Regional Management Corp. · NYSE:RM
Regional Management — Q3 2021 Earnings Presentation
22 slides from Regional Management's earnings presentation, Nov 2, 2021
Slide 1: 3Q 2021 Earnings Call Supplemental Presentation
3Q 2021 Earnings Call Supplemental Presentation November 2, 2021
Slide 2: Legal Disclosures
Legal Disclosures This document contains summarized information concerning Regional Management Corp. (the “Company”) and the Company’s business, operations, financial performance, and trends. No representation is made that the information in this document is complete. For additional financial, stati
Slide 3: 3Q 2021 Financial Highlights
3Q 2021 Financial Highlights dollars in millions $ Chg % Chg 3Q 21 3Q 20 (except per share amounts) B/(W) B/(W) Interest & Fee Income $99.4 $81.3 $18.0 22.2% Insurance Income, Net 9.4 6.9 2.6 37.3% Other Income 2.7 2.4 0.3 13.3% Total Revenue 111.5 90.5 20.9 23.1% Provision For Credit Losses 26.1 22
Slide 4: Originations Increase & Delinquencies Remain Low
Originations Increase & Delinquencies Remain Low Quarterly Origination Trend $200.0 Monthly Origination Trend $450.0 $420.7 $377.7 $175.0 $156.1 $400.0 $363.9 $364.0 $147.6 $353.7 $353.5 $350.0 $150.0 $133.0 $135.7 $312.5 $128.9 Millions $300.0 $125.0 Millions $232.6 $234.8 $97.1 $250.0 $100.0 $83.9
Slide 5: Record High Portfolio Growth and Solid Small Loan Growth
Record High Portfolio Growth and Solid Small Loan Growth Ending Net Finance Receivables (ENR) vs. 2Q 21 vs. 3Q 20 in millions 2Q 19 3Q 19 4Q 19 1Q 20 2Q 20 3Q 20 4Q 20 1Q 21 2Q 21 3Q 21 $ Chg I/(D) % Chg I/(D) $ Chg I/(D) % Chg I/(D) Small Loans (≤ $2,500) $435 $454 $468 $440 $380 $383 $403 $371 $38
Slide 6: Digitally Sourced Originations – Record High
Digitally Sourced Originations – Record High • Digital originations are sourced from either our affiliate partnerships or directly from our website • All digitally sourced loans are underwritten in our branches by our custom credit scorecards and serviced by our branches • Our new digital volume rep
Slide 7: Revenue and Average Net Finance Receivables Trends
Revenue and Average Net Finance Receivables Trends Revenue $120 $111.5 • Total revenue yield increased 80 $110 basis points year-over-year and 40 $98.0 $97.4 $97.7 $99.7 $96.1 basis points sequentially $100 $91.7 $89.9 $90.5 $84.3 Millions $90 $80 • Interest and fee yield increased 50 $70 basis poin
Slide 8: Lower Net Credit Losses on Low Delinquency Levels
Lower Net Credit Losses on Low Delinquency Levels Net credit loss rate improved 280 basis points versus the prior-year period on low delinquency levels Net Credit Loss Rates 12.0% 10.5% 10.6% 10.4% 10.0% Annualized % of ANR 9.0% 8.1% 7.8% 7.7% 8.0% 7.4% 6.9% 6.0% 5.0% 4.0% 2Q 19 3Q 19 4Q 19 1Q 20 2Q
Slide 9: Delinquency Remains Low (Beginning to Normalize)
Delinquency Remains Low (Beginning to Normalize) 3Q 21 delinquency is flat year-over-year and down 180 basis points from 3Q 19 • 30+ days past due of 4.7% is equal to prior year • 30+ days past due of $61.3 million (loan loss reserves of $150.1 million) 30+ & 90+ Delinquency Rates $90.0 12.0% $79.5
Slide 10: Reserved For Stressed Credit Losses
Reserved For Stressed Credit Losses In 3Q 21, we reserved $12.7 million primarily for $130.8 million in sequential portfolio growth and released COVID-19 related reserves of $2.0 million based on the macroeconomic model $150.0 (1) $30.4 $12.7 $150.1 $139.6 $6.1 $139.4 ($2.7) ($6.6) ($3.8) $122.3 ($2
Slide 11: Operating Expense Ratio Trend
