Regional Management Corp. · NYSE:RM
Regional Management — Investor Presentation (November 2021)
29 slides from Regional Management's investor presentation, Nov 18, 2021
Slide 1: Investor Presentation November 18, 2021
Investor Presentation November 18, 2021 Exhibit 99.1
Slide 2: Legal Disclosures
2 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, sta
Slide 3: Investment Highlights: Modern Infrastructure & Digital Capabilities
3 Investment Highlights Modern Infrastructure & Digital Capabilities
Slide 4: Strong Profitability While Investing for the Long-Term
4 Strong Profitability While Investing for the Long-Term Credit performance remains very strong through prudent underwriting to rigorous pre-pandemic standards, ongoing investment in custom scorecards, enhanced verification processes, and the use of alternative data in risk and response models Year-
Slide 5: Abundant Market Opportunity to Serve the Underserved
5 Abundant Market Opportunity to Serve the Underserved Approximately 75 million Americans generally align with Regional’s customer base $76 billion market opportunity – RM has less than 2% market share; significant runway for growth $4.1 Trillion Consumer Finance Market (1) 29% of US Population with
Slide 6: Supporting Growth to Generate Shareholder Value
6 Supporting Growth to Generate Shareholder Value Digital initiatives, new-state expansion, and new product development drive record growth Differentiated go-to-market strategy offering small and large loans Well-established, cost-efficient omni-channel sales with integrated marketing Modernized inf
Slide 7: Omni-Channel Approach to Growth
7 Omni-Channel Approach to Growth Net Finance Receivables Geographic Footprint (1) Date of Entry: SC: 1987 TX: 2001 NC: 2004 TN: 2007 AL: 2009 OK: 2011 NM: 2012 GA: 2013 VA: 2015 MO: 2018 WI: 2018 IL: 2021 UT: 2021 Legacy States (prior to 2021) 2021 New States To Date (IL, UT) Potential Future State
Slide 8: Multi-Product Offering Fits Customer Needs
Multi-Product Offering Fits Customer Needs Size (1) Term Security Net Finance Receivables (2) # of Loans (2) Average APR (3) Range: $500 to $2,500 Average: ~$2,000 Up to 48 months Non-essential household goods $419.6 million 257,000 42.7% Range: $2,501 to $25,000 Average: ~$6,100 18 to 60 months Tit
Slide 9: Our Typical Customer
Our Typical Customer Annual income (1) $45,000 Some college or advanced degree (1) 56% Our customer demographics… How we solve their financial needs… Average age 53 years Homeownership 52% (1) Sourced from Fall 2021 Customer Satisfaction Survey 9
Slide 10: Top-Shelf Customer Experience
Top-Shelf Customer Experience Net promoter score of 63, representing our customers’ strong loyalty and willingness to recommend our products to others (1) 90+% favorable ratings for key attributes (1): Loan process was quick, easy, and understandable People are professional, responsive, respectful,
Slide 11: Omni-Channel Originations Provide Market Opportunities
$100.3MM Omni-Channel Originations Provide Market Opportunities Regional Branch Network Supports All Origination Channels Personal Relationships with Customers Convenience Check Loans Furniture and Appliance Retailers (Relationships with approx. 300 retailers) $235.5MM 73% Large Loans 27% Small Loan
Slide 12: Originations Increase & Delinquencies Remain Low
12 Originations Increase & Delinquencies Remain Low 3Q 21 originations are up 34.6% year-over-year Record volume driven by growth initiative originations of $128.6 million in 3Q 21 Digital channel all-time high originations of $48.1 million, up from $36.0 million in 2Q 21 3Q 21 delinquency is flat y
Slide 13: Developing Capabilities to Provide Choices for Customers
Branch Mobile Phone Originate Service Renew existing future Omni-Channel Capabilities Browser 13 Developing Capabilities to Provide Choices for Customers
Slide 14: Improved Branch Loan Origination Process Through Automation
Rudimentary processes Simple linking ads with online partners Limited digital lead volumes API integrations with online affiliate partners Prequalified lead flow driving significant loan volumes Online guaranteed loan offers Modern, cloud-based digital services development pipeline Paper-based loan
