Regional Management Q4 2025 Regional Management Corp Earnings Call | AllMind AI Earnings | AllMind AI
Q4 2025 Regional Management Corp Earnings Call
Speaker #1: Greetings. And welcome to the Regional Management fourth quarter, 2025 earnings call. At this time, all participants are in a listen-only mode. A presentation. You may be placed recorded.
Speaker #1: Greetings. And welcome to the Regional Management fourth quarter, 2025 earnings call. At this time, all participants are in a listen-only mode. A presentation. You may be placed keypad.
Operator: Greetings, and welcome to the Regional Management Q4 2025 Earnings Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. You may be placed into question queue at any time by pressing star one on your telephone keypad. As a reminder, this conference is being recorded. If anyone should require operator assistance, please press star zero. It's now my pleasure to turn the call over to Garrett Edson with ICR. Garrett, please go ahead.
Operator: Greetings, and welcome to the Regional Management Q4 2025 Earnings Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. You may be placed into question queue at any time by pressing star one on your telephone keypad. As a reminder, this conference is being recorded. If anyone should require operator assistance, please press star zero. It's now my pleasure to turn the call over to Garrett Edson with ICR. Garrett, please go ahead.
Speaker #1: If anyone question-and-answer session will follow the formal should require operator assistance, please press star zero. It's now my pleasure to turn the call over to Garrett Edson with As a reminder, this conference is being ICR.
Speaker #1: Garrett, please go
Speaker #1: ahead. Thank you and good
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. Before we begin our formal remarks, I will direct you to page 2 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.
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. Before we begin our formal remarks, I will direct you to page 2 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 #2: 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 #2: Before we begin our formal remarks, I will direct you to page two of our supplemental presentation, which contains statements and the use of non-GAAP financial important disclosures concerning forward-looking measures.
Speaker #2: 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.
Speaker #2: 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 #2: These statements are not guarantees of future performance, and therefore, you should not place undue reliance upon them. 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 condition.
Garrett Edson: These statements are not guarantees of future performance, and therefore you should not place undue reliance upon them. 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. Also, our discussion today may include references to certain non-GAAP measures. A 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. I would now like to introduce Lakhbir Lamba, President and CEO of Regional Management Corp.
Garrett Edson: These statements are not guarantees of future performance, and therefore you should not place undue reliance upon them. 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. Also, our discussion today may include references to certain non-GAAP measures. A 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. I would now like to introduce Lakhbir Lamba, President and CEO of Regional Management Corp.
Speaker #2: Also, our discussion today may include references to certain non-GAAP measures to the most comparable GAAP measures, can measures. For reconciliation of these be found within our earnings announcement or earnings presentation and posted on our website at regionalmanagement.com.
Speaker #2: I would now like to introduce Laffer Lamba, president and CEO of Regional Management Corp.
Lakhbir Lamba: Thanks, Garrett, and good afternoon, everyone. I'm pleased to be joining you today on my first earnings call as President and CEO of Regional Management. Over the past few months, I've had the opportunity to spend time in the business, meet many members of the Regional team, and deepen my understanding of what makes this company special. I've also had significant time that I've spent reviewing the economics of the business across various customer, product, risk, and market segments, with an eye towards opportunities to grow net income and increase risk-adjusted returns. I'm excited about the opportunity ahead and honored to lead an organization with strong culture, a disciplined operating model, and a long track record of responsible growth. Before turning to our results, I want to thank Rob for his leadership in building the strong platform we have today.
Lakhbir Lamba: Thanks, Garrett, and good afternoon, everyone. I'm pleased to be joining you today on my first earnings call as President and CEO of Regional Management. Over the past few months, I've had the opportunity to spend time in the business, meet many members of the Regional team, and deepen my understanding of what makes this company special. I've also had significant time that I've spent reviewing the economics of the business across various customer, product, risk, and market segments, with an eye towards opportunities to grow net income and increase risk-adjusted returns. I'm excited about the opportunity ahead and honored to lead an organization with strong culture, a disciplined operating model, and a long track record of responsible growth. Before turning to our results, I want to thank Rob for his leadership in building the strong platform we have today.
Speaker #3: Everyone, I'm pleased to be—thanks, Garrett—and good afternoon. I'm joining you today on my first earnings call as President and CEO of Regional Management.
Speaker #3: Over the past few months, I've had the opportunity to spend time in the business, meet many members of the regional team, and deepen my understanding of what makes this company special.
Speaker #3: I've also had significant time that I've spent reviewing the economics of the business across various customer product risk and market segments. With an eye towards opportunities to grow net income and increase about the opportunity ahead and honored to lead an organization with strong culture, a disciplined operating model, and a long track record of responsible growth.
Speaker #3: Before turning to our results, risk-adjusted returns. I want to thank Rob for his I'm excited leadership in building the strong platform working closely with him during this transition.
Speaker #3: We have today. I've appreciated outlook. And then Harp will walk through the financial details. We delivered strong financial and operating results in the fourth quarter and finished 2025 with excellent momentum.
Lakhbir Lamba: I've appreciated working closely with him during this transition. Regional enters 2026 from a position of strength, and my focus is on building on that momentum. Joining me on the call today is Harp Rana, our Chief Financial and Administrative Officer. I'll begin with a summary of our Q4 and full year results, provide an update on our strategic priorities and outlook, and then Harp will walk through the financial details. We delivered strong financial and operating results in the Q4 and finished 2025 with excellent momentum. In the Q4, we generated net income of $12.9 million, or $1.30 of diluted earnings per share, representing an increase of 33% year-over-year. This result exceeded our guidance, despite incurring a larger provision for credit losses, driven by stronger than expected portfolio growth.
Lakhbir Lamba: I've appreciated working closely with him during this transition. Regional enters 2026 from a position of strength, and my focus is on building on that momentum. Joining me on the call today is Harp Rana, our Chief Financial and Administrative Officer. I'll begin with a summary of our Q4 and full year results, provide an update on our strategic priorities and outlook, and then Harp will walk through the financial details. We delivered strong financial and operating results in the Q4 and finished 2025 with excellent momentum. In the Q4, we generated net income of $12.9 million, or $1.30 of diluted earnings per share, representing an increase of 33% year-over-year. This result exceeded our guidance, despite incurring a larger provision for credit losses, driven by stronger than expected portfolio growth.
Speaker #3: Regional enters 2026 from a position of strength and my focus is on building on that momentum. Joining me on the call chief financial and administrative officer, I'll begin with a summary of her fourth quarter and fully results.
Speaker #3: In the of 12.9 million, earnings per share, representing an increase of 33% year over or $1.30 of diluted year. exceeded our guidance despite This result incurring a larger provision for credit losses driven by stronger fourth quarter, we generated net income than expected portfolio growth.
Speaker #3: Quarterly revenue reached record levels reflecting continued growth in net receivables, and consistent execution across the organization. For the full year, we generated net income of 44.4 million 8% compared to end of the guidance range we previously provided.
Lakhbir Lamba: Quarterly revenue reached record levels, reflecting continued growth in net receivables and consistent execution across the organization. For the full year, we generated net income of $44.4 million, an increase of 8% compared to 2024, landing towards the upper end of the guidance range we previously provided. Ending net receivables grew by $248 million, or 13% year-over-year, in line with the growth guidance of at least 10% that we provided at the outset of 2025. We closed the year with a loan portfolio of $2.1 billion. Portfolio growth remained a key driver of our performance. In Q4, net receivables increased by $87 million, supported by strong origination activity across channels and a healthy customer demand.
Lakhbir Lamba: Quarterly revenue reached record levels, reflecting continued growth in net receivables and consistent execution across the organization. For the full year, we generated net income of $44.4 million, an increase of 8% compared to 2024, landing towards the upper end of the guidance range we previously provided. Ending net receivables grew by $248 million, or 13% year-over-year, in line with the growth guidance of at least 10% that we provided at the outset of 2025. We closed the year with a loan portfolio of $2.1 billion. Portfolio growth remained a key driver of our performance. In Q4, net receivables increased by $87 million, supported by strong origination activity across channels and a healthy customer demand.
Speaker #3: Ending net receivables grew by dollars, an increase of 2024. Landing towards the upper 248 million, or 13% year over year, in line with the growth guidance of at least 10% that we provided at the outset of 2025.
Speaker #3: We closed the year 2.1 billion. Portfolio growth remained a key driver of our performance. In the fourth quarter, net receivables increased by 87 million dollars, supported by strong origination activity across channels, and a healthy customer demand.
Speaker #3: Total fourth quarter originations was 537 million dollars, up meaningfully from the prior year encouraging trends in our underlying period. We continue to see fourth quarter.
Lakhbir Lamba: Total fourth quarter originations was $537 million, up meaningfully from the prior year period. We continue to see encouraging trends in our underlying credit performance. Our 30-plus delinquency rate improved 20 basis points year-over-year in the fourth quarter, supported by our credit tightening actions, improved analytics and credit decisioning, and strong performance in most segments of newer vintages. This trend supports continued improved credit performance throughout the year. On an adjusted basis, our fourth quarter 2025 annualized net credit loss rate improved by 30 basis points year-over-year, and our full year 2025 net credit loss rate improved by 70 basis points compared to the prior year. These improvements reflect disciplined underwriting, enhanced credit risk management, and the benefits of investments we've been making in data, analytics, and portfolio monitoring.
Lakhbir Lamba: Total fourth quarter originations was $537 million, up meaningfully from the prior year period. We continue to see encouraging trends in our underlying credit performance. Our 30-plus delinquency rate improved 20 basis points year-over-year in the fourth quarter, supported by our credit tightening actions, improved analytics and credit decisioning, and strong performance in most segments of newer vintages. This trend supports continued improved credit performance throughout the year. On an adjusted basis, our fourth quarter 2025 annualized net credit loss rate improved by 30 basis points year-over-year, and our full year 2025 net credit loss rate improved by 70 basis points compared to the prior year. These improvements reflect disciplined underwriting, enhanced credit risk management, and the benefits of investments we've been making in data, analytics, and portfolio monitoring.
Speaker #3: A supports continued improved credit performance throughout the year. On an adjusted basis, our fourth quarter 2025 annualized net credit loss rate improved by 30 basis points year 2025 net credit loss rate improved by over year, and our full year 70 basis points compared to the prior year.
