United PanAm Financial Announces Third Quarter 2002 Results
NEWPORT BEACH, Calif.--Oct. 22, 2002--United PanAm Financial Corp. today announced results for its third quarter ended Sept. 30, 2002.For the quarter ended Sept. 30, 2002, the company reported net income of $3.34 million, equal to $0.19 per diluted share, compared with net income of $2.14 million, or $0.12 per diluted share for the same period a year ago. This represents a 56% increase in net income between the two periods and a 58% increase in earnings per diluted share.
Net interest income for the 2002 third quarter rose 35% to $13.63 million from $10.11 million in the third quarter of 2001.
For the nine months ended Sept. 30, 2002, the company reported net income of $9.03 million or $0.51 per diluted share, versus net income of $5.55 million or $0.33 per diluted share for the comparable period a year ago. This represents a 63% increase in net income between the two periods and a 55% increase in earnings per diluted share.
Net interest income for the first nine months of 2002 increased 37% to $38.10 million from $27.80 million a year earlier.
The company purchased $84 million of auto loans during the third quarter of 2002, compared with $59 million in the third quarter of 2001, representing a 42% increase. Auto loans outstanding totaled $275.8 million at Sept. 30, 2002, a 36% increase over Sept. 30, 2001.
The growth in auto loans is the result of planned expansion of the branch network throughout the country and portfolio growth at the branch level. UPFC opened 5 new branches during the third quarter for a total of 11 new branches during the first nine months of 2002. The company plans to continue its philosophy of controlled expansion of the auto finance branch network with the anticipated opening of 3 additional new branches for the remainder of 2002 for a total of 54 branches in 24 states by year-end 2002.
Delinquency over 30 days amounted to 0.65% of auto loans at Sept. 30, 2002, compared with 0.57% at Sept. 30, 2001. Delinquency and total repossessions over 30 days amounted to 1.2% of auto loans at Sept. 30, 2002. This compares with 1.1% at Sept. 30, 2001.
The annualized net charge-off rate was 6.20% for the third quarter of 2002, which was higher than the 5.23% for the comparable period in 2001 but still an improvement from 6.77% experienced during the fourth quarter of 2001.
"Auto loan originations continue to grow at a controlled pace," said Guillermo Bron, chairman. "The deteriorating economy and depressed value of used cars -- partially due to renewed zero interest financing incentives from major auto companies during the summer 2002 -- resulted in charge-offs above those experienced during the second quarter 2002. Yet, the prevailing lower interest rates and corresponding higher interest spreads continue to offset the used car value deterioration."
United PanAm Financial, a specialty finance company, originates and acquires for investment retail automobile installment sales contracts and insurance premium finance contracts. Its principal operating units include Pan American Bank, FSB, the largest Hispanic-controlled savings association in California, with $443 million in deposits at Sept. 30, 2002, United Auto Credit Corp. with 51 branch offices in 24 states, and the insurance premium finance division, which is the largest non-insurance provider of financing for insurance premiums in California.
Any statements set forth above that are not historical facts are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act ("SLRA") of 1995, including statements concerning the company's strategies, plans, objectives and intentions. Such statements are subject to a variety of estimates, risks and uncertainties, known and unknown, which may cause the company's actual results to differ materially from those anticipated in such forward-looking statements. Potential risks and uncertainties include, but are not limited to, such factors as limited operating history, the impaired or limited credit history of the company's borrowers, the availability of additional financing, the concentration of the company's business in California, rapid growth of the company's businesses, the reliance on the company's systems and controls and key employees, fluctuations in market rates of interest, general economic conditions and other risks, certain of which are detailed from time-to-time in the company's filings with the United States Securities and Exchange Commission.
