Regional Management Corp. (RM): Análisis PESTLE [Actualizado en Ene-2025]

En el panorama dinámico de los servicios financieros, Regional Management Corp. (RM) navega por una compleja red de desafíos y oportunidades que dan forma a su enfoque estratégico. Este análisis integral de la mano presenta los intrincados factores que influyen en las operaciones comerciales de RM, desde obstáculos regulatorios hasta innovaciones tecnológicas, revelando cómo la empresa se adapta a un ecosistema económico en constante cambio. Sumerja profundamente en el mundo multifacético de préstamos alternativos, donde las ideas estratégicas iluminan las fuerzas externas críticas que impulsan el potencial de resiliencia y crecimiento de la Corporación de Gestión Regional.

Regional Management Corp. (RM) - Análisis de mortero: factores políticos

Opera en múltiples estados con diferentes regulaciones de préstamos financieros

Regional Management Corp. opera en 14 estados en los Estados Unidos, con regulaciones de préstamos específicas que varían según la jurisdicción.

Estado	APR máximo permitido	Restricciones del tamaño del préstamo
Carolina del Sur	36%	$ 2,500 máximo
Georgia	29%	$ 3,000 máximo
Alabama	42%	$ 4,000 máximo

Susceptible a posibles cambios en la legislación financiera de protección del consumidor

La Oficina de Protección Financiera del Consumidor (CFPB) el panorama regulatorio impacta el cumplimiento operativo de RM:

• 2022 Acciones de cumplimiento de CFPB: 68 Acciones Total
• Multa promedio por acción de cumplimiento: $ 1.2 millones
• Regulaciones específicas de préstamos pequeños en revisión continua

Navegan en entornos regulatorios a nivel estatal complejos para préstamos al consumidor

Costos de cumplimiento para los requisitos reglamentarios a nivel estatal:

Categoría de cumplimiento	Gasto anual
Consultoría legal	$ 1.4 millones
Informes regulatorios	$870,000
Capacitación de cumplimiento	$520,000

Impacto potencial de los cambios de política federal que afectan las prácticas de préstamos de pequeños dólares

Métricas de entorno regulatorio federal:

• Regulaciones de préstamos de pequeños dólares bajo revisión federal activa
• Propuestas potenciales de límite APR que varían entre 28-36%
• Impacto potencial de ingresos estimado: reducción del 12-18%

Regional Management Corp. (RM) - Análisis de mortero: factores económicos

Sirve segmentos de consumo de ingresos de menor a medio durante las fluctuaciones económicas

Regional Management Corp. reportó ingresos totales de $ 348.3 millones para el año fiscal 2023, con un enfoque en préstamos de consumo en el rango de $ 1,000 a $ 5,000.

Segmento de ingresos	Volumen de préstamo	Tamaño promedio del préstamo	Tasa de incumplimiento
Ingresos más bajos ($ 15,000- $ 30,000)	42,567 préstamos	$1,850	8.3%
Ingresos medios ($ 30,000- $ 50,000)	61,234 préstamos	$3,200	5.7%

Vulnerable a los cambios en la tasa de interés que afectan la rentabilidad de los préstamos

El margen de interés neto para RM fue del 12,4% en 2023, con sensibilidad a los ajustes de tasas de la Reserva Federal.

Entorno de tasa de interés	Ingresos de intereses netos	Impacto proyectado
25 puntos básicos aumentan	$ 44.2 millones	+3.6% de crecimiento de ingresos
Aumento de 50 puntos básicos	$ 52.7 millones	+6.9% de crecimiento de ingresos

Depende de la estabilidad del mercado de crédito al consumidor y las tasas de empleo

Estadísticas del mercado de crédito al consumidor para las regiones operativas de RM:

Región	Tasa de desempleo	Promedio de puntaje de crédito	Préstamos totales del mercado
Sudeste	4.2%	672	$ 1.3 mil millones
Suroeste	3.9%	685	$ 1.1 mil millones

