White River Capital Announces Earnings for the 3rd Quarter of 2005; Net Earnings for the Third Quarter of 2005 Totaled $2.0 Million.INDIANAPOLIS Indianapolis (ĭn'dēənă`pəlĭs), city (1990 pop. 731,327), state capital and seat of Marion co., central Ind., on the White River; selected 1820 as the site of the state capital (which was moved there in 1825), inc. 1847. -- White River Capital, Inc. (Pink Sheets:WRVC WRVC could refer to two radio stations in United States:
tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared to a third quarter 2004 net loss of $(1.7) million, or $(5.54) per diluted share. Net earnings per share for the third quarter 2005, assuming the 3,810,155 shares outstanding at period end were outstanding throughout the period, was $0.52 per share. The increase over the third quarter of 2004 is primarily due to: --the increase in accretion The act of adding portions of soil to the soil already in possession of the owner by gradual deposition through the operation of natural causes. The growth of the value of a particular item given to a person as a specific bequest under the provisions of a will between the income related to distributions from the Union Acceptance Company LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control ("UAC (User Account Control) The management of user accounts in Windows Vista. Because malware has greater control of the computer when it is running in administrator mode, UAC was designed to enable more users to run their computers as a standard user rather than as ") subsidiary Master Trust, --the elimination of a substantial portion of the accretion and interest expense associated with creditor An individual to whom an obligation is owed because he or she has given something of value in exchange. One who may legally demand and receive money, either through the fulfillment of a contract or due to injury sustained as a result of another's Negligence liabilities after White River Capital, Inc. ("White River") purchased 89.1% of the restructured subordinated Subordinated A claim ranked lower in priority than other claims. Common stock claims are always subordinated to debt. notes and 57.3% of the general unsecured Unsecured A loan or equity interest that is given without any guarantee of payment, performance, satisfaction or opportunity for return from the recipient. No property, interest or security is used as collateral in either a guarantee or a pledge. claims of UAC, and --activity from the Coastal Credit LLC ("Coastal Credit") subsidiary, whose acquisition was effective on August 31, 2005, which contributed $0.7 million to the increase. Net earnings for the nine months ended September September: see month. 30, 2005, were $13.3 million, or $18.74 per diluted share. Included in these earnings is a gain from the extinguishment The destruction or cancellation of a right, a power, a contract, or an estate. Extinguishment is sometimes confused with merger, though there is a clear distinction between them. of debt at UAC totaling $11.3 million. Net earnings per share for the nine months ended September 30, 2005, assuming the 3,810,155 shares outstanding at period end were outstanding throughout the period, was $3.49 per share. The comparability of financial information is affected by our acquisition of Coastal Credit. Operating results include the operations of Coastal Credit from the effective date of its acquisition, August 31, 2005. EARNINGS PER SHARE The weighted average number of common shares outstanding during a period is weighted for the portion of the period that the shares were outstanding. The 3.5 million shares issued by White River during its subscription offering, which was completed on August 31, 2005, were outstanding for 31 of 92 days and 31 of 273 days for the three and nine months ended September 30, 2005, respectively. The relatively short time period these shares have been outstanding resulted in a significantly different weighted average number of shares for the three and nine months ended September 30, 2005 (1,492,669 and 708,658 diluted weighted average number of common shares outstanding, respectively) compared to the period end share count (3,810,155 shares). Thus, the earnings per share for the three and nine months ended September 30, 2005 calculated in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). has been significantly inflated compared to the earnings per share calculated using the period end share count. INTEREST ON RECEIVABLES Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed Interest on receivables for the third quarter of 2005 totaled $7.9 million compared to $3.6 million for the third quarter of 2004. Interest on receivables for the nine months ended September 30, 2005 totaled $17.8 million compared to $9.5 million for the nine months ended September 30, 2004. The increase in interest on receivables resulted largely from the increase in off balance sheet securitized securitized Of, related to, or being debt securities that are secured with assets. For example, mortgage purchase bonds are secured by mortgages that have been purchased with the bond issue's proceeds. receivables repurchased in 2005 compared to 2004 and the activity of Coastal Credit which was acquired on August 31, 2005. ACCRETION AND OTHER INTEREST Accretion and other interest increased to $2.3 million compared to $0.3 million for the three months ended September 30, 2005 and 2004, respectively. Accretion and other interest increased