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DATE

Wednesday, February 4, 2026 at 5:00 p.m. ET

CALL PARTICIPANTS

  • President and Chief Executive Officer — Latvir Lambda
  • Chief Financial and Administrative Officer — Harpreet Rana
  • Managing Director, ICR — Garrett Edson

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TAKEAWAYS

  • Net Income -- $12.9 million for the quarter, representing a 33% increase year over year and $1.30 in diluted earnings per share.
  • Full-Year Net Income -- $44.4 million, up 8%, landing toward the higher end of management's stated guidance.
  • Net Receivables Growth -- Ending net receivables rose by $248 million, or 13%, reaching the previously guided minimum of 10% annual growth.
  • Loan Portfolio Size -- Total loan portfolio reached $2.1 billion at year-end.
  • Originations -- Fourth-quarter originations totaled $537 million, a 13% increase year over year and a new record level.
  • Full-Year Originations -- Originations reached $2 billion, marking a 19% increase.
  • Credit Performance -- The 30-plus day delinquency rate improved by 20 basis points to 7.5%, reflecting actions taken to tighten credit and improved analytics.
  • Net Credit Loss Rate -- Adjusted annualized net credit loss rate improved 30 basis points for the quarter and 70 basis points for the year, after adjustments for previous disaster deferral and loan sale impacts.
  • Allowance for Credit Losses -- Increased by $8.9 million in the quarter to support portfolio growth, with a rate of 10.3%, up 20 basis points from the prior year period.
  • Operating Expense Ratio -- Annualized ratio at 12.4% for the quarter, a company record and a 160 basis point improvement year over year; full-year ratio at 13.1%, a 70 basis point improvement.
  • Capital Generation and Returns -- $74 million capital generated for the year; $36 million returned to shareholders through dividends and share repurchases.
  • Auto Secured Portfolio Growth -- This segment grew 42% year over year, becoming a larger component of the loan portfolio.
  • Branch Expansion -- Five new branches opened during the quarter in California and Louisiana, with further expansion planned and new states under review.
  • Dividend and Share Repurchase -- Board declared a 30¢ per share dividend for the first quarter; 197,000 shares repurchased in the quarter at $38.87 average price, and 702,000 shares repurchased for the year at $34.12 average price.
  • 2026 Guidance -- Management projects at least 10% ending net receivables growth, and 20%-25% net income growth for the full year.
  • Expense Management -- Ongoing focus on expense discipline expected to continue lowering the operating expense ratio over time, supported by scale and process improvements.
  • Digital and AI Investments -- Management plans investments to improve origination productivity, servicing experience, and cost efficiency in digital channels using analytics and AI.
  • Bank Partnership Initiative -- Still in development, this strategy is intended to expand market access, improve operational consistency across states, and optimize risk-adjusted yields.
  • Seasonality Expectations -- First quarter often features higher net credit losses and softer origination due to tax refund season, with guidance indicating this effect could be more pronounced in 2026 due to larger expected tax refunds.
  • Interest Expense -- Fourth-quarter interest expense was $22.6 million, equal to 4.3% of average net receivables on an annualized basis.

SUMMARY

Management highlighted a shift to full-year guidance, moving away from short-term precision as quarterly swings were considered less indicative of underlying business trends. Investment in digital origination and servicing, along with data analytics and AI, is expected to enhance both risk management and cost efficiency in upcoming periods. The company’s bank partnership initiative aims to deliver strategic advantages in product delivery, compliance uniformity, and faster entry into regulated markets. The auto secured loan product is set to receive continued focus, given its rapid growth and high risk-adjusted returns as noted by management. Management signaled ongoing expansion into new geographies and a disciplined approach to market entry and branch profitability evaluation.

  • Latvir Lambda said, "We delivered strong results while continuing to invest in the business, improve underlying credit performance, and drive operating leverage."
  • Chief Financial and Administrative Officer Harpreet Rana stated that "net income will be meaningfully higher in the second half of the year than the first half," citing seasonal factors and operational improvements.
  • The company expects the projected increase in tax refunds due to the One Big Beautiful Bill Act will "reduce balances through debt pay downs and improve collections and delinquencies in the first quarter."
  • Management noted that pricing remains closely aligned with market competition, and programmatic extension of loan duration has not occurred beyond shifts driven by product mix.
  • Ongoing improvements in credit and marketing efficiency are expected to be reinvested in business growth if demand remains favorable.

