Westcorp Reports Record Third Quarter Net Income
IRVINE, Calif.--Oct. 2, 20055, 2005--Westcorp:-- Third quarter net income increased 22% to a record $67 million -- Earnings per share increased 21% to a record $1.26 per share -- Contract originations grew 15% to $2.1 billion
Westcorp reported that net income increased 22% to a record $66.5 million for the three months ended September 30, 2005 compared with $54.7 million for the same period a year ago. Earnings per diluted share increased 21% to a record $1.26 for the three months ended September 30, 2005 compared with $1.04 per diluted share for the same period a year earlier. For the nine months ended September 30, 2005, net income increased 26% to a record $193 million compared with $152 million for the same period a year earlier. Earnings per diluted share rose 26% to a record $3.65 for the nine months ended September 30, 2005 compared with $2.90 for the same period a year ago.
"Our record third quarter performance reflects our sustained growth in auto originations and the strength of our business model," said Tom Wolfe, President of Westcorp. "We continue to experience double digit origination growth across the country. Additionally, our superior credit performance is the result of our ongoing commitment to credit quality and operational excellence."
Annualized credit loss experience improved 70 basis points to 1.25% of average managed automobile contracts for the third quarter compared with 1.95% for the same period a year earlier. For the nine months ended September 30, 2005, credit loss experience improved 63 basis points to 1.35% compared with 1.98% for the same period a year earlier. The improvement in credit loss experience reflects a 15% decrease in the annualized default rate for the quarter to 3.9% compared with 4.6% a year ago. In addition, the total recovery rate improved 20% to 74% for the quarter compared to 62% a year ago. This rate includes both the average realization on the collateral sold of 53%, up from 49% a year ago, and the deficiency balance recoveries of 21%, up from 13% a year ago. The increase in the deficiency balance recoveries was due primarily to the recognition of $7.3 million in sales tax refunds on charged off accounts due to a favorable tax authority ruling. Of the $7.3 million, $6.4 million relates to prior quarters. The amount that relates to prior quarters reduced the credit loss experience for the quarter by 20 basis points. The percentage of outstanding automobile contracts 30 days or more delinquent improved 9 basis points to 2.15% at September 30, 2005 compared with 2.24% a year ago.
The provision for credit losses decreased to $40.2 million for the three months ended September 30, 2005, compared with $60.3 million for the same period a year earlier due to lower chargeoff experience, including the effect of sales tax refunds recognized during the quarter. For the nine months ended September 30, 2005, the provision for credit losses decreased to $127 million compared with $174 million for the same period a year ago. At September 30, 2005, the allowance for credit losses totaled $320 million or 2.4% of loans receivable compared with $315 million or 2.6% at December 31, 2004.
Automobile contract purchases totaled $2.1 billion for the third quarter of 2005, a 15% increase from the same period a year earlier. For the nine months ended September 30, 2005, automobile contract purchases totaled $5.9 billion, a 16% increase compared with $5.1 billion a year ago. As a result of higher contract originations, the Company's portfolio of managed automobile contracts grew 11% to $12.7 billion at September 30, 2005, up from $11.4 billion a year earlier. Total average interest earning assets increased $1.7 billion to $16.9 billion for the third quarter, up from $15.2 billion for the same period a year ago. As a result, net interest income grew 10% to $226 million for the third quarter compared with $206 million for the same period a year earlier. Net interest margin was 4.91% for the third quarter compared with 5.02% for the same period a year ago. For the nine months ended September 30, 2005, net interest income grew 10% to $657 million compared with $598 million for the same period a year earlier. Net interest margin was 5.05% for the nine months ended September 30, 2005 compared with 5.02% for the same period a year ago.