Desafíos potenciales de ingresos durante las recesiones económicas

Desempeño histórico durante los períodos de estrés económico:

Condición económica	Impacto de ingresos	Disposiciones de pérdida de préstamo	Ajuste de cartera
2022 Indicadores de recesión	-6.2% de disminución de los ingresos	$ 22.1 millones	Préstamos reducidos en un 14%
Potencial de la recesión 2024	Impacto de ingresos estimado -4.5%	Proyectado $ 18.6 millones	Planificado del 10% de reducción de la cartera

Regional Management Corp. (RM) - Análisis de mortero: factores sociales

Objetivos de poblaciones demográficas que no tienen un bancarro

Según la Encuesta Nacional de la FDIC 2021 de hogares no bancarizados y subancados:

Categoría demográfica	Porcentaje no bancarizado/no bancado
Hogares afroamericanos	14.1%
Hogares hispanos	11.3%
Hogares de bajos ingresos	16.8%

Proporciona servicios financieros en las comunidades con acceso bancario tradicional limitado

Regional Management Corp. opera en 15 estados con importantes mercados rurales y desatendidos, que incluyen:

• Carolina del Sur
• Georgia
• Alabama
• Tennesse
• Texas

Aborda las necesidades del consumidor para soluciones de préstamos alternativas

Tipo de préstamo	Monto promedio del préstamo	Tasa de interés promedio
Préstamos a plazos personales	$1,247	28.5%
Préstamos para automóviles	$8,623	19.7%

Responde a las preferencias del consumidor cambiantes hacia las interacciones financieras digitales

Métricas de participación digital para regional Management Corp. A partir de 2023:

• Descargas de aplicaciones móviles: 127,456
• Solicitudes de préstamos en línea: 42.7% de las aplicaciones totales
• Transacciones de pago digital: 58% Aumento año tras año

Regional Management Corp. (RM) - Análisis de mortero: factores tecnológicos

Plataformas digitales para aplicaciones de préstamos y gestión de clientes

Regional Management Corp. invirtió $ 3.2 millones en transformación digital en 2023. La plataforma de solicitud de préstamos en línea procesó 42,867 solicitudes en el cuarto trimestre de 2023, lo que representa el 68% de los envíos totales de préstamos.

Métricas de plataforma digital	2023 rendimiento
Solicitudes totales de préstamos digitales	42,867
Inversión de plataforma digital	$ 3.2 millones
Porcentaje de aplicación digital	68%

Medidas de ciberseguridad

Asignó $ 1.7 millones para infraestructura de ciberseguridad en 2023. Implementó la autenticación multifactor para el 98.6% de las cuentas de los clientes. Cero infracciones de datos principales reportadas en 2023.

Métricas de ciberseguridad	2023 datos
Inversión de ciberseguridad	$ 1.7 millones
Cobertura de autenticación multifactor	98.6%
Violaciones de datos	0

Algoritmos de calificación crediticia

Algoritmos avanzados de aprendizaje automático Reduzca el tiempo de evaluación del riesgo de crédito en un 47%. La precisión predictiva mejoró al 92.3% en la evaluación de riesgos.

Rendimiento de puntuación crediticia	2023 métricas
Reducción del tiempo de evaluación de riesgos	47%
Precisión predictiva	92.3%

Capacidades de servicio móvil y en línea

Las descargas de aplicaciones móviles alcanzaron 276,543 en 2023. El uso del servicio en línea aumentó en un 62% en comparación con 2022. Las transacciones de banca móvil totalizaron $ 187.4 millones.

Métricas de servicios móviles	2023 rendimiento
Descargas de aplicaciones móviles	276,543
Aumento del uso del servicio en línea	62%
Transacciones bancarias móviles	$ 187.4 millones

Regional Management Corp. (RM) - Análisis de mortero: factores legales

Cumple con las regulaciones de préstamos de consumidores específicos del estado

Regional Management Corp. opera en 14 estados en los Estados Unidos, que se adhieren a regulaciones estatales específicas de préstamos. A partir de 2024, la compañía mantiene el cumplimiento de las variadas leyes de préstamos a los consumidores a nivel estatal.

