RM 10-K & 10-Q changes, risk factors and insider trading

Regional Management Corp. | 2025 Annual Report on Form 10-K | 16 Changes in the competitive environment in which we operate or a decrease in the demand for our products;

Regional Management Corp. | 2024 Annual Report on Form 10-K | 16 Our ability to achieve successful acquisitions and strategic alliances;

We have grown significantly inover recentthe years, and our delinquency, credit loss rates, and overall results of operations may be adversely affected if we do not manage our growth effectively.

We have experienced substantial growth inover recentthe years, increasing the size of our finance receivable portfolio from $1.1 billion as of December 31, 20192020 to $1.9$2.1 billion at the end of 2024,2025, a compound annual growth rateCAGR of 10.8%.13.5%. We intend to continue our growth strategy in the future. As we increase the number of branches we operate, we will be required to find new, or relocate existing, employees to operate our branches and allocate resources to train and supervise those employees. The success of a branch depends significantly on the manager overseeing its operations and on our ability to enforce our underwriting standards and implement controls over branch operations. Recruiting suitable managers for new branches can be challenging, particularly in remote areas and in areas where we face significant competition. Furthermore, the annual turnover rate among our branch managers was approximately 15% in 2023 and 19% in 2024, and turnover rates of managers in our new branches may be similar or higher. Increasing the number of branches that we operate may divide the attention of our senior management or strain our ability to adapt our infrastructure and systems to accommodate our growth. If we are unable to promote, relocate, or recruit suitable managers, oversee their activities effectively, maintain our underwriting and loan servicing standards, and otherwise appropriately and effectively staff our branches, our delinquency and credit loss rates may increase and our overall results of operations may be adversely impacted.

the inherent uncertainty regarding general economic conditions, including the impact of inflationary pressures and higher interest ratesrate volatility;

A significant portion of the growth in our installment loans portfolio has been achieved through direct mail campaigns. One aspect of our direct mail campaigns involves mailing “convenience checks” to pre-screened recipients, which recipients can sign and cash or deposit, thereby agreeing to the terms of the proposed loan, which are disclosed on the front and back of the check and in the accompanying disclosures. We use convenience checks to seed new branch openings and to attract new customers to existing branches in our geographic footprint. In 20232024 and 2024,2025, loans initiated through convenience checks represented 27.3%27.4% and 27.4%,26.2%, Regional Management Corp. | 2025 Annual Report on Form 10-K | 18 respectively, of the value of our originated installment loans. We expect that convenience checks will continue to represent a meaningful portion of our installment loan originations in the future. There are several risks associated with the use or origination of convenience checks, including the following:

Regional Management Corp. | 2024 Annual Report on Form 10-K | 18 we rely on credit information from a third-party credit bureau that is more limited than a full credit report to pre-screen potential convenience check recipients, which may not be as effective as a full credit report or may be inaccurate or outdated;

The ability of our borrowers to make payments on their loans, as well as the prepayment experience thereon, will be affected by a variety of social and economic factors. Economic factors include interest rates, unemployment levels, gasoline prices, the availability and cost of credit (including mortgages), upward adjustments in monthly mortgage payments and rents, real estate values, the rate of inflation, and consumer perceptions of economic conditions generally. Economic conditions may also be impacted by localized weather events and environmental disasters or adverse impacts from public health crises, epidemics, or pandemics. Social Regional Management Corp. | 2025 Annual Report on Form 10-K | 19 factors include changes in consumer confidence levels and attitudes toward incurring debt and changing attitudes regarding the stigma of personal bankruptcy.

Except for loans originated by a centralized branch and serviced at a centralized location pursuant to a limited program we operate in select markets, a substantial portion of our underwriting activities and our credit extension decisions are made at our local branches. We rely on certain inputs and verifications in the underwriting process to be performed by individual personnel at Regional Management Corp. | 2024 Annual Report on Form 10-K | 19 the branch level or a centralized location. In addition, pursuant to our operations policies and procedures, exceptions to the general underwriting criteria can be approved by central underwriting employees and certain other senior employees. We train our employees individually onsite in the branch or at a centralized location and through online training modules to make loans that conform to our underwriting standards. Such training includes critical aspects of state and federal regulatory compliance, cash handling, account management, and customer relations. Although we have standardized employee manuals and online training modules, we primarily rely on our district supervisors, with oversight by our state vice presidents, branch auditors, and headquarters personnel, to train and supervise our branch employees, rather than centralized training programs. Therefore, the quality of training and supervision may vary from district to district and branch to branch depending on the amount of time apportioned to training and supervision and individual interpretations of our operations policies and procedures. There can also be no assurance that we will be able to attract, train, and retain qualified personnel to perform the tasks that are part of the underwriting process. If the training or supervision of our personnel fails to be effective, or if we are unable to attract and retain qualified employees, it is possible that our underwriting criteria would be improperly applied to a greater percentage of such applications. If such improper applications were to increase, delinquency and losses on our loan portfolio could increase and could increase significantly.

Regional Management Corp. | 2025 Annual Report on Form 10-K | 20 Most of our loan portfolio is secured, but a significant portion of such security interests have not been and will not be perfected, which means that we cannot be certain that such security interests will be given first priority over other creditors. The lack of perfected security interests is one of several factors that may make it more difficult for us to collect on our loan portfolio. Additionally, for those of our loans that are unsecured, borrowers may choose to repay obligations under other indebtedness before repaying loans to us because such borrowers may feel that they have no collateral at risk. In addition, given the relatively small size of our loans, the costs of collecting loans may be high relative to the amount of the loan. As a result, many collection practices that are legally available, such as litigation, may be financially impracticable. Lastly, there is an inherent risk that a portion of the retail installment loans that we hold will be subject to certain claims or defenses that the borrower may assert against the originator of Regional Management Corp. | 2024 Annual Report on Form 10-K | 20 the contract and, by extension, us as the holder of the contract. These factors may increase our credit losses, which would have a material adverse effect on our results of operations and financial condition.

Regional Management Corp. | 2025 Annual Report on Form 10-K | 21 If any of these events, risks, or uncertainties were to occur or materialize, it could have a material adverse effect on our business, financial condition, and results of operations and cash flows.

