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WFS Financial Reports Record First Quarter Earnings Results

    IRVINE, Calif.--April 24, 2001--WFS Financial Inc today reported record earnings of $18.8 million, or $0.66 per diluted share for the first quarter of 2001 compared with $14.8 million, or $0.54 per diluted share for the same period a year earlier. On a comparative basis, net income increased 27% and earnings per share rose 22%.
    WFS Financial ("WFS"), continued to experience considerable origination growth with automobile contract purchases totaling $1.2 billion for the first quarter of 2001. This represents a 22% increase from the $970 million of automobile contracts purchased during the first quarter of 2000. As a result of higher contract originations, WFS' portfolio of serviced contracts reached $7.2 billion at March 31, 2001, up from $6.8 billion at Dec. 31, 2000. During the quarter, WFS issued $1 billion of automobile asset-backed securities accounted for as a secured financing.
    Annualized credit loss experience for the first quarter improved by 15 basis points to 1.9% of average serviced automobile contracts compared with 2% a year earlier. Contracts 30 days or more delinquent improved 90 basis points to 2.3% at March 31, 2001 compared with 3.2% at Dec. 31, 2000.
    "Our continued improvement in credit trends demonstrates the success of our credit scoring, underwriting and servicing technology and processes as well as our increased focus on prime lending over the past several years," said Schaefer.
    Total revenues increased 21% to $102 million for the three months ended March 31, 2001 compared with $84.7 million for the same period a year earlier. Net interest income almost doubled while servicing income declined as the company accounts for its newer securitization transaction as secured financings rather than sales. Revenues from securitization transactions treated as sales are reported as servicing income while revenues from securitization transactions treated as secured financings are reported as net interest income.
    Major components of revenue include net interest income that increased 75% to $65.4 million for the three months ended March 31, 2001 compared with $37.3 million for the period a year earlier. Servicing income totaled $36.8 million for the three months ended March 31, 2001 compared with $39.7 million for the same period a year ago.
    The provision for credit losses was $20.1 million for the three months ended March 31, 2001 compared with $11.7 million for the same period a year ago. The increase in provision for credit losses was the result of a higher level of contracts held on the balance sheet resulting from the company accounting for its securitization transactions as secured financings rather than sales. The allowance for credit losses as a percentage of owned contracts outstanding totaled 1.9% at March 31, 2001 compared with 2.3% at Dec. 31, 2000.
    Operating expenses totaled $50.7 million or 2.9% of average serviced contracts for the first quarter of 2001 compared with $47.7 million or 3.5% for the same period a year ago. Operating costs as a percent of total revenues declined to 50% for the first quarter of 2001 compared with 56% for the same period a year earlier.
    During the second quarter of 2001, the company expects to sell approximately $1.5 billion of automobile contracts to its ultimate parent, Westcorp. This sale is designed to efficiently utilize capital and allow continued growth at WFS. The company expects to continue to service the contracts it intends to sell.
    The financial schedules attached to this earnings release include tables presenting pro forma portfolio basis statements of income. These statements present the company's results under the assumption that the whole loan sale completed in the third quarter of 2000 and all its securitization transactions are treated as secured financings rather than sales.
    The company believes that such a presentation is an important performance measure of its operations and believes that these portfolio basis statements assist in better understanding its business. If treated as secured financings, no gain on sale or subsequent contractual servicing and retained interest income is recognized. Instead, the earnings of the contracts in the securitization trusts and related financing costs are reflected over the life of the underlying pool of contracts.
    On a portfolio basis, WFS earned $23.3 million, or $0.81 per diluted share for the first quarter of 2001 compared with $14.9 million, or $0.54 per diluted share for the same period a year earlier.
    "Differences between portfolio basis earnings and reported earnings during the year 2000 and 2001 represent the transitional effect of treating our newer securitization transactions as secured financings rather than sales," said Schaefer.
    "We expect that our reported earnings will ultimately approach our portfolio basis earnings as we continue to treat our future securitization transactions as secured financings."
    WFS will host a conference call for analysts and investors at 9 a.m. (PDT) on Wednesday, April 25, 2001. As part of this conference call, WFS management will discuss, at greater length, earnings results for the first quarter as well as management's outlook for the rest of 2001. For a live Internet broadcast of this conference call, go to the company's Web site to register, download, and install any necessary audio software. For those who cannot listen to the live broadcast, a replay will be available shortly after the call.
    WFS is one of the nation's largest independent automobile finance companies. WFS specializes in originating, securitizing, and servicing new and used prime and non-prime credit quality automobile contracts through its nationwide relationships with automobile dealers. Information about WFS can be found at its Web site at http://www.wfsfinancial.com.

