Exhibit 99.1
First Investors Reports Fiscal Year Earnings
HOUSTON, July 8 /PRNewswire-FirstCall/ -- First Investors Financial
Services Group, Inc. (Nasdaq: FIFS) has reported net income of $33,563 or
$0.01 per share for the fiscal year ended April 30, 2004 compared to net
income of $332,618 or $0.07 per share for the fiscal year ended April 30,
2003. The results for the 2004 fiscal year were impacted by a lower
origination volume and lower effective yields which compressed revenue while
an increase in net charge-off rates adversely impacted provision expense. In
addition, while operating expenses as a percentage of the managed portfolio
decreased from 4.2% in fiscal year 2003 to 3.1% in fiscal year 2004 as a
result of increased operating efficiency created by growth in the managed
portfolio, this improvement was negatively impacted by additional expenses
incurred in connection with the introduction of new loan programs during the
2004 fiscal year and particularly in the fourth quarter ended April 30, 2004.
For the twelve-month period, First Investors' portfolio of Receivables
Held for Investment, Net decreased 8.4% to $209.8 million as a result of a
decrease in new loan originations during the period. New loan originations
for the twelve-month period were $88.1 million compared to $111.9 million in
the prior year period. Net interest income for the year declined $0.7 million
or 3.1% primarily due to a reduction in the receivables portfolio and lower
effective yields, which was offset by a lower cost of funds. The effective
yield decreased from 15.0% in 2003 to 13.9% due to an increase in the direct
loan portfolio, which carries lower interest rates, and higher net charge-
offs. The cost of funds declined from 4.6% to 3.7%. The delinquency rate
decreased from 3.1% at April 30, 2003 to 2.5% at April 30, 2004 while the
annualized charge-off rate increased from 4.7% to 5.7% over the same period as
a result of a higher number of repossessions during the period and lower
recovery rates on repossessed collateral.
Tommy A. Moore, Jr., President and CEO, stated that "Fiscal year 2004 was
a challenging year in that our revenue did not grow as we had projected given
our decision to remain conservative in a sluggish economic environment and we
experienced higher net charge-offs as a result of high repossession rates and
lower recovery rates. However, we are encouraged as we enter fiscal year
2005. Our delinquency rates and static pool losses on recent vintages are
running at historically low levels. More recently, we have begun to see our
repossession rates and recovery rates also returning to historical levels.
Perhaps more importantly, we have begun to see improvements in our origination
volume, particularly in our direct to consumer channel."
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 28 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 Twelve Months Ended
April 30, April 30,
2004 2003 2004 2003
Interest Income $ 7,005 $ 7,868 $ 30,498 $ 32,940
Interest Expense 2,189 2,104 8,438 10,166
Net Interest Income 4,816 5,764 22,060 22,774
Provision for Credit Losses 2,442 2,884 12,428 10,338
Income after Provision for
Credit Losses 2,374 2,880 9,632 12,436
Servicing Revenue 1,044 858 4,889 1,081
Late fees and Other income 655 376 1,825 1,186
Income from investment 191 273 1,009 418
Other interest income 75 56 461 283
Unrealized Loss on Interest
Rate Derivative Positions (1) (166) (34) (329)
Total Costs and Expenses 4,664 4,161 17,740 14,437
Income (Loss) before Provision
for Income Taxes and
Minority Interest (326) 116 42 638
Provision for Income Taxes
(Benefits) (119) 46 19 191
Minority Interest --- (10) (11) 114
Net Income (Loss) $ (207) $ 80 $ 34 $ 333
Basic and Diluted
Net Income (Loss)
Per Common Share $ (0.04) $ 0.02 $ 0.01 $ 0.07
Other Operating Data
Average Principal Balance
of Receivables Held
for Investment $210,401 $226,219 $220,255 $217,163
Average Managed Receivables 508,035 538,582 572,883 345,708
Originations Volume 20,777 25,766 88,062 111,854
Effective Yield on Receivables
Held for Investment 13.3% 13.9% 13.9% 15.0%
Average Cost of Debt 4.0% 3.7% 3.7% 4.6%
Weighted Average Number
of Shares Outstanding
(in thousands) 5,000 5,026 5,008 5,104
April 30, April 30,
2004 2003
Financial Position
Cash and Short-Term
Investments $ 21,055 $ 21,920
Receivables Held for
Investment, Net 209,777 228,989
Receivables Acquired for
Investment, Net 1,190 2,704
Assets Held for Sale 851 1,303
Total Assets 245,756 272,996
Total Debt 216,185 238,764
Minority Interest --- 732
Total Shareholders' Equity 27,304 26,493
Shareholders' Equity
per Common Share 5.46 5.27
As of or As of or
For the For the
Twelve Twelve
Months Months
Ended Ended
April 30, April 30,
Credit Quality Data 2004 2003
Receivables Held for Investment:
30 + days past due
Number of Loans 3.4% 3.9%
$ Amount 2.5% 3.1%
Net Charge-offs as a % of
average receivables 5.7% 4.7%
Net Charge-offs for the
period ending $ 12,626 $ 10,279
SOURCE First Investors Financial Services Group, Inc.
-0- 07/08/2004
/CONTACT: Bennie H. Duck of First Investors Financial Services Group,
Inc., +1-713-977-2600/
(FIFS)
CO: First Investors Financial Services Group, Inc.
ST: Texas
IN: FIN
SU: ERN