Noninterest income decreased $10.2 million to $19.8 million for the three months ended September 30, 2005 compared with $30.0 million for the same period a year earlier. For the nine months ended September 30, 2005, noninterest income decreased $27.6 million to $58.7 million compared with $86.3 million for the same period a year ago. Noninterest income was reduced by $18.1 million and $49.3 million of loan origination fees that were deferred during the three and nine months ended September 30, 2005, respectively. Noninterest expense increased to $78.0 million or 32% of total revenues for the third quarter compared with $74.9 million or 32% of total revenues for the same period a year earlier. For the nine months ended September 30, 2005, noninterest expense increased to $225 million or 31% of total revenues compared with $220 million or 32% of total revenues a year ago. Included in noninterest expense is $6.6 million of transaction expenses related to the previously proposed merger of WFS Financial into Western Financial Bank as part of the acquisition of the minority interest in WFS Financial and the recently announced merger agreement entered into among Wachovia, Western Financial Bank, WFS Financial and the Company. Noninterest expense was reduced by $7.3 million and $20.7 million of direct origination costs that were deferred during the three and nine months ended September 30, 2005, respectively. Historically, the Company performed analysis on the fees and direct costs related to its origination of automobile loans and elected not to defer and amortize such amounts as the net effect was not material to its financial statements in accordance with Statement of Financial Accounting Standard No. 91 and SEC Staff Accounting Bulletin No. 99. Due to continuing improvements in operating efficiencies and the higher amount of documentation fees earned, the difference between the amount of fees received and the direct costs incurred has gradually increased. The Company decided to defer and amortize these amounts to interest income prospectively beginning in the first quarter of this year.
The Company continued to maintain a favorable deposit mix in 2005, consistent with its shift from certificates of deposit to lower cost demand deposit and money market accounts. Total demand deposit and money market accounts increased $150 million, or 11%, to $1.51 billion at September 30, 2005 compared with $1.36 billion a year ago and represented 65% of total deposits. The weighted average interest cost of deposits (excluding the effects of hedging) increased to 2.49% for the third quarter compared with 1.44% for the same period a year earlier.
The Company issued $2.7 billion of automobile receivable asset-backed securities during the quarter in its largest transaction to date. The Company continues to be the largest non-captive issuer of automobile asset-backed securities in the U.S. having issued a total of $46 billion of such securities in 68 transactions to date.
As provided in the merger agreement entered into among Wachovia, Westcorp, Western Financial Bank and WFS Financial Inc as of September 12, 2005, the Company is permitted to continue to pay regular quarterly dividends prior to completion of the Westcorp merger, so long as such dividends are at a rate that is no greater than the rate paid by it during the second quarter of 2005. The declaration of any future dividends will be made by the Board of Directors in its discretion, and will be coordinated with Wachovia in an effort to ensure that Westcorp shareholders will not receive two dividends, or fail to receive one dividend (to the extent that a dividend is declared), for any quarter with respect to shares of Westcorp common stock and any shares of Wachovia common stock that Westcorp shareholders will receive in connection with the merger.
The Company reaffirms its previous earnings guidance of around $250 million to $255 million, or roughly $4.75 to $4.85 per share for the year ended December 31, 2005. The Company expects to recognize additional transaction related expenses associated with the proposed merger with Wachovia through the consummation of the transaction.
Due to the pending merger with Wachovia, there will be no scheduled investor conference call to discuss the third quarter results.
Westcorp is a financial services holding company whose principal subsidiaries are WFS Financial Inc and Western Financial Bank. Westcorp is a publicly owned company whose common stock is traded on the New York Stock Exchange under the symbol WES. Information about Westcorp can be found at its web site at http://www.westcorpinc.com.
Westcorp, through its subsidiary, WFS Financial, is one of the nation's largest independent automobile finance companies. WFS Financial specializes in originating, securitizing, and servicing new and pre-owned prime and non-prime credit quality automobile contracts through its nationwide relationships with automobile dealers. WFS Financial is a publicly owned company whose common stock is traded on the Nasdaq under the symbol WFSI. Information about WFS Financial can be found at its web site at http://www.wfsfinancial.com.
Westcorp, through its subsidiary, Western Financial Bank, operates retail bank branches and provides commercial banking services in Southern California. Information on the products and services offered by the Bank can be found at its web site at http://www.wfb.com.
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act, as amended. Forward-looking statements are identified by the use of terms and phrases such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan," "predict," "project," "will," and similar terms and phrases, including references to assumptions. Forward-looking statements in this press release relate to analyses and other information, which are based on forecasts of future results and estimates of amounts not yet determinable. In addition, these statements relate to the Company's future prospects, developments and business strategies and include information regarding the Company's improved credit quality trends and higher automobile origination growth. In addition, forward-looking statements include statements regarding the proposed merger with Wachovia, and the future payment of dividends.
These statements are subject to uncertainties and factors relating to the Company's operations and business environment, all of which are difficult to predict and many of which are beyond its control that could cause actual results to differ materially from those expressed in or implied by these forward-looking statements. In particular, there can be no assurances that improved credit quality trends or origination growth identified in this press release will continue in future periods.
