Regional Management Corp (RM) 2012 Q2 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Second Quarter 2012 Regional Management Corporation Earnings Conference Call. My name is Jeff and I'll be your coordinator for today. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session.

(Operator Instructions)

I would now like to turn the conference over to your host for today, Mr. Garrett Edson, Senior Vice President at ICR. And you have the floor, Mr. Edson.

Thank you, Jeff, and good afternoon. By now everyone should have access to our earnings announcement, which was released prior to this call. These documents may also be found on our website at regionalmanagement.com.

Before we begin our formal remarks, I need to remind everyone that part of our discussion today may include forward-looking statements, which are based on the expectations, estimates, and projections of management as of today. Forward-looking statements in our discussion are subject to various assumptions, risks, uncertainties, and other factors that are difficult to predict, and which 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, undue reliance should not be placed upon them. We refer all of you to our recent filings with the SEC for a more detailed discussion of the risks that could impact the future operating results, and financial condition of Regional Management Corp.

We disclaim any intentions or obligations to update or revise any forward-looking statements except to the extent required by applicable law. Also, our discussion today may include references to certain non-GAAP measures. A reconciliation of these measures to the most comparable GAAP measure can be found on our website at regionalmanagement.com.

I would now like to introduce Tom Fortin, CEO of Regional Management Corp. Tom.

Thank you very much, Garrett, and good afternoon everyone. I'd like to welcome you to our Second Quarter Earnings Conference Call. I'm joined today by our Chief Financial Officer, Bob Barry, who will speak shortly about our second quarter financial results.

But before we get into the results in more detail, I wanted to provide you with an overview of our second quarter in terms of our company, as well as what we're seeing in the industry.

Overall, we're very pleased with our second quarter results, as we continue to see double-digit growth in our key metrics, including net loan growth, revenues, and net income. During the second quarter, we grew our branch count to 206 store locations, which includes the 19 Superior branches from our Alabama acquisition in January, as well as 17 de novo branches opened this year.

We're also excited during the second quarter to establish our first store location in New Mexico, our seventh state of operations. With these openings, we remain on pace to meet our 2012 de novo branch opening goals, and while we can't discuss which is our next state for future expansion, we continue to target several states in the Southeast and the Midwest, including Louisiana, Mississippi, Georgia, Missouri, Virginia, and Kentucky.

Some quick financial highlights, which Bob will expand upon in his remarks, total revenue for the quarter was $32 million, up 31% from the prior year. Net income was $6.6 million, and earnings per share were $0.52.

Finance receivables as of June 30, 2012 were $345.4 million, up 33% from June 30 in 2011.

Same store sales for the second quarter grew at 17.3%, showing that our maturing and mature stores continue to perform extremely well.

From a customer account perspective, we now service over 189,000 active accounts as of June 30, which is a material increase from the approximate 165,000 accounts we serviced as of March 31. And as we've mentioned publicly before, we see traditional seasonality in our business with the first quarter usually being the weakest for us, as customers usually use their tax refunds to pay down their loans. Thus, we often see a decline in customer accounts from December 31 to March 31, with a significant uptick in our second through our fourth quarters in terms of our active accounts and loan portfolio.

Turning to our portfolio quality, our furniture and appliance purchase loan product, otherwise known as RMC Retail, saw significant increase in average balance in the second quarter, and we're very excited that this relatively new product is beginning to hit stride. The entire RMC Retail team continues to step up, and we'll continue to look for retailers to directly partner with in order to provide customer financing at the point-of-sale, and to support our crossselling efforts.

We're also extremely pleased in the quarter at continuing to reduce our expenses as a percentage of revenue, and we recorded an efficiency ratio of 41.4%, a decline of 30 basis points from the prior year quarter. Now, when you consider that we've added 43 new stores since June 30, 2011, including the integration of the 19 net stores from our Alabama acquisition in January, plus the increase costs from being a public company, the efficiency ratio decline in the second quarter is even more impressive. We believe it's a testament to the efforts of the entire Regional team in carefully watching our cost structure.

As we continue to rapidly grow our workforce, and given that our model is predicated on having close, person-to-person communications in the field, we recognized it was necessary to invest in our human resources function to further deepen our branch strength, and ensure that we employ and train the best people. With that in mind, last month we brought on board Bill Stubbs to our executive management team as our Senior Director of Human Resource.

