Regional Management Corp. · NYSE:RM
Regional Management — Investor Presentation (November 2021)
29 slides from Regional Management's investor presentation, Nov 18, 2021
Slide 1: Investor Presentation November 18, 2021
Investor Presentation November 18, 2021
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 Geographic, Product, and Channel Expansion Omni-Channel Drive Growth Strong Balance Growth Sheet Supports Strategy with Capital Abundant Returns Market Opportunity Deep Controlled Management Growth with Experience Stable Credit Through Credit Using Modern Advanced Cycles Infras
Slide 4: Strong Profitability While Investing for the Long-Term
Strong Profitability While Investing for the Long-Term • 372 branches in 13 states (1) Profile • Total receivables of $1.3 billion (1) • Omni-channel originations: branches, direct mail, digital, and retailers • Year-over-year record loan growth of $255 million, or 24.0% (1) Growth • Digital initiat
Slide 5: Abundant Market Opportunity to Serve the Underserved
Abundant Market Opportunity to Serve the Underserved • Approximately 75 million Americans generally align with Regional’s customer base • $76 billion market opportunity – RM has less than 2% market share; significant runway for growth $4.1 Trillion Consumer Finance Market (1) 29% of US Population wi
Slide 6: Supporting Growth to Generate Shareholder Value
Supporting Growth to Generate Shareholder Value Digital initiatives, new-state expansion, and new product development drive record growth Differentiated go-to-market strategy offering small and large loans Well-established, cost-efficient omni-channel sales with integrated marketing Modernized infra
Slide 7: Omni-Channel Approach to Growth
Omni-Channel Approach to Growth • Multiple channels and products provide attractive market opportunities • 3Q 21 year-over-year record loan growth of $255 million, or 24.0% • Plan to enter 5-7 new states by the end of 2022 Net Finance Receivables Geographic Footprint (1) Date of Entry: $1,400 $1,314
Slide 8: 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
Slide 9: Our Typical Customer
Our Typical Customer Our customer demographics… How we solve their financial needs… Originations (1) Average age Cash needs Auto-related 12% 53 years 10% Debt Home-related consolidation 9% 17% Annual income (1) $45,000 Medical 6% Family event- Homeownership related 7% 52% Household bills Other 24% 1
Slide 10: Top-Shelf Customer Experience
Top-Shelf Customer Experience Net promoter score of 63, representing our customers’ strong loyalty and willingness to recommend our products to others (1) 92% of customers would apply to Regional Finance first the next time they need a loan (1) 90+% favorable ratings for key attributes (1): • Loan p
Slide 11: Omni-Channel Originations Provide Market Opportunities
Omni-Channel Originations Provide Market Opportunities • Branches continue to be an integral part of Regional’s omni-channel strategy • Mail campaigns attracted approximately 150,000 new customers to Regional within the last 12 months (1) • Majority of new customers come through the Direct Mail and
Slide 12: Originations Increase & Delinquencies Remain Low
Originations Increase & Delinquencies Remain Low Quarterly Origination Trend $200.0 Monthly Origination Trend $450.0 $420.7 $377.7 $175.0 $156.1 $400.0 $363.9 $364.0 $147.6 $353.7 $353.5 $350.0 $150.02020 $133.0 $135.7 $312.5 $128.9 Millions $300.0 $125.0 Millions $232.6 $234.8 $97.1 $250.0 $100.0 $
Slide 13: Developing Capabilities to Provide Choices for Customers
Developing Capabilities to Provide Choices for Customers Branch Phone Browser Mobile Originate Service Renew Omni-Channel Capabilities existing future 13
Slide 14: Digital Journey – Past, Present and Future
Digital Journey – Past, Present and Future Past Present Future • Paper-based loan application • Standardized system • Paperless loan Improved Branch Loan process workflows execution Origination Process • Labor intensive data entry • Remote loan closings • Automated digital Through Automation require
