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0001193125-17-363253.txt : 201712070001193125-17-363253.hdr.sgml : 2017120720171207060704ACCESSION NUMBER:0001193125-17-363253CONFORMED SUBMISSION TYPE:8-KPUBLIC DOCUMENT COUNT:18CONFORMED PERIOD OF REPORT:20171207ITEM INFORMATION:Regulation FD DisclosureITEM INFORMATION:Financial Statements and ExhibitsFILED AS OF DATE:20171207DATE AS OF CHANGE:20171207

FILER:

COMPANY DATA:COMPANY CONFORMED NAME:Regional Management Corp.CENTRAL INDEX KEY:0001519401STANDARD INDUSTRIAL CLASSIFICATION:PERSONAL CREDIT INSTITUTIONS [6141]IRS NUMBER:570847115STATE OF INCORPORATION:DEFISCAL YEAR END:1231

FILING VALUES:FORM TYPE:8-KSEC ACT:1934 ActSEC FILE NUMBER:001-35477FILM NUMBER:171243472

BUSINESS ADDRESS:STREET 1:979 BATESVILLE ROADSTREET 2:SUITE BCITY:GREERSTATE:SCZIP:29651BUSINESS PHONE:864-448-7000

MAIL ADDRESS:STREET 1:979 BATESVILLE ROADSTREET 2:SUITE BCITY:GREERSTATE:SCZIP:29651

8-K1d489596d8k.htmFORM 8-K

Form 8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENTREPORT

Pursuant to Section13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): December7, 2017

Regional Management Corp.

(Exact name of registrant as specified in its charter)

Delaware001-3547757-0847115

(State or other jurisdiction

of incorporation)

(Commission

File Number)

(IRS Employer

Identification No.)

979 Batesville Road, Suite B

Greer, South Carolina 29651

(Address of principal executive offices) (zip code)

(864) 448-7000

(Registrants telephone number, including area code)

Not Applicable

(Formername or former address, if changed since last report.)

Check the appropriate box belowif the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company asdefined in Rule 405 of the Securities Act of 1933 (230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new orrevised financial accounting standards provided pursuant to Section13(a) of the Exchange Act.

Item7.01. Regulation FD Disclosure.

Management of Regional Management Corp. (the Company) will meet with investors at the Jefferies Crossover Consumer Finance Summiton December7, 2017 in New York, NY. A copy of the investor presentation to be used during these meetings is attached to this Current Report on Form 8-K as Exhibit 99.1 and is also available at theCompanys website at www.regionalmanagement.com.

The information set forth in this Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1 hereto, shall not be deemed filed for purposes of Section18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or otherwise subject tothe liabilities of that section. The information in this Item 7.01 of this Current Report on Form 8-K shall not be deemed to be incorporated by reference in any filing under the Securities Act of 1933, asamended, or the Exchange Act, except as expressly set forth by specific reference in such filing.

Item9.01. Financial Statements and Exhibits.

(d)Exhibits.

Exhibit
No.

Description

99.1Regional Management Corp. Jefferies Crossover Consumer Finance Summit Investor Presentation, dated December7, 2017.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf bythe undersigned hereunto duly authorized.

Regional Management Corp.

Date: December7, 2017

By:

/s/ Donald E. Thomas

Donald E. Thomas

Executive Vice President and Chief Financial

Officer

EX-99.12d489596dex991.htmEXHIBIT 99.1

Exhibit 99.1

Exhibit 99.1

Jefferies Crossover Consumer Finance Summit
December7, 2017

Safe Harbor Statement
This presentation, therelated remarks, and the responses to various questions may contain various forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which represent Regional Management Corp.sexpectations or beliefs concerning future events. Words such as may, will, should, likely, anticipates, expects, intends, plans, projects,believes, estimates, outlook, and similar expressions may be used to identify these forward-looking statements. Such forward-looking statements are about matters that are inherently subject to risks anduncertainties, many of which are outside of the control of Regional Management. Factors that could cause actual results or performance to differ from the expectations expressed or implied in such forward-looking statements include, but are notlimited to, the following: changes in general economic conditions, including levels of unemployment and bankruptcies; risks associated with Regional Managements transition to a new loan origination and servicing software system; risks relatedto opening new branches, including the ability or inability to open new branches as planned; risks inherent in making loans, including repayment risks and value of collateral, which risks may increase in light of adverse or recessionary economicconditions; changes in interest rates; the risk that Regional Managements existing sources of liquidity become insufficient to satisfy its needs or that its access to these sources becomes unexpectedly restricted; changes in federal, state, orlocal laws, regulations, or regulatory policies and practices, and risks associated with the manner in which laws and regulations are interpreted, implemented, and enforced; the timing and amount of revenues that may be recognized by RegionalManagement; changes in current revenue and expense trends (including trends affecting delinquencies and credit losses); changes in Regional Managements markets and general changes in the economy (particularly in the markets served by RegionalManagement); changes in the competitive environment in which Regional Management operates or in the demand for its products; risks related to acquisitions; changes in operating and administrative expenses; and the departure, transition, orreplacement of key personnel. Such factors and others are discussed in greater detail in Regional Managements filings with the Securities and Exchange Commission. We cannot guarantee future events, results, actions, levels of activity,performance, or achievements.
Except to the extent required by law, neither Regional Management nor any of its respective agents, employees, or advisors intend orhave any duty or obligation to supplement, amend, update, or revise any forward-looking statement, whether as a result of new information, future developments, or otherwise.
The information and opinions contained in this document are provided as of the date of this presentation and are subject to change without notice. This document has not beenapproved by any regulatory or supervisory authority.
2