Bill brings to Regional over 30 years of human resource experience, most recently as the Senior Director of Human Resources for Bi-Lo Supermarkets, where he oversaw more than 18,000 employees. We're confident that he's the right person to lead our human resources function going forward, and we welcome Bill Stubbs to Regional.

In terms of branches, we opened 12 de novo branches for the second quarter of 2012. On our previous earnings call, I mentioned that we opened 33 de novo stores in 2011, and with the 17 de novos opened in the first half of this year, combined with the 19 net branches we acquired in January, we are well on pace for our stated goal of 46 incremental store units in fiscal 2012. We've been pleased, thus far, with our newest branches, especially in our new states, Oklahoma and New Mexico, where the early results are very encouraging.

And while we had no acquisitions in the second quarter, we will continue to be in the market for small- to mid-size acquisitions that are accretive, and that provide us with strong growth potential. To that end, we continue to successfully integrate the branches we acquired in January in Alabama, and to further build out our presence in that state.

Turning to our financing sources, yesterday we received approval from our syndicate of banks for the increase in our senior revolving credit facility to $352 million, a $70 million increase from our previous upper limit, and this is further evidence of our fiscal responsibility and our strength. We intend to use any additional monies from the facility to fund product, channel, and de novo growth strategies, as well as any value-added acquisition opportunities.

So, in summary, it was another very solid quarter here at Regional, with strong double-digit growth in most of our metrics, as we continue to keep a watchful eye on our overall cost structure.

Before I turn the call over to Bob to discuss our second quarter financial highlights, I just want to touch on the latest regarding regulatory issues in the industry. First, we really don't have much to report to you or to update this quarter regarding any new meetings or pronouncements from the CFPB, nor do we have much to report to you on the state level.

As we mentioned on our last earnings call, we are indeed subject to CFPB oversight. However, we still believe that the current focus of the Bureau remains on the payday loan industry, mortgage originations, credit cards, and student loans, and non on the installment loan industry.

We will continue to work closely with the Bureau to educate them as to why installment loans are much more attractive, safer, and more transparent for consumers in all respects. And we'll continue to keep you apprised of any regulatory developments on future calls.

Finally, I want to mention that given recent developments with regard to credit insurance products and the CFPB, I just wanted to take a brief minute to discuss Regional's credit insurance products, which today comprise between 7% to 10% of our quarterly revenue, depending upon seasonality.

I want to make it very clear to you that our credit insurance products are optional for our customers. Customers do not need to purchase credit insurance in order to take a loan. In fact, if they do decide to purchase insurance, our contractual terms are very clearly spelled out in plain English in the contract that the customer signs. There are no secrets, and there is no fine print.

Additionally, we require our borrowers who do purchase credit insurance to sign an affirmative consent form, again in plain English, stating that the understand that the purchase of insurance is not required for the granting of the loan. Moreover, our employees in the field are specifically trained to make sure that the customer is comfortable with the insurance purchase, and knows exactly what he or she is purchasing. And our employees are happy to answer any and all questions from our customers.

Because of this, while the CFPB could eventually take a look at these ancillary credit insurance products, we are confident that our practices at Regional are the direct opposite of the Capital One situation, and that our credit insurance products can withstand any scrutiny from the Bureau.

With that, I'd like to turn the call over to our Chief Financial Officer, Bob Barry, who will discuss our second quarter results, and then I'll give you some closing comments. Bob.

Thanks, Tom. Good afternoon, everyone, and let's go straight to our second quarter results. For the second quarter 2012, we recorded total revenue of $32 million, a 31% increase from the $24.4 million in the prior year period.

Interest and fee revenue for the second quarter of 2012 was $28.2 million, a 31% increase from $21.5 million in the prior year, primarily due to a 33% increase in average finance receivables. Insurance and other income for the second quarter of 2012 were $3.8 million, a 33% increase from the prior year period. Same store revenue, which we define as stores open for more than one year, for the second quarter 2012 were 17.3%.

Finance receivables outstanding at June 30, 2012 were $345.4 million, a 33% increase from the $259.2 million in the prior year period. Finance receivables increased primarily due to the addition of 43 branches since June 30, 2011, through both the de novo openings and acquisitions, including the 19 net new branches acquired in Alabama in January 2012.

Same store loans receivable for stores open for at least one year grew 17.6%. We have 206 branches in 7 states open as of June 30. During the second quarter, we opened 12 de novos, and as of June 30, we have opened 17 for the year.

As of June 30, small installment loans make up 35% of our portfolio. Large installment loans make up 17%. Automobile purchase loans are 42%, and furniture and appliance loans are 6%.

