Regional Management Corp.

Greetings and welcome to the Regional Management First Quarter 2026 Earnings Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Garrett Edson. Please go ahead.

Thank you and good afternoon. By now, everyone should have access to our earnings announcement 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 two of our supplemental presentation, which contains important disclosures concerning forward-looking statements and the use of non-GAAP financial measures. Part of our discussion today may include forward-looking statements, which are based on management's current expectations, estimates, and projections about the company's future financial performance and business prospects. These forward-looking statements speak only as of today and are subject to various assumptions, risks, uncertainties, and other factors that are difficult to predict, and that could cause actual results to differ materially from those expressed or implied in the forward-looking statements. 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 finals at the SEC for a more detailed discussion of our forward-looking statements and the risks and uncertainties that could impact our future operating results and financial conditions. Also, our discussion today may include references to certain non-GAAP measures. Reconciliation of these measures to the most comparable GAAP measures can be found within our earnings announcement or earnings presentation and posted on our website at regionalmanagement.com. I would now like to introduce Lapir Lemba, President and CEO of Regional Management Corp.

Thanks, Garrett, and good afternoon, everyone. We delivered a strong start to 2026 with solid financial performance, continued year-over-year portfolio growth, and further progress on our strategic priorities. Over the past few months, I've spent significant time across the organization, continuing to listen, learn, and evaluate our business. And I'm increasingly excited about the opportunities ahead. As I've deepened my understanding of our customers, products, and markets, I see a clear path to stronger performance and improving return outcomes over time. Our results in the first quarter reflect the strength of our operating model, disciplined execution, and continued investment in the business. Joining me on the call today is Harp Rana, our Chief Financial and Administrative Officer. I'll begin with a summary of our first quarter results, provide an update on our strategic initiatives, and then Harp will walk through the financial details. We generated net income of $11.4 million or $1.18 of diluted earnings per share, representing an increase of 69% year over year. These results were driven by continued portfolio growth, strong revenue performance, and further improvement in operating efficiency. Our loan portfolio increased by $214 million year over year to $2.1 billion, representing 11% growth, and we generated record revenue for our first quarter, up 9% compared to the prior year period. Demand for our products remains healthy, and we continue to grow this portfolio in a disciplined manner. We also delivered strong operating leverage. G&A expenses declined 2% year over year, even as we continued to invest in growth initiatives, technology, and digital capabilities. Our operating expense ratio improved 180 basis points year-over-year to 12.2%, another all-time best for the company. Notably, revenue growth outpaced G&A and interest expense growth by a wide margin, reflecting the scalability of our model. Capital generation remained strong in the quarter. We had $12 million of capital generation and returned more than $10 million to shareholders through dividends and share repurchases while continuing to fund portfolio growth. Our 30-plus day delinquency and net credit loss rates in Q1 were flat year over year after adjusting for this year's larger portfolio liquidation. Our customers remain stable and resilient in the current economic environment, and overall credit trends continue to perform within our expectations. That said, We are closely monitoring macroeconomic conditions, including elevated gas prices and inflation, and we remain disciplined and conservative in our underwriting. As we discussed on our last call, we are focused on continuing to improve our net credit loss rate over time with a long-term target below 10 percent. In support of this objective, we are increasing our investment in data, credit analytics, emerging AI capabilities and fraud detection, including first-party and synthetic fraud controls. We are actively evaluating and beginning to deploy AI initiatives to enhance our underwriting, decisioning capabilities, and collections over time while maintaining appropriate risk controls. These investments are critical to improving credit performance as we scale the portfolio and enter new markets. We continue to make good progress on our key strategic priorities. First, we are continuing to invest in market expansion. We plan to enter the state of Florida in the second quarter, which will mark our expansion into our 20th state and represents an important long-term growth opportunity. Second, responsible portfolio growth remains a core priority. We are seeing continuous strength in our auto-secured lending product the auto-secured portfolio reached $300 million in outstandings at the end of the first quarter, representing a 38% increase year-over-year. It now accounts for 14% of our total portfolio and carries a 30-plus day delinquency rate of 2%. This product continues to deliver attractive credit performance and returns. Third, we are advancing our bank partnership strategy In early March, we announced the launch of our partnership with Column, a nationally chartered bank. We expect this partnership to provide several important strategic benefits over time as it scales, including optimization of risk-adjusted yields, expanded relationships with existing customers and a broader addressable market, greater product and operational uniformity across states, faster entry into new markets, additional fee income opportunities, and increased wallet share over time from the introduction of new products. We launched the partnership in one branch with select products and have since expanded to 12 branches. We are encouraged by the early results, particularly in the origination trends, including volume, mix, and revenue characteristics. As we expected at this stage, our data is primarily focused on origination, credit quality, and yield metrics, and we expect to begin seeing early credit performance in the coming months. We plan to expand the partnership throughout the year as we continue to evaluate results, assess customer adoption, and refine the strategy. Fourth, we are continuing to invest in an end-to-end digital originations capability. We see meaningful long-term opportunity in this channel including the ability to reach higher credit quality customers and expand our addressable market. We are focused on creating a frictionless digital experience with strong fraud detection, credit underwriting, and risk-based pricing capabilities as we scale this channel. We are also evaluating the use of AI to enhance customer acquisition, improve decisioning speed and accuracy, and optimize channel performance. Our bank partnership will play an important role in supporting this initiative over time. Looking ahead, our expectations for the year remain unchanged. We continue to target full-year portfolio growth of 10% and net income growth in the range of 20 to 25%, while remaining prepared to moderate portfolio growth if warranted by macroeconomic or credit conditions. As a reminder, we expect second quarter net income to represent the low point for the year, consistent with normal seasonal trends. First quarter tax refund activity results in portfolio liquidation, which impacts second quarter revenue, while growth begins to accelerate as we move through the second quarter, driving sequentially higher CECL provisioning and G&A expenses. Portfolio growth in the second quarter and throughout the remainder of the year supports stronger revenue and earnings in the third and fourth quarters. We also expect net credit losses to remain seasonally elevated in the second quarter before improving to lower levels in the second half of the year. In addition, we anticipate the benefits of our bank partnership, portfolio growth, and other strategic initiatives will build throughout the year, supporting stronger earnings performance in the third and fourth quarters. Over the longer term, our objective remains clear. We will deliver sustainable, profitable growth while generating attractive returns for shareholders. We will continue to improve our return on equity through responsible portfolio growth, improving credit performance, operating leverage, and disciplined capital management. Regional is off to a strong start in 2026. We have a clear strategy, strong execution, and meaningful opportunities ahead. And we remain focused on delivering long-term value for our shareholders. With that, I will turn the call over to Harp.