to $8.1 million compared to $0.7 million for the nine months ended September 30, 2005 and 2004, respectively. The increases are attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to an increase in accretion income related to distributions from the UAC subsidiary Master Trust. UAC has continued to accrue To increase; to augment; to come to by way of increase; to be added as an increase, profit, or damage. Acquired; falling due; made or executed; matured; occurred; received; vested; was created; was incurred. increases in the fair value of beneficial interest in Master Trust due to lower than expected credit losses during 2005 resulting in the increase in accretion income. CREDIT (CHARGE) TO MASTER TRUST, NET The credit (charge) to Master Trust, net was a $(2.1) million charge for the three months ended September 30, 2005 compared to $0.5 million credit for the three months ended September 30, 2004 and a $(5.2) million charge for the nine months ended September 30, 2005 compared to a $1.6 million credit for the nine months ended September 30, 2004. Charge to Master Trust, net is an expense related to future transfers of funds to the Master Trust from on balance sheet securitized finance receivables of UAC. As additional off balance sheet securitized finance receivables were purchased and the performance of UAC's securitized finance receivables improved, interest income increased, and thus the amounts related to future transfers of funds owed to the Master Trust increased resulting in an increase in the charge to Master Trust, net. GAIN FROM EXTINGUISHMENT OF DEBT Gain from extinguishment of debt was $0.3 million for the three months ended September 30, 2005. This gain is related to the purchase by White River of a portion of UAC's general unsecured claims during this period. Financial Accounting Standard 140, Accounting for Transfers and Servicing of Financial Assets Financial assets Claims on real assets. and Extinguishments of Liabilities, requires that such activity be recognized as extinguishment of debt. No such activity occurred for the three months ended September 30, 2004. Gain from extinguishment of debt was $11.3 million for the nine months ended September 30, 2005. $11.0 million of this gain is related to the purchase by White River of a significant portion of UAC's restructured subordinated notes during June June: see month. 2005. Although White River completed the share exchange with UAC shareholders during August 2005, Financial Accounting Standard 141, Business Combinations, requires that the extinguishment of debt be recognized during June 2005 as though White River and UAC were always combined, also known as predecessor accounting. No such activity occurred for the nine months ended September 30, 2004. The UAC creditor notes payable purchased by White River remain outstanding, but are owed by UAC to its parent, White River. CREDIT QUALITY The following tables set forth delinquency delinquency Criminal behaviour carried out by a juvenile. Young males make up the bulk of the delinquent population (about 80% in the U.S.) in all countries in which the behaviour is reported. , loan loss reserve levels, and securitized pool loss information for Coastal Credit and UAC:
Coastal Credit LLC
Delinquency Rates Experienced - Finance Receivables
(in thousands except percentages)
September 30, December 31,
2005 2004
------------- ------------
Finance receivables - gross balance $96,102 $86,040
Delinquencies:
30-59 days 1,411 1,101
60-89 days 769 695
90+ days 844 1,101
------------- ------------
Total delinquencies $3,024 $2,897
============= ============
Delinquencies as a percentage of fiance
receivables - gross balance 3.1% 3.4%
Coastal Credit LLC
Allowance for Loan Losses - Finance Receivables
(in thousands except percentages)
One Month Ended
September 30,
2005
-------------
Balance at the beginning of period $6,100
Charge-offs, net of recoveries (375)
Provision for estimated credit losses 375
-------------
Balance at the end of the period $6,100
=============
Net charge offs $375
Finance receivables, net of unearned
finance charges $86,292
Allowance for loan losses as a percent of
finance receivables, net of unearned
finance charges 7.07%
Annualized net charge offs as a percent of
finance receivables, net of unearned
finance charges 5.21%
Allowance for loan losses as a percent of
annualized net charge offs 135.56%
Union Acceptance Company LLC
Delinquency Rates Experienced - On Balance Sheet Securitized Finance
Receivables
(in thousands except percentages)
September 30, June 30, September 30,
2005 2005 2004
------------- --------- -------------
Securitized finance receivables
principal balance $150,928 $142,338 $103,599
Delinquencies:
30-59 days 8,899 6,892 6,373
60-89 days 2,638 2,100 1,980
90+ days 1,054 953 989
------------- --------- -------------
Total delinquencies $12,591 $9,945 $9,342
============= ========= =============
Delinquencies as a percentage of
securitized finance receivables 8.3% 7.0% 9.0%
Union Acceptance Company LLC
Allowance for Loan Losses - On Balance Sheet Securitized Finance
Receivables
(in thousands except percentages)
Three Months Ended Nine Months Ended
September 30, September 30,
2005 2004 2005 2004
--------- --------- --------- ---------
Balance at the beginning of
period $13,425 $8,189 $11,722 $5,006
Allowance at purchase 2,131 213 5,163 3,183
Charge-offs (5,812) (4,313) (16,410) (12,787)
Recoveries 3,580 2,485 11,037 6,973
Provision for estimated credit