Provision for loan losses in the second quarter was $5.9 million versus $3.5 million in the prior year period, primarily due to the increase in loan volume. Accounts that over contractually delinquent were 2%, up slightly from the 1.9% at June 30, 2011.

Net charge-offs as a percentage of average receivables for the second quarter was 6.1% on an annualized basis, an increase from 5.6% in the prior year period. The increase was mostly due to growth in the portfolio, as well as uncertainty on loans acquired from Superior, which justified being additionally conservative and prudent with that division.

For the six months ended June 30 our net charge-offs as a percentage of average receivables was 6.2%, and that compares with 6.0% in the prior year.

General and administrative expenses for the second quarter were $13.3 million, an increase of 30% form the $10.2 million in the prior year period, primarily due to an increased personnel cost from opening and acquiring an additional 43 branches since June of 2011, as well as increased costs from being a public company.

But despite these increased costs, Regional's efficiency ratio, which we define as a percentage of general and administrative expenses to total revenue, in second quarter of 2012 was 41.4%, an improvement of 30 basis points from the prior year 41.7%.

Net income for the second quarter was $6.6 million, a 40% increase compared to net income of $4.7 million in the prior year period.

Diluted earnings per share for the second quarter were $0.52, and that's based on a diluted share count of 12.7 million.

As of June 30, Regional has financed receivables of $345.4 million, and outstanding debt of $212.7 million. As Tom mentioned, yesterday we closed on the increase on our senior revolving credit facility from our syndicated banks, increasing that line to $325 million from $255 million, with a maturity of July 2015.

Borrowing terms of the line bear interest at the rate equal to LIBOR, and the maturity we select between one and six months, with a LIBOR floor of 1% plus a margin of 3%. Alternatively, we can borrow at the prime rate with a margin of 2%. In addition, we pay an unused line fee of 50 basis points, which will decline to 37.5 basis points at certain usage levels.

I'd like to turn the call back to Tom for his closing remarks.

Thanks very much, Bob. We're very proud of our second quarter performance here at Regional, and we'd be delighted, Operator, to open up the line to any questions that callers may have.

Alright, excellent. (Operator Instructions). Your first question comes from John Hecht with Stephens. Please proceed.

Thanks for taking my question. Congratulations on a successful first public quarter, and I apologize for any background noise. I'm in an airport.

No problem. Nice to talk to you, John.

Thanks. First question is, Tom, can you give us just an update on market conditions, where you're seeing yields in the market place and the various products, and is there any changes in the competitive environment in that line?

Yes, I'll take a general cut at that, John, and Bob can fill in some of the specifics. I mean, look, from a market perspective, I think the second quarter, at least from where Regional stands, was very strong and very robust. 17% plus year-over-year same store growth in both revenues and assets for us is outstanding. That's about 300 basis points above our historical average.

So, we've heard talk in the market place from some competitors there may be some softness in consumer demand. We have absolutely and categorically not seen that at Regional. In fact, I think quite the opposite.

In terms of our mix, and in terms of yields, to be perfectly honest, we've actually modeled in declines, slight decline,s to our overall portfolio yield, and yet our experiences held out very well, certainly, during the second quarter, and fully during the six months. I think that the area of our business, as we've discussed previously on calls, that's most sensitive to pricing and rates has traditionally been, and is currently today, the automobile lending market. We see more pressure in the indirect side of the automobile lending market, certainly, than we do on the direct side.

And let me just define that for those of you on the call. 15% of our auto lending volume is driven through our indirect channel, which is typically at franchise automobile dealerships, lower mileage vehicles with higher credit score borrowers. The other 85% of our automobile lending originations comes through direct -- a direct lending platform, which is traditionally with used or independent dealers, where we close the loan at our own location.

John, I would just say, in general terms, it's a very competitive market for indirect. It's a relatively small portion, very small portion of our overall auto business. As you know, we compete in that space through our auto credit source brand name in four metro markets. I would say for us, quarter-over-quarter the auto credit source yields have been very stable. We've seen improvement, actually, a slight improvement in yields on the direct side of the business.

So, I would just say, in general terms, despite our planning for a slight degradation in our portfolio yield, that really hasn't borne out in practice. Bob, do you want to give some specifics?

John, the -- for the three months, our overall portfolio yield was 34.6% in 2011, and that declined to 34.2%. Although the rates were not on automobile loans overall given the [relic] relationship of those rates to small loans, we did have a decline in portfolio yield. Year-to-date, it's about the same trend 34.7% in 2011, and 34% for the six months ended 2012.

