Regional Management Corp. · NYSE:RM
Regional Management — Q3 2019 Earnings Presentation
20 slides from Regional Management's earnings presentation, Nov 6, 2019
Slide 1: 3Q 2019 Earnings Call Supplemental Presentation
3Q 2019 Earnings Call Supplemental Presentation November 6, 2019
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: 3Q 19 Highlights
3Q 19 Highlights dollars in millions 3Q 19 3Q 18 $ Chg B/(W) % Chg B/(W) (except per share amounts) Average Finance Receivables $1,010.5 $869.1 $141.5 16.3% Interest & Fee Income 83.1 72.1 11.0 15.2% Total Revenue 91.7 77.9 13.8 17.7% Provision for Credit Losses 24.5 23.6 (0.9) (3.7%) G&A Expense 40
Slide 4: Consecutive Quarters of Year-Over-Year Double-Digit Portfolio Growth
18 Consecutive Quarters of Year-Over-Year Double-Digit Portfolio Growth Ending Finance Receivables vs. 2Q 19 vs. 3Q 18 in millions 2Q 17 3Q 17 4Q 17 1Q 18 2Q 18 3Q 18 4Q 18 1Q 19 2Q 19 3Q 19 $ Chg I/(D) % Chg I/(D) $ Chg I/(D) % Chg I/(D) Small Loans (≤ $2,500) $349 $363 $376 $360 $385 $414 $438 $42
Slide 5: Consecutive Quarters of Year-Over-Year Double-Digit Revenue Growth
13 Consecutive Quarters of Year-Over-Year Double-Digit Revenue Growth Revenue • Total revenue increased 17.7% vs. $100.0 $91.7 prior-year period $90.0 $83.7 $84.3 $81.7 $77.9 $80.0 $72.1 $72.6 $72.4 • Interest and fee yield decreased Millions $69.2 $70.0 $65.3 30 basis points vs. the prior-year peri
Slide 6: Recent Net Credit Loss Trends
Recent Net Credit Loss Trends • Annualized net credit loss rate increased 50 basis points vs. the prior-year period. The increase includes 40 basis points of additional non- file insurance claims (bankruptcy losses) that shifted to net credit losses following the business policy change implemented i
Slide 7: Recent Provision Trends
Recent Provision Trends $70.0 14% Allowance as % of Ending Finance Receivables $30.0 Provision for Credit Losses 35.0% $60.0 12% 30.3% 30.5% $60.9 28.5% 29.1% 28.3% 28.6% 26.7% $58.3 27.9% 30.0% Provision for Credit Losses (in millions) $57.2 $25.0 27.0% 26.9% Allowance for Credit Losses (in million
Slide 8: Seasonal Pattern of Delinquency
Seasonal Pattern of Delinquency • 3Q 19 delinquency is down slightly from prior year largely due to new credit scorecards − 30+ days past due of 6.6% is 50 basis points lower than prior year − 90+ days past due of 2.8% is 10 basis points lower than prior year 30+ & 90+ Delinquency Rates $75.0 12.0%
Slide 9: Achieving Operating Leverage While Investing in Our Business
Achieving Operating Leverage While Investing in Our Business Operating Expense Ratio $50.0 19.0% 17.9% 18.0% $40.2 $40.0 $38.2 $37.7 18.0% $35.9 $36.6 $33.8 $34.0 $34.6 $33.2 $31.6 17.0% $30.0 17.0% 17.1% % of AFR 16.5% 16.5% Millions 16.2% 16.1% 16.2% 15.9% $20.0 16.0% $10.0 15.0% $0.0 14.0% 2Q 17
Slide 10: Achieving Operating Leverage While Investing in Our Business
Achieving Operating Leverage While Investing in Our Business Efficiency Ratio $50.0 50.0% 48.9% 48.4% $40.2 $40.0 47.2% 47.6% $38.2 $37.7 48.0% $35.9 $36.6 $33.8 $33.2 46.7% $31.6 $34.6 46.0% $34.0 $30.0 46.0% % of Revenue 44.8% Millions 45.9% 43.7% 43.8% $20.0 44.0% $10.0 42.0% $0.0 40.0% 2Q 17 3Q
Slide 11: Interest Expense Trend
Interest Expense Trend $12.0 12.0% $10.3 $9.6 $9.7 $9.8 $10.0 10.0% $8.7 $7.9 $8.0 8.0% $7.2 $6.7 $6.8 % of AFR Millions $6.0 6.0% $5.2 4.2% 4.2% 4.2% 4.1% 3.9% 4.0% $4.0 3.5% 3.4% 3.5% 4.0% 3.0% $2.0 2.0% $0.0 0.0% 2Q 17 3Q 17 4Q 17 1Q 18 2Q 18 3Q 18 4Q 18 1Q 19 2Q 19 3Q 19 Interest Expense % of AF
Slide 12: Funding Enhancements
Funding Enhancements Senior Revolver Warehouse Facility RMIT 2019-1 Amendment Amendment Securitization Extended the maturity to Extended the maturity to $130 million of new fixed-rate September 2022 April 2022 debt through the securitization market Changed Agent to Wells Fargo Reduced pric
Slide 13: Strong Funding Profile
Strong Funding Profile Debt Capacity • As of September 30, 2019, total undrawn capacity was $400 $94 $311 million (subject to $95 $120 $74 borrowing base) $300 $43 $34 $101 $34 • Fixed rate debt represents Millions $200 $69 $59 $339 39% of total debt $287 $312 $294 $277 $224 $257 $100 $193 $179 $188
Slide 14: Continued Growth Opportunity from Existing and De Novo Branches
Continued Growth Opportunity from Existing and De Novo Branches • Same store(1) portfolio growth in 3Q 19 of 15.9% vs. 14.4% in the prior-year period • Considerable growth opportunities in our existing branch footprint, particularly from branches opened within the last 3 years • Plan to open approxi
Slide 15: Digitally Sourced Originations Continue to Accelerate
Digitally Sourced Originations Continue to Accelerate • 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 • As of 3Q 19, our
Slide 16: Appendix
CREGIONAL MANAGEMENT Appendix
Slide 17: Consolidated Income Statements
Consolidated Income Statements in thousands 3Q 19 3Q 18 2018 2017 2016 2015 Revenue Interest and fee income $ 83,089 $ 72,128 $ 280,121 $ 249,034 $ 220,963 $ 195,794 Insurance income, net 5,087 2,898 14,793 13,061 9,456 11,654 Other income 3,531 2,890 11,792 10,364 10,099 9,858 Total revenue 91,707
Slide 18: Consolidated Balance Sheets
Consolidated Balance Sheets in thousands 3Q 19 3Q 18 2018 2017 2016 2015 Cash $ 2,044 $ 517 $ 3,657 $ 5,230 $ 4,446 $ 7,654 Gross finance receivables 1,404,172 1,175,797 1,237,526 1,066,650 916,954 785,042 Unearned finance charges and insurance premiums (361,986) (287,721) (305,283) (249,187) (199,1
Slide 19: Balance Sheet Metrics
Balance Sheet Metrics In addition to financial measures presented in accordance with generally accepted accounting principles (“GAAP”), this presentation contains certain non- GAAP financial measures. We utilize non-GAAP measures as additional metrics to aid in, and enhance, the understanding of our
Slide 20: CREGIONAL
CREGIONAL MANAGEMENT @ REGIONAL MANAGEMENT L"*