net receivables. Despite the loan sale benefit in the prior year period, while our credit performance has improved and our adjusted net credit loss rate will be better year over year.

Harpreet Rana: While our credit performance has improved and our adjusted net credit loss rate will be better year-over-year, our net credit losses will be up from the prior year because of the prior year loan sale benefit. Our investment and growth will also increase our provisioning expense in the first quarter of this year, as we expect to largely maintain our portfolio size in the quarter, rather than benefit from a reserve release from a large liquidation of our portfolio, like we had in the first quarter of last year. We'll also incur incrementally higher G&A expenses to support the larger portfolio and our newly added branches, and interest expense will be higher due to our larger portfolio size and the increase in prevailing interest rates.

Hart: Net credit losses will be up from the prior year because of the prior year long still thermostat.

Hart: Our investment in growth will also increase our provisioning expense in the first quarter of this year as we expect to largely maintain our portfolio size in the quarter rather than benefit from a reserve release from a large liquidation of a portfolio like we had in the first quarter of last year will also incur incrementally higher G&A expenses.

Hart: The larger portfolio and our newly added branches and interest expense will be higher due to our larger portfolio size and the increase in prevailing interest rates.

Harpreet Rana: As Rob noted, we aren't yet providing full-year net income guidance, but we're committed to increasing our net income meaningfully in 2025. I will, however, provide a reminder that consistent with typical seasonal patterns, we expect that our net income will be lower in the first half of the year than the second half of the year as we begin to provision for loan growth and due to seasonally higher net credit losses, particularly as our remaining back-book portfolio rolls to loss. Net income will then increase materially in the second half of the year as we benefit on the revenue line from a larger portfolio size and on the credit and revenue lines from seasonally lower net credit losses.

Hart: As Rob noted, we arent, yet providing full year net income guidance, but we're committed to increasing our net income meaningfully in 2025 I will however, provide a reminder that consistent with typical seasonal patterns. We expect that our net income will be lower in the first half of the year than the second half of the year as we begin to provision for long.

Hart: And due to seasonally higher net credit losses, particularly as our remaining backlog portfolio well la net.

Hart: Net income will then increase materially in the second half of the year as we benefit on the revenue line from a larger portfolio size and on the credit and revenue lines from seasonally lower net credit losses.

Harpreet Rana: Aside from investing in our growth and strategic initiatives, we continue to allocate excess capital to our dividend and 30 million share repurchase programs. Our board of directors declared a dividend of $0.30 per common share for the first quarter. The dividend will be paid on March 13, 2025 to shareholders of record as of the close of business on February 20, 2025. Pursuant to our buyback program, we repurchased a little over 100,000 shares of our common stock in the fourth quarter at a weighted average price of $33.83 per share.

Hart: <unk> from investing in our growth and strategic initiatives, we continue to allocate excess capital towards dividend and $30 million share repurchase program.

Hart: Our board of directors declared a dividend of 30 cents per common share for the first quarter. The dividend will be paid on March 13th 2025 to shareholders of record as of the close of business on February 20th 2025.

Hart: They went to our buyback program, we repurchased a little over 100000 shares of our common stock in the fourth quarter at a weighted average price of $33 83 per share.

Harpreet Rana: Finally, I'll note that we provide a summary of our first quarter 2025 guidance on page 15 of our earnings supplement.

Hart: Finally, I'll note that we provide a summary of our first quarter 2020 guidance on page 15 of our earnings supplement that.

Rob Beck: That concludes my remarks, and I'll now turn the call back over to Rob. Thanks, Harp. Once again, I'd like to thank the regional team for its excellent work in 2024. We're proud of how we performed and of the results we delivered for our shareholders. In the fourth quarter, we generated strong portfolio and revenue growth, continued to improve our yields, operating efficiency, and portfolio credit performance, and posted solid bottom line results. The quarter kept an impressive year in 2024 where we materially improved our operating and financial metrics on nearly all lines. Looking ahead to 2025, we're excited that our portfolio credit quality and strengthening macroeconomic conditions are conducive to a return towards more normalized growth.

Hart: That concludes my remarks, and I'll now turn the call back over to Robert.

Harp: Thanks Harp once again like to thank the regional team for excellent work in 2024, we're proud of how we performed and the results we delivered for our shareholders in the fourth quarter. We generated strong portfolio revenue growth continued to improve our yields operating efficiency and portfolio credit performance and posted solid bottom line results.

Harp: The quarter capped an impressive year in 2024, where we materially improved our operating and financial metrics on nearly all lines.

Harp: Looking ahead to 2025, we're excited that our portfolio credit quality and strengthening macroeconomic conditions are conducive to a return towards more normalized growth.

