þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Michigan
(State or other jurisdiction of incorporation or organization)
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38-1999511
(I.R.S. Employer Identification No.)
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25505 W. Twelve Mile Road
Southfield, Michigan
(Address of principal executive offices)
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48034-8339
(Zip Code)
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248-353-2700
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(Registrant’s telephone number, including area code)
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Not Applicable
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(Former name, former address and former
fiscal year, if changed since last report)
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Large accelerated filer
þ
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Accelerated filer
o
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Non-accelerated filer
o
(Do not check if a smaller reporting company)
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Smaller reporting company
o
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Emerging growth company
o
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PART I. — FINANCIAL INFORMATION
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ITEM 1. FINANCIAL STATEMENTS
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Consolidated Balance Sheets - As of September 30, 2017 and December 31, 2016
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Consolidated Statements of Income - Three and nine months ended September 30, 2017 and 2016
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Consolidated Statements of Comprehensive Income - Three and nine months ended September 30, 2017 and 2016
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Consolidated Statements of Cash Flows - Nine months ended September 30, 2017 and 2016
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PART II. — OTHER INFORMATION
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ITEM 1. LEGAL PROCEEDINGS
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ITEM 6. EXHIBITS
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SIGNATURES
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(Dollars in millions, except per share data)
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As of
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||||||
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September 30, 2017
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December 31, 2016
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||||
ASSETS:
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||||
Cash and cash equivalents
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$
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4.9
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$
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14.6
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Restricted cash and cash equivalents
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273.6
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224.7
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Restricted securities available for sale
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46.1
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45.3
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Loans receivable (including $1.4 from affiliates as of December 31, 2016)
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4,827.6
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4,207.0
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Allowance for credit losses
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(376.2
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)
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(320.4
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)
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Loans receivable, net
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4,451.4
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3,886.6
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Property and equipment, net
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20.3
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18.2
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Income taxes receivable
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5.5
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2.3
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Other assets
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25.1
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26.3
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Total Assets
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$
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4,826.9
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$
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4,218.0
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LIABILITIES AND SHAREHOLDERS' EQUITY:
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Liabilities:
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Accounts payable and accrued liabilities
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$
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140.5
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$
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143.9
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Revolving secured line of credit
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130.5
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—
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Secured financing
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2,327.9
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2,062.4
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Senior notes
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542.4
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541.3
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Deferred income taxes, net
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333.6
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273.1
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Income taxes payable
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0.2
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23.6
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Total Liabilities
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3,475.1
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3,044.3
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Commitments and Contingencies - See Note 15
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Shareholders' Equity:
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Preferred stock, $0.01 par value, 1,000,000 shares authorized, none issued
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—
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—
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Common stock, $0.01 par value, 80,000,000 shares authorized, 19,310,226 and 19,877,381 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively
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0.2
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0.2
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Paid-in capital
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138.4
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131.7
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Retained earnings
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1,213.2
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1,042.0
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Accumulated other comprehensive loss
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—
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(0.2
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)
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Total Shareholders' Equity
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1,351.8
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1,173.7
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Total Liabilities and Shareholders' Equity
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$
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4,826.9
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$
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4,218.0
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(Dollars in millions, except per share data)
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For the Three Months Ended
September 30, |
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For the Nine Months Ended
September 30, |
||||||||||||
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2017
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2016
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2017
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2016
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Revenue:
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Finance charges
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$
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259.4
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$
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223.9
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$
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749.2
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$
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641.9
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Premiums earned
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10.3
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10.7
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30.9
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32.4
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Other income
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14.2
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12.0
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42.6
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38.7
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Total revenue
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283.9
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246.6
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822.7
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713.0
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Costs and expenses:
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Salaries and wages
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33.7
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32.4
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101.9
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95.2
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General and administrative
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14.2
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11.0
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42.1
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35.7
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Sales and marketing
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14.2
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12.2
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43.7
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37.8
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Provision for credit losses
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25.7
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22.8
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68.0
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62.8
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Interest
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30.5
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25.1
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88.0
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71.5
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Provision for claims
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5.5
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6.6
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17.6
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20.4
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Total costs and expenses
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123.8
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110.1
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361.3
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323.4
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Income before provision for income taxes
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160.1
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136.5
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461.4
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389.6
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Provision for income taxes
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59.4
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50.6
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168.3
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144.4
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Net income
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$
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100.7
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$
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85.9
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$
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293.1