losses 656 2,285 2,468 6,484
--------- --------- --------- ---------
Balance at the end of the
period $13,980 $8,859 $13,980 $8,859
========= ========= ========= =========
Net charge offs $2,232 $1,828 $5,373 $5,814
Securitized finance
receivables $150,928 $103,599 $150,928 $103,599
Allowance for loan losses as a
percent of securitized
finance receivables 9.26% 8.55% 9.26% 8.55%
Annualized net charge offs as
a percent of securitized
finance receivables 5.92% 7.06% 4.75% 7.48%
Allowance for loan losses as a
percent of annualized net
charge offs 156.59% 121.16% 195.14% 114.28%
Union Acceptance Company LLC
Selected Information about Active Securitizations
(in thousands except percentages)
Remaining
Balance as Net Loss
Remaining a to
Original Balance Percentage Original
Amount of at of Amount at
Current Initial Initial September Original September
Transaction Transaction Transaction 30, 2005 Amount 30, 2005
----------- ----------- ------------ ---------- ----------- ----------
On Balance Sheet Securitized Finance Receivables:
2003-A Note 1 $1,813,648 $7,016 0.39% 7.40%
2004-A1 1999-C 364,792 5,636 1.54% 9.56%
2004-A2 1999-D 302,693 6,712 2.22% 11.03%
2004-B 2000-A 282,721 7,511 2.66% 9.10%
2004-C 2000-B 534,294 22,546 4.22% 11.64%
2005-A 2000-C 499,999 24,796 4.96% 9.65%
2005-B 2000-D 510,000 32,359 6.34% 10.24%
2005-C 2001-A 573,000 44,352 7.74% 9.31%
------------ ----------
4,881,147 150,928
------------ ----------
Off Balance Sheet Securitized Finance Receivables:
2001-B 150,002 15,602 10.40% 7.46%
2001-C 330,000 42,034 12.74% 6.90%
2002-A 300,000 41,168 13.72% 5.07%
------------ ----------
780,002 98,804
------------ ----------
Total $5,661,149 $249,732 4.41% 8.72%
============ ==========
Note 1: 1998-1, 1998-A, 1998-B, 1998-C, 1998-D, 1999-A and 1999-B
ACQUISITIONS On August 31, 2005, White River completed its previously announced acquisition of Coastal Credit, a subprime automobile automobile, self-propelled vehicle used for travel on land. The term is commonly applied to a four-wheeled vehicle designed to carry two to six passengers and a limited amount of cargo, as contrasted with a truck, which is designed primarily for the transportation of finance company based in Virginia Beach, Virginia Virginia Beach is an independent city located in the South Hampton Roads area in the Commonwealth of Virginia, on the shores of the Chesapeake Bay and the Atlantic Ocean. It is the most populous city in Virginia and the 41st largest city in the United States, with an estimated . The aggregate purchase price for the acquisition was $50.8 million. $45.0 million was paid at closing and $5.0 million will be held back until March 31, 2006 and payable with interest at the rate of 10% per annum Per annum Yearly. . Upon completion of the acquisition, Coastal Credit became a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of White River. White River funded the $45.0 million purchase price due at closing with a portion of the approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $33.5 million in net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). it received in its $35.0 million subscription offering of common stock and with $14.8 million in net proceeds it received from the private placement of a $15.0 million secured note with a third party accredited investor Accredited Investor A term used by the Securities and Exchange Commission (SEC) under Regulation D to refer to investors who are financially sophisticated and have a reduced need for the protection provided by certain government filings. Also known as "qualified purchaser". . In the subscription offering, White River issued 3,500,000 shares at a price of $10.00 per share to former shareholders of UAC who chose to subscribe To sign up for a service. Contrast with unsubscribe. See opt-in and syndication format. (messaging) subscribe - To request to receive messages posted to a mailing list or newsgroup. In contrast to the mundane use of the word this is often free of charge. in the offering and to certain standby standby Medtalk adjective Referring to the immediate availability of a certain specialist–anesthesiologist, surgeon, who can be deployed in a medical emergency. Cf Concurrent. investors. The subscription offering and the note placement also closed on August 31, 2005. ABOUT WHITE RIVER, COASTAL CREDIT AND UAC White River is the holding company for Coastal Credit LLC and Union Acceptance Company LLC. Coastal Credit is a specialized spe·cial·ize v. spe·cial·ized, spe·cial·iz·ing, spe·cial·iz·es v.intr. 1. To pursue a special activity, occupation, or field of study. 2. subprime auto finance company engaged primarily in (1) acquiring retail installment sales Installment sale The sale of an asset in exchange for a specified series of payments (the installments). installment sale A sale in which the buyer is scheduled to make a series of payments over a period of time. contracts from both franchised and independent automobile dealers which have entered into contracts with purchasers of used and, to a much lesser extent, new cars and light trucks, and (2) servicing the contract portfolio. Coastal Credit commenced operations in Virginia Virginia, state, United States Virginia, state of the south-central United States. It is bordered by the Atlantic Ocean (E), North Carolina and Tennessee (S), Kentucky and West Virginia (W), and Maryland and the District of Columbia (N and NE). in 1987 and conducts business in sixteen states through its fourteen branch locations. Coastal Credit recognized total revenues of $23.8 million and net income of $6.7 million for the year ended December December: see month. 