United PanAm Financial Corp. Announces Third Quarter 2005 Results
NEWPORT BEACH, Calif.--Oct. 2, 20054, 2005--United PanAm Financial Corp. today announced results for its third quarter ended Sept. 30, 2005.For the quarter ended Sept. 30, 2005, the company reported income of $7.0 million from continuing operations, compared to income of $4.0 million for the same period a year ago, representing a 75% increase over 2004. The company reported income of $0.37 per diluted share from continuing operations for the third quarter of 2005 compared to $0.23 per diluted share for the same period a year ago, representing a 61% increase over 2004.
Interest income on loans for the third quarter of 2005 rose 37% to $41.3 million from $30.1 million in the third quarter of 2004.
For the nine months ended Sept. 30, 2005, the company reported net income of $20.6 million from continuing operations, compared to net income from continuing operations of $14.5 million for the same period a year ago, representing a 42% increase over 2004. The company reported income of $1.11 per diluted share from continuing operations for the nine months ended Sept. 30, 2005, compared to $0.80 per diluted share for the same period in 2004, representing a 39% increase.
Interest income on loans for the first nine months of 2005 increased 35% to $114.6 million from $85.0 million for the first nine months of 2004.
The company purchased $357.7 million of automobile installment sale contracts during the first nine months of 2005, compared with $279.7 million for the same period in 2004, representing a 28% increase. Automobile installment sale contracts outstanding totaled $646.7 million at Sept. 30, 2005, compared with $502.2 million at Sept. 30, 2004, representing 29% increase. The growth in automobile installment sale contracts is the result of the expansion of our branch network and portfolio growth at the branch level. During the third quarter of 2005, the company opened six new auto finance branches bringing our total to 103 branches in 31 states. The company intends to continue its philosophy of controlled expansion of the auto finance branch network, with the expectation of opening up to four additional new branches before year-end, bringing the total number of new branches for the year to 20.
Delinquencies over 30 days amounted to 0.81% of outstanding automobile installment sale contracts at Sept. 30, 2005, compared with 0.68% at Sept. 30, 2004. Delinquencies and total repossessions over 30 days amounted to 1.26% of outstanding automobile installment sale contracts at Sept. 30, 2005, compared with 1.18% at Sept. 30, 2004.
The annualized quarterly net charge-off rate was 4.58% for the third quarter of 2005, compared with 5.20% for the comparable 2004 period.
"The third quarter of 2005 showed a continuing controlled growth of 29% in automobile installment sale contracts while credit quality continued to be strong as indicated by the 62 basis points drop in the company's net charge-off rate from the comparable period in 2004," said Guillermo Bron, chairman of the board of directors.
UPFC is a specialty finance company engaged in non-prime automobile finance, which includes the purchase, warehousing, securitization and servicing of automobile installment sales contracts originated by independent and franchised dealers of used automobiles. UPFC conducts its automobile finance business through its wholly owned subsidiary, United Auto Credit Corp., with 103 branch offices in 31 states.
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 our recent shift of the funding source of our business; our dependence on securitizations; our need for substantial liquidity to run our business; loans we made to credit-impaired borrowers; reliance on operational systems and controls and key employees; competitive pressures which we face; rapid growth of our business; fluctuations in market rates of interest; general economic conditions; the effects of accounting changes; 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
Sept. 30, Dec. 31,
2005 2004
(Dollars in thousands) (Unaudited) (Audited)
Assets
Cash $11,074 $4,237
Short term investments 22,495 ---
Cash and cash equivalents 33,569 4,237
Restricted cash 51,372 36,729
Securities available for sale, at fair value 488,412 788,090
Loans 614,907 499,343
Allowance for loan losses (27,648) (25,593)
Loans, net 587,259 473,750
Premises and equipment, net 3,579 3,519
Accrued interest receivable 7,403 6,901