The following factors are among those that may cause actual results to differ materially from the forward-looking statements: changes in general economic and business conditions; interest rate fluctuations, including the effect of hedging activities; the Company's financial condition and liquidity, as well as future cash flow and earnings and the level of operating expenses; competition; the effect, interpretation, or application of new or existing laws, regulations, court decisions and significant litigation; the exercise of discretionary authority by regulatory agencies; a decision to change the Company's corporate structure; the availability of sources of funding; and the level of chargeoffs on the automobile contracts that the Company originates. In addition, the Company can provide no assurances that the merger with Wachovia will close when expected, if at all. The merger of the Company and Wachovia is subject to the requisite approval of the Company's shareholders, and the merger of WFS Financial and Wachovia is subject to the requisite approval of WFS Financial's shareholders (including the approval of a majority of shares of WFS Financial common stock represented and voting at the WFS shareholder meeting, excluding shares of WFS Financial common stock held by the Company and its affiliates). Additionally, each of the mergers are subject to receipt of requisite regulatory approvals, including the approval of applicable federal and state banking regulators, receipt of tax opinions and other closing conditions. The Company can also provide no assurances that any future dividends will be declared by the Company's board of directors.
A further list of these risks, uncertainties and other matters can be found in the Company's filings with the Securities and Exchange Commission. If one or more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect, the Company's actual results may vary materially from those expected, estimated or projected. The information contained in this press release is as of October 25, 2005. The Company assumes no obligation to update any forward-looking statements to reflect future events or circumstances.
WESTCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
For the Three For the Nine
Months Ended Months Ended
September 30, September 30,
----------------------- -----------------------
2005 2004 2005 2004
----------- ----------- ----------- -----------
(Dollars in thousands, except per share amounts)
Interest income:
Loans, including fees $327,638 $291,796 $937,182 $863,989
Mortgage-backed
securities 27,368 25,828 82,020 72,666
Investment securities 1,798 1,173 4,146 3,354
Other 8,418 2,441 18,628 5,871
----------- ----------- ----------- -----------
TOTAL INTEREST
INCOME 365,222 321,238 1,041,976 945,880
Interest expense:
Deposits 21,110 15,101 59,099 42,291
Notes payable on
automobile secured
financing 101,587 89,869 282,114 272,678
Other 16,262 10,030 43,323 33,102
----------- ----------- ----------- -----------
TOTAL INTEREST
EXPENSE 138,959 115,000 384,536 348,071
----------- ----------- ----------- -----------
NET INTEREST INCOME 226,263 206,238 657,440 597,809
Provision for credit
losses 40,188 60,337 126,865 174,171
----------- ----------- ----------- -----------
NET INTEREST INCOME
AFTER PROVISION FOR
CREDIT LOSSES 186,075 145,901 530,575 423,638
Noninterest income:
Automobile lending 15,498 26,830 45,538 77,646
Insurance income 3,020 2,264 7,215 5,778
Mortgage banking 82 64 259 548
Other 1,246 869 5,701 2,300
----------- ----------- ----------- -----------
TOTAL NONINTEREST
INCOME 19,846 30,027 58,713 86,272
Noninterest expenses:
Salaries and associate
benefits 41,522 43,541 128,459 130,995
Credit and collections 8,773 8,056 25,361 24,359
Data processing 5,172 4,053 14,660 12,313
Occupancy 4,182 3,983 12,019 11,710
Other 18,361 15,313 44,193 40,604
----------- ----------- ----------- -----------
TOTAL NONINTEREST
EXPENSES 78,010 74,946 224,692 219,981
----------- ----------- ----------- -----------
INCOME BEFORE INCOME
TAX 127,911 100,982 364,596 289,929
Income tax 51,138 40,188 143,876 115,227
----------- ----------- ----------- -----------
INCOME BEFORE MINORITY
INTEREST 76,773 60,794 220,720 174,702
Minority interest in
earnings of
subsidiaries 10,252 6,122 28,199 22,251
----------- ----------- ----------- -----------
NET INCOME $66,521 $54,672 $192,521 $152,451
=========== =========== =========== ===========
Earnings per common
share:
Basic $1.27 $1.05 $3.70 $2.94
=========== =========== =========== ===========
Diluted $1.26 $1.04 $3.65 $2.90
=========== =========== =========== ===========
Weighted average number
of common shares
outstanding:
Basic 52,207,935 51,859,531 52,083,134 51,806,929
=========== =========== =========== ===========
Diluted 52,886,618 52,510,834 52,746,532 52,528,983
=========== =========== =========== ===========
Dividends declared $0.15 $0.14 $0.45 $0.42
=========== =========== =========== ===========
See accompanying notes to consolidated financial statements.
WESTCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
September 30, December 31,
2005 2004
-------------- --------------
(Dollars in thousands)
ASSETS
Cash $93,222 $89,333
Interest bearing deposits with other
financial institutions 32,158 4,177
Other short-term investments 285,000 125,000
-------------- --------------
Cash and due from banks 410,380 218,510
Restricted cash 550,183 417,833
Investment securities available for sale 164,984 119,811
Mortgage-backed securities available for
sale 2,635,947 2,649,758
Loans receivable 13,222,321 12,135,748
Allowance for credit losses (320,001) (315,402)
-------------- --------------
Loans receivable, net 12,902,320 11,820,346
Interest receivable 85,436 79,825
Premises and equipment, net 73,391 76,526
Other assets 176,487 162,731
-------------- --------------
TOTAL ASSETS $16,999,128 $15,545,340
============== ==============
LIABILITIES
Deposits $2,317,405 $2,183,499
Notes payable on automobile secured
financing 11,327,812 10,242,900
Federal Home Loan Bank advances 1,122,434 1,139,521
Subordinated debentures 296,074 295,321
Other liabilities 207,662 178,939
-------------- --------------
TOTAL LIABILITIES 15,271,387 14,040,180
Minority interest 196,824 165,484
SHAREHOLDERS' EQUITY
Common stock (par value $1.00 per share;
authorized 65,000,000 shares; issued and
outstanding 52,251,061 shares at
September 30, 2005 and 51,895,258 shares
at December 31, 2004) 52,251 51,895
Paid-in capital 725,590 717,098
Retained earnings 776,602 606,987
Accumulated other comprehensive loss, net
of tax (23,526) (36,304)
-------------- --------------
TOTAL SHAREHOLDERS' EQUITY 1,530,917 1,339,676
-------------- --------------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $16,999,128 $15,545,340
============== ==============
See accompanying notes to consolidated financial statements.
The following table presents information relative to the average
balances and interest rates on an owned basis for the periods
indicated:
For the Three Months Ended
September 30, 2005
--------------------------------
Average Interest Yield/
Balance Rate
------------ ----------- -------
(Dollars in thousands)
Interest earning assets:
Total investments:
Mortgage-backed securities $2,596,121 $27,368 4.22%
Other short-term investments 934,014 8,378 3.56
Investment securities 192,156 1,798 3.74
Interest earning deposits with
others 52,911 40 0.30
------------ ----------- -------
Total investments 3,775,202 37,584 3.98
Total loans: (1)
Consumer loans 12,748,833 322,144 10.02
Mortgage loans 151,574 2,186 5.77
Commercial loans 168,048 2,799 6.52
Construction loans 29,789 509 6.68
------------ ----------- -------
Total loans 13,098,244 327,638 9.92
------------ ----------- -------
Total interest earning assets $16,873,446 365,222 8.59
============
Interest bearing liabilities:
Deposits $2,255,371 21,110 3.71
FHLB advances and other borrowings 990,907 8,772 3.47
Notes payable on automobile
secured financing 11,511,409 101,587 3.53
Subordinated debentures 295,897 7,490 10.12
------------ ----------- -------
Total interest bearing
liabilities $15,053,584 138,959 3.68
============ ----------- -------
Net interest income and interest rate
spread $226,263 4.91%
=========== =======
Net yield on average interest earning
assets 5.31%
=======
For the Three Months Ended
September 30, 2004
--------------------------------
Average Interest Yield/
Balance Rate
------------ ----------- -------
(Dollars in thousands)
Interest earning assets:
Total investments:
Mortgage-backed securities $2,610,918 $25,828 3.96%
Other short-term investments 660,922 2,427 1.46
Investment securities 115,445 1,173 4.07
Interest earning deposits with
others 5,668 14 0.98
------------ --------- ------
Total investments 3,392,953 29,442 3.47
Total loans: (1)
Consumer loans 11,461,360 287,806 9.99
Mortgage loans 174,927 2,181 4.99
Commercial loans 116,178 1,628 5.48
Construction loans 13,944 181 5.08
------------ --------- ------
Total loans 11,766,409 291,796 9.87
------------ --------- ------
Total interest earning
assets $15,159,362 321,238 8.43
============
Interest bearing liabilities:
Deposits $2,083,963 15,101 2.88
FHLB advances and other
borrowings 638,999 1,937 1.19
Notes payable on automobile
secured financing 10,722,274 89,869 3.35
Subordinated debentures 321,990 8,093 10.05
------------ --------- ------
Total interest bearing
liabilities $13,767,226 115,000 3.41
============ --------- ------
Net interest income and interest
rate spread $206,238 5.02%
========= ======
Net yield on average interest
earning assets 5.41%
======
(1) For the purpose of these computations, nonaccruing loans are
included in the average amounts outstanding.
