Regional Management Corp. · NYSE:RM
Regional Management — Q3 2020 Earnings Presentation
21 slides from Regional Management's earnings presentation, Oct 29, 2020
Slide 1: 3Q 2020 Earnings Call Supplemental Presentation
3Q 2020 Earnings Call Supplemental Presentation October 29, 2020 Exhibit 99.2
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 2020 Financial Highlights
3Q 2020 Financial Highlights Net income of $11.2 million, or $1.01 diluted EPS Total revenue decline of $1.2 million, or 1.3%, driven by the product mix shift toward large loans Interest and fee income down 2.1% year-over-year on a 60 basis point decline in interest and fee yield Insurance income, n
Slide 4: Generated Core Growth Sequentially and Year-Over-Year
Generated Core Growth Sequentially and Year-Over-Year Generated core loan product growth of $41 million, or 4.1%, in 3Q 20 Executed new product initiatives, which drove $20 million of the $41 million growth Achieved core loan product growth of $10 million year-over-year Continued the mix shift towar
Slide 5: Originations Increase & Credit Quality Remains Stable
Originations Increase & Credit Quality Remains Stable September originations up 7% year-over-year driven by increased demand and the execution of new growth initiatives Branch originations further increased from $67.0 million in June to $82.3 million in September Continue direct mail and digital cha
Slide 6: Digitally-Sourced Originations
Digitally-Sourced Originations 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 As of 3Q 20, our digital volume represented ap
Slide 7: Average Receivables and Revenue Trends
Average Receivables and Revenue Trends Total revenue declined 1% and the interest and fee yield declined 60 basis points year-over-year, both due to the continued product mix shift toward large loans and the portfolio composition shift to higher credit quality customers with slightly lower interest
Slide 8: Significant Capacity to Absorb Losses
(1) TTM Margin defined as total revenue of $374.4 million, less general and administrative expenses of $172.4 million and interest expense of $38.9 million from 4Q 19 through 3Q 20 (2) Net credit losses as a percentage of average net finance receivables Significant Capacity to Absorb Losses Our bala
Slide 9: Lower Net Credit Losses on Low Delinquency Levels
Lower Net Credit Losses on Low Delinquency Levels Net credit loss rate decreased 30 basis points vs. the prior-year period and 280 basis points sequentially on low delinquency levels
Slide 10: Delinquency at Historically Low Levels
Delinquency at Historically Low Levels 3Q 20 delinquency is down from the prior year even as borrower assistance usage returned to pre-pandemic levels and government stimulus diminished 30+ days past due of 4.7% is 180 basis points lower than prior year 90+ days past due of 2.2% is 60 basis points l
Slide 11: Reserved For Stressed Credit Losses
Reserved For Stressed Credit Losses (1) 3Q 20 Ending Reserve includes $31.9 million of incremental COVID-19 reserves (in millions) We ran several macroeconomic stress scenarios, and our final forecast contemplated the following: unemployment peaking at 17.5% in 2020 and declining to 9.0% by the end
Slide 12: Operating Expense Ratio
Operating Expense Ratio (1) Annualized general and administrative expenses as a percentage of average net finance receivables (2) Normalized to exclude $3.8 million of non-operating costs; $3.1 million related to the CEO transition and $0.7 million from the system outage (3) Normalized to exclude $0
Slide 13: Cost of Funds Trending Downward
Cost of Funds Trending Downward 3Q 20 annualized interest expense as a percentage of ANR improved 50 basis points from the prior-year period In 3Q 20, successfully closed a $180 million securitization with a 3-year revolving period and weighted-average coupon (WAC) of 2.85% (replacing a prior transa
Slide 14: Strong Funding Profile
Strong Funding Profile (1) This is a non-GAAP measure. Refer to the Appendix for a reconciliation to the most comparable GAAP measure (2) Annualized interest expense as a percentage of average net finance receivables (1) As of September 30, 2020, total undrawn capacity was $507 million (subject to b
Slide 15: Appendix
G@REGIONAL MANAGEMENT Appendix a
Slide 16: Same Store Portfolio Growth
Same Store Portfolio Growth (1) Same store sales are based on branches more than 1 year old Same store(1) year-over-year growth rate of -1.5% in 3Q 20 vs. +17.1% in the prior-year period Considerable growth opportunities in our existing branch footprint, particularly from branches opened within the
Slide 17: Senior Revolver, Securitizations and Warehouse Facility
Senior Revolver Size: $640 million Interest Type: Floating Maturity: September 2022 Lenders: Wells Fargo Bank (Agent), Bank of America, BMO Harris, First Tennessee, Texas Capital, Synovus, Bank United, Axos Bank Collateral: Allows for the funding of Small, Large, and Retail loans Facility has been u
Slide 18: Consolidated Income Statements
Consolidated Income Statements
Slide 19: Consolidated Balance Sheets
Consolidated Balance Sheets
Slide 20: Non-GAAP Financial Measures
Non-GAAP Financial Measures In addition to financial measures presented in accordance with generally accepted accounting principles (“GAAP”), this press release contains certain non-GAAP financial measures. The company’s management utilizes non-GAAP measures as additional metrics to aid in, and enha
Slide 21: Non-GAAP Financial Measures (Cont'd)
Non-GAAP Financial Measures (Cont’d)