Speaker #3: Supported by 30-plus delinquency rate improved our credit-tightening actions, decisioning, and strong 20 basis points year over year in the credit performance. performance in most segments of newer vintages.
Speaker #3: These improvements reflect disciplined underwriting enhanced credit risk management, making in data analytics and and the benefits of investments we've been portfolio monitoring. During the first quarter, we expect to observe typical seasonality in net credit losses, reflective of our later stage delinquency levels, which ordinarily drive a sequential net credit loss rate increase of roughly 150 basis points.
Lakhbir Lamba: During Q1, we expect to observe typical seasonality in net credit losses, reflective of our later stage delinquency levels, which ordinarily drive a sequential net credit loss rate increase of roughly 150 basis points. Where we land in Q1 will be sensitive to the denominator impact of payment and credit behavior, driven by expected elevated tax refunds. Looking ahead, we'll continue to improve our net credit loss rate with a portfolio NCL rate risk tolerance level under 10% over the long term. Assuming a stable macroeconomic environment, we would expect to make continuous progress towards this 10% level throughout 2026. Expense discipline remained a key priority throughout the quarter and the year.
Lakhbir Lamba: During Q1, we expect to observe typical seasonality in net credit losses, reflective of our later stage delinquency levels, which ordinarily drive a sequential net credit loss rate increase of roughly 150 basis points. Where we land in Q1 will be sensitive to the denominator impact of payment and credit behavior, driven by expected elevated tax refunds. Looking ahead, we'll continue to improve our net credit loss rate with a portfolio NCL rate risk tolerance level under 10% over the long term. Assuming a stable macroeconomic environment, we would expect to make continuous progress towards this 10% level throughout 2026. Expense discipline remained a key priority throughout the quarter and the year.
Speaker #3: Where we land in the first quarter will be sensitive to the denominator impact of payment and credit behavior, driven by expected elevated tax refunds.
Speaker #3: Looking ahead, we'll continue with a portfolio and CL rate risk tolerance level under term. Assuming a stable macroeconomic environment, we would expect to make continuous progress towards this 10% level throughout 2026.
Speaker #3: Expense discipline remained a key priority throughout the quarter, and the year. Our annualized operating expense ratio was 12.4% in the fourth quarter. An all-time best and an improvement of 160 basis points compared to the prior year period.
Lakhbir Lamba: Our annualized operating expense ratio was 12.4% in the fourth quarter, an all-time best and an improvement of 160 basis points compared to the prior year period. This reflected benefits of scale and continued focus on operating efficiency. For the full year, our operating expense ratio was 13.1%, an improvement of 70 basis points year-over-year, even as we continued to invest in the business. Capital generation remained strong throughout 2025. For the full year, we generated $74 million of capital and returned $36 million to shareholders through dividends and share repurchases. Our balance sheet remains healthy, flexible, and well-positioned to support continued growth and capital returns. Overall, we are very pleased with how the year finished and with the consistency of execution throughout the company.
Lakhbir Lamba: Our annualized operating expense ratio was 12.4% in the fourth quarter, an all-time best and an improvement of 160 basis points compared to the prior year period. This reflected benefits of scale and continued focus on operating efficiency. For the full year, our operating expense ratio was 13.1%, an improvement of 70 basis points year-over-year, even as we continued to invest in the business. Capital generation remained strong throughout 2025. For the full year, we generated $74 million of capital and returned $36 million to shareholders through dividends and share repurchases. Our balance sheet remains healthy, flexible, and well-positioned to support continued growth and capital returns. Overall, we are very pleased with how the year finished and with the consistency of execution throughout the company.
Speaker #3: and continued focus on operating efficiency. For the This reflected benefits of scale full year, our operating expense ratio was 13.1%, an improvement of 70 basis points year over year, even as we continued to invest in the business.
Speaker #3: Capital generation remained strong throughout 2025. For the full year, we generated 74 million of capital and returned 36 million to shareholders through repurchases. Our balance sheet remains dividends and share healthy, flexible, and well-positioned to support continued growth and capital returns.
Speaker #3: Overall, we are very pleased with how the year finished and with the consistency of execution throughout the company. As I step into this role, my immediate focus has been on listening, learning, and building on regional strengths.
Lakhbir Lamba: As I step into this role, my immediate focus has been on listening, learning, and building on regional strengths. That said, there are several areas I see meaningful opportunity to grow shareholder value. First, portfolio growth remains a core priority, and within that, our auto-secured portfolio stands out as a particularly attractive opportunity. In 2025, our auto-secured portfolio grew by 42% year-over-year and continues to represent a larger portion of our overall portfolio. Credit performance and returns in this segment remain extremely compelling, and we will continue to invest in this asset class in a disciplined and analytical, rigorous manner. Second, we continue to expand our physical footprint in attractive markets. In Q4, we opened 5 new branches in California and Louisiana.
Lakhbir Lamba: As I step into this role, my immediate focus has been on listening, learning, and building on regional strengths. That said, there are several areas I see meaningful opportunity to grow shareholder value. First, portfolio growth remains a core priority, and within that, our auto-secured portfolio stands out as a particularly attractive opportunity. In 2025, our auto-secured portfolio grew by 42% year-over-year and continues to represent a larger portion of our overall portfolio. Credit performance and returns in this segment remain extremely compelling, and we will continue to invest in this asset class in a disciplined and analytical, rigorous manner. Second, we continue to expand our physical footprint in attractive markets. In Q4, we opened 5 new branches in California and Louisiana.
Speaker #3: That said, there are several areas I see meaningful opportunity to grow shareholder value. First, portfolio growth remains a core priority. And within that, our auto-secured portfolio stands out as a particularly attractive opportunity.
Speaker #3: In 2025, our auto-secured portfolio grew by 42% year over year, and continues to represent a larger portion of our overall portfolio. Credit performance and returns in this segment remain extremely class in a disciplined and analytical rigorous manner.
Speaker #3: Second, we continue to expand our physical footprint in attractive markets in the fourth quarter. We opened five new branches in California and Louisiana. Looking ahead, we expect to open additional branches throughout 2026, with the potential for a new state expansion as well.
Lakhbir Lamba: Looking ahead, we expect to open additional branches throughout 2026, with the potential for new state expansion as well. We will approach this expansion thoughtfully, with a focus on execution, local talent, fraud and credit risk, and returns. Third, I see significant opportunities in continuing to invest in our people, technology, data and analytics, and credit risk management. Regional success has been built on strong operators, a disciplined credit culture, and continuous improvement. My initial assessment of our digital capabilities, origination, and servicing customer journey indicates numerous opportunities to improve both the customer and team member experience. We believe investment in digital and AI will help us grow origination and lower our cost to originate and service our loan book. Importantly, even as we make these investments, we will continue lowering our operating expense ratio over time, supported by scale and productivity improvements.
Lakhbir Lamba: Looking ahead, we expect to open additional branches throughout 2026, with the potential for new state expansion as well. We will approach this expansion thoughtfully, with a focus on execution, local talent, fraud and credit risk, and returns. Third, I see significant opportunities in continuing to invest in our people, technology, data and analytics, and credit risk management. Regional success has been built on strong operators, a disciplined credit culture, and continuous improvement. My initial assessment of our digital capabilities, origination, and servicing customer journey indicates numerous opportunities to improve both the customer and team member experience. We believe investment in digital and AI will help us grow origination and lower our cost to originate and service our loan book. Importantly, even as we make these investments, we will continue lowering our operating expense ratio over time, supported by scale and productivity improvements.
Speaker #3: We will approach this expansion thoughtfully with a focus on execution, local talent, fraud and credit risk, and returns. Third, I see significant opportunities in continuing to invest in our people, technology, data analytics, and credit risk management.
Speaker #3: Regional success has been built on strong operators, a disciplined credit culture, and continuous improvement. My initial assessment of our digital capabilities origination and servicing customer journey indicates numerous opportunities to improve both the customer and team member experience.
Speaker #3: We believe investments in digital and AI will help us grow originations and lower our cost to originate and service our loanbook. investments, we will continue lowering our operating expense ratio over productivity improvements.
Speaker #3: In parallel, we remain focused on improving branch and state-level profitability. As the portfolio and footprint grow, disciplined evaluation of to delivering performance in every segment will remain critical sustainable, profitable growth and maximizing risk-adjusted return on capital.
Lakhbir Lamba: In parallel, we remain focused on improving branch and state-level profitability. As the portfolio and footprint grow, disciplined evaluation of performance in every segment will remain critical to delivering sustainable, profitable growth and maximizing risk-adjusted return on capital. As we look at our business across various markets and digital affiliate channels, we are paying particular attention to first payment default trends, sales productivity, operating expenses, and risk-adjusted yields. We believe we have opportunities to optimize our yields and operating expenses in certain markets. I also want to touch briefly on an initiative that we've been working on over the past several quarters, developing a bank partnership capability. While still in development, we believe a bank partnership model could provide meaningful strategic benefits over time, including faster entry into new markets, greater product and operational uniformity across states, the ability to broaden our product set and optimize risk-adjusted yields.
Lakhbir Lamba: In parallel, we remain focused on improving branch and state-level profitability. As the portfolio and footprint grow, disciplined evaluation of performance in every segment will remain critical to delivering sustainable, profitable growth and maximizing risk-adjusted return on capital. As we look at our business across various markets and digital affiliate channels, we are paying particular attention to first payment default trends, sales productivity, operating expenses, and risk-adjusted yields. We believe we have opportunities to optimize our yields and operating expenses in certain markets. I also want to touch briefly on an initiative that we've been working on over the past several quarters, developing a bank partnership capability. While still in development, we believe a bank partnership model could provide meaningful strategic benefits over time, including faster entry into new markets, greater product and operational uniformity across states, the ability to broaden our product set and optimize risk-adjusted yields.
Speaker #3: As we look at our business across various markets, and digital affiliate attention to first payment default trends, sales productivity, operating expenses, and risk-adjusted yields.
Speaker #3: We believe we have opportunities to optimize our yields and operating expenses in certain markets. I also want to touch briefly on an initiative that we've been working on over the past several quarters: developing a bank partnership capability.
Speaker #3: While still in development, we believe a bank partnership model could provide meaningful strategic benefits over time, including faster entry into new markets, greater product and operational uniformity across states, the ability to broaden our product set, and optimize risk-adjusted yields.