For the Nine Months Ended
September 30, 2005
------------------------------
Average Interest Yield/
Balance Rate
------------ ---------- ------
(Dollars in thousands)
Interest earning assets:
Total investments:
Mortgage-backed securities $2,594,732 $82,020 4.21%
Other short-term investments 794,687 18,500 3.11
Investment securities 151,902 4,146 3.64
Interest earning deposits with
others 44,541 128 0.39
------------ ---------- ------
Total investments 3,585,862 104,794 3.90
Total loans: (1)
Consumer loans 12,286,641 921,646 10.03
Mortgage loans 161,158 6,665 5.51
Commercial loans 159,785 7,610 6.28
Construction loans 25,592 1,261 6.49
------------ ---------- ------
Total loans 12,633,176 937,182 9.92
------------ ---------- ------
Total interest earning assets $16,219,038 1,041,976 8.59
============
Interest bearing liabilities:
Deposits $2,203,380 59,099 3.59
Securities sold under agreements
to repurchase
FHLB advances and other borrowings 900,494 20,861 3.06
Notes payable on automobile
secured financing 11,073,297 282,114 3.40
Subordinated debentures 295,663 22,462 10.13
------------ ---------- ------
Total interest bearing
liabilities $14,472,834 384,536 3.54
============ ---------- ------
Net interest income and interest rate
spread $657,440 5.05%
========== ======
Net yield on average interest earning
assets 5.43%
======
For the Nine Months Ended
September 30, 2004
------------------------------
Average Interest Yield/
Balance Rate
------------ ---------- ------
(Dollars in thousands)
Interest earning assets:
Total investments:
Mortgage-backed securities $2,593,595 $72,666 3.74%
Other short-term investments 638,409 5,840 1.22
Investment securities 123,329 3,354 3.63
Interest earning deposits with
others 5,740 31 0.74
------------ --------- ------
Total investments 3,361,073 81,891 3.25
Total loans: (1)
Consumer loans 11,167,879 851,622 10.19
Mortgage loans 204,821 7,708 5.02
Commercial loans 106,169 4,371 5.41
Construction loans 7,817 288 4.83
------------ --------- ------
Total loans 11,486,686 863,989 10.05
------------ --------- ------
Total interest earning assets $14,847,759 945,880 8.51
============
Interest bearing liabilities:
Deposits $2,026,245 42,291 2.79
Securities sold under agreements
to repurchase 10,894 94 1.13
FHLB advances and other borrowings 608,456 5,640 1.22
Notes payable on automobile
secured financing 10,377,881 272,678 3.50
Subordinated debentures 365,619 27,368 9.98
------------ --------- ------
Total interest bearing
liabilities $13,389,095 348,071 3.49
============ --------- ------
Net interest income and interest rate
spread $597,809 5.02%
========= ======
Net yield on average interest earning
assets 5.39%
======
(1) For the purpose of these computations, nonaccruing loans are
included in the average amounts outstanding.
