Keith, I guess you've seen the big drop in price on both Wescorp and WFSI. They've got some anouncements. Apparantly, the bad loans are for real and the President of Wescorp's "Bank" is leaving.
WFS Financial Expects First Quarter Operating Loss
IRVINE, Calif.--(BUSINESS WIRE)--March 27, 1998--WFS Financial Inc (Nasdaq: WFSI - news) today announced that it will report a first quarter operating loss in addition to the restructuring charge announced earlier this quarter.
The first quarter operating loss is primarily the result of continuing deterioration in delinquency and loss trends in the Company's automobile loan portfolio. These asset quality trends are the result of various factors including continuing negative credit trends on contracts originated during the Company's expansion, declining resale values on repossessions, lower than expected collections of deficiency balances, the restructuring of the western region and higher than expected turnover of collections personnel. The Company's servicing income, gain on sale and provision for loan losses will be adversely impacted by these trends. However, the retained interest in securitized assets on the Company's balance sheet relating to existing securitizations has not become impaired as a result of these higher loss levels.
As previously announced, the restructuring of the western region of the Company included consolidating 15 prime-lending dealer centers and 44 non-prime lending branch offices into 12 regional business centers and 15 satellite offices. The Company will report an after-tax restructuring charge of approximately $5.8 million or $.22 per share in the first quarter related to this restructuring. Once completed, the restructuring is designed to save up to $12 million annually in expenses.
WFS is an indirect automobile finance Company specializing in the purchase, securitization and servicing of prime and non-prime credit quality contracts. WFS currently purchases contracts in 40 states nationwide.
This news release contains forward-looking statements including, but not limited to, estimates of the impact of restructuring as well as future loan volumes, credit quality, losses and operating costs in future periods that are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected, including that the systems changes and initiatives that the Company is undertaking do not achieve their intended results. Additional risks that may affect the Company's future performance are detailed under the caption ''Forward-looking Statements'' in the Business section of the Company's annual report on Form 10-K and quarterly reports on Form 10-Q as filed with the Securities and Exchange Commission.
WFS Financial Expects First Quarter Operating Loss
IRVINE, Calif.--(BUSINESS WIRE)--March 27, 1998--WFS Financial Inc (Nasdaq: WFSI - news) today announced that it will report a first quarter operating loss in addition to the restructuring charge announced earlier this quarter.
The first quarter operating loss is primarily the result of continuing deterioration in delinquency and loss trends in the Company's automobile loan portfolio. These asset quality trends are the result of various factors including continuing negative credit trends on contracts originated during the Company's expansion, declining resale values on repossessions, lower than expected collections of deficiency balances, the restructuring of the western region and higher than expected turnover of collections personnel. The Company's servicing income, gain on sale and provision for loan losses will be adversely impacted by these trends. However, the retained interest in securitized assets on the Company's balance sheet relating to existing securitizations has not become impaired as a result of these higher loss levels.
As previously announced, the restructuring of the western region of the Company included consolidating 15 prime-lending dealer centers and 44 non-prime lending branch offices into 12 regional business centers and 15 satellite offices. The Company will report an after-tax restructuring charge of approximately $5.8 million or $.22 per share in the first quarter related to this restructuring. Once completed, the restructuring is designed to save up to $12 million annually in expenses.
WFS is an indirect automobile finance Company specializing in the purchase, securitization and servicing of prime and non-prime credit quality contracts. WFS currently purchases contracts in 40 states nationwide.
This news release contains forward-looking statements including, but not limited to, estimates of the impact of restructuring as well as future loan volumes, credit quality, losses and operating costs in future periods that are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected, including that the systems changes and initiatives that the Company is undertaking do not achieve their intended results. Additional risks that may affect the Company's future performance are detailed under the caption ''Forward-looking Statements'' in the Business section of the Company's annual report on Form 10-K and quarterly reports on Form 10-Q as filed with the Securities and Exchange Commission. |
