Slide 1: 2Q 2016 Earnings Call Presentation
2Q 2016 Earnings Call Presentation July 26, 2016 Exhibit 99.2
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation and the responses to various questions contain forward-looking statements, which reflect our current views with respect to, among other things, the Company’s operations and financial performance. You can identify these forward-looking statements by the use of
Slide 3: 2Q16 Highlights – A Solid Quarter
2Q16 Highlights – A Solid Quarter GAAP Non-GAAP (in millions, except EPS) 2Q16 2Q15 $ Chg B/(W) % Chg B/(W) 2Q16 % Chg B/(W) Revenue $57.3 $53.0 $4.3 8% $57.3 8% Provision for credit losses $13.4 $12.1 ($1.3) (11%) $13.4 (11%) G&A expense $29.5 $28.2 ($1.3) (5%) $28.9 (2%) Interest expense $4.8 $3.9
Slide 4: Net Income Follows Seasonal Pattern of Portfolio Growth
Net Income Follows Seasonal Pattern of Portfolio Growth Return to normal pattern of seasonal portfolio-driven performance Non-GAAP NI YoY % (54.4%) 21.0% 22.6% 110.1% 42.9% (5.6%) 16.5% EPS (1) $0.33 $0.44 $0.41 $0.50 $0.47 $0.42 $0.53 (1) Calculated using diluted share count; non-GAAP net income ad
Slide 5: Revenue Growth Driven by Strong Portfolio Growth and Stabilizing Yields
Sequential r (2.4%) 0.9% 4.0% 2.9% 0.0% 1.1% Year / Year r 5.9% 11.7% 2.2% 5.4% 7.9% 8.2% Revenue Growth Driven by Strong Portfolio Growth and Stabilizing Yields 8.2% revenue growth is the highest in last four quarters Revenue growth continues to converge with growth in average net receivables Stabl
Slide 6: Product Category Trends
Product Category Trends in millions Large loans continue to grow; now represent 30% of total loan portfolio Pace of automobile loan liquidation slowed in quarter Renewal of checks into small loans began during 2Q; reporting of convenience checks will change in 3Q Ending Net Receivables 1Q 2015 2Q 20
Slide 7: Net Charge-Offs Improve; Credit Quality Stable
Net Charge-Offs Improve; Credit Quality Stable Excluding Bulk Charged-Off Debt Sale 2Q16 charge-offs reflect roll through of 1Q16 delinquency profile Sequential r (29.2%) (3.0%) (3.2%) (5.5%) 27.4% (10.6%) Year / Year r 4.4% (3.6%) (9.8%) (37.1%) 13.1% 4.2% Sequential r (4.0%) (0.5%) (0.9%) 0.5% 0.7
Slide 8: 2Q 2016 30+ day delinquency level increased to 6.8%
2Q 2016 30+ day delinquency level increased to 6.8% Total delinquencies in 2Q 2016 remained low at 18.3% Current profile normally indicative of next two quarters of loss Last three delinquency buckets expected to roll through in third quarter Seasonal Pattern of Delinquency Slow File % 19.2% 20.6% 2
Slide 9: Good Sequential and Year-Over-Year Expense Management
Good Sequential and Year-Over-Year Expense Management Relatively flat expense profile despite 22 net additional branches 2Q16 vs. 2Q15, ~ $1.2 million System conversion expense of $0.4 million in 1Q16 and $0.6 million in 2Q16 Sequential r 14.9% (13.4%) (7.3%) 9.0% 4.4% (0.9%) Year / Year r 64.0% 21.
Slide 10: Estimated Incremental Costs From 2016 Initiatives
Estimated Incremental Costs From 2016 Initiatives in millions Actual 1Q16 Actual 2Q16 Estimated 3Q16 Estimated 4Q16 Loan system conversion costs $0.4 $0.6 $0.8 $0.5 After-tax impact $0.2 $0.4 $0.5 $0.3
Slide 11: Normalized Return Ratios Trends - Fluctuate with Seasonal Results
Normalized Return Ratios Trends - Fluctuate with Seasonal Results
Slide 12: Strategic Updates
Strategic Updates Nortridge loan management system 8 Virginia branches on system Converted all 18 New Mexico branches in July Incurring higher IT costs in 2016 for system implementation Marketing / Online lending update LendingTree channel – call transfer extended to all markets in 3Q South Carolina
Slide 13: CFPB Proposed “Small Dollar” Lending Rule – Highlights
CFPB Proposed “Small Dollar” Lending Rule – Highlights Certain key elements of the proposed rule include: The proposal requires underwriting of covered loans at the inception of the loan—an “ability to repay” determination. Lenders must make a reasonable determination that the consumer will have eno
Slide 14: CFPB Proposed “Small Dollar” Lending Rule – Impact
CFPB Proposed “Small Dollar” Lending Rule – Impact RM’s business practices and estimated impact of proposed rule: RM estimates that 4% to 5% of its current portfolio would qualify as covered loans under the proposed rule based on an all-in APR above 36% and a non-purchase money security interest in
Slide 15: Appendix
Appendix
Slide 16: Non-GAAP Reconciliation
Non-GAAP Reconciliation in millions in millions Because they adjust for certain non-operating and non-cash items, the Company believes that non-GAAP measures are useful to investors as supplemental financial measures that, when viewed with the Company’s GAAP financial information, provide informatio
Slide 17: Regional Management Corp.
Regional Management Corp. ib