Other assets 24,360 29,601
Assets of discontinued operations --- 72,080
Total assets $1,195,954 $1,414,907
Liabilities and Shareholders' Equity
Warehouse line of credit $189,380 $101,776
Securities notes payable 357,890 352,564
Repurchase agreements 449,065 745,295
Accrued expenses and other liabilities 8,891 8,793
Obligation to purchase a security 30,048 ---
Junior subordinated debentures/trust
preferred security 10,310 10,310
Liabilities of discontinued operations --
deposits held for sale --- 71,916
Total liabilities 1,045,584 1,290,654
Common stock (no par value):
Authorized, 30,000,000 shares
Issued and outstanding, 17,111,950 at
Sept. 30, 2005, and 16,525,832 at
Dec. 31, 2004 76,738 70,332
Retained earnings 73,810 53,517
Unrealized (loss) gain on securities available
for sale, net (178) 404
Total shareholders' equity 150,370 124,253
Total liabilities and shareholders'
equity $1,195,954 $1,414,907
United PanAm Financial Corp. and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
(In thousands, except Three Months Nine Months
per share data) Ended Sept. 30, Ended Sept. 30,
2005 2004 2005 2004
Interest Income
Loans $41,310 $30,100 $114,590 $85,012
Short term investments and
securities for sale 4,239 6,358 12,520 15,042
Total interest income 45,549 36,458 127,110 100,054
Interest Expense
Securitized notes payable 4,285 342 11,519 342
Warehouse line of credit 1,876 5 4,266 5
Repurchase agreements 3,730 3,644 10,597 9,294
Deposits --- 2,895 --- 9,304
Junior subordinated
debentures/trust preferred
security 170 123 469 352
Total interest expense 10,061 7,009 26,851 19,297
Net interest income 35,488 29,449 100,259 80,757
Provision for loan losses 8,567 7,266 21,125 17,471
Net interest income after
provision for loan losses 26,921 22,183 79,134 63,286
Non-interest Income
Service charges and fees --- 96 --- 339
Loan related charges and fees 117 78 342 693
Gain on sale of securities 502 160 2,534 241
Other income 89 69 278 690
Total non-interest income 708 403 3,154 1,963
Non-interest Expense
Compensation and benefits 10,077 8,547 29,366 24,016
Occupancy 1,031 1,368 2,916 3,897
Market loss - derivative
instruments --- 2,071 --- 2,368
Other 5,088 3,705 15,510 10,582
Total non-interest expense 16,196 15,691 47,792 40,863
Income from continuing operations
before income taxes 11,433 6,895 34,496 24,386
Income taxes 4,468 2,847 13,868 9,905
Income from continuing operations 6,965 4,048 20,628 14,481
(Loss) income from discontinued
operations net of tax --- 3,260 (333) 4,088
Net income $6,965 $7,308 $20,295 $18,569
Earnings per share - basic:
Continuing operations $0.41 $0.25 $1.23 $0.90
Discontinued operations 0.00 0.20 (0.02) 0.25
Net income $0.41 $0.45 $1.21 $1.15
Weighted average shares
outstanding 17,030 16,168 16,790 16,146
Earnings per share - diluted:
Continuing operations $0.37 $0.23 $1.11 $0.80
Discontinued operations 0.00 0.18 (0.02) 0.23
Net income $0.37 $0.41 $1.09 $1.03
Weighted average shares
outstanding 18,835 18,022 18,631 18,012
United PanAm Financial Corp. and Subsidiaries
Selected Financial Data
(Unaudited)
(Dollars and shares in At or For the At or For the
thousands) Three Months Ended Nine Months Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2005 2004 2005 2004
Automobile Finance Data
Gross contracts purchased $114,560 $91,177 $357,679 $279,677
Contracts outstanding 646,718 502,150 646,718 502,150
Unearned discount (31,811) (22,880) (31,811) (22,880)
Allowance for loan losses (27,648) (24,973) (27,648) (24,973)
Allowance for loan losses
to gross loans net of
unearned discount 4.50% 5.21% 4.50% 5.21%
Unearned discount to gross
loans 4.92% 4.56% 4.92% 4.56%
Annualized net charge-offs to
average contracts (a) 4.58% 5.20% 4.26% 5.05%
Delinquencies
(% of net contracts)
31-60 days 0.52% 0.44% 0.52% 0.44%
61-90 days 0.19% 0.14% 0.19% 0.14%
90+ days 0.10% 0.10% 0.10% 0.10%
Total 0.81% 0.68% 0.81% 0.68%
Other Data
Return on average assets from
continuing operations (a) 2.46% 1.04% 2.44% 1.22%
Return on average shareholders'
equity from continuing
operations (a) 19.10% 14.22% 20.07% 17.66%
Consolidated capital to assets
ratio 12.57% 7.34% 12.57% 7.34%
Weighted average shares
outstanding 17,030 16,168 16,790 16,146
Additional shares included for
fully diluted calculations 1,805 1,854 1,841 1,866
Number of shares used in fully
diluted calculations 18,835 18,022 18,631 18,012
(a) Quarterly and nine month information is annualized for
comparability with full year information.