Regional Management Corp. Announces Completion of $ 125 Million Private Asset Backed Securitization

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GREENVILLE, South Carolina – (COMMERCIAL THREAD) – Regional Management Corp. (NYSE: RM), a diversified consumer credit company, today announced that it has completed a $ 125 million private asset-backed securitization with a large institutional investor. The tickets sold were issued at a fixed coupon of 3.875%, and the transaction structure allows for the financing of several loan products, including small, large and payday loans, digital source montages and loans. with APRs greater than 36%.

“We are satisfied with our latest securitization as it further reduces our cost of capital with fixed rate funding for a five year revolving period and allows us to repay variable rate debt,” said Robert W. Beck, president and CEO. by Regional Management Corp. “The new facility further strengthens our balance sheet, diversifies our funding sources and enables our continued growth, including our ability to make smaller, higher yielding loans. Our weighted average fixed cost of funding is now at a low 2.7% and has a weighted average revolving term of almost three years. With 87% of our total long-term debt now bearing a fixed interest rate and $ 450 million in interest rate caps covering our floating rate debt as we continue to grow, we are well protected in the event of a loss. rising interest rates. As a result, we remain in a strong position to rapidly and sustainably grow our franchise and deliver attractive returns and value to our shareholders. ”

The transaction was a private offering of securities, not registered under the Securities Act of 1933, or any state securities law. All these titles having been sold, this announcement of their sale is only indicative.

Update on Liquidity and Capital Resources

As a result of the securitization closing on October 8, 2021, the company had $ 1.017 billion in debt ($ 1.015 billion in outstanding debt and $ 2.2 million in interest payable). The debt consisted of:

  • $ 44.3 million on the Company’s $ 640 million revolving credit facility,

  • $ 88.4 million on the Company’s total revolving warehouse credit facilities of $ 300 million, and

  • $ 884.7 million through the company’s asset-backed securitizations.

The Company’s spare capacity on its revolving credit facilities (subject to borrowing base) was $ 808.5 million, or 86.0%, as of October 8, 2021.

The company also currently holds interest rate caps for a total nominal amount of $ 450 million to manage the risk associated with floating rate debt. Interest rate caps are based on one-month LIBOR and reimburse the business the difference when the one-month LIBOR exceeds the strike rate. Of the total amount, $ 350 million in interest rate caps have strike rates of 25 or 50 basis points and a weighted average term of 2.2 years.

About Regional Management Corp.

Regional Management Corp. (NYSE: RM) is a diversified consumer credit company that offers attractive and easy-to-understand installment loan products primarily to customers with limited access to consumer credit from banks, savings banks, credit unions, credit card companies and other lenders. Regional Management operates under the name “Regional Finance” in more than 360 branches in 13 states of the United States. Most of its loan products are secured and each is structured on a fixed rate and fixed term basis with fully amortized equal monthly payments, repayable at any time without penalty. The regional branch obtains loans through its multi-channel platform, which includes branches, centrally managed direct mail campaigns, digital partners, retailers and its mainstream website. For more information, please visit www.RegionalManagement.com.

Forward-looking statements

This press release may contain various “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not statements of historical fact, but rather represent the expectations or beliefs of Regional Management Corp. regarding future events. . Forward-looking statements include, without limitation, statements regarding the financial outlook or future plans, objectives, goals, projections, strategies, events or performance, and the underlying assumptions and other statements relating thereto. Words such as “may”, “will”, “should”, “probably”, “anticipate”, “expect”, “intend”, “plan”, “projects”, “believe” , “Estimates,” “outlook,” and similar expressions may be used to identify these forward-looking statements. These forward-looking statements are only valid on the date on which they were made and concern matters which are inherently subject to risks and uncertainties, many of which are beyond the control of regional management. Therefore, actual performance and results may differ materially from those contemplated by these forward-looking statements. Therefore, investors should not place undue reliance on forward-looking statements.

Factors that could cause actual results or performance to differ from expectations expressed or implied in the forward-looking statements include, without limitation, the following: risks relating to the activities of regional management, including the pandemic of COVID-19 and its impact on management’s operations and financial condition; manage growth effectively, implement the growth strategy of the regional management and open new branches as planned; the regional management’s proximity control strategy; regional office policies and procedures for underwriting, processing and servicing loans; the capacity of the Regional Directorate to recover its loan portfolio; the insurance operations of the Regional Directorate; exposure to credit risk and repayment risk, which risks may increase in the light of adverse economic conditions or recession; the implementation of new underwriting models and processes, including the effectiveness of new personalized scorecards; changes in the competitive environment in which Regional Management operates or a drop in demand for its products; the geographic concentration of the Regional Department’s loan portfolio; the failure of third party service providers, including those who provide IT products; changes in economic conditions in the markets served by the regional management, including levels of unemployment and bankruptcies; the ability to make successful acquisitions and strategic alliances; the ability to make technological improvements as quickly as competitors; security breaches, cyber attacks, information system failures or fraudulent activity; the ability to make loans; dependence on information technology resources and providers, including the risk of prolonged system failures; changes in current income and expenditure trends, including trends affecting delinquencies and credit losses; variations in operating and administrative expenses; the departure, transition or replacement of key personnel; the ability to timely and effectively implement, transition to and maintain the information technology systems, infrastructure, processes and controls necessary to support regional management operations and initiatives ; changes in interest rates; existing sources of liquidity may become insufficient or access to such sources may be unexpectedly restricted; exposure to financial risk due to asset-backed securitization transactions; risks relating to regulations and legal proceedings, including changes in laws or regulations or in the interpretation or application of laws or regulations; changes in accounting standards, rules and interpretations and the failure of associated assumptions and estimates, including those associated with the implementation of CECL accounting; the impact of changes in tax laws, guidelines and interpretations, including the timing and amount of revenue that may be recognized; risks associated with the ownership of regional management common shares, including the volatility of the market price of regional management common shares; the timing and amount of future cash dividend payments; and anti-takeover provisions in regional management charter documents and applicable state law. The COVID-19 pandemic can also amplify many of these risks and uncertainties.

The above and other factors are discussed in more detail in documents filed by regional management with the Securities and Exchange Commission. Regional management will not update or revise forward-looking statements to reflect events or circumstances after the date of this press release or to reflect the occurrence of unforeseen events or the non-occurrence of anticipated events, whether either because of new information, future developments, or otherwise, except as required by law. The regional management is not responsible for changes made to this document by communication services or Internet services.


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