Regional Management Corp. · NYSE:RM
Regional Management — Q4 2024 Earnings Presentation
25 slides from Regional Management's earnings presentation, Feb 5, 2025
Slide 1: 4Q 24 Earnings Presentation
4Q 24 Earnings Presentation February 5, 2025
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: 2024 Highlights
2024 Highlights $41.2 million net income Net income and diluted EPS more than doubled YoY $4.14 diluted EPS $1.7 billion originations 7.8% YoY increase in originations Opened 7 new branches in 2024 to expand 6.8% net finance receivables growth addressable market; revenue increased 6.7% YoY $52 milli
Slide 4: 4Q 24 Highlights
4Q 24 Highlights 575,400 29.8% $0.98 Customer Accounts Interest and Fee Yield* Diluted Earnings Per Share Up 6.9% YoY Up 100 basis points YoY $1.89 billion 7.7% 3.5% Net Finance Receivables 30+ Delinquency Rate Dividend Yield Up $121 million or 6.8% YoY 4Q 24 $0.30 dividend per share 10.8% $476 mill
Slide 5: 4Q 24 Financial Highlights
4Q 24 Financial Highlights • Net income of $9.9 million; diluted EPS of $0.98 • Includes $7.7 million impact to provision for credit losses, or $6.0 million impact to net income, from sequential portfolio growth of $72.8 million $ Chg % Chg • Record total revenue of $154.8 million increased $13.2 mi
Slide 6: Originations Trend
Originations Trend • Record total originations of $475.9 million were up from $407.8 million in 4Q 23 • 4Q 24 branch, digital, and direct mail originations were up year-over-year by 14.8%, 34.9%, and 14.6%, respectively Quarterly Origination Trend ($ in millions) $470.3 $475.9 $418.7 $425.1 $426.1 $
Slide 7: Controlled Portfolio Growth and Solid Small Loan Growth
Controlled Portfolio Growth and Solid Small Loan Growth Ending Net Finance Receivables ($ in millions) vs. 3Q 24 vs. 4Q 23 3Q 22 4Q 22 1Q 23 2Q 23 3Q 23 4Q 23 1Q 24 2Q 24 3Q 24 4Q 24 $ Chg I/(D) % Chg I/(D) $ Chg I/(D) % Chg I/(D) Large loans (> $2,500) $1,116 $1,208 $1,212 $1,238 $1,272 $1,274 $1,2
Slide 8: Revenue and Average Net Finance Receivables Trends
Revenue and Average Net Finance Receivables Trends Total Revenue ($ in millions) $154.8 • Record total revenue of $154.8 million grew $146.3 $135.4 $133.5 $140.9 $141.7 $144.3 $143.0 9.3% year-over-year in 4Q 24, including a $1.9 $131.5 $132.0 Other Income million benefit in 4Q 23 from the loan sale
Slide 9: Recent Credit Trends
Recent Credit Trends 13.9% 30+ & 90+ Delinquency Rates ($ in millions) $145.8 $72.2 • 4Q 24 delinquency of 7.7% compared to 6.9% $121.2 $128.4 $122.9 $124.2 $122.7 $126.0 11.9% in 4Q 23 $119.8 30-89 Days $116.0 $116.3 $64.6 $55.4 $63.0 90-179 Days $57.7 $67.6 $52.6 $58.6 $66.0 $62.6 9.9% • 4Q 24 30+
Slide 10: Front Book 89% of Total Portfolio
Front Book 89% of Total Portfolio Front Book/Back Book Mix ($ in millions) • Higher-credit-quality ENR from the front book is (December 31, 2024) performing as expected and becoming a larger portion of the portfolio $1,893 $146 (1) $200 (2) • Front book was 89% of the total portfolio, an increase fr
Slide 11: Reserved For Stressed Credit Losses
Reserved For Stressed Credit Losses • In 4Q 24, we increased our allowance for credit losses by $7.4 million. Portfolio growth increased the allowance $7.7 million and was partially offset by changes in estimated future impacts of weather events on credit losses. We are required to reserve for expec
Slide 12: Continued Focus on Operating Leverage & Tight Expense Control
