May 2, 2013
Executives
Garrett Edson - Investor Relations Thomas F. Fortin - Chief Executive Officer Donald E.
Thomas - Executive Vice President and Chief Financial Officer
Analysts
Bob Ramsey – FBR David J. Chiaverini - BMO Capital Markets David Scharf - JMP Securities Daniel Furtado - Jefferies & Co.
John Hecht - Stephens & Co. William J.
Dezellem - Tieton Capital Management
Operator
Good day, ladies and gentlemen and welcome to the Q1, 2013 Regional Management Corp. Earnings Conference Call.
My name is Kirsten and I will be your operator for today. At this time all participants are in a listen-only mode.
We will conduct a question-and-answer session towards the end of this conference. (Operator Instructions).
As a reminder this call is being recorded for replay purposes. I would now like to turn the call over to Mr.
Garrett Edson, Senior Vice President of ICR, Please proceed.
Garrett Edson
Thank you Kirsten 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.
The forward-looking statements in our discussion are subject to various assumptions, risk, 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 put 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 conditions 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, reconciliations of these measures to the most comparable GAAP measure can be found within our earnings announcement and posted on our website at regionalmanagement.com. I would now like to introduce Tom Fortin, CEO of Regional Management Corp.
Thomas F. Fortin
Well thank you very much, Garrett and good afternoon everyone and welcome to our first quarter 2013 earnings conference call. I am here with our Chief Financial Officer, Don Thomas who will speak later about our first quarter financial results.
I am also joined by other members of our senior leadership team. Let me start by saying that we are very pleased with our first quarter performance.
We recorded total revenues of $38.6 million, up 22% from the prior year, net income of $6.9 million and diluted earnings per share of $0.54. Finance receivables as of March 31, 2013 were $430.4, million, up some 36% from the prior year period end, and same store sales growth remains very strong as we recorded a 14% increase in the fourth quarter.
Don's going to expand on these metrics in his remarks shortly but broadly as we previously discussed Regional conducted its first ever January and February live check direct mailings and overall we were quite pleased with the response we achieved and the information gathered during this process will certainly help us further refine and optimize next year's first quarter mailings. While we experienced very little impact from IRS delays in tax returns we feel that the incremental volume from our off-cycle direct mail live check programs were a net positive for us in the first quarter.
In terms of our branches we grew our branch count at the end of March 2013 to 232 locations as we opened 11 de novo stores in the first quarter, accelerating our original plans and including our first AutoCredit Source branch in the State of Georgia. We were especially pleased with the efficient build out and opening of our de novo branches during the first quarter.
As of today's call we have opened 14 de novo branches thus far in 2013 and we are now projecting de novo growth of 41 branches this year. As of today we have leases signed on all 41 of these de novo branch locations and the bulk of these branches are under construction and will be open in the second quarter.
After the first quarter ended we closed an acquisition of two Georgia branches which gave us a start in the small installment loan business in the State of Georgia. And while this transaction is not material to our overall operations or results it's an important symbolic step for us in a highly strategic state.
Once we gain more experience in the State of Georgia we will look forward to future expansion. And of course we continue to watch for additional accretive small to mid-sized acquisition opportunities nationwide.
From a customer account perspective we serviced over 244,000 active accounts as of March 31st, nearly comparable to the approximate 245,500 accounts that we serviced as of December 31, 2012. And let me remind you listening to the call that the first quarter is historically our slowest origination period seasonally and we normally see a decline in customer accounts and in our portfolio ledger and receivables from December 31 to March 31 as customers use their tax refunds to pay down or pay off loans.
Given this pattern we are very pleased that we managed to keep total accounts essentially flat on a sequential basis and our portfolio is currently growing according to historical patterns. Turning attention to our RMC Retail unit, RMC Retail continues to perform admirably having crossed the $30 million receivables total during the first quarter of 2013.
We now partner with more than 780 retail and furniture stores as of the end of April 2013, and we continue to steadily add new points of financing at a consistent pace to our network. While RMC Retail is indeed our lowest yielding unit these are in fact the highest quality loans in our portfolio and the highest quality borrowers by a considerable amount.