Rob Beck: We'll pursue a minimum of 10% portfolio growth in 2025 while continuing to invest in our strategic initiative. These efforts will enable us to improve our net income and returns in the near and long term. Thank you again for your time and interest.

Harp: We will pursue a minimum of 10% portfolio growth in 2025, while continuing to invest in our strategic initiatives. These efforts will enable us to improve our net income and returns in the near and long term. Thank.

Harp: Thank you again for your time and interest I'll now open up the call for questions. Operator could you. Please open the line.

Operator: I'll now open up the call for questions.

Operator: Operator, could you please open the line? Certainly.

Operator: We'll now be conducting a question and answer session. If you'd like to be placed into question queue, please press star 1 on your telephone. Of confirmation, tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question. One moment, please, while we poll for questions.

Speaker Change: Certainly well now be conducting a question answer session, if you'd like to be placed in the question. Hugh Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May Press Star two if you like to remove your question from the Q1 moment. Please poll for questions. Our first question is coming from John Heck.

John Hecht: Our first question is coming from John Hecht from Jeffrey, your line is online. Afternoon, guys. Thanks for taking my questions. Your product mix between the large and smaller installment loans has been pretty consistent for a while. As we go into 2025, is there anything we should think about in terms of a makeshift in products, including the auto-secured products?

Speaker Change: From Jefferies. Your line is alive.

John Heck: Afternoon, guys. Thanks for taking my questions. It just.

John Heck: Your product mix between the large and smaller installment loans, it's been pretty consistent for a while.

John Heck: As you go as we go into 'twenty five is there anything we can think should think about in terms of a mix shift in products, including the auto secured product.

Rob Beck: Hey, John, thanks for the question. Yeah, we're going to continue to lean into the auto secured business. You know, our barbell strategy is working very well. You know, that that growth in the auto secured business is balancing out, you know, the growth in the, the higher rate, small loan business, which, as you know, is kind of the fuel for our business to, you know, graduate those customers into large loans.

Speaker Change: Hey, Jonathan Thanks for the question, Yeah, we're going to continue to lean into the auto secured business. Our barbell strategy is working very well you know that that growth in the auto secured business is balancing out the growth in the higher.

Speaker Change: The higher rate small loan business, which as you know it was kind of the fuel for our business too.

Speaker Change: Wait those customers and into large loans. So you know our strategy going into 2025 is going to be you know.

Rob Beck: So, you know, our strategy, you know, going into 2025, is going to be, you know, consistent with what, what we did in 2025. Okay.

Speaker Change: Consistent with what we did in 2024.

Speaker Change: Okay.

Rob Beck: And then, you know, I know the front book is getting better, you know, relative to the back book, but maybe anything you can, you know, any, I guess, details you can share with us on maybe the 24 vintage versus the 23 vintage? Is there any early looks to the relative performance of that? Yeah, I mean, I would tell you that, you know, the newer originations that we're putting on are performing, you know, right in line with our expectations, which is good. And I think you can kind of see that, you know, again, you know, on the front book, back book split that we provide in the supplement.

Speaker Change: And then you know.

Speaker Change: I know that the front book is getting better.

Relative tobacco, but maybe anything you can you know any I guess details you can share with us on maybe the twenty-four vintage versus the 23 vintages or any early looks to the relative performance of that.

Speaker Change: Yeah, I mean, I would tell you that you know the new originations that we're putting on are performing right in line with our expectations, which is good and I think you can kind of see that you know again you know on the front book back book split that we provide in the in the supplement I mean, the delinquencies on the front book and again.

Rob Beck: I mean, the delinquencies on the front book, and again, delinquencies are still seizing on the front book is 7.2%, and on the back book, it's 11.9%. And even the reserve levels is indicative, you know, we're at 10.2% on the front book and 14.1 on the back book. And of course, you know, we reserve for lifetime losses. So that's kind of indicative of how the portfolio is performing. So, yeah, we're happy about the progress and tightening of the book and how that's flowing through the numbers. I mean, naturally, when we, you know, move up into the higher rate business, that is putting additional pressure, you know, on the small loans, delinquencies and, you know, and losses, but we're getting paid for it because of the higher rate.

Speaker Change: Delinquencies are still seasoning on the front book is seven 2%.

Speaker Change: And on the back book, It's it's 11, 9% and even the reserve levels as indicative you know we're at 10, 2% on the front book in 2000 14.1 on the back book and of course, you know we reserve for lifetime losses. So that's kind of indicative of how the portfolio is performing so yeah, we're happy about.

Speaker Change: The progress in tightening of the book and how that's.

