Another specialty consumer finance companies is eying a potential securitization.
Regional Management Co., which does business in eight states under the names Regional Finance, RMC Financial Services, Anchor Finance, Superior Financial Services, First Community Credit, and Sun Finance, offers auto loans and other kinds of financing to consumers with limited access to credit from banks, thrifts and credit card companies.
On Monday, the company disclosed that it had obtained a $75 million amortizing loan from Wells Fargo Bank that will be secured by automobile receivables that will allow it to expand lending. In a press release, the company’s chief executive, Michael R. Dunn, said that the “structure and processes we have put in place for the credit agreement pave the way for us to close a public securitization in the future, if the conditions are desirable.”
Under the terms of the agreement, Regional Management will act as services of the auto loan receivables that serve as collateral. Wells Fargo Bank will also act as collateral custodian and backup servicer for the facility, and Wells Fargo Securities will act as administrative agent for the lender.
The credit agreement terminates in December 2022.
As of Sept. 30, Regional Management had $601.6 million in finance receivables, $128.1 million of which were auto loans, according to a regulatory filing. The remainder is identified as “branch small loans,” convenience checks, large loans and retail loans.
Allowances for credit losses totaled $37.7 million as of Sept. 30. Finance receivables associated with customers in bankruptcy as a percentage of total finance receivables was 1.0%