Slide 1: 3Q 24 Earnings Presentation
3Q 24 Earnings Presentation November 6, 2024
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 24 Highlights
3Q 24 Highlights 557,400 29.9% $0.76 Customer Accounts Interest and Fee Yield* Diluted Earnings Per Share Up 5.1% YoY Up 90 basis points YoY Inclusive of estimated hurricane impacts of $0.42 per share $1.82 billion 6.9% 3.7% Net Finance Receivables 30+ Delinquencies Dividend Yield* Up 3.9% YoY 3Q 24
Slide 4: 3Q 24 Financial Highlights
3Q 24 Financial Highlights • Net income of $7.7 million; diluted EPS of $0.76, down $0.15 versus 3Q 23, inclusive of estimated hurricane impacts of $4.3 million, or $0.42 per share • Record total revenue of $146.3 million increased $5.5 $ Chg % Chg million, or 3.9%, year-over-year due to the impact
Slide 5: Originations Trend
Originations Trend • Branch originations in 3Q 24 were up year-over-year by 5.3%, while digital originations remained relatively flat year- over-year. Direct mail originations were down year-over-year by 9.1%, as we de-emphasized large loan convenience check offers to new borrowers as part of our cr
Slide 6: Controlled Portfolio Growth and Solid Small Loan Growth
Controlled Portfolio Growth and Solid Small Loan Growth Ending Net Finance Receivables ($ in millions) vs. 2Q 24 vs. 3Q 23 2Q 22 3Q 22 4Q 22 1Q 23 2Q 23 3Q 23 4Q 23 1Q 24 2Q 24 3Q 24 $ Chg I/(D) % Chg I/(D) $ Chg I/(D) % Chg I/(D) Large loans (> $2,500) $1,060 $1,116 $1,208 $1,212 $1,238 $1,272 $1,2
Slide 7: Revenue and Average Net Finance Receivables Trends
Revenue and Average Net Finance Receivables Trends Total Revenue ($ in millions) $135.4 $140.9 $141.7 $144.3 $143.0 $146.3 • Record total revenue of $146.3 million grew $122.9 $131.5 $132.0 $133.5 3.9% year-over-year, inclusive of a 250 basis Other Income point impact from lower insurance income Ins
Slide 8: Recent Credit Trends – Continued Year-Over-Year Improvement
Recent Credit Trends – Continued Year-Over-Year Improvement 30+ & 90+ Delinquency Rates ($ in millions) 13.9% $128.4 $126.0 $122.9 $124.2 $122.7 $119.8 $121.2 $116.0 $116.3 $64.6 $63.0 $66.0 $55.4 $62.6 11.9% 30-89 Days $57.7 $67.6 $52.6 $58.6 • 3Q 24 delinquency of 6.9% improved 40 90-179 Days $94.
