CACC - Earnings call transcript Q3 2021 | Credit Acceptance Corporation

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Operator

Good day everyone and welcome to the Credit Acceptance Corporation third quarter 2021 earnings call. Today's call is being recorded. A webcast and transcript of today's earnings call will be made available on Credit Acceptance website. At this time, I will now turn the call over to Credit Acceptance's Chief Treasury Officer, Doug Busk. Sir, you may now begin.

Doug Busk

you. Thank welcome Acceptance and XXXX third the call. earnings to afternoon Corporation Credit quarter Good

actual our posted our federal a include as and news control news forward-looking Relations differ and read and in of within results which in cause subject recognize you These uncertainties to As in release to forward-looking release. contain These our this from could and call, many the statements are statements at risks forward-looking uncertainties, those forward-looking uncertainties. light that to are statements. such the both beyond all information section meaning included on regarding risks materially website those ir.creditacceptance.com law. listen number which of and other out of of you Consider cautionary the conference please risks securities of statement spelled Investor the statements and

comply the our G, mention Regulation with GAAP that SEC's I measures. which release, measures news results Additionally, financial how reconcile provides tables to to should non-GAAP the showing to section refer please of

shares your Vice the our Officer, increased of from XXXX $XX.XX. and approximately XX% the for quarter this Martin, to XXXX XXXX. Chief for of XXXX our to increase million This At X%,of net flows the increase and portfolio. X.X volumes of in I, forecasted of Finance cash XXXX from and increased million. collection third unit of Accounting Booth, outstanding our quarter third Jay XX.X%, in questions. from take Ken beginning respectively quarter loan results Our compared declined the Stock XX.X% net the forecasted in will $XX.X third per a and loans at $XXX.X Senior quarter dollar Executive originated quarter. rates earnings the and include XX% President, resulted through to income the time, in Adjusted the repurchases Adjusted share million,

Operator

Instructions]. [Operator

comes question from first David Your from last the JMP Scharf year Securities. of line

line Your open. now is

David Scharf

health off, issues, obviously the issues you on so Good taking taking particular Hi. independent dealers your active take of am affordability Thanks I in the if industry a we and that obviously seeing with is at can dealers, for reflecting to and independent But decline on afternoon. entire that volume the inventory the Or And industry car little related give the I once place guess color front. elevated again dealer values, is among wondering, used but now? no network? surprise in on is affordability first as volume forces, the decline issues? any you struggling my perhaps attrition the questions. are entirely just there unique that look right

Doug Busk

and all come business I Independent don't unique have go insight there. the any think dealers real out into of time. business we that

I best that's The to to be understand look happening that think on basis. at data. is way attrition what's would industry with the that all problem lagged perspective from a some available an

a passage challenging are, with able faring they to an difficult to exactly think how right levels am it's time time. But I I understand it's say. be will there So now, attrition But better the what be sure dealer. of to independent that and of are

David Scharf

it. Got

about the values size XX% But of at loan average looking borrower what maybe Okay. year. follow-up. just question $XX,XXX, obviously, certainly it probably it's just ball. the was a And without your again, this most. past one crystal rising maybe quarter, the impacts just the first above it And of qualitative Once in more car almost a half in used the

in ceiling off where areas kind we wearing you reached borrower obviously room feel of the somebody stimulus just of have about $XX,XXX a support, aspects As like go? there put your comfortable is pretty affordability and you be be a of Or think beyond with do level? payments and they other vehicle this you to to would to their do it's think where to be going monthly able difficult

Doug Busk

again, the think have payment we does. use it's, certainly criteria tough the tell. income to as when we loans, to that We I industry underwrite

As car out, our prices certainly, you challenging borrower. have increasingly elevated made point used it for

think is will think I to fair say incrementally this to I increases prices is difficult it challenging. in car the it's very say But that used further it's limit. make more

it higher the prices incrementally think fair it's I makes challenging. more go, to say, it

So there borrower can't a that to if think that. for I fair relief the is occurs. say, used way, But I prices think don't phenomenon would our I say other there be car some went cliff

David Scharf

it. through right obviously living we you events thank enough. all mean lot I a now. unprecedented are much. Fair Got Well, very Great. of

Doug Busk

bet. You

Operator

net comes from of line Credit Your question the Moshe Suisse. from Orenbuch

line now Your open. is

Moshe Orenbuch

Maybe Great. to on follow-up that.

other are think you steps of price are I Any kind to nameboard that you to of steps in things terms in are you alluded place? car that taking the taking environment. a of putting you in a higher used some underwrite

Doug Busk

We to haven't material changes made underwriting process. our

Moshe Orenbuch

Got it.

that parameters I any Okay. in gone adjusted it talks would strong number footnotes the yield I being should notice Is the collections rate. the that around up to I quarters the we assumption some way think has put that of and there that? last say, expect at persistence? XX%. or a did couple to about of Is that

Doug Busk

elevated to tell really think But it's predict It hard I to collections long on on. how will the if that long hard depends mean it's I But for persist strong going collections to not. are real remain. go how it's or us.

revenue. see will they As pretty long adjusted as continue, high we

Moshe Orenbuch

notes, stock Got we think it. a should release be How amount? options about that, regular going to quarterly And million? $XX.X that expense, is the