    This news release contains forward-looking statements. These forward-looking statements are subject to many risks and uncertainties that could cause actual results to differ significantly from historical results or from those anticipated by WFS. The most significant risks and uncertainties the company faces are the level of chargeoffs, as an increase in the level of chargeoffs will decrease its earnings; the company's ability to originate new contracts in a sufficient amount to reach its needs, as a decrease in the amount of contracts it originates will decrease its earnings; a decrease in the difference between the average interest rate the company receives on contracts it originates and the rate of interest it must pay to fund such contracts, as a decrease will reduce its earnings; the continued availability of sources of funding for its operations, as a reduction in the availability of funding will reduce its ability to originate contracts; the level of notes treated as secured financings, as the level will impact the timing of revenue recognized; and the level of operating costs, as an increase in those costs will reduce its net earnings.
    There are other risks and uncertainties the company faces, including the effect of changes in general economic conditions and the effect of new laws, regulations and court decisions. You are cautioned not to place undue reliance on forward-looking statements. You should carefully review the factors referred to above and other documents the company files from time to time with the Securities and Exchange Commission, including quarterly reports on Form 10-Q and annual reports on Form 10-K.


                  WFS FINANCIAL INC AND SUBSIDIARIES
                   CONSOLIDATED STATEMENTS OF INCOME
                              (UNAUDITED)

                                             Three Months Ended
                                                  March 31,
                                           2001              2000
                                       (Dollars in thousands, except 
                                             per share amounts)
REVENUES
 Interest income                      $ 122,329         $  61,025
 Interest expense                        56,975            23,728
  Net interest income                    65,354            37,297
 Servicing income                        36,755            39,690
 Gain on sale of contracts                                  7,719
  TOTAL REVENUES                        102,109            84,706

EXPENSES
 Provision for credit losses             20,068            11,677
 Operating expenses:
  Salaries and associate benefits        31,277            30,587
  Credit and collections                  6,403             5,410
  Data processing                         4,224             3,845
  Miscellaneous                           8,763             7,837
   TOTAL OPERATING EXPENSES              50,667            47,679
   TOTAL EXPENSES                        70,735            59,356

INCOME BEFORE INCOME TAX                 31,374            25,350
 Income tax                              12,606            10,584
NET INCOME                            $  18,768         $  14,766

Net income per common share:
 Basic                                $    0.66         $    0.54
 Diluted                              $    0.66         $    0.54

Weighted average number of common 
 shares outstanding:
 Basic                               28,456,296        27,424,479
 Diluted                             28,562,625        27,547,335


                  WFS FINANCIAL INC AND SUBSIDIARIES
            CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                              (UNAUDITED)

                                  March 31, 2001    December 31, 2000
                                          (Dollars in thousands)
ASSETS
 Cash and short-term investments  $       19,261       $       25,296
 Investment securities available 
  for sale                                 6,166                6,517
 Contracts receivable                  4,001,657            3,049,475
 Allowance for credit losses             (77,624)             (71,308)
  Contracts receivable, net            3,924,033            2,978,167
 Amounts due from trusts                 304,121              366,125
 Retained interest in securitized 
  assets                                  98,167              111,558
 Premises and equipment, net              37,859               36,526
 Accrued interest receivable              27,023               23,116
 Other assets                             15,496               27,832
  TOTAL ASSETS                    $    4,432,126       $    3,575,137

LIABILITIES
 Secured lines of credit - parent $      248,139       $      235,984
 Notes payable on automobile 
  secured financing                    3,080,798            2,249,363
 Notes payable - parent                  146,219              146,219
 Amounts held on behalf of trustee       582,135              590,715
 Other liabilities                        47,134               35,651
  TOTAL LIABILITIES                    4,104,425            3,257,932

SHAREHOLDERS' EQUITY
Common stock, (no par value; 
 authorized 50,000,000 shares; 
 issued and outstanding 28,463,426 
 shares in 2001 and 28,446,837 in 
 2000)                                   112,200              112,070
Paid-in capital                            4,337                4,337
Retained earnings                        219,829              201,062
Accumulated other comprehensive loss, 
 net of tax                               (8,665)                (264)
 TOTAL SHAREHOLDERS' EQUITY              327,701              317,205
 TOTAL LIABILITIES AND 
  SHAREHOLDERS' EQUITY            $    4,432,126       $    3,575,137


                  WFS FINANCIAL INC AND SUBSIDIARIES
                     OTHER SELECTED FINANCIAL DATA
                              (UNAUDITED)
                        (Dollars in thousands)

                             Three Months Ended
                                   March 31,
                             2001          2000
CONTRACT 
 ORIGINATIONS        $  1,182,431  $    970,481

