Exhibit 99.1
First Investors Reports Improved Second Quarter Earnings and Increases Stock
Repurchase Plan
HOUSTON, Dec. 9 /PRNewswire-FirstCall/ -- First Investors Financial
Services (OTC Pink Sheets: FIFS) has reported net income of $216,070 or $.04
per share for the three months ended October 31, 2004 and $303,023 or $.06 per
share for the six months ended October 31, 2004. This compares to the
$187,805 or $0.04 per share and $407,884 or $0.08 per share reported for the
three and six month periods ended October 31, 2003, respectively. Net income
for each period was negatively affected by unrealized losses on interest rate
derivative positions. Adjusting for these losses, net income for the three
and six months ended October 31, 2004, would have been $324,082 and $453,997
respectively. This compares to net income after adjustment for the comparable
2003 periods of $282,462 and $411,890, respectively. During the three months
ended October 31, 2004, the Company benefited from a lower provision for loan
losses, a lower cost of funds and increased fee income from collections and
loan originations, which was partially offset by lower interest revenue and
lower servicing revenue.
The Company also announced that it has repurchased 259,400 shares of stock
at a weighted average purchase price of $4.28 share under its recently
expanded share repurchase plan, including 258,500 shares which were
repurchased subsequent to October 31, 2004. Following these repurchases,
$385,637 remained under the $1.5 million increase in the share repurchase plan
approved by the Company in September 2004. Consequently, the Board of
Directors also announced that it has further amended its Share Repurchase Plan
to increase the size by $1 million which establishes $1,385,637 in
availability to repurchase common stock in either open market or privately
negotiated transactions. The timing, price and quantity of any future
purchases will be at the discretion of the Company and will be based on a
variety of factors including stock price and other market and economic
conditions. Since inception, 842,800 shares or 15.1 % of the outstanding
stock has been repurchased.
On November 19, 2004, the Company announced that it received a letter from
Nasdaq dated November 16, 2004, indicating that Nasdaq is reviewing the
Company's eligibility for continued listing on The Nasdaq National Market as a
consequence of failure to meet the minimum 400 round lot shareholder
requirement of Marketplace Rule 4450(a)(4). In the letter Nasdaq states that
First Investors has until December 1, 2004, to provide an acceptable plan to
regain compliance or the staff will initiate delisting of First Investors'
common stock. Also announced at the time was the Board of Director's decision
not to take remedial action to increase the number of beneficial holders. As
a result, the common stock of the Company was de-listed from the Nasdaq
National Market on December 1, 2004 and now trades in the over-the-counter
bulletin board market.
For the six months ended October 31, 2004, First Investors' portfolio of
receivables held for investment, net increased 5.2% to $220.7 million. For
the six months ended October 31, 2004, the Company reported new origination
volume of $65.3 million, which represents an increase of 26.3% over the
$51.7 million originated during the prior year period. Net interest income
decreased 14.3% during the three and six months ended October 31, 2004, due to
a decline in average receivables outstanding and a decline in effective yields
due to an increase in receivables originated directly to consumers which
typically carry lower interest rates. Total operating expenses were
essentially flat during the three month and six month periods, respectively as
costs associated with the increase in origination volume were offset by
declining costs associated with a reduction in the total managed portfolio.
The delinquency rate by dollars of delinquent accounts decreased from 3.2% at
October 31, 2003 to 2.6% at October 31, 2004. This is attributable to
significantly better default performance on more recent vintage receivables
and higher recovery rates on repossessed collateral. The annualized charge-
off rate for the six months ended October 31, 2004, decreased to 4.6% compared
to 5.9% for the six months ended October 31, 2003, reflecting lower
repossession rates and higher recovery rates for the 2004 period.
Tommy A. Moore, Jr., President and CEO, stated, "We continue to see
positive year over year increases in profitability assisted by improving
origination volumes. Our origination volume during the second quarter was the
highest in over four years and is being driven largely by our increased focus
on our direct lending segment. We also continue to be very pleased with our
overall delinquency rates and the performance of our loans originated during
the past two years which comprises a growing percentage of our overall
portfolio. Our annualized net charge-off rate decreased significantly year-
over-year and we expect continued improvements over the course of fiscal year
2005 and into 2006 based on our static pool trends and the quality of our new
originations."
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,
2004 2003 2004 2003
Interest Income $ 7,001 $ 7,924 $ 13,953 $ 15,994
Interest Expense 1,829 1,889 3,605 3,907
Net Interest Income 5,172 6,035 10,348 12,087
Provision for Credit Losses 2,442 3,270 4,885 6,662
Income after Provision
for Credit Losses 2,730 2,765 5,463 5,425
Servicing Revenue 905 1,224 1,875 2,498
Late fees and Other income 1,206 469 1,837 849
Income from investment 176 297 370 544
Other interest income 92 138 166 186
Unrealized (Loss)/Gain on
Interest Rate Derivative
Positions (170) (149) (238) (6)
Total other income 2,209 1,979 4,010 4,071
Total Costs and Expenses 4,599 4,450 8,996 8,865
Income (Loss) before
Provision for Income Taxes
and Minority Interest 340 294 477 631
Provision for Income Taxes
(Benefits) 124 108 174 234
Minority Interest --- (2) --- (11)
Net Income (Loss) $ 216 $ 188 $ 303 $ 408
Basic and Diluted
Net Income (Loss) Per
Common Share $ 0.04 $ 0.04 $ 0.06 $ 0.08
Other Operating Data
Average Principal Balance
of Receivables Held for
Investment $211,909 $225,452 $209,670 $226,395
Total Managed Receivables 455,241 570,647
Originations Volume 37,281 22,543 65,284 51,744
Effective Yield on
Receivables Held for
Investment 13.2% 14.0% 13.3% 14.1%
Average Cost of Debt 3.5% 3.3% 3.5% 3.4%
Weighted Average Number
of Diluted Shares
Outstanding (in thousands) 5,071 5,084 5,109 5,077
October 31, April 30,
2004 2004
Financial Position
Cash and Short-Term
Investments $ 21,717 $ 21,055
Receivables Held for
Investment, Net 220,737 209,777
Receivables Acquired for
Investment, Net 819 1,190
Assets Held for Sale 705 851
Total Assets 257,513 245,756
Total Debt 226,594 216,185
Total Other Liabilities 3,316 2,267
Total Liabilities 229,910 218,452
Total Shareholders' Equity 27,603 27,304
Shareholders' Equity per
Common Share 5.52 5.46
As of or As of or
For the Six For the Six
Months Ended Months Ended
Oct 31, Oct 31,
Credit Quality Data 2004 2003
Receivables Held for Investment:
30 + days past due
Number of Loans 3.5% 4.3%
$ Amount 2.6% 3.2%
Net Charge-offs as a % of
average receivables 4.6% 5.9%
Net Charge-offs for the
period ending $ 4,773 $ 6,695
SOURCE First Investors Financial Services
-0- 12/09/2004
/CONTACT: Bennie H. Duck of First Investors Financial Services,
+1-713-977-2600/
(FIFS)
CO: First Investors Financial Services
ST: Texas
IN: FIN OTC
SU: ERN