Any concentration of our loan portfolio in a state or region may present unique risk concentrations. Our branches in Texas, North Carolina,Texas and SouthNorth Carolina accounted for 30%, 16%,30% and 10%,15%, respectively, of our finance receivables as of December 31, 2024.2025. Further, as of December 31, 2024,2025, all of our operations were across 19 states. As a result, we are highly susceptible to adverse economic conditions in these areas. The unemployment and bankruptcy rates in some states in our footprint are among the highest in the country. High unemployment rates may reduce the number of qualified borrowers to whom we will extend loans, which would result in reduced loan originations. In addition, some geographic regions of the United States will, from time to time, experience weaker regional economic conditions and consequently will experience higher rates of loss and delinquency. A regional economy may be affected by the loss of jobs in certain industries, by state and local taxes, or by other factors. A region’s economic condition may be directly, or indirectly, adversely affected by international events such as military conflicts or wars, prolonged public health crises, epidemics, or pandemics, national events such as civil disturbances, or natural disasters such as hurricanes, wildfires, earthquakes, and other extreme conditions (including an increase in the frequency or severity of such conditions and events as a result of climate change). These events and disasters may occur in any area of the country, even places where these events are considered unlikely. In the event that a significant portion of our loan portfolio is comprised of loans owed by borrowers residing in certain jurisdictions, economic conditions, elevated bankruptcy filings, natural disasters, or other factors affecting these jurisdictions in particular could adversely impact the delinquency and default experience of our loan portfolio, and, we could experience reduced or delayed payments on outstanding loans. Conversely, an improvement in economic conditions could result in prepayments by our borrowers of their payment obligations on our loans. As a result, we may receive principal payments on the outstanding loans earlier than anticipated, which would reduce our finance receivables and the interest income earned thereon. No assurance can be given as to the effect of economic conditions on the rate of delinquencies, prepayments, or losses on our loan portfolio with respect to any part of our geographic footprint.

Further, the Nortridge platform may in the future fail to perform in a manner consistent with our current expectations and may be inadequate for our needs. As we are dependent upon our ability to gather and promptly transmit accurate information to key decision makers, our business, financial condition, and results of operations may be adversely affected if our loan management system Regional Management Corp. | 20242025 Annual Report on Form 10-K | 23 system does not allow us to transmit accurate information, even for a short period of time. Failure to properly or adequately address these issues could materially impact our ability to perform necessary business operations.

The financial services industry is undergoing rapid technological changes, with frequent introductions of new technology-driven products, services, and marketing channels, including the use of artificial intelligenceAI and machine-learning solutions to interact with customers, sell products and services, and support and grow a customer base. We rely on our integrated branch network as the foundation of our omni-channel platform and the primary point of contact with our active accounts. In order to serve consumers who want to reach us over the internet, we make an online loan application available on our consumer website, and we provide our customers an online customer portal, giving them online access to their account information and an electronic payment option. Our future success will depend, in part, on our ability to address the needs of our customers by using technology to provide products and services that will satisfy customer demand for convenience, as well as to create additional efficiencies in our operations. We expect that new Regional Management Corp. | 20242025 Annual Report on Form 10-K | 24 operations. We expect that new technologies and business processes applicable to the consumer finance industry will continue to emerge, and these new technologies and business processes may be more efficient than those that we currently use. We cannot ensure that we will be able to sustain our investment in new technology, and we may not be able to effectively implement new technology-driven products and services as quickly as some of our competitors or be successful in marketing these products and services to our customers. Failure to successfully keep pace with technological change affecting the financial services industry could cause disruptions in our operations, harm our ability to compete with our competitors, and adversely affect our business, prospects, financial condition, results of operations, and liquidity.

We rely heavily on communications and information systems to conduct our business. Each branch is part of an information network that is designed to permit us to maintain adequate cash inventory, reconcile cash balances on a daily basis, and report revenues and expenses to our headquarters. Our computer systems, software, and networks may be vulnerable to breaches (including via computer hackings), unauthorized access, misuse, computer viruses, malware or ransomware, phishing, employee error or malfeasance, or other failures or disruptions that could result in disruption to our business or the loss or theft of confidential information, including customer, employee, and business information. Further, the rapid evolution and increased adoption of AI technologies, increased sophistication and activities of organized crime, hackers, terrorists, activists, and other external parties may increase our level of cybersecurity risk. Any failure, interruption, or breach in security of these systems, including any failure of our back-up systems, hardware failures, or an inability to access data maintained offsite, could result in failures or disruptions in our customer relationship management, general ledger, loan, and other systems and could result in a loss of data (including loan portfolio data), a loss of customer business, or a violation of applicable privacy and other laws, subject us to additional regulatory scrutiny, or expose us to civil litigation, possible financial liability, and other adverse consequences, any of which could have a material adverse effect on our financial condition and results of operations. Furthermore, the techniques that are used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and are often difficult to detect for long periods of time. Accordingly, we may not be able to detect immediately any such breach, which may increase the losses that we would suffer. Additionally, our existing insurance policies may be insufficient to reimburse us for all of the damages that we might incur as a result of a breach.

A security breach or cyber-attack on our computer systems could interrupt or damage our operations or harm our reputation. We have implemented systems and processes designed to protect against unauthorized access to or use of personal information and rely on encryption and authentication technology to effectively secure transmission of confidential information, including customer bank account, credit card, and other personal information. Despite the implementation of these security measures, there is no guarantee that they are adequate to safeguard against all security breaches and our systems may still be vulnerable to data theft, computer viruses, programming errors, attacks by third parties, or similar disruptive problems. We may also face new or heightened risks related to remote work among certain of our employees and use of digital operations, both of which have become more common in recent years. The continued evolution and increased usage of artificial intelligenceAI technologies may further increase our cybersecurity risks. If we were to experience a security breach or cyber-attack, we could be required to incur substantial costs and liabilities, including, among other things, the following:

Further, any compromise of security or cyber-attack could deter consumers from entering into transactions that require them to provide confidential information to us. In addition, if confidential customer information or information belonging to our business partners is misappropriated from our computer systems, we could be sued by those who assert that we did not take adequate precautions to safeguard our systems and confidential data belonging to our customers or business partners, which could subject us Regional Management Corp. | 2025 Annual Report on Form 10-K | 25 to liability and result in significant legal fees and expenses in defending these claims. As a result, any compromise of security of our computer systems or cyber-attack could have a material adverse effect on our business, financial condition, and results of operations.

Regional Management Corp. | 2024 Annual Report on Form 10-K | 25 As part of our business, and subject to applicable privacy laws, we may share confidential customer information and proprietary information with vendors, service providers, and business partners. The information systems of these third parties may also be vulnerable to security breaches, and we may not be able to ensure that these third parties have appropriate security controls in place to protect the information that we share with them. If our proprietary or confidential customer information is intercepted, stolen, misused, or mishandled while in possession of a third party, it could result in reputational harm to us, loss of customer business, and additional regulatory scrutiny, and it could expose us to civil litigation and possible financial liability, any of which could have a material adverse effect on our business, financial condition, and liquidity. Although we maintain insurance that is intended to cover certain losses from such events, there can be no assurance that such insurance will be adequate or available.