Speaker Change: Flowing through the numbers I mean naturally when we move up into the higher rate business.

Speaker Change: That is putting additional pressure on the small loans delinquencies and and losses, but we're getting paid for it.

Speaker Change: Because of the higher yield.

John Hecht: Okay, and then any comments on, you know, how interest rate, you know, if we get one versus more than one rate cut this year, what that would, how that might impact you guys on a marginal perspective? So we've obviously calculated that, John. It's not something that we're going to disclose. But we've looked at 25 basis points, plus or minus, on both our variable and our fixed rate debt if we were to enter the market for a new fixed rate debt in 2025, which we plan on. Okay?

Speaker Change: Okay, and then any comments on how interest rate.

Speaker Change: If we get one versus more than one rate cut this year, what that would how that might impact you guys on the marginal perspective.

Speaker Change: So we've obviously calculated that John its not something that that were going to disclose but you know we've looked at 25 basis points plus or minus I'm on both our variable and our fixed rate debt. If we were to enter the market for a new fixed rate debt.

In 2025, which we plan on doing.

John Hecht: Wonderful, guys. Thanks very much. Great. Thanks, John.

Speaker Change: Okay wonderful guys. Thanks very much.

John Hecht: Have a good evening. Thank you.

Speaker Change: Thanks, Sean and good evening.

Speaker Change: Thank you as a reminder, that star one to be placed in the question queue. Our next question is coming from David Scharf from citizens JMP. Your line is that right.

Operator: As a reminder, that's star one to be placed in the question queue.

Peter Leijon: Our next question is coming from David Sharp from...

Peter Leijon: Peter Leijon is our... Hi, good afternoon. Thanks for taking my questions as well. Hey, Rob, wondering if you could just get a little clarification on, or really specifics on what indicators you're seeing out that, you know, give you conviction about consumer health. And I primarily ask because we've had a number of lenders in the last week. You know, still express some caution and... I think in the words of one of them, a big competitor of yours, they said, you know, we're not necessarily seeing an improving consumer, we just have better consumers on our books. and I think they were very clear to draw a distinction.

David Scharf: Hi, good afternoon, thanks for taking my questions as well.

Speaker Change: Hey, Rob wondering if.

Speaker Change: You can just get a little clarification on really specifics and what indicators you're seeing out there.

Speaker Change:

Did that.

Speaker Change: Give you conviction about consumer health improving.

Speaker Change: And I, primarily asked because we've had a number of lenders in the last week or so.

Speaker Change: Still express some caution and.

Speaker Change: I think in the words of one of our big competitor of Yours. They said.

Speaker Change: We're not necessarily seeing an improving consumer we just have better consumers on our books after two years of credit tightening.

Speaker Change: And I think they were very clear to draw a distinction between those two.

Peter Leijon: uh... but you seem to be expressing the fair amount of confidence that it's more than just your credit tightening uh... credit quality on the ground is improving uh... are there any You know, green flags you can highlight for us, like what specifically you're... In the consumer, is it either savings rates, payment rates, anything to help us out?

Speaker Change: But you seem to be expressing a fair amount of confidence that it's more than just your credit tightening that.

Speaker Change: Our credit quality on the ground is improving or are there any.

Speaker Change: You know Green flags, you can highlight for us late like what specifically Youre seeing.

Speaker Change: And the consumer is it either savings rates payment rates or anything to help us out.

Rob Beck: So David, great question. I think it's both, right? And it's a little hard to determine how much of one versus the other is coming through your portfolio. But certainly, tightening means that we put better credit on. And so that's consistent with whatever the other competitor said. I think when we look out going forward and we kind of look at the progression of what's happened this year, I mean, if you look at unemployment still low, you look at real wage growth. You know, I think the open jobs have come down a little bit to the $6 or $7 million range, but again, you know, for our customer set, it's over-indexed that way.

Speaker Change: So David Great question, I think it's both right and you know, it's a little hard to determine how much of one versus the other is coming through your portfolio, but but certainly tightening means that we put better credit on it and so that's.

Speaker Change: That's consistent with whatever the other competitor side I think when we look out going forward and we kind of look at you know kind of the progression of what's happened. This year I mean, if you look at unemployment is still low you look at real wage growth.

Speaker Change: I think the open jobs have come down a little bit to the six or $7 million range, but again, you know for our customers said, it's over index that way.

