Regional Management Corp. (NYSE:RM), a diversified specialty consumer finance company, announced today the launch of a secondary offering of 2,040,065 shares of its common stock. All of the shares are being offered by: (i) Palladium Equity Partners III, L.P., an existing stockholder of the Company and an affiliate of Palladium Equity Partners; (ii) Parallel 2005 Equity Fund, LP, an existing stockholder of the Company and an affiliate of Parallel Investment Partners; (iii) entities affiliated with Richard A. Godley, a director, existing stockholder and founder of the Company; and (iv) C. Glynn Quattlebaum, President and Chief Operating Officer of the Company and an existing stockholder and founder of the Company. Regional Management will not sell any shares or receive any proceeds from the offering. Stephens Inc. and Keefe, Bruyette & Woods, Inc. are serving as joint book-running managers for the offering, and FBR Capital Markets & Co. is serving as the co-manager. The selling stockholders have granted the underwriters an option for 30 days to purchase up to an additional 306,009 shares of common stock. In connection with the secondary offering, the Company provided an update on its implementation of internal controls over financial reporting as required by the Sarbanes–Oxley Act of 2002, stating that it expects to be fully compliant by the end of this year. However, as an “emerging growth company” under the Jumpstart Our Business Startups Act, the Company’s independent auditors are not required to report on the effectiveness of the Company’s internal controls until the Company no longer qualifies as an “emerging growth company.” In connection with its internal control implementation work, the Company discovered that non-income based franchise taxes in certain states were not properly expensed when incurred. Although $561,000 of the taxes have been paid and no taxes are past due, the Company will record in its financial results for the fourth quarter of 2013 an operating expense of approximately $607,000 relating to these franchise taxes, which will reduce fourth quarter diluted earnings per share by approximately $0.03. Approximately $310,000 of the operating expense relates to 2011 and 2012, with the remainder pertaining to 2013. Management does not believe the amounts related to any quarter or any year are material; therefore, no restatement of the Company's prior financial statements is necessary. The Company, in consultation with its advisors, has determined that the Company’s incorrect recording of the franchise taxes is a “significant deficiency” (as defined under standards established by the American Institute of Certified Public Accountants). Management has identified and has implemented the necessary corrections to its accounting and internal control structure to fully remediate the significant deficiency, and expects that it will be able to certify in its 2013 annual report on Form 10-K that its internal controls over financial reporting are effectively designed, in place and functioning properly as of December 31, 2013.