Slide 15: Digitally Sourced Originations – Record High
Digitally Sourced Originations – Record High Digital originations are sourced from either our affiliate partnerships or directly from our website All digitally sourced loans are underwritten in our branches by our custom credit scorecards and serviced by our branches Our new digital volume represent
Slide 16: Record High Portfolio Growth
Record High Portfolio Growth ($ in millions) ($ in millions) Net Finance Receivables Total Revenue 16 Year-over-year record loan growth of $255 million, or 24.0% Digital initiatives, new-state expansion, and new product development drive record growth Continuous revenue growth through market cycles
Slide 17: Strong Profitability - Now & Through the Cycle
Strong Profitability - Now & Through the Cycle ($ in millions) Net Income & Diluted Earnings Per Share Return on Assets & Return on Equity 17 As of September 30 (1) (1) (1) (1)
Slide 18: Robust Loan Approval Process
Robust Loan Approval Process 18 Custom automated decision engine used to determine if customer qualifies for product offerings based on risk profile and ability to repay Maintained rigorous pre-pandemic underwriting standards with the addition of enhanced verification processes and the use of altern
Slide 19: Operating Expense Ratio
Operating Expense Ratio Expense Ratios ($ in millions) ($ in millions) (1) (2) (1) (2) Normalized to exclude $3.8 million of non-operating costs; $3.1 million related to the CEO transition and $0.7 million from the system outage. This is a non-GAAP measure. Refer to the Appendix for a reconciliation
Slide 20: Diversified Liquidity Profile
20 Diversified Liquidity Profile Weighted-Average Coupon Private Offering closed in October 2021 - allows for funding of loans with APRs greater than 36% Long history of liquidity support from a strong group of banking partners Diversified funding platform with a senior revolving facility, warehouse
Slide 21: Strong Funding Profile
21 Strong Funding Profile This is a non-GAAP measure. Refer to the Appendix for a reconciliation to the most comparable GAAP measure. Annualized interest expense as a percentage of average net finance receivables As of September 30, 2021, total unused capacity was $722 million (subject to borrowing
Slide 22: Delivering Returns to Shareholders
22 Delivering Returns to Shareholders The Board of Directors and Management have confidence in our business model’s ability to generate excess capital to return to our shareholders on a regular basis. The recurring dividend and repurchase programs allow us to return value to our shareholders, while
Slide 23: Appendix
CHRD Appendix
Slide 24: Deep and Tested Management Experience
Deep and Tested Management Experience Rob Beck President and CEO John Schachtel COO Manish Parmar Chief Credit Risk Officer Harp Rana CFO Jim Ryan Chief Marketing Officer 20+ years of financial services experience Prior to joining Regional, was Managing Director, North America Retail Bank at Citigro
Slide 25: Strong Corporate Governance and Board of Directors
Strong Corporate Governance and Board of Directors Jonathan Brown Partner with Basswood Capital Management, LLC Formerly at Sandelman Partners Formerly at Goldman Sachs Maria Contreras-Sweet Former Administrator of U.S. Small Business Administration Founder of ProAmerica Bank Former Secretary of CA’
Slide 26: Significant Capacity to Absorb Losses
(1) TTM Margin defined as total revenue of $406.3 million, less general and administrative expenses of $184.8 million and interest expense of $33.0 million from 4Q 20 through 3Q 21 (2) Net credit losses as a percentage of average net finance receivables 26 Significant Capacity to Absorb Losses Our b
Slide 27: Non-GAAP Financial Measures
27 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 en
Slide 28: Non-GAAP Financial Measures (Cont’d)
28 Non-GAAP Financial Measures (Cont’d)
Slide 29: CREGIONAL
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