Speaker #3: We view this as another potential tool to support responsible growth and enhance our long-term strategic flexibility. We'll share more as this partnership and capability continue to take shape.
Lakhbir Lamba: We view this as another potential tool to support responsible growth and enhance our long-term strategic flexibility. We'll share more as this partnership and capability continue to take shape. Looking ahead, we remain focused on disciplined execution as we enter 2026. For the full year of 2026, we expect another year of ending net receivables growth of at least 10% and net income growth in the 20% to 25% range. For Q1 2026, we expect net income to reflect our portfolio growth levels, normal first quarter credit seasonality, and continued investment in the business. The projected year-over-year increase in tax refunds due to the One Big Beautiful Bill Act will likely reduce balances through debt paydowns and improve collections and delinquencies in the first quarter.
Lakhbir Lamba: We view this as another potential tool to support responsible growth and enhance our long-term strategic flexibility. We'll share more as this partnership and capability continue to take shape. Looking ahead, we remain focused on disciplined execution as we enter 2026. For the full year of 2026, we expect another year of ending net receivables growth of at least 10% and net income growth in the 20% to 25% range. For Q1 2026, we expect net income to reflect our portfolio growth levels, normal first quarter credit seasonality, and continued investment in the business. The projected year-over-year increase in tax refunds due to the One Big Beautiful Bill Act will likely reduce balances through debt paydowns and improve collections and delinquencies in the first quarter.
Speaker #3: Looking disciplined execution as we enter 2026. For the full year of 2026, we receivables growth of at least expect another year of ending net 10% and net income growth in the 20% to 25% range.
Speaker #3: For the first quarter of 2026, we expect net income to reflect our portfolio growth levels, normal ahead, we remain focused on first quarter credit seasonality, and continued investment in the business.
Speaker #3: The projected year-over-year increase in tax refunds due to the One Big, Reduce Balances Through Debt Pay Beautiful Bill Act will likely drive downs and improve collections and delinquencies in the first quarter.
Speaker #3: Over the longer term, our objective is clear: to deliver sustainable, profitable growth while generating attractive returns. We will improve our return on equity through responsible portfolio growth, improving credit performance, operating leverage, and disciplined capital management.
Lakhbir Lamba: Over the longer term, our objective is clear: to deliver sustainable, profitable growth while generating attractive returns for shareholders. We will improve our return on equity through responsible portfolio growth, improving credit performance, operating leverage, and disciplined capital management. Regional enters the next phase of its growth with a strong foundation, a talented team, and a clear strategic focus. I'm excited about what lies ahead and confident in our ability to continue creating long-term value for our clients, our communities, and our shareholders. With that, I'll turn the call over to Harp, who will provide more detail on our financial results.
Lakhbir Lamba: Over the longer term, our objective is clear: to deliver sustainable, profitable growth while generating attractive returns for shareholders. We will improve our return on equity through responsible portfolio growth, improving credit performance, operating leverage, and disciplined capital management. Regional enters the next phase of its growth with a strong foundation, a talented team, and a clear strategic focus. I'm excited about what lies ahead and confident in our ability to continue creating long-term value for our clients, our communities, and our shareholders. With that, I'll turn the call over to Harp, who will provide more detail on our financial results.
Speaker #3: Regional enters the next phase of its growth with a strong foundation, a talented team, and a clear strategic focus. I'm excited about what lies ahead and confident in our ability to continue creating long-term value for our clients, our communities, and our shareholders.
Speaker #3: With that, I'll turn the call over to Harp, who will provide more detail on our financial
Speaker #2: Thank you,
Harp Rana: Thank you, Lakhbir, and hello, everyone. I'll now take you through our Q4 results in more detail. On page 5 of the supplemental presentation, we provide our Q4 financial highlights, demonstrating another quarter of significant improvement across key financial metrics. Our net income of $12.9 million and diluted EPS of $1.30 were once again supported by solid portfolio and revenue growth, a healthy credit profile, expense discipline, and a strong balance sheet. For 2026, consistent with seasonal trends and our 2025 quarterly results, our net income will be meaningfully higher in the second half of the year than the first half of the year, driven by stronger credit performance, balance sheet growth, and continued improvement in operating leverage.
Harp Rana: Thank you, Lakhbir, and hello, everyone. I'll now take you through our Q4 results in more detail. On page 5 of the supplemental presentation, we provide our Q4 financial highlights, demonstrating another quarter of significant improvement across key financial metrics. Our net income of $12.9 million and diluted EPS of $1.30 were once again supported by solid portfolio and revenue growth, a healthy credit profile, expense discipline, and a strong balance sheet. For 2026, consistent with seasonal trends and our 2025 quarterly results, our net income will be meaningfully higher in the second half of the year than the first half of the year, driven by stronger credit performance, balance sheet growth, and continued improvement in operating leverage.
Speaker #2: Lockbeer, and hello everyone. I'll now take you through our fourth quarter results in more results. detail. On page five of the supplemental presentation, we provide our fourth quarter financial highlights, demonstrating another quarter of significant improvements across key financial metrics.
Speaker #2: Our net income of $12.9 million and diluted EPS of $1.30 were once again supported by solid portfolio and revenue growth, a healthy credit profile, expense discipline, and a strong balance sheet.
Speaker #2: For 2026, consistent with seasonal trends, and our 2025 quarterly results, our net income will be meaningfully higher in the second half year, driven by stronger credit performance, balance sheet growth, and of the year, than the first half of the continued improvement in operating leverage.
Speaker #2: Turning to pages six and seven, we had a record total origination of $537 million in the fourth quarter, up 13% year over year. Loan volume was driven by continued strong performance from digital leads, our auto-secured product, and the 17 de novo branches we've opened over the past 12 months.
Harp Rana: Turning to pages six and seven, we had a record total originations of $537 million in Q4, up 13% year-over-year. Loan volume was driven by continued strong performance from digital leads, our auto-secured product, and the 17 de novo branches we've opened over the past 12 months. For the full year, we generated $2 billion in originations, a 19% increase from 2024. Our total portfolio finished at a record $2.1 billion at year-end, while our ending net receivables per branch reached $6.1 million on average. We continue to believe that key economic markers remain strong and that our customers tend to be resilient and adaptable. These conditions, along with the increase in our addressable market through geographic expansion, have allowed us to grow our portfolio while maintaining a tight credit box.
Harp Rana: Turning to pages six and seven, we had a record total originations of $537 million in Q4, up 13% year-over-year. Loan volume was driven by continued strong performance from digital leads, our auto-secured product, and the 17 de novo branches we've opened over the past 12 months. For the full year, we generated $2 billion in originations, a 19% increase from 2024. Our total portfolio finished at a record $2.1 billion at year-end, while our ending net receivables per branch reached $6.1 million on average. We continue to believe that key economic markers remain strong and that our customers tend to be resilient and adaptable. These conditions, along with the increase in our addressable market through geographic expansion, have allowed us to grow our portfolio while maintaining a tight credit box.
Speaker #2: For the full year, we generated $2 billion in originations, a 19% increase from 2024. Our total portfolio finished at a record $2.1 billion at year-end, while our ending net receivables per branch reached $6.1 million on average.
Speaker #2: We continue to believe that key economic markers remain strong, and that our customers tend to be resilient and adaptable. These conditions, along with the increase in our addressable market through geographic expansion, have allowed us to grow our portfolio while maintaining a tight credit box.
Speaker #2: Looking ahead as a reminder, the first quarter is always our softest origination quarter because of the normal seasonal impact of tax refunds. Demand may be particularly soft this year, due to the expected larger tax refunds for our customers, as a result, we anticipate that our ending net receivables will contract sequentially in the first quarter and perhaps more than our typical seasonal trend, due to the OVBA impact.
Harp Rana: Looking ahead, as a reminder, Q1 is always our softest origination quarter because of the normal seasonal impact of tax refunds. Demand may be particularly soft this year due to the expected larger tax refunds for our customers. As a result, we anticipate that our ending net receivables will contract sequentially in Q1 and perhaps more than our typical seasonal trend due to the OBBA impact. However, we expect consumer loan demand to remain strong for the balance of the year following tax season. Turning to page 8, total revenue grew to a record $170 million in Q4, up 10% year-over-year. Our total revenue yield and interest and fee yield declined 60 and 40 basis points sequentially to 32.5% and 29.3%, respectively, due to seasonality and product mix.
Harp Rana: Looking ahead, as a reminder, Q1 is always our softest origination quarter because of the normal seasonal impact of tax refunds. Demand may be particularly soft this year due to the expected larger tax refunds for our customers. As a result, we anticipate that our ending net receivables will contract sequentially in Q1 and perhaps more than our typical seasonal trend due to the OBBA impact. However, we expect consumer loan demand to remain strong for the balance of the year following tax season. Turning to page 8, total revenue grew to a record $170 million in Q4, up 10% year-over-year. Our total revenue yield and interest and fee yield declined 60 and 40 basis points sequentially to 32.5% and 29.3%, respectively, due to seasonality and product mix.
Speaker #2: However, we expect consumer loan demand to remain strong for the balance of the year following tax season. Turning to page eight, total revenue grew to a record $170 million in the fourth quarter.
Speaker #2: over year. Our total revenue yield and Up 10% year interest in C yield declined 60% and 40 basis points sequentially to 32.5% and 29.3%, respectively, due to seasonality and product mix.
Speaker #2: In the first quarter, we expect total revenue yield to decrease sequentially due to normal seasonal trends of interest accrual reversals, associated with NCLs, and the runoff of smaller higher yielding loans during tax season.
Harp Rana: In Q1, we expect total revenue yield to decrease sequentially due to normal seasonal trends of interest accrual reversals associated with NCLs and the runoff of smaller, higher-yielding loans during tax season. Moving to page nine, our portfolio continues to perform well. Our thirty-plus day delinquency rate as of quarter-end was 7.5%, a 20 basis point improvement year-over-year. Our Q4 annualized net credit loss rate improved by 30 basis points year-over-year after adjusting for the prior year, 50 basis point impact from disaster deferrals. For the full year, our NCL rate improved by 70 basis points compared to 2024, after adjusting for the impact of the 2024 disaster deferrals and the Q4 2023 loan sale, which materially benefited Q1 2024 net credit losses.