Contract sales                     $    660,000
Secured financing    $  1,000,000       540,000
CONTRACT SALES AND 
 SECURITIZATIONS     $  1,000,000  $  1,200,000

SERVICED DELINQUENCY      March 31, 2001           December 31, 2000
                       Amount       Percent       Amount       Percent
Contracts 
 serviced at end 
 of period         $7,190,457                 $6,818,182
Period of 
 delinquency
 30-59 days        $  113,434         1.58%   $  157,843         2.32%
 60 days or more       52,159         0.73        59,166         0.86
Total contracts 
 delinquent        $  165,593         2.30%   $  217,009         3.18%

SERVICED CONTRACT            Three Months Ended
 LOSS EXPERIENCE                  March 31,
                             2001          2000
Contracts serviced 
 at end of period    $  7,190,457  $  5,664,144

Average contracts 
 serviced during the 
 period              $  6,998,682  $  5,480,129

Gross charge offs    $     48,226  $     40,952
Recoveries                 15,746        13,484
Net charge offs      $     32,480  $     27,468
Net charge offs as a 
 percentage of 
 average contracts 
 outstanding during 
 period                     1.86%         2.01%


                  WFS FINANCIAL INC AND SUBSIDIARIES
                 PORTFOLIO BASIS STATEMENTS OF INCOME
                              (UNAUDITED)

                                             Three Months Ended
                                                 March 31,
                                           2001              2000
                                           (Dollars in thousands, 
                                          except per share amounts)

Interest income                      $  233,250       $   180,470
Interest expense                        123,076            86,876
 Net interest income                    110,174            93,594
Net chargeoffs(1)                        32,481            27,466
Provision for growth(2)                   5,607             5,165
 Provision for credit losses             38,088            32,631
 Net interest income after provision 
  for credit losses                      72,086            60,963
Other income                             18,002            14,692
Operating expenses                       51,179            50,112
 Income before income tax                38,909            25,543
Income tax(3)                            15,634            10,665
Portfolio basis net income           $   23,275        $   14,878

Portfolio basis net income per common 
 share - diluted                     $     0.81        $     0.54

(1) Represents actual chargeoffs incurred during the period, net of 
    recoveries.
(2) Represents additional allowance for credit losses that would be
    set aside due to an increase in the serviced portfolio.
(3) Such tax effect is based upon the company's tax rate for the 
    respective period.

                  WFS FINANCIAL INC AND SUBSIDIARIES
                      PORTFOLIO BASIS YIELD TABLE
                              (UNAUDITED)

                                             Three Months Ended
                                                  March 31,
                                           2001(1)           2000(1)

Interest income                            13.6%             13.2%
Interest expense                            7.0               6.3
 Net interest income                        6.6               6.9
Net chargeoffs                              1.9               2.0
Provision for growth                        0.3               0.4
 Provision for credit losses                2.2               2.4
 Net interest income after provision for 
  credit losses                             4.4               4.5
Other income                                1.0               1.1
Operating expenses                          2.9               3.7
 Income before income tax                   2.5               1.9
Income tax                                  0.9               0.8
Portfolio basis net income                  1.6%              1.1%

Average serviced contracts       $    6,998,682    $    5,480,129

(1) Rates are calculated by dividing amounts by average serviced 
    contracts for the respective periods.

                  WFS FINANCIAL INC AND SUBSIDIARIES
 RECONCILIATION OF GAAP BASIS NET INCOME TO PORTFOLIO BASIS NET INCOME
                              (UNAUDITED)
                                                
                                             Three Months Ended 
                                                 March 31,
                                           2001              2000

GAAP basis net income               $    18,768       $    14,766

Portfolio basis adjustments:
 Gain on sales of contracts                                (7,719)
 Retained interest income                (2,836)          (13,316)
 Contractual servicing income           (15,917)          (11,682)
 Net interest income                     44,820            55,635
 Provision for credit losses            (18,020)          (20,954)
 Operating expenses                        (512)           (1,771)
Total portfolio basis adjustments         7,535               193
Net tax effect(1)                         3,028                81
 Portfolio basis net income         $    23,275       $    14,878

(1) Such tax is based on the company's tax rate for the respective 
    period.

