Regional Management Corp. (RM): Analyse du Pestle [Jan-2025 MISE À JOUR]

Dans le paysage dynamique des services financiers, Regional Management Corp. (RM) navigue dans un réseau complexe de défis et d'opportunités qui façonnent son approche stratégique. Cette analyse complète du pilon dévoile les facteurs complexes qui influencent les opérations commerciales de RM, des obstacles réglementaires aux innovations technologiques, révélant comment l'entreprise s'adapte à un écosystème économique en constante évolution. Plongez profondément dans le monde à multiples facettes des prêts alternatifs, où les informations stratégiques illuminent les forces externes critiques stimulant la résilience et le potentiel de croissance de la Management Regional Management Corp.

Regional Management Corp. (RM) - Analyse du pilon: facteurs politiques

Opère dans plusieurs États avec des réglementations de prêt financier variables

Regional Management Corp. opère dans 14 États des États-Unis, avec des réglementations spécifiques de prêt variant selon la juridiction.

État	APR maximum autorisé	Restrictions de taille de prêt
Caroline du Sud	36%	2 500 $ maximum
Georgia	29%	3 000 $ maximum
Alabama	42%	4 000 $ maximum

Sensible aux changements potentiels de la législation financière de protection des consommateurs

Consumer Financial Protection Bureau (CFPB) Le paysage réglementaire a un impact sur la conformité opérationnelle de RM:

• 2022 Actions d'application de la loi CFPB: 68 Actions totales
• Amende moyenne par action d'application: 1,2 million de dollars
• Règlements spécifiques de prêts à petit dollar dans un examen continu

Navigue des environnements réglementaires complexes au niveau de l'État pour les prêts aux consommateurs

Coûts de conformité pour les exigences réglementaires au niveau de l'État:

Catégorie de conformité	Dépenses annuelles
Conseil juridique	1,4 million de dollars
Représentation réglementaire	$870,000
Formation de la conformité	$520,000

Impact potentiel des changements de politique fédérale affectant les pratiques de prêt en petit dollar

Métriques fédérales de l'environnement réglementaire:

• Règlements sur les prêts en petit dollar dans le cadre de l'examen fédéral actif
• Propositions potentielles de CAP APR allant entre 28 et 36%
• Impact estimé des revenus potentiels: réduction de 12 à 18%

Regional Management Corp. (RM) - Analyse du pilon: facteurs économiques

Sert des segments de consommateurs plus bas aux revenus intermédiaires pendant les fluctuations économiques

Regional Management Corp. a déclaré un chiffre d'affaires total de 348,3 millions de dollars pour l'exercice 2023, en mettant l'accent sur les prêts à la consommation dans la fourchette de 1 000 $ à 5 000 $.

Segment des revenus	Volume de prêt	Taille moyenne du prêt	Taux par défaut
Revenu inférieur (15 000 $ à 30 000 $)	42 567 prêts	$1,850	8.3%
Revenu moyen (30 000 $ - 50 000 $)	61 234 prêts	$3,200	5.7%

Vulnérable aux changements de taux d'intérêt affectant la rentabilité des prêts

La marge d'intérêt nette pour RM était de 12,4% en 2023, avec sensibilité aux ajustements des taux de la Réserve fédérale.

Environnement de taux d'intérêt	Revenu net d'intérêt	Impact projeté
25 points de base augmentent	44,2 millions de dollars	+ 3,6% de croissance des revenus
50 points de base augmentent	52,7 millions de dollars	+ 6,9% de croissance des revenus

Cela dépend de la stabilité du marché du crédit à la consommation et des taux d'emploi

Statistiques du marché du crédit à la consommation pour les régions opérationnelles de RM:

Région	Taux de chômage	Moyenne du pointage de crédit	Prages du marché total
Au sud-est	4.2%	672	1,3 milliard de dollars
Sud-ouest	3.9%	685	1,1 milliard de dollars

Défis de revenus potentiels pendant les ralentissements économiques

Performance historique pendant les périodes de stress économique:

Condition économique	Impact sur les revenus	Dispositions de perte de prêt	Ajustement du portefeuille
2022 Indicateurs de récession	-6,2% de baisse des revenus	22,1 millions de dollars	Réduction des prêts de 14%
Potentiel 2024 ralentissement	Impact estimé -4,5% des revenus	Prévu 18,6 millions de dollars	Réduction prévue du portefeuille de 10%

Regional Management Corp. (RM) - Analyse du pilon: facteurs sociaux

Cible sous-banca

Selon l'enquête nationale de la FDIC 2021 sur les ménages non bancarisés et sous-bancarisés:

Catégorie démographique	Pourcentage non bancarisé / sous-banca
Ménages afro-américains	14.1%
Ménages hispaniques	11.3%
Ménages à faible revenu	16.8%

Fournit des services financiers dans les communautés un accès bancaire traditionnel limité

Regional Management Corp. opère dans 15 États avec des marchés ruraux et mal desservis importants, notamment:

• Caroline du Sud
• Georgia
• Alabama
• Tennessee
• Texas

Répond aux besoins des consommateurs pour des solutions de prêt alternatives

Type de prêt	Montant moyen du prêt	Taux d'intérêt moyen
Prêts à versement personnel	$1,247	28.5%
Prêts automobiles	$8,623	19.7%

Répond au changement des préférences des consommateurs vers les interactions financières numériques

Métriques d'engagement numérique pour Regional Management Corp. à partir de 2023:

• Téléchargements d'applications mobiles: 127,456
• Demandes de prêt en ligne: 42,7% du total des applications
• Transactions de paiement numérique: Augmentation de 58% d'une année à l'autre

Regional Management Corp. (RM) - Analyse du pilon: facteurs technologiques

Plateformes numériques pour les applications de prêt et la gestion des clients

Regional Management Corp. a investi 3,2 millions de dollars dans la transformation numérique en 2023. La plate-forme de demande de prêt en ligne a traité 42 867 demandes au quatrième trimestre 2023, ce qui représente 68% des soumissions totales de prêts.

