Regional Management Corp. · NYSE:RM
Regional Management — SFIG Vegas Conference 2018
22 slides from Regional Management's conference presentation, Feb 26, 2018
Slide 1: Regional Management Corp. SFIG Vegas Conference
Regional Management Corp. SFIG Vegas Conference February 26–27, 2018
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation, the related remarks, and the responses to various questions may contain various “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, which represent Regional Management Corp.’s expectations or beliefs concer
Slide 3: Company Overview
Company Overview • Consumer Finance Installment Lender • 30 Years of Operating History • Brick-and-Mortar Model with Strategic Digital Partnerships • Headquartered in Greer, SC • Operations in the Southeast, Southwest, and Mid-Atlantic • Near-Prime to Non-Prime Customer Base • Parent Company is a De
Slide 4: Operating History
Operating History RM Completes Portfolio Migration to RM Founded Private RM Enters Reaches $500 RM Enters in South Equity Invests Nortridge Loan Oklahoma Million in Virginia Carolina in RM Size Management System 1987 2004 2007 2009 2011 2012 2013 2014 2015 2016 2017 2018 RM Operates RM Closes RM Ent
Slide 5: Management Team and Board of Directors
Management Team Board of Directors Peter Knitzer President and Chief Executive Officer John Schachtel Don Thomas Dan Taggart Jim Ryan Joseph Manavalan Ralph Warchol Brian Fisher Chief Operating Chief Financial Chief Risk Chief Marketing Chief Digital Chief Information General Counsel Officer Officer
Slide 6: Deep Management Experience
Deep Management Experience • 30+ years of consumer financial services experience Peter Knitzer President and • Spent 14 years at Citi in various senior roles, including Chairman & CEO of Citibank North America CEO President and Director at E*TRADE Bank • Prior to joining Regional, was EVP and Head o
Slide 7: Strong Corporate Governance and Board of Directors
Strong Corporate Governance and Board of Directors Board of Directors (Non-Employee Directors) Maria Steve Freiberg Carlos Roel Campos Jonathan Al de Molina Mike Dunn Contreras-Sweet Palomares Brown • Chairman of • Senior Advisor • Former CEO • Partner at • Former RM’s Board of to The Boston and Exe
Slide 8: Significant Market Opportunity
Significant Market Opportunity • There are approximately 80 million Americans that generally align with our customer base. • We believe that the personal installment loan segment is an approximately $60 billion market opportunity. • Regional has assembled an experienced leadership team to help drive
Slide 9: Strong Liquidity Profile
Strong Liquidity Profile ï,§ Long history of liquidity support from a strong group of banking partners ï,§ Diversified funding platform with an ABL, warehouse facility, and an amortizing loan facility Amortizing Loan Senior Revolver (ABL) Warehouse Facility Facility ï,§ Size: $638 Millionï,§ Size: $
Slide 10: Branch Network Overview
Branch Network Overview Branch Overview Geographic Footprint • Approximately 372,000 individual borrower accounts through network of 342 branches as of December 31, 2017 Date of Entry: • Branch personnel establish and develop customer relationships 17 SC: 1987 throughout life of loan TX: 2001 21 37
Slide 11: Regional Product Offerings
Regional Product Offerings ï,§ Product diversity allows Regional to offer customers various products as credit needs changeï,§ Products are easy for customers to understand and underwritten based on an ability to repay Small Large Retail ï,§ Short-term cash needsï,§ Vacation expensesï,§ Home furnish
Slide 12: Multi-Channel Origination Platform
Multi-Channel Origination Platform ï,§ Branches are foundation of Regional’s multi-channel strategy ï,§ Mail campaigns attract ~100,000 new customers per year to Regional ï,§ Continued expansion of digital channel / online lending capabilities to acquire customers Branch Originated Non-Branch Origin
Slide 13: Consistent Total Portfolio Growth Through Multiple Cycles
Consistent Total Portfolio Growth Through Multiple Cycles $1,000 $900 $800 $700 $600 Millions $500 $400 $300 $200 $100 $0 13
Slide 14: Recent Portfolio Growth Driven by Large Loans
Millions $ $ $ $ $ $ $ $ $ $ 0 100 200 300 400 500 600 700 800 900 Jan-14 Feb-14 Mar-14 Recent Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Portfolio Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Growth Mar-15 Apr-15 May-15 Jun-15 Driven SMALL Jul-15 Aug-15 by Sep-15 LARGE Oct-15 Nov-15 Large Dec-15 AUTO Jan-16 F
Slide 15: Large Loan Originations
Millions $ $ $ $ $ $ $ $ $ * 0 5 10 15 20 25 30 35 40 Data Feb-07 Apr-07 Jun-07 Large includes Aug-07Oct-07 large Dec-07 Feb-08 Loan loans Apr-08 Jun-08 with Aug-08 < Oct-08 =Dec-08 36% Feb-09 Apr-09 APR Jun-09 only Aug-09 Oct-09 Dec-09 Originations Feb-10 Apr-10 Jun-10 Aug-10 Oct-10 Dec-10 Feb-11 A
Slide 16: Large Loan Origination Metrics
Large Loan Origination Metrics Monthly Payment Original Term $225 45 $200 40 $175 35 $150 Jan-15 Jun-15 Nov-15 Apr-16 Sep-16 Feb-17 Jul-17 Dec-17 30 Jun-15 Nov-15 Apr-16 Sep-16 Feb-17 Jul-17 Dec-17 Average Monthly Pmt Weighted Average Original Term (in months) APR Original Loan Balance 31% $6,000 30
Slide 17: Large Loan Portfolio Performance
Large Loan Portfolio Performance Average FICO—Origination Portfolio 30+ Delinquency Origination FICO has generally increased over time Delinquency rate has generally remained consistent 626 626 over time 622 5.34% 5.15% 4.56% 3.37% 597 2014 2015 2016 2017 2014 2015 2016 2017 Portfolio Net Credit Los
Slide 18: Loan Application Approval Process
Loan Application Approval Process ï,§ Customized auto decision engine used to determine if customer qualifies for product offeringsï,§ Product offering is based on risk profile of customer and their ability to repay 17 21 36 28 Review of 72 49 Initial Customer Decision Financials Review Credit Custo
Slide 19: Robust Underwriting Standards
Robust Underwriting Standards Collateral Verifications •All borrowers must provide •Identity collateral •Employment •Secured by titled assets •Income (hard secured) or personal property (soft secured) Credit Scoring Repayment Ability •Diverse data attributes •Debt to Income Calculation •Review of cr
Slide 20: Servicing Overview
Servicing Overview Regional employs a hybrid strategy of localized collection efforts through the branches and centralized support for late stage collections In-Branch Servicing Centralized Collections • Collection efforts primarily • Late stage co-collection support for the branches by performed in
Slide 21: Historical Financial Performance
Historical Financial Performance Net Income ($ in millions) $30 $28.8 $30.0 $25.4 $23.4 $24.0 $25 $21.2 $20 • Recent earnings $16.4 $14.8 growth driven by $15 $10 $9.9 combination of $6.5 volume-related $5 $3.1 revenue growth $0 and more 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 normali
Slide 22: Regional Management RM Listed NYSE
REGIONAL MANAGEMENT RM LISTED NYSE