Slide 15: Digitally Sourced Originations – Record High
Digitally Sourced Originations – Record High • 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 • Our new digital volume rep
Slide 16: Record High Portfolio Growth
Record High Portfolio Growth Net Finance Receivables $1,314 ($ in millions) $1,133 $1,136 • Year-over-year $1,060 record loan growth $951 $834 of $255 million, or $729 24.0% • Digital initiatives, new-state expansion, and new product development drive 2016 2017 2018 2019 2020 YTD 20 (1) YTD 21 (1) r
Slide 17: Strong Profitability - Now & Through the Cycle
Strong Profitability - Now & Through the Cycle Net Income & Diluted Earnings Per Share ($ in millions) $3.80 $6.29 Net income $2.93 $2.54 $2.40 Diluted EPS $1.99 $67.9 $44.7 $30.0 $35.3 $1.11 $24.0 $26.7 $12.4 2016 2017 2018 2019 2020 YTD 20 (1) YTD 21 (1) Net income Diluted EPS Return on Assets & R
Slide 18: Robust Loan Approval Process
Robust Loan Approval Process • Custom automated decision engine used to determine if customer qualifies for product offerings based on risk profile and ability to repay • Maintained rigorous pre-pandemic underwriting standards with the addition of enhanced verification processes and the use of alter
Slide 19: Expense Ratios
Expense Ratios Operating Expense Ratio ($ in millions) $176.3 $157.0 $131.5 $140.0 $131.0 $140.3 $118.6 16.4% 16.4% 17.8% 16.0% 17.3% 16.1% 15.6% 16.0% 16.0% 15.8% (1) (2) (1) (2) (5) (3) (5) 2016 2017 2018 2019 2020 YTD 20 YTD 21 G&A Expense % of ANR Non-GAAP % of ANR G&A Expense % of ANR Non-GAAP
Slide 20: 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 Securitizations Size: $640 million Size: $300 mill
Slide 21: Strong Funding Profile
Strong Funding Profile $800 Debt Capacity $722 • As of September 30, 2021, total unused $647 capacity was $722 million (subject to $700 $573 borrowing base) $600 $212 $493 $507 $151 • Available liquidity of $194 million as of Millions $500 $438 $89 $400 $94 September 30, 2021 $368 $369 $98 $400 $83
Slide 22: Delivering Returns to Shareholders
Delivering Returns to Shareholders • The Board of Directors and Management have confidence in our business model’s ability to generate excess capital to return to our shareholders on a regular basis. • The recurring dividend and repurchase programs allow us to return value to our shareholders, while
Slide 23: Appendix
@ REGIONAL MANAGEMENT Appendix
Slide 24: Deep and Tested Management Experience
Deep and Tested Management Experience Rob Beck • 30+ years of finance and accounting experience President and • Also spent 29 years at Citi, including service as COO of the US Retail Bank CEO • Prior to joining Regional, was EVP and COO for the Leukemia and Lymphoma Society John • 30+ years of consu
Slide 25: Strong Corporate Governance and Board of Directors
Strong Corporate Governance and Board of Directors Board of Directors (Non-Employee Directors) Steve Freiberg Mike Dunn Carlos Maria RoelMaria Campos Jonathan Jonathan Sandra Palomares Contreras- Contreras-Sweet Brown Johnson,Brown Ph.D. Sweet • Partner with - Senior Advisor - Former CEO and - Chair
Slide 26: Significant Capacity to Absorb Losses
Significant Capacity to Absorb Losses Our balance sheet is in a strong position to absorb losses Absorption Capacity (in millions) 3Q 21 Total stockholders' equity $277.5 Allowance for credit losses $150.1 Total absorption capacity $427.6 Absorption capacity as % of net finance receivables 32.5% (1)
Slide 27: 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 28: Non-GAAP Financial Measures (Cont'd)
Non-GAAP Financial Measures (Cont’d) in thousands 3Q 21 3Q 20 2020 2019 2018 2017 Total assets $ 1,313,558 $ 1,037,559 $ 1,103,856 $ 1,158,540 $ 956,395 $ 829,483 Less: Intangible assets 9,184 8,677 8,689 9,438 10,010 10,607 Tangible assets (non-GAAP) 1,304,374 1,028,882 1,095,167 1,149,102 946,385
Slide 29: CREGIONAL
CREGIONAL MANAGEMENT REGIONAL = MANAGEMENT nyse
Regional Management — Investor Presentation (November 2021) on 6ix