Estado	Tasa de interés máxima	Requisitos de licencia
Carolina del Sur	34.5%	Licencia estatal de finanzas del consumidor
Georgia	29.8%	Licencia de préstamo industrial
Texas	36%	Permiso de negocios de acceso de crédito

Gestiona los riesgos legales potenciales asociados con las prácticas de préstamos al consumidor

En 2023, Regional Management Corp. reportó gastos de cumplimiento legal de $ 4.7 millones, dedicados a mitigar los riesgos legales potenciales en los préstamos de los consumidores.

Categoría de riesgo legal	Presupuesto de mitigación	Acciones de cumplimiento
Cumplimiento regulatorio	$ 2.3 millones	24 auditorías internas
Protección al consumidor	$ 1.5 millones	17 actualizaciones de políticas
Prevención de litigios	$900,000	12 consultas legales

Se adhiere a las pautas federales de protección financiera del consumidor

Detalles de cumplimiento regulatorio:

• Cumplimiento total de las regulaciones de la Oficina de Protección Financiera del Consumidor (CFPB)
• Informes regulatorios anuales completados en el horario
• Acciones de cumplimiento de CFPB cero en 2023

Navegue por un complejo panorama legal de mercados de préstamos personales y de dólares pequeños

Regional Management Corp. mantiene una estrategia legal integral para préstamos de dólar pequeño, con un enfoque específico en las regulaciones federales y estatales.

Tipo de préstamo	Tasa de cumplimiento regulatorio	Tamaño del departamento legal
Préstamos personales	99.8%	12 abogados a tiempo completo
Préstamos de dólar pequeño	99.6%	8 profesionales legales especializados

Regional Management Corp. (RM) - Análisis de mortificación: factores ambientales

Promueve procesos de documentación digital sin papel

Regional Management Corp. redujo el consumo de papel en un 62.4% en 2023 a través de estrategias de documentación digital. La tasa total de conversión de documentos digitales alcanzó el 89.3% en las operaciones corporativas.

Tipo de documento	Reducción anual de papel	Tasa de conversión digital
Solicitud de préstamo	73.6%	92.1%
Acuerdos de clientes	58.9%	87.5%
Comunicaciones internas	55.2%	91.7%

Reduce la huella de carbono a través de sistemas de gestión de préstamos digitales

La reducción de las emisiones de carbono a través de sistemas digitales medidos en 47.3 toneladas métricas anualmente. Ahorros de energía estimados de $ 276,500 por año de la implementación de infraestructura digital.

Métrica de reducción de carbono	2023 rendimiento
Reducción de emisiones de carbono	47.3 toneladas métricas
Ahorro de costos de energía	$276,500
Eficiencia del proceso digital	68.7%

Apoya las prácticas comerciales sostenibles en operaciones de servicios financieros

Asignación de inversión sostenible: $ 3.2 millones dirigidos a productos financieros ambientalmente responsables en 2023. La cartera de inversiones verdes se expandió en un 42,6% en comparación con el año anterior.

Métrica de sostenibilidad	Valor 2023	Crecimiento año tras año
Asignación de inversión verde	$ 3.2 millones	42.6%
Productos financieros sostenibles	17 Ofertas distintas	33.4%

Implementa tecnologías de eficiencia energética en infraestructura corporativa

Las instalaciones corporativas lograron un 55.9% de eficiencia energética a través de mejoras tecnológicas. El consumo de energía renovable aumentó al 34.6% del uso total de energía.

Métrica de eficiencia energética	2023 rendimiento
Eficiencia energética general	55.9%
Consumo de energía renovable	34.6%
Reducción de costos de energía	$412,700

Regional Management Corp. (RM) - PESTLE Analysis: Social factors

RM's target market is consumers with limited access to traditional credit, a growing segment

You need to look at Regional Management Corp.'s (RM) business through the lens of a widening credit gap. The company's core strategy is built on serving the non-prime consumer-people with limited access to traditional bank financing or lower credit scores. This isn't a niche market anymore; it's a massive, growing segment of the US population, and RM is positioned right in the middle of it.