Investment Highlights
Numerous Avenues forAdditional Growth
Attractive Long-Term Market Opportunity
10 ConsecutiveQuarters of Double-Digit Receivable Growth
Significantly Upgraded Infrastructure
Stable Credit Performance
Deep Management Experience
3

Company Overview
History
Consumer finance company founded in 1987 Focused on consumer installment lending IPO: March 2012; NYSE: RM
Who We Are
344 branches in 9 southeastern and southwestern U.S. states Core portfolio of smalland large personal loans (core loans), and retail loans
- Large loans have been a key source of growth since early 2015
Multiple origination channels
- Branches, direct mail, website, lead sources, and retailers
Growth
Multi-channel platform to grow core small and large loan portfolio$775million in total loan receivables as of September30, 2017 3-year core loan receivable CAGR of 24% (Sep-14 toSep-17) 3-year large loan receivable CAGR of 94% (Sep-14 to Sep-17)
4

2018 & 2019: Realize the Benefits of Our Investments
Recent significant investments should accelerate top and bottom line growth in the coming years.
, With modernized infrastructure, plan to increase de novo branches in 2018
, Hybrid approach to growth: increased receivables per branch and de novo expansion
, Focus on core portfolio small and large loans
, Digital platform will enhance existing customer engagement and experience, as well as attract new digital-oriented customers
, Strong credit function to improve the credit quality of new loans
- New creditscorecards
- Automation of underwriting, which should significantly reduce manual errors
, Centralized collections to decrease delinquency and reduce net credit losses
-Allows branch labor to focus on local marketing and customer sales
5

Significant Market Opportunity
Regionals360,000 customer accounts represent 0.3% of the approximately 115million Americans that generally align with the Companys customer base.
Regionalbelieves that most of this population is underserved and provides an attractive market opportunity.
$3.1 Trillion US Consumer Finance Market Personal InstallmentLoans Account for ~$70billion
Student Loans -Private 20%
Auto Loans 29%
Credit Cards 25%
Other 10%
Personal Installment Loans 2%
Student Loans-Govt. 14%
32% of US Population with FICO Score Between 550 & 700 (1)
800-850 20%
300-499 5%
500-549 7%
550-599 9%
600-649 10%
650-699 13%
700-749 17%
750-799 19%
(1) FICOTM Banking Analytics Blog Fair Isaac Corporation (as of April 2017)
6

Hybrid Approach to Growth
Branch Overview Hybrid Approach to Growth
, Multiple channels and products provide attractive market opportunities
- Most loans are serviced and collected through branches
- Migrating late-stage delinquency /collections to centralized collections group
, Many branches have significant capacity to increase the size of their portfolios, Renewingde novo expansion in 2018
Receivables Per Branch
$2,500 Branch $2,252 $2,250Per $2,117 $2,000 $1,899 Receivables $1,821 $1,750 $1,500 2014 2015 2016 3Q 17 Geographic Footprint Date of Entry: SC: 1987 17 TX: 2001 21 3617 NC: 2004 28 18 28 21 TN: 2007 70 18 48 8 AL: 2009 48 OK: 2011 98 98 NM: 2012 GA: 2013 VA: 2015 CurrentStates of Operation Attractive States for Expansion Total branches: 344 Note: As of 9/30/17
7

Core Loan Portfolio Growth Driven by Large Loan Receivables
Since adding large loans as a core product, large loan receivables have grown by nearly 600%, from $46million to $309million, in less than three years
(in millions)
$750 Small $672 Loans Large $593 Core$485 of $500 $309$235 $366 $147 Receivables $46 Net $250 $338 $358 $363 Ending $320 $0 2014 2015 2016 3Q 17
8

Multi-Channel Origination Platform Provides Broad Reach
, Branches are foundation of Regionals multi-channel strategy , Mail campaigns attract ~100,000 new customers per year to Regional
, Continued expansion of digital channel / online lending capabilities to acquire customers
Branch Originated Non-Branch Originated
YTDOrigination Volume as of September30, 2017 Retailers Mail Web
$262.2MM $249.0MM $20.5MM $159 M Em g
Furniture and
Convenience Digital Lead Small Branch Large Branch Appliance Check LoansGeneration / Originated Loans Originated Loans Retailers
Over 5.5million Partnership (344 branches as of (344 branches as of (Relationships with conveniencechecks September30, 2017) September30, 2017) approx. 900 Affiliates mailed Sep-17 TTD retailers)
RegionalBranch Network Supports All Origination Channels
Personal Relationships with Customers
9