Our branches also serve as an important component of our ongoing servicing and collecting processes. Except for loans originated by a centralized branch and serviced at a centralized location in certain markets, the primary responsibility for the Regional Management Corp. | 2024 Annual Report on Form 10-K | 26 servicing and collections process generally resides with the applicable local branch, although in the future, we may direct borrowers to remit payments through one or more lockboxes. A certain minimum level of staffing is necessary in order to ensure an adequate level of servicing and collections. For example, we seek to contact our customers soon after a loan becomes delinquent because historically, when collection efforts begin at an earlier stage of delinquency, there is a greater likelihood that the applicable personal loan will not be charged off (though there is no assurance that such historical trend will continue). Consequently, during periods of increased delinquencies, it becomes extremely important that our branches are properly staffed and trained to take appropriate action in an effort to bring delinquent balances current and ultimately avoid a loan from becoming charged off. If we are unable to attract and retain a sufficient number of qualified credit and collection personnel, it could result in increased delinquencies and credit losses on our loan portfolio.

Our workforce is comprised primarily of employees who work on an hourly basis. In certain areas where we operate, there is significant competition for employees. In the past, we have lost employees and candidates to competitors who have been willing to pay higher compensation. Our ability to continue to expand our operations depends on our ability to attract, train, and retain a large and growing number of qualified employees. Turnover in our branches has remained at high levels during recent years, ranging from approximately 46% in 2020 to 50%53% in 2024.2025. This turnover increases our cost of operations and makes it more difficult to operate our branches. Our accountloan executivesspecialist and assistant manager roles have historically experienced high turnover. We may not be able to retain and cultivate personnel at these ranks for future promotion to branch manager. If our employee turnover rates continue to increase or remain above historical levels or if unanticipated problems arise from our high employee turnover and we are unable to readily replace such employees, our business, results of operations, financial condition, and ability to continue to expand could be adversely affected.

Our future success significantly depends on the continued service and performance of our key management personnel. Competition for these employees is intense. Our operating results could be adversely affected by higher employee turnover or increased salary and benefit costs. Like most businesses, our employees are important to our success, and we are dependent in part on our ability to retain the services of our key management, operational, finance, and administrative personnel. We have built our business on a set of core values, and we attempt to hire employees who are committed to these values. We want to hire and retain employees who will fit our culture of compliance and of providing exceptional service to our customers. In order to compete and to continue to grow, we must attract, retain, and motivate employees, including those in executive, senior management, and operational positions. As our employees gain experience and develop their knowledge and skills, they become highly desired by other businesses. Therefore, to retain our employees, we must provide a satisfying work environment and competitive Regional Management Corp. | 2024 Annual Report on Form 10-K | 27 compensation and benefits. If costs to retain our skilled employees increase, then our business and financial results may be negatively affected.

Furthermore, weWe may not be successful in retaining the current members of our executive or senior management team or our other key employees. Furthermore, key management transitions, such as our recent change in President and Chief Executive Officer, involve inherent risk, and such transition periods can be disruptive and may result in a loss of personnel with deep institutional knowledge. The loss of the services of any of our executive officers, senior management, or key team members, including state vice presidents, or the inability to attract additional qualified personnel as needed, could have an adverse effect on our business, financial condition, and results of operations. We also depend on our district supervisors to supervise, train, and motivate our branch employees. These supervisors have significant experience with our company and within our industry and would be difficult to replace. If we lose a district supervisor to a competitor, we could also be at risk of losing other employees and customers.

We could incur substantial losses and our business operations could be disrupted if we are unable to effectively identify, manage, monitor, and mitigate financial risks, such as credit risk, interest rate risk, prepayment risk, liquidity risk, and other market-related risks, as well as regulatory and operational risks related to our business, assets, and liabilities. Our risk management policies, Regional Management Corp. | 2024 Annual Report on Form 10-K | 28 procedures, and techniques may not be sufficient to identify all of the risks we are exposed to, mitigate the risks we have identified, or identify additional risks to which we may become subject in the future.

Regional Management Corp. | 2025 Annual Report on Form 10-K | 29 If material weaknesses or significant deficiencies in our internal control over financial reporting are discovered or occur in the future or if our controls and procedures fail or are circumvented, our consolidated financial statements may contain material misstatements, we could be required to restate our financial results, we may be unable to produce accurate and timely financial statements, and we may be unable to maintain compliance with applicable stock exchange listing requirements, any of which could have a material adverse effect on our business, results of operations, financial condition, and stock price. The discovery of a material weakness and the disclosure of that fact, even if quickly remediated, could reduce the market value of shares of our common stock. Additionally, the existence of any material weakness or significant deficiency requires management to devote significant time and incur significant expense to remediate any such material weaknesses or significant deficiency, and management may not be able to remediate any such material weaknesses or significant deficiency in a timely manner. Undetected material weaknesses in our internal controls could lead to financial statement restatements, which could have a material adverse effect on our business, financial condition, and results of operations.

We maintain an allowance for credit losses for all loans we make. To estimate the appropriate level of credit loss reserves, we consider known and relevant internal and external factors that affect loan collectability, including the total amount of loans outstanding; delinquency levels, roll rates, and trends; historical credit losses; our current collection patterns; and economic trends. Our methodology for establishing our allowance for credit losses is based on models (probability of default, loss given default), our historical loss experience, and estimates of future macroeconomic environments. If customer behavior changes because of economic, political, social, or other conditions and if we are unable to predict how the unemployment rate and general economic uncertainty may affect our credit loss allowance, our provision for credit losses may be inadequate. As of December 31, 2023,2024, our allowance for credit losses was $187.4$199.5 million,million. and weWe had net credit losses of $178.0$195.7 million during fiscal year 20242025 that related to our portfolio as of December 31, 2023.2024. Net credit losses related to the December 31, 20232024 portfolio were impacted by sustained macroeconomic stress on our customers related to elevated inflation and interest rates during 2024.2025. As of December 31, 2024,2025, our allowance for credit losses was $199.5$220.9 million. Maintaining the adequacy of our allowance for credit losses may require significant and unanticipated changes in our provisions for credit losses, which would materially affect our results of operations. Our allowance for credit losses, however, is an estimate, and if actual credit losses are materially greater than our credit loss allowance, our financial condition and results of operations could be adversely affected. Neither state regulators nor federal regulators regulate our allowance for credit losses.

We are required to use certain assumptions and estimates in preparing our financial statements under GAAP, including in determining allowances for credit losses, the fair value of financial instruments, asset impairment, reserves related to litigation and other legal matters, the fair value of share-based compensation, and other taxes and regulatory exposures. In addition, significant assumptions and estimates are involved in determining certain disclosures required under GAAP, including those involving the fair Regional Management Corp. | 2024 Annual Report on Form 10-K | 29 value of our financial instruments. If the assumptions or estimates underlying our financial statements are incorrect, the actual amounts realized on transactions and balances subject to those estimates will be different, and this could have a material adverse effect on our results of operations and financial condition.

