Regional Management Corp. · NYSE:RM
Regional Management — Q1 2021 Earnings Presentation
21 slides from Regional Management's earnings presentation, May 4, 2021
Slide 1: 1Q 2021 Earnings Call Supplemental Presentation
1Q 2021 Earnings Call Supplemental Presentation May 4, 2021
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 2021 Financial Highlights
1Q 2021 Financial Highlights dollars in millions 1Q 21 1Q 20 $ Chg B/(W) % Chg B/(W) (except per share amounts) Average Net Finance Receivables (ANR) $ 1,123.4 $ 1,123.3 $ 0.1 0.0% Interest & Fee Income 87.3 87.0 0.3 0.3% Total Revenue 97.7 96.1 1.7 1.7% Provision For Credit Losses 11.4 49.5 38.2 77
Slide 4: Originations Increase & Credit Quality Remains Stable
Originations Increase & Credit Quality Remains Stable Quarterly Origination Trend $100.0 1Q Monthly Origination Trend $400.0 $349.0 $348.9 $359.1 $358.7 $82.8 $79.2 $350.0 $80.0 $308.1 $69.4 $295.2 $300.0 2020 $60.0 Millions $229.2 $231.4 Millions $250.0 $219.5 $200.0 $172.2 $40.0 $150.0 2019 $100.0
Slide 5: Generated Year-Over-Year Loan Growth
Generated Year-Over-Year Loan Growth Ending Net Finance Receivables (ENR) vs. 4Q 20 vs. 1Q 20 in millions 4Q 18 1Q 19 2Q 19 3Q 19 4Q 19 1Q 20 2Q 20 3Q 20 4Q 20 1Q 21 $ Chg I/(D) % Chg I/(D) $ Chg I/(D) % Chg I/(D) Small Loans (≤ $2,500) $442 $426 $435 $454 $468 $440 $380 $383 $403 $371 ($32) (7.9%)
Slide 6: 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 33% of ou
Slide 7: Average Net Finance Receivables and Revenue Trends
Average Net Finance Receivables and Revenue Trends Revenue $100.0 $98.0 $96.1 $97.4 $97.7 • Total revenue yield increased 60 $91.7 $89.9 $90.5 basis points year-over-year $90.0 $83.7 $84.3 $81.7 • Interest and fee yield increased 10 Millions $80.0 basis points year-over-year $70.0 $60.0 • As of Marc
Slide 8: Lower Net Credit Losses on Low Delinquency Levels
Lower Net Credit Losses on Low Delinquency Levels Net credit loss rate decreased 280 basis points versus the prior-year period on low delinquency levels Net Credit Loss Rates 11.0% 10.7% 10.5% 10.6% 10.4% Annualized % of ANR 8.9% 9.0% 9.0% 8.1% 7.8% 7.7% 6.9% 7.0% 5.0% 4Q 18 1Q 19 2Q 19 3Q 19 4Q 19
Slide 9: Delinquency at Historically Low Levels
Delinquency at Historically Low Levels 1Q 21 delinquency is down from the prior year as a result of government stimulus and enhanced credit standards • 30+ days past due of 4.3% is 230 basis points lower than prior year • 30+ days past due of $47.7 million (loan loss reserves of $139.6 million) 30+
Slide 10: Reserved For Stressed Credit Losses
Reserved For Stressed Credit Losses We ran several macroeconomic stress scenarios and adjusted for the potential benefits of government stimulus. In 1Q 21, we released $3.8 million of the reserve primarily for $30.7 million in sequential portfolio liquidation and released COVID-19 related reserves o
Slide 11: Operating Expense Ratio Trend
Operating Expense Ratio Trend The following items impacted the Operating Expense Ratio by 80 basis points in 1Q 21: our investment in digital and technological capabilities of $1.3 million, and increased marketing expenses of $1.0 million to support our growth initiatives $50.0 Operating Expense Rat
Slide 12: Cost of Funds Trending Downward
Cost of Funds Trending Downward $12.0 12.0% $10.3 $10.3 $10.2 $10.0 $9.6 $9.7 $9.8 10.0% $9.1 $9.3 $9.3 $8.0 8.0% $7.1 % of ANR (1) Millions $6.0 6.0% 4.1% 4.1% 4.1% 4.0% 3.7% 3.6% 3.5% $4.0 3.4% 3.3% 4.0% 2.6% $2.0 2.0% $- - 4Q 18 1Q 19 2Q 19 3Q 19 4Q 19 1Q 20 2Q 20 3Q 20 4Q 20 1Q 21 Interest Expen
Slide 13: Strong Funding Profile
Strong Funding Profile $600 Debt Capacity $573 • As of March 31, 2021, total $493 $507 unused capacity was $573 million $89 $500 $433 $438 (subject to borrowing base) $407 $400 $98 $94 $368 $369 • Available liquidity of $207 million Millions $400 $94 $83 $95 $311 $70 as of March 31, 2021 $74 $79 $30
Slide 14: Appendix
@ REGIONAL MANAGEMENT Appendix NTE
Slide 15: Significant Capacity to Absorb Losses
Significant Capacity to Absorb Losses Our balance sheet is in a strong position to absorb losses Absorption Capacity (in millions) 1Q 21 Total stockholders' equity $283.6 Allowance for credit losses $139.6 Total absorption capacity $423.2 Absorption capacity as % of net finance receivables 38.3% TTM
Slide 16: Same Store Portfolio Growth
Same Store Portfolio Growth • Same store(1) year-over-year growth rate of 0.2% in 1Q 21 vs. 17.6% in the prior-year period • Considerable growth opportunities in our existing branch footprint, particularly from branches opened within the last 3 years $3,500 Ending Net Finance Receivables Per Branch
Slide 17: 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 Securitizations Size: $640 million Size: $300 mill
Slide 18: Consolidated Income Statements
Consolidated Income Statements in thousands 1Q 21 1Q 20 2020 2019 2018 2017 Revenue Interest and fee income $ 87,279 $ 86,997 $ 335,215 $ 321,169 $ 280,121 $ 249,034 Insurance income, net 7,985 5,949 28,349 20,817 14,793 13,061 Other income 2,467 3,128 10,342 13,727 11,792 10,364 Total revenue 97,73
Slide 19: Consolidated Balance Sheets
Consolidated Balance Sheets in thousands 1Q 21 1Q 20 2020 2019 2018 2017 Cash $ 7,226 $ 14,668 $ 8,052 $ 2,263 $ 3,657 $ 5,230 Net finance receivables 1,105,603 1,102,285 1,136,259 1,133,404 951,183 834,045 Unearned insurance premiums (34,751) (28,183) (34,545) (28,591) (18,940) (16,582) Allowance f
Slide 20: 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 21: Non-GAAP Financial Measures (Cont'd)
Non-GAAP Financial Measures (Cont’d) in thousands 1Q 21 1Q 20 2020 2019 2018 2017 Total assets $ 1,098,295 $ 1,078,890 $ 1,103,856 $ 1,158,540 $ 956,395 $ 829,483 Less: Intangible assets 8,926 9,144 8,689 9,438 10,010 10,607 Tangible assets (non-GAAP) 1,089,369 1,069,746 1,095,167 1,149,102 946,385