31, 2004. Coastal Credit recognized total revenues of $23.3 million and net income of $6.1 million for the year ended December 31, 2003. Coastal Credit's historical consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: financial information reflects its status (prior to the acquisition by White River) as a limited liability company taxed as a partnership. UAC is a specialized auto finance company. Since confirmation of UAC's bankruptcy bankruptcy, in law, settlement of the liabilities of a person or organization wholly or partially unable to meet financial obligations. The purposes are to distribute, through a court-appointed receiver, the bankrupt's assets equitably among creditors and, in most Plan of Reorganization The process of carrying out, through agreements and legal proceedings, a business plan for winding up the affairs of, or foreclosing a mortgage upon, the property of a corporation that has become insolvent. in August 2003, UAC has carried out the terms and provisions of the Plan of Reorganization. UAC is continuing business activities related to oversight
Oversight may refer to:
An extension and/or increase in amount of existing debt. of its securitized and unsecuritized auto receivable portfolios in compliance with its Plan of Reorganization. Generally, UAC continues to collect cash as it becomes available from prescribed pre·scribe v. pre·scribed, pre·scrib·ing, pre·scribes v.tr. 1. To set down as a rule or guide; enjoin. See Synonyms at dictate. 2. To order the use of (a medicine or other treatment). assets of the bankruptcy estate and to distribute such cash to the creditors of the bankruptcy estate who made allowed claims in the bankruptcy case. As a result of a creditor buyout Buyout The purchase of a company or a controlling interest of a corporation's shares. Notes: A leveraged buyout is accomplished with borrowed money or by issuing more stock. , White River holds a substantial majority of the claims. ADDITIONAL INFORMATION AND WHERE TO FIND IT Additional information is available in White River's public filings with the U.S. Securities and Exchange Commission (the "SEC") (which can be viewed on the SEC's website at www.sec.gov See .gov and GovNet. (networking) gov - The top-level domain for US government bodies. ), including but not limited to its Current Reports on Form 8-K Form 8-K The form required by the SEC when a publicly held company incurs any event that might affect its financial situation or the share value of its stock. Form 8-K See 8-K. dated September 2, 2005 and August 12, 2005, and its Quarterly Report on Form 10-Q Form 10-Q See 10-Q. dated August 26, 2005. White River's recent subscription offering was effected under a Registration Statement on Form S-1/S-4 (Reg REG, n.pr See random event generator. . No. 333-123909) which is also available on the SEC's website. FORWARD-LOOKING STATEMENTS forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. This press release contains certain forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. information about White River that is intended to be covered by the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. for "forward-looking statements" provided by the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. All statements other than statements of historical fact are forward-looking statements. Such statements involve inherent risks and uncertainties, many of which are difficult to predict and are generally beyond the control of White River. White River cautions readers that a number of important factors could cause actual results to differ materially from those expressed in, implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. or projected by, such forward-looking statements. Risks and uncertainties include, but are not limited to: --losses and prepayments Prepayments Payments made in excess of scheduled mortgage principal repayments. on our receivable portfolios; --general economic, market, or business conditions; --changes in interest rates, the cost of funds Cost of Funds The interest rate paid on an outstanding loan. Notes: Money isn't free! Cost of funds is the cost of borrowing money. See also: Interest Rate Cost of funds Interest rate associated with borrowing money. , and demand for our financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. ; --changes in our competitive position; --our ability to manage growth and integrate acquired businesses; --the opportunities that may be presented to and pursued by us; --competitive actions by other companies; --changes in laws or regulations; --the outcome of pending litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. ; --changes in the policies of federal or state regulators and agencies. These and other risks are described in White River's public filings with the SEC; see, in particular, risk factors described in White River's registration statement on Form S-1/S-4 (Reg. No. 333-123909), on file with the SEC. If any of these risks or uncertainties materializes or if any of the assumptions underlying such forward-looking statements proves to be incorrect, White River's results could differ materially from those expressed in, implied or projected by such forward-looking statements. White River assumes no obligation to update such forward-looking statements.