We have a senior revolving credit facility committed through SeptemberAugust 20252028 that allows us to borrow up to $355.0 million,million (with an accordion provision that can expand up to $420.0 million), assuming we are in compliance with a number of covenants and conditions. The amount outstanding thereunder was $219.3$188.6 million ($217.8$187.4 million of outstanding debt and $1.6$1.2 million of interest payable) as of December 31, 2024,2025, and we had $137.2$167.6 million of unused capacity on the credit facility (subject to certain covenants Regional Management Corp. | 2025 Annual Report on Form 10-K | 30 and conditions) at that time. During fiscal 2024,2025, the maximum amount of borrowings outstanding under the facility at any one time was $309.7$254.2 million. The senior revolving credit facility is collateralized by certain of our assets, including substantially all of our finance receivables (other than those held by certain SPEs, as described below) and equity interests of the majority of our subsidiaries. We use our senior revolving credit facility as a source of liquidity, including for working capital and to fund the loans we make to our customers. If our existing sources of liquidity become insufficient to satisfy our financial needs or our access to these sources becomes unexpectedly restricted, we may need to try to raise additional capital in the future. If such an event were to occur, we can give no assurance that such alternate sources of liquidity would be available to us on favorable terms or at all. In addition, we cannot be certain that we will be able to replace the senior revolving credit facility when it matures on favorable terms or at all. If any of these events occur, our business, financial condition, and results of operations could be adversely affected.

As of December 31, 2024,2025, we have completed eleventhirteen securitizations, and we may in the future securitize certain of our finance receivables to generate cash to originate new finance receivables or to pay our outstanding indebtedness. In such transactions, we typically convey a pool of finance receivables to a special purpose entity, which, in turn, conveys the finance receivables to a trust (the issuing entity). Concurrently, the issuing entity issues non-recourse notes or certificates pursuant to the terms of an indenture and/or amended and restated trust agreement, which then are transferred to the special purpose entity in exchange for the finance receivables. The securities issued by the issuing entity are secured by the pool of finance receivables. In exchange for the transfer of finance receivables to the issuing entity, we typically receive the cash proceeds from the sale of the securities issued by the issuing entity, all residual interests, if any, in the cash flows from the finance receivables after payment of the securities, and a 100% beneficial interest in the issuing entity.

Although we successfully completed securitizations during the past sixseven years, we can give no assurances that we will be able to complete additional securitizations, including if, for example, the securitization markets become constrained or events within the Company cause investors to lack confidence in our ability to fulfill our obligations as servicer with respect to the securitizations. Further, the value of any subordinated securities that we may retain in our securitizations might be reduced or, in some cases, eliminated as a result of an adverse change in economic conditions or other factors.

Regional Management Corp. currently acts as the Servicer with respect to each securitization. If the Servicer defaults in its servicing obligations, an early amortization event could occur under each securitization and the Servicer could be replaced as servicer. Servicer defaults include, but are not limited to, the failure of the Servicer to make any payment, transfer, or deposit in accordance with applicable securitization documents; breaches of representations, warranties, or certifications made by the Servicer under applicable securitization documents; and the occurrence of certain insolvency events with respect to the Servicer. Such an early amortization event could have materially adverse consequences on our liquidity and cost of funds.

We have entered into certain financing arrangements, including revolving warehouse credit facilities and securitizations, which are secured by Receivables. As of December 31, 2024,2025, our outstanding principal balances ofranged Receivablesbetween were as follows: September 2020 (approximately $49.2$102.1 million); Februaryand 2021 (approximately $103.0$291.8 million); based on securitizations completed between July 2021 (approximately $193.0 million);and October 2021 (approximately $131.6 million); February 2022 (approximately $244.9 million); June 2024 (approximately $199.0 million); and November 2024 (approximately $264.8 million).2025. Our operating subsidiaries originated the Receivables and subsequently transferred the Receivables to certain of our wholly owned subsidiaries that were established for the special purpose of entering into the financing arrangements and the respective securitizations. The documents governing our financing arrangements and securitizations contain provisions that require us to repurchase the affected Receivables under certain circumstances. While our financing and securitization documents vary, they generally contain customary provisions that require us Regional Management Corp. | 2024 Annual Report on Form 10-K | 31 and the special purpose entities to make certain representations and warranties about the quality and nature of the Receivables. Together with the special purpose entities, we may be required to repurchase the Receivables if a representation or warranty is later determined to be inaccurate. In such a case, we will be required to pay a repurchase price for the release of the affected Receivables.

Regional Management Corp. | 2025 Annual Report on Form 10-K | 32 In addition, elevated interest rates increase our cost of capital by influencing the amount of interest we pay on our senior revolving credit facility, our revolving warehouse credit facilities, or any other floating interest rate obligations that we may incur, which would increase our operating costs and decrease our operating margins. Interest payable on our senior revolving credit facility and our revolving warehouse credit facilities is variable and could increase in the future.

In recent years, the U.S. economy has undergone a period of rapid change and significant uncertainty, driven in part by elevated inflation and interest rates, as well as changing U.S. consumer spending patterns. InflationWhile hitinflation ahas 40-year highdecreased in Junerecent 2022years atto 9.1%. While the U.S. annual inflation rate was 2.9%2.7% for the twelve monthsyear ended December 31, 2024,2025, inflationit remains above the Federal Reserve Board's target of 2.0%. The Federal Reserve Board has increased rates materially in 2022 and 2023 in an effort to combat elevated inflation and began to lowerlowered interest rates in 2024 inand response2025; tohowever, moderating inflation. Itit remains uncertain if the Federal Reserve Board will continue to lower interest rates in 2025,2026. and thereThere is also no guarantee that the Federal Reserve Board may not raise interest rates in the future depending on economic conditions.

During an economic downturn or recession, credit losses in the financial services industry generally increase and demand for credit products often decreases. Declining asset values, defaults on consumer loans, and the lack of market and investor confidence, Regional Management Corp. | 2024 Annual Report on Form 10-K | 32 as well as other factors, all combine to decrease liquidity during an economic downturn. As a result of these factors, some banks and other lenders have suffered significant losses during economic downturns, and the strength and liquidity of many financial institutions worldwide may weaken during an economic crisis. Additionally, during an economic downturn, our loan servicing costs and collection costs may increase as we may have to expend greater time and resources on these activities. Our underwriting criteria, policies and procedures, and product offerings may not sufficiently protect our growth and profitability during a sustained period of economic downturn or recession. Any renewed economic downturn will adversely affect the financial resources of our customers and may result in the inability of our customers to make principal and interest payments on, or refinance, the outstanding debt when due.

Many of our stakeholders possess increased interest in our environmental, social, and governance responsibilities. Our absolute and relative progress, or lack thereof, on environmental, social, and governance matters, along with our disclosure (or lack of disclosure) related thereto, could impact our reputation, brand, and the willingness of individuals and institutions to hold our common Regional Management Corp. | 2025 Annual Report on Form 10-K | 33 stock. If we do not successfully maintain, protect, and promote our brand, we may be unable to maintain and/or expand our customer and/or investor base, which may materially harm our business.