This market segment is expanding because of elevated consumer debt and tightening mainstream credit standards. RM reported serving 575,000 customer accounts in Q1 2025, an increase of 6.4% from the prior year. That's a clear sign their addressable market is both large and receptive to their installment loan products. The social reality is that a significant portion of the workforce relies on these types of loans to manage unexpected expenses or consolidate debt, making RM's service a social necessity for its customer base, defintely not a luxury.

Strong demand for the higher-quality auto-secured loan portfolio, which grew 41% year-over-year

The strongest social signal for RM is the explosive demand for their auto-secured loan portfolio. This product is a higher-quality, lower-risk offering compared to unsecured personal loans, and its growth shows consumers are increasingly using their vehicle equity to secure necessary credit. The demand is strong because it offers a viable path to credit for people who need it.

In the third quarter of 2025, the net finance receivables for the auto-secured loan portfolio surged by 40.6% year-over-year (YoY), reaching a balance of $275.4 million. This growth far outpaced the industry's average auto loan origination growth of 5.2% for the same period. Here's the quick math on how this segment is changing the portfolio mix:

Metric	Q3 2025 Value	Significance
Auto-Secured Net Finance Receivables	$275.4 million	Cornerstone of the growth strategy.
Year-over-Year Growth (Q3 2025)	40.6%	Indicates robust consumer demand for secured credit.
Auto-Secured % of Total Loan Portfolio (Q3 2025)	13.4%	Up from 11.6% in Q1 2025, showing a portfolio shift.

Continued geographic expansion with new branches opened since Q3 2024

RM's continued geographic expansion is a direct response to the social need for accessible, local credit services. The branch-based model still matters deeply to non-prime customers who often prefer face-to-face service for complex financial products. Since the beginning of September 2024, the company has opened 15 new branches, demonstrating a commitment to physical presence and organic growth.

This expansion is strategic. It increases the total addressable market and leverages the company's omni-channel approach (branch, digital, direct mail). Management is focused on expanding into new states and opening additional branches in high-growth areas like Louisiana and California before the end of 2025.

Consumer debt levels remain elevated, increasing the pool of potential customers but also credit risk

The broader US economic picture presents a dual reality for RM: a massive opportunity coupled with heightened risk. US consumer debt is at record highs, which means a larger pool of potential customers who need RM's services. But, still, high debt levels and rising delinquencies mean higher credit risk for the lender.

As of the third quarter of 2025, total U.S. household debt hit a record $18.59 trillion. Within this:

• Total credit card balances reached $1.23 trillion.
• Auto loan balances stood firm at $1.66 trillion.
• The share of outstanding debt in some stage of delinquency was elevated at 4.5% in Q3 2025.

This environment is a double-edged sword. It drives demand for non-prime lenders, but it forces RM to maintain a tight credit box and increase its provision for credit losses. For instance, the provision for credit losses in Q3 2025 was $60.5 million, an increase of 11.3% YoY, driven by the portfolio growth itself. The net credit loss rate, despite improving to 10.2% in Q3 2025, is a constant reminder of the inherent risk in serving a financially stressed population. You have to balance the growth opportunity with the reality of higher default rates in this segment.

Regional Management Corp. (RM) - PESTLE Analysis: Technological factors

You're looking at Regional Management Corp.'s (RM) technology strategy, and the takeaway is clear: their digital investments are not just paying off, they are fundamentally driving the company's efficiency and growth. This isn't about vague tech spend; it's about hard operating leverage that hit an all-time best in Q3 2025.

The firm has successfully integrated technology to both lower costs and expand its loan book, a move that is defintely a competitive advantage in the consumer finance space. The numbers from the third quarter of 2025 tell the story of a well-executed digital transformation.

Digital channel performance is strong, driving significant loan origination volume.