WESTCORP AND SUBSIDIARIES
OTHER FINANCIAL DATA AND STATISTICAL SUMMARY
Q3 2005 Q2 2005 Q1 2005
(Dollars in thousands,
except per share amounts)
----------------------------------------------------------------------
Earnings:
Net interest income $226,263 $214,250 $216,927
Provision for credit losses 40,188 37,699 48,978
Noninterest income 19,846 19,575 19,293
Noninterest expense 78,010 74,093 72,590
Income before taxes 127,911 122,033 114,652
Income taxes 51,138 47,099 45,639
Net income 66,521 65,318 60,682
----------------------------------------------------------------------
Equity:
Earning per share - basic $1.27 $1.25 $1.17
Earning per share - diluted $1.26 $1.24 $1.15
Dividends per share $0.15 $0.15 $0.15
Book value per share
(period end) (1) $29.75 $28.62 $27.52
Stock price per share
(period end) $58.90 $52.42 $42.25
Total equity to assets (2) 10.30% 10.14% 9.95%
Return on average equity (1) 17.47% 17.88% 17.31%
Average shares outstanding -
diluted 52,886,618 52,680,870 52,597,731
----------------------------------------------------------------------
Loan Portfolio:
Automobile contracts
purchased $2,070,694 $2,013,622 $1,782,414
Automobile contracts managed
(period end) $12,718,750 $12,307,454 $11,852,222
Number of accounts managed
(period end) 941,616 919,722 895,377
Average automobile contracts
managed $12,376,118 $12,019,325 $11,702,544
----------------------------------------------------------------------
Credit Quality:
Delinquency rate (30+ days) 2.15% 1.80% 1.53%
Repossessions to total
contracts 0.05% 0.05% 0.05%
Net chargeoffs (annualized) 1.25% 1.15% 1.66%
Allowance to loans receivable 2.42% 2.49% 2.56%
----------------------------------------------------------------------
Operations:
Total assets $16,999,128 $16,544,234 $16,156,288
Noninterest expense to total
revenues 31.70% 31.69% 30.73%
WESTCORP AND SUBSIDIARIES
OTHER FINANCIAL DATA AND STATISTICAL SUMMARY
Q4 2004 Q3 2004
(Dollars in thousands,
except per share amounts)
----------------------------------------------------------------------
Earnings:
Net interest income $209,949 $206,238
Provision for credit losses 61,078 60,337
Noninterest income 29,851 30,027
Noninterest expense 75,626 74,946
Income before taxes 103,096 100,982
Income taxes 40,571 40,188
Net income 55,510 54,672
----------------------------------------------------------------------
Equity:
Earning per share - basic $1.07 $1.05
Earning per share - diluted $1.06 $1.04
Dividends per share $0.14 $0.14
Book value per share (period end) (1) $26.51 $25.55
Stock price per share (period end) $45.93 $42.52
Total equity to assets (2) 9.92% 9.66%
Return on average equity (1) 16.45% 16.82%
Average shares outstanding - diluted 52,573,953 52,510,834
----------------------------------------------------------------------
Loan Portfolio:
Automobile contracts purchased $1,583,748 $1,799,106
Automobile contracts managed (period end) $11,560,890 $11,440,353
Number of accounts managed (period end) 876,695 869,038
Average automobile contracts managed $11,512,626 $11,268,695
----------------------------------------------------------------------
Credit Quality:
Delinquency rate (30+ days) 2.24% 2.24%
Repossessions to total contracts 0.07% 0.06%
Net chargeoffs (annualized) 2.01% 1.95%
Allowance to loans receivable 2.60% 2.62%