Rob Beck: You know, I've heard a thesis out there, and look, I'm not going to put a lot of weight on this one, but, you know, if immigration is slowed and there's less, you know, workers coming in for, you know, lower-paying jobs, that's going to put more pressure on – upward on wages for our customer set. So I think that there's a lot of things in the backdrop. You know, we're being balanced in our growth, you know, with a 10% growth, I think, given the environment, and the macro environment is pretty good. But, of course, you know, we're very mindful of, you know, other things that could happen, whether impacts of tariffs and other things, and we would – you know, we have the ability to adjust very quickly if we see anything kind of start to cause pressure on our portfolio.

Speaker Change: You know I've heard of a thesis out there and look at it I'm not going to put a lot of weight on this one but you know if immigration is.

Speaker Change: Is has slowed and theres less workers coming in for lower paying jobs, that's going to put more pressure on upward on wages for our customer set. So I think that there is there's a lot of things in the backdrop, you know where we're being balanced in our growth you know with a with a 10.

Speaker Change: Percent growth I think given the environment and the macro environment is it was pretty good but of course you know we're we're very mindful of you know other things that could happen weather impacts of tariffs and other things and we would you know we have the ability to adjust very quickly if we see anything kind of start to cause pressure on our portfolio.

Rob Beck: So, you know, by and large, I think the customer is healing. They certainly haven't completely gotten through the hangover effects of the high inflationary period, and there's still pockets of inflation. You know, as you know, inflation's not back down to the 2%. So we're watching it all, but I think from where we're at, we're feeling good about putting on a minimum of 10% E&R growth. You know, look, you know, we have the ability to grow much faster, but, you know, I think we temper that with all the things I've said.

Speaker Change: So by and large I think the the customer is is healing.

Speaker Change: You haven't completely gotten through the hangover effects of the high inflationary period, and there's still pockets of inflation.

Speaker Change:

Speaker Change: No inflation is not back down to the 2%. So we're watching it all but I think from where we're at where we're feeling good about putting on a minimum of 10% in our growth.

Speaker Change: Yeah.

Speaker Change: You know we have the ability to grow much faster, but you know I think we temper that with all the things I've just said.

Peter Leijon: got it, got it, it all sounds very constructive and maybe follow up on the competitive front you know We're seeing a lot more private credit.

Speaker Change: Got it got it no that's it.

Speaker Change: It sounds very constructive and maybe follow up on the competitive front you know, we've obviously seen a lot more private credit funds.

Speaker Change: First in the personal loan space in the last sort of 18 months.

Rob Beck: I'm curious, in your small loan category, Are you seeing any additional sources of funding come into that kind of asset class? is that a more. Well, it's hard for us to, I mean, on the funding side, what funding is coming in to support competitors, but when we look at what's happening competitively in that space, I mean, you know, a lot of the folks in the installment loan space have capped themselves at 36%. Obviously, there's players that are, you know, triple digits, but in the space that we play out, which is, you know, I would call it marginally above the 36% rate, which we have, which we believe is, you know, appropriate for our customers to give them access to credit and help them improve their, you know, their credit profile and graduate them to a lower rate loan.

Speaker Change: I'm curious in your small loan category.

Speaker Change: That higher yielding paper.

Speaker Change: Paper is it.

Speaker Change: Are you seeing any.

Speaker Change: Additional sources of funding come into that kind of asset class or.

Speaker Change: Is that a more benign.

Speaker Change: Area to be competing in right now.

Speaker Change: Well, it's hard for us to I mean on the funding side, what funding is coming in to support competitors, but when we look at what's happening competitively in that space. I mean, you know a lot of the folks in the installment loan space at Caf.

Speaker Change: [noise] themselves at 36%, obviously, there's players that are you know triple digits, but in the space that we play out which is you know I would I'd call it marginally above the 36% rate.

Speaker Change: Which we are which we believe is appropriate for our customers to give them access to credit and help them improve their you know the credit profile and graduate them to a lower rate loan I don't we're not really seeing any any change in the competitive dynamics. There in terms of pressure I think we could.

Rob Beck: I don't, we're not really seeing any change in the competitive dynamics there in terms of pressure.

Rob Beck: I think we could grow that space, you know. We're not going to go as fast as we wanted to, but we're being smart about it. Got it, got it.

Speaker Change: Grow that space, you know them as fast as we wanted to but where we're being smart about it.

Speaker Change: Got it got it and maybe just one last one sort of following up on that thought.

Rob Beck: And maybe just one last one, sort of following up on that thought. This is not meant to be a loaded question, but you did a good job of highlighting the trade-off between... growing faster and some of the accounting realities around CECL provisioning. But, you know. If you kind of set aside the account... You know, what are some of the... ignoring the accounting and volatility. What are some of the factors that sort of drive your decision about... maybe not striking while the iron is hot as much as you could. I get it, I get it. Yeah, no, I get it.