We did put in in the selected financial data in the press release, we did put in a rate volume table. It will illustrate some more of these changes.

Okay, good. That's very good color, thanks. Second question is related to credit. Stable credit, what are you seeing in terms of the roll rates from early stage to late stage delinquencies? Any changes there?

No, we've seen, John, we've seen stability in all of the delinquency buckets. We obviously just closed the month of July yesterday, and while we can't give any specifics, absolutely what we saw for the month of July in terms of portfolio quality and consistency, it lines up very well with the six months we're reporting here.

So, with seven months of experience under our belt, we're seeing very high quality in the portfolio. In terms of accounts that are rolling from the 90 to 120 day and beyond, Bob, do you have any comments you'd like to make on delinquency rates?

John, just overall, at June 30, 2011 compared to 2012, delinquency was down slightly. It was 6% in the current year, 6.1% last year. We mentioned that 90-day accounts went up from 1.9% to 2.0%. That's a very small increase, and actually, our 180-day accounts remained constant at 0.5% of the portfolio.

Okay, thank you very much. Last question is, we spoke historically about potentially conducting, I guess that's private securitization with the auto portfolio. Do you guys have any update on that?

No, we don't, other than it was an important step for the company to complete the extension and the upsizing of our senior line. With that ink dried, just yesterday is when we closed that deal. We want to catch our breath. We're studying that market for the securitization opportunity.

We note that there have been a couple of interesting medium-size deals that have been successfully placed in the market. It seemed to be well received, and, John, I would think if we were to do something with an auto securitization, it would be more or less in line with some of the recent comparable transactions. But we don't have anything to report on a potential securitization at this point in time.

Okay. Thanks very much guys.

Very welcome.

Our next question comes from Bob Ramsey of FBR. Please proceed.

Oh, good evening, guys.

Hi, Bob, how are you?

I'm good, thank you. I know you said the end of period finance receivable growth that you all mentioned is much stronger than the growth of the average balance. Was growth backend loaded in the quarter, and how should we think about growth going forward?

No, Bob, it wasn't backend loaded. I think that some of that reflects what we've discussed in terms of the seasonal growth curve. Typically, again just to recap, what happens is that during the first calendar quarter, our customers will tend to pay down, or in fact, pay off their borrowings with us. We always see, and we always expect a retraction of the portfolio between January 1 and, typically, about the end of March.

Some years, it's a little bit earlier that we rebound. Other years, it's later. Second quarter, the growth in the portfolio is starting to get on the steeper part of the curve. I can tell you that we did have a very nice pick up in the last two month of July. In fact, it's going on as we speak, and this relates to a very significant direct mail marketing campaign that we're conducting that's timed for the tax-free back-to-school shopping weekends.

I believe with the exception of Texas, the other six states we're in are all the first weekend in August. So, those live checks, if you will, start hitting households in our targeted markets about ten days ago, and we're seeing a very strong response from that campaign.

So, I'm certain that we picked a few -- picked up a few very strong days in July, and that may explain the difference between end of period and average for the quarter.

Okay, that's helpful. And, obviously, the same store sales growth was really very strong this quarter, stronger than even it has been recently, and you all highlighted in your introductory comments the view that, if anything, consumer demand is not weakening, but maybe strengthening a little bit. What do you attribute that to?

Well, it's probably an unquantifiable, Bob. We've detected, certainly with our borrowers, and I wish I could lay out empirical data to prove this, but my sense is that even our borrowers are taking much better care of their credit. That's certainly reflected in the quality. I also think there's certainly been a fair amount of pent up demand on the part of our demographic. We certainly see this with a very robust back-to-school shopping season.

I think that customers have learned lessons from credit challenges in the past. They're taking better care of their credit. They're more judicious in their purchases. But, look, the financial needs of this very large chunk of the US population, they don't go away. They continue.

I would say, when we think about the diversity of the Regional product set, whether we're talking about small personal loans, furniture or appliance purchases, certainly automobile purchases, it's certainly not clear to us that those diverse channels, those diverse product sets, are necessarily correlated. So,we've got some -- yes, we've got the advantage with that product set diversity that there's certainly some dampening of demand spikes or declines.

So, I can't point to anything in particular. I just think consumers are doing a better job of managing their household budgets, and we've certainly seen no abatement in demand for our products in Q2.

Great. And then last question and I'll back out. Do you have the loan originations by portfolio for the quarter by any chance?