INDUSTRY GLOSSARY

  • Net Credit Loss (NCL) Rate: Annualized net loan charge-offs as a percentage of average net receivables, measuring the effectiveness of credit risk management.
  • 30-Plus Day Delinquency Rate: Percentage of loan balances more than 30 days overdue, indicating early stage credit performance trends.
  • Operating Expense Ratio: Operating expenses divided by average net receivables, reflecting cost-efficiency in loan operations.
  • ENR (Ending Net Receivables): Net principal amount outstanding on all loans owned at period-end.
  • Auto Secured Portfolio: Segment consisting of loans secured by automobile collateral.
  • One Big Beautiful Bill Act (OBBA): Referenced federal legislation impacting tax refunds, directly influencing customer loan payoff patterns.

Full Conference Call Transcript

Operator: Greetings.

Garrett Edson: And welcome to the Regional Management Fourth Quarter 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 the question queue at any time by pressing star 1 on your telephone keypad. As a reminder, this conference is being recorded. If anyone should require operator assistance, please press 0. It's now my pleasure to turn the call over to Garrett Edson with ICR. Garrett, please go ahead. 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 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 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, 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 Latvir Lambda, president and CEO of Regional Management Corp.

Latvir Lambda: 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 a 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. 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 fourth quarter 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 fourth quarter and finished 2025 with excellent momentum.

In the fourth quarter, 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. 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 the fourth quarter, net receivables increased by $87 million supported by strong origination activity across channels and healthy customer demand. Total fourth quarter originations were $537 million, up meaningfully from the prior year period. We continue to see encouraging trends in our underlying credit performance.

A 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.

During the first quarter, we expect to observe typical seasonality in net credit losses reflective of our later stage delinquency level which ordinarily drive a sequential net credit loss rate increase of roughly 150 basis points. 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. Looking ahead, we'll continue to improve our net credit loss rate with a portfolio NPL rate this 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.

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. As I step into this role, my immediate focus has been on listening, learning, and building on regional trends. 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 analytically rigorous manner. 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 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 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 capability 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 originations 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. In parallel, we remain focused on improving branch state level profitability.

As the portfolio and footprint grow, disciplined evaluation of performance in every segment remains 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 the yield 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. 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 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 pay downs and improve collections and delinquencies in the first quarter. 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.

Harpreet Rana: Thank you, Lockbir, and hello, everyone. I'll now take you through our fourth quarter results in more 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. 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.

Turning to pages six and seven, we had a record total originations 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 twelve 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 for 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. Looking ahead, as a reminder, the first quarter is always our softest origination quarter because of the normal seasonal 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 OBBA impact. 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, up 10% year over year. Total revenue yield and interest and fee yield declined sixty and forty basis points sequentially to 32.5% and 29.3% respectively, due to seasonality and product mix. In the first quarter, we expect total revenue yield to decrease sequentially due to normal seasonal trends of interest accrual reversal associated with NCL 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 fourth quarter 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 fourth quarter 2023 loan sale, which materially benefited first quarter 2024 net credit losses. In the first quarter, we expect our delinquency rate to improve consistent with seasonal patterns associated with tax refund benefits. We anticipate that our net credit losses will increase sequentially, again, due to normal seasonality for 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 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.

Turning to pages twelve and thirteen, our interest expense for the fourth quarter 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 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.

Our board of directors declared a dividend of 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 $38.87 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 Lockheeder.

Latvir Lambda: 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. With that, we'll open the call for questions. Operator, could you please open the line?

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 1 on your telephone keypad. We ask you please ask one question and one follow-up, then return to the queue. You may press 2 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 the star keys. One moment, please, while we poll for questions. Our first question is coming from Vincent Caintic from BTIG. Your line is now live.

Vincent Caintic: Hey, good afternoon. Thanks for taking my questions and Lockbir, we are looking forward to working with you. Welcome on board. And thank you. First question, as you were very comprehensive already in your kind of strategic vision, 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 nonbanks 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.

Latvir Lambda: 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 getting that initiative executed. We believe it'll improve our speed to market, expand our digital reach, and help us with product uniformity across the footprint. I think, as 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 of the way the regulations work. Plus, it'll help us optimize yields, just make sure we get paid for the risk we take in all various segments of our business.

At this point, we don't have a detailed timeline, viewpoint, or any specific state rollouts at the state, but we'll be sharing that as soon as we're comfortable doing so. 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 nonbanks buying banking institutions. 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 had been working on for a number of quarters.

But we'll continue to evaluate the landscape to your point, as it works.

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, 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.

