Regional Management Corp. · NYSE:RM
Regional Management — Investor Presentation (May 2019)
21 slides from Regional Management's investor presentation, May 14, 2019
Slide 1: Investor Presentation May 2019
Investor Presentation May 2019
Slide 2: Safe Harbor Statement
Safe Harbor Statement 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, s
Slide 3: Investment Highlights
Investment Highlights Abundant Market Opportunity Deep Management Experience Clear Path Forward for Sustainable Long-Term Growth Modern Infrastructure 16 Consecutive Quarters of Double-Digit Receivable Growth Advanced Credit Tools 3
Slide 4: Company Overview
Company Overview History Consumer finance company founded in 1987 Focused on consumer installment lending IPO: March 2012; NYSE: RM Who We Are 360 branches in 11 states as of March 31, 2019 Core portfolio of small and large personal loans (“core loans”), and retail loans; $912 million in total recei
Slide 5: Deep and Tested Management Experience
Deep and Tested Management Experience Peter Knitzer President and CEO 30+ years of consumer financial services experience Spent 14 years at Citi in various senior roles, including Chairman & CEO of Citibank North America Prior to joining Regional, was EVP and Head of Payments at CIBC, and President
Slide 6: Strong Corporate Governance and Board of Directors
Strong Corporate Governance and Board of Directors Board of Directors (Non-Employee Directors) Al de Molina • Chairman of RM’s Board of Directors • Former CEO and COO of GMAC • Former CFO of Bank of America • Former CEO of Banc of America Securities Steve Freiberg • Senior Advisor to The Boston Cons
Slide 7: Supporting Growth and Generating Shareholder Value
Supporting Growth and Generating Shareholder Value Hybrid approach to extend double-digit portfolio growth –increasing receivables per branch, de novo expansion Focused de novo expansion; entered Wisconsin in 4Q18, additional 15 de novo branches expected in 2019 Well-established, cost-efficient sale
Slide 8: Abundant Market Opportunity to Serve the Underserved
Abundant Market Opportunity to Serve the Underserved • Approximately 80 million Americans generally align with Regional’s customer base • $66 billion market opportunity –RM has 1% market share; significant runway for growth $3.9 Trillion Consumer Finance Market (1) Student Loans 37% Personal Install
Slide 9: Hybrid Approach to Growth
Hybrid Approach to Growth Branch Overview –Hybrid Approach to Growth ? Multiple channels and products provide attractive market opportunities —Most loans serviced and collected through branches—Late-stage delinquency through centralized collections group ? Most branches with significant capacity to
Slide 10: Multi-Product Offering Fits Customer Needs
Multi-Product Offering Fits Customer Needs ? Product suite provides multiple solutions for customers as their credit needs evolve? Easy-to-understand products based on credit underwriting and ability to repay? Ability to cost-effectively “graduate” qualified small loan customers to larger loans at r
Slide 11: Transitioning to Omni-Channel Originations
Transitioning to Omni-Channel Originations ? Branches are the foundation of Regional’s multi-channel strategy ? Mail campaigns attract ~100,000 new customers per year to Regional ? Continued expansion of digital channel / online lending capabilities to acquire customers Branch Originated (1) Non-Bra
Slide 12: NLS Supports Enhanced Analytics
NLS Supports Enhanced Analytics NLS provides visibility to the “application funnel” that was previously invisible. (Marketing Stimulus) Applications System Eligible Branch Approved Loans Booked Pre-NLS Post-NLS • Understanding funnel dynamics provides significant benefit to Marketing, Risk, and Oper
Slide 13: A Snapshot of Regional's Digital Journey – 2016 to 2019
A Snapshot of Regional’s Digital Journey –2016 to 2019 # Function 2016 2019 1 Loan Origination Process • Paper-Based Process • Implemented in NLS as streamlined workflow from application to booking • Debt Consolidation Sales Tools in NLS 2 Loan Underwriting Process • Manual and Paper-Based Process •
Slide 14: Robust Loan Approval Process
Robust Loan Approval Process ? Custom automated decision engine used to determine if customer qualifies for product offerings? Product offering is based on risk profile of customer and their ability to repay? Credit exceptions are administered by central underwriting team Determine Review of Collate
Slide 15: Top-Shelf Customer Satisfaction
Top-Shelf Customer Satisfaction Top-three box (8, 9, or 10 out of 10) customer satisfaction of 88% 75%+ customers would apply to Regional Finance first the next time they need a loan ~90% favorable ratings for key attributes:—Loan process was quick, easy, affordable, understandable—People are profes
Slide 16: Core Loan Portfolio Growth Driven by Large Loan Receivables
Core Loan Portfolio Growth Driven by Large Loan Receivables Since adding large loans as a core product in 2015, large loan receivables have grown approximately 860%, from $46 million to $441 million Core Loan Finance Receivables ($ in millions) $876 $862 $900 Small Large $723 $724 $720 $594 $438 $44
Slide 17: Receivables Growth Leads to Bottom-Line Expansion
Receivables Growth Leads to Bottom-Line Expansion (1) Recent earnings growth driven by combination of volume-related revenue growth and more normalized credit losses (2) Q1 19 net income was down slightly year-over-year while implementing custom credit scorecards, but we expect a double-digit increa
Slide 18: Diversified Liquidity Profile
Diversified Liquidity Profile ? Long history of liquidity support from a strong group of banking partners ? Diversified funding platform with an ABL, warehouse facility, amortizing loan facility, and securitization Senior Revolver (ABL) ? Size:$638 Million? Interest Type: Floating? Maturity: June 20
Slide 19: Strong Funding Profile
Strong Funding Profile Millions Debt Capacity $500 $400 $94 $95 $300 $120 $43 $101 $34 $200 $69 $59 $312 $339 $287 $257 $100 $193 $224 $179 $188 $133 $155 $- 4Q 16 1Q 17 2Q 17 3Q 17 4Q 17 1Q 18 2Q 18 3Q 18 4Q 18 1Q 19 • As of March 31, 2019, total undrawn capacity was $433M (subject to borrowing bas
Slide 20: Investment Highlights
Investment Highlights Abundant Market Opportunity Deep Management Experience Clear Path Forward for Sustainable Long-Term Growth Modern Infrastructure 16 Consecutive Quarters of Double-Digit Receivable Growth Advanced Credit Tools 20
Slide 21: CPEGIONAL
CPEGIONAL MANAGEMENT Cc REGIONAL |. MANAGEMENT L'
Regional Management — Investor Presentation (May 2019) on 6ix