Regional Management Corp. | 2024 Annual Report on Form 10-K | 33 Due to the highly regulated nature of the consumer finance industry, we are required to comply with a wide array of federal, state, and local laws and regulations that affect, among other things, the manner in which we conduct our origination and servicing operations. These laws and regulations directly impact our business and require constant compliance, monitoring, and internal and external audits. Although we have an enterprise-wide compliance framework structured to continuously evaluate our activities, compliance with applicable law is costly and may create operational constraints.

Federal and state consumer protection laws impose requirements, including licensing requirements, and place restrictions on creditors in connection with extensions of credit and collections on personal loans and protection of sensitive customer data obtained in the origination and servicing thereof. Personal loans that do not comply with consumer protection laws may not be valid or enforceable under their terms against the borrowers of those loans. The federal and state consumer protection laws, rules, and regulations applicable to the solicitation and advertising for, underwriting of, granting, servicing, and collection of personal loans, and the protection of sensitive customer data, frequently provide for administrative penalties, as well as civil (and in some cases, criminal) liability resulting from their violation. An administrative proceeding or litigation relating to one or more allegations or findings of the violation of such laws by us could result in modifications to our methods of doing business, which could impair our ability to originate Regional Management Corp. | 2025 Annual Report on Form 10-K | 34 or otherwise acquire new loans or collect on our loan portfolio or result in us having to pay damages and/or cancel the balance or other amount owing under the loan associated with such violations. Our loans are subject to generally standard documentation. Thus, many borrowers may be similarly situated in so far as the provisions of their respective contractual obligations are concerned. Accordingly, allegations of violations of the provisions of applicable federal or state consumer protection laws could potentially result in a large class of claimants asserting claims against us. There is no assurance that such claims will not be asserted against us in the future.

Our primary regulators are the state regulators for the states in which we operate. We operate each of our branches under licenses granted to us by these state regulators. State regulators may enter our branches and conduct audits of our records and practices at any time, with or without notice. If we fail to observe, or are not able to comply with, applicable legal requirements, we may be forced to discontinue certain product offerings, which could adversely affect our business, financial condition, and results of operations. In addition, violation of these laws and regulations could result in fines and other civil and/or criminal penalties, including the suspension or revocation of our branch licenses, rendering us unable to operate in one or more locations. All of the states in which we operate have laws governing the interest rates and fees that we can charge and required disclosure statements, among other restrictions. Violation of these laws could involve penalties requiring the forfeiture of principal and/or interest and fees that we have charged. Depending on the nature and scope of a violation, fines and other penalties for noncompliance of applicable Regional Management Corp. | 2024 Annual Report on Form 10-K | 34 requirements could be significant and could have a material adverse effect on our business, financial condition, and results of operations.

Regional Management Corp. | 2025 Annual Report on Form 10-K | 35 Additionally, Congress, the states, and regulatory agencies could further regulate the consumer credit industry in ways that make it more difficult for us to conduct business. Further, changes in the regulatory application or judicial interpretation of the laws and regulations applicable to financial institutions also could impact the manner in which we conduct our business. The regulatory environment in which financial institutions operate has become increasingly complex and robust, and following the financial crisis of 2008, supervisory efforts to apply relevant laws, regulations, and policies have become more intense.robust. Any of the events described above could have a material adverse effect on all aspects of our business, financial condition, and results of operations.

State and federal legislatures and regulators may also seek to impose new requirements or interpret or enforce existing requirements in new ways. Changes in current laws or regulations or the implementation of new laws or regulations in the future may restrict our ability to continue our current methods of operation or expand our operations. For example, in 2019, bills werehave Regional Management Corp. | 2024 Annual Report on Form 10-K | 35been introduced to Congress in the past that sought to prohibit the practice of directly mailing convenience checks to potential borrowers and extend the Military Lending Act’s consumer protections to all consumers, includingplace a 36 percent interest rate cap on all consumer loans. Similarly, in July 2021, the Veterans and Consumers Fair Credit Act was introduced in the Senate seeking to amend the Truth in Lending Act to effectively extend to all consumers the 36% interest rate cap that is currently only applicable to servicemembers and certain dependents under the Military Lending Act. While these bills have not become law, if similar bills were ultimately to become law, such legislation could materially and adversely affect our business, results of operations, and prospects. Further, in January 2026, the current presidential administration proposed a 10% interest rate cap for credit cards which, if implemented, could have an adverse effect on our business and results of operations. Additionally, if the proposal for an interest rate cap (and any related legislation or executive order) extends to other forms of consumer credit such as personal loans, and, depending on how that would be implemented, our business and financial results could be materially and adversely impacted.

Additionally, the Dodd-Frank Act established the CFPB, as a consumer protection regulator tasked with regulating consumer financial services and products. Since its creation, the CFPB has been the subject of lawsuits challenging its authority. However, in May 2024, in the case of Community Financial Services Association of America, Limited v. Consumer Financial Protection Bureau, the U.S. Supreme Court confirmed that the statute providing funding to the CFPB does not violate the appropriations clause of the Constitution. This decision marks an end to the last pending wholesale challenge to the CFPB’s constitutionality. However, there have also been legislative proposals in Congress from time to time seeking to significantly reform the CFPB’s structure, authority, funding, and/or mandate. The current administration has also indicated its desire to makemade potentially significant changes to the regulatory enforcement and supervisory agenda of the CFPB. As a result, there is, and will continue to be, uncertainty regarding the future of the CFPB and the impact on the lending markets. We cannot predict whether future executive or legislative actions regarding the CFPB, consumer laws, and related regulations may impact the industry generally, including potential actions that state or other federal regulators may take in response to such executive or legislative actions.

Large and small installment loans are our core products and will be the drivers of future growth. We ceased accepting applications for our retail loan product offering in November 2022, to focus on growing our core loan portfolio. We continue to own and service our existing portfolio of retail loans. Our primary sources of revenue are interest and fee income from our loan products, of which interest and fees relating to large and small installment loans are the largest component. In addition to interest and fee income from loans, we deriveearn revenue from optional insurance products purchased by customers of our direct loan products.

We continually assess the macroeconomic environment in which we operate in order to adapt appropriately and timely adapt to current market conditions. Macroeconomic factors, including, but not limited to, unemployment, inflationary pressures, higher interest rates, tariffs, and impacts from current geopolitical events outside the U.S., may affect our business, liquidity, financial condition, and results of operations.

