EX-99.1 3 dex991.htm PRESS RELEASE DATED MAY 1, 2003 Press Release dated May 1, 2003

 

Exhibit 99.1

 

[LOGO OF UNITED PANAM FINANCIAL, CORP.]

 

News Release

 

Contact:


   

Garland W. Koch

Chief Financial Officer

United PanAm Financial Corp.

949.224.1917

e-mail: gkoch@upfc.com

 

Cecilia A. Wilkinson

Pondel /Wilkinson Group

310.207.9300

e-mail: investor@pondel.com

 

FOR IMMEDIATE RELEASE

 

UNITED PANAM FINANCIAL ANNOUNCES

FIRST QUARTER 2003 RESULTS

 

Newport Beach, California – May 1, 2003 – United PanAm Financial Corp. (Nasdaq:UPFC) today announced results for its first quarter ended March 31, 2003.

 

For the quarter ended March 31, 2003 the Company reported net income of $3.9 million, equal to $0.22 per diluted share, compared to net income of $2.7 million, or $0.15 per diluted share for the same period a year ago. This represents a 44% increase in net income between the two periods and a 47% increase in earnings per diluted share. During the first quarter of 2003, we recognized an after-tax gain of $425,000 on the sale of the final portions of our mortgage securitization pools and the disposition of all remaining assets related to mortgage servicing. If we excluded this income, the net income from operations would have been $3.5 million or $0.20 per diluted share. This would represent a 36% increase in net income and a 33% increase in earnings per diluted share when compared to earnings from operations in the first quarter of 2002.

 

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Net interest income for the first quarter of 2003 rose 30% to $15.2 million from $11.7 million in the first quarter of 2002.

 

The Company purchased $106 million of gross auto loans, including unearned interest, during the first quarter 2003, representing a 48% increase over the first quarter of 2002. Auto loans outstanding totaled $322.4 million at March 31, 2003; a 38% increase over March 31, 2002. The growth in auto loans is the result of planned expansion of the branch network throughout the country and portfolio growth at the branch level. During the first quarter of 2003, the Company opened 4 new auto loan branches bringing our total to 58 branches in 25 states. The Company will continue its philosophy of controlled expansion of the auto finance branch network, opening an additional 10-12 branches before year-end.

 

Delinquency over 30 days amounted to 0.54% of auto loans at March 31, 2003 compared with 0.64% at March 31, 2002. Delinquency and total repossessions over 30 days amounted to 1.0% of auto loans at March 31, 2003, compared with 1.1% at March 31, 2002.

 

The annualized quarterly net charge off rate was 5.73% for the first quarter of 2003, compared with 6.63% for the comparable period in 2002. The 2003 amount reflects a recovery of $536,000 from prior years’ sales tax on California repossessions. Without this recovery the net charge off rate would have been 6.41%.

 

“This quarter represents our 10th consecutive quarter of increased earnings per share,” said Guillermo Bron, Chairman. “In spite of the difficult economic environment, delinquency and total repossessions over 30 days decreased from fourth quarter levels as a result of management’s continued focus on and maintenance of strict operating guidelines. In addition, auto loan originations continue to increase in accordance with our planned branch expansion program.”

 

Beginning in 2003, the Company adopted a new accounting policy, changing from the purchase accounting method to an incurred loss method for purchased auto loans. The new accounting method will change the allocation of discount on loans purchased from loan loss reserves to unearned discount (increasing unearned loan discount and interest income from the accretion of unearned finance charges). Loan loss reserves for loans originated beginning in 2003 and thereafter, will be built up through provisions for loan losses in the income statement and increased interest

 

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income from the accretion of unearned discount on loans purchased. The accounting change did not cause any material impact in the first quarter results. In addition, management believes the accounting change will not cause any material change in the financial results for the remainder of 2003.