Bob, no, we do not.

Okay. Alright, thank you.

Thank you.

Our next question comes from David Scharf with JMP Securities. Please proceed.

Alright, good afternoon, thanks for taking my questions. Just a few follow ups. First time on product mix, I'll qualify this by admitting my model is just one of many out there. But I'm curious relative to kind of what we were looking for seemed to be a little lighter on small loans, and upsize on the large installment, and on the furniture side. Just curious, could you comment on whether or not, whether it's the new geographies you're in, just the Superior acquisition, whether the product mix is flushing out the way you had anticipated, or if there's any adjustments in the second half we should think about?

Yes, quite question, Dave, and good afternoon to you. I think you hit the nail on the head with the Superior acquisition. Certainly, the large installment loan growth year-over-year really is reflective of the portfolio we bought there. There's been, certainly, a concerted effort on all product fronts to continue our marketing efforts. So, we haven't made any decisions to de-emphasize any particular product, or to the exclusion of another. Bob, do you want to make a comment on what you see in the mix?

No, I think that's correct, Dave, is that the large loan increase is solely attributable to the Superior transaction. Small loans, we've always anticipated that there would be some decline in small loans relative to automobile loans. That's been a little skewed this quarter, and actually for the year-to-date because of the Superior acquisition.

Got you. And staying on that topic, with the live check campaign you had mentioned. I guess two things. One, should we see a normal than usual sequential increase, you think on the small loan side, given the response rate you've identified so far? And then, in general, are you still seeing the typical type of yield on the new originations, and not economic yield, but rather, you mentioned in the past that about 40% of small loan originations come from live check. Is that a figure that's holding stable, or you expect to rise in the future?

I'll take the second of the questions first, Dave. Yes, we would expect the ratio of those originations coming from live checks to remain more or less stable. Without divulging any specifics as to the volume of checks we've mailed out, or the specific response rates we've seen thus far, I can tell you that this back-to-school campaign that we're midway through right now is the most robust in the five years that we've been running it. I looked earlier today at some of the daily inbound volume of live checks, and we're scrambling to staff so that we can input those checks as rapidly as we can. It's been very, very robust.

In terms of sequential, thinking about small checks, or small loans going forward, look, we've traditionally and historically seen an uptick in the later half of the year on our small loan originations, especially in the fourth quarter, and as you can imagine, that really relates to the pre-holiday ramp. I would anticipate that fiscal 2012 would be more or less a similar pattern. Do you see any different, Bob?

I think that's right, Dave. We're coming off the quarter, the two quarters actually, particularly Q1, where our small loans go down, and our automobile loans go up. By the time we get to the end of the year that will switch. Automobile loans are generally slow in Q4, whereas our small loans are very strong in that quarter.

So, I think, it's more of a rolling factor of what the cycle is for us, and I think you'll see that getting back -- those ratios getting back more in line, particularly as we -- some of the large loans we acquired in Alabama transaction get rolled into our loan products.

Got you there. That's very helpful. Maybe one last question then I'll get back in queue. Just circling back to commentary on credit. As you had mentioned, Q2 is typically the lowest loss rate of the year as the denominator effect building up balances takes effect. Was the sequential decline from kind of 6.4% to 6.1% in line with what you expected? It is a little less dramatic than we saw a year ago, and is that a good barometer for thinking about the second half of the year?

Yes, I think so. We came off an awfully strong last year, last year, in terms of charge-offs, but we think that they'll be in the same range. I can't, obviously, make any predictions, but I think we're in the 6.5% range, would be a comfortable number.

Terrific. Thank you very much.

You're welcome, Dave.

(Operator Instructions). Up next, we have Daniel Furtado with Jefferies. Please proceed.

Thanks, Tom and Bob, I appreciate the opportunity to ask some questions. Congratulations on a good quarter as well.

Thanks, Dan.

One of the things that really sticks out, I think, in this report is the expansion in same store sales from 11% to 17% quarter-over-quarter. And I appreciate that there's some seasonality that occurs in the business. How, generally, when we think about seasonality moving into 3Q in light of this initial strength in the back-to-school program that you're engaged in right now, how do we think about same store sales seasonality as we move from 2Q to 3Q?

Yes, Dan, it's a really interesting question, and I guess, I'm not so certainty that it's the seasonality impact that's led to these same store sales and same store asset, or receivables growth, as it is what we discussed during the road show, and in some of the subsequent inventor conferences, this maturation curve for our stores.

