Regional Management Corp. · NYSE:RM
Regional Management — Q4 2020 Earnings Presentation
22 slides from Regional Management's earnings presentation, Feb 10, 2021
Slide 1: 4Q 2020 Earnings Call Supplemental Presentation
4Q 2020 Earnings Call Supplemental Presentation February 10, 2021 Exhibit 99.2
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 20 Financial Highlights
4Q 20 Financial Highlights 3 Net income of $14.3 million, or $1.28 diluted EPS Total revenue decline of $0.5 million, or 0.6%, driven by lower average net finance receivables Interest and fee income down 1.1% year-over-year on 0.7% decrease in average net finance receivables Insurance income, net in
Slide 4: Strong Portfolio Growth Supported by Growth Initiatives
4 Strong Portfolio Growth Supported by Growth Initiatives Strong rebound in portfolio growth in 2H 20 from increased loan demand and adoption of our new growth initiatives Total net finance receivables increased $3 million for the year with $114 million in 2H 20 Core net finance receivables increase
Slide 5: Generated Core Growth Sequentially and Year-Over-Year
Generated Core Growth Sequentially and Year-Over-Year Generated sequential total loan growth of $77 million, or 7.2%, in 4Q 20 Executed new product initiatives, which drove $36 million of the $77 million growth Achieved core loan growth of $19 million year-over-year Continued the mix shift toward la
Slide 6: Originations Increase & Credit Quality Remains Stable
6 Originations Increase & Credit Quality Remains Stable (1) Percentage of accounts that utilized borrower assistance programs during the month Sequentially, 4Q 20 originations are up 16% driven by increased demand and the execution of new growth initiatives Continued direct mail and digital channels
Slide 7: Digitally-Sourced Originations
Digitally-Sourced Originations 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 digital volume represented 29% of our tota
Slide 8: Average Net Finance Receivables and Revenue Trends
Average Net Finance Receivables and Revenue Trends 8 Total revenue yield remained at 35.7% year-over-year Interest and fee yield declined 10 basis points year-over-year due to continued portfolio mix shift toward large loans As of December 31, 2020, 80% of net finance receivables were at or below 36
Slide 9: Significant Capacity to Absorb Losses
(1) TTM Margin defined as total revenue of $373.9 million, less general and administrative expenses of $176.3 million and interest expense of $37.9 million from 1Q 20 through 4Q 20 (2) Net credit losses as a percentage of average net finance receivables 9 Significant Capacity to Absorb Losses Our ba
Slide 10: Lower Net Credit Losses on Low Delinquency Levels
Lower Net Credit Losses on Low Delinquency Levels 10 Net credit loss rate decreased 210 basis points vs. the prior-year period and 90 basis points sequentially on low delinquency levels
Slide 11: Delinquency at Historically Low Levels
Delinquency at Historically Low Levels 4Q 20 delinquency was down from prior year even as borrower assistance usage returned to pre-pandemic levels and government stimulus diminished 30+ days past due of 5.3% was 170 basis points lower than prior year 90+ days past due of 2.4% was 70 basis points lo
Slide 12: Reserved For Stressed Credit Losses
Reserved For Stressed Credit Losses (1) 4Q 20 Ending Reserve includes $30.4 million of incremental COVID-19 reserves (in millions) We ran several macroeconomic stress scenarios, and our final forecast assumed unemployment is 9% at the end of 2021. The macro scenario was adjusted for the potential be
Slide 13: Operating Leverage Impacted by Marketing & Digital Investment
Operating Leverage Impacted by Marketing & Digital Investment Annualized general and administrative expenses as a percentage of average net finance receivables 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 outag
Slide 14: Cost of Funds Trending Downward
Cost of Funds Trending Downward 4Q 20 annualized interest expense as a percentage of ANR improved 40 basis points from the prior-year period, primarily due to the successful closing of a $180 million securitization with a 3-year revolving period and a weighted-average coupon (WAC) of 2.85% in 3Q 20
Slide 15: Strong Funding Profile
15 Strong Funding Profile This is a non-GAAP measure. Refer to the Appendix for a reconciliation to the most comparable GAAP measure Interest expense as a percentage of average net finance receivables (1) As of December 31, 2020, total unused capacity was $438 million (subject to borrowing base) Ava
Slide 16: Appendix
CRRRONAT Appendix —————_———“‘“_O__
Slide 17: Same Store Portfolio Growth
Same Store Portfolio Growth (1) Same store sales are based on branches more than 1 year old 17 Same store(1) year-over-year growth rate of 0.1% in 4Q 20 vs. 17.2% in the prior-year period Considerable growth opportunities in our existing branch footprint, particularly from branches opened within the
Slide 18: Senior Revolver, Securitizations and Warehouse Facility
Senior Revolver Size: $640 million Interest Type: Floating Maturity: September 2022 Lenders: Wells Fargo Bank (Agent), Bank of America, BMO Harris, First Tennessee, Texas Capital, Synovus, Bank United, Axos Bank Collateral: Allows for the funding of Small, Large, and Retail loans Facility has been u
Slide 19: Consolidated Income Statements
Consolidated Income Statements 19
Slide 20: Consolidated Balance Sheets
Consolidated Balance Sheets 20
Slide 21: 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 22: Non-GAAP Financial Measures (Cont'd)
Non-GAAP Financial Measures (Cont’d) 22