Regional Management Corp. · NYSE:RM
Regional Management — Q1 2025 Earnings Presentation
26 slides from Regional Management's earnings presentation, Apr 30, 2025
Slide 1: 1Q 25 Earnings Presentation
1Q 25 Earnings Presentation April 30, 2025
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: 1Q 25 Highlights
1Q 25 Highlights 575,000 28.9% $0.70 Customer Accounts Interest and Fee Yield* Diluted Earnings Per Share Up 6.4% YoY Up 10 bps after adjusting for the Consistent with 1Q 25 guidance 4Q 23 loan sale $1.89 billion 7.1% 4.0% Net Finance Receivables 30+ Delinquency Rate* Dividend Yield* Up $146MM or 8.
Slide 4: 1Q 25 Financial Highlights
1Q 25 Financial Highlights • Net income of $7.0MM and diluted EPS of $0.70 were lower than 1Q 24 due to the benefit in the prior-year period of the sale of certain non-performing loans during 4Q 23 • Record total revenue for a first quarter of $153.0MM grew 6.0% year-over- year, or 7.4% after adjust
Slide 5: Originations Trend
Originations Trend • Record total originations for a first quarter of $392.1MM were up 20.2% from $326.4MM in 1Q 24 • 1Q 25 branch, direct mail, and digital originations were up year-over-year by 17.2%, 17.8%, and 46.1%, respectively Quarterly Origination Trend ($ in millions) $475.9 $425.1 $426.1 $
Slide 6: Controlled Portfolio Growth Year-Over-Year
Controlled Portfolio Growth Year-Over-Year vs. 4Q 24 vs. 1Q 24 2Q 23 3Q 23 4Q 23 1Q 24 2Q 24 3Q 24 4Q 24 1Q 25 $ Chg I/(D) % Chg I/(D) $ Chg I/(D) % Chg I/(D) Large loans (> $2,500) $1,238 $1,272 $1,274 $1,251 $1,266 $1,293 $1,337 $1,346 $9 0.7% $95 7.6% Small loans (≤ $2,500) 445 474 493 491 506 52
Slide 7: Revenue and Average Net Finance Receivables Trends
Revenue and Average Net Finance Receivables Trends Total Revenue ($ in millions) • Record total revenue for a first quarter of $154.8 $153.0 $153.0MM grew 6.0% year-over-year, or 7.4% after $140.9 $141.7 $144.3 $143.0 $146.3 adjusting for the estimated $1.9MM increase to $133.5 revenue in 1Q 24 from
Slide 8: Recent Credit Trends
Recent Credit Trends 30+ & 90+ Delinquency Rates ($ in millions) $145.8 $72.2 $134.0 $128.4 $126.0 $122.9 $124.2 $122.7 $61.6 30-89 Days $116.3 $64.6 $66.0 $55.4 $62.6 $63.0 • 1Q 25 delinquency of 7.1% was consistent 90-179 Days $58.6 with 1Q 24 delinquency, despite an estimated 90+ DQ % 10 bps poin
Slide 9: Reserved For Stressed Credit Losses
Reserved For Stressed Credit Losses • In 1Q 25, we decreased our allowance for credit losses by $0.4MM primarily due to portfolio liquidation. We are required to reserve for expected lifetime credit losses at origination of each loan, while the revenue benefits are recognized over the life of the lo
Slide 10: Continued Focus on Operating Leverage & Tight Expense Control
Continued Focus on Operating Leverage & Tight Expense Control • G&A expenses of $66.0MM in 1Q 25 were Operating Expense Ratio ($ in millions) $5.6MM higher than the prior-year period $66.0 $62.1 $64.8 $62.5 $64.6 • The increase was primarily driven by $60.4 $60.1 $1.7MM of incentive expenses $56.9 T
Slide 11: Cost of Funds
Cost of Funds • 1Q 25 cost of funds* increased 20 bps year-over-year due to higher average debt and the maturation of lower-cost, fixed- rate debt • Cost of funds has remained consistent the last several quarters Interest Expense ($ in millions) $19.4 $19.8 $19.8 $17.5 $17.5 $17.9 $16.9 $16.2 4.3% 4
Slide 12: Strong Funding Profile
Strong Funding Profile Unused Capacity ($ in millions) $641 • As of March 31, 2025, total unused capacity was $641MM $555 $552 (subject to borrowing base) $466 • Available liquidity of $129MM as of March 31, 2025 • Fixed-rate debt represented 90% of total debt as of March 31, 2025, with WAC of 4.4%