Harp Rana: In Q1, we expect total revenue yield to decrease sequentially due to normal seasonal trends of interest accrual reversals associated with NCLs and the runoff of smaller, higher-yielding loans during tax season. Moving to page nine, our portfolio continues to perform well. Our thirty-plus day delinquency rate as of quarter-end was 7.5%, a 20 basis point improvement year-over-year. Our Q4 annualized net credit loss rate improved by 30 basis points year-over-year after adjusting for the prior year, 50 basis point impact from disaster deferrals. For the full year, our NCL rate improved by 70 basis points compared to 2024, after adjusting for the impact of the 2024 disaster deferrals and the Q4 2023 loan sale, which materially benefited Q1 2024 net credit losses.
Speaker #2: Moving to page nine, our portfolio continues to perform well. Our 30-plus day delinquency rate as a quarter end was 7.5%, a 20 basis point improvement year over year.
Speaker #2: Our fourth quarter annualized net credit loss rate improved by 30 basis points year over year, after adjusting for the prior year's 50 basis point impact from disaster deferrals.
Speaker #2: For the full year, our NCL rate improved by 70 basis points compared to 2024, after adjusting for the impact of the 2024 disaster deferrals and the fourth quarter 2023 loan sale, which materially benefited first quarter 2024 net credit losses.
Speaker #2: In the first quarter, we expect our delinquency rate to improve consistent with seasonal patterns associated with tax refund benefits, and we anticipate that our net credit losses will increase, sequentially, again, due to normal seasonality from NCLs.
Harp Rana: In Q1, we expect our delinquency rate to improve, consistent with seasonal patterns associated with tax refund benefits, and we anticipate that our net credit losses will increase sequentially, again, due to normal seasonality from NCLs. Turning to page 10, we increased our allowance for credit losses in the quarter by $8.9 million to support portfolio growth. Consistent with our outlook, our allowance for credit losses rate remained steady at 10.3%, an improvement of 20 basis points from the prior year period. Flipping to page 11, we continue to closely manage our spending while still investing in our growth, capabilities, and strategic initiatives. Our annualized operating expense ratio was 12.4% in Q4, another all-time best and an improvement of 160 basis points from the prior year period, as we modestly reduced expenses year-over-year.
Harp Rana: In Q1, we expect our delinquency rate to improve, consistent with seasonal patterns associated with tax refund benefits, and we anticipate that our net credit losses will increase sequentially, again, due to normal seasonality from NCLs. Turning to page 10, we increased our allowance for credit losses in the quarter by $8.9 million to support portfolio growth. Consistent with our outlook, our allowance for credit losses rate remained steady at 10.3%, an improvement of 20 basis points from the prior year period. Flipping to page 11, we continue to closely manage our spending while still investing in our growth, capabilities, and strategic initiatives. Our annualized operating expense ratio was 12.4% in Q4, another all-time best and an improvement of 160 basis points from the prior year period, as we modestly reduced expenses year-over-year.
Speaker #2: Turning to page 10, we increased our allowance for credit losses in the quarter by 8.9 million, to support portfolio growth. Consistent with our outlook, our allowance for credit losses rate remained steady at 10.3% and improvement of 20 basis points from the prior year period.
Speaker #2: Flipping to page 11, we continue to closely manage our spending while still investing in our growth, capabilities, and strategic initiatives. Our annualized operating expense ratio was 12.4% in the fourth quarter, another all-time best, and an improvement of 160 basis points from the prior year period, as we modestly reduced expenses year over year.
Speaker #2: Turning to pages 12 and 13, our interest expense for the fourth quarter was $22.6 million, or 4.3% of average net receivables on an annualized basis.
Harp Rana: Turning to pages 12 and 13, our interest expense for Q4 was $22.6 million, or 4.3% of average net receivables on an annualized basis. We remain pleased with the way that we've managed our interest expense over the past few years. Moving forward, we'll 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. Aside from investing in our growth and strategic initiatives, we continue to allocate excess capital to our dividend and share repurchase program.
Harp Rana: Turning to pages 12 and 13, our interest expense for Q4 was $22.6 million, or 4.3% of average net receivables on an annualized basis. We remain pleased with the way that we've managed our interest expense over the past few years. Moving forward, we'll 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. Aside from investing in our growth and strategic initiatives, we continue to allocate excess capital to our dividend and share repurchase program.
Speaker #2: We remain pleased with the way that we've managed our interest expense over the past few years. Moving forward, we'll continue to maintain a strong balance sheet with ample liquidity and borrowing capacity, diversified in staggered funding sources, and a sensible interest rate management strategy.
Speaker #2: Aside from investing in our growth and strategic initiatives, we continue to allocate excess capital to our dividend and share repurchase programs. Our board of directors declared a dividend of $0.30 per common share for the first quarter, and pursuant to our buyback program, we repurchased approximately $197,000 shares of our common stock in the fourth quarter at a weighted average price of $38.07 per share.
Harp Rana: Our board of directors declared a dividend of $0.30 per common share for Q1, and pursuant to our buyback program, we repurchased approximately 197,000 shares of our common stock in Q4 at a weighted average price of $38.07 per share. For the full year, we repurchased approximately 702,000 shares at a weighted average price of $34.12 per share. That concludes my remarks. I'll now turn the call back over to Lakhbir.
Harp Rana: Our board of directors declared a dividend of $0.30 per common share for Q1, and pursuant to our buyback program, we repurchased approximately 197,000 shares of our common stock in Q4 at a weighted average price of $38.07 per share. For the full year, we repurchased approximately 702,000 shares at a weighted average price of $34.12 per share. That concludes my remarks. I'll now turn the call back over to Lakhbir.
Speaker #2: For the full year, we repurchased approximately 702,000 shares at a weighted average price of $34.12 per share. I'll now turn the call back over to Lockbier.
Speaker #2: Thanks, Harp. To close, we are very pleased with how we finished 2025 and encouraged by the momentum we are carrying into 2026. We while continuing to invest in the delivered strong results business, improve underlying credit performance, and drive operating leverage.
Lakhbir Lamba: Thanks, Harp. To close, we are very pleased with how we finished 2025 and encouraged by the momentum we are carrying into 2026. We delivered strong results while continuing to invest in the business, improve underlying credit performance, and drive operating leverage. Importantly, we did this in a disciplined way that positions us well for sustainable, profitable growth. As we look ahead, our priorities are clear: continue growing the portfolio responsibly, improving credit outcomes, expanding into attractive new markets, and investing in our people, technology, and analytics to enhance risk-adjusted returns. We believe the opportunities in front of us across products, markets, and operating efficiency are compelling, and we are focused on executing against them thoughtfully. Regional has a strong foundation, a resilient customer base, and a talented team, and I'm confident in our ability to continue creating long-term value for our shareholders.
Lakhbir Lamba: Thanks, Harp. To close, we are very pleased with how we finished 2025 and encouraged by the momentum we are carrying into 2026. We delivered strong results while continuing to invest in the business, improve underlying credit performance, and drive operating leverage. Importantly, we did this in a disciplined way that positions us well for sustainable, profitable growth. As we look ahead, our priorities are clear: continue growing the portfolio responsibly, improving credit outcomes, expanding into attractive new markets, and investing in our people, technology, and analytics to enhance risk-adjusted returns. We believe the opportunities in front of us across products, markets, and operating efficiency are compelling, and we are focused on executing against them thoughtfully. Regional has a strong foundation, a resilient customer base, and a talented team, and I'm confident in our ability to continue creating long-term value for our shareholders.
Speaker #2: Importantly, we did this in a disciplined way that positions us well for sustainable, profitable growth. As we look clear. Continue growing the portfolio responsibly.
Speaker #2: Improving credit outcomes. Expanding into attractive new markets. And investing in our people, technology, and analytics to enhance risk-adjusted returns. We believe the opportunities in front of us across products, markets, and operating efficiency are compelling, and we are focused on executing against them thoughtfully.
Speaker #2: Regional has a strong foundation and a resilient team, and I'm confident in our ability to continue creating long-term value for our shareholders. With that, we'll open the call for questions.
Lakhbir Lamba: With that, we'll open the call for questions. Operator, could you please open the line?
Lakhbir Lamba: With that, we'll open the call for questions. Operator, could you please open the line?
Speaker #2: Operator, could you please open the
Speaker #2: Operator, could you please open the line? Certainly.
Operator: Certainly. We'll now be conducting a question-and-answer session. If you'd like to be placed in the question queue, please press star one on your telephone keypad. We ask you please ask one question and one follow-up, then return to the queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing star one. One moment please, while we poll for questions. Our first question is coming from Vincent Caintic from BTIG. Your line is now live.
Operator: Certainly. We'll now be conducting a question-and-answer session. If you'd like to be placed in the question queue, please press star one on your telephone keypad. We ask you please ask one question and one follow-up, then return to the queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing star one. One moment please, while we poll for questions. Our first question is coming from Vincent Caintic from BTIG. Your line is now live.
Speaker #3: Will now be conducting a question and answer session. If you'd like to be placed into question queue, please press star one on your telephone keypad.
Speaker #3: We ask that you please ask one question and one follow-up, then return to the queue. You may press star two if you'd like to move your question from the queue.
Speaker #3: For participants using speaker equipment, may be necessary to pick up your star one. One moment, please, while we pull for questions. Our first question is coming from Vincent Kanting from BTIG.
Speaker #3: Your line is now handset before pressing live.
Speaker #4: Hey, good afternoon. Thanks for taking my questions in, Lockbier. Looking forward to working with you. Welcome on board. First question. Yep, thank you. As you were very comprehensive already with your kind of strategic vision and the things you're focused on, so I really appreciate that.
Vincent Caintic: Hey, good afternoon, and thanks for taking my questions, and Lakhbir, looking forward to working with you. Welcome, welcome on board.
Vincent Caintic: Hey, good afternoon, and thanks for taking my questions, and Lakhbir, looking forward to working with you. Welcome, welcome on board.
Lakhbir Lamba: Thank you.
Lakhbir Lamba: Thank you.
Vincent Caintic: First question. Yep, thank you. So you were very comprehensive already with your kind of strategic vision and the things you're focused on, so I really appreciate that. One of the comments you were discussing is bank partnerships, and I was wondering if you could go into more detail about what sort of things we can anticipate Regional Management getting enhanced by with the bank. And then, have you thought about becoming a bank yourselves? It seems like some non-banks are now kind of thinking about becoming banks, given that it might be an easier path with the new administration. So just wanted your thoughts on that as well. Thank you.
