Regional Management Corp. · NYSE:RM
Regional Management — Q2 2022 Earnings Presentation
19 slides from Regional Management's earnings presentation, Aug 3, 2022
Slide 1: 2Q 2022 Earnings Presentation
2Q 2022 Earnings Presentation August 3rd, 2022
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: 2Q 2022 Financial Highlights
2Q 2022 Financial Highlights $ in millions $ Chg % Chg 2Q 22 2Q 21 (except per share amounts) B/(W) B/(W) Net income of $12.0 million, or $1.24 diluted EPS Interest & Fee Income $ 109.8 $ 88.8 $ 21.0 23.6% Insurance Income, Net 10.2 8.7 1.6 18.1% Total revenue increased $23.2 million, or 23.3% Other
Slide 4: Strong Originations and Delinquency Trend
Strong Originations and Delinquency Trend Record originations for a second ($ in millions) Quarterly Origination Trend quarter, and up 12.9% year-over- $420.7 $434.4 $426.3 year $364.0 $377.7 $312.5 $326.0 Digital Originations Direct Mail $232.6 $174.2 $234.8 Year-over-year growth rate Branch Origin
Slide 5: Digitally Sourced Originations – Record High
Digitally Sourced Originations – Record High Record originations driven by affiliate expansion; offset by credit tightening actions Digital originations are sourced from either our affiliate partnerships or directly from our website All digitally sourced loans are underwritten by our custom credit s
Slide 6: Record Second Quarter Portfolio Growth
Record Second Quarter Portfolio Growth ($ in millions) Ending Net Receivables (ENR) vs. 1Q 22 vs. 2Q 21 1Q 20 2Q 20 3Q 20 4Q 20 1Q 21 2Q 21 3Q 21 4Q 21 1Q 22 2Q 22 $ Chg I/(D) % Chg I/(D) $ Chg I/(D) % Chg I/(D) Small Loans (≤ $2,500) $440 $380 $383 $403 $371 $381 $420 $445 $438 $455 $17 3.9% $74 19
Slide 7: Higher ENR Per Branch is Driving Efficiency
Higher ENR Per Branch is Driving Efficiency Branch consolidations and our new state, lighter footprint strategy with larger branches, are driving strong ENR growth in all branch cohorts Same store(1) year-over-year growth rate of 24.7% in 2Q 22 vs. 15.4% in the prior-year period Considerable growth
Slide 8: Revenue Up 23.3% on Strong Receivable Growth
Revenue Up 23.3% on Strong Receivable Growth Total revenue yield decreased 210 basis ($ in millions) Total Revenue $119.5 $120.8 $122.9 points year-over-year and 30 basis $111.5 points sequentially $97.4 $97.7 $99.7 Other Income $96.1 $89.9 $90.5 Insurance Income Interest and fee yield decreased 180
Slide 9: Recent Credit Trends
Recent Credit Trends ($ in millions) 30+ & 90+ Delinquency Rates $94.7 $84.9 $43.5 $82.0 $39.2 $72.4 $45.8 $35.0 90-179 Days $60.5 $61.3 30+ days past due of 6.2% is 50 basis points 30-89 Days $26.0 30+ DQ % 6.6% $49.5 $49.9 $27.1 $47.7 6.2% higher than 1Q 22 and still 10 basis points $22.8 $42.8 90
Slide 10: Reserved For Stressed Credit Losses
Reserved For Stressed Credit Losses In 2Q 22, we increased loan loss reserves by $8.7 million on $79.6 million in sequential portfolio growth and maintained a consistent reserve as a percentage of ENR (11.0%) from 1Q 22 to 2Q 22. The 2Q 22 ending reserve included $14.9 million associated with estima
Slide 11: Achieving Operating Leverage While Investing in Our Business
Achieving Operating Leverage While Investing in Our Business ($ in millions) Operating Expense Ratio $55.5 $55.1 $54.1 $47.8 G&A expense held relatively $46.2 $45.8 $46.4 $41.5 $43.8 $44.8 flat for prior three quarters 17.0% while growing the business Total G&A Expense 16.5% 16.4% 16.5% % of ANR (1)
Slide 12: Low Cost of Funds
Low Cost of Funds (5) Favorable market value increase on interest rate caps impacted interest expense in 2Q 22 by $3.0 million Sold $450 million of interest rate caps in 2Q 22 and locked in $12.8 million of lifetime market value gains As of June 30, 2022, we had $100 million in total interest rate c
Slide 13: Strong Funding Profile
Strong Funding Profile ($ in millions) Debt Capacity $722 Unused Warehouse Capacity $671 $647 Unused Senior Revolver Capacity $611 $573 $557 $212 $507 As of June 30, 2022, total unused capacity was $611 million $400 $493 $438 $89 $151 $216 $189 $94 $168 (subject to borrowing base) $70 $98 $83 $484 $
Slide 14: Appendix
Appendix 14
Slide 15: 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 Private Securitization Securitizations Size $500 milli
Slide 16: Consolidated Income Statements
Consolidated Income Statements 2Q 22 2Q 21 2021 2020 2019 2018 $ in thousands Revenue Interest and fee income $ 109,771 $ 88,793 $ 382,544 $ 335,215 $ 321,169 $ 280,121 Insurance income, net 10,220 8,656 35,482 28,349 20,817 14,793 Other income 2,880 2,227 10,325 10,342 13,727 11,792 Total revenue 1
Slide 17: Consolidated Balance Sheets
Consolidated Balance Sheets 2Q 22 2Q 21 2021 2020 2019 2018 $ in thousands Cash $ 7,928 $ 6,086 $ 10,507 $ 8,052 $ 2,263 $ 3,657 Net finance receivables 1,525,659 1,183,387 1,426,257 1,136,259 1,133,404 951,183 Unearned insurance premiums (48,986) (39,469) (47,837) (34,545) (28,591) (18,940) Allowan
Slide 18: 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 19: Non-GAAP Financial Measures (Cont'd)
Non-GAAP Financial Measures (Cont’d) $ in thousands 2Q 22 2Q 21 2021 2020 2019 2018 Total assets $ 1,547,944 $ 1,191,305 $ 1,459,662 $ 1,103,856 $ 1,158,540 $ 956,395 Less: Intangible assets 10,312 9,081 9,517 8,689 9,438 10,010 Tangible assets (non-GAAP) 1,537,632 1,182,224 1,450,145 1,095,167 1,14