Regional Management Corp. · NYSE:RM
Regional Management — Q4 2019 Earnings Presentation
20 slides from Regional Management's earnings presentation, Feb 25, 2020
Slide 1: 4Q 2019 Earnings Call Supplemental Presentation
4Q 2019 Earnings Call Supplemental Presentation February 25, 2020
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: 4Q 19 Highlights
4Q 19 Highlights dollars in millions 4Q 19 4Q 18 $ Chg B/(W) % Chg B/(W) (except per share amounts) Average Finance Receivables $1,071.3 $912.5 $158.7 17.4% Interest & Fee Income 87.8 75.0 12.8 17.0% Total Revenue 98.0 83.7 14.2 17.0% Provision for Credit Losses 26.0 23.7 (2.3) (9.9%) G&A Expense 40
Slide 4: Consecutive Quarters of Year-Over-Year Double-Digit Portfolio Growth
19 Consecutive Quarters of Year-Over-Year Double-Digit Portfolio Growth Ending Finance Receivables vs. 3Q 19 vs. 4Q 18 in millions 3Q 17 4Q 17 1Q 18 2Q 18 3Q 18 4Q 18 1Q 19 2Q 19 3Q 19 4Q 19 $ Chg I/(D) % Chg I/(D) $ Chg I/(D) % Chg I/(D) Small Loans (≤ $2,500) $363 $376 $360 $385 $414 $438 $422 $43
Slide 5: Consecutive Quarters of Year-Over-Year Double-Digit Revenue Growth
14 Consecutive Quarters of Year-Over-Year Double-Digit Revenue Growth $100.0 Revenue $98.0 • Total revenue increased 17.0% vs. $91.7 the prior-year period $90.0 $83.7 $84.3 $81.7 $77.9 • Interest and fee yield decreased $80.0 $72.1 $72.6 $72.4 10 basis points vs. the prior-year Millions $69.2 $70.0
Slide 6: Recent Net Credit Loss Trends
Recent Net Credit Loss Trends • Annualized net credit loss rate increased 10 basis points vs. the prior-year period. The increase includes 10 basis points of additional non- file insurance claims (bankruptcy losses) that shifted to net credit losses following the business policy change implemented i
Slide 7: Recent Provision Trends
Recent Provision Trends $70.0 14% Allowance for Credit Losses Provision for Credit Losses $30.0 50.0% $60.0 $62.2 12% $60.9 $58.3 Provision for Credit Losses (in millions) $57.2 $25.0 $26.0 Allowance for Credit Losses (in millions) $55.3 $56.4 $25.7 40.0% $50.0 10% $24.5 $23.6 $23.7 $23.3 $48.9 $48.
Slide 8: Seasonal Pattern of Delinquency
Seasonal Pattern of Delinquency • 4Q 19 delinquency is down from prior year − 30+ days past due of 7.2% is 50 basis points lower than prior year − 90+ days past due of 3.2% is 30 basis points lower than prior year 30+ & 90+ Delinquency Rates 12.0% $75.0 $35.3 $32.3 10.0% $29.5 Delinquency in Million
Slide 9: Achieving Operating Leverage While Investing in Our Business
Achieving Operating Leverage While Investing in Our Business $50.0 19.0% Operating Expense Ratio 18.0% $40.2 $40.9 $40.0 $38.2 $37.7 18.0% $35.9 $36.6 $33.8 $34.0 $34.6 $33.2 17.0% $30.0 17.0% 17.1% % of AFR 16.5% 16.5% Millions 16.2% 16.2% 16.1% 15.9% $20.0 16.0% 15.3% $10.0 15.0% $0.0 14.0% 3Q 17
Slide 10: Achieving Operating Leverage While Investing in Our Business
Achieving Operating Leverage While Investing in Our Business $50.0 Efficiency Ratio 50.0% 48.9% $40.2 $40.9 $40.0 47.2% 47.6% $38.2 $37.7 48.0% $35.9 $36.6 $33.8 $33.2 46.7% $34.0 $34.6 46.0% $30.0 46.0% % of Revenue 44.8% Millions 45.9% 43.7% 43.8% $20.0 44.0% 41.7% $10.0 42.0% $0.0 40.0% 3Q 17 4Q
Slide 11: Interest Expense Trend
Interest Expense Trend $12.0 12.0% $10.3 $10.3 $9.6 $9.7 $9.8 $10.0 10.0% $8.7 $7.9 $8.0 8.0% $7.2 $6.7 $6.8 % of AFR Millions $6.0 6.0% 4.0% 4.2% 4.2% 4.2% 4.1% 3.9% 3.8% $4.0 3.5% 3.4% 3.5% 4.0% $2.0 2.0% $0.0 0.0% 3Q 17 4Q 17 1Q 18 2Q 18 3Q 18 4Q 18 1Q 19 2Q 19 3Q 19 4Q 19 Interest Expense % of A
Slide 12: Funding Enhancements
Funding Enhancements Senior Revolver Warehouse Facility RMIT 2019-1 Amendment Amendment Securitization Extended the maturity to Extended the maturity to $130 million of new fixed-rate September 2022 April 2022 debt through the securitization market Changed Agent to Wells Fargo Reduced pric
Slide 13: Strong Funding Profile
Strong Funding Profile Debt Capacity • As of December 31, 2019, total undrawn capacity was $400 $94 $369 million (subject to $95 $300 $120 $43 $74 $79 borrowing base) $34 $34 Millions $200 $69 $59 • Fixed-rate debt represents $312 $339 $294 51% of total debt $257 $287 $277 $291 $100 $179 $188 $224 •
Slide 14: Continued Growth Opportunity from Existing and De Novo Branches
Continued Growth Opportunity from Existing and De Novo Branches • Same store(1) portfolio growth in 4Q 19 of 16.7% vs. 13.7% in the prior-year period • Considerable growth opportunities in our existing branch footprint, particularly from branches opened within the last 3 years • Plan to open approxi
Slide 15: Digitally-Sourced Originations Continue to Accelerate
Digitally-Sourced Originations Continue to Accelerate • 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 • As of 4Q 19, our
Slide 16: Appendix
CREGIONAL MANAGEMENT Appendix
Slide 17: Consolidated Income Statements
Consolidated Income Statements in thousands 4Q 19 4Q 18 2019 2018 2017 2016 Revenue Interest and fee income $ 87,784 $ 75,013 $ 321,169 $ 280,121 $ 249,034 $ 220,963 Insurance income, net 6,551 5,624 20,817 14,793 13,061 9,456 Other income 3,649 3,112 13,727 11,792 10,364 10,099 Total revenue 97,984
Slide 18: Consolidated Balance Sheets
Consolidated Balance Sheets in thousands 2019 2018 2017 2016 Cash $ 2,263 $ 3,657 $ 5,230 $ 4,446 Gross finance receivables 1,500,962 1,237,526 1,066,650 916,954 Unearned finance charges and insurance premiums (396,149) (305,283) (249,187) (199,179) Finance receivables 1,104,813 932,243 817,463 717,
Slide 19: Balance Sheet Metrics
Balance Sheet Metrics In addition to financial measures presented in accordance with generally accepted accounting principles (“GAAP”), this presentation contains certain non- GAAP financial measures. We utilize non-GAAP measures as additional metrics to aid in, and enhance, the understanding of our
Slide 20: Regional Management
CREGIONAL MANAGEMENT @ REGIONAL MANAGEMENT L™*