Vincent Caintic: First question. Yep, thank you. So you were very comprehensive already with your kind of strategic vision and the things you're focused on, so I really appreciate that. One of the comments you were discussing is bank partnerships, and I was wondering if you could go into more detail about what sort of things we can anticipate Regional Management getting enhanced by with the bank. And then, have you thought about becoming a bank yourselves? It seems like some non-banks are now kind of thinking about becoming banks, given that it might be an easier path with the new administration. So just wanted your thoughts on that as well. Thank you.
Speaker #4: One of the comments you were discussing is bank partnerships, and I was wondering if you could go into more detail about what sort of things we can anticipate regional management getting enhanced by with the bank, and then have you thought about becoming a bank yourselves?
Speaker #4: It seems like some of the some non-banks are now kind of thinking about becoming banks, given that it might be an easier path with a new administration.
Speaker #4: So, just wanted your thoughts on that as well. Thank you.
Speaker #2: Thanks, Vincent. As I shared in my remarks, we've been working on a bank partnership for several quarters. I'm highly focused with the team on getting that initiative executed.
Lakhbir Lamba: Thanks, Vincent. You know, as I shared in my remarks, we've been working on a bank partnership for several quarters. I'm highly focused with the team on, you know, getting that initiative executed. We believe it'll improve our speed to market, it'll expand our digital reach, you know, help us with product uniformity across our footprint. I think as I mentioned, one of the key things is it'll help us fill holes we have in meeting our client needs in certain states, just because the way the regulations work. Plus, you know, it'll help us optimize yields.
Lakhbir Lamba: Thanks, Vincent. You know, as I shared in my remarks, we've been working on a bank partnership for several quarters. I'm highly focused with the team on, you know, getting that initiative executed. We believe it'll improve our speed to market, it'll expand our digital reach, you know, help us with product uniformity across our footprint. I think as I mentioned, one of the key things is it'll help us fill holes we have in meeting our client needs in certain states, just because the way the regulations work. Plus, you know, it'll help us optimize yields.
Speaker #2: We believe it'll improve our speed to market. It'll expand our digital reach. Help us with product uniformity across our footprint. I think, as I mentioned, one of the key things is it'll help us fill holes we have in our meeting our client needs in certain states, just because of the way the regulations work.
Speaker #2: Plus, it'll help us optimize yields. Just make sure we get paid for the risk we take and all various segments of our business. At this point, we don't have detailed timeline, to your point, or any specific state rollouts.
Lakhbir Lamba: ... just make sure we get paid for the risk we take in, you know, all various segments of our business. At this point, we don't have detailed timeline to your point or any specific state rollouts at the state, but we'll be sharing that as soon as we're comfortable doing. To your second question, again, too early in the seat for me to come in and, you know, change the overall strategy or question the strategy. But to your point, you know, we do see a number of non-banks buying banking institutions. I think long term, it does obviously help with cost of funds, flexibility and, and strategic, you know, options, if you will.
Lakhbir Lamba: ... just make sure we get paid for the risk we take in, you know, all various segments of our business. At this point, we don't have detailed timeline to your point or any specific state rollouts at the state, but we'll be sharing that as soon as we're comfortable doing. To your second question, again, too early in the seat for me to come in and, you know, change the overall strategy or question the strategy. But to your point, you know, we do see a number of non-banks buying banking institutions. I think long term, it does obviously help with cost of funds, flexibility and, and strategic, you know, options, if you will.
Speaker #2: At the state, but we'll be sharing that as soon as we're comfortable doing. To your second question, again, too early in the seat for me to come in and change the overall strategy or question the strategy, but to your point, we do see a number of non-banks buying banking institutions.
Speaker #2: I think long term it does, obviously, help with cost of funds, flexibility, and strategic options, if you will. In the near term, though, I think our focus is getting this initiative done that the team has been working on for a number of quarters.
Lakhbir Lamba: In the near term, though, I think our focus is getting this initiative done that the team had been working on for a number of quarters. So, but we'll, you know, we'll continue to evaluate the landscape, to your point, as it evolves.
Lakhbir Lamba: In the near term, though, I think our focus is getting this initiative done that the team had been working on for a number of quarters. So, but we'll, you know, we'll continue to evaluate the landscape, to your point, as it evolves.
Speaker #2: So but we'll continue to evaluate the landscape, to your point, as it works.
Speaker #3: Okay. Thank you. Appreciate that. And then Harp, so thank you for all the different guidance items for 2026. I was just curious, I think in the past you've had some other guidance items, so I was just curious if you're willing to give guidance on credit reserves, and maybe I think you were talking about expenses being a bit higher, and then how should we think about yields and interest expense?
Vincent Caintic: Okay. Thank you. Appreciate that. And then, Harp, so thank you for all the different guidance items for 2026. I was just curious, you know, I think in the past you've had some other guidance items, so I was just curious if you're willing to give guidance on, like, credit reserves, and maybe I think you were talking about expenses being a bit higher, and then how should we think about yields and interest expense? Thank you.
Vincent Caintic: Okay. Thank you. Appreciate that. And then, Harp, so thank you for all the different guidance items for 2026. I was just curious, you know, I think in the past you've had some other guidance items, so I was just curious if you're willing to give guidance on, like, credit reserves, and maybe I think you were talking about expenses being a bit higher, and then how should we think about yields and interest expense? Thank you.
Speaker #3: Thank you.
Speaker #5: Yeah. So Vincent, traditionally and historically, we have provided detailed short-term P&L guidance, but we've briefly assessed our forecasting framework and how we run the business.
Harp Rana: Yeah. So Vincent, you know, traditionally and historically, we have provided detailed short-term P&L guidance, but, you know, we've reassessed our forecasting framework and how we run the business. And, you know, short-term precision isn't always the most effective or reliable way to communicate our outlook. Quarterly results can swing meaningfully due to timing-related factors that don't always, you know, reflect the true underlying momentum of the business. So we're shifting to a full year view. We're going to keep the focus where it belongs, on the fundamental drivers of long-term value creation. You know, nothing about our transparency is going to change. We're always going to continue to provide you guys with color on these calls. How I would think about, you know, first quarter and the other quarters is, I would take a look at our business; it's very, you know, seasonal.
Harp Rana: Yeah. So Vincent, you know, traditionally and historically, we have provided detailed short-term P&L guidance, but, you know, we've reassessed our forecasting framework and how we run the business. And, you know, short-term precision isn't always the most effective or reliable way to communicate our outlook. Quarterly results can swing meaningfully due to timing-related factors that don't always, you know, reflect the true underlying momentum of the business. So we're shifting to a full year view. We're going to keep the focus where it belongs, on the fundamental drivers of long-term value creation. You know, nothing about our transparency is going to change. We're always going to continue to provide you guys with color on these calls. How I would think about, you know, first quarter and the other quarters is, I would take a look at our business; it's very, you know, seasonal.
Speaker #5: And short-term precision isn't always the most effective or reliable way to communicate our outlook. Quarterly results can swing meaningfully due to timing-related factors that don't always reflect the true underlying momentum of the business.
Speaker #5: So we're shifting to a full-year view. We're going to keep the focus where it belongs on the fundamental drivers of long-term value, creation, nothing about our transparency is going to change.
Speaker #5: We're always going to continue to provide you guys with color on these calls. How I would think about first-quarter and the other quarters is I would take a look at our business is very seasonal.
Speaker #5: So, we've talked a little bit about that. Yields will be lower in the first quarter, as the higher-rate small loans pay down due to the impact of tax season.
Harp Rana: So we've talked a little bit about that. You know, yields will be lower in Q1 as the higher rate small loans pay down due to the impact of tax season. That could be, you know, a little bit higher this year as folks are expecting higher tax refunds. We know our delinquencies, you know, typically are always lowest in the first half, and then they increase, and as a result, our net credit losses are always highest in the first half of the year, and then they are lower in, you know, the rest of the year. In terms of ENR growth, we've talked about, right, the impact of tax season.
Harp Rana: So we've talked a little bit about that. You know, yields will be lower in Q1 as the higher rate small loans pay down due to the impact of tax season. That could be, you know, a little bit higher this year as folks are expecting higher tax refunds. We know our delinquencies, you know, typically are always lowest in the first half, and then they increase, and as a result, our net credit losses are always highest in the first half of the year, and then they are lower in, you know, the rest of the year. In terms of ENR growth, we've talked about, right, the impact of tax season.
Speaker #5: That could be a little bit higher this year as folks are expecting higher tax refunds. We know our delinquencies typically are always lowest in the first half, and then they increase.
Speaker #5: And as a result, our net credit losses are always highest in the first half of the year, and then they are lower in the rest of the year.
Speaker #5: In terms of E&R growth, we've talked about the impact of tax season when you're looking at last year, you'll want to normalize for the de novo growth that we had in the first quarter, which muted some of that runoff that we normally see.
Harp Rana: When you're looking at last year, you'll want to normalize for the de novo growth that we had in Q1, which muted some of that runoff that we normally see, just because those de novos came on in Q4 of 2024. So you'll want to adjust for that. And then the other thing that I would tell you is, you know, just adjust for the hurricane noise that we've had in the past year, and then also for the loan sale benefit that we had in Q1 2024.
Harp Rana: When you're looking at last year, you'll want to normalize for the de novo growth that we had in Q1, which muted some of that runoff that we normally see, just because those de novos came on in Q4 of 2024. So you'll want to adjust for that. And then the other thing that I would tell you is, you know, just adjust for the hurricane noise that we've had in the past year, and then also for the loan sale benefit that we had in Q1 2024.
Speaker #5: Just because those de novos came on in fourth-quarter of 2024. So you'll want to adjust for that. And then the other thing that I would tell you is just adjust for the hurricane noise that we've had in the past year, and then also for the loan sale benefit that we had in first-quarter '24.
Speaker #5: So if you make those adjustments and then you go back to the cyclicality of the business, that should get you there with your models.
Harp Rana: So if you make those adjustments, and then you go back to the cyclicality of the business, that should get you there with your model, along with the, you know, guidance that we did provide around the at least 10% ENR growth and, you know, our net income guidance for the year at that range. You also mentioned expenses. So, you know, expenses, you will see our OpEx come down over time, as we gain scale. But there is seasonality, of course, in our expenses, particularly year-over-year, just as, you know, the full year impact of some of the investments that we made last year sort of comes fully online in Q1. So that's how I would think about, you know, the model, but we're happy to delve deeper with you guys on, on, you know, the analyst calls later.