Speaker Change: This is not meant to be a loaded question, but.

Speaker Change: You did a good job of highlighting the tradeoff between.

Speaker Change: Growing faster and some of the accounting realities around Cecil provisioning.

Speaker Change:

Speaker Change: But you know.

Speaker Change: If if you kind of set aside the accounting.

Speaker Change: You know what what are some of the ignoring.

Speaker Change: Ignoring the accounting and volatility.

Speaker Change: What are some of the factors that sort of drive your decision about.

Speaker Change: Maybe not striking while the iron is hot as much as you could.

Speaker Change: Right.

Yeah.

Speaker Change: Yeah, you know what.

Speaker Change: Yeah, No I get it I mean look obviously there is the you know the optics of you know the timing from an accounting standpoint, which I'm not convinced the market has ever really look through an expanded you know the peas in a in the installment loan space for them for the seasonal effect I think it's it's.

Rob Beck: I mean, look, obviously there is the, you know, the optics of, you know, the timing from an accounting standpoint, which I'm not convinced the market has ever really looked through and expanded, you know, the PEs and the installment loan space for the CECL effect. I think it's, you know, you're naturally a higher risk business in subprime or near subprime, but you're reserving everything day one. And I don't think PE expansion has gone along with the accounting chain. But putting that aside, I mean, look, it's always a question of, you know, having capital to grow, which we do, and Harp's talked about the ample room on the balance sheet, you know, to grow the business.

Speaker Change: You know you're in a naturally a higher risk business in subprime and near subprime, but you're reserving everything day, one and I don't think P expansion is gone along with the accounting change, but putting that aside I mean look it's always a question of you know having capital and grow which we do in harvest talked about the ample room on the balance sheet.

Speaker Change: You know to grow the business. So we're not constrained there which is good and then it's really about execution in terms of how much investment dollars. We put to work relative to you know the timing of the return back on those investment dollars and I think we do a good job of balancing that out.

Rob Beck: So we're not constrained there, which is good. And then it's really about, you know, execution in terms of how much investment dollars we put to work relative to, you know, the timing of the return back on those investment dollars. And I think we do a good job of balancing that out. But we also know that we can flex up when we feel the time is right to flex up.

Speaker Change: But we also know that we can flex up when we feel the time is right to flex up I mean, and I'll give you a perfect example, in the fourth quarter you know, we flexed up and added added more branches put that and you know additional branches into the first quarter and you know those branches on average you know in a couple of years going to be.

Rob Beck: I mean, and I'll give you a perfect example, in the fourth quarter, you know, we flexed up and added more branches, put that in, you know, additional branches into the first quarter. And, you know, those branches, on average, you know, in a couple of years are going to be worth, you know, have $7 million in balances. So, you know, we're just being smart about how we invest and make sure we get the returns to, you know, in a timely way for those investments. And, you know, I think it bodes well for the future.

Speaker Change: You now have $7 million balances. So yeah, we're just being smart about how we invest and make sure we get the returns to them you know in a timely way for those investments and you know I think its it bodes well for the future.

Speaker Change: Understood great. Thanks. Thank.

Peter Leijon: Thank you.

Speaker Change: Thank you very much.

Peter Leijon: Thanks, David. Have a good night.

Speaker Change: Thanks, Dan.

Operator: Thank you.

Speaker Change: Thank you. Your next question today is coming from John Rowan from Janney. Your line is alive.

John Rowan: Next question today is coming from John Rowan from Janney. Your line is now live. Good afternoon. Just so I'm clear, you are guiding for net income to be above $41 million that you reported in 2024, is that correct?

John Rowan: Hey, good afternoon.

John Rowan: Just so I'm clear, you're you're guiding for net income to be about $41 million that you reported in 2024 is that correct.

Rob Beck: We've only guided to first quarter income, John, and we've given a specific number on that this quarter, which we've not done previously. The only thing I can say right now is that we are committed that net income, if all of the factors that are currently at play currently work out the way that we think they are, that we would be higher in net income meaningfully, as we said in the prepared report. Yeah, I mean, I think we said, John, look, we we could grow the net income, you know, up to 30%. But we're we're being mindful of, you know, the growth effect on that as well.

Speaker Change: We've only guided to first quarter income, John and and we've given a specific number on that this quarter, which we've not done previously I'm. The only thing I can say right. Now is that we are committed that you know net income. If you know all of the factors that are currently in play currently work out the way that we think.

Speaker Change: They are that we would be higher and net income meaningfully at least that in the prepared remarks, yeah. I mean, I think we said John look we could grow the net income.

Speaker Change: Up to 30%, but we're being mindful of you know the growth effect.