Growth in Loan Portfolio. The revenue that we generate from interest and fees is largely driven by the balance of loans that we originate. We source our loans through our branches, centrally-managed direct mail program, digital partners, and our consumer website. The majority of our loans, regardless of origination channel, are serviced through our branches. Increasing the number of loans per branch and growing our state footprint allows us to increase the number of customers we are able to serve. We continue to assess our branch network for clear opportunities to add branches in new and existing states where it is favorable for us to conduct business or consolidate operations into larger branches within close geographic proximity. This branch optimization is consistent with our Regional Management Corp. | 2025 Annual Report on Form 10-K | 48 omni-channel strategy and builds upon our recent successes in entering new states with a lighter branch footprint, while still providing customers with best-in-class service. As we consider our growth rate, we not only consider the health of the consumer, the strength of the economy, and the credit performance of our portfolio, we also balance our commitment to deliver strong short-term results for investors while also generating the portfolio growth that will fuel our success and returns over the long-term. As we grow our portfolio, we are required to reserve for expected lifetime credit losses at the origination of each loan, which reduces net income. The related revenue benefits are recognized over the life of each loan.

Regional Management Corp. | 2024 Annual Report on Form 10-K | 48 The primary underlying factors driving the provision for credit losses for each loan type are our underwriting standards, delinquency trends, the general economic conditions in the areas in which we conduct business, loan portfolio growth, and the effectiveness of our servicing and collection efforts. We monitor these factors, and the amount and past due status of all loans, to identify trends that might require us to modify the allowance for credit losses.

Interest Rates. Our costs of funds are affected by changes in interest rates, as the interest rates that we pay on certain of our credit facilities are variable. As a component of our strategy to manage the interest rate risk associated with future interest payments on our variable-rate debt, a majority of our funding was held at a fixed rate as of December 31, 2024,2025, representing 79%84% of our total debt.debt balance.

Most states allow certain fees in connection with lending activities, such as loan origination fees, acquisition fees, and maintenance fees. Some states allow for higher fees while keeping interest rates lower. Loan fees are additional charges to the customer and generally are included in the annual percentage rateAPR shown in the Truth in Lending disclosure that we make to our customers. The fees may or may not be refundable to the customer in the event of an early payoff, depending on state law. Fees are recognized as income over the life of the loan on the constant yield method.

Other Income. Our other income consists primarily of late charges assessed on customers who fail to make a payment within a specified number of days following the due date of the payment. In addition,payment, interest income from restricted cash, commissions earned from the sale of club membership products, and investment income from restricted AFS securities are included in other income.securities.

Regional Management Corp. | 2025 Annual Report on Form 10-K | 49 Provision for Credit Losses. Provisions for credit losses are charged to incomerecorded in amounts that we estimate as sufficient to maintain an allowance for credit losses at an adequate level to provide for lifetime expected credit losses on the related finance receivable portfolio. We reserve for expected lifetime credit losses at origination of each loan, while the revenue benefits are recognized over the life of the loan. Credit loss experience, current conditions, reasonable and supportable economic forecasts, delinquency of finance receivables, loan portfolio growth, the value of underlying collateral, and management’s judgment are factors used in assessing the overall adequacy of the allowance and the resulting provision for credit losses. Substantial adjustments to the allowance may be necessary if there are significant changes in forecasted economic conditions or loan portfolio performance.

Regional Management Corp. | 2024 Annual Report on Form 10-K | 49 Our personnel expenses are the largest component of our general and administrative expenses and consist primarily of the salaries and wages, overtime, contract labor, relocation costs, incentives, benefits, and related payroll taxes associated with all of our operations and head office employees.

Our occupancy expenses consist primarily of the cost of renting our facilities, all of which are leased, and the utility, depreciation of leasehold improvements and furniture and fixtures, communication and connectivity services, data processing, and other non-personnel costs associated with operating our business.

Interest Expense. Our interest expense consists primarily of paid and accrued interest for debt, unused line fees, and amortization of debt issuance costs on debt.costs.

The following table summarizes our results of operations, both in dollars and as a percentage of average net finance receivables for the periods indicated:

The following discussion and table describe the changes in finance receivables by product type for the periods indicated:

Large Loans (>$2,500) – Large loans outstanding increased by $62.6$256.4 million, or 4.9%,19.2%, to $1.3$1.6 billion at December 31, 2024,2025, from $1.3 billion at December 31, 2023.2024. The increase was due to growth in our auto-secured loan portfolio, the growth of receivables in branches opened during 20232024 and 2024,2025, and the transition of small loan customers to large loans.

RetailSmall Loans (≤$2,500) – RetailSmall loans outstanding decreased $2.7by $8.7 million, or 71.9%,1.6%, to $1.1$547.0 million at December 31, 2024,2025, from $3.8$555.8 million at December 31, 2023.2024. WeThe ceaseddecrease acceptingwas applicationsdue forto ourthe retailtransition of small loan productcustomers offeringto large loans, offset by growth of receivables in Novemberbranches 2022opened toduring focus2024 onand growing our core loan portfolio.2025.

Other than the risk factor set forth below, thereThere have been no material changes to our risk factors from those included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.2025, Inother addition tothan the risk factor belowset andforth in Part II, Item 1A, “Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2026. In addition to the other information set forth in this report and in our other reports and statements that we file with the SEC, you should carefully consider the factors discussed in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (which was filed with the SEC on February 20, 2026), which could materially affect our business, financial condition, and/or future operating results. The risks described in our Annual Report on Form 10-K are not the only risks facing our company. Additional risks and uncertainties not currently known to the Company or that the Company currently deems to be immaterial also may materially and adversely affect the Company’s business, financial condition, and/or operating results.

The following discussion and analysis should be read in conjunction with, and is qualified in its entirety by reference to, our unaudited consolidated financial statements and the related notes that appear elsewhere in this Quarterly Report on Form 10-Q. These discussions contain forward-looking statements that reflect our current expectations and that include, but are not limited to, statements concerning our strategies, future operations, future financial position, future revenues, projected costs, expectations regarding demand and acceptance for our financial products, growth opportunities and trends in the market in which we operate, prospects, and plans and objectives of management. The words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “predicts,” “will,” “would,” “should,” “could,” “potential,” “continue,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements involve risks and uncertainties that could cause actual results, events, and/or performance to differ materially from the plans, intentions, and expectations disclosed in the forward-looking statements. Such risks and uncertainties include, without limitation, the risks set forth in our filings with the SEC, including our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (which was filed with the SEC on February 20, 2026), our Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2026 (which was filed with the SEC on May 1, 2026), and this Quarterly Report on Form 10-Q. The forward-looking information we have provided in this Quarterly Report on Form 10-Q pursuant to the safe harbor established under the Private Securities Litigation Reform Act of 1995 should be evaluated in the context of these factors. Forward-looking statements speak only as of the date they were made, and we undertake no obligation to update or revise such statements, except as required by the federal securities laws.