As we have discussed in the past RMC Retail allows us an additional channel opportunity to broaden our market approach, allows us to introduce customers to Regional generally and to potentially cross-sell an auto loan or installment loan to a higher credit quality consumer, thus growing our revenue base while potentially improving the quality of our loan portfolio. We are also quite pleased in the first quarter with our automobile purchase loan segment which grew its receivables base on a sequential basis despite the continued intense competition in the auto lending sector.
Now in terms of the regulatory landscape we had only a few minor updates on both the federal and the state level. At the state level the recent proposed legislation regarding pay day loans in Texas if indeed passed and signed into law would not have an impact on Regional.
Just yesterday in the State of North Carolina, an important potential positive bill was passed out of a Senate panel and will now be heard before the full state Senate in North Carolina that could be a positive addition to our operations in the State. On the federal level the Consumer Financial Protection Bureau recently put out a white paper concerning payday loans and deposit advances, but there has still been no discussions concerning installment loans.
We continue to invest in our own internal compliance programs and resources so that we can provide our customers competitive, safe and transparent consumer financial products that are a good economic value to their household. Finally before turning things over to Don, I do want to announce that we've made several key additions to our executive team during the first quarter.
You all know of course at the turn of the year Don Thomas joined as Chief Financial Officer. We also want to acknowledge the addition of our new Vice President and General Counsel, Brian Fischer.
Additionally, we've recently reported -- we recently added as our Senior Director of Marketing, Barbara Turner who joins us from a similar position at Springleaf Financial. These new executives functionally round our senior leadership team, and we believe position us well for future growth and performance.
With those comments all the way I would like to now turn the call over Don who'll discuss the details of our first quarter results and then I will provide some closing commentary. Don.
Donald E. Thomas
Thank you, Tom. Good afternoon everyone and let's go right into our first quarter results.
For the first quarter of 2013 we reported total revenue of $38.6 million, a 22% increase from $31.5 million in the prior-year period. Interest and fee income for the first quarter of 2013 was $34 million, a 26% increase from $27.1 million in the prior year period primarily due to a 36% increase in our finance receivables.
Insurance and other income for the first quarter of 2013 was $4.5 million, a 1% increase from the prior year period. As we mentioned in our prior call as our product mix includes more indirect loans from furniture and auto we do expect fewer opportunities to offer insurance product with our loans.
Same store revenue growth for the first quarter of 2013 was 14.4%. We define same store as store open for at least 13 months.
Finance receivables outstanding at March 31, 2013 were $430.4 million, a 36% increase from $317.5 million in the prior year period. The small auto and furniture categories of finance receivables increased primarily due to the addition of 38 de novo branches, successful live check campaigns and strong customer demand for auto and furniture products.
Our same store finance receivables grew 28.7%, once again our same store calculations use stores that have open at least 13 months. Composite yield for the first quarter of 2013 was 35.3%, down from 39.6% in the prior year period.
Composite yield declined primarily due to the success of our back-to-school holiday and January live check campaigns, which included testing of higher credit score customers with lower rates and larger loan amounts. At the end of the first quarter approximately 49% of our back-to-school, 80% of our holidays live check loans and 94% of the January live check loans remain in our portfolio.
In addition the composite yield also declined due to the increase in automobile and RMC Retail loans, our lowest yielding product as a proportion of our product mix. We continue to take disciplined steps to analyze and improve our yield including the reduction of the use of lower rates in our live check campaigns.
As of March 31, small installments loan made up 42% of our portfolio, large installment loans made up 12% of our portfolio, automobile purchase loans were 39% and furniture and appliance purchase loans were 7% of our portfolio. The provision for credit losses in the first quarter of 2013 was $8.1 million versus $5.6 million in the prior year period primarily due to growth in the portfolio.
Accounts over 90 days contractually delinquent were 2.6%, up from a rate of 2.3% as of March 31, 2012. A portion of the increase in accounts over 90 days are in fact accounts over 180 days contractually delinquent which requires us to provision 100% of the amount in our specific account allowance.
Therefore our overall allowance increased for the first quarter. Net charge-offs as a percentage of average finance receivables for the first quarter of 2013 was 6.5% on an annualized basis, a slight increase from 6.4% in the prior-year period.