Slide 13: Excess Capital Consistently Returned to Stockholders
Excess Capital Consistently Returned to Stockholders We have a proven business model capable of generating excess capital to return to stockholders and to reinvest in strategic initiatives that will generate sustainable, long-term profitable growth. Even during the recent period of high inflation, t
Slide 14: 1Q Results and Outlook
1Q 25 Results and Outlook Key Metrics 1Q 25 Results 2Q 25 Outlook Net Income $7.0MM ~$7.0 - $7.3MM ENR Growth/(Liquidation) ($2.2MM) ~$55.0 - $60.0MM ANR Growth $36.3MM ~$15.0MM 100 bps ~20 bps Total Revenue Yield sequential decrease sequential increase Net Credit Losses/ $58.4MM ~$57.0MM / ~12.0% N
Slide 15: Appendix
Appendix CRERIONAL 15
Slide 16: Front Book 92% of Total Portfolio
Front Book 92% of Total Portfolio Front Book/Back Book Mix ($ in millions) (March 31, 2025) • Higher-credit-quality ENR from the front book is performing as expected $1,890 $134 (1) $199 (2) • Front book was 92% of the total portfolio, an increase from 89% as of December 31, 2024 • Front book was 88
Slide 17: Higher ENR Per Branch is Driving Efficiency
Higher ENR Per Branch is Driving Efficiency • Branch consolidations and our new-state, lighter-footprint strategy with larger branches drove higher ENR per branch • Same store* year-over-year growth rate of 6.5% in 1Q 25 compared to 3.4% in the prior-year period • The less than 1 year branch cohort
Slide 18: Digitally Sourced Originations
Digitally Sourced Originations • Digital volume represented 24.9% of our total new borrower volume in 1Q 25 • Large loans represented 75.3% of new borrower digitally sourced loans booked in 1Q 25 Digitally Sourced Origination Volume ($ in millions) $53.8 $50.7 $50.6 $50.7 $45.6 $43.4 $39.9 Large Loa
Slide 19: 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 $355MM
Slide 20: Consolidated Income Statements
Consolidated Income Statements $ in thousands 1Q 25 1Q 24 2024 2023 2022 2021 Revenue Interest and fee income $ 136,553 $ 128,818 $ 528,894 $ 489,698 $ 450,854 $ 382,544 Insurance income, net 11,297 10,974 40,695 44,529 43,502 35,482 Other income 5,117 4,516 18,914 17,172 12,831 10,325 Total revenue
Slide 21: Consolidated Balance Sheets
Consolidated Balance Sheets $ in thousands 1Q 25 1Q 24 2024 2023 2022 2021 Cash $ 4,158 $ 4,215 $ 3,951 $ 4,509 $ 3,873 $ 10,507 Net finance receivables 1,890,351 1,744,286 1,892,535 1,771,410 1,699,393 1,426,257 Unearned insurance premiums (47,107) (45,675) (48,068) (47,892) (51,008) (47,837) Allow
Slide 22: 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 23: Non-GAAP Financial Measures (Cont'd)
Non-GAAP Financial Measures (Cont’d) $ in millions 2020 2021 2022 2023 2024 1Q 25 Beginning stockholders' equity $ 256.9 $ 272.1 $ 282.7 $ 308.6 $ 322.3 $ 357.1 Ending stockholders' equity 272.1 282.7 308.6 322.3 357.1 357.9 Change in stockholders' equity 15.3 10.6 25.9 13.6 34.8 0.8 Beginning allow
Slide 24: Non-GAAP Financial Measures (Cont'd)
Non-GAAP Financial Measures (Cont’d) $ in thousands 1Q 25 1Q 24 2024 2023 2022 2021 Total assets $ 1,900,683 $ 1,756,748 $ 1,909,109 $ 1,794,527 $ 1,724,987 $ 1,459,662 Less: intangible assets 26,750 17,360 24,524 15,846 12,122 9,517 Tangible assets (non-GAAP) 1,873,933 1,739,388 1,884,585 1,778,681
Slide 25: Glossary
Glossary • Allowance for credit loss rate – allowance for credit losses as a percentage of ending net finance receivables • 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 • Bps – bas
Slide 26: Regional Management
¢ REGIONAL =" MANAGEMENT. nyse NYSE