WHITE RIVER CAPITAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands)
ASSETS September 30, December 31,
2005 2004
------------- ------------
Cash and cash equivalent $8,884 $3,745
Restricted cash 28,059 23,530
Securitized finance receivables--net 138,169 115,165
Finance receivables--net 69,936
Beneficial interest in Master Trust 7,831 3,677
Deferred costs - 634
Goodwill 40,638 -
Other assets 3,820 4,179
------------- ------------
TOTAL $297,337 $150,930
============= ============
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY)
LIABILITIES:
Collateralized financing $160,620 $132,257
Line of credit 53,500
Secured note payable 15,000
Subordinated debentures 7,750
Notes payable - Coastal Credit purchase
holdback 5,000
Accrued interest 1,666 7,100
Amounts due to Master Trust 5,416 6,640
Creditor notes payable 1,321 11,445
Due to Castle Creek - 634
Other payables and accrued expenses 2,842 1,156
------------- ------------
Total liabilities 253,115 159,232
============= ============
SHAREHOLDERS' EQUITY:
Preferred Stock, without par value,
authorized 3,000,000 shares; none
issued and outstanding - -
Common Stock, without par value,
authorized 20,000,000 shares;
3,810,155 issued and outstanding 179,157 145,900
Warrants 534 -
Accumulated other comprehensive income 7,394 1,943
Accumulated deficit (142,863) (156,145)
------------- ------------
Total shareholders' equity (deficiency) 44,222 (8,302)
------------- ------------
TOTAL $297,337 $150,930
============= ============
WHITE RIVER CAPITAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
2005 2004 2005 2004
---------- -------- -------- --------
INTEREST:
Interest on receivables $7,888 $3,569 $17,775 $9,517
Accretion and other interest 2,333 301 8,052 732
---------- -------- -------- --------
Total interest income 10,221 3,870 25,827 10,249
Interest expense (3,189) (3,415) (11,532) (9,623)
---------- -------- -------- --------
Net interest margin 7,032 455 14,295 626
Provision for estimated credit
losses (1,031) (2,285) (2,844) (6,484)
---------- -------- -------- --------
Net interest margin (deficiency)
after provision for estimated
credit losses 6,001 (1,830) 11,451 (5,858)
---------- -------- -------- --------
OTHER REVENUES:
Credit (charge) to Master
Trust -- net (2,126) 496 (5,179) 1,633
Gain from extinguishment of
debt 266 - 11,327 -
Other income 188 707 614 2,293
---------- -------- -------- --------
Total other revenues
(charges), net (1,672) 1,203 6,762 3,926
---------- -------- -------- --------
OTHER EXPENSES:
Salaries and benefits 551 105 722 309
Operating expenses 718 242 1,324 824
Third party servicing expense 1,015 639 2,642 1,720
Bankruptcy costs 74 104 244 404
---------- -------- -------- --------
Total other expenses 2,358 1,090 4,932 3,257
---------- -------- -------- --------
INCOME (LOSS) BEFORE INCOME TAXES 1,971 (1,717) 13,281 (5,189)
INCOME TAXES - - - -
---------- -------- -------- --------
NET INCOME (LOSS) $1,971 $(1,717) $13,281 $(5,189)
========== ======== ======== ========
NET INCOME (LOSS) PER COMMON
SHARE (BASIC) $1.32 $(5.54) $18.77 $(16.73)
========== ======== ======== ========
NET INCOME (LOSS) PER COMMON
SHARE (DILUTED) $1.32 $(5.54) $18.74 $(16.73)
========== ======== ======== ========
BASIC WEIGHTED AVERAGE NUMBER
OF COMMON SHARES OUTSTANDING 1,489,503 310,191 707,591 310,191
========== ======== ======== ========
DILUTED WEIGHTED AVERAGE NUMBER
OF COMMON SHARES OUTSTANDING 1,492,669 310,191 708,658 310,191
========== ======== ======== ========
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