Harp Rana: So if you make those adjustments, and then you go back to the cyclicality of the business, that should get you there with your model, along with the, you know, guidance that we did provide around the at least 10% ENR growth and, you know, our net income guidance for the year at that range. You also mentioned expenses. So, you know, expenses, you will see our OpEx come down over time, as we gain scale. But there is seasonality, of course, in our expenses, particularly year-over-year, just as, you know, the full year impact of some of the investments that we made last year sort of comes fully online in Q1. So that's how I would think about, you know, the model, but we're happy to delve deeper with you guys on, on, you know, the analyst calls later.
Speaker #5: Along with the guidance that we did provide around the at least 10% E&R growth and our net income guidance for the year at that range.
Speaker #5: You also mentioned expenses. So expenses, you will see our OpEx come down over time. As we gain scale, but there is seasonality of course in our expenses, particularly year-over-year, just as the full-year impact of some of the investments that we made last year sort of comes fully online in the first quarter.
Speaker #5: So that's how I would think about the models, but we're happy the delve deeper with you guys on the analyst calls later.
Speaker #3: Okay. Great. Very helpful. Thank
Vincent Caintic: Okay, great. Very helpful. Thank you.
Vincent Caintic: Okay, great. Very helpful. Thank you.
Speaker #3: you. Thank you.
Lakhbir Lamba: Thank you. Next question is coming from David Scharf, from Citizens Capital Markets. The line is now live.
Operator: Thank you. Next question is coming from David Scharf, from Citizens Capital Markets. The line is now live.
Speaker #6: Next question is coming from David Sharpe from Citizens Capital Markets. The line is now
Speaker #6: live. Hi.
[Analyst] (Citizens Capital Markets): Hi, good afternoon. This is Zach Oster on for David. Thank you for taking our question, and congrats on the strong operational quarter. Wanted to dig in a little bit on the same store results. So obviously, there's good acceleration throughout the year in terms of same store receivable growth. And, you know, speaking towards the guide for kind of expansion going into the new year, wanted to get some more detail or color on how much room there is basically to continue growing those balances on the same store basis versus, you know, just kind of expanding the store count. Thank you.
Zach Oster: Hi, good afternoon. This is Zach Oster on for David. Thank you for taking our question, and congrats on the strong operational quarter. Wanted to dig in a little bit on the same store results. So obviously, there's good acceleration throughout the year in terms of same store receivable growth. And, you know, speaking towards the guide for kind of expansion going into the new year, wanted to get some more detail or color on how much room there is basically to continue growing those balances on the same store basis versus, you know, just kind of expanding the store count. Thank you.
Speaker #7: Good afternoon. This is Zach Osteron for David. Thank you for taking our question and congrats on the strong operational quarter. I wanted to dig in a little bit on the same-store results.
Speaker #7: So obviously, there's good acceleration throughout the year in terms of same-store receivable growth. And speaking towards the guide for kind of expansion going into the new year, I wanted to get some more detail or color on how much room there is basically to continue growing those balances in the same-store basis versus just kind of expanding the store cap.
Speaker #7: Thank you.
Harp Rana: Kyle, can you just repeat that last part of that question for me again, please?
Harp Rana: Kyle, can you just repeat that last part of that question for me again, please?
Speaker #1: Harp, can you just repeat that last part of that question for me again, please?
Speaker #6: Yeah, no worries. I just wanted to get some more color on where the growth trajectory is and kind of what pace we could be seeing for growth on a per-store basis for receivables versus just more organic store expansion growth.
[Analyst] (Citizens Capital Markets): Yeah, no worries. Yeah, just wanted to get some more color on, you know, where the growth trajectory is and kind of what pace we could be today - we could be seeing for growth on a per store basis for receivables versus, you know, just more kind of organic store expansion growth.
Zach Oster: Yeah, no worries. Yeah, just wanted to get some more color on, you know, where the growth trajectory is and kind of what pace we could be today - we could be seeing for growth on a per store basis for receivables versus, you know, just more kind of organic store expansion growth.
Speaker #1: So, I think we've talked a lot about our market expansion—our geographic expansion. Kyle, in terms of that, it still is a lever for us.
Harp Rana: So I think we've talked a lot about, you know, sort of our market expansion, our geographic expansion, Kyle, in terms of, right, that still is a lever for us. I think if you look at the supplemental presentation, you will see that we've become more efficient in terms of the loan balances that we have per branch. So we are becoming more efficient with those branches. So I would really marry those two things together as you're sort of thinking about the impact that that is going to have on, you know, our overall ENR balances. And then, you know, we've provided you obviously with, you know, the ENR growth forecast for this year. And I would just again look at that in terms of seasonality, in terms of when we put that on.
Harp Rana: So I think we've talked a lot about, you know, sort of our market expansion, our geographic expansion, Kyle, in terms of, right, that still is a lever for us. I think if you look at the supplemental presentation, you will see that we've become more efficient in terms of the loan balances that we have per branch. So we are becoming more efficient with those branches. So I would really marry those two things together as you're sort of thinking about the impact that that is going to have on, you know, our overall ENR balances. And then, you know, we've provided you obviously with, you know, the ENR growth forecast for this year. And I would just again look at that in terms of seasonality, in terms of when we put that on.
Speaker #1: I think if you look at the supplemental presentation, you will see that we've become more efficient in terms of the loan balances, that we have per branch.
Speaker #1: So we are becoming more efficient with those branches. So I would really marry those two things together as you're sort of thinking about the impact that that is going to have on our overall E&R balances.
Speaker #1: And then we've provided you, obviously, with the E&R growth forecast for this year. And I would just, again, look at that in terms of seasonality in terms of when we put that on as we know in first-quarter, you have the tax refund, we go back to growing those balances, and second, third, and fourth-quarter, and we would expect without any exogenous variables that that would be the same pattern that we would follow this year.
Speaker #1: And then we've provided you, obviously, with the E&R growth forecast for this year. And I would just, again, look at that in terms of seasonality in terms of when we put that on as we know in first-quarter, you have the tax refund, we go back to growing those balances, and second, third, and fourth-quarter, and we would expect without any exogenous variables that that would be the same pattern that we would follow this year.
Harp Rana: As we know, right, in Q1, you have the tax refund. We go back to growing those balances in, you know, Q2, Q3, and Q4, and we would expect without any, you know, exogenous variables, that would be the same pattern that we would follow this year.
Harp Rana: As we know, right, in Q1, you have the tax refund. We go back to growing those balances in, you know, Q2, Q3, and Q4, and we would expect without any, you know, exogenous variables, that would be the same pattern that we would follow this year.
Speaker #7: Got it. And then if we can just get one follow-up, I wanted to get a little bit more detail also on the graduation program.
[Analyst] (Citizens Capital Markets): Got it. And then I think if we can just get one follow-up. I wanted to get a little bit more detail also on, you know, the graduation program. I think that small balance loans came in a little bit lower than we were expecting, while larger loans came in higher. I just wanted to see if we can get more color on, you know, how that's progressing, and if there was kind of more of a funnel over to the larger loans in graduation during the quarter than expected.
Zach Oster: Got it. And then I think if we can just get one follow-up. I wanted to get a little bit more detail also on, you know, the graduation program. I think that small balance loans came in a little bit lower than we were expecting, while larger loans came in higher. I just wanted to see if we can get more color on, you know, how that's progressing, and if there was kind of more of a funnel over to the larger loans in graduation during the quarter than expected.
Speaker #7: I think that small balance loans came in a little bit lower than we were expecting while larger loans came in higher. So I wanted to see if we can get more color on how that's progressing and if there was kind of more of a funnel over to the larger loans and graduation during the quarter than expected.
Speaker #1: Yeah. So Kyle, how I would think about that is very much we meet the demand where the demand is as long as it fits within our credit box.
Harp Rana: Yeah. So, Kyle, how I would think about that is very much we meet the demand where the demand is, as long as it fits within our credit box. So that is very much what we've been doing. Our auto secured product is more of a newer product for us, so you are seeing that grow in terms of it's growing, you know, quite rapidly just because you're coming off of that smaller base. And then, of course, it has the larger ticket size. But we remain committed to our balanced approach to growth. We will continue to bring in smaller, higher-yielding loans that fit our credit box and our return hurdles. We will continue to graduate them up to larger small loans, and also larger large loans, with the other end of that, you know, continuum being, you know, the auto secured business.
Harp Rana: Yeah. So, Kyle, how I would think about that is very much we meet the demand where the demand is, as long as it fits within our credit box. So that is very much what we've been doing. Our auto secured product is more of a newer product for us, so you are seeing that grow in terms of it's growing, you know, quite rapidly just because you're coming off of that smaller base. And then, of course, it has the larger ticket size. But we remain committed to our balanced approach to growth. We will continue to bring in smaller, higher-yielding loans that fit our credit box and our return hurdles. We will continue to graduate them up to larger small loans, and also larger large loans, with the other end of that, you know, continuum being, you know, the auto secured business.
Speaker #1: So that is very much what we've been doing. Our auto-secured product is more of a newer product for us. So you are seeing that grow in terms of it's growing quite rapidly just because you're coming off of that smaller base and then, of course, it has the larger ticket size.
Speaker #1: But we remain committed to our balanced approach to growth. We will continue to bring in smaller, higher-yielding loans that fit our credit box. And our return hurdles, we will continue to graduate them up to larger small loans and also larger large loans with the other end of that continuum being the auto-secured.
Harp Rana: You know, Lakhbir talked a little bit about the auto secured business in his prepared remarks. You know, we think that is a very stable portfolio, but we also understand what small loans, you know, bring to our balanced approach, and so we will continue with that graduation strategy. You will see, you know, sometimes some oscillation in that, but that is really because of where the demand is and our credit box at that time. We'll always continue to put on good loans that meet our return hurdles.
Harp Rana: You know, Lakhbir talked a little bit about the auto secured business in his prepared remarks. You know, we think that is a very stable portfolio, but we also understand what small loans, you know, bring to our balanced approach, and so we will continue with that graduation strategy. You will see, you know, sometimes some oscillation in that, but that is really because of where the demand is and our credit box at that time. We'll always continue to put on good loans that meet our return hurdles.