We are a diversified consumer finance company that provides installment loan products primarily to customers with limited access to consumer credit from banks, thrifts, credit card companies, and other lenders. As of MarchJune 31,30, 2026, we operate under the name “Regional Finance” online and in 355357 branch locations in 1920 states across the United States, serving 572,000563,600 active accounts. Most of our loan products are secured, and each is structured on a fixed-rate, fixed-term basis with fully amortizing equal monthly installment payments, repayable at any time without penalty. We source our loans through our omni-channel platform, which includes our branches, centrally-managed direct mail campaigns, digital partners, and our consumer website. We operate an integrated branch model in which nearly all loans, regardless of origination channel, are serviced through our branch network with the support of centralized sales, underwriting, service, collections, and administrative teams. This model provides us with frequent contact with our customers, which we believe improves our credit performance and customer loyalty. Our goal is to consistently grow our finance receivables and to soundly manage our portfolio risk, while providing our customers with attractive and easy-to-understand loan products that serve their varied financial needs.

Large Loans (>$2,500) – As of MarchJune 31,30, 2026, we had 286.8293.1 thousand large installment loans outstanding, representing $1.6$1.7 billion in net finance receivables. This included 81.285.4 thousand large loan convenience checks, representing $259.7$286.5 million in net finance receivables.

Small Loans (≤$2,500) – As of MarchJune 31,30, 2026, we had 285.2270.5 thousand small installment loans outstanding, representing $512.5$488.6 million in net finance receivables. This included 147.6138.1 thousand small loan convenience checks, representing $227.5$211.9 million in net finance receivables.

Growth in Loan Portfolio. The revenue that we generate from interest and fees is largely driven by the balance of loans that we originate. We source our loans through our branches, centrally-managed direct mail program, digital partners, and consumer website. The majority of our loans, regardless of origination channel, are serviced through our branches. Increasing the number of loans per branch and growing our state footprint allows us to increase the number of customers we are able to serve. We grew our state footprint from 19 to 20 states in May 2026, expanding our operations to Florida. We continue to assess our branch network for clear opportunities to add branches in new and existing states where it is favorable for us to conduct business or consolidate operations into larger branches within close geographic proximity. This branch optimization is consistent with our omni-channel strategy and builds upon our recent successes in entering new states with a lighter branch footprint, while still providing customers with best-in-class service.

Interest Rates. Our costs of funds are affected by changes in interest rates, as the interest rates that we pay on certain of our credit facilities are variable. As a component of our strategy to manage the interest rate risk associated with future interest payments on our variable-rate debt, a majority of our funding was held at a fixed rate as of MarchJune 31,30, 2026, representing 84%80% of our total debt balance.

Other Income. Our other income consists of late charges assessed on customers who fail to make a payment within a specified number of days following the due date of the payment, interest income from restricted cash, commissions earned from the sale of club membership products, and investment income from restricted AFS securities.securities, and marketing and processing fee income earned through our bank partnership program.

Provision for Credit Losses. Provisions for credit losses are recorded in amounts that we estimate as sufficient to maintain an allowance for credit losses at an adequate level to provide for lifetime expected credit losses on the related finance receivable portfolio. We reserve for expected lifetime credit losses at origination of each loan, while the revenue benefits are recognized over the life of the loan. Credit loss experience, current conditions, reasonable and supportable economic forecasts, delinquency of finance receivables, loan portfolio growth, the value of underlying collateral, and management’s judgment are factors used in assessing the overall adequacy of the allowance and the resulting provision for credit losses. Substantial adjustments to the allowance may be necessary if there are significant changes in forecasted economic conditions or loan portfolio performance.

Comparison of MarchJune 31,30, 2026, versus MarchJune 31,30, 2025

Large Loans (>$2,500) – Large loans outstanding increased by $245.7$246.3 million, or 18.3%,17.4%, to $1.6$1.7 billion at MarchJune 31,30, 2026, from $1.3$1.4 billion at MarchJune 31,30, 2025. The increase was due to growth in our auto-secured loan portfolio, the growth of receivables in branches opened during 2025 and 2026, and the transition of small loan customers to large loans.

Small Loans (≤$2,500) – Small loans outstanding decreased by $32.1$58.4 million, or 5.9%,10.7%, to $512.5$488.6 million at MarchJune 31,30, 2026, from $544.5$547.0 million at MarchJune 31,30, 2025. The decrease was duedriven toby lowertightened demandunderwriting fromin higher-risk business amid a strongermore taxcompetitive refundenvironment season,for disciplinednew underwriting,customer acquisition, and the transition of small loan customers to large loans, partially offset by growth of receivables in branches opened during 2025 and 2026.

Comparison of the Three Months Ended MarchJune 31,30, 2026, versus the Three Months Ended MarchJune 31,30, 2025

Net Income. Net income increaseddecreased $4.4$2.0 million, or 62.7%,19.6%, to $11.4$8.2 million during the three months ended MarchJune 31,30, 2026, from $7.0$10.1 million during the prior-year period. The change in net income is explained in greater detail below.

Revenue. Total revenue increased $14.3$10.6 million, or 9.4%,6.7%, to $167.3$168.0 million during the three months ended MarchJune 31,30, 2026, from $153.0$157.4 million during the prior-year period. The components of revenue are explained in greater detail below.

Interest and Fee Income. Interest and fee income increased $13.7$9.6 million, or 10.1%,6.8%, to $150.3 million during the three months ended MarchJune 31,30, 2026, from $136.6$140.7 million during the prior-year period. The increase was primarily due to a 12.4%10.6% increase in average net finance receivables, partially offset by a 0.6%1.0% decrease in interest and fee yield. The decrease in yield was primarily due to changes in portfolio mix, including a higher percentage of large and auto-secured loans withinand thea portfolio.shift toward larger balance small loans with longer maturities, which generally carry lower interest rates.

Total originations decreased to $388.0$503.6 million during the three months ended MarchJune 31,30, 2026, from $392.1$510.3 million during the prior-year periodperiod. dueSmall toloan loweroriginations decreased $41.5 million, or 23.9%, driven by tightened underwriting in higher-risk business amid a more competitive environment for new customer acquisition. This decrease was partially offset by a $34.8 million, or 10.4%, increase in large loan originations, driven by growth in our auto-secured loan portfolio, new branches opened during 2025 and 2026, and the transition of small loan demandcustomers fromto alarge stronger tax refund season and disciplined underwriting.loans. The following table represents the principal balance of loans originated, refinanced, and purchased for the periods indicated:

The following table summarizes the components of the increase in interest and fee income when comparing the three months ended MarchJune 31,30, 2026 and 2025:

Insurance Income, Net. Insurance income, net increaseddecreased $0.5 million, or 4.5% to $11.8$11.0 million during the three months ended MarchJune 31,30, 2026, from $11.3$11.5 million during the prior-year period. During both the three months ended MarchJune 31,30, 2026 and 2025, personal property insurance premiums represented the largest component of aggregate earned insurance premiums, and life insurance claims expense represented the largest component of direct insurance expenses.

