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Contacts: Bryan A. Binyon, V. P. and Treasurer
(812) 468-5195
Robert A. Cole, S.V.P. and CFO
(812) 468-5601
AMERICAN GENERAL FINANCE CORPORATION
REPORTS STRONG PERFORMANCE FOR
THE SECOND QUARTER OF 1999
Highlights for the quarter:
- Growth in receivables
- Improvement in charge-off
- 22% increase in earnings
EVANSVILLE, IN, JULY 28, 1999 - American General Finance
Corporation reports second quarter 1999 net income of $57
million, representing a 22% increase over the same quarter
of 1998. The strong performance is attributed to asset
growth, expense control and credit quality improvement.
Finance receivables grew by $150 million during the quarter
to total $9.8 billion. At June 30, 1999, the portfolio was
comprised of 63% real estate loans, 25% non-real estate
loans and 12% retail sales finance receivables.
The total portfolio charge-off ratio continued to improve.
For the current quarter, the ratio was 1.96% compared to
2.63% for second quarter 1998 and 2.14% for first quarter
1999. For first half 1999, the ratio was 2.05%,
significantly improving on the 2.67% for the first 6 months
of the prior year. At June 30, the 60-day plus delinquency
ratio improved to 3.56% from 3.68% at March 31, 1999, and
was up slightly from 3.45% at mid-year 1998. The allowance
for finance receivable losses at period end remained strong
at 3.85% of net finance receivables.
Management is pleased with American General Finance's
results through the first half of 1999. The company expects
to continue growth with quality receivables while
controlling operating expenses. With a strong branch
network of well-trained individuals and advanced credit
risk management systems, the company anticipates the solid
performance to continue for the second half of 1999.
___________________________________________________________
American General Finance Corporation and its subsidiaries
are engaged in the consumer finance and credit insurance
business. The company, headquartered in Evansville,
Indiana, has assets of $11 billion and operates 1,298 offices
in 40 states, Puerto Rico, and the U.S. Virgin Islands.
Products and services are provided to more than 2 million
American families. The company offers direct consumer and
home equity loans, retail sales financing, and other
credit-related products.
All statements, trend analyses, and other information
contained in this report and elsewhere (such as other
filings by the company with the Securities and Exchange
Commission, press releases, presentations by management of
the company, or oral statements) relative to trends in the
company's operations or financial results, as well as other
statements including words such as "anticipate," "believe,"
"plan," "estimate," "expect," "intend," and other similar
expressions, constitute forward-looking statements under
the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are made based upon management's
current expectations and beliefs concerning future
developments and their potential effects upon the company.
There can be no assurance that future developments
affecting the company will be those anticipated by
management. Actual results may differ materially from those
included in the forward-looking statements.
These forward-looking statements involve risks and
uncertainties including, but not limited to, the following:
(1) changes in general economic conditions, including the
performance of financial markets, interest rates, and the
level of personal bankruptcies; (2) competitive,
regulatory, or tax changes that affect the cost of, or
demand for, the company's products; (3) the company's
ability or the ability of third parties to achieve and
maintain Year 2000 readiness for critical systems and
operations; and (4) adverse litigation results or
resolution of litigation. Readers are also directed to
other risks and uncertainties discussed in other documents
filed by the company with the Securities and Exchange
Commission. The company undertakes no obligation to update
or revise any forward-looking information, whether as a
result of new information, future developments, or
otherwise.
American General Finance Corporation
FINANCIAL HIGHLIGHTS:
(Dollars in Millions, Annualized Percentages)
For the Three Months For the Six Months
Ended June 30 Ended June 30
----------------- -----------------
1999 1998 1999 1998
-------- ------- -------- -------
Total Revenues $421 $393 $840 $779
Interest Expense 137 122 272 241
Operating Expenses 128 124 258 247
Provision for Finance
Receivable Losses 47 50 98 98
Insurance Losses and
Loss Adjustments 19 22 39 44
-------- ------- ------- -------
Total Expenses 331 318 667 630
Income Before Provision
for Income Tax 90 75 173 149
Provision for Income
Tax 33 28 63 56
-------- ------- ------- -------
Net Income $ 57 $ 47 $110 $ 93
======== ======= ======= =======
Finance Charge Yield 14.42% 16.11% 14.61% 16.29%
Charge-off Ratio 1.96% 2.63% 2.05% 2.67%
-------- -------- ------- -------
Risk Adjusted Yield 12.46% 13.48% 12.56% 13.62%
Operating Expenses as
a % of Average Net
Receivables 5.27% 6.17% 5.36% 6.22%
Return on Assets 2.03% 1.96% 1.96% 1.97%
Return on Equity 14.06% 13.27% 13.46% 13.23%
Charge-off Ratios
- -----------------
Real Estate Loans 0.57% 0.70% 0.52% 0.68%
Non-Real Estate Loans 5.09% 5.66% 5.34% 5.71%
Retail Sales Finance 2.56% 3.24% 2.76% 3.34%
------- ------- ------- -----
Total Finance
Receivables 1.96% 2.63% 2.05% 2.67%
AT: 6/30/99 6/30/98
--------- ---------
Total Assets $11,366 $9,956
Net Finance Receivables
- -----------------------
Real Estate Loans 6,116 4,649
Non-Real Estate Loans 2,449 2,516
Retail Sales Finance 1,208 1,273
--------- ---------
Total Finance Receivables $ 9,773 $8,438
Allowance for Finance
Receivable Losses
- ---------------------
Balance at End of Period $376 $356
As a Percentage of Net
Finance Receivables 3.85% 4.21%
60-Day+ Delinquency Ratios
- --------------------------
Real Estate Loans 3.25% 2.75%
Non-Real Estate Loans 5.08% 5.29%
Retail Sales Finance 1.87% 2.15%
--------- ---------
Total Finance Receivables 3.56% 3.45%