Rob Beck: And so that's, that's why we kind of laid it out the way.

Speaker Change: On that as well and so that's that's why we kind of laid it out the way we did.

John Rowan: Oh, I thought you said that we were going to grow net income in 2025. I didn't hear that correctly? Yeah. No, we did. We said we would. We would grow. Yeah. But we also said that, you know, this business could grow as much as 30 percent, but we pointed out the growth effect from CECL on that, so. No, no. I get it. You had $41 million of net income in 2024, and if you're growing, that means you would have to be somewhere north of that for 2025. Correct. That's what I wanted to clarify.

Speaker Change: I thought you said that we were going to grow net income in 2025 that I didn't hear that correctly.

Speaker Change: Yeah. We did we said we would we would grow at what we also said that you know this business could grow as much as 30 per se, but we pointed out the growth of the gross effect from seasonal on that so I don't know I got it I was just you had $41 million of net anytime in 2024, and if you're growing that means you would have to be somewhere north of that.

Speaker Change: For 2025.

Speaker Change: Correct.

Harpreet Rana: Okay, and then as far as G&A expenses, I mean is $65 million your take a little bit? Is that kind of the right run rate to use going forward?

Speaker Change: So that's that.

Speaker Change: What I wanted to clarify.

Speaker Change: And then as far as G&A expenses, I mean, it's $65 million give or take a little bit is that kind of the right run rate to use going forward.

Harpreet Rana: Yep, 65 to 65.5 is the guidance that we just gave. For first quarter.

Speaker Change: Yup 65 to 65.5 is the guidance that we've escaped for first quarter for first quarter.

John Rowan: Okay. And then, um...

Speaker Change: Okay.

Speaker Change: And then.

Harpreet Rana: You know, is there any, you know, one of your peers guided to kind of just a natural drift down in the cost of funds? You know, even if rates stay the same as, you know, some of the prior, you know, fixed cost stuff rolls off. Is there any type of, you know, benefit you guys have from a funding profile, just static, if, you know, forget the differences in funding one product versus the other, just static if, you know, if rates stay the same. So, I think what we have to think about for us is our securitizations that we have put on in the past that would be maturing, and those would reset, John, at a higher rate than what we put them on.

Speaker Change: Is there any.

Speaker Change: One of your peers guided to kind of just a natural drift down in the cost of funds you know even you have.

Speaker Change: Stay the same as you know some of the prior no fixed cost stuff rolls off as that.

Speaker Change: Is there any type of benefits do you guys have from our funding profile just static if you don't forget the differences in funding one product versus the other just static if youre if rates stay the same.

Speaker Change: Yeah.

Speaker Change: So I think what we have to think about for US is our securitization that we have put on in the past that would be maturing and those would reset John at a higher rate than what we put them on if you look at our cost of funds. We've done a really good job of keeping them around 4% for several quarters. We are now doing you know new secured.

Harpreet Rana: If you look at our cost of funds, we've done a really good job of keeping them around 4% for several quarters. We are now doing new securitizations, and we had a really good print on our last securitization, but as old securitizations that are around 3% mature, you will be putting them on at a higher rate. However, the other thing to remember is variable rates should come down depending upon how many rate cuts you believe are going to happen in 2025. So, you will see our securitizations at the fixed rates resetting at higher rates than what they've been at historically, but you should see variable rate debt come down if the interest rate curves reflect any cuts.

Speaker Change: <unk> and we had a really good print on our last securitization, but as old securitizations that are around 3% mature you will be putting them on at a higher rate. However, the other thing to remember is you know variable rate shouldn't come down depending upon how many rate cuts do you believe are going to happen in 2025. So you were.

You'll see our fixed caught our securitizations with the fixed rate three setting at higher rates than what they've been at historically, but you should see variable rate debt come down if interest rate. If the interest rate curve you know reflect any cuts yeah I think John the other thing I'd say is we've done such a good job of holding our cost of funds and locking in funding.

Harpreet Rana: Yeah, and John, the other thing I'd say is we've done such a good job of holding our cost of funds and locking in funding early that we never went up like some competitors. And so, the coming down is not in our book because we're fixed at a low rate. So, there'll be a natural creep up in cost of funds, of course, mitigated depending on what the Fed does. Okay.

Speaker Change: Lee that we never went up like like some competitors and so they're coming down is is is not not you know.

Speaker Change: In our book.

Speaker Change: Because where were fixed.

Speaker Change: At a low rate so there'll be a natural creep up in cost of funds of course mitigated depending on what the fed does over the course of the year. Okay. All right fair enough. Thank you.

