Allan,
Here's the text portion of that release:
TFC Enterprises Reports Continued Improved Financial Results for Third Quarter And First Nine Months of 1998
NORFOLK, Va., Oct. 20 /PRNewswire/ -- TFC Enterprises, Inc. (Nasdaq: TFCE)
today reported increased profits and contract purchase volume for the third
quarter and first nine months of 1998. Third quarter 1998 net income
increased to $1.3 million, or $.12 per common share, compared to a net
operating loss of $0.1 million, or $.01 per common share, in the third quarter
of 1997. For the first nine months of 1998, the Company reported net income of
$2.7 million, or $.23 per common share, compared to net income of $0.8
million, or $.07 per common share, for the first nine months of 1997. The
Company also reported that new contract volume increased by $47.5 million, or
40%, for the first nine months of 1998 compared to the first nine months of
1997, and that volume for the third quarter of 1998 increased by $15.6
million, or 39%, compared to the third quarter of 1997.
"The Company continues to post outstanding results during a time when
others in our industry are experiencing problems," said Robert S. Raley Jr.,
TFCE Chairman, President and Chief Executive Officer. "During 1998, The
Finance Company has opened two new Loan Production Offices; one in Tacoma,
Washington and one in Clarksville, Tennessee, and signed a lease for a third
in Columbus, Georgia. In addition, the Company significantly increased
purchase volume, improved delinquency and increased pricing and overall yield.
We believe the Company will also benefit by the decrease in interest rates.
The turnaround efforts, started in 1996, are continuing to pay off."
In August, The Finance Company changed its charge off policy to better
align TFC's policy with the industry. Prior to the change, it was generally
TFC's policy to charge off, through reserves, all contract receivables which
were both 180 days past due and which have had no significant payment activity
for 90 days. TFC's current policy is to generally charge off, through
reserves, all contract receivables which are 180 days past due without regard
to recent payment history.
Charge off, net loan charge-off as a percentage of average contract
receivables (net of unearned interest), before reflecting the change in
charge off policy, decreased (on an annualized basis) from 19.10% in the first
nine months of 1997 to 15.85% in the first nine months of 1998 and from 16.19%
in the third quarter of 1997 to 14.12% in the third quarter of 1998. The
charge off percentage (on an annualized basis), after reflecting the change in
charge off policy, decreased to 17.11% in the first nine months of 1998 and
increased to 17.69% in the third quarter of 1998.
Delinquency, 60+ days delinquency as a percent of period-end gross
contract receivables, before reflecting the change in charge off policy,
decreased significantly from 8.66% at September 30,1997 and 8.85% at December
31, 1997 to 6.30% at September 30, 1998. Delinquency, after reflecting the
change in charge off policy, decreased to 5.57% at September 30, 1998.
The Company reported that auto finance contract purchase volume totaled
$51.6 million in the third quarter of 1998, an increase of $14.6 million, or
39%, over the third quarter of 1997. For the first nine months of 1998,
contract purchase volume was $152.3 million, an increase of $44.4 million, or
41%, over the first nine months of 1997.
Consumer finance contract originations increased to $4.3 million in the
third quarter of 1998, an increase of $1.0 million, or 32%, over the third
quarter of 1997. For the first nine months, consumer finance contract
originations totaled $12.5 million, an increase of $3.1 million, or 33%,
compared to the first nine months of 1997.
The provision for credit losses relates solely to the Company's consumer
finance loan business. Improved credit quality and servicing of the Company's
auto finance contracts eliminated the need for a loss provision for all of
1997 and the first nine months of 1998.
The yield on interest earning assets was 23.17% in the third quarter of
1998, compared to 21.11% in the third quarter of 1997. The yield on interest
earning assets was 22.53% for the first nine months of 1998, compared to
21.27% for the first nine months of 1997. The increase was attributable to an
increase in the amount of contract purchase discount accreted to interest
revenue as a yield enhancement as a result of increased discounts on purchased
receivables and improved delinquency and charge off.
The cost of interest bearing liabilities was 10.52% in the third quarter
of 1998, compared with 11.25% in the third quarter of 1997. The cost of
interest bearing liabilities was 10.66% for the first nine months of 1998,
compared to 10.82% for the first nine months of 1997. The decrease was
primarily related to an interest rate reduction in the primary line of credit.
The Company continues to explore ways to reduce its overall cost of interest
bearing liabilities.
In addition to historical information, this press release contains
forward-looking statements that are subject to risks and uncertainties that
could cause the Company's actual results to differ materially from those
anticipated in these forward-looking statements. Readers are cautioned not to
place undue reliance on these forward-looking statements, which reflect
management's current analysis. In accordance with the Private Securities
Litigation Reform Act of 1995, the following are factors that could cause the
Company's actual results to differ materially from those expressed or implied
by such forward-looking statements: a rise in interest rates, a deterioration
of credit experience, the loss of or reduction in its credit facilities, or if
the Company were to face increased competition. Investors are encouraged to
review the Company's SEC filings for more information about the factors
affecting the Company's business.
TFC Enterprises, Inc., through its wholly-owned subsidiary The Finance
Company, specializes in purchasing and servicing installment sales contracts
originated by automobile and motorcycle dealers. Through First Community
Finance, Inc., another wholly-owned subsidiary, TFC Enterprises, Inc. is
involved in the direct origination and servicing of small consumer loans.
Based in Norfolk, VA, TFC Enterprises, Inc. has offices of The Finance
Company in Killeen, TX; Jacksonville, FL; Norfolk, VA; San Diego, CA;
Clarksville, TN and Tacoma , WA and offices of First Community Finance in
Virginia and North Carolina.
NOTE: Detailed supplemental information follows.
Conference Call Notice
Robert S. Raley, Jr., Chairman, President and Chief Executive Officer of
TFC Enterprises, Inc., will host a conference call for analysts and investors
at 2:00 p.m. eastern time on Wednesday, October 21, 1998. Those wishing to
participate should call 1-800-425-7617 a few minutes prior to the scheduled
start of the conference call. |