 

United PanAm Financial Corp., a specialty finance company, originates and acquires for investment retail automobile installment sales contracts and insurance premium finance contracts. Its principal operating units include Pan American Bank, FSB, the largest Hispanic-controlled savings association in California, with over $1 billion in assets at March 31, 2003, United Auto Credit Corporation with 58 branch offices in 25 states, and the insurance premium finance division, which is the largest non-insurance provider of financing for insurance premiums in California

 

Any statements set forth above that are not historical facts are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act (“SLRA”) of 1995, including statements concerning the Company’s strategies, plans, objectives and intentions. Such statements are subject to a variety of estimates, risks and uncertainties, known and unknown, which may cause the company’s actual results to differ materially from those anticipated in such forward-looking statements. Potential risks and uncertainties include, but are not limited to, such factors as the impaired or limited credit history of the Company’s borrowers, the availability of additional financing, rapid growth of the Company’s business, the reliance on the Company’s systems and controls and key employees, competitive pressure we face in the banking industry, fluctuations in market rates of interest, general economic conditions and other risks, certain of which are detailed from time to time in the Company’s filings with the United States Securities and Exchange Commission.

 

# # #

 

Editors Note:  Three pages of selected financial data follows.

 

 

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United PanAm Financial Corp. and Subsidiaries

Consolidated Statements of Financial Condition

(Unaudited)

 

(Dollars in thousands)

   

March 31, 2003

     

December 31, 2002

  

Assets

                  

Cash and due from banks

   

$

11,693

 

   

$

9,964

 

Short term investments

   

 

17,151

 

   

 

3,590

 

    
  

Cash and cash equivalents

   

 

28,844

 

   

 

13,554

 

Securities available for sale, at fair value

   

 

804,957

 

   

 

603,268

 

Loans

   

 

357,442

 

   

 

331,257

 

Less unearned discount

   

 

(4,325

)

   

 

—  

 

Less allowance for loan losses

   

 

(19,177

)

   

 

(23,179

)

    
  

Loans held for sale

   

 

333,940

 

   

 

308,078

 

Premises and equipment, net

   

 

2,714

 

   

 

2,700

 

Federal Home Loan Bank stock, at cost

   

 

7,406

 

   

 

1,675

 

Accrued interest receivable

   

 

1,830

 

   

 

1,880

 

Other assets

   

 

15,702

 

   

 

20,131

 

    
  

Total assets

   

$

1,195,393

 

   

$

951,286

 

    
  

Liabilities and Shareholders’ Equity

                  

Deposits

   

$

471,031

 

   

$

468,458

 

Repurchase Agreements

   

 

625,177

 

   

 

384,624

 

Accrued expenses and other liabilities

   

 

5,876

 

   

 

8,545

 

    
  

Total liabilities

   

 

1,102,084

 

   

 

861,627

 

    
  

Common stock (no par value):

                  

Authorized, 30,000,000 shares

Issued and outstanding, 15,872,666 at March 31, 2003 and 15,798,338 at December 31, 2002

   

 

64,961

 

   

 

64,957

 

Retained earnings

   

 

27,724

 

   

 

23,814

 

Unrealized gain on securities available for sale, net

   

 

624

 

   

 

888

 

    
  

Total shareholders’ equity

   

 

93,309

 

   

 

89,659

 

    
  

Total liabilities and shareholders’ equity

   

$

1,195,393

 

   

$

951,286

 

    
  

 

 

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United PanAm Financial Corp. and Subsidiaries

 

Consolidated Statements of Operations

(Unaudited)

 

(In thousands, except per share data)

   

Three Months Ended March 31,

    

2003

   

2002

Interest Income

              

Loans

   

$

16,803

   

$

13,037

Short term investments

   

 

3,714

   

 

2,659

    
  

Total interest income

   

 

20,517

   

 

15,696

    
  

Interest Expense

              

Deposits

   

 

3,692

   

 

3,232

Repurchase Agreements

   

 

1,596

   

 

193

Federal Home Loan Bank advances

   

 

—  

   

 

571

    
  

Total interest expense

   

 

5,288

   

 

3,996

    
  

Net interest income

   

 

15,229

   

 