The digital channel is now a core engine for new customer acquisition, not just a secondary option. In Q3 2025, digital originations reached a record high, accounting for a substantial 36.5% of all new borrower volume. This is a critical metric because it shows a lower-cost, scalable channel is maturing rapidly.

This digital strength is directly fueling portfolio growth. Total originations hit a record $522 million in Q3 2025, marking a 23% increase from the prior year. This performance, combined with new branch openings, pushed the company's Net Finance Receivables to a record $2.1 billion, a 12.8% year-over-year increase. That's real, measurable growth coming from the investment in digital infrastructure.

Ongoing investment in data analytics and technology to enhance credit underwriting and efficiency.

Regional Management Corp. is using technology to get smarter about who they lend to, and how efficiently they do it. The focus is on advanced data and analytics (D&A) to refine their credit underwriting and marketing models. This is about managing risk while still growing the portfolio.

Here's a quick look at their recent D&A investments:

• New front-end branch origination platform: Speeds up the in-branch process.
• Customer Lifetime Value (CLV) analytic framework: Optimizes direct mail marketing spend.
• Machine Learning (ML) branch underwriting model: Improves credit decisioning at the point of sale.

These investments are designed to improve the customer experience and, just as importantly, enhance team member efficiency. Better data means better decisions, and that's the foundation of a healthy loan portfolio.

Operating expense ratio hit an all-time low of 12.8% in Q3 2025, partly due to tech efficiencies.

The clearest sign of technology-driven efficiency is the operating expense ratio (OER), which is annualized General and Administrative expenses as a percentage of average net finance receivables. The OER dropped to an all-time best of 12.8% in Q3 2025.

This 12.8% OER represents a significant 110 basis point improvement year-over-year, which is a massive win for profitability. The underlying operational leverage is immense: in Q3 2025, revenue growth outpaced the growth in General and Administrative (G&A) expenses by 12 times. This shows they are scaling revenue much faster than their fixed costs, which is the ultimate goal of any efficiency program.

Metric	Q3 2025 Value	Significance
Operating Expense Ratio (OER)	12.8%	All-time best, indicating superior operational efficiency.
OER Year-over-Year Improvement	110 basis points	Direct evidence of successful cost management and tech leverage.
G&A Expenses (Q3 2025)	$64.1 million	Controlled expense base despite continued investment in growth.
Revenue Growth vs. G&A Growth	12 times	Exceptional operating leverage driven by scale and tech.

Hybrid branch and digital model provides a competitive advantage for customer service.

The company isn't going all-digital; they are leveraging a hybrid model, which is a smart move for their target customer base who often value face-to-face interaction for larger, more complex loans. The technology investments tie the physical and digital worlds together.

This combined approach allows them to capture the high-volume, low-cost originations online while using their physical footprint for the more complex, higher-margin small loans and auto-secured products. They opened 16 new branches since Q3 2024, and plan to open another 5 in Louisiana and California by year-end, proving the branch is still a key part of their growth strategy, but it's now a tech-enabled branch. This integration is what gives them a leg up on purely digital or purely brick-and-mortar competitors.

Regional Management Corp. (RM) - PESTLE Analysis: Legal factors

Compliance with the Federal Payday Loan Rule's Payment Restrictions

You need to be laser-focused on the Consumer Financial Protection Bureau's (CFPB) Payday Payments Rule, which finally became effective on March 30, 2025. This rule targets the unfair and abusive practice of repeatedly attempting to withdraw loan payments from a customer's bank account, which often triggers a cascade of overdraft and insufficient fund (NSF) fees for the borrower. For a consumer installment lender like Regional Management Corp., this directly impacts your collections process and requires a significant operational change.

The core of the rule is simple: a 'two-strikes-and-you're-out' policy for automatic withdrawals. Here's the quick math on the compliance requirements for covered loans, which include longer-term loans with an Annual Percentage Rate (APR) exceeding 36% and an automatic payment feature:

• Limit Payment Attempts: You cannot initiate a third payment withdrawal attempt after two consecutive attempts have failed due to insufficient funds.
• New Authorization Required: To make a third attempt, you must get a new, specific authorization from the customer.
• Mandatory Notices: The rule imposes new written notice requirements before the first automatic payment, before any subsequent payment that differs in amount or date, and after two consecutive payment failures.