General and administrative expenses for the quarter, first quarter 2013 were $16.4 million, an increase of 28% from 12.8 million in the prior year period, primarily due to increased personnel and operating costs from opening an additional 38 branches since March 31, 2012 including opening 11 new stores in the first quarter of 2013. In addition we've incurred incremental electronic (portal) costs to do a larger number of deals in a more competitive indirect auto loans environment and certain public company costs are now included in our income statement that were not included in our 2012 first quarter results.
Regional Management's efficiency ratio as a percentage of general administrative expenses compared to total revenue in the first quarter of 2013 was 42.6%, 200 basis points above the 40.6% figure in the prior year period. We continue to put time and effort into managing our expenses and have successfully negotiated new contracts with certain vendors that will lower costs in the future.
However the primary reason for the increase in our efficiency ratio is a decline in our composite yield as noted above. Net income for the first quarter of 2013 was $6.9 million, a 35% increase compared to GAAP net income of $5.1 million in the prior year period.
Pro forma net income for the first quarter of 2012, which excludes one time IPO expenses and applies the proceeds from the IPO to reduce outstanding debt was $6.8 million. Diluted earnings per share for the first quarter of 2013 was $0.54 based on a dilutive share count of 12.8 million shares.
As of March 31, 2013 Regional Management had finance receivables of 430.4 million and outstanding debt of 273 million on our $325 million senior revolving credit facility. Our credit facility does have an expansion feature to grow to 400 million.
I would now like to turn the call back to Tom for our closing remarks.
Thomas F. Fortin
Thanks Don. And to sum up our first quarter was a very strong start to fiscal 2013 for Regional Management.
And we generated solid growth that clearly flowed to the bottom line. Our overall growth strategy for 2013 in terms of building de novo stores and targeting live check campaigns is clearly on track and I'm quite optimistic about Regional's potential.
We're excited about entering the State of Georgia, our eighth state. We think there are numerous opportunities for growth in that key state.
And importantly we remain on very solid footing from liquidity and a balance sheet perspective. I am certainly proud of the entire Regional Management team's dedication.
And I am certain they'll keep up the good work in the coming quarters. With that operator we'd be delighted to take questions from participants.
Operator
(Operator Instructions). Please standby for your first question, which comes from the line of Bob Ramsey from FBR.
Please proceed.
Bob Ramsey – FBR
Good evening guys.
Thomas F. Fortin
Hi Bob.
Bob Ramsey – FBR
Nice quarter, the growth really is tremendous this quarter. I'm curious it looks like when I look at the origination data, the originations of the small loan product are I guess driving a lot of that growth.
They were up something like 80% year-over-year, with more modest so this saw nice increases in the other portfolios. Is that the live check campaign that's driving most of that or is a lot of that the new branches or sort of how do we think about the different growth drivers?
Donald E. Thomas
Bob, this is Don, I'll take that one. And the answer is yes that is our live check campaigns helping to grow these small loan volume.
And so as we've added that element here in the first quarter, and never done it before it shows a pretty nice increase.
Bob Ramsey – FBR
And would it be your expectations since you are having some success with the live check campaigns that going forward we will continue to see I guess growth sort of dominated by that small installment loan portfolio?
Thomas F. Fortin
Yeah, Bob this is Tom and I will take that one. I think certainly we've been very encouraged by the focused Q1 live check campaigns.
Our philosophy here at Regional has always been to experiment in a controlled manner. We're going to watch those portfolios of live checks that we sent in Q1 to see how they perform.
But in terms of reaching a new market segment that prior to this quarter we never been involved in before, yeah, I think it's very encouraging and on a going forward basis we are encouraged by what we have achieved and I think you can anticipate that we will certainly participate in off cycle mailings on a go forward basis.
Bob Ramsey – FBR
And how are you thinking about the potential for loan growth in fiscal 2013?
Thomas F. Fortin
That's a tough question, Bob.
Bob Ramsey – FBR
Well I guess it may be this quarter I think you were up 35%-36%. I think you had a little bit of benefit this quarter still from the Superior acquisition I can't remember but that might have been late January of last year.
So is it -- these stay above 30 for the year, is it something in the high 20s or is that over estimating, I mean they are big numbers, but is that a little high, how are you thinking about the potential and sort of a range?