                  WFS FINANCIAL INC AND SUBSIDIARIES
            CUMULATIVE STATIC POOL LOSS CURVES (UNAUDITED)
                           AT MARCH 31, 2001

Period  1997  1997  1997  1998  1998  1998  1999  1999  1999  2000
         -B    -C    -D    -A    -B    -C    -A    -B    -C    -A
1       0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
2       0.06% 0.05% 0.05% 0.04% 0.02% 0.04% 0.04% 0.04% 0.02% 0.03%
3       0.15% 0.12% 0.14% 0.11% 0.08% 0.11% 0.11% 0.11% 0.10% 0.10%
4       0.33% 0.29% 0.31% 0.25% 0.18% 0.23% 0.20% 0.26% 0.25% 0.20%
5       0.56% 0.46% 0.56% 0.44% 0.38% 0.39% 0.33% 0.47% 0.40% 0.36%
6       0.77% 0.67% 0.75% 0.66% 0.59% 0.50% 0.46% 0.66% 0.56% 0.55%
7       1.10% 0.93% 0.99% 0.95% 0.83% 0.61% 0.62% 0.87% 0.71% 0.71%
8       1.40% 1.16% 1.24% 1.23% 1.03% 0.75% 0.76% 1.00% 0.86% 0.91%
9       1.70% 1.37% 1.47% 1.50% 1.21% 0.86% 0.92% 1.13% 1.01% 1.10%
10      2.00% 1.66% 1.75% 1.79% 1.40% 1.00% 1.11% 1.24% 1.14% 1.27%
11      2.22% 1.94% 2.06% 2.03% 1.53% 1.17% 1.30% 1.35% 1.34% 1.45%
12      2.43% 2.16% 2.35% 2.21% 1.62% 1.32% 1.47% 1.44% 1.52% 1.58%
13      2.66% 2.40% 2.63% 2.39% 1.74% 1.48% 1.61% 1.58% 1.74% 1.73%
14      2.91% 2.65% 2.86% 2.49% 1.84% 1.66% 1.73% 1.74% 1.94%
15      3.15% 2.90% 3.05% 2.60% 1.96% 1.79% 1.81% 1.85% 2.09%
16      3.47% 3.15% 3.19% 2.72% 2.10% 1.91% 1.89% 2.03% 2.27%
17      3.77% 3.36% 3.32% 2.85% 2.22% 2.01% 2.00% 2.16% 2.39%
18      3.97% 3.55% 3.42% 2.98% 2.40% 2.07% 2.10% 2.30% 2.53%
19      4.20% 3.70% 3.50% 3.11% 2.55% 2.11% 2.24% 2.42%
20      4.39% 3.81% 3.60% 3.25% 2.69% 2.17% 2.35% 2.50%
21      4.53% 3.91% 3.69% 3.35% 2.79% 2.24% 2.46% 2.58%
22      4.67% 4.00% 3.81% 3.48% 2.85% 2.34% 2.55%
23      4.75% 4.11% 3.96% 3.62% 2.89% 2.43% 2.63%
24      4.81% 4.21% 4.10% 3.70% 2.92% 2.52% 2.71%
25      4.88% 4.30% 4.23% 3.75% 2.97% 2.62% 2.77%
26      4.94% 4.44% 4.34% 3.80% 3.04% 2.71% 2.82%
27      5.04% 4.56% 4.44% 3.87% 3.13% 2.80%
28      5.11% 4.66% 4.51% 3.92% 3.18% 2.87%
29      5.21% 4.77% 4.54% 3.98% 3.24% 2.90%
30      5.31% 4.79% 4.56% 4.06% 3.32%
31      5.40% 4.83% 4.57% 4.11% 3.38%
32      5.48% 4.86% 4.63% 4.17% 3.43%
33      5.52% 4.88% 4.67% 4.22% 3.47%
34      5.54% 4.90% 4.71% 4.27% 3.48%
35      5.56% 4.92% 4.76% 4.32%
36      5.58% 4.98% 4.80% 4.34%
37      5.61% 5.01% 4.84% 4.35%
38      5.64% 5.06% 4.89%
39      5.66% 5.10% 4.92%
40      5.67% 5.14% 4.92%
41      5.69% 5.17%
42      5.71% 5.17%
43      5.72% 5.17%
44      5.74%
45      5.74%
46      5.73%
47
48
49
50
51
52
53
54
55
Prime 
Mix       55%   53%   49%   57%   67%   70%   70%   70%   67%   69%

                  WFS FINANCIAL INC AND SUBSIDIARIES
            CUMULATIVE STATIC POOL LOSS CURVES (UNAUDITED)
                           AT MARCH 31, 2001


   Period        2000-B     2000-C      2000-D      2001-A


      1           0.00%      0.00%       0.00%       0.00%
      2           0.02%      0.04%       0.04%       0.03%
      3           0.09%      0.13%       0.11%
      4           0.24%      0.27%       0.24%
      5           0.39%      0.46%       0.39%
      6           0.59%      0.65%
      7           0.78%      0.81%
      8           0.99%      0.93%
      9           1.17%
     10           1.33%
     11           1.44%
     12
     13
     14
     15
     16
     17
     18
     19
     20
     21
     22
     23
     24
     25
     26
     27
     28
     29
     30
     31

  Prime Mix         69%        68%         70%         72%