Speaker #1: Lockbier talked a little bit about the auto-secured business in his prepared remarks. We think that is a very stable portfolio. But we also understand what small loans bring to our balanced approach.
Speaker #1: And so we will continue with that graduation strategy. You will see sometimes some oscillation in that, but that is really because of where the demand is and our credit box at that time.
Speaker #1: We'll always continue to put on good loans that meet our return hurdles.
Speaker #7: Got it. Thank you.
[Analyst] (Citizens Capital Markets): Got it. Thank you.
Zach Oster: Got it. Thank you.
Speaker #6: Thank you. Next question is coming from Kyle Joseph from Stevens. Your line is now live.
Operator: Thank you. Next question is coming from Kyle Joseph from Stephens. Your line is now live.
Operator: Thank you. Next question is coming from Kyle Joseph from Stephens. Your line is now live.
[Analyst] (Stephens): Hey, good afternoon. Thanks for taking my questions. Just wanted to step back and get your perspective on macro. Appreciate what you guys said in terms of tax refunds, and we understand the seasonality there. But, you know, from a high level, obviously, there's some uncertainty out there. But, you know, we've seen, call it almost two years now or more of kind of this, a good mix of strong loan demand balanced with stable credit. So, you know, on the heels of the higher tax refunds, how are you expecting kind of the remainder of 2026 to look and how that factors into your outlook? Thanks.
Kyle Joseph: Hey, good afternoon. Thanks for taking my questions. Just wanted to step back and get your perspective on macro. Appreciate what you guys said in terms of tax refunds, and we understand the seasonality there. But, you know, from a high level, obviously, there's some uncertainty out there. But, you know, we've seen, call it almost two years now or more of kind of this, a good mix of strong loan demand balanced with stable credit. So, you know, on the heels of the higher tax refunds, how are you expecting kind of the remainder of 2026 to look and how that factors into your outlook? Thanks.
Speaker #8: Hey. Good afternoon. Thanks for taking my questions. Just wanted to step back and get your perspective on macro appreciate what you guys said in terms of tax refunds and we understand the seasonality there, but from a high level, obviously, there's some uncertainty out there, but we've seen a call it almost two years now or more of kind of a good mix of strong loan demand balanced with stable credit.
Speaker #8: So, weighing on the heels of the higher tax refunds, how you're expecting kind of the remainder of '26 to look, and how that factors into your outlook.
Speaker #8: Thanks.
Speaker #7: Thanks, Kyle. Good afternoon, Lockbier. I appreciate the question. On a macro picture, I’ll just restate what the FOMC statement was last week: the economy has been growing at a solid pace.
Lakhbir Lamba: Hey, Kyle. Good afternoon. It's Lakhbir. I appreciate the question. You know, the macro picture, I'd just restate what the FOMC statement was last week. You know, the economy has been growing at a solid pace. We do see the consumer to be, you know, healthy, so on the early stage, delinquency levels for fourth quarter. And so, as I said, I've been- we've been studying kind of various segments of the book, slicing, dicing various segments and markets. And, I think overall, the consumer, to your point, fairly healthy, even in the, the part of the K-shaped economy that we serve. In terms of first quarter, as we mentioned, we believe the OBBA impact really sort of has three sort of rungs to it.
Lakhbir Lamba: Hey, Kyle. Good afternoon. It's Lakhbir. I appreciate the question. You know, the macro picture, I'd just restate what the FOMC statement was last week. You know, the economy has been growing at a solid pace. We do see the consumer to be, you know, healthy, so on the early stage, delinquency levels for fourth quarter. And so, as I said, I've been- we've been studying kind of various segments of the book, slicing, dicing various segments and markets. And, I think overall, the consumer, to your point, fairly healthy, even in the, the part of the K-shaped economy that we serve. In terms of first quarter, as we mentioned, we believe the OBBA impact really sort of has three sort of rungs to it.
Speaker #7: We do see the consumer to be healthy. So in the early stage, delinquency levels for fourth-quarter and as I said, we've been studying kind of various segments of the book slicing, dicing various segments and markets and I think overall the consumer to your point is fairly healthy even in the part of the K-shaped economy that we serve.
Speaker #7: In terms of first-quarter, as we mentioned, the we believe the OBBA impact really sort of has three sort of rungs to it. One, I think the real increase in purchasing power we believe consumers are going to use to pay down past-due debt.
Lakhbir Lamba: One, I think the real increase in purchasing power, we believe consumer is going to use to pay down past due debt. So it should help in collections. Two, if the consumers might use that increase in purchasing power, to pay down debt in general, that's high, high interest rate or what have you. And so that's the big question mark, and how much impact it does to balances. And then three, I think, some of this, refund, increase, which, you know, folks estimate could be 20% year-over-year increase, will also help increase discretionary spending, which frankly, gives us an opportunity to grow loans. And so, so we're looking at this from all key perspectives. Post-OBBA impact, which, you know, kind of ends May kind of timeframe.
Lakhbir Lamba: One, I think the real increase in purchasing power, we believe consumer is going to use to pay down past due debt. So it should help in collections. Two, if the consumers might use that increase in purchasing power, to pay down debt in general, that's high, high interest rate or what have you. And so that's the big question mark, and how much impact it does to balances. And then three, I think, some of this, refund, increase, which, you know, folks estimate could be 20% year-over-year increase, will also help increase discretionary spending, which frankly, gives us an opportunity to grow loans. And so, so we're looking at this from all key perspectives. Post-OBBA impact, which, you know, kind of ends May kind of timeframe.
Speaker #7: So, it should help in collections. Two, consumers might use that increase in purchasing power to pay down debt in general, that's high-interest rate or what have you.
Speaker #7: And so that's the big question mark and how much impact it does to balances. And then three, I think some of this refund increase, which folks estimate could be 20% year-over-year increase, will also help increase an opportunity to grow loans.
Speaker #7: And so we're looking at this from all three perspectives. Post-OBBA impact, which Kyle kind of ends may kind of time frame, we believe the consumer demand is going to loan demand is going to stay healthy as it has been.
Lakhbir Lamba: We believe consumer demand is gonna, loan demand is gonna stay healthy as it has been. And so that's kind of what's reflected in our 10% receivables growth year-over-year sort of guidance for 2026.
Lakhbir Lamba: We believe consumer demand is gonna, loan demand is gonna stay healthy as it has been. And so that's kind of what's reflected in our 10% receivables growth year-over-year sort of guidance for 2026.
Speaker #7: And so, that's kind of what's reflected in our 10% receivables growth year-over-year sort of guidance for '26.
Speaker #1: Yeah. And Kyle, just some of the other things that I would add to that, some of the metrics that we tend to follow will continue to look at the employment rate and then the unemployment rate for the folks.
Harp Rana: Yeah, and Kyle, just some of the other things that I would add to that, you know, some of the metrics that we tend to follow. We'll continue to look at, you know, the employment rate and then the unemployment rate for the folks, you know, for our current customers and for those folks that, you know, could be potential customers. We know that open jobs still remain at 7 million. So, you know, open jobs, ample open jobs for our folks, even if they do tend to lose their jobs. We've been watching inflation, which is moderating. And then, you know, we look at wage growth in sort of the, you know, the lowest quartiles, and there is wage growth. It has moderated, but it still continues to be real wage growth. And then we always look at the gas per gallon, right?
Harp Rana: Yeah, and Kyle, just some of the other things that I would add to that, you know, some of the metrics that we tend to follow. We'll continue to look at, you know, the employment rate and then the unemployment rate for the folks, you know, for our current customers and for those folks that, you know, could be potential customers. We know that open jobs still remain at 7 million. So, you know, open jobs, ample open jobs for our folks, even if they do tend to lose their jobs. We've been watching inflation, which is moderating. And then, you know, we look at wage growth in sort of the, you know, the lowest quartiles, and there is wage growth. It has moderated, but it still continues to be real wage growth. And then we always look at the gas per gallon, right?
Speaker #1: For our current customers and for those folks, that could be potential customers. We know that open jobs still remain at 7 million. So open jobs ample open jobs for our folks even if they do tend to lose their jobs.
Speaker #1: We've been watching inflation, which is moderating. And then we look at wage growth, and sort of the lowest quartiles, and there is wage growth.
Speaker #1: It has moderated, but it still continues to be real wage growth. And then we always look at the gaps per gallon, right? And the gaps per gallon has come down from where it was last year.
Harp Rana: And the gas per gallon, you know, has come down from where it was last year. It's come down from where it was in September. And, you know, we always look at the health of our customer in terms of their ability to pay. So we'll continue to do that, but we do believe that, you know, even if there is an outsized, you know, sort of tax impact, because people get higher refunds, we believe that all indications are demand will continue to be there. And if they do pay down their loans, that you should see that in terms of collections and then, of course, on NCL later in the year.
Harp Rana: And the gas per gallon, you know, has come down from where it was last year. It's come down from where it was in September. And, you know, we always look at the health of our customer in terms of their ability to pay. So we'll continue to do that, but we do believe that, you know, even if there is an outsized, you know, sort of tax impact, because people get higher refunds, we believe that all indications are demand will continue to be there. And if they do pay down their loans, that you should see that in terms of collections and then, of course, on NCL later in the year.
Speaker #1: It's come down from where it was in September. And we always look at the health of our customer in terms of their ability to pay.
Speaker #1: So we'll continue to do that, but we do believe that even if there is an outsized sort of tax impact because people get higher refunds, we believe that all indications are demand will continue to be there.
Speaker #1: And if they do pay down their loans, then you should see that in terms of collections, and then, of course, on NCL later in the period.
Speaker #1: year. Got it.
[Analyst]: Got it. Very helpful. And then, just kind of honing in on customer acquisition costs. Obviously, marketing isn't, you know, a huge part of your PNL, but just kind of want to get your sense for, you know, how marketing should trend, kind of weighing what you talked about in terms of, you know, broader GNA trends.
Kyle Joseph: Got it. Very helpful. And then, just kind of honing in on customer acquisition costs. Obviously, marketing isn't, you know, a huge part of your PNL, but just kind of want to get your sense for, you know, how marketing should trend, kind of weighing what you talked about in terms of, you know, broader GNA trends.
Speaker #8: Very helpful. And then just kind of honing in on customer acquisition costs. Obviously, marketing isn't a huge part of your P&L, but I just kind of want to get your sense for how marketing should trend, kind of weighing what you talked about in terms of broader G&A.
