Regional Management Corp. · NYSE:RM
Regional Management — Q1 2022 Earnings Presentation
19 slides from Regional Management's earnings presentation, May 4, 2022
Slide 1: 1Q 2022 Earnings Presentation
1Q 2022 Earnings Presentation May 4th, 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: 1Q 2022 Financial Highlights
1Q 2022 Financial Highlights $ in millions $ Chg % Chg 1Q 22 1Q 21 (except per share amounts) B/(W) B/(W) Record net income of $26.8 million, or $2.67 diluted EPS Interest & Fee Income $ 107.6 $ 87.3 $ 20.4 23.3% Insurance Income, Net 10.5 8.0 2.6 32.0% Total revenue increased $23.1 million, or 23.7
Slide 4: Record Originations and Low Delinquencies
Record Originations and Low Delinquencies Quarterly Origination Trend ($ in millions) $420.7 $434.4 $363.9 $312.5 $364.0 $377.7 $326.0 Record originations for a first Digital Originations $232.6 $174.2 $234.8 quarter, and up 38.8% year-over- Direct Mail Branch Originations year 4Q 19 1Q 20 2Q 20 3Q
Slide 5: Digitally Sourced Originations Increase 150% Year-Over-Year
Digitally Sourced Originations Increase 150% Year-Over-Year Digital originations are sourced from either our affiliate partnerships or directly from our website All digitally sourced loans are underwritten in our branches by our custom credit scorecards and serviced by our branches Digital volume re
Slide 6: Record First Quarter Portfolio Growth
Record First Quarter Portfolio Growth ($ in millions) Ending Net Receivables (ENR) vs. 4Q 21 vs. 1Q 21 4Q 19 1Q 20 2Q 20 3Q 20 4Q 20 1Q 21 2Q 21 3Q 21 4Q 21 1Q 22 $ Chg I/(D) % Chg I/(D) $ Chg I/(D) % Chg I/(D) Small Loans (≤ $2,500) $468 $440 $380 $383 $403 $371 $381 $420 $445 $438 ($7) (1.5%) $67
Slide 7: Same Store Portfolio Growth
Same Store Portfolio Growth Same store(1) year-over-year growth rate of 27.3% in 1Q 22 vs. 0.2% in the prior-year period Branch consolidations and our new state, lighter footprint strategy with larger branches are driving very strong ENR growth in all branch cohorts Record-high ENR per branch of $4.
Slide 8: Record Revenue Up 23.7% on Strong Receivable Growth
Record Revenue Up 23.7% on Strong Receivable Growth ($ in millions) Total Revenue $119.5 $120.8 Total revenue and interest and fee $111.5 yields both decreased 110 basis points Other Income $98.0 $96.1 $97.4 $97.7 $99.7 year-over-year due to the continued mix Insurance Income $89.9 $90.5 shift to la
Slide 9: Credit Quality Better Than Pre-Pandemic Levels
Credit Quality Better Than Pre-Pandemic Levels $84.9 ($ in millions) $79.5 30+ & 90+ Delinquency Rates $39.2 $82.0 30+ days past due of 5.7% improved 30 $45.8 basis points from 4Q 21 and 120 basis $72.4 $35.5 $35.0 points from 1Q 19 $60.5 $61.3 90-179 Days $26.0 $49.5 $49.9 $27.1 • 30+ days past due
Slide 10: Reserved For Stressed Credit Losses
Reserved For Stressed Credit Losses In 1Q 22, we reserved $0.6 million primarily for $20.0 million in sequential portfolio growth and released $1.1 million based on the macroeconomic model. The 1Q 22 ending reserve included $15.9 million associated with potential future macroeconomic impacts on cred
Slide 11: Operating Expense Ratio Trend
Operating Expense Ratio Trend (5) Operating expense ratio decreased 0.9% over prior year to 15.4% • Branch optimization costs of $0.4 million increased the ratio 20 basis points in 1Q 22 ($ in millions) Operating Expense Ratio $55.5 $55.1 $46.4 $47.8 $46.2 $45.8 $43.8 $44.8 $40.9 $41.5 17.0% Total G
Slide 12: Low Cost of Funds
Low Cost of Funds (5) Favorable market value increases on interest rate caps impacted interest expense in 1Q 22 by $10.2 million As of March 31, 2022, we had $550 million in total interest rate cap protection (with a weighted-average duration of 1.7 years) on our $129.5 million of variable rate debt
Slide 13: Strong Funding Profile
Strong Funding Profile ($ in millions) Debt Capacity $722 Unused Warehouse Capacity $671 $647 Unused Senior Revolver Capacity $573 $212 $557 $493 $507 $151 $216 As of March 31, 2022, total unused capacity was $671 $369 $400 $94 $438 $89 $168 $98 million (subject to borrowing base) $79 $70 $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 1Q 22 1Q 21 2021 2020 2019 2018 $ in thousands Revenue Interest and fee income $ 107,631 $ 87,279 $ 382,544 $ 335,215 $ 321,169 $ 280,121 Insurance income, net 10,544 7,985 35,482 28,349 20,817 14,793 Other income 2,673 2,467 10,325 10,342 13,727 11,792 Total revenue 1
Slide 17: Consolidated Balance Sheets
Consolidated Balance Sheets 1Q 22 1Q 21 2021 2020 2019 2018 $ in thousands Cash $ 17,635 $ 7,226 $ 10,507 $ 8,052 $ 2,263 $ 3,657 Net finance receivables 1,446,071 1,105,603 1,426,257 1,136,259 1,133,404 951,183 Unearned insurance premiums (47,075) (34,751) (47,837) (34,545) (28,591) (18,940) Allowa
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 1Q 22 1Q 21 2021 2020 2019 2018 Total assets $ 1,497,671 $ 1,098,295 $ 1,459,662 $ 1,103,856 $ 1,158,540 $ 956,395 Less: Intangible assets 9,475 8,926 9,517 8,689 9,438 10,010 Tangible assets (non-GAAP) 1,488,196 1,089,369 1,450,145 1,095,167 1,149