Regional Management Corp. · NYSE:RM
Regional Management — SFVegas 2024
32 slides from Regional Management's conference presentation, Feb 23, 2024
Slide 1: SFVegas Presentation February 2024
SFVegas Presentation February 2024
Slide 2: Legal Disclosures
Legal Disclosures 2 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, sta
Slide 3: Company Overview
Company Overview
Slide 4: Company Overview
4 Company Overview Founded 1987 NYSE Listed: RM 346 branches 19 states Total receivables of $1.77 billion Multi-channel marketing: branches, digital, and direct mail Legacy States (prior to 2021) 2021 New States (IL, UT) 2022 New States (MS, IN, CA, LA) Potential Future State Expansion Geographic fo
Slide 5: Growth Strategy
Growth Strategy 5 Geographic Expansion Accelerated Innovation Product and Channel Expansion Identified states with favorable economics for expansion Continue to identify opportunities to optimize branch network within existing footprint Continue to drive scale using centralized originations and serv
Slide 6: Investment Highlights
Investment Highlights Strong balance sheet supports capital returns Geographic, product, and channel expansion drive growth Omni-channel growth strategy with abundant market opportunity Controlled growth with stable credit using advanced credit tools Modern infrastructure and digital capabilities De
Slide 7: Financial Results
7 Financial Results In millions In millions Continued growth in account base and portfolio in controlled and profitable manner Digital initiatives, new state expansion, and new product development have driven strong growth Enhanced prequalification capabilities and tighter integration with digital a
Slide 8: Abundant Total Addressable Market
Abundant Total Addressable Market 8 Approximately 72 million Americans generally align with Regional’s customer base (1)(3) $91 billion market opportunity – RM has less than 2% market share and increased our addressable market by over 80% since 2020; still significant runway for growth $4.7 Trillion
Slide 9: Our Customer
Our Customer 9 Average Age (2) 55 Years Annual Income (2) $51,000 Some College or Advanced Degree (1) 54% Net promoter score of 64 representing our customers’ strong loyalty and willingness to recommend our products to others (1) 90%+ favorable ratings for key attributes (1): Loan process was quick,
Slide 10: Product Offering
Product Offering 10 Multi-Channel Acquisition Small Loans Large Loans In Branch $947.8MM Originated 68% Large/32% Small Direct Mail $418.9MM Originated Convenience Check Loans Digital $168.3MM Originated Digital Lead Generation Partnership Affiliates Customer Need Short-term cash needs Bill payment
Slide 11: Originations Lower from Credit Tightening
Originations Lower from Credit Tightening Year-over-year growth rate reduced from credit tightening actions; originations were more concentrated on programs to present and former borrowers, which perform better than new borrowers 4Q 23 direct mail, digital and branch originations were down year-over
Slide 12: Funding
Funding
Slide 13: Evolution of Regional Management Funding
Evolution of Regional Management Funding 1987 2007 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 RM Founded in South Carolina RM Enters Texas Private Equity Invests in RM RM Operates in 5 States (SC, TX, NC, TN, AL) RM Enters Oklahoma RM Closes Initial Public Offering RM Enters Georgia and
Slide 14: 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 14 (1) Based on the February 2024 senior revolver renewal
Slide 15: ABS Program Highlights
ABS Program Highlights Strength of Sponsor Regional has been in business since 1987 and has effectively managed multiple economic and business cycles Deep management and board experience in consumer finance industry Profitable every year since IPO in 2012 Seasoned Program Regional has successfully c
Slide 16: Governance & Controls
Governance & Controls
Slide 17: Public Company Discipline and Transparency
Public Company Discipline and Transparency 17 Full Transparency – Public SEC Filings and Disclosures Internal Controls – SOX controls in place since 2013 External Audits – Deloitte & Touche LLP Compliance – Team of 20 FTE led by Chief Compliance Officer Enterprise Risk Management – Identifies and ma
Slide 18: Deep Management Experience
Deep Management Experience 18 Accomplished team with extensive backgrounds in consumer finance Rob Beck President and CEO Manish Parmar Chief Credit Risk Officer Harp Rana CFO 20+ years of financial services experience Prior to joining Regional, was Managing Director, North America Retail at Citigro
Slide 19: Strong Corporate Governance and Diverse Board of Directors
Strong Corporate Governance and Diverse Board of Directors Jonathan Brown Partner with Basswood Capital Management, LLC Formerly at Sandelman Partners Formerly at Goldman Sachs Maria Contreras-Sweet Former Administrator of U.S. Small Business Administration Founder of ProAmerica Bank Former Secretar
Slide 20: Robust Procedures and Controls
Robust Procedures and Controls Oversight Collateral All borrowers must provide collateral Secured by titled assets (hard secured) or personal property (soft secured) Verifications Identity Employment Income Credit Scoring Diverse data attributes Review of credit bureau information Implementation of
Slide 21: Compliance and Audit
Compliance and Audit Compliance Across Home Office Departments Monthly monitoring of critical analytics Establish standards and provide guidance for risk management and controls Well documented and controlled reporting framework Oversees external state regulatory audits and internal branch audits Al
Slide 22: Strong Servicing Capabilities and Loss Mitigation
Strong Servicing Capabilities and Loss Mitigation 22 Early-stage collection efforts primarily performed in the branches High-touch relationship allows branches to quickly anticipate and proactively resolve repayment problems Combination of payment options available Late-stage co-collection support f
Slide 23: Credit Performance
Credit Performance
Slide 24: Credit
Credit 24 4Q 23 delinquency of 6.9% decreased 40 basis points sequentially and decreased 20 basis points versus prior year (inclusive of a 90 basis point reduction in 4Q 23 and 4Q 22 from the loan sale that occurred in each quarter) 30+ days past due of $122.9 million compares favorably to loan los
Slide 25: Origination Metrics by Product
Origination Metrics by Product (Less than or equal to 36% APR loans) 25 FICO Original Term APR Original Loan Balance (1) The 4Q 22 increases in original term and original balance in the convenience check portfolio were due to targeted campaigns of large checks to former borrowers (1) (1)
Slide 26: 30+ Delinquency Trend – Managed Portfolio
30+ Delinquency Trend – Managed Portfolio (Less than or equal to 36% APR loans) 26 (1) 2020 and 2021 delinquency levels were favorably impacted by government stimulus Data as of 12/31/2023 (1)
Slide 27: Consistent Credit Performance for ABS Transactions
Consistent Credit Performance for ABS Transactions 27 (1) RMIT 2022-2 closed in October of 2022 – minimal losses are normal during the early months of a new facility Credit performance for ABS transactions includes their revolving periods (1)
Slide 28: Payment Channel Mix
Payment Channel Mix (Less than or equal to 36% APR loans) 28 Significant reduction in cash and check payments in branch 83% of payments received by RM are currently made electronically (ACH and Debit)
Slide 29: Appendix
Appendix
Slide 30: Consolidated Income Statements
Consolidated Income Statements 30
Slide 31: Consolidated Balance Sheets
Consolidated Balance Sheets 31
Slide 32: CREGIONAL oe
CREGIONAL oe MANAGEMENT nyse