Philip M. Hanley
Chief Financial Officer
American General Finance, Inc.
812-468-5420
AMERICAN GENERAL FINANCE CORPORATION
REPORTS RECORD EARNINGS
ON STRONG ASSET GROWTH
HIGHLIGHTS
- Record net income of $243 million; up 20% over 1993
- 19% growth in assets
- Return on assets of 3.0%; return on equity of 19.5%
EVANSVILLE, IN, JANUARY 31, 1995.--American General Finance Corporation
established a new high for net income during 1994, propelled by 19% asset
growth. Net income of $243 million represents a 20% increase over the $202
million earned during 1993, before one-time accounting changes of $12.6
million. 1994 return on assets reached 3.0% and return on equity was 19.5%,
compared with 2.8% and 17.3%, respectively, for 1993 before the one-time
accounting changes. Record fourth quarter net income was $71 million, up 39%
over the $51 million earned during the final quarter of 1993.
The outstanding performance was driven by strong asset growth, which increased
$1.4 billion from the end of 1993. Gains were achieved across all receivables
categories, with exceptional growth in retail-based and traditional consumer
loans. The greater proportion of these higher margin assets continued to have
an overall positive impact on performance. Higher yields, offset partially by
rising borrowing costs, resulted in a continued favorable net lending spread,
which was 10.8% for the full year of 1994, versus 10.1% for 1993. Delinquent
receivables were 2.9% at December 31, 1994, compared to 2.5% at December 31,
1993. Net charge offs were 2.2% for 1994, versus 2.0% for 1993.
Daniel Leitch III, Chairman and Chief Executive Officer, in commenting on the
significant achievements said, "The strategy of increasing our market presence
through focused business development efforts in each of our lending areas has
provided notable improvements in our earnings and profitability. We will
continue to develop and employ this strategy in the future."
FINANCIAL HIGHLIGHTS:
(Dollars in Millions)
For the Year Ended December 31, 1994 1993
Total Revenues $1,388 $1,213
Income Before Accounting Changes $243.3 $202.2
Net Income $243.3 $189.6
Finance Charge Yield 17.4% 16.8%
Net Charge Offs 2.20% 2.01%
Return on Assets* 3.0% 2.8%
Return on Equity* 19.5% 17.3%
* 1993 is before one-time accounting changes of $12.6 million.
For the Quarter Ended December 31, 1994 1993
Total Revenues $382 $307
Net Income $70.7 $50.7
At: 12/31/94 12/31/93
Total Assets $8,919 $7,505
Net Receivables** $7,907 $5,872
Delinquency 2.9% 2.5%
** The $2.0 billion increase in net receivables includes $1.3 billion of
revolving retail and bank card receivables exchanged with the direct parent,
American General Finance, Inc., on December 31, 1994. These receivables
replaced an intercompany note that previously financed the receivables.
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 assets of $8.9 billion and operates
over 1,300 offices in 40 states, Puerto Rico, and the U.S. Virgin Islands.
Products and services are provided to over 3 million low-to-middle income
American families. The company offers direct consumer and home equity loans;
indirect retail sales financing; credit cards; and credit and non-credit
related insurance.