Donald E. Thomas
I think I mean first and foremost I mean we really don't provide much in a way of guidance and so I can understand why you are asking the question. We have brought Barbara (inaudible) on for a reason to continue improve our live check campaign.
So I think that we will continue to look for all the options that we can to move it forward, and it will be a key part of what we do.
Thomas F. Fortin
Bob I will just add on to that. As I said in my prepared comments I mean this is from our perspective a great start to the year.
I can't imagine a scenario where we -- would it ever slowdown our trajectory. We've got plenty of room under our existing funding arrangement, the quality of the paper is very strong, the real challenge that the rate governing factor and the way we look at growth is, and we've said this consistently on a number of our previous calls its people, it's having the quality of people in the field to manage branches and really keep control on the portfolio.
So we're very confident with the 41 stores that we've announced that we have the right people in place to absorb that growth. I don't anticipate us accelerating from this trajectory but certainly we are not going to slow things down.
I hate to preface but as Don says we are not offering guidance on top line growth, and I think I've to be somewhat vague on that.
Bob Ramsey – FBR
Okay, no, that's helpful color, thank you guys.
Thomas F. Fortin
You're welcome
Operator
Thank you. Your next question comes from the line of David Chiaverini from BMO Capital Markets.
Please proceed
David J. Chiaverini - BMO Capital Markets
Couple of questions for you, starting first you mentioned about how you expect to open up 41 branches this year and you've opened 14 through the first quarter. So did I hear you right that most of them the balance are going to be open by the end of the second quarter?
And if that's the case sounds that if you are going to be pulling back up a bit on new branching opening until 2014
Thomas F. Fortin
Well, Dave this is Tom speaking and good afternoon. I would say we had really targeted a midpoint of the guidance range, 35 to 45 branches.
Our thinking had been 40. We since upped that obviously to 41.
My preference has always been to open stores earlier in the year, the more experience we can obtain in a de novo location the better that sets our personnel up for our busiest period which is the fourth quarter. So our philosophy again has been open early and get experienced under your belt.
I will say as you have seen in the past few years, we've been highly opportunistic in terms of looking at back half of the year growth, I am not prepared to make any announcement today about what we might do that would be incremental to 41, but with 41 de novo locations essentially done by the end of June that gives us a lot of latitude to really see how we are positioned midway through the year. We have talked before on previous calls about a growing proportion of our de novo store openings being so called back fill locations and to remind participants on the call once again a back fill is an existing market where one of our existing branch locations has really reached its upper limit in terms of the number of customers that we like to have in a branch for optimal control.
So by design we will literary self-cannibalize an existing branch and co-locate a de novo branch in proximity or adjacent to an existing branch. So we will keep an eye on those states and I would say our perspective in the latter half of the year would be highly opportunistic.
I guess the penalty would be potentially over performing on the 41, but I won't give guidance on that right now.
David J. Chiaverini - BMO Capital Markets
Okay, understood and you have 41 in the first half of the year it's remarkable. So moving on to credit quality, any signs of the economy slowing in the markets you are in?
Thomas F. Fortin
No, I think from a demand perspective, certainly the first quarter was a good one for us. I have been asked a number of times of late, was there much impact, noticeable impact of the delays imposed by the internal revenue service on tax returns and we did not see that in our results.
In many ways we do benefit from having the diversity of our product set as well as the marketing channels, some of which are counter seasonal, counter cyclical. The first quarter is generally again a period when people use tax returns to pay down or pay off small loans, but conversely they also tend to use tax returns to use as a down payment for automobile purchases and given that that's 40%-42% of our asset base, it tends to be somewhat of a mitigating factor for Regional.
I think when you layer on top of that the fact that we made again a concerted effort to do what we are now calling off-cycle January and February live check mailings we saw a strong demand. Don, you want to speak about maybe the downstream quality of delinquencies and charge-offs.
Donald E. Thomas
Absolutely our (inaudible) which is our leading indicator has been improving for the last several months, which is always good. It's going the other way you start getting concerned and so it's actually quite good at the end of March and probably one of the best ratings we have seen in a long, long time if not the very best.
So we feel good about that. You will notice in our other income line which includes late fees that it's down.
And part of the reason it's down is because with a higher quality credit portfolio we are not seeing the volume of late charges coming through just because of the change in the portfolio. I think downstream we have good thoughts about where we are headed.
