Regional Management Corp. · NYSE:RM
Regional Management — Q4 2016 Earnings Presentation
16 slides from Regional Management's earnings presentation, Feb 7, 2017
Slide 1: 4Q 2016 Earnings Call Presentation
4Q 2016 Earnings Call Presentation February 7, 2017 Exhibit 99.2
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation and the responses to various questions contain forward-looking statements, which reflect our current views with respect to, among other things, the Company’s operations and financial performance. You can identify these forward-looking statements by the use of
Slide 3: 4Q16 Highlights – Strong Portfolio Growth
4Q16 Highlights – Strong Portfolio Growth GAAP net income of $6.5 million is $0.9 million below prior year; non-GAAP net income up 5% vs. prior year Non-GAAP net income up $0.3 million; prior year benefited from a one-time $1.2 million after-tax benefit attributable to a bulk charged-off debt sale N
Slide 4: Net Income Follows Seasonal Pattern of Ledger Growth
Net Income Follows Seasonal Pattern of Ledger Growth YoY $24.2 $54.6 $58.3 $82.3 $81.5 $73.2 $94.5 $89.3 Change 4.8% 10.5% 10.7% 15.1% 15.5% 12.8% 15.7% 14.2% Normal pattern of seasonal driven performance 4Q15 included $1.2 million after-tax benefit from bulk charged-off debt sale Strong 4Q16 growth
Slide 5: Revenue Driven by Strong Portfolio Growth
Revenue Driven by Strong Portfolio Growth Interest & fee yields impacted by higher net credit losses and higher 90+ delinquencies Insurance income impacted by higher insurance claims Average net receivables up in 4Q; 3Q & 4Q show largest increases from seasonal growth Sequential Δ (0.4%) (0.9%) (1.1
Slide 6: Interest & Fee Income Driven by Strong Portfolio Growth
Interest & Fee Income Driven by Strong Portfolio Growth Interest & fee income y/y growth accelerated Average net receivables up in 4Q; 3Q & 4Q show largest increases from seasonal growth Sequential Δ (0.9%) (0.6%) (0.9%) (0.4%) (0.2%) 0.5% 0.3% (0.2%) Year / Year Δ 1.8% 0.8% (2.5%) (2.8%) (2.1%) (1.
Slide 7: Product Category Trends
in millions Product Category Trends Small loans (including convenience check loans) have grown in dollars but have become a smaller percentage of the total portfolio (from 56% in 1Q15 to 50% in 4Q16) Large loans now represent 33% of the total portfolio
Slide 8: Growth Drives Increase in Provision; NCL Rate Increased
Growth Drives Increase in Provision; NCL Rate Increased Excludes $2.0MM gain on bulk sale of charged-off loans 4Q 2016 provision increased due to strong portfolio growth and net build of allowance $13.3 $12.9 $12.5 $11.8 $15.0 $13.4 $13.5 $17.3 $2.0 $0.0 $4.0 $8.0 $12.0 $16.0 $20.0 $24.0 $0.0 $4.0 $
Slide 9: 4Q 2016 Delinquency
4Q 2016 Delinquency: Fourth consecutive quarter for 1+ days past due below 19% 30+ days past due shows seasonal increase to 7.4% Last 3 delinquency buckets expected to roll through in next quarter Seasonal Pattern of Delinquency 1+ days past due % 19.2% 20.6% 22.4% 20.3% 16.7% 18.3% 18.2% 18.1% 30+
Slide 10: Continuing to Manage Expenses Closely
Continuing to Manage Expenses Closely Sequential Δ 14.9% (13.4%) (7.3%) 9.0% 4.4% (0.9%) 3.1% (5.3%) Year / Year Δ 64.0% 21.7% 3.6% 0.5% (8.6%) 4.6% 16.3% 1.0% As % of ANR (1) 24.4% 20.5% 17.8% 18.6% 19.3% 18.9% 18.1% 16.3% (1) As a percentage of average receivables (annualized)
Slide 11: Strategic Updates
Strategic Updates Nortridge loan management system implementation Conversion to NLS progressing Building additional functionality prior to converting additional states Plan to roll out balance of states throughout 2017 Marketing / De Novo branches Rolling out improved targeting and segmentation in d
Slide 12: Comparison of Loan System Implementation Costs
Comparison of Loan System Implementation Costs in millions 1Q 2Q 3Q 4Q Full Year 2016 actual costs $0.4 $0.6 $0.4 $0.2 $1.6 2017 estimated costs $0.6 - $0.7 $0.6 - $0.8 $0.6 - $0.8 $0.6 - $0.7 $2.5 - $3.0 Pre-tax increase $0.2 - $0.3 $0.0 - $0.2 $0.2 - $0.4 $0.4 - $0.5 $0.9 - $1.4 After-tax increase
Slide 13: Appendix
Appendix q
Slide 14: Non-GAAP Reconciliation
Non-GAAP Reconciliation The Company believes that non-GAAP measures are useful to investors as supplemental financial measures that, when viewed with the Company’s GAAP financial information, provide information regarding trends in the Company’s results of operations, which is intended to help inves
Slide 15: Non-GAAP Reconciliation – Non-GAAP Adjustments
Non-GAAP Reconciliation Non-GAAP Adjustments (in millions, except EPS) 1Q 2015 2Q 2015 3Q 2015 4Q 2015 1Q 2016 2Q 2016 3Q 2016 4Q 2016 (1) Bulk sale of charged-off loans $— $— $— $-1.964 $— $— $— $— (2) Loan system conversion 0.60899999999999999 — — 0.18 0.39200000000000002 0.63600000000000001 0.411
Slide 16: Regional Management Corp.
Regional Management Corp. ib