Doug Busk

Yes.

about we we didn't received begin that shareholder in think until expense, approval July. that you recognizing If

July we XX. approval So received

that about expense So for if you worth look of at third that number, XX the was quarter. days

going first stock granted is first vesting that is One for in we that the years, out period be compressed the annual first until thing annual it of will be fourth point shareholder project then December, that year. the these can recognition be that You this in spread in and we future it's would them to will back more out begin the what quarter. installment throughout I out didn't there since options, approval, expense we received last where

Moshe Orenbuch

see. I

So QX be you and So QX is as we that a amount say, the expect XXXX? year will calendar for full that the year? see would to

Doug Busk

I think December. in options it the look grant depends because at last are large granted majority when of was April. granted, if them another you the There were

exactly won't it forward. going be amount So that

Moshe Orenbuch

Okay.

We offline. will take it

XXX,XXX on notice quarter. you XX, like It it front did We in will about of volumes should like the how be How obviously still we about in thinking bought in pace figure we thinking the XXXX of a large maybe shares. light looks through another repurchase out. should October based that? amount So I queue looked October? repurchase that given very back that

Doug Busk

approach we think to in I it excess Right look we obviously capital, that. got what we business. standard now invest business, just challenging. the invested When that's been in originations we our first, to If are follow to going opportunities the do. to really have have we have

We have got adequate capital.

we point, return that at shareholders. to So

for we while. to So continue expected would I would consider, a

Moshe Orenbuch

Excellent.

Doug Busk

Hi Moshe.

Moshe Orenbuch

Yes.

Doug Busk

year amount subsequent stock of is of the about question XX the and your a expected that years. remainder page on of to the shows expense Q there table for the expense, option Relative

Moshe Orenbuch

Okay. Thanks gotten it to yet. I a lot. haven't

Doug Busk

You bet.

Operator

question Capital. Anfield Ray next Your from comes from the line Cheesman of

is now open. line Your

Ray Cheesman

they today. exposure have questions. you Most of Thank and over my I consumer quality outstanding banks the also projects away off credit two where warned various reporting two loans the with to the are had quarters taking also big loan turning if student us other went that to first. next fall expect are they four that for terrific government of streams things they support on more back normalize like

in of the same to business or to the kind would XXXX, check rates? expect As you anything of go kind basically different old gut you your happen back

Doug Busk

I mean, have don't ball. a we crystal

you more collections hard we So would to going It back think logical couple happen. have falloff, releases. But to predict. levels. very know been it's forever. seen not our some go to of collections continue what's But to does seem at have last point I normal that those expect When they as in don't will really I strong,

Ray Cheesman

other was of the like shift the loans, risk changes you portfolio question loans that versus in increased purchase the The portfolio? the profile dealer I had do toward feel

Doug Busk

it Yes. because know to program the the a on we risk loan it changes degree, you on are with Certainly, the portfolio sharing think I dealer. the

a So by any offset change collections holdback. percentage of reduction is dealer modest. in the shortfall was portfolio relatively substantially in The in the

So there a margin. is hasn't been But of a portfolio. on the there reduction significant the derisking

Ray Cheesman

more one quickly. And may, if just I

live a that me you do fly look because assignments, will fall and looking standards. I that and your generate used to market to I be I am to they a two, term in in your off I term, one, ever the to Colorado. in if we car am Texas honest question said underwriting call one in years? get use order some and hadn't might the changed The to support wondering new the you guys I I next tell is, have in that because adjust you of of for volume, the kind with play the risk car it moderate technical pricing value shouldn't You play, three

Doug Busk

of running that challenges are profit our champion kind We maximize various economic always originated.

we and example we So But are can't the in attempt not to or not for we do scenarios chasing we price future. run something appropriately. volume, against we various are it hedging predict

Ray Cheesman

you. Thank

Operator

Instructions]. [Operator

line comes from question Wildhack. of next Your the Rob

line now Your open. is

Rob Wildhack

How question. think strategic do for leverage about running the you or level broader more A guys. the Hi appropriate business?

Doug Busk

wide to we finance if way an markets when of business are level a us sure period for the cost-effective closed is maintain open, markets extended the with amount to were make we trying time. What also of capital but allows result originations are produces the the do capital it

balance liability has So significant the modest excess run have the driven with sheet, way of availability that operating on revolver. side we the and leverage the really

an of analysis an output we kind it's So do. that of

Rob Wildhack

say security characterized you meet availability? degree today, Would and and Okay. those will have that of estimates modest excess levers all as you the that be

Doug Busk

Yes.

Rob Wildhack

Thanks. Okay.

Operator

like remarks. questions to Mr. With would Busk I over closing turn or additional the to any in the conference for queue, back

Doug Busk

would us everyone today. and for support to our for their We thank on call conference joining like

our direct follow-up We to If you at forward quarter. again look questions, have you. them Thank next talking any mailbox to additional ir@creditacceptance.com. you Relations Investor to please

Operator

today's Once participation. your again, this you does We conclude thank for conference.

You may disconnect. now

Credit Acceptance (CACC) 1 Nov 212021 Q3 Earnings call transcript