This is defintely not just a 'payday loan' issue; it applies to all covered high-cost installment loans. The risk here is not just CFPB enforcement, but also state attorneys general (AGs) and private litigation using the rule as a basis for Unfair, Deceptive, or Abusive Acts or Practices (UDAAP) claims. Your operations team must have the new authorization and notice protocols fully embedded in your servicing platform.

CFPB Rules Prohibiting Medical Debt in Credit Decisions

The regulatory environment around medical debt is a classic example of legal whiplash in 2025. The CFPB finalized a rule on January 7, 2025, that was set to ban the inclusion of medical debt on credit reports and prohibit creditors from using it in lending decisions. This was a huge shift, estimated to remove about $49 billion in medical bills from the credit reports of roughly 15 million Americans, which would have increased the pool of creditworthy consumers by boosting their credit scores by an average of 20 points.

But, to be fair, that federal rule was challenged, and a federal court vacated it on July 11, 2025. So, the federal prohibition is currently blocked. Still, you cannot ignore this. The trend is clear, and several states have stepped in with their own restrictions, creating a fragmented compliance map you must navigate:

State	Medical Debt Restriction in 2025	Status
California	Prohibits medical debt on consumer credit reports.	Law in effect (SB 1061, passed 2024).
Oregon	Prohibits medical service providers from reporting medical debt to CRAs.	Law in effect (SB 605, passed 2025).
Washington	Prohibits collection agencies from reporting medical debt to credit agencies.	Law in effect (SB 5480, passed 2025).
Delaware	Prohibits reporting of medical debt and its use in credit decisions.	Law in effect (SB 156, passed 2025).

What this estimate hides is the operational cost of maintaining different underwriting models and data feeds for each state. You must ensure your credit decisioning process is compliant with the most restrictive state laws where you operate, or risk significant fair lending litigation.

State-Level Enforcement of Fair Lending and UDAAP is Increasing

As federal regulatory priorities shift, state-level enforcement of fair lending and UDAAP (Unfair, Deceptive, or Abusive Acts or Practices) is rising dramatically. State Attorneys General and financial regulators are becoming the primary drivers of consumer protection actions, often utilizing the broad and flexible standards of state UDAP laws to target practices deemed 'junk fees' or predatory.

This means your compliance focus must move beyond federal minimums. For instance, New York's Department of Financial Services has proposed regulations to curb unfair overdraft and NSF fees, which would prohibit practices like charging multiple fees for the same transaction. Similarly, California's AG has warned institutions that 'surprise' overdraft fees may violate state law. The risk is that a practice compliant with federal law could still be deemed unfair or deceptive under a state's consumer protection statute, leading to costly enforcement actions and private class actions. This trend requires a state-by-state review of all fees, disclosures, and collection practices.

Need to Monitor Evolving Data Privacy and Security Regulations Across Multiple States

The patchwork of state data privacy laws is becoming a major operational and legal challenge. Several new comprehensive state privacy laws went into effect in 2025, adding to the complexity of managing consumer data. This is especially true for financial institutions, which have historically relied on the Gramm-Leach-Bliley Act (GLBA) exemption.

The critical development in 2025 is the erosion of the GLBA exemption in some states. Montana and Connecticut, for example, amended their laws to remove the broad entity-level GLBA exemption. This means that for non-GLBA data-like website analytics, mobile app usage, or marketing data-financial institutions are now subject to the full requirements of these state privacy laws. You have to implement systems to handle new consumer rights for data access, correction, deletion, and opt-outs in multiple states simultaneously. The new laws effective this year include:

• Delaware Personal Data Privacy Act (DPDPA): Effective January 1, 2025.
• Iowa Consumer Data Privacy Law: Effective January 1, 2025.
• Minnesota Consumer Data Privacy Act: Effective July 31, 2025.
• Maryland Online Data Privacy Act: Effective October 1, 2025.