Slide 9: Front Book 86% of Total Portfolio
Front Book 86% of Total Portfolio Front Book/Back Book Mix ($ in millions) (September 30, 2024) • Higher-credit-quality ENR from the front book is $1,820 $126 (1) $192 (2) performing as expected and becoming a larger portion of the portfolio • Front book was 86% of the total portfolio, an increase f
Slide 10: Reserved For Stressed Credit Losses
Reserved For Stressed Credit Losses • In 3Q 24, we increased our loan loss reserves by $6.7 million due to portfolio growth ($4.6 million) and hurricanes ($2.1 million) that occurred during the third quarter of 2024. The $2.1 million provision related to hurricanes increased our reserve rate by 20 b
Slide 11: Continued Focus on Operating Leverage & Expense Control
Continued Focus on Operating Leverage & Expense Control Operating Expense Ratio ($ in millions) $64.8 $62.1 $62.5 $60.4 $60.1 $59.3 $58.2 $56.9 $55.1 $54.1 Total G&A Expense Operating Expense Ratio • G&A expense increased only 14.9% 14.8% $0.4 million, or 0.6%, from 3Q 14.7% 14.0% 14.4% 13.9% 23 whi
Slide 12: Cost of Funds
Cost of Funds • 3Q 24 cost of funds* increased 30 basis points year-over-year due to the maturation of lower-cost, fixed-rate debt Interest Expense ($ in millions) $19.4 $17.5 $17.5 $17.9 $16.8 $16.2 $16.9 $14.9 $11.9 $7.6 $19.4 $16.8 $16.9 $17.5 $17.5 $17.9 $16.2 $14.9 Interest Expense $10.6 $11.8
Slide 13: Strong Funding Profile
Strong Funding Profile Unused Capacity ($ in millions) $557 $555 $552 (1) $482 • As of September 30, 2024, total unused capacity was $482 million(1) (subject to borrowing base) • Available liquidity of $155 million as of September 30, 2024 2021 2022 2023 3Q 24 • Fixed-rate debt represented 82% of to
Slide 14: 3Q 24 Results and Outlook
3Q 24 Results and Outlook Key Metrics 3Q 24 Results 4Q 24 Outlook ENR Growth $46.0 million ~$65.0 - $70.0 million ANR Growth $44.0 million ~$63.5 million 10 basis points ~60 basis points Total Revenue Yield sequential decrease sequential increase Net Credit Losses $47.6 million ~$50.5 million Reserv
Slide 15: Appendix
Appendix REGIONAL 15 MANAGFMENT
Slide 16: Higher ENR Per Branch is Driving Efficiency
Higher ENR Per Branch is Driving Efficiency • Branch consolidations and our new-state, lighter-footprint strategy with larger branches drove higher ENR per branch • Same store* year-over-year growth rate of 3.7% in 3Q 24 vs. 4.9% in the prior-year period • The less than 1 year branch cohort as of 3Q
Slide 17: Digitally Sourced Originations
Digitally Sourced Originations • Digital volume represented 29.0% of our total new borrower volume in 3Q 24 • Large loans represented 71.1% of new borrower digitally sourced loans booked in 3Q 24 Digitally Sourced Origination Volume ($ in millions) $56.3 $53.5 $50.7 $50.6 $50.7 $47.7 $43.4 $39.9 Lar
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 Private Securitization Securitizations Debt balanc
Slide 19: Consolidated Income Statements
Consolidated Income Statements $ in thousands 3Q 24 3Q 23 2023 2022 2021 2020 Revenue Interest and fee income $ 133,932 $ 125,018 $ 489,698 $ 450,854 $ 382,544 $ 335,215 Insurance income, net 7,422 11,382 44,529 43,502 35,482 28,349 Other income 4,984 4,478 17,172 12,831 10,325 10,342 Total revenue
Slide 20: Consolidated Balance Sheets
Consolidated Balance Sheets $ in thousands 3Q 24 3Q 23 2023 2022 2021 2020 Cash $ 4,745 $ 7,413 $ 4,509 $ 3,873 $ 10,507 $ 8,052 Net finance receivables 1,819,756 1,751,009 1,771,410 1,699,393 1,426,257 1,136,259 Unearned insurance premiums (46,508) (48,764) (47,892) (51,008) (47,837) (34,545) Allow
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 24 3Q 23 2023 2022 2021 2020 Total assets $ 1,821,831 $ 1,765,340 $ 1,794,527 $ 1,724,987 $ 1,459,662 $ 1,103,856 Less: Intangible assets 22,250 15,048 15,846 12,122 9,517 8,689 Tangible assets (non-GAAP) 1,799,581 1,750,292 1,778,681 1,712,865
Slide 23: Glossary
Glossary • ANR – average net finance receivables • Back book – loans originated from 4Q 21 to 3Q 22 and all delinquent renewals associated with loans originated prior to 4Q 22 • Cost of funds – annualized interest expense as a percentage of average net finance receivables • Debt balance – the balanc
Slide 24: Regional Management
¢ REGIONAL = MANAGEMENT. nyse NYSE