Multi-Product Offering Fits Customer Needs
, Product suite provides multiple solutions for customers as their credit needs change, Easy to understand products based on creditunderwriting and ability to pay
Small Large Retail
, Short-termcash needs, Vacation expenses, Home furnishings Customer Need, Bill payment, Loan consolidation, Appliances,Back-to-school expenses, Medical expenses, Televisions and electronics, Auto repair
(a) Range: $500 to $2,500 Range: $2,501 to $20,000 Range: Up to $7,500 Size Average: $1,651 Average: $4,937 Average: $1,923
Term (b)Up to 36 months 18 to 60 months 6 to 48 months
Security Non-essential Title to a vehicle or non- Purchased goods household goods essential household goods (e.g. furniture)
Net Receivables (c) $363.3million $308.6million $31.3million
# of Loans (b)~260,000 ~73,000 ~21,400
Average APR (d) 48% 30% 22%
(a) Represents theaverage origination loan size (new and renewal) for quarter ended September30, 2017 (b) Fixed installment loans with equal monthly payments (c)Represents the portfolio balances at September30, 2017 (d) Fixed interest rates;represents average portfolio APR for the quarter ended September30, 2017
Note: Product offering table excludes $71.7million auto portfolio, as theCompany is no longer originating auto loans.
10

High Customer Satisfaction
RegionalsNet Promoter Score (NPS) of 66%, which measures customer loyalty, compares favorably to other companies in financial services and in other industries.
Top-three box (8, 9, or 10 out of 10) customer satisfaction of 88%
Over 75% of customers would apply to Regional Finance firstthe next time they need a loan
~90% favorable ratings for key attributes:
Loan process was quick, easy, affordable, understandable
People areprofessional, responsive, respectful, knowledgeable, helpful, friendly
Customers pleased with products/services; anticipate enhancements, such as texting, onlineaccount self-service, electronic payments, and digital lending, should increase customer satisfaction
11

Diverse Funding and Liquidity Profile
, Continue to diversify sources of funding to support future growth, Plan to complete first capital markets ABS transaction in 2018
Amended and Upsized Senior Revolver
, Committed line of$638million; $459million outstanding at September30, 2017
, Contains accordion feature to increase line to $700million
, Allows for a large loan warehouse facility and for subsequent securitizations using warehouse collateral
, Maturity date: June 2020
Revolving Warehouse Facility
, Committed facility of $125million; $56million outstanding at September30, 2017
, Expandable to $150million; funded by large loan receivables
,Initial term of 18 months, to be followed by 12-month amortization period
, Plan to amend and extend facilitybefore end of initial term
, Facility is being funded by Credit Suisse and Wells Fargo
12

Deep Management Experience
Peter Knitzer 30+ years of consumer financial services experience
President and Spent 14 years at Citi in various senior roles, including Chairman& CEO ofCitibank North America CEO
Prior to joining Regional, was EVP and Head of Payments at CIBC, and President and Director at E*TRADE Bank
30 years of consumer financial services experience
John
Schachtel Prior to joining Regional, was Chief Operating Officer at OneMain Financial COO
Extensive operations experience at CitiFinancial (now OneMain)
30+ years of finance and accounting experience, CPA
Don Thomas
Priorto joining Regional, was Chief Financial Officer at TMX Finance CFO
Also spent 17 years at 7-Eleven, includingservice as Chief Accounting Officer, Controller, and acting CFO
Dan Taggart 20+ years of financial services and credit experience
Chief Risk Prior to joining Regional, was SVP at Wingspan Portfolio Advisors, managing servicing and loss mitigation Officer
Also spent 11 years at Citi, including service as SVP and Chief Credit Officer at CitiFinancial
Jim Ryan 20+ years of consumer financial services experience
Chief
Marketing Prior to joining Regional, was Chief Marketing Officer at OneMain Financial for 10 years
Officer Also held additional senior positions at CitiFinancial, including SVP of Operations and Vice President of Credit Risk
13

Recent Historical Financial Performance
Net Income
($ in millions)
$30 $23.4 $24.0
$25 $19.1 $17.6 $20 $14.8 $15
,Receivables $10 and revenue $5 have grown $0
in parallel 2014 2015 2016 3Q 16 3Q 17
and over YTD YTD time should TotalReceivables and Net Credit Losses Total Revenue create
opportunity ($ in millions) ($ in millions) $241 $800 20.0% $250 Total Receivables $774.9
for improved $217
NCL $205 $200
net income 16.0% $200
$717.8 $176 $725
margins $696.1
12.0% $150 $650 $628.4 11.1% $100
9.0% 9.5% 8.0%
8.8% 8.7% $575 $50 $546.2 4.0%
$0 $500 0.0% 2014 2015 2016 3Q 16 3Q 17 2014 2015 2016 3Q 16 3Q 17 YTD YTD
YTD YTD
14

Investment Highlights
AttractiveLong-Term Market
Opportunity 10 Numerous Consecutive Avenues for Quarters of Additional Double-Digit Growth Receivable Growth
Deep Significantly Management Upgraded Experience Infrastructure Stable Credit Performance
15

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