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United PanAm Financial Corp. Announces Third Quarter 2010 Results


Published on 2010-11-04 13:45:40 - Market Wire
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IRVINE, Calif.--([ BUSINESS WIRE ])--United PanAm Financial Corp. (Pink Sheets: UPFC) today announced results for its third quarter ended September 30, 2010.

Results for the Period Ended September 30, 2010

For the quarter ended September 30, 2010, UPFC reported a net loss of $1.8 million, compared to a net loss of $19.9 million for the same period a year ago. Interest income decreased to $4.3 million for the quarter ended September 30, 2010 from $29.9 million for the same period a year ago. The reduction in interest income was mostly due to a reduction in the aggregate amount of outstanding receivables following UPFCa™s previously-disclosed sale of its securitization residual interests in May 2010. UPFC reported a net loss of $0.12 per diluted share for the quarter ended September 30, 2010, compared to a net loss of $1.29 per diluted share for the same period a year ago.

For the nine months ended September 30, 2010, UPFC reported a net loss of $4.4 million, compared to a net loss of $23.0 million for the same period a year ago. For the nine months ended September 30, 2010, interest income was $37.7 million, compared to $105.2 million for the same period a year ago. The reduction in interest income was largely a result of the reduction in outstanding receivables described above. UPFC reported a net loss of $0.28 per diluted share for the nine months ended September 30, 2010, compared to a net loss of $1.47 per diluted share for the same period a year ago. The reported net loss for the nine months ended September 30, 2010 includes an after-tax charge of $6.9 million, or $0.45 per diluted share, for restructuring charges associated with branch closures and other non-recurring charges, including an adjustment to its deferred tax asset. The reported net loss for the nine months ended September 30, 2009 included an after-tax charge of $6.0 million, or $0.39 per diluted share, for restructuring charges associated with branch closures and other non-recurring charges.

United Auto Credit Corporation (UACC), a wholly-owned subsidiary of UPFC, purchases automobile installment sales contracts through its field marketing staff and regional underwriting offices and services all of its automobile installment sales contracts through its Hurst, Texas office. UACC purchased approximately $27.5 million of automobile installment sales contracts for the three months ended September 30, 2010 and $60.2 million for the nine months ended September 30, 2010. Comparatively, UACC purchased approximately $2.4 million of automobile installment sales contracts for the three months ended September 30, 2009 and $2.4 million for the nine months ended September 30, 2009.

On October 28, 2010, UACC entered into a transaction with Wells Fargo Preferred Capital, Inc. (WFPC) pursuant to which UACC may borrow up to $25 million against specifically pledged auto receivables. The facility is for a three-year period and, subject to WFPCa™s approval, may be increased to $50 million.

About United PanAm Financial Corp.

United PanAm Financial Corp. is a specialty finance company engaged in indirect automobile finance, which includes the purchasing and servicing of automobile installment sales contracts from independent and franchised dealers of used automobiles. UPFC conducts its automobile finance business through its wholly-owned subsidiary, United Auto Credit Corporation.

Forward Looking Statements

Any statements set forth above as well as some oral statements by our officials to securities analysts and shareholders during presentations about us are aforward-looking statements.a Statements which are predictive in nature, which depend upon or refer to future events or conditions, or which include words such as aexpects,a aanticipates,a aintends,a aplans,a abelieves,a aestimates,a ahopes,a aassumes,a amay,a aproject,a awilla and similar expressions constitute forward-looking statements. In addition, any statements concerning future financial performance (including future revenues, earnings or growth rates), ongoing business strategies or prospects, and possible future actions, which may be provided by management, are also forward-looking statements. Forward-looking statements are based upon expectations and projections about future events and are subject to assumptions, risks and uncertainties about, among other things, our company and economic and market factors. Actual events and results may differ materially from those expressed or forecasted in the forward-looking statements due to a number of factors. The principal factors that could cause our actual performance and future events and actions to differ materially from such forward-looking statements include, but are not limited to, 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 pressure we face, changes in the interest rate environment, general economic conditions, the effects of accounting changes, inability to manage consolidating operations and other factors or conditions. Our past performance and past or present economic conditions are not indicative of our future performance or of future economic conditions. Undue reliance should not be placed on forward-looking statements. In addition, we undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of anticipated or unanticipated events or changes to projections over time unless required by federal securities law.

United PanAm Financial Corp. and Subsidiaries
Consolidated Statements of Financial Condition
September 30, December 31,
2010 2009
(Dollars in thousands)
Assets
Cash $ 404 $ 40,989
Short term investments 66,861 -
Cash and cash equivalents 67,265 40,989
Restricted cash - 34,822
Loans 59,713 395,775
Allowance for loan losses (6,721 ) (46,888 )
Loans, net 52,992 348,887
Premises and equipment, net 2,454 3,056
Interest receivable 744 4,462
Other assets 26,475 40,318
Total assets $ 149,930 $ 472,534
Liabilities and Shareholdersa™ Equity
Securitization notes payable $ - $ 198,577
Term facility - Santander Consumer USA Inc. - 121,057
Junior subordinated debentures 10,310 10,310
Accrued expenses and other liabilities 9,005 7,329
Total liabilities 19,315 337,274
Preferred stock (no par value):