John Rowan: All right. Fair enough.

John Rowan: Thank you.

John Rowan: Thanks, John. Have a good evening.

Speaker Change: Thanks, Shawn and good evening.

Operator: Thank you.

Vincent Caintic: Next question is coming from Vincent Caintic from BTIG, your line is online. Good afternoon. Thanks for taking my questions. Going back to credit. So you sound more positive about the new originations that you're getting in all the different categories of your originations.

Speaker Change: The next question is coming from Vincent cancer from BPI Junior miners that life.

Hey, good afternoon, thanks for taking my questions and they've been pulling back to me.

Speaker Change: Hey.

Speaker Change: Thanks for taking my questions are going back to credit.

Speaker Change: And you sound more positive about the new originations.

Harpreet Rana: Just wondering if you could talk about sort of the credit reserve rate that you're expecting on these new originations, and I'm guessing we should be expecting both credit improvement as well as maybe the credit reserves coming down over the course of 2025. So just wanted to get your views.

Speaker Change: If you're getting all the different categories of your originations just wondering if you could talk about.

Speaker Change: Sort of be the credit reserve rate that you're expecting on these new originations and I am guessing you should be expecting.

Speaker Change: Both credit.

Speaker Change: The improvement as well as maybe the credit reserves coming down over the course of 2025. So just wanted to get your views on that.

Harpreet Rana: Yeah, what I would tell you is, I mean, we guided in the first quarter, I think, to stay flat to the fourth quarter.

Speaker Change: Yeah, what I would tell you is I mean, we guided in the first quarter I think to stay to stay flat.

Speaker Change: Fourth quarter, you know what I would tell you is this is first quarter is the most impactful quarter for the industry because of the tax season, and you know I think that you know that plus you know obviously you know just getting another quarter's worth of understanding what's happening from a macro standpoint as well as.

Harpreet Rana: You know, what I would tell you is this, is first quarter is the most impactful quarter for the industry because of tax season. And you know, I think that, you know, that plus, you know, obviously, you know, just getting another quarter's worth of understanding what's happening from a macro standpoint, as well as what's happening from a policy standpoint in D.C., I think will help us give you kind of better guidance on that.

Speaker Change: What's happening from a policy standpoint in D. C. I think will help us give you kind of kind of better guidance on that now you know I think if you look at the reserve levels that we have on the front book at 10 two.

Harpreet Rana: Now, you know, I think if you look at the reserve levels that we have on the front book at 10-2, you know, you kind of see, and that's a lifetime, you know, reserve, you can kind of see that's, you know, kind of where you start evolving to once the back book comes off, you know, so that's kind of what I would say. Okay, great, thank you.

Speaker Change: You know you kind of see and that's a lifetime reserve you can kind of see that you know kind of where you started evolving to once the back book comes off you know so that's kind of what I would say to you.

Speaker Change: Okay.

Speaker Change: Okay, great. Thank you.

Harpreet Rana: And then, I guess, relatedly, so you provided the commentary that the first half, or I should say the second half net income is higher than the first half net income, part of the seasonality. I guess, should we be thinking that the growth rate on your originations, you would hit the, I guess, the expected level of growth rate, so that's where we're seeing that level of, I guess, net income starting to come in where the reserves aren't overpowering it yet at that point. Well, I guess where I would put it is, you know, so the first quarter, you know, we guided to, you know, some runoff in the portfolio, which is a lot less runoff.

Speaker Change: And then I guess relatedly.

Speaker Change: You provided the commentary that the first half or I should say the second half net income is higher than the first half net income part of the seasonality, but I guess should we be thinking about the growth rate on.

Speaker Change: On your originations.

You would get the.

Speaker Change: I guess the expected level of growth rate. So that's that's where.

Speaker Change: Where we're seeing that level of.

Speaker Change: Net income starting to come in where the reserves aren't overpowering it yet at that point.

Speaker Change: Well, I guess, where I would put it is you know so the first quarter we guided.

Speaker Change: You know some run off in the portfolio, which is a lot less run off than in prior years and part of that is because of the new branches, we built in and building up the portfolio and so I think he got a few things you know going through the dynamics of the profitability. One is you know just the the portfolio growth.

Harpreet Rana: And I'm going to go through a couple of the things that we've done in the prior years. And part of that is because of the new branches we built and building up the portfolio. And so, I think you got a few things going through the dynamics of the profitability. One is just the portfolio growth that we...or the lower runoff that we have in the first quarter. But then when you...on top of that, the rest of the growth will be in the last three quarters of the year. But if you look from a credit standpoint... You know, as the seasonal increase in the first quarter for NCL moves back down post-tax season and you see back book continue to run off, you're going to see the benefit on the bottom line in the second half of the year from the portfolio as well as the better credit Okay, perfect.