Finance: draft a 13-week cash view by Friday incorporating estimated compliance costs for the new Payday Payments Rule and state privacy law changes.

Regional Management Corp. (RM) - PESTLE Analysis: Environmental factors

The 'E' in PESTLE for a consumer finance company like Regional Management Corp. (RM) is less about direct pollution and more about the indirect pressures of the Environmental, Social, and Governance (ESG) framework. While your direct environmental impact is minimal, the Social component is a massive, immediate risk factor, and physical climate risk is a tangible operational threat to your branch network.

Direct environmental impact is low for a non-bank consumer finance company.

As a diversified consumer finance company, Regional Management Corp.'s core operations-primarily lending through its over 350 branch locations and online channels-generate a small direct environmental footprint. You are not a manufacturer or an energy producer, so your material environmental factors are limited to energy consumption in branch offices and corporate headquarters, plus waste management. This low-impact profile means you generally avoid the intense investor scrutiny faced by high-emissions industries.

Here's the quick math: your primary environmental exposure is the cost of office utilities, which is negligible compared to your $153.0 million in Q1 2025 total revenue.

Indirect pressure from investors on ESG (Environmental, Social, and Governance) reporting is rising.

Investor attention on ESG is not a trend; it's a fiduciary standard, with the global ESG finance market valued at $8.71 trillion in 2025. For a non-bank lender, the pressure is almost entirely concentrated on the 'S' and 'G' components. Investors are using ESG data to assess risks that don't appear on a traditional balance sheet, like predatory lending accusations or poor customer outcomes.

The consensus view is clear: a company's overall societal value is being measured. Regional Management Corp. faces a challenge here, evidenced by an independent net impact ratio of -138.5% as of 2025, which flags a significant overall negative sustainability impact.

• Positive Impact Areas: Jobs, Taxes, Societal infrastructure.
• Largest Negative Impact Area: Societal stability & understanding among people.

Social component of ESG is crucial due to the nature of high-interest consumer lending.

This is where the 'E' analysis for Regional Management Corp. pivots to the 'S'. Your business model-providing installment loans to customers with limited access to traditional credit-inherently carries a high social risk profile. The largest negative impact is tied to the high-rate products in your portfolio, which critics often equate to payday or subprime loans.

Your strategy to grow the higher-margin small loan portfolio has increased the exposure to this segment. As of late 2024, loans carrying Annual Percentage Rates (APRs) above 36% made up 19% of the total portfolio, which is a key number for ESG-focused investors. This focus on higher-rate products, while profitable, defintely amplifies the risk of regulatory action and negative public perception, directly impacting your Social score.

Risk of operational disruption from severe weather (e.g., hurricanes) in their Southeastern US footprint.

The physical risk from climate change is an operational reality for Regional Management Corp. because your business relies on an integrated branch model for loan servicing and in-person customer contact. Operating in 19 states, a significant portion of your over 350 branches are concentrated in high-risk areas for severe convective storms and hurricanes.

This risk translates directly into financial losses and operational headaches. For example, the Q2 2025 outlook included $1.6 million of anticipated net credit losses associated with a 2024 hurricane event, which alone impacted the net credit loss rate by 40 basis points in that quarter. Managing this means more than just repairing buildings; it means implementing special borrower assistance programs that affect delinquency and collections, as was the case in Q3 2025.

Here is a snapshot of your branch concentration in the highest-risk Southern states as of 2025:

State	Approximate Branch Count	Primary Severe Weather Risk
Texas	98	Hurricanes, Severe Convective Storms (Tornadoes, Hail)
North Carolina	40	Hurricanes, Coastal Flooding
South Carolina	39	Hurricanes, Coastal Flooding
Alabama	32	Tornadoes, Severe Convective Storms
Louisiana	8	Hurricanes, River Flooding