Authorized, 2,000,000 shares; no shares issued and outstanding

- -
Common stock (no par value):
Authorized, 30,000,000 shares; 15,288,782 and 15,484,680 shares issued and outstanding at September 30, 2010 and December 31, 2009, respectively 49,767 50,016
Retained earnings 80,848 85,244
Total shareholdersa™ equity 130,614 135,260
Total liabilities and shareholdersa™ equity $ 149,930 $ 472,534
United PanAm Financial Corp. and Subsidiaries
Consolidated Statements of Operations
(In thousands, except per share data) Three Months Ended Nine Months Ended
September 30,September 30,
2010 2009 2010 2009
Interest Income
Loans $ 4,241 $ 29,917 $ 37,630 $ 105,010
Short term investments and restricted cash 36 20 61 197
Total interest income 4,277 29,937 37,691 105,207
Interest Expense
Securitization notes payable - 4,279 5,054 15,340
Term facility and warehouse line of credit - Deutsche Bank - - - 7,474
Term facility - Santander Consumer USA Inc. - 4,614 5,085 7,998
Other interest expense 91 91 259 302
Total interest expense 91 8,984 10,397 31,114
Net interest income 4,185 20,953 27,294 74,093
Provision for loan losses 1,595 38,515 11,346 61,057
Net interest income (expense) after provision for loan losses 2,590 (17,562 ) 15,948 13,036
Non-interest Income 256 675 12,555 1,889
Non-interest Expense
Compensation and benefits 3,860 8,368 16,592 26,000
Occupancy 570 1,350 2,204 3,936
Other non-interest expense 1,433 3,947 6,495 11,831
Restructuring charges (11 ) 1,102 5,546 8,970
Other non-recurring charges - - 3,008 633
Total non-interest expense 5,852 14,767 33,845 51,370
(Loss) Income before income taxes (3,005 ) (31,654 ) (5,342 ) (36,445 )
Income tax expense (benefit) (1,232 ) (11,712 ) (946 ) (13,485 )
Net Loss (1,773 ) $ (19,942 ) $ (4,396 ) $ (22,960 )
Loss per share-basic:
Net (Loss) Income (0.12 ) $ (1.29 ) $ (0.28 ) $ (1.47 )
Weighted average basic shares outstanding 15,289 15,511 15,432 15,669
Loss per share-diluted:

Net (Loss) Income

(0.12 ) $ (1.29 ) $ (0.28 ) $ (1.47 )
Weighted average diluted shares outstanding 15,292 15,511 15,446 15,669
United PanAm Financial Corp. and Subsidiaries
Consolidated Statement of Changes in Shareholdera™s Equity
Total
NumberCommonRetainedShareholdersa™
of SharesStockEarningsEquity
(Dollars in thousands)
Balance, December 31, 2009 15,484,680 $ 50,016 $ 85,244 $ 135,260
Net loss - - (4,396 ) (4,396 )
Repurchase of common stock (242,233 ) (1,003 ) - (1,003 )
Issuance of restricted stock 40,000 - - -
Exercise of stock options 6,335 19 - 19
Stock-based compensation expense - 735 - 735
Balance, September 30, 2010 15,288,782 $ 49,767 $ 80,848 $ 130,614
United PanAm Financial Corp. and Subsidiaries
Selected Financial Data
(Dollars in thousands) Three Months Ended Nine Months Ended
September 30,September 30,
2010 2009 2010 2009
Operating Data
Contracts purchased $ 27,478 $ 2,353 $ 60,188 $ 2,364
Contracts outstanding $ 67,164 $ 470,898 $ 67,164 $ 470,898
Unearned acquisition discounts $ (7,451 ) $ (14,971 ) $ (7,451 ) $ (14,971 )
Average loan balance $ 56,573 $ 507,012 $ 208,909 $ 594,310
Unearned acquisition discounts to gross loans 11.09 % 3.18 % 11.09 % 3.18 %
Average percentage rate to borrowers 23.17 % 22.70 % 23.17 % 22.70 %
Loan Quality Data
Allowance for loan losses $ (6,721 ) $ (53,397 ) $ (6,721 ) $ (53,397 )

Allowance for loan losses to gross loans net of unearned acquisition discounts

11.26 % 11.71 % 11.26 % 11.71 %
Delinquencies (% of net contracts)
31-60 days 1.87 % 3.39 % 1.87 % 3.39 %
61-90 days 0.86 % 0.97 % 0.86 % 0.97 %
90+ days 0.71 % 0.50 % 0.71 % 0.50 %
Total 3.44 % 4.86 % 3.44 % 4.86 %

Repossessions over 30 days past due (% of net contracts)

0.79 % 1.79 % 0.79 % 1.79 %
Annualized net charge-offs to average loans 0.01 % 12.63 % 5.17 % 11.45 %
Other Data
Number of employees 159 469 159 469
Interest income $ 4,277 $ 29,937 $ 37,691 $ 105,207
Interest expense $ 91 $ 8,984 $ 10,397 $ 31,114
Interest margin $ 4,185 $ 20,953 $ 27,294 $ 74,093
Net interest margin as a percentage of interest income 97.86 % 69.99 % 72.41 % 70.43 %
Net interest margin as a percentage of average loans (1) 29.59 % 16.40 % 17.42 % 16.67 %
Non-interest expense to average loans (1) 41.37 % 11.56 % 21.60 % 11.56 %
Non-interest expense to average loans (2) 41.45 % 10.69 % 16.14 % 9.40 %
Return on average assets (1) -4.69 % -13.48 % -2.02 % -4.62 %
Return on average shareholdersa™ equity (1) -5.40 % -52.41 % -4.40 % -19.78 %
Consolidated capital to assets ratio 87.12 % 25.62 % 87.12 % 25.62 %

(1) Quarterly information is annualized for comparability with full year information.

(2) Excluding restructuring charges and other non-recurring charges.

Contributing Sources