Regional Management Corp. · NYSE:RM
Regional Management — Investor Presentation (December 2024)
24 slides from Regional Management's investor presentation, Dec 11, 2024
Slide 1: Investor Presentation December 12th, 2024
Investor Presentation December 12th, 2024
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: 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 4: Strategic Imperatives
Strategic Imperatives Expand margins and maximize cash flows from loan portfolio Pricing increases, mix shift to higher-APR loans, and improving credit performance expected to drive strong revenue yields Deployment of barbell strategy of growth in higher-quality, auto-secured loans and higher-margin
Slide 5: Growth and Capabilities
Growth and Capabilities 5 Our continued investment in growth and strategic initiatives, including data and analytical capabilities and technological modernization, will drive 10% to 12% receivables growth in 2025 and create additional, sustainable growth, improved credit performance, and greater pro
Slide 6: Excess Capital Consistently Returned to Shareholders
Excess Capital Consistently Returned to Shareholders Proven business model capable of generating excess capital to return to shareholders and to reinvest in strategic initiatives that will generate sustainable, long-term profitable growth Cumulative dividends and common stock repurchases reflect act
Slide 7: Company Overview
Company Overview Founded 1987 NYSE Listed: RM 340 branches 19 states Total receivables of $1.8 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 footp
Slide 8: Abundant Total Addressable Market
Abundant Total Addressable Market 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 its addressable market by over 80% since 2020; still significant runway for growth $4.7 Trillion C
Slide 9: Serving Our Customers Best
Serving Our Customers Best Excellent net promoter score of 61 (1) 90+% favorable ratings for key attributes (1): Loan process was quick, easy, and understandable People are professional, responsive, respectful, knowledgeable, helpful, and friendly 92% of customers would apply to Regional Finance fir
Slide 10: Product Offerings
Product Offerings Multi-Channel Acquisition Small Loans Large Loans In Branch $976.9MM Originated 69% Large/31% Small Direct Mail $437.2MM Originated Convenience Check Loans Digital $172.4MM Originated Digital Lead Generation Partnership Affiliates Customer Need Short-term cash needs Bill payment Ba
Slide 11: Financial Overview: Originations
Financial Overview: Originations In millions In millions In millions 11 Branch originations in 3Q 24 were up year-over-year by 5.3%, while digital originations remained relatively flat year-over-year Direct mail originations were down year-over-year by 9.1%, as we de-emphasized large loan convenienc
Slide 12: Financial Overview: Total Revenue
Record total revenue of $146.3 million grew 3.9% year-over-year, inclusive of a 250 basis point impact from lower insurance income due to personal property insurance claims and reserves of $3.5 million related to hurricane activity Despite the impact of the hurricanes on revenue, revenue grew in lin
Slide 13: Financial Overview: Credit
Reflects the impact of government stimulus Financial Overview: Credit Portfolio credit quality and performance has improved in 2024; higher-quality originations in the front book make up a larger portion of portfolio, continue to perform in line with expectations, and are delivering at lower loss le
Slide 14: Financial Overview: Credit (Front Book 86% of Total Portfolio)
Financial Overview: Credit (Front Book 86% of Total Portfolio) 14 Higher-credit-quality ENR from the front book is performing as expected and becoming a larger portion of the portfolio Front book was 86% of the total portfolio, an increase from 83% as of June 30, 2024 Front book was 81% of the 30+ d
Slide 15: Financial Overview: Continued Focus on Operating Leverage & Expense Control
Financial Overview: Continued Focus on Operating Leverage & Expense Control G&A expense increased only $0.4 million, or 0.6%, from 3Q 23, while the operating expense ratio decreased 50 basis points due to continued disciplined expense management 3Q 24 year-over-year total revenue growth outpaced G&A
Slide 16: Financial Overview: Key Financial Results
Financial Overview: Key Financial Results In millions In millions Net Income In millions Challenging macroeconomic conditions have impacted recent returns and profitability levels Continued growth in account base and portfolio in controlled and profitable manner 3Q 24 year-over-year total revenue gr
Slide 17: 3Q Highlights
3Q 24 Highlights *See appendix for glossary 557,400 Customer Accounts Up 5.1% YoY $1.82 billion Net Finance Receivables Up 3.9% YoY $426 million Origination Volume Up 0.3% YoY 13.9% Operating Expense Ratio* Down 50 basis points YoY 29.9% Interest and Fee Yield* Up 90 basis points YoY 6.9% 30+ Delinq
Slide 18: Strong Funding Profile
As of September 30, 2024, total unused capacity was $482 million(1) (subject to borrowing base) Available liquidity of $155 million as of September 30, 2024 Fixed-rate debt represented 82% of total debt as of September 30, 2024, with a weighted-average coupon of 4.3% and a weighted-average revolving
Slide 19: Long-Term, Sustainable, and Profitable Growth
Long-Term, Sustainable, and Profitable Growth 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 centr
Slide 20: Appendix
Appendix
Slide 21: 3Q Results and Outlook
3Q 24 Results and Outlook 21 Prior to discrete items, such as any tax impacts of equity compensation Key Metrics 3Q 24 Results 4Q 24 Outlook ENR Growth $46.0 million ~$65.0 - $70.0 million ANR Growth $44.0 million ~$63.5 million Total Revenue Yield 10 basis points sequential decrease ~60 basis point
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: Glossary
Glossary 23 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 Cost of funds – annualized interest expense as a percentage of average net finance receivables Debt balance – the balance for
Slide 24: ¢ REGIONAL =
¢ REGIONAL = MANAGEMENT. nyse NYSE
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