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America’s Car-Mart Reports Higher Revenues

Thursday, 22 February 2018 03:56
America’s Car-Mart Inc. reported net income of $2.8 million for the quarter ended Jan. 31.The buy-here, pay-here chain saw revenues of $139 million compared to $137 million for the prior year quarter.Retail unit sales decreased to 10,866 from 11,013 for the prior year quarter with increased productivity at 25.3 retail units sold per store per month, up from 25 for the prior year quarter.Average retail sales price increased to $10,629.Gross profit margin percentage increased to 40.8 percent from 40.3 percent for the prior year quarter.Collections as a percentage of average finance receivables of 12.4 percent compared to 12.9 percent for the prior year quarter.  The weighted average contract term increased to 31.9 months from 30.9.Net charge-offs as a percent of average finance receivables were 7.8 percent, up from 6.6 percent for prior year quarter.Accounts over 30 days past due decreased to 4.7 percent from 5 percent at Jan. 31, 2016.Average percentage of finance receivables current were 79.5 percent compared to 81.4 percent at Jan. 31, 2016.Provision for credit losses rose to 31 percent of sales vs. 26.9 percent for prior year quarter.  Selling, general and administrative expenses fell to 18.7 percent of sales vs. 19.4 percent for prior year quarter.Active accounts base was approximately 67,300, an increase of approximately 2,300 from April 30, 2016.

Auto Finance Growth Slows

Thursday, 22 February 2018 03:56
Auto finance saw the lowest annual growth rate in the fourth quarter since the second quarter of 2012, according to TransUnion.Auto finance balances grew 5.5 percent between the fourth quarter of 2016 and the fourth quarter of 2017. They grew 5.3 percent in the second quarter of 2012 over the second quarter of 2011. Despite a slowdown in balance growth, auto loans grew to 79.4 million in the fourth quarter, compared to 75.8 million one-year prior. Originations declined on a yearly basis for the fifth consecutive quarter, falling 4.8 percent in the third quarter of 2017. The decline in originations was driven by an 8.2 percent yearly drop for the subprime, near-prime and prime credit risk categories, though that was partially dampened by only a 0.2 percent annual decline in the prime plus and super prime risk categories. Serious auto finance delinquency rates per borrower also remained stable, improving to 1.43 percent at the end of 2017.

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Nicholas Financial Names Interim CFO

Thursday, 22 February 2018 03:56
Nicholas Financial Inc. announced that Chad Steinorth will be rejoining the company as vice president and interim chief financial officer, effective March 1. Steinorth originally spent 13 years with Nicholas Financial, from November 1993 to November 2006, holding several positions including controller and vice president of finance.  Since then, Steinorth ran his own local auto finance company in the Tampa Bay area before selling it in 2016.  Steinorth most recently served as vice president of finance at Platinum Auto Finance.  Steinorth will serve as the interim chief financial officer while the company completes a search for a permanent replacement.  Once that replacement is named and installed, Steinorth will remain with Nicholas Financial and assist with other special projects and initiatives.

Auto Finance Reaches Record Levels

Monday, 19 February 2018 17:28 Written by
  Auto finance origination volume reached the highest level ever observed by Federal Reserve Bank of New York last year. Auto finance debt reached $1.22 trillion in 2017, up $64 billion from 2016. Auto debt levels increased by $8 billion in the fourth quarter. Auto finance balances have risen steadily since 2011. However, originations decreased slightly in the fourth quarter. The number of finance contracts becoming 90 days or more delinquent also decreased, to 2.3 percent from 2.4 percent in the third quarter. Another measure of consumer auto credit performance provides a less positive picture. After posting two consecutive months of improvement, annualized net losses and 60-plus day delinquencies in KBRA’s Non-Prime Index rose in January. This took place in the December collection period. The Kroll Index shows 60-plus day delinquencies increased to 5.25 percent. The increase in delinquency and loss rates was driven primarily by a shift in issuer composition. Santander’s deep-subprime arm, which exhibits some of the highest delinquency and loss rates in the nonprime market, accounted for 18 percent of the index in January, compared to 16 percent the previous month and 10 percent in January 2017. Elevated severity rates also played a role in driving net losses higher, with index severities rising to 61.9 percent in January, compared to 59.6 percent in December and 57.4 percent during the sameperiod last year. Performance in KBRA’s Prime Index also deteriorated in January.  The increase in delinquency and loss rates in Kroll’s Prime Index were primarily driven by deteriorating collateral performance from CarMax and World Omni. Again, higher severities across most securitized prime auto loan pools contributed to the rise in net loss rates. The severity rate in Kroll’s Prime Index rose to 53.5 percent in January, compared to 49.1 percent the previous month and 50.4 percent one year ago. Kroll Rating Agency expects performance to improve in the spring as consumers receive their tax refunds.