David J. Chiaverini - BMO Capital Markets
Great, thanks.
Thomas F. Fortin
Sure.
Operator
Thank you. Your next question comes from the line of David Scharf from JMP Securities.
David Scharf - JMP Securities
All right thanks for taking my questions. Tom I had a few follow-ups on the live check program.
First as we look at the acceleration in same-store receivables growth, is any of that impacted by how you direct the live check mailings? I mean these mailings ultimately have to get allocated to a particular location, correct and is there any sort of concentration geographically zip mailing or patterns and response rates that are driving the same-store metric.
Thomas F. Fortin
Yeah, Dave I mean we are always looking to balance the number of customers across the base of branches and I think you are actually correct, in our busiest branches we might actually hold off on mailing certain zip codes so as to not overload a busy branch with active accounts. The flip side to that is on our smaller locations, that need to grow as we might proportionately send more checks to that particular market place.
So at this point in time I think we are serving something like 5,500 almost 6,000 zip codes. And it's somewhat laborious to go through that every campaign.
But we do attempt to balance out the mailings to how busy the branches are.
David Scharf - JMP Securities
Okay got it. Also curious the states that you currently operate in with the physical location as well as the ones you're targeting, do any of those states or any futures states that you're looking to enter have restrictions or limitations on live checks?
Thomas F. Fortin
They do, until very recently the State of Georgia did not permit live check direct mail marketing. We're permitted under the state licenses that we just received through this acquisition to do live check mailings limited to the counties in which our branches are located.
We're a small participant and a new participant in Georgia so we're taking a very disciplined and deliberate approach. In fact we have -- we've recently submitted to state regulator our form of a live check and we're awaiting approval.
So it's somewhat of a patchwork from a regulatory perspective but other than what I've just described in Georgia there are no limitations beyond state driven disclosures with respect to live checks.
David Scharf - JMP Securities
Got it. And just a couple of kind of clean-up sort of modeling questions if you will.
Given your comments about the late tax refund season not really impacting you is it fair to say that we should not be thinking about average balances trending down in April as it -- there were a delayed response from the difficult pay down cycle in Q1. Sounds like the number you've reported is kind of a real normal seasonal March 31st number?
Thomas F. Fortin
Absolutely I think that number was $2,110 approximately, the average outstanding on a basis 244,000 active accounts. We've seen a slight decline in the average outstanding David primarily due to mix shift.
And it was noted that in terms of driving originations we certainly accelerated the small loan category through some of the programs and initiatives that we just talked about. So that's going to cause a slight decline in the average outstanding.
But I wouldn't describe materiality to that.
David Scharf - JMP Securities
Got it. And then lastly on the provisioning front when I look at last year, when I look at the four quarters the ending allowance rate as the spread above your charge-off rate in the quarter, it looked like it was starting with Q1, 70 then 70 then 90 then a 100 basis points spread.
It looks like in Q1 your provisioning rate, your ending allowances about a 100 basis points above your loss rate. Is that a good way to think about modeling the ending provision each quarter this year?
Donald E. Thomas
This is Don. And I'll answer that.
I think you can look at it that way, that's a reasonable approach to take.
David Scharf - JMP Securities
Okay so we shouldn't accept any change in that relationship based on some of these leading indicators in delinquency trend you're seeing?
Donald E. Thomas
Nothing significant.
David Scharf - JMP Securities
Got it. Thank you very much guys.
Thomas F. Fortin
Thanks, David.
Operator
Thank you. Your next question comes from the line of Daniel Furtado from Jefferies.
Please go ahead.
Daniel Furtado - Jefferies & Co.
Good evening everyone. Thank you for the opportunity.
The first question is just kind of conceptual. I know when the pawn and pay day space, one at the pay day space, there's been a big move towards the installment loan business in the sense that it's viewed to have lower regulatory risk, but then we look at your performance.
And obviously 36% year-over-year growth, certainly it feels like you are finding growth out there. Are you just not crossing tabs with this other consumer or is the pie big enough to spread amongst everybody who is operating in this space.
Thomas F. Fortin
Well I think both of the statements are true Dan. I would argue that we have virtually no or very little overlap with the pay day customer by the very nature of the product.