Speaker Change: The lower runoff that we have in the first quarter, but then you on top of that the rest of the growth will be in the last three quarters of the year, but if you look from a credit standpoint, you know as the back.

Speaker Change: Seasonal increase in the first quarter for Ncl's moves back down post tax season and.

Speaker Change: And you see back book continue to run off you're going to see the benefit on the bottom line in the second half of the year from the portfolio as well as the better credit performance.

Speaker Change: Okay perfect that makes sense and then last one for me is just you mentioned a couple of times about the impact of the tax refunds in the first quarter.

Harpreet Rana: That makes sense.

Vincent Caintic: And last one for me, since you mentioned a couple of times about the impact of the tax refunds in the first quarter, if we could get what your what your views are for this year, if there's anything. or anything incremental from that. Thank you.

Speaker Change: If we could get what your what your views are for this year, if there's anything.

Speaker Change: Unusual or anything incremental from that you know really too early to tell I would say were only just starting to here you know on some of our calls about tax refunds and so where we're a few weeks away from starting to get any kind of indication on that so you know.

Vincent Caintic: You know really too early to tell, I would say we're only just starting to hear, you know, on some of our calls about tax refunds, so, we're a few weeks away from starting to get any kind of indication on that, so, you know, stay tuned on the show. Okay, sounds good. Thank you very much.

Speaker Change: Stay tuned on that.

Speaker Change: Okay sounds good thank you very much.

Vincent Caintic: All right. Thanks, Vincent.

Speaker Change: Alright, Thanks Vincent.

Vincent Caintic: Have a good one. Thank you.

Speaker Change: Thank you we reached end of our question and answer session I'd like to turn the floor back over for any further or closing comments.

Rob Beck: We have reached the end of our question and answer session. I'd like to turn the floor back over for any further closing Yeah, thank you, operator. And thanks, everyone, for joining.

Speaker Change: Yeah. Thank you operator, and thanks, everyone for joining I'm.

Rob Beck: You know, I think the takeaway here is from from my perspective, Harp's perspective, you know, fourth quarter results is very much indicative of where we are as a business going in 2025, you know, we had solid bottom line growth in 2024. We increased our book value by 8% to $35.70, paid out a $1.20 dividend per share, announced the $30 million buyback. And, you know, purchased about $3.5 million of that in the fourth quarter. You know, we had record E&R and revenues. As I said, we expect a minimum 10% E&R growth this coming year. And, of course, we talked about the growth effect of CECL.

Speaker Change: You know I think the takeaway here is from my perspective Harp perspective, you know fourth quarter results is very much indicative of where we are as a business going into 2025. You know we have saw solid bottom line growth in 2024, we increased our book value by 8% to $35.

Speaker Change: 70 cents paid out $1 20 dividend per share announced a $30 million buyback and purchased about three and a half million of add in the fourth quarter. You know we had record Ian are in revenues as I said, we expect a minimum 10% a year in our growth this coming year and of course, we talked about the growth in fact.

Speaker Change: So our credit front book is performing as expected our barbell strategy is working well because we balance out the low risk auto secured with the higher rates small loan business to drive returns continue.

Rob Beck: Our credit front book is performing as expected. Our barbell strategy is working well because we balance out the low risk auto secured with the higher rate small loan business to drive returns. And then, of course, strong balance sheet management. And, you know, as Harp said, cost of funds have been hovering around 4% for a lot of quarters. It was actually down 10 basis points versus third quarter. And only up 20 basis points versus last year. So, all those drivers are putting us in a great position and we're well placed, I think, to continue our momentum in 2025.

Speaker Change: Continued expense expense discipline, while investing in growth and.

Speaker Change: Look I being down you know were down and you know expenses versus prior year and even without the restructuring we held.

Speaker Change: <unk> expense is pretty modest growth year on year, and then of course strong balance sheet management and you know its hard cost of funds has been hovering around 4% for a lot of quarters. It was actually down 10 basis points versus the third quarter and only up 20 basis points versus last year. So all of those drivers are putting us in.

Speaker Change: A great position and we're well well placed I think to continue our momentum into 2025. So thanks again for joining and have a good evening.

Rob Beck: So, thanks again for joining and have a good evening.

Operator: Thank you.

Speaker Change: Thank you that does conclude today's teleconference and webcast you may disconnect at this time and have a wonderful day, we thank you for your participation today.

Operator: That does conclude today's teleconference and webcast and we disconnect to line out this time and have a wonderful day. We thank you for your participation.