Regional Management Corp. · NYSE:RM
Regional Management — Investor Presentation (February 2021)
33 slides from Regional Management's investor presentation, Feb 23, 2021
Slide 1: Investor Presentation February 24, 2021
Investor Presentation February 24, 2021 Exhibit 99.1
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: Investment Highlights
Investment Highlights Clear Path Forward for Sustainable Long-Term Growth Successful Differentiated Growth Strategy Advanced Credit Tools Deep Management Experience Abundant Market Opportunity Modern Infrastructure
Slide 4: Originations Increase & Credit Quality Remains Stable
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 5: Strong Portfolio Growth Supported by Growth Initiatives
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 increased
Slide 6: 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 Significant Capacity to Absorb Losses
Slide 7: Stable Profitability While Investing for the Long-Term
Stable Profitability While Investing for the Long-Term Credit performance continues to be very strong due to quality and adaptability of our underwriting criteria, custom scorecards, and borrower assistance programs, as well as the bridge provided by government stimulus Large loan portfolio receivab
Slide 8: Abundant Market Opportunity to Serve the Underserved
Abundant Market Opportunity to Serve the Underserved Approximately 80 million Americans generally align with Regional’s customer base $77 billion market opportunity – RM has less than 2% market share; significant runway for growth $4.1 Trillion Consumer Finance Market (1) 30% of US Population with F
Slide 9: Supporting Growth to Generate Shareholder Value
Supporting Growth to Generate Shareholder Value Hybrid approach for portfolio growth – increasing receivables per branch and de novo expansion Differentiated go-to-market strategy offering small and large loans Well-established, cost-efficient omni-channel sales with integrated marketing Modernized
Slide 10: Hybrid Approach to Growth
Hybrid Approach to Growth Multiple channels and products provide attractive market opportunities Most loans serviced and collected through branches Late-stage delinquencies collected through centralized collections group Most branches with significant capacity to increase size of their portfolios En
Slide 11: 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 $403.1 million ~252,000 41.9% Range: $2,501 to $12,000 Average: ~$5,500 18 to 60 months Ti
Slide 12: Core Loan Portfolio Growth Driven by Large Loan Receivables
Core Loan Portfolio Growth Driven by Large Loan Receivables Since adding large loans as a core product in 2015, large loan receivables have grown from $47 million to $715 million Large Loan CAGR of 57%
Slide 13: 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 approximately 2
Slide 14: Omni-Channel Originations Provide Market Opportunities
$43.5MM Omni-Channel Originations Provide Market Opportunities Branches are the foundation of Regional’s multi-channel strategy. Mail campaigns attract approximately 100,000 new customers per year to Regional. Regional continues to expand digital channel / online lending capabilities to acquire cust
Slide 15: NLS Platform Supports Advanced Marketing & Analytics
NLS provides visibility to the “application funnel” that was previously invisible Applications System Eligible Branch Approved (Marketing Stimulus) Pre-NLS Post-NLS NLS Platform Supports Advanced Marketing & Analytics Understanding “funnel dynamics” provides significant benefit to Marketing, Risk, a
Slide 16: Regional's Digital Journey – Past, Present and Future
Regional’s Digital Journey – Past, Present and Future Rudimentary processes and no prequalification criteria to acquire digital leads Lead generation through online affiliates Servicing via customer portal Remote closings for renewals Paper-based loan application process Labor intensive data entry r
Slide 17: Developing Omni-Channel Capabilities for Customers
Developing Capabilities to Provide Customers the Choice of Where and How to Interact With Us In Branch Phone Browser Originate Service Renew existing future Omni-Channel Capabilities Mobile
Slide 18: Top-Shelf Customer Experience
Top-Shelf Customer Experience Net promoter score of 58, 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, k
Slide 19: Our Typical Customer
Our Typical Customer Annual income (1) $45,000 Some college or advanced degree (1) 61% Our customer demographics… How we solve their financial needs… Average age 54 years Homeownership 56% (1) Sourced from Fall 2020 Customer Satisfaction Survey
Slide 20: Robust Loan Approval Process
Send to Branch Underwriting Decision Branch Exceptions Review Credit Assess Ability to Repay Positive Net Cash Flow Audits Initial Decision Review of Customer Financials Underwriting Exceptions Sent to Home Office Credit Custom Decision Engine Final Decision Book New Loan Credit / Underwriting Proce
Slide 21: Operating Expense and Efficiency Ratios
Operating Expense and Efficiency Ratios Operating Expense Ratios ($ in millions) ($ in millions) (1) (1) (2) Excludes non-operating G&A expenses of $3.1 million related to executive transition costs, $0.7 million from the system outage, and $0.8 million of severance related to workforce actions Excl
Slide 22: Volume Driven Revenue Growth
Volume Driven Revenue Growth ($ in millions) ($ in millions) Net Finance Receivables Total Revenue
Slide 23: Continued Profitability Despite Challenging COVID-19 Environment
Continued Profitability Despite Challenging COVID-19 Environment ($ in millions) Net Income & Diluted Earnings Per Share Return on Assets & Return on Equity 2020 results impacted by COVID-19 pandemic Financials include a $30.4 million reserve for estimated incremental credit losses on customer accou
Slide 24: Funding Sources: Senior Revolver, Securitizations, Warehouse
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 25: Strong Funding Profile
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) Availa
Slide 26: Announcement of Capital Return Plan
Announcement of Capital Return Plan Shareholder value creation… Our Board of Directors authorized the repurchase of up to $30.0 million of our outstanding shares of common stock. As of December 31, 2020, we had repurchased 435 thousand shares of common stock at a total cost of $12.0 million. Our Boa
Slide 27: Investment Highlights
Investment Highlights Clear Path Forward for Sustainable Long-Term Growth Successful Differentiated Growth Strategy Advanced Credit Tools Deep Management Experience Abundant Market Opportunity Modern Infrastructure
Slide 28: Appendix
G@REGIONAL MANAGEMENT Appendix _——_t—‘OS™éCOCOW
Slide 29: 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 Citigrou
Slide 30: 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 31: 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 32: Non-GAAP Financial Measures (Cont'd)
Non-GAAP Financial Measures (Cont’d)
Slide 33: EGIONAL
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