And as you well know with your coverage universe big difference between a $200 or $300 loan that's a 14 day instrument, a triple digit APRs and the prototypical regional loan which is obviously termed out to significantly longer maturity, a much bigger denomination, you really fundamentally different need on the part of the consumer. Having said that I guess I'll circle back to my earlier comment about breadth of the product set, and I think this is a part of a story that makes the regional story somewhat unique in this market place, no reliance on one particular product or one particular channel and frankly with the breadth of that, the reach of those products I think it allows us to tap into segments of growth that frankly many others in our industry have yet to really embrace.
Daniel Furtado - Jefferies & Co.
Got you, I appreciate the color there. And then one is little more on the modeling side.
I noticed that the -- and I apologize if you've talked about this but I didn't seem to hear it, the large loan look like they were down a little bit year-over-year, and that seems to be little bit atypical just in general for the last couple of years, and I am wondering if this is something that's more on the seasonal side that you saw on the large loan or what's really explaining the movement in the large loan balance. Thanks, Tom.
Thomas F. Fortin
Yeah, thank you Don, I will take the first part of that and I think Don wants to talk but you know you're correct, and really the reason in my view of the slight decline in the large installment loan category, this is the one product line out of the four in our core business model that we frankly just do nothing in the way of marketing. It's really more of an accommodation to customers who might evolve and grow out of the core small installment loan product and again we define that small installment loan category as a $300 to $2,500 loan.
Sometimes customers over time will evolve and say I need more than $2,500, but that's nothing that actively promote or market. We certainly don't send out live checks any larger than a couple of thousand dollars.
So really if you I think lack of effort other slices of the pie where we do put marketing dollars and resources to work are tending to outgrow the larger installment category. Do you want to add anything to that Don?
Donald E. Thomas
The only thing I will add to that is the acquisition last year in January of loans, and certainly the large loans were a big part of that acquisition. I believe we found that the underwriting for those loans allow just a little bit larger loan than we were accustomed to making and so as we've gone through the renewal processes for some of those customers.
We've renewed them to probably little a bit less than what the original loans may have been. So that's another contributing factor and may see itself kind of tapering off.
Daniel Furtado - Jefferies & Co.
Great, thanks for the color on that everybody, take care.
Thomas F. Fortin
Thank you
Operator
Thank you. The next question comes from the line of John Hecht from Stephens.
Please go ahead.
John Hecht - Stephens & Co.
Good afternoon, congrats on a good quarter and thanks for taking my questions. The first one if I recall on a vintage basis you were achieving profitability right around the year mark, going back a year from now when you opened a store.
With the multi-product format that's expanding and the live check program, can you comment on any increase in productivity with the time to profitability and then just generally speaking on how the vintages are doing at this part of the business cycle.
Thomas F. Fortin
Sure, John and this is Tom. Generally speaking what we've said in past call is that historically we've seen breakeven at the store level operating income line between months eight and 12.
And that certainly holds true in the most recent two years of de novo vintages. We've seen some decline in that breakeven which is a positive.
And again in part this relates back to the comments I had earlier about so a called back fill de novo. So if you remember that concept unlike a pure Greenfield de novo where we go into a market where we have never done business, we don't know customers, customers don't know us.
In the back fill environment we can actually seed a back fill de novo with the existing current accounts from an adjacent and existing regional branch, and it stands to reason that if on day one we can open the doors of that back fill de novo with a few to several hundred existing accounts, it certainly accelerates the profitability of those branches. So I won't hazard a guess but I would suggest that is a net positive in terms of modeling the unit economics of our stores.
The other thing I would add that we've taken a concerted focus on certainly in the last vintage is is really pre-marketing our stores prior to the opening with our live check programs. It used to be that on day one we'd open the doors and start from scratch.
You actually want to start 30 to 45 days before you expect to open the doors. And we've gotten to the point with our marketing analytics where we're very precise in terms of how we really target the households within our market catch basin.
We want to get the doors swinging as close to grand opening day as possible. So I would simply comment John that's been an added factor in helping improve time to breakeven and profitability.
With respect to these vintages we do look back on a yearly basis I would say we're encouraged by what we've seen of late and we continue to focus on efficient cost structure and building branches, timing in terms of opening them. And efficiency once the doors are open.
