EXHIBIT 99 Philip M. Hanley
Chief Financial Officer
American General Finance, Inc.
812-468-5420
AMERICAN GENERAL FINANCE CORPORATION
ACHIEVES RECORD QUARTERLY EARNINGS
WITH STRONG LOAN GROWTH
HIGHLIGHTS
- Record quarterly net income of $58 million; first half net income
of $110 million
- Net finance receivables up $268 million over year-end
- Return on assets of 2.86%; return on equity of 18.06%
EVANSVILLE, IN, JULY 26, 1994.-- American General Finance Corporation posted
record net income during 1994's second quarter, reaching $58 million versus
$55 million for the second quarter of 1993, a 5% increase. Year-to-date net
income also reached a new high of $110 million, an 8% increase over the six
months ended June 30, 1993 which was $101 million, before one-time accounting
changes of $12.6 million. Annualized year-to-date return on assets increased
to 2.86% and return on equity was 18.06%, up from 2.83% and 17.57%,
respectively, for the first six months of 1993 prior to the one-time
accounting changes.
Net receivables grew $268 million during the first half of 1994, including
$218 million in the second quarter. This growth occurred in all receivables
categories, with significant gains in traditional consumer loans and retail
sales finance contracts. Reemphasis on real estate lending also produced the
first quarterly gain in that category since March 1993. The increase in
earnings has been fueled by this asset growth, as well as by improved finance
spreads and increased insurance revenues. The spread between yield and
borrowing cost increased to 10.8% for the second quarter of 1994 and 10.7%
year-to-date, compared with 10.1% and 10.0% for the comparable periods in
1993. This improvement is due primarily to the increased yields on
receivables as well as to continued favorable borrowing costs. Delinquent
receivables were 2.5% at June 30, 1994 while net charge offs were 2.0% for the
first six months, compared to 2.3% and 1.7%, respectively, for 1993. Full year
1993 charge offs were 2.0% and delinquencies were 2.5% at December 31, 1993.
Daniel Leitch III, President and Chief Executive Officer, said in commenting
on the results, "Solid growth in finance receivables is driving the
improvement in operating earnings. We are encouraged by the recent increases
in all receivables types."
FINANCIAL HIGHLIGHTS:
(Dollars in Millions, Annualized Percents)
For the Quarter Ended June 30, 1994 1993
Total Revenues $335 $304
Net Income $ 58 $ 55
Finance Charge Yield 17.4% 16.9%
Net Charge Offs 2.0% 1.8%
For the Six Months Ended June 30, 1994 1993
Total Revenues $649 $596
Income Before Accounting Changes $110 $101
Net Income $110 $ 89
Finance Charge Yield 17.3% 16.9%
Net Charge Offs 2.0% 1.7%
Return on Assets 2.86% 2.83%*
Return on Equity 18.06% 17.57%*
* Before one-time accounting changes of $12.6 million.
At: 6/30/94 12/31/93
Total Assets $7,985 $7,505
Net Receivables $6,140 $5,872
Delinquency 2.5% 2.5%
American General Finance Corporation and its subsidiaries are engaged in the
consumer finance and related credit insurance business. The company,
headquartered in Evansville, Indiana, has nearly $8 billion in assets and
operates over 1,200 offices in 39 states, Puerto Rico, and the U.S. Virgin
Islands. Products and services are provided to approximately 2.4 million low-
to-middle income American families. The company offers direct consumer and
home equity loans; indirect retail sales financing; and credit and non-credit
related insurance.