Harpreet Rana: Yes. So Vincent, traditionally and historically, we have provided detailed short-term P&L guidance but, you know, we believe that our forecasting framework and how we run the business, 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. So we're shifting to a full-year view. We're going to keep focus where it belongs on the fundamental drivers of long-term value creation. 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 the first quarter and the other quarters is I would take a look at our business as very, you know, seasonal. So we've talked a little bit about that, you know, yield will be lower in the first quarter 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 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 the rest of the year. In terms of ENR growth, we've talked about, right, 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, just because those de novos came on in 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 the first quarter of 2024. So if you make those adjustments, 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 our net income guidance for the year at that range. 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, you know, the full-year impact of some of the investments that we made last year sort of comes fully online in the first quarter. So that's how I would think about the model, but we're happy to delve deeper with you guys on, you know, the analyst calls later.

Vincent Caintic: Okay. Great. Very helpful. Thank you.

Operator: Thank you. Next question is coming from David Scharf from Citizens Capital Markets. Your line is now live.

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. I wanted to dig in a little bit on the same store results. So, obviously, 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 keep growing those balances on the same store basis versus, you know, just kind of expanding the store cap? Thank you.

Harpreet Rana: Paul, can you just repeat that last part of the question for me again, please?

Zach Oster: Hey, no worries. Yeah, 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, you know, just more of organic store expansion growth?

Harpreet Rana: So I think we've talked a lot about, you know, sort of our market expansion, our geographic expansion pile 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 is going to have on our overall ENR balances. And then, you know, we provided you, obviously, with 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 as we know, right, in the first quarter, you have the tax refund. We go back to growing those balances in, you know, second, third, and fourth quarter. And we would expect without any exogenous variables that would be the same pattern that we would follow this year.

Zach Oster: Got it. And then if maybe 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. So I 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 and graduation during the quarter than expected?

Harpreet 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 product is more of a newer product for us. So you are seeing that grow in terms of its 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, but the other end of that continuum being, you know, the auto secured test. You know, Lockfeder 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. 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.

Zach Oster: Got it. Thank you.

Operator: Next question is coming from Kyle Joseph from Stephens. Your line is now live.

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 a call it, almost two years now or more of kind of a good mix of strong loan demand, balanced with stable credit. So, you know, 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. Thanks.

Latvir Lambda: Hey, Kyle. Good afternoon. Slackware. I appreciate the question. You know, the macro picture, I'm just restating 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 healthy, so in the early stage delinquency levels for the fourth quarter. And so and as I said, I've been we've been studying kind of various segments of the book slicing dicing various segments and markets and think overall, the consumer to your points fairly healthy even in the part of the K-shaped economy that we serve.

In terms of the first quarter, as we mentioned, the believe the OBPA impact really sort of has three sort of rungs to it. One, I think the real increase in purchasing power we believe consumers are gonna use to pay down past due debt. So it'll should help in collections. Two, if consumers might use that increase in purchase power to pay down debt in general. That's high interest rate or what have you. And so that's the big question mark in how much impact it does to balances.

And then three, I think some of this refund increase, which folks estimate would be 20% year over year increase, will also help increase discretionary spending, which frankly gives us an opportunity to grow loans. And so we are looking at this from all three perspectives. Post OVBA impact, which you know, by kind of ends May kind of time frame, we believe consumer demands can loan demand's gonna stay healthy as it has been, and so that's kinda what's reflected in our 10% receivables growth year over year sort of guidance for '26.

Harpreet Rana: Yeah. And Kyle, just the other that I would add to that, some of the metrics that we tend to follow, we'll continue to look at 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 job. 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 that has moderated.

But it still continues to be real wage growth. And then we always look at the gas per gallon. Right? And the gas per gallon 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 even if there is an outsized 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.

Kyle Joseph: Got it. 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 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 G&A trends.

Harpreet Rana: 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 had 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 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.

Kyle Joseph: Got it. Very helpful. Thanks for taking my questions.

Operator: Next question is coming from Alexander Villalobos from Jefferies. Your line is now live.

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 was just curious if pricing might come down a little bit as rates go down. Should we think about pricing, you know, yields of the book kind of, like, staying where they are? Thank you.

Harpreet 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, 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 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, 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 the market will bear in terms of competition, the consumer in this segment is usually most concerned about their monthly payment. So we put all of that together when we think about pricing.

Alexander Villalobos: 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, like, payment that you're talking about, some other companies have extended duration. I was just curious if that has happened as well.

Harpreet Rana: So we haven't done that, you know, in terms of how you're asking about it in terms of programmatically, I mean, we have put on, you know, our auto product, which just comes with, you know, it's a longer loan. So, you know, that definitely is a variable. And then, of course, as we work through 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 that lens, but, no, there's no programmatic extension of duration.

Alexander Villalobos: Perfect. Thank you.

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

Latvir Lambda: Thank you. Just to close and maybe repeat my remarks, 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 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.

Operator: Thank you. That does conclude today's teleconference. You may disconnect your line at this time, and have a wonderful day. We thank you for your participation today.