----------------------------------------------------------------------
Operations:
Total assets $15,545,340 $15,351,999
Noninterest expense to total revenues 31.54% 31.72%
(1) Excludes other comprehensive income
(2) Excludes other comprehensive income and includes minority
interest
WESTCORP AND SUBSIDIARIES
CUMULATIVE STATIC POOL LOSS CURVES (UNAUDITED)
At September 30, 2005
The following table sets forth the cumulative static pool losses
by month for all outstanding public securitized pools:
Period (1) 2002-1 2002-2 2002-3 2002-4 2003-1 2003-2 2003-3 2003-4
----------------------------------------------------------------------
1 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
2 0.01% 0.00% 0.02% 0.02% 0.01% 0.00% 0.00% 0.01%
3 0.06% 0.03% 0.06% 0.07% 0.04% 0.02% 0.02% 0.03%
4 0.15% 0.10% 0.14% 0.16% 0.11% 0.06% 0.06% 0.08%
5 0.29% 0.18% 0.27% 0.26% 0.18% 0.14% 0.13% 0.14%
6 0.43% 0.32% 0.44% 0.38% 0.29% 0.25% 0.23% 0.21%
7 0.60% 0.49% 0.57% 0.50% 0.41% 0.36% 0.32% 0.28%
8 0.84% 0.66% 0.70% 0.61% 0.53% 0.48% 0.40% 0.35%
9 1.06% 0.82% 0.82% 0.78% 0.66% 0.59% 0.47% 0.44%
10 1.28% 0.96% 0.96% 0.94% 0.80% 0.70% 0.55% 0.54%
11 1.48% 1.10% 1.10% 1.08% 0.93% 0.80% 0.62% 0.61%
12 1.67% 1.26% 1.24% 1.28% 1.06% 0.89% 0.71% 0.73%
13 1.82% 1.39% 1.38% 1.43% 1.21% 0.98% 0.80% 0.83%
14 1.99% 1.51% 1.53% 1.59% 1.31% 1.08% 0.88% 0.93%
15 2.14% 1.68% 1.70% 1.77% 1.40% 1.20% 0.97% 1.03%
16 2.27% 1.83% 1.88% 1.92% 1.50% 1.31% 1.07% 1.09%
17 2.45% 1.99% 2.03% 2.05% 1.60% 1.41% 1.16% 1.19%
18 2.62% 2.16% 2.15% 2.16% 1.70% 1.53% 1.25% 1.24%
19 2.80% 2.31% 2.28% 2.25% 1.85% 1.66% 1.33% 1.30%
20 2.99% 2.46% 2.41% 2.37% 1.99% 1.76% 1.40% 1.36%
21 3.15% 2.60% 2.52% 2.49% 2.14% 1.87% 1.45% 1.42%
22 3.31% 2.72% 2.62% 2.62% 2.27% 1.95% 1.50% 1.47%
23 3.45% 2.86% 2.74% 2.73% 2.37% 2.02% 1.57% 1.54%
24 3.58% 2.95% 2.83% 2.84% 2.47% 2.09% 1.62%
25 3.69% 3.03% 2.96% 2.95% 2.57% 2.16% 1.69%
26 3.80% 3.13% 3.08% 3.06% 2.63% 2.21% 1.74%
27 3.92% 3.22% 3.21% 3.17% 2.68% 2.27%
28 4.02% 3.33% 3.31% 3.25% 2.73% 2.34%
29 4.12% 3.41% 3.41% 3.32% 2.78% 2.40%
30 4.22% 3.50% 3.48% 3.38% 2.85%
31 4.30% 3.58% 3.56% 3.43% 2.91%
32 4.39% 3.66% 3.62% 3.48% 2.93%
33 4.49% 3.73% 3.67% 3.55%
34 4.56% 3.78% 3.71% 3.61%
35 4.63% 3.84% 3.74% 3.63%
36 4.69% 3.86% 3.80%
37 4.74% 3.90% 3.84%
38 4.77% 3.93% 3.86%
39 4.80% 3.97%
40 4.84% 4.01%
41 4.87% 4.02%
42 4.91%
43 4.90%
Prime
Mix (2) 70% 87% 85% 80% 80% 82% 84% 82%
Period (1) 2004-1 2004-2 2004-3 2004-4 2005-1 2005-2 2005-3
----------------------------------------------------------------------
1 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
2 0.00% 0.00% 0.02% 0.00% 0.00% 0.00% 0.01%
3 0.02% 0.03% 0.06% 0.04% 0.02% 0.02% 0.03%
4 0.06% 0.07% 0.13% 0.09% 0.06% 0.07%
5 0.11% 0.15% 0.21% 0.15% 0.13% 0.13%
6 0.19% 0.24% 0.30% 0.23% 0.20% 0.22%
7 0.27% 0.33% 0.40% 0.30% 0.28% 0.30%
8 0.34% 0.41% 0.50% 0.37% 0.38%
9 0.42% 0.51% 0.56% 0.45% 0.48%
10 0.52% 0.59% 0.64% 0.54%
11 0.59% 0.65% 0.69% 0.65%
12 0.67% 0.70% 0.77% 0.75%
13 0.75% 0.76% 0.87%
14 0.81% 0.83% 0.94%
15 0.88% 0.91%
16 0.93% 0.98%
17 1.00% 1.03%
18 1.06%
19 1.12%
20 1.18%
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
Prime
Mix (2) 82% 82% 81% 78% 78% 77% 76%
(1) Represents the number of months since inception of the
securitization.
(2) Represents the original percentage of prime automobile
contracts securitized within each pool.