United PanAm Financial Corp. and Subsidiaries
Consolidated Statements of Financial Condition
(Unaudited)
Sept. 30, Dec. 31,
(Dollars in thousands) 2002 2001
Assets
Cash and due from banks $ 8,753 $ 5,428
Short-term investments 2,071 135,267
Cash and cash equivalents 10,824 140,695
Securities available for sale, at fair
value 598,023 284,837
Loans 316,537 252,858
Less allowance for loan losses (21,646) (16,410)
Loans, net 294,891 236,448
Loans held for sale 21 194
Premises and equipment, net 2,431 2,124
Federal Home Loan Bank stock, at cost 1,816 6,500
Accrued interest receivable 2,101 4,029
Other assets 9,971 14,746
Total assets $ 920,078 $ 689,573
Liabilities and Shareholders' Equity
Deposits $ 442,617 $ 357,350
Federal Home Loan Bank advances --- 130,000
Repurchase Agreements 386,560 114,776
Accrued expenses and other liabilities 5,857 11,781
Total liabilities 835,034 613,907
Common stock (no par value):
Authorized, 30,000,000 shares
Issued and outstanding, 15,738,218
shares at Sept. 30, 2002 and
15,571,800 at Dec. 31, 2001 64,186 63,630
Retained earnings 20,325 11,287
Unrealized gain on securities available
for sale, net 533 749
Total shareholders' equity 85,044 75,666
Total liabilities and shareholders'
equity $ 920,078 $ 689,573
United PanAm Financial Corp. and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
Three Months Nine Months
(In thousands, Ended Sept. 30, Ended Sept. 30,
except per share data) 2002 2001 2002 2001
Interest Income
Loans $ 15,080 $ 11,852 $ 42,197 $ 33,199
Securities 3,816 2,880 9,598 9,988
Total interest income 18,896 14,732 51,795 43,187
Interest Expense
Deposits 3,503 4,464 9,850 14,295
Federal Home Loan Bank
advances 38 71 823 979
Repurchase Agreements 1,724 86 3,025 118
Total interest expense 5,265 4,621 13,698 15,392
Net interest income 13,631 10,111 38,097 27,795
Provision for loan losses 51 108 234 276
Net interest income
after provision
for loan losses 13,580 10,003 37,863 27,519
Non-interest Income
Net gain on sale of
securities 210 -- 271 --
Net gain on sales of loans -- -- -- 1,607
Service charges and fees 199 164 587 497
Loan related charges and fees 75 68 231 209
Other income 35 35 91 102
Total non-interest income 519 267 1,180 2,415
Non-interest Expense
Compensation and benefits 5,146 4,060 14,926 12,921
Occupancy 939 788 2,709 2,305
Other 2,508 1,913 6,829 5,618
Total non-interest
expense 8,593 6,761 24,464 20,844
Income before income taxes
and cumulative effect of
change in accounting
principle 5,506 3,509 14,579 9,090
Income taxes 2,171 1,369 5,659 3,544
Income before cumulative effect
of change in accounting
principle 3,335 2,140 8,920 5,546
Cumulative effect of change in
accounting principle, net of
tax -- -- 106 --
Net income $ 3,335 $ 2,140 $ 9,026 $ 5,546
Earnings (loss) per share --
basic:
Income before cumulative
effect of change in
accounting principle $ 0.21 $ 0.13 $ 0.57 $ 0.34
Cumulative effect of change
in accounting principle -- -- 0.01 --
Net income $ 0.21 $ 0.13 $ 0.58 $ 0.34
Weighted average shares
outstanding 15,607 16,171 15,583 16,164
Earnings per share --
diluted:
Income before cumulative
effect of change in
accounting principle $ 0.19 $ 0.12 $ 0.50 $ 0.33
Cumulative effect of change
in accounting principle -- -- 0.01 --
Net income $ 0.19 $ 0.12 $ 0.51 $ 0.33
Weighted average shares
outstanding 17,649 17,860 17,550 16,859
Selected Financial Data
(Unaudited)
At or for the At or for the
(Dollars in thousands) Three Months Ended Nine Months Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2002 2001 2002 2001
Automobile Finance Data
Gross contracts
purchased $ 83,651 $ 58,694 $ 232,622 $ 176,985
Contracts outstanding 275,823 202,602 275,823 202,602
Allowance for loan
losses (21,097) (16,109) (21,097) (16,109)
Annualized net
charge-offs to average
contracts (a) 6.20% 5.23% 6.17% 4.59%
Delinquencies (% of net
contracts)
31-60 days 0.39% 0.37% 0.39% 0.37%
61-90 days 0.17% 0.11% 0.17% 0.11%
90+ days 0.09% 0.09% 0.09% 0.09%
Insurance Premium
Finance Data
Loans originated $ 25,676 $ 28,204 $ 84,021 $ 77,170
Loans outstanding at
period end 40,628 38,215 40,628 38,215
Allowance for loan
losses (508) (488) (508) (488)
Annualized net
charge-offs to
average loans (a) 0.66% 0.95% 0.73% 0.92%
Other Data
Return on average
assets (a) 1.50% 1.38% 1.62% 1.62%
Return on average
shareholders' equity (a) 16.16% 11.46% 15.15% 12.36%
Retail deposits $ 255,954 $ 282,990 $ 255,954 $ 282,990
Wholesale deposits 186,663 78,856 186,663 78,856
Weighted average
interest rate on
deposits 3.29% 4.49% 3.29% 4.49%
Allowance for credit
losses to total loans 6.88% 7.08% 6.88% 7.08%
Consolidated capital to
assets ratio 9.22% 11.35% 9.22% 11.35%
Pan American Bank
capital ratios:
Tangible 8.16% 7.30% 8.16% 7.30%
Core 8.16% 7.30% 8.16% 7.30%
Risk-based 18.85% 16.14% 18.85% 16.14%
(a) Quarterly information is annualized for comparability with
full-year information.