John Hecht - Stephens & Co.
Okay, that's great color. And second question is on topic of Georgia I mean you mentioned it's a tactically important region for you to be in.
You guys generally speaking would do a demographic analysis to identify opportunities for store builds and so forth, I mean how big could Georgia be. And how important is it for say this year and maybe next in terms of store builds.
Thomas F. Fortin
It's not important this year or next year in terms of store builds. And John I said in my prepared comments and I'll reiterate here.
We are a new participant to the state. As you've seen us do in other states that we recently entered New Mexico, Oklahoma and four and five years ago Tennessee and Alabama we don't (curtail) in the pond.
We take a very disciplined methodical approach. We want to make sure we fully understand unit economics, the operating environment, a brand new regulatory and political and legislative climate, before we attempt to scale anything up.
I would think that, that will come certainly beyond the year. But there's no question from a demographic point of view Georgia is a big opportunity for us.
From our headquarters here in Greenville we can reach millions of people in just the northern third of the state of Georgia. So we're certainly doing a lot of the preparatory analytical work thinking about de novo opportunities.
We're also thinking about potential small to midsize acquisitions in the state as well. But I think you'll see us rolling out Georgia in the coming years in a very measured fashion.
John Hecht - Stephens & Co.
Okay, and final question is what if you could give us an update on the private, the potential private securitization for your auto loan portfolio?
Thomas F. Fortin
I really don't have any commentary on that. We expect to commence a process this month to select an agent or agents for a proposed transaction.
But I'm not in a position to talk about the potential scale or scope of that transaction. I will say that the (unbilled) securitization market remains very positive.
There been a number of recent comparable and precedent transactions that we think were well executed that profile and frame up well with what we're thinking about. And frankly are very attractively priced.
It's been a very resilient asset category. And our sense is that there's strong demand on the part of institutional investor.
So we've talked and planned about this for more than a year. I hope to have more news that I can share with you within the next 30 days about our process.
John Hecht - Stephens & Co.
I appreciate that, just if you could give me a sense of -- and maybe Don could share some of this, from the time you select an agent to the time to completion, do you -- I mean is there's any thoughts on that timeframe?
Donald E. Thomas
Yeah I think just talking about averages it is easily six months to get a deal done and lot of things have to be completed on the way.
John Hecht - Stephens & Co.
Okay, great, understood and thanks for the color.
Thomas F. Fortin
Thanks, John.
Operator
Thank you, your next question comes from the line of Bill Dezellem of Tieton Capital Management.
William J. Dezellem - Tieton Capital Management
Thank you. You did address the large loans the decline in receivable balance and mentioned that it was the one area that you historically have not promoted or marketed.
With that in mind do you have thoughts that are different going forward than what you had done in the past to promote that segment or do you believe it will continue to be a by-product of the smallest loans.
Thomas F. Fortin
Hi, Bill this is Tom. I guess I will take that question.
We really don't have any focused plans, to actively promote the large loan category. I think your statement is correct it's really more of a byproduct of small installment customer who migrates up to a larger loan.
William J. Dezellem - Tieton Capital Management
Thank you.
Thomas F. Fortin
Sure.
Operator
Thank you. The next question comes from the line of David Scharf from JMP Securities.
David Scharf - JMP Securities
Hi, just a quick follow-up, Tom are you able to provide a same-store growth figure, either sales and/or receivable that excludes live check mailings, just to give us a sense for how the kind of traditional good traffic customer is trending?
Thomas F. Fortin
At this time we really -- it's mixed in with our loan management system and we don't yet have the ability to parse that out.
David Scharf - JMP Securities
Got it. Thank you.
Thomas F. Fortin
Sure.
Operator
Thank you very much. We have no further questions in the question queue for you and I'd like to turn the call over to management for closing remarks.
Thomas F. Fortin
Well, thank you very much and for all participants on the call, we very much appreciate your ongoing support for Regional. We are quite pleased with our first quarter.
We think we are well launched for fiscal 2013. And we look forward to future quarterly calls where we can share our results with you.
Thanks very much.
Operator
Thank you for attending today's conference. This concludes the presentation.
You may now disconnect. Good day.