11,700

Provision for loan losses

   

 

535

   

 

85

    
  

Net interest income after provision for loan losses

   

 

14,694

   

 

11,615

    
  

Non-interest Income

              

Services charges and fees

   

 

230

   

 

191

Loan related charges and fees

   

 

92

   

 

85

Gain on sale of securities

   

 

—  

   

 

61

Other income

   

 

898

   

 

29

    
  

Total non-interest income

   

 

1,220

   

 

366

    
  

Non-interest Expense

              

Compensation and benefits

   

 

6,011

   

 

4,810

Occupancy

   

 

1,031

   

 

874

Other

   

 

2,279

   

 

2,195

    
  

Total non-interest expense

   

 

9,321

   

 

7,879

    
  

Income before income taxes and cumulative effect of change in accounting principles

   

 

6,593

   

 

4,102

Income taxes

   

 

2,683

   

 

1,541

    
  

Income before cumulative effect of change in accounting principles

   

$

3,910

   

$

2,561

Cumulative effect of change in accounting principle, net of tax

   

 

—  

   

 

106

Net Income

   

$

3,910

   

$

2,667

    
  

Earnings per share-basic:

              

Net income cumulative effect of change in accounting principles

   

$

0.25

   

$

0.16

Cumulative effect of change in accounting principle

   

 

—  

   

 

0.01

    
  

Net Income

   

$

0.25

   

$

0.17

    
  

Weighted average shares outstanding

   

 

15,868

   

 

15,571

    
  

Earnings per share-diluted:

              

Net income cumulative effect of change in accounting principles

   

$

0.22

   

$

0.15

Cumulative effect of change in accounting principle

   

 

—  

   

 

—  

    
  

Net Income

   

$

0.22

   

$

0.15

    
  

Weighted average shares outstanding

   

 

17,796

   

 

17,338

    
  

 

United PanAm Financial Corp. and Subsidiaries

 

Selected Financial Data

(Unaudited)

 

(Dollars in thousands)

   

At or For the

Three Months Ended

  
    

March 31, 2003

     

March 31, 2002

  

Automobile Finance Data

                  

Gross contracts purchased

   

$

106,239

 

   

$

71,875

 

Contracts outstanding

   

 

322,446

 

   

 

223,196

 

Allowance for credit losses to total loans

   

 

5.88

%

   

 

7.65

%

Unearned discount on loans to total loans

   

 

1.34

%

   

 

—  

 

Annualized net charge-offs to average contracts (1)

   

 

5.73

%

   

 

6.63

%

Delinquencies (% of net contracts)

                  

31-60 days

   

 

0.36

%

   

 

0.40

%

61-90 days

   

 

0.11

%

   

 

0.13

%

90+ days

   

 

0.07

%

   

 

0.11

%

 

Insurance Premium Finance

                  

Loans originated

   

$

24,450

 

   

$

28,210

 

Loans outstanding end of period

   

 

34,881

 

   

 

40,639

 

Allowance for loan losses

   

 

222

 

   

 

508

 

Annualized net charge-offs to average loans (1)

   

 

0.42

%

   

 

0.72

%

Allowance for credit losses to total loans

   

 

0.64

%

   

 

1.25

%

 

Other Data

                  

Return on average assets (1)

   

 

1.51

%

   

 

1.79

%

Return on average shareholder equity (1)

   

 

17.31

%

   

 

14.07

%

 

Retail deposits

   

$

315,305

 

   

$

321,256

 

Brokered deposits

   

 

155,726

 

   

 

51,476

 

Weighted average interest rates on deposits

   

 

3.13

%

   

 

3.43

%

 

Consolidated capital to assets ratio

   

 

7.81

%

   

 

10.54

%

Pan American Bank capital ratios:

                  

Tangible

   

 

6.91

%

   

 

9.29

%

Core

   

 

6.91

%

   

 

9.29

%

Risk-based

   

 

16.81

%

   

 

20.34

%

(1)   Quarterly information is annualized for comparability with full year information