MINNEAPOLIS, April 21 /PRNewswire/ -- Arcadia Financial Ltd. (NYSE: AAC)
today reported net income of $7,875,000, or $.20 per diluted share, on total
revenues of $65,099,000 for the first quarter ended March 31, 1999. In the
comparable 1998 period, the company reported net income of $4,956,000, or $.13
per diluted share, on total revenues of $66,613,000.
Richard A. Greenawalt, Arcadia Financial's chief executive officer, said
the company's first quarter performance benefited from continued efforts to
reduce risk and volatility in the company's business and improve overall
operating effectiveness. "We are especially encouraged by the reductions in
our loan loss and delinquency rates during the quarter," said Greenawalt. "In
addition to the seasonal improvements in these areas, we believe the improved
results also reflect the benefits of centralizing our collections activities
and providing better training and technology for our collectors."
For the 1999 first quarter, loans delinquent more than 30 days were 3.64%
of the company's total servicing portfolio compared to 4.78% at December 31,
1998 and 3.53% at March 31, 1998. Annualized net losses as a percentage of
the average servicing portfolio during the 1999 first quarter were 4.28%
compared to 4.34% in the prior quarter and 3.91% in the 1998 first quarter.
This quarter marks the fourth consecutive quarter in which annualized loan
losses were essentially flat, according to Greenawalt, and in line with
company expectations.
Greenawalt said cash flows continue to meet the company's expectations.
Cash released from restricted spread accounts totaled approximately $45
million in the first quarter of 1999 compared to $43 million in the 1998
fourth quarter and $25 million in the 1998 first quarter.
During the 1999 first quarter, Arcadia purchased $582 million in
automobile loans, an increase from $467 million last quarter, and securitized
$550 million, compared to $483 million in fourth quarter 1998. The gross
interest rate spread on this quarter's securitization was 11.4%, the second
largest spread the company has ever achieved on a securitization.
"The fundamental trends in our business right now appear to be promising,"
said Greenawalt. "Auto dealers are responding well to the profile pricing
system we introduced late last year. As a result, we were able to increase
loan purchases, while adhering to our revised credit quality standards and
risk-based pricing formulas."
Recoveries on repossessions are holding above the levels assumed in
Arcadia's financial models. The inventory of repossessed vehicles at
March 31, 1999 totaled $32 million, down from $33 million at the end of the
1998 fourth quarter and $51 million at the end of the 1998 first quarter.
This change primarily reflects the elimination of Arcadia's retail remarketing
program."
"Overall, we are pleased with our first quarter results. We believe that
the changes in structure, systems and procedures we have put in place over the
past two years are beginning to pay off. We hope to steadily improve
performance over the course of the year," said Greenawalt.
Selected 1999 First Quarter Highlights:
-- First quarter loan purchases totaled $582 million compared to
$467 million in the 1998 fourth quarter and $584 million in the 1998
first quarter.
-- The net interest rate spread on the $550 million of loans securitized
during the 1999 first quarter was 10.32% compared to 9.74% in the 1998
fourth quarter and 9.45% in the 1998 first quarter.
-- Operating expenses as a percentage of the average servicing portfolio
were 3.42% compared to 3.39% in the 1998 fourth quarter and 3.67% in
the 1998 first quarter.
-- The company's servicing portfolio totaled $5.1 billion at March 31,
1999 compared to $5.1 billion at December 31, 1998 and $5.0 billion at
March 31, 1998.
-- Loans delinquent more than 30 days were 3.64% of the average servicing
portfolio at March 31, 1999, compared to 4.78% at December 31, 1998 and
3.53% at March 31, 1998.
-- Annualized net losses as a percentage of the average servicing
portfolio were 4.28% for the quarter ended March 31, 1999, compared to
4.34% for the quarter ended December 31, 1998 and 3.91% for the quarter
ended March 31, 1998.
-- Reserves for loan losses totaled $408.0 million, or 7.92% of the
servicing portfolio, at March 31, 1999, compared to $415.4 million, or
8.15% of the servicing portfolio, at December 31, 1998 and
$236.3 million, or 4.70% of the servicing portfolio, at March 31, 1998.
Arcadia Financial Ltd. is a Minneapolis-based consumer financial services
company specializing in purchasing, selling and servicing retail installment
contracts for new and used automobiles originated in 45 states. The company,
founded in 1990, is the nation's largest independent provider of automobile
financing. Its 18 Regional Buying Centers are located in Arizona; northern
and southern California; Colorado; Florida; Georgia; Maryland; Massachusetts;
Minnesota; Missouri; New York; North Carolina; Ohio; Tennessee; north, south
and west Texas; and Washington.
This news release contains forward-looking statements that are subject to
certain risks and uncertainties that could cause actual results to differ
materially from historical results of from those results currently anticipated
or projected. Such factors include, among other things, the following:
increased delinquency and loan loss rates; accounting and regulatory changes;
interest rate fluctuations; difficulties or delays in the securitization of
automobile loans; availability of adequate short- and long-term financing;
general economic and business conditions; and other matters set forth under
the caption "Cautionary Statements" in exhibit 99.1 to the company's annual
report on Form 10-K for the year ended December 31, 1998.
Arcadia Financial LTD
Selected Financial and Other Operating Data
March 31, 1999
Three months ended
March 31, March 31,
Dollars in thousands, except per share data 1999 1998
REVENUES:
Net interest margin $ 21,289 $ 19,947
Gain on sale of loans 21,995 27,000
Servicing fee income 21,815 19,666
Total revenues 65,099 66,613
EXPENSES:
Operating expenses 43,758 45,834
Long term debt and other interest expense 13,466 12,785
Total expenses 57,224 58,619
Operating income before income taxes 7,875 7,994
Income tax expense -- 3,038
Net income $ 7,875 $ 4,956
Basic Earnings per Share $ 0.20 $ 0.13
Diluted Earnings per Share $ 0.20 $ 0.13
Weighted average shares outstanding:
Basic 39,204,110 38,988,885
Diluted 39,279,849 39,360,968
Number of buying centers 18 18
Servicing portfolio (in millions) $ 5,148.9 $ 5,026.5
Delinquencies as a percentage
of servicing portfolio 3.64% 3.53%
Book value per common share $ 7.03 $ 8.79
Automobile loan purchases (in millions) $ 582.5 $ 584.0
Annualized net losses as a percentage
of average servicing portfolio 4.28% 3.91%
March 31, December 31,
Dollars in thousands 1999 1998
ASSETS
Cash and cash equivalents $ 12,116 $ 10,827
Due from securitization trust 148,819 62,081
Auto loans held for sale 43,731 17,899
Finance income receivable (a) 607,996 587,946
Other assets 47,618 48,930
Total assets $ 860,280 $ 727,683
LIABILITIES AND SHAREHOLDERS' EQUITY
Amounts due under warehouse facilities $ 129,482 $ --
Senior term notes 366,911 366,657
Subordinated notes 59,764 51,898
Capital lease obligations 3,167 3,384
Deferred income taxes -- --
Accounts payable and accrued liabilities 25,330 36,935
Total liabilities 584,654 458,874
Shareholders' equity 275,626 268,809
Total liabilities and
shareholders' equity $ 860,280 $ 727,683
(a) Includes restricted cash deposits in spread accounts of $237.8 million
and $227.7 million at March 31, 1999 and December 31, 1998,
respectively.
SOURCE Arcadia Financial Ltd.
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800-758-5804, ext. 652638
CONTACT:
Scott Fjellman, Investor Relations of Arcadia
Financial, 612-944-4582
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