Regional Management Corp. · NYSE:RM
Regional Management — Q4 2021 Earnings Presentation
19 slides from Regional Management's earnings presentation, Feb 9, 2022
Slide 1: Earnings Presentation
Earnings Presentation February 9th, 2022
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: 4Q 2021 Financial Highlights
4Q 2021 Financial Highlights dollars in millions $ Chg % Chg Net income of $20.8 million, or $2.04 diluted EPS 4Q 21 4Q 20 (except per share amounts) B/(W) B/(W) Interest & Fee Income $ 107.1 $ 86.8 $ 20.3 23.3% Total revenue increased $22.0 million, or 22.6% Insurance Income, Net 9.4 7.9 1.5 19.4%
Slide 4: Record Originations & Low Delinquencies
Record Originations & Low Delinquencies ($ in millions) Quarterly Origination Trend $420.7 $434.4 $353.5 $363.9 $364.0 $377.7 $312.5 Digital Originations $232.6 $174.2 $234.8 4Q 21 originations (all-time high), Direct Mail Branch Originations are up 19.3% year-over-year 3Q 19 4Q 19 1Q 20 2Q 20 3Q 20
Slide 5: Strong Portfolio Growth and Solid Small Loan Growth
Strong Portfolio Growth and Solid Small Loan Growth Ending Net Receivables (ENR) vs. 3Q 21 vs. 4Q 20 ($ in millions) 3Q 19 4Q 19 1Q 20 2Q 20 3Q 20 4Q 20 1Q 21 2Q 21 3Q 21 4Q 21 $ Chg I/(D) % Chg I/(D) $ Chg I/(D) % Chg I/(D) Small Loans (≤ $2,500) $454 $468 $440 $380 $383 $403 $371 $381 $420 $445 $2
Slide 6: Digitally Sourced Originations – Record High
Digitally Sourced Originations – Record High Digital originations are sourced from either our affiliate partnerships or directly from our website All digitally sourced loans are underwritten in our branches by our custom credit scorecards and serviced by our branches Our new digital volume represent
Slide 7: Record Revenue Up 22.6% on Strong Receivable Growth
Record Revenue Up 22.6% on Strong Receivable Growth ($ in millions) Total Revenue $119.5 $111.5 Total revenue yield decreased 60 basis Other Income $98.0 $96.1 $97.4 $97.7 $99.7 points year-over-year and 80 basis $91.7 Insurance Income $89.9 $90.5 points sequentially Interest and Fee Income Interest
Slide 8: Lower Net Credit Losses on Low Delinquency Levels
Lower Net Credit Losses on Low Delinquency Levels ($ in millions) $79.5 30+ & 90+ Delinquency Rates $84.9 $39.2 $35.5 $72.4 $68.9 $35.0 $29.6 $60.5 $61.3 90-179 Days 30-89 Days $49.5 $49.9 $27.1 $47.7 $26.0 4Q 21 delinquency is up 70 basis points 30+ DQ % 6.5% 7.0% 6.6% $24.5 $22.8 $26.7 $42.8 6.0%
Slide 9: Reserve For Stressed Credit Losses
Reserve For Stressed Credit Losses In 4Q 21, we reserved $10.3 million primarily for $112.0 million in sequential portfolio growth and released COVID-19 related reserves of $1.1 million based on the macroeconomic model. The 4Q 21 ending reserve included $14.4 million of remaining COVID-19 reserves.
Slide 10: Operating Expense Ratio Trend
Operating Expense Ratio Trend Operating expense ratio decreased 0.1% over prior year to 16.3% • Branch optimization costs of $0.9 million increased the ratio 30 basis points in 4Q 21 ($ in millions) Operating Expense Ratio $55.5 $46.4 $47.8 $46.2 $45.8 $43.8 $44.8 $40.2 $40.9 $41.5 17.0% Total G&A E
Slide 11: Cost of Funds Remains Low
Cost of Funds Remains Low ($ in millions) Interest Expense 4Q 21 annualized interest expense as a percentage of ANR improved 100 basis points Interest Expense from the prior-year period % of ANR (1) $10.3 $10.3 $10.2 $9.3 $9.3 Favorable market value increases on interest rate $9.1 $8.8 caps impacted
Slide 12: Strong Funding Profile
Strong Funding Profile ($ in millions) Debt Capacity $722 Unused Warehouse Capacity $647 Unused Senior Revolver Capacity $573 $212 $557 $493 $507 $151 $438 $89 $400 $94 $168 $369 $98 $311 $83 $70 $79 $510 $34 $484 $496 As of December 31, 2021, total unused capacity was $557 $277 $291 $329 $395 $413
Slide 13: Appendix
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Slide 14: Same Store Portfolio Growth
Same Store Portfolio Growth Same store(1) year-over-year growth rate of 23.3% in 4Q 21 vs. 0.1% in the prior-year period Considerable growth opportunities in our existing branch footprint, particularly from branches opened within the last 3 years ($ in thousands) Ending Net Finance Receivables Per B
Slide 15: 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 Size $500 milli
Slide 16: Consolidated Income Statements
Consolidated Income Statements 4Q 21 4Q 20 2021 2020 2019 2018 in thousands Revenue Interest and fee income $ 107,117 $ 86,845 $ 382,544 $ 335,215 $ 321,169 $ 280,121 Insurance income, net 9,423 7,889 35,482 28,349 20,817 14,793 Other income 2,944 2,710 10,325 10,342 13,727 11,792 Total revenue 119,
Slide 17: Consolidated Balance Sheets
Consolidated Balance Sheets 2021 2020 2019 2018 in thousands Cash $ 10,507 $ 8,052 $ 2,263 $ 3,657 Net finance receivables 1,426,257 1,136,259 1,133,404 951,183 Unearned insurance premiums (47,837) (34,545) (28,591) (18,940) Allowance for credit losses (159,300) (150,000) (62,200) (58,300) Net finan
Slide 18: 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 19: Non-GAAP Financial Measures (Cont’d)
Non-GAAP Financial Measures (Cont’d) in thousands 2021 2020 2019 2018 Total assets $ 1,459,662 $ 1,103,856 $ 1,158,540 $ 956,395 Less: Intangible assets 9,517 8,689 9,438 10,010 Tangible assets (non-GAAP) 1,450,145 1,095,167 1,149,102 946,385 Debt 1,107,953 768,909 808,218 660,507 Total stockholders