Speaker #8: trends. Yeah.
Harp Rana: Yeah, I mean, if you take a look at our marketing quarter-over-quarter and year-over-year, we've improved it. Talked a little bit about it during the last call. We've become much more efficient, you know, around our mail. Now what we will do is we will probably reinvest some of that, right, in terms of growth. So right now, you saw in the quarter that we actually had, you know, ample growth in the quarter, a little bit higher than the guidance that I gave, but we were better on our marketing expenses, and that's really due to the efficiency. But, you know, if demand is strong and those folks meet our risk box, we will probably redeploy some of those expenses in order to grow the business.
Harp Rana: Yeah, I mean, if you take a look at our marketing quarter-over-quarter and year-over-year, we've improved it. Talked a little bit about it during the last call. We've become much more efficient, you know, around our mail. Now what we will do is we will probably reinvest some of that, right, in terms of growth. So right now, you saw in the quarter that we actually had, you know, ample growth in the quarter, a little bit higher than the guidance that I gave, but we were better on our marketing expenses, and that's really due to the efficiency. But, you know, if demand is strong and those folks meet our risk box, we will probably redeploy some of those expenses in order to grow the business.
Speaker #1: I mean, if you take a look at our marketing quarter over quarter and year over year, we've improved it. Talked a little bit about it during the last fall.
Speaker #1: We've become much more efficient around our mail. Now what we will do is we will probably reinvest some of that, right, in terms of growth.
Speaker #1: So right now, you saw in the quarter that we actually had ample growth in the quarter. It was a little bit higher than the guidance that I gave.
Speaker #1: But we were better on our marketing expenses and that's really due to the efficiency. But if demand is strong and those folks meet our risk box, we will probably redeploy some of those expenses in order to grow the
Speaker #1: business. Got it.
[Analyst]: Got it. Very helpful. Thanks for taking my questions.
Kyle Joseph: Got it. Very helpful. Thanks for taking my questions.
Speaker #8: Very helpful. Thanks for taking my questions.
Speaker #1: Yep. Thank
Harp Rana: Yeah.
Harp Rana: Yeah.
Operator: Thank you. As a reminder, that's star one to be placed into question queue. Our next question is coming from Alexander Villalobos from Jefferies. Your line is now live.
Operator: Thank you. As a reminder, that's star one to be placed into question queue. Our next question is coming from Alexander Villalobos from Jefferies. Your line is now live.
Speaker #2: You. As a reminder, that's star one to be placed into question queue. Our next question is coming from Alexander Villalobos from Jefferies. Carolina, is that live?
Speaker #9: Hey, guys. Thank you for taking my question. A lot of the questions I had have been answered. I did want to ask a question about pricing, though.
[Analyst] (Jefferies): Hey, guys, thank you for taking my question. A lot of the questions I had have been answered. Did want to ask a question about pricing, though. Obviously, rates have come down a decent amount last year. Are you guys able to keep pricing kind of where it is, given the segment of the consumer that you guys serve not being that maybe in that elastic? But was just curious if pricing might come down a little bit as rates go down, or should we think about pricing, you know, yields of the book, kind of like staying where they are? Thank you.
Alexander Villalobos: Hey, guys, thank you for taking my question. A lot of the questions I had have been answered. Did want to ask a question about pricing, though. Obviously, rates have come down a decent amount last year. Are you guys able to keep pricing kind of where it is, given the segment of the consumer that you guys serve not being that maybe in that elastic? But was just curious if pricing might come down a little bit as rates go down, or should we think about pricing, you know, yields of the book, kind of like staying where they are? Thank you.
Speaker #9: Obviously, rates have come down a decent amount. Last year, are you guys able to keep pricing kind of where it is, given the segment of the consumer that you guys serve?
Speaker #9: Not being that maybe that elastic, but was just curious if pricing might come down a little bit as rates go down, or should we think about pricing yields of the book kind of staying where they are?
Speaker #9: Thank
Speaker #9: you. So hey, just
Harp Rana: So, hey, just a couple of things on that, Alex. So when we think about pricing, we really look at pricing in context of, you know, where the market's at.
Harp Rana: So, hey, just a couple of things on that, Alex. So when we think about pricing, we really look at pricing in context of, you know, where the market's at.
Speaker #1: a couple of things on that, Alex. So when we think about pricing, we really look at pricing in context of where the market's at.
Speaker #1: And so you always want to price within a range to the market because you don't want adverse selection if you're too high. You don't want to be too low because then you just don't want to be too low.
[Analyst] (Jefferies): Got it.
Alexander Villalobos: Got it.
Harp Rana: So you always want to price within a range to the market because you don't want adverse selection if you're too high. You don't want to be too low because then, you know, you just don't want to be too low. You're leaving some opportunity there on the table. So you know, we always measure those things as we look at pricing. But as again, I'll go back to right, we also look at, obviously, the consumer's ability to pay, and this consumer is often more focused on the payment dollars that they have to pay every month. So as long as you do that first part, where you're in line with what the market will bear in terms of competition, the consumer in this segment is usually most concerned about their, you know, monthly payment.
Harp Rana: So you always want to price within a range to the market because you don't want adverse selection if you're too high. You don't want to be too low because then, you know, you just don't want to be too low. You're leaving some opportunity there on the table. So you know, we always measure those things as we look at pricing. But as again, I'll go back to right, we also look at, obviously, the consumer's ability to pay, and this consumer is often more focused on the payment dollars that they have to pay every month. So as long as you do that first part, where you're in line with what the market will bear in terms of competition, the consumer in this segment is usually most concerned about their, you know, monthly payment.
Speaker #1: You're leaving some opportunity there on the table. So we always measure those things as we look at pricing. But again, I'll go back to—right—we also look at, obviously, the consumer's ability to pay.
Speaker #1: And this consumer is often more focused on the payment dollars that they have to pay every month. So as long as you do that first part where you're in line with what the market will bear in terms of competition, the consumer in this segment is usually most concerned about their monthly payment.
Speaker #1: So, we put all of that together when we think about pricing.
Harp Rana: So, we put all of that together when we think about pricing.
Harp Rana: So, we put all of that together when we think about pricing.
Speaker #9: And some other different firms have been extending duration. Have you guys kind of kept duration where it has been historically, or to get to that payment that you're talking about, some other companies have extended duration?
[Analyst] (Jefferies): Some other different firms have been extending duration. Have you guys kind of kept duration where it has been historically? Or to get to that, like, payment that you're talking about, some other companies have extended duration. Was just curious if that has happened as well.
Alexander Villalobos: Some other different firms have been extending duration. Have you guys kind of kept duration where it has been historically? Or to get to that, like, payment that you're talking about, some other companies have extended duration. Was just curious if that has happened as well.
Speaker #9: Was just curious if that has happened as
Speaker #1: So we haven't done that in terms of how you're asking about it in terms of programatically. I mean, we have put on our auto-secured product, which just comes with it's a longer loan.
Harp Rana: So we haven't done that, you know, in, in terms of how you're asking about it, in terms of program- programmatically. I mean, we, we have put on, you know, our auto secured product, which just comes with, you know, it's a longer loan. So, you know, that definitely is, is a variable. And then, of course, you know, as we work through, you know, our programs with customers who are having difficulty making payments, you know, we'll look at a number of curing tools in order- and that's on a, you know, loan-by-loan basis, in order to ensure that the customer has the ability to pay us and therefore will pay us. So we do look at it from, from that lens, but no, there's no programmatic, extension of, of duration.
Harp Rana: So we haven't done that, you know, in, in terms of how you're asking about it, in terms of program- programmatically. I mean, we, we have put on, you know, our auto secured product, which just comes with, you know, it's a longer loan. So, you know, that definitely is, is a variable. And then, of course, you know, as we work through, you know, our programs with customers who are having difficulty making payments, you know, we'll look at a number of curing tools in order- and that's on a, you know, loan-by-loan basis, in order to ensure that the customer has the ability to pay us and therefore will pay us. So we do look at it from, from that lens, but no, there's no programmatic, extension of, of duration.
Speaker #1: So that definitely is a variable. And then, of course, as we work through our programs with customers who are having difficulty making payments, we'll look at a number of curing tools in order.
Speaker #1: And that's on a loan-by-loan basis. In order to ensure that the customer has the ability to pay us, and therefore will pay us. So we do look at it from that lens, but no, there's no programmatic extension of duration.
Speaker #9: Perfect. Thank
[Analyst] (Jefferies): Perfect. Thank you.
Alexander Villalobos: Perfect. Thank you.
Speaker #9: you. Thank
Speaker #1: you. Thank you.
Harp Rana: Thank you.
Harp Rana: Thank you.
Operator: Thank you. We've reached the end of our question and answer session. I'd like to turn the floor back over for any further closing comments.
Operator: Thank you. We've reached the end of our question and answer session. I'd like to turn the floor back over for any further closing comments.
Speaker #2: We’ve reached the end of our question and answer session. I’d like to turn the floor back over for any further closing comments.
Speaker #3: Thank you, as just to close and maybe repeat myself, we're very pleased with how we finished 2025. Really encouraged by the momentum we are carrying into 2026.
[Analyst]: Thank you. As just to close and maybe repeat myself, I'll be very pleased with how we finished 2025. Really encouraged by the momentum we are carrying into 2026. I want to thank all my colleagues at Regional. The team, they've done a tremendous job of building the platform and the momentum we have today, and I really thank them and wish them luck as we work together in building an amazing 2026. Thank you.
Lakhbir Lamba: Thank you. As just to close and maybe repeat myself, I'll be very pleased with how we finished 2025. Really encouraged by the momentum we are carrying into 2026. I want to thank all my colleagues at Regional. The team, they've done a tremendous job of building the platform and the momentum we have today, and I really thank them and wish them luck as we work together in building an amazing 2026. Thank you.
Speaker #3: I want to thank all my colleagues at Regional, the teams that have done a tremendous job building the platform, and the momentum we have today.
Speaker #3: And I really thank them and wish them luck as we work together in building an amazing 2026. Thank
Speaker #3: you. Thank you.
Operator: Thank you. That does conclude today's teleconference. We disconnect your line at this time, and have a wonderful day. We thank you for your participation today.
Operator: Thank you. That does conclude today's teleconference. We disconnect your line at this time, and have a wonderful day. We thank you for your participation today.