Earned premiums increased by $0.6$0.2 million, and claims, reserves, and certain direct expenses wereincreased consistent,by $0.7 million, in each case compared to the prior-year period. The increase in insurance premiums was primarily due to increases in personal property insurance premiums and life insurance premiums. Claims, reserves, and direct expenses increased primarily due to a prior-year release in personal property insurance reserves related to previous hurricane activity.

Other Income. Other income increased $0.1$1.5 million, or 1.3%,28.7%, to $5.2$6.8 million during the three months ended MarchJune 31,30, 2026, from $5.1$5.2 million during the prior-year period, primarily due to anmarketing increaseand processing fee income earned through our bank partnership program of $1.7 million, partially offset by a decrease in lateinterest chargesincome associatedof with$0.2 portfoliomillion growth.from decreases in our restricted cash balances year-over-year.

Provision for Credit Losses. Our provision for credit losses increased $6.9$8.4 million, or 11.9%,13.9%, to $64.9$69.0 million during the three months ended MarchJune 31,30, 2026, from $58.0$60.6 million during the prior-year period. The increase was due to an increase in net credit losses of $7.9$7.6 million,million partially offset byand the sequential change in provisionthe expenseallowance for credit losses of $1.0$0.8 million, in each case compared to the prior-year period. The increase in the provision for credit losses is explained in greater detail below.

Allowance for Credit Losses. We evaluate delinquency and losses in each of our loan products in establishing the allowance for credit losses. During the three months ended MarchJune 31,30, 2026 and 2025, the allowance for credit losses included releasesbuilds of $1.4$4.5 million and $0.4$3.7 million, respectively. The allowance for credit losses as a percentage of net finance receivables decreasedincreased to 10.4% as of MarchJune 31,30, 2026, from 10.5%10.3% as of MarchJune 31,30, 2025. The higher build in the allowance year-over-year was primarily driven by portfolio growth and changes in estimated future macroeconomic impacts on credit losses.

Net Credit Losses. Net credit losses increased $7.9$7.6 million, or 13.5%,13.4%, to $66.3$64.5 million during the three months ended MarchJune 31,30, 2026, from $58.4$56.9 million during the prior-year period. The net credit loss rate was 12.5%12.2% during the three months ended MarchJune 31,30, 2026, compared to 12.4%11.9% during the prior-year period. The increase in the net credit loss rate was inclusive ofincluded a 1020 basis point increase due to the impact from higherslower portfolio balancegrowth liquidation inover the threefirst six months ended March 31,of 2026 compared to the same period in 2025.

Delinquency Performance. Our delinquency rate increased to 7.2%7.0% as of MarchJune 31,30, 2026 from 7.1%6.6% as of the prior-year period.period, Theprimarily delinquencydriven rateby wasslower inclusiveportfolio ofgrowth a 10 basis point increase due toduring the impactfirst from higher portfolio balance liquidation in the threesix months ended March 31,of 2026 compared to the same period in 2025.2025, which contributed approximately 20 basis points to the increase, and the continued impact of legacy balances from higher-risk segments that we have since tightened.

General and Administrative Expenses. Our general and administrative expenses decreasedincreased $1.4$2.5 million, or 2.1%,4.0%, to $64.7$65.4 million during the three months ended MarchJune 31,30, 2026, from $66.0$62.9 million during the prior-year period. The absolute dollar decreaseincrease in general and administrative expenses is explained in greater detail below.

Personnel. The largest component of general and administrative expenses was personnel expense, which decreasedincreased $1.8$0.8 million, or 4.4%,2.2%, to $39.3$39.4 million during the three months ended MarchJune 31,30, 2026, from $41.1$38.6 million during the prior-year period. The decreaseincrease was primarily driven by lower CEO costs of $1.2 million, lower earned incentive compensation of $0.6 million, and higher capitalized loan origination costs, which reduce personnel expenses, of $0.5 million. The decrease was partially offset by increased labor costs of $0.4$1.0 million to support growth.growth (including labor costs associated with the bank partnership program of $0.5 million that are expensed as incurred rather than deferred, as described above in “Factors Affecting Our Results of Operations”), incremental executive transition costs of $0.4 million, and a reduction in capitalized loan origination costs of $0.2 million (which increased personnel expenses). The increase was partially offset by lower incentive compensation of $0.9 million.

Occupancy. Occupancy expenses increased $0.6$0.3 million, or 8.3%,4.9%, to $7.5$7.3 million during the three months ended MarchJune 31,30, 2026, from $6.9 million during the prior-year period, primarily due to expenses associated with opening 1012 new branches since the prior-year period.

Marketing. Marketing expenses decreased $1.2$0.2 million, or 22.7%,3.4%, to $4.2$4.9 million during the three months ended MarchJune 31,30, 2026, from $5.4$5.1 million during the prior-year period, primarily due to optimization of our framework for direct mail marketing.marketing of $0.4 million, partially offset by digital marketing costs associated with the bank partnership program of $0.2 million that are expensed as incurred rather than deferred, as described above in “Factors Affecting Our Results of Operations.”

Other Expenses. Other expenses increased $1.1$1.5 million, or 8.5%,11.9%, to $13.7$13.9 million during the three months ended MarchJune 31,30, 2026, from $12.6$12.4 million during the prior-year period. Other expenses increased $0.8$0.9 million due to investmentdeployment inof digital and technological capabilities, including our new front-end branch origination platform.platform, Additionally,and bank partnership fees of $0.2 million. In addition, we often experience increases in other expenses including legal expenses, bank fees, and certain professional expenses as we grow our loan portfolio and expand our market footprint.

Operating Expense Ratio. Our operating expense ratio decreased to 12.2%12.4% during the three months ended MarchJune 31,30, 2026, from 14.0%13.2% during the prior-year period. Our operating expense ratio has improved as we have grown our loan portfolio and controlled expense growth.

Interest Expense. Interest expense increased $3.2$2.6 million, or 15.9%,12.6%, to $22.9$23.0 million during the three months ended MarchJune 31,30, 2026, from $19.8$20.4 million during the prior-year period primarily due to an increase in the average balance of our debt facilities. The average balance of our debt facilities increased to $1.6 billion during the three months ended MarchJune 31,30, 2026, from $1.5 billion during the prior-year period. Our cost of funds increased 0.1%0.2% to 4.3%4.4% during the three months ended MarchJune 31,30, 2026, from 4.2% during the prior-year period.

Income Taxes. Income taxes increaseddecreased $1.3$0.9 million, or 59.4%,27.9%, to $3.4$2.4 million during the three months ended MarchJune 31,30, 2026, from $2.2$3.3 million during the prior-year period. The increasedecrease was primarily due to a $5.7$2.9 million increasedecrease in income before taxes compared to the prior-year period. Our effective tax rates were 23.1%22.8% and 23.5%24.8% for the three months ended MarchJune 31,30, 2026 and 2025, respectively.