Operating Expense Ratio Trend The following items impacted the operating expense ratio in 3Q 21: • Incremental deferrals associated with digital loan origination costs of $1.5 million decreased the ratio by 50 basis points • Branch optimization costs of $0.7 million increased the ratio by 30 basis p
Slide 12: Cost of Funds Remains Low
Cost of Funds Remains Low $12.0 12.0% $10.3 $10.3 $10.2 $10.0 $9.8 10.0% $9.1 $9.3 $9.3 $8.8 $7.8 $8.0 8.0% $7.1 % of ANR (1) Millions $6.0 6.0% 4.1% 4.0% 3.7% 3.6% 3.5% $4.0 3.4% 3.3% 4.0% 2.6% 2.8% 2.8% $2.0 2.0% $- - 2Q 19 3Q 19 4Q 19 1Q 20 2Q 20 3Q 20 4Q 20 1Q 21 2Q 21 3Q 21 Interest Expense % o
Slide 13: Strong Funding Profile
Strong Funding Profile $800 Debt Capacity $722 • As of September 30, 2021, total unused $647 capacity was $722 million (subject to $700 $573 borrowing base) $600 $212 $493 $507 $151 • Available liquidity of $194 million as of $89 Millions $500 $438 September 30, 2021 $369 $400 $98 $94 $368 $400 $83
Slide 14: Appendix
@ REGIONAL MANAGEMENT Appendix
Slide 15: Items Impacting 3Q 21 Results
Items Impacting 3Q 21 Results in millions Pre-Tax Net (2) (except per share amounts) Income/(Loss) Income/(Loss) Diluted EPS Provision for credit losses ($26.1) ($19.6) ($1.86) Net credit losses (15.4) (11.5) (1.10) Change in allowance (10.7) (8.0) (0.76) Rate cap market value impact (0.3) (0.2) (0.
Slide 16: Significant Capacity to Absorb Losses
Significant Capacity to Absorb Losses Our balance sheet is in a strong position to absorb losses Absorption Capacity (in millions) 3Q 21 Total stockholders' equity $277.5 Allowance for credit losses $150.1 Total absorption capacity $427.6 Absorption capacity as % of net finance receivables 32.5% TTM
Slide 17: Same Store Portfolio Growth
Same Store Portfolio Growth • Same store(1) year-over-year growth rate of 22.7% in 3Q 21 vs. a decrease of 1.5% in the prior-year period • Considerable growth opportunities in our existing branch footprint, particularly from branches opened within the last 3 years $4,000 Ending Net Finance Receivabl
Slide 18: Diversified Liquidity Profile
Diversified Liquidity Profile • Long history of liquidity support from a strong group of banking partners • Diversified funding platform with a senior revolving facility, warehouse facilities, and securitizations Senior Revolver Warehouse Facilities Securitizations Size: $640 million Size: $300 mill
Slide 19: Consolidated Income Statements
Consolidated Income Statements in thousands 3Q 21 3Q 20 YTD 21 YTD 20 2020 2019 2018 2017 Revenue Interest and fee income $ 99,355 $ 81,306 $ 275,427 $ 248,370 $ 335,215 $ 321,169 $ 280,121 $ 249,034 Insurance income, net 9,418 6,861 26,059 20,460 28,349 20,817 14,793 13,061 Other income 2,687 2,371
Slide 20: Consolidated Balance Sheets
Consolidated Balance Sheets in thousands 3Q 21 3Q 20 2020 2019 2018 2017 Cash $ 8,146 $ 4,292 $ 8,052 $ 2,263 $ 3,657 $ 5,230 Net finance receivables 1,314,233 1,059,554 1,136,259 1,133,404 951,183 834,045 Unearned insurance premiums (44,142) (30,024) (34,545) (28,591) (18,940) (16,582) Allowance fo
Slide 21: Non-GAAP Financial Measures
Non-GAAP Financial Measures In addition to financial measures presented in accordance with generally accepted accounting principles (“GAAP”), this presentation contains certain non-GAAP financial measures. The company’s management utilizes non-GAAP measures as additional metrics to aid in, and enhan
Slide 22: Non-GAAP Financial Measures (Cont’d)
Non-GAAP Financial Measures (Cont’d) in thousands 3Q 21 3Q 20 2020 2019 2018 2017 Total assets $ 1,313,558 $ 1,037,559 $ 1,103,856 $ 1,158,540 $ 956,395 $ 829,483 Less: Intangible assets 9,184 8,677 8,689 9,438 10,010 10,607 Tangible assets (non-GAAP) 1,304,374 1,028,882 1,095,167 1,149,102 946,385