Curo — Debt Investor Presentation (October 2023)
21 slides from Curo's debt investor presentation, Oct 23, 2023
Slide 1: ABS Investor Presentation October 2023
ABS Investor Presentation October 2023
Slide 2: Disclaimer
Disclaimer IMPORTANT: You must read the following information before continuing to the rest of the presentation, which is being provided to you for informational purposes only. FORWARD-LOOKING STATEMENTS This presentation contains forward-looking statements. These forward-looking statements include
Slide 3: Key Management
Key Management 3 Rusty Foster SVP, Corporate Treasurer ▪ Joined CURO in 2013, and oversees Treasury and Capital Markets ▪ 23+ years of treasury management and capital markets experience within a variety of industries, including 10 years in the financial services industry Doug Clark Chief Executive O
Slide 4: Company Overview
4 Company Overview ▪ Omni-channel consumer finance company serving consumers in the U.S. and Canada ▪ Operates in almost 500 branches across 13 states in the U.S. and nearly 150 branches in Canada, eight provinces with retail locations and eight provinces and one territory online ▪ Secured and unsec
Slide 5: Strategic Transformation
Strategic Transformation 5 Acquisition of First Heritage Credit Expands <36% APR lending capabilities, adding new strategic geographies Sale of Legacy U.S. Direct Lending Business Accelerates transition from and reduces exposure to high APR loan products Acquisition of Heights Entrance into the <36%
Slide 6: Public Company Discipline
Public Company Discipline 6 PUBLIC COMPANY TRANSPARENCY Publicly available SEC filings and disclosures EXTERNAL AUDIT External financial statement and SOX audit performed by Deloitte COMPLIANCE AND RISK ▪ Experienced robust compliance team; CCO reports to the board ▪ Enterprise Risk Framework implem
Slide 7: U.S. Direct Lending and Canada Direct Lending
U.S. DIRECT LENDING Secured and unsecured installment loan products to near-prime and non- prime consumers as well as credit insurance and other ancillary financial products in almost 500 branches across 13 states. Direct Lending by Geography 7 CANADA DIRECT LENDING Near-prime and non-prime open-end
Slide 8: Direct Lending (U.S.) Overview
Direct Lending (U.S.) Overview 8 Overview: • Gross AR >$700M • Almost 500 branches across 13 states • Near-prime and non-prime, both secured and unsecured • Ongoing shift to larger, lower rate loans decreases regulatory risk Loan Characteristics1 ≤ 36% APR > 36% APR % of Portfolio 51% 49% Avg Origin
Slide 9: Direct Lending (Canada) Overview
Direct Lending (Canada) Overview 9 Open-end Loan Characteristics1,2 Avg Original Balance ~C$3,500 Avg Term n/a2 Avg Credit Vision Score 627 Avg Yield3 ~58% 1 As of 6/30/23, all values are rounded 2 Our primary product in Canada is an open-ended product 3 Avg Yield = (Revenue / Average Receivables) a
Slide 10: Our Typical Customer in the U.S.
Our Typical Customer in the U.S. 10 Average Monthly Net Income ~$2,300 Average FICO 626 Home Ownership 46% Avg Years at Residence 10.2 Note: The above demographics are as of 9/30/2023
Slide 11: Disciplined and gradual receivables growth
Disciplined and gradual receivables growth 11 ($ Millions) 1 Excludes Legacy U.S. Direct Lending business which was sold during 3Q22 1
Slide 12: Delinquency Rates Remain Relatively Stable
Delinquency Rates Remain Relatively Stable ($ Millions) 12 Canada U.S. Total Direct Lending 1 Source: 2Q23 Earnings Presentation 1 Implemented change in charge-off policy in Canada during 1Q23
Slide 13: Credit Quality Improving
Credit Quality Improving Highlights: • In the U.S., Direct Lending net charge-offs ("NCOs") declined sequentially • In Canada, 2Q23 NCOs reflect a full period of the change in charge-off policy, while 1Q23 NCOs were artificially low due to this change in policy. Excluding the change in policy during
Slide 14: Responsible Growth Priorities
Responsible Growth Priorities 14 • Build and introduce new credit models • Introduce new tools / capabilities for underwriting and preventing fraud • Standardize underwriting and marketing programs across First Heritage and Heights • Expand secured lending programs in U.S. • Open additional offices
Slide 15: More than half of our debt is fixed rate
15 More than half of our debt is fixed rate 57% 43% Fixed1 vs Variable of Funded Debt Fixed Variable (Millions, rounded) Fixed / Variable Maturity Date Effective Interest Rate Borrowing Capacity Outstanding as of 06/30/23 Corporate Debt: 1.0L Term Loan Fixed Aug-27 18.0% n/a $167.5 1.5L Senior Notes
Slide 16: U.S. Portfolio & Credit Trends (≤ 36% APR)
U.S. Portfolio & Credit Trends (≤ 36% APR)
Slide 17: Portfolio Trends (≤ 36% APR)
Portfolio Trends (≤ 36% APR)1,2 171 First Heritage acquired in July 2022 and reflected in data accordingly 2 Data reflects averages 610 620 630 640 FICO 28% 29% 30% 31% APR 37 38 39 40 41 42 43 44 Original Term $4,000 $4,250 $4,500 $4,750 $5,000 Original Balance
Slide 18: Performance Trends (≤ 36% APR)
Performance Trends (≤ 36% APR)1 181 First Heritage acquired in July 2022 and reflected in data accordingly 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 60+ dpd 30+ dpd 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% Net Annualized Loss 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% Total Pmt Rate Prin Pmt Rate $0 $50 $100 $150 $200 $
Slide 19: = xo) c o Q. 2. <
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Slide 20: Updated 3Q 2023 Outlook
Updated 3Q 2023 Outlook Excluding Flexiti Strengthen our Foundation Execute with Excellence Grow Responsibly Continue to maintain adequate liquidity and capacity for growth EOP Receivables: $1.23-1.28B Revenue: $165-170MM Net Charge-off: 17.0-19.5% Operating Expenses: $90-100M Note: There have been
Slide 21: Slide 21
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