Continued Focus on Operating Leverage & Tight Expense Control Operating Expense Ratio ($ in millions) $64.8 $64.6 $62.1 $62.5 $59.3 $60.4 $60.1 $58.2 $56.9 Total G&A Expense $55.1 Operating Expense • 4Q 24 operating expense ratio Ratio decreased 80 basis points from 14.9% 14.4% 14.8% the prior-year
Slide 13: Cost of Funds
Cost of Funds • 4Q 24 cost of funds* increased 20 basis points year-over-year due to the maturation of lower-cost, fixed-rate debt • 4Q 24 cost of funds is comparable sequentially Interest Expense ($ in millions) 10.00% $19.4 $19.8 9.00% $17.5 $17.5 $17.9 8.00% $16.8 $16.9 $16.2 $14.9 7.00% 6.00% $1
Slide 14: Strong Funding Profile
Strong Funding Profile Unused Capacity ($ in millions) $557 $555 $552 • As of December 31, 2024, total unused capacity was $466 $466 million (subject to borrowing base) • Available liquidity of $137 million as of December 31, 2024 • Fixed-rate debt represented 79% of total debt as of 2021 2022 2023
Slide 15: 4Q Results and Outlook
4Q 24 Results and Outlook Key Metrics 4Q 24 Results 1Q 25 Outlook ENR Growth/(Liquidation) $72.8 million ~($0.0 - $5.0 million) ANR Growth $60.0 million ~$35.0 million 80 basis points ~90 basis points Total Revenue Yield sequential increase sequential decrease Net Credit Losses/ ~$60.0 million / 12.
Slide 16: Appendix
Appendix REGIONAL 16 MANAGFMENT
Slide 17: Higher ENR Per Branch is Driving Efficiency
Higher ENR Per Branch is Driving Efficiency • Branch consolidations and our new-state, lighter-footprint strategy with larger branches drove higher ENR per branch • Same store* year-over-year growth rate of 6.1% in 4Q 24 vs. 1.5% in the prior-year period • The less than 1 year branch cohort as of 4Q
Slide 18: Digitally Sourced Originations
Digitally Sourced Originations • Digital volume represented 26.1% of our total new borrower volume in 4Q 24 • Large loans represented 71.5% of new borrower digitally sourced loans booked in 4Q 24 Digitally Sourced Origination Volume ($ in millions) $56.3 $53.8 $50.7 $50.6 $50.7 $47.7 $43.4 $39.9 Lar
Slide 19: 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 $355 m
Slide 20: Consolidated Income Statements
Consolidated Income Statements $ in thousands 4Q 24 4Q 23 2024 2023 2022 2021 Revenue Interest and fee income $ 138,246 $ 126,190 $ 528,894 $ 489,698 $ 450,854 $ 382,544 Insurance income, net 11,792 10,985 40,695 44,529 43,502 35,482 Other income 4,794 4,484 18,914 17,172 12,831 10,325 Total revenue
Slide 21: Consolidated Balance Sheets
Consolidated Balance Sheets $ in thousands 2024 2023 2022 2021 Cash $ 3,951 $ 4,509 $ 3,873 $ 10,507 Net finance receivables 1,892,535 1,771,410 1,699,393 1,426,257 Unearned insurance premiums (48,068) (47,892) (51,008) (47,837) Allowance for credit losses (199,500) (187,400) (178,800) (159,300) Net
Slide 22: 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 23: Non-GAAP Financial Measures (Cont'd)
Non-GAAP Financial Measures (Cont’d) $ in thousands 2024 2023 2022 2021 Total assets $ 1,909,109 $ 1,794,527 $ 1,724,987 $ 1,459,662 Less: Intangible assets 24,524 15,846 12,122 9,517 Tangible assets (non-GAAP) 1,884,585 1,778,681 1,712,865 1,450,145 Debt 1,478,336 1,399,814 1,355,359 1,107,953 Tota
Slide 24: Glossary
Glossary • Allowance for credit loss rate – allowance for credit losses as a percentage of ending net finance receivables • ANR – average net finance receivables • Back book – loans originated from 4Q 21 to 3Q 22 and all delinquent renewals associated with loans originated prior to 4Q 22 • Cost of f
Slide 25: Regional Management
¢ REGIONAL = MANAGEMENT. nyse NYSE