And, as we discussed during the road show publicly, fully 50% -- 55% of our store units are younger than five years, which we deem to be a mature store. So as these cohorts, as these vintages of stores are really headed into the steepest part of the traditional development and growth curve for a de novo store, a greenfield location, I think we're really catching that spring-loaded growth effect that we've talked about in the past.

So, I don't know that I could point to the 17% plus same store sales and necessarily pin that much on seasonality. We're seeing seasonal trends this year that are fairly consistent with historical seasonal trends. Now, on a going forward basis, it'd be hard for me, obviously, to predict where those same store sales will come out in ensuing quarter. I think, Bob, on the six month same store sales, we were --

Six month same store sales, on revenue we were 14.3%, and receivable growth 17.6%. Prior year, 12.9% on revenue, and 15.1% on receivable growth.

Dan, it's just really difficult and challenging for us to predict on any given quarter whether it's going to be 13% same store sales, or 17%. So, I guess I would dodge the question by saying, I really can't predict where it's going to be in Q3 and Q4.

Understood. Thank you for that for the insight there. What about from something that may have more detectable seasonality, or at least, obviously, I'm not looking for specific guidance, but general thoughts around the seasonality in the insurance and other income line items. How should we think about that for the remainder of this year as we're modeling the company?

Well, I would say generally, we have our best shot at offering and featuring the insurance products to our customers when we have face-to-face contact with the consumer. And bear in mind that as our furniture and as our indirect IO loans grow as a percentage of our portfolio, and in terms of our relationship with consumers, those are instances where we do not see the customer face-to-face. So, in the retail setting, that loan is closed at the furniture or appliance store, and we simply do not have an opportunity to offer them insurance.

The same thing with a franchised car dealer. We do not see the customer face-to-face, so we can't -- we have no opportunity to sell them the insurance.

So, I can't say that there's necessarily a seasonal or component to our credit insurance sales. I think it's much more correlated to the mix of the product set. And again, as we gradually dial in more our RMC Retail, the furniture and appliance loans, and as we very gradually dial in more of the indirect, we would expect to see a smaller opportunity -- a lower opportunity to actually sell the insurance.

Dan, I would add to that, the insurance revenues -- insurance income as a percentage of total revenue in Q2 was down slightly from Q2 of 2011, but more dramatically down to 7.9% for the year-to-date versus 8.4% in the prior year. I think as Tom indicated, as automobile and furniture loans ramp up, we've disclosed before, we fully expect that the percentage of receivables and revenue, more importantly, as a percentage of receivables insurance income, will gradually decline.

Got you. Thanks for the clarity on that, and congratulations again on a solid quarter.

Thank you, Dan.

Ladies and gentlemen, our next question is a follow up. It comes from Bob Ramsey with FBR. Please proceed.

Thanks for taking the follow up. I was just wondering, can you provide the net charge-offs by loan portfolio?

Yes, we can. There is a table in the financial statements that we'll be publishing that will have the charge-offs, but if you want that right now, just bear with me a second.

Sure. Maybe while you dig that up, I was also curious, could you remind me with the previous credit facility, what the cost on that was, and sort of how the new facility, is there any difference on what the cost is, or just on the amount that you will have the ability to draw down?

Yes, Bob, this is Tom. I'll answer that while Bob digs up the category charge-offs. Prior to the IPO, it was LIBOR plus 3.25%. With the IPO in late March, it was LIBOR plus 300. The pricing remains the same. So there's the same LIBOR margin of 300 basis points. There were really no material changes to terms in the facility. The upsizing and extension of it, other than what was previously described, the unused line fee, which declines at certain usage levels --

That's correct. That is the new addition this year to the line, is that we do get a -- as our line usage increases, we do get a reduction in the unused line fee.

Back to your question of by product, for the six months, small installment loans, the losses, net losses, were $6,033,000; the large installment loans were $1,164,000; automobile loans were $2.7 million; and furniture loans were $159,000.

Great. Thank you. And is the 37% tax rate you all had this quarter a good run rate going forward?

Yes.

Great. Thank you very much for taking the follow ups.

Ladies and gentlemen, since there are no further question in queue, I'd now like to turn the call over to Mr. Tom Fortin for closing remarks.

Thank you, Jeff. Folks, we really appreciate your support for the company during the second quarter, and we look forward to delivering you more, more results like this in the future. Thanks very much.

Ladies and gentlemen, that concludes today's conference. Thank you for your participation. You may now disconnect. Have a wonderful day.