Exhibit 99.1
First Investors Reports Improved Second Quarter Earnings
HOUSTON, Dec. 11 /PRNewswire-FirstCall/ -- First Investors Financial
Services (Nasdaq: FIFS) has reported net income of $187,805 or $.04 per share
for the second quarter ended October 31, 2003 and $407,884 or $.08 per share
for the six month period ended October 31, 2003. This compares to the
$46,131 or $0.01 per share and $189,825 or $0.04 per share reported for the
three and six month periods ended October 31, 2002, respectively. This
increase was driven by higher net interest income from the company's portfolio
of receivables held for investment and the impact of higher servicing and
investment revenues associated with the increase in the portfolio of
receivables managed. These items offset the increase in provision expense
related to higher net charge-offs and an increase in operating expenses
related to the increase in the managed receivables portfolio.
For the six month period, First Investors' portfolio of receivables held
for investment, net declined slightly to $225.7 million as new loan
origination volume fell slightly below principal collections on the
outstanding portfolio. For the six month period, the Company reported new
origination volume of $51.7 million, which represents an increase of 11.7%
over the $46.3 million originated during the prior year period. Net interest
income increased 10.7% during the three month period and 9.1% for the six
month period due to both an increase in net interest spreads and an increase
in the average principal balance of the portfolio of receivables held for
investment, which offset a decline in the average balance of the portfolio of
receivables acquired for investment. Income from servicing activities was
$1.2 million for the current three month period and $2.5 million for the
current six month period, while late fee and other income increased 158.6% and
131.7% in the three month and six month periods, respectively. The
contributions from servicing income and the increase in late fees and other
income are attributable to the increases in the servicing portfolio and an
investment in First Auto Receivables Corp. which acquired certain receivables
assets from Union Acceptance Corporation. Total operating expenses increased
33.1% and 34.9% in the three month and six month periods, respectively due to
the increase in managed assets during the 2003 period. The delinquency rate
by dollars of delinquent accounts decreased from 4.5% at October 31, 2002 to
3.2% at October 31, 2003 while the delinquency rate by number of accounts
decreased from 5.1% to 4.3% over the same period. This is attributable to
significantly better performance on more recent vintage receivables which tend
to have higher balances relative to older vintage receivables which are
experiencing higher delinquency rates as a result of continued economic
weakness and a rising unemployment rate over the past two years as the
receivables originated during the 2000-2001 period were entering the peak loss
stage. The annualized charge-off rate for the six-month period increased from
4.5% to 5.9% over the same periods also as a result of the economic
environment as well as declines in recovery rates on the sale of repossessed
collateral.
Tommy A. Moore, Jr., President and CEO, stated, "We continue to see
positive year over year increases in profitability assisted by improving net
interest spreads and the contributions from the portfolio acquisitions during
the year. We also continue to be very pleased with our overall delinquency
rates and the performance of our loans originated during the past two years.
Conversely, we continue to see high net losses coming from the older vintage
pools despite the fact that these loans are declining as a percentage of our
overall portfolio of receivables held. We continue to see areas of economic
weakness, particularly on the employment front, as well as many consumers who
have negative equity in their automobiles due to the decline in wholesale
prices over the past two years. This is creating high delinquency and loss
rates in our earlier vintage pools. As this population of loans continues to
decline, we expect significant improvements in the number of delinquent
accounts and in our net charge-off rates."
First Investors is a specialized consumer finance company engaged in the
origination and retention of automobile finance receivables originated from
franchised automobile dealers and directly through consumers from the sale or
refinance of new and late-model used vehicles. The Company is headquartered
in Houston, Texas and operates in 30 states.
The statements contained in this release, which are not historical
statements of fact, may constitute forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. Any such
forward-looking statements involve a number of risks and uncertainties. The
actual results of future events could differ materially from those stated in
any forward-looking statements herein.
First Investors Financial Services Group, Inc.
Condensed Consolidated Statements of Operations and Selected Data (Unaudited)
Dollars in thousands, except per share data
For the For the
Three Months Ended Six Months Ended
October 31, October 31,
2003 2002 2003 2002
Interest Income $ 7,924 $ 8,145 $ 15,994 $ 16,657
Interest Expense 1,889 2,693 3,907 5,576
Net Interest Income 6,035 5,452 12,087 11,081
Provision for Credit Losses 3,270 2,270 6,662 4,639
Income after Provision for
Credit Losses 2,765 3,182 5,425 6,442
Late fee and Other Income 905 350 1,580 682
Servicing Income 1,224 --- 2,498 ---
Unrealized Loss on Interest
Rate Derivative Positions (149) (85) (6) (122)
Total Operating Expenses 4,451 3,345 8,866 6,572
Income (Loss) before Provision
for Income Taxes
and Minority Interest 294 102 631 430
Provision for Income Taxes
(Benefits) 108 27 234 109
Minority Interest (2) 29 (11) 131
Net Income (Loss) $ 188 $ 46 $ 408 $ 190
Basic and Diluted
Net Income (Loss) Per
Common Share $ 0.04 $ 0.01 $ 0.08 $ 0.04
Other Operating Data
Average Principal Balance of
Receivables Held for
Investment $ 225,452 $ 210,027 $ 226,395 $ 211,109
Total Managed Receivables 570,647 213,281
Originations Volume 22,543 22,184 51,744 46,294
Effective Yield on Receivables
Held for Investment 14.0% 15.3% 14.1% 15.3%
Average Cost of Debt 3.3% 5.1% 3.4% 5.3%
Weighted Average Number of
Shares Outstanding
(in thousands) 5,079 5,030 5,075 5,184
Oct 31, April 30,
2003 2003
Financial Position
Cash and Short-Term
Investments $ 20,367 $ 21,920
Receivables Held for
Investment, Net 225,703 228,989
Receivables Acquired for
Investment, Net 1,921 2,704
Assets Held for Sale 1,339 1,303
Total Assets 265,208 272,996
Total Debt 232,915 238,764
Minority Interest --- 732
Total Shareholders' Equity 27,265 26,493
Shareholders' Equity per
Common Share 5.45 5.27
As of or As of or
For the Six For the Six
Months Ended Months Ended
Oct 31, Oct 31,
Credit Quality Data 2003 2002
Receivables Held for Investment:
30 + days past due
Number of Loans 4.3% 5.1%
$ Amount 3.2% 4.9%
Net Charge-offs as a % of
average receivables 5.9% 4.5%
Net Charge-offs for the
period ending $6,695 $4,757
SOURCE First Investors Financial Services
-0- 12/11/2003
/CONTACT: Bennie H. Duck of First Investors Financial Services,
+1-713-977-2600/
(FIFS)
CO: First Investors Financial Services
ST: Texas
IN: FIN AUT
SU: ERN