Métriques de plate-forme numérique	Performance de 2023
Applications totales de prêt numérique	42,867
Investissement de plate-forme numérique	3,2 millions de dollars
Pourcentage d'application numérique	68%

Mesures de cybersécurité

Alloué 1,7 million de dollars pour les infrastructures de cybersécurité en 2023. Implémenta l'authentification multi-facteurs pour 98,6% des comptes clients. Zéro violations de données majeures rapportées en 2023.

Métriques de cybersécurité	2023 données
Investissement en cybersécurité	1,7 million de dollars
Couverture d'authentification multi-facteurs	98.6%
Violation de données	0

Algorithmes de notation du crédit

Algorithmes avancés d'apprentissage automatique Réduisez le temps d'évaluation des risques de crédit de 47%. La précision prédictive s'est améliorée à 92,3% dans l'évaluation des risques.

Performance de notation du crédit	2023 métriques
Réduction du temps d'évaluation des risques	47%
Précision prédictive	92.3%

Capacités de service mobile et en ligne

Les téléchargements des applications mobiles ont atteint 276 543 en 2023. L'utilisation du service en ligne a augmenté de 62% par rapport à 2022. Les transactions bancaires mobiles ont totalisé 187,4 millions de dollars.

Métriques de service mobile	Performance de 2023
Téléchargements d'applications mobiles	276,543
Augmentation d'utilisation des services en ligne	62%
Transactions bancaires mobiles	187,4 millions de dollars

Regional Management Corp. (RM) - Analyse du pilon: facteurs juridiques

Se conforme aux réglementations de prêt de consommation spécifiques à l'État

Regional Management Corp. opère dans 14 États des États-Unis, adhérant à des réglementations spécifiques de prêt d'État. Depuis 2024, la société maintient le respect de variétés de lois sur les prêts aux consommateurs au niveau de l'État.

État	Taux d'intérêt maximum	Exigences de licence
Caroline du Sud	34.5%	Licence de financement des consommateurs d'État
Georgia	29.8%	Licence de prêt industriel
Texas	36%	Permis commercial d'accès au crédit

Gère les risques juridiques potentiels associés aux pratiques de prêt à la consommation

En 2023, Regional Management Corp. a déclaré des frais de conformité juridiques de 4,7 millions de dollars, dédiés à l'atténuation des risques juridiques potentiels dans les prêts aux consommateurs.

Catégorie de risque juridique	Budget d'atténuation	Actions de conformité
Conformité réglementaire	2,3 millions de dollars	24 audits internes
Protection des consommateurs	1,5 million de dollars	17 mises à jour de la politique
Prévention des litiges	$900,000	12 consultations juridiques

Adhère aux directives fédérales de protection financière des consommateurs

Détails de la conformité réglementaire:

• Compliance complète aux réglementations du Bureau de protection financière des consommateurs (CFPB)
• Les rapports réglementaires annuels terminés dans les délais
• Zéro actions d'application du CFPB en 2023

Navigue sur le paysage juridique complexe des marchés de prêts à petit dollar et personnels

Regional Management Corp. maintient une stratégie juridique complète pour les prêts en petit dollar, avec un accent particulier sur les réglementations fédérales et étatiques.

Type de prêt	Taux de conformité réglementaire	Taille du département juridique
Prêts personnels	99.8%	12 avocats à temps plein
Prêts en petit dollar	99.6%	8 professionnels spécialisés juridiques

Regional Management Corp. (RM) - Analyse du pilon: facteurs environnementaux

Promose les processus de documentation numérique sans papier

Regional Management Corp. a réduit la consommation de papier de 62,4% en 2023 par le biais de stratégies de documentation numérique. Le taux total de conversion de documents numériques a atteint 89,3% entre les opérations des entreprises.

Type de document	Réduction du papier annuel	Taux de conversion numérique
Demandes de prêt	73.6%	92.1%
Accords des clients	58.9%	87.5%
Communications internes	55.2%	91.7%

Réduit l'empreinte carbone par le biais de systèmes de gestion de prêts numériques

Réduction des émissions de carbone par le biais de systèmes numériques mesurés à 47,3 tonnes métriques par an. Économies d'énergie estimées de 276 500 $ par an à partir de la mise en œuvre des infrastructures numériques.

Métrique de réduction du carbone	Performance de 2023
Réduction des émissions de carbone	47,3 tonnes métriques
Économies de coûts énergétiques	$276,500
Efficacité du processus numérique	68.7%

Soutient les pratiques commerciales durables dans les opérations de service financier

Attribution durable des investissements: 3,2 millions de dollars se sont orientés vers les produits financiers responsables de l'environnement en 2023. Green Investment Portfolio a augmenté de 42,6% par rapport à l'année précédente.

Métrique de la durabilité	Valeur 2023	Croissance d'une année à l'autre
Attribution des investissements verts	3,2 millions de dollars	42.6%
Produits financiers durables	17 offrandes distinctes	33.4%

Met en œuvre des technologies économes en énergie dans les infrastructures d'entreprise

Les installations d'entreprise ont atteint 55,9% d'efficacité énergétique grâce à des mises à niveau technologiques. La consommation d'énergie renouvelable a augmenté à 34,6% de la consommation d'énergie totale.

Métrique de l'efficacité énergétique	Performance de 2023
Efficacité énergétique globale	55.9%
Consommation d'énergie renouvelable	34.6%
Réduction des coûts énergétiques	$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