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$
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245.2
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Net income per share:
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Basic
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$
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5.19
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$
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4.22
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$
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15.01
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$
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12.02
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Diluted
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$
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5.19
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$
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4.21
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$
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14.99
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$
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12.01
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Weighted average shares outstanding:
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||||||||
Basic
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19,407,344
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20,379,557
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19,528,175
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20,398,037
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Diluted
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19,415,545
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20,384,624
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19,547,674
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20,415,981
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(In millions)
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For the Three Months Ended
September 30, |
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For the Nine Months Ended
September 30, |
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2017
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2016
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2017
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2016
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Net income
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$
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100.7
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$
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85.9
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$
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293.1
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$
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245.2
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Other comprehensive income (loss), net of tax:
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Unrealized gain (loss) on securities, net of tax
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—
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(0.1
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)
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0.2
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0.4
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Other comprehensive income (loss)
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—
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(0.1
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)
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0.2
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0.4
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Comprehensive income
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$
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100.7
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$
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85.8
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$
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293.3
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$
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245.6
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(In millions)
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For the Nine Months Ended September 30,
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||||||
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2017
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2016
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Cash Flows From Operating Activities:
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Net income
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$
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293.1
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|
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$
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245.2
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Adjustments to reconcile cash provided by operating activities:
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||||
Provision for credit losses
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68.0
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62.8
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Depreciation
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4.7
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4.7
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Amortization
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7.5
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6.8
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Loss on retirement of property and equipment
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0.1
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0.1
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Provision for deferred income taxes
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60.5
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32.0
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Stock-based compensation
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8.3
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5.6
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Change in operating assets and liabilities:
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||||
Decrease in accounts payable and accrued liabilities
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(2.8
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)
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(0.9
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)
|
||
Decrease (increase) in income taxes receivable
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(3.2
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)
|
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4.6
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Increase (decrease) in income taxes payable
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(23.4
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)
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2.0
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Decrease in other assets
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1.8
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0.6
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Net cash provided by operating activities
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414.6
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363.5
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Cash Flows From Investing Activities:
|
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|
||||
Increase in restricted cash and cash equivalents
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(48.9
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)
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(65.4
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)
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Purchases of restricted securities available for sale
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(28.0
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)
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(28.3
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)
|
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Proceeds from sale of restricted securities available for sale
|
23.0
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25.5
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Maturities of restricted securities available for sale
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4.3
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|
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4.5
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Principal collected on Loans receivable
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1,657.4
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1,493.2
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Advances to Dealers
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(1,467.2
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)
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(1,476.4
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)
|
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Purchases of Consumer Loans
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(686.7
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)
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(589.4
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)
|
||
Accelerated payments of Dealer Holdback
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(35.5
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)
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(43.4
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)
|
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Payments of Dealer Holdback
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(100.8
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)
|
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(109.7
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)
|
||
Purchases of property and equipment
|
(6.9
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)
|
|
(3.6
|
)
|
||
Net cash used in investing activities
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(689.3
|
)
|
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(793.0
|
)
|
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Cash Flows From Financing Activities:
|
|
|
|
||||
Borrowings under revolving secured line of credit
|
3,076.7
|
|
|
1,280.8
|
|
||
Repayments under revolving secured line of credit
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(2,946.2
|
)
|
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(1,253.3
|
)
|
||
Proceeds from secured financing
|
1,664.5
|
|
|
1,433.3
|
|
||
Repayments of secured financing
|
(1,396.8
|
)
|
|
(1,019.0
|
)
|
||
Payments of debt issuance costs
|
(9.1
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)
|
|
(6.3
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)
|
||
Repurchase of common stock
|
(123.5
|
)
|
|
(40.8
|
)
|
||
Excess tax benefits from stock-based compensation plans
|
—
|
|
|
27.2
|
|
||
Other financing activities
|
(0.6
|
)
|
|
7.0
|
|
||
Net cash provided by financing activities
|
265.0
|
|
|
428.9
|
|
||
Net decrease in cash and cash equivalents
|
(9.7
|
)
|
|
(0.6
|
)
|
||
Cash and cash equivalents, beginning of period
|
14.6
|
|
|
6.3
|
|
||
Cash and cash equivalents, end of period
|
$
|
4.9
|
|
|
$
|
5.7
|
|
Supplemental Disclosure of Cash Flow Information:
|
|
|
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||||
Cash paid during the period for interest
|
$
|
88.9
|
|
|
$
|
73.5
|
|
Cash paid during the period for income taxes
|
$
|
132.1
|
|
|
$
|
75.2
|
|
|
|
For the Three Months Ended September 30,
|
|
For the Nine Months Ended September 30,
|
||||||||
Consumer Loan Assignment Volume
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||
Percentage of total unit volume with either FICO
®
scores below 650 or no FICO
®
scores
|
|
95.2
|
%
|
|
95.4
|
%
|
|
95.7
|
%
|
|
95.9
|
%
|
|
|
Unit Volume
|
|
Dollar Volume (1)
|
||||||||
Three Months Ended
|
|
Dealer Loans
|
|
Purchased Loans
|
|
Dealer Loans
|
|
Purchased Loans
|
||||
March 31, 2016
|
|
82.4
|
%
|
|
17.6
|
%
|
|
75.6
|
%
|
|
24.4
|
%
|
June 30, 2016
|
|
77.8
|
%
|
|
22.2
|
%
|
|
69.8
|
%
|
|
30.2
|
%
|
September 30, 2016
|
|
76.2
|
%
|
|
23.8
|
%
|
|
68.5
|
%
|
|
31.5
|
%
|
December 31, 2016
|
|
76.9
|
%
|
|
23.1
|
%
|
|
71.1
|
%
|
|
28.9
|
%
|
March 31, 2017
|
|
73.3
|
%
|
|
26.7
|
%
|
|
67.8
|
%
|
|
32.2
|
%
|
June 30, 2017
|
|
72.3
|
%
|
|
27.7
|
%
|
|
67.9
|
%
|
|
32.1
|
%
|
September 30, 2017
|
|
71.9
|
%
|
|
28.1
|
%
|
|
68.6
|
%
|
|
31.4
|
%
|
(1)
|
Represents advances paid to Dealers on Consumer Loans assigned under our Portfolio Program and one-time payments made to Dealers to purchase Consumer Loans assigned under our Purchase Program. Payments of Dealer Holdback and accelerated Dealer Holdback are not included.
|
•
|
a down payment from the consumer;
|
•
|
a non-recourse cash payment (“advance”) from us; and
|
•
|
after the advance has been recovered by us, the cash from payments made on the Consumer Loan, net of certain collection costs and our servicing fee (“Dealer Holdback”).
|
•
|
first, to reimburse us for certain collection costs;
|
•
|
second, to pay us our servicing fee, which generally equals
20%
of collections;
|
•
|
third, to reduce the aggregate advance balance and to pay any other amounts due from the Dealer to us; and
|
•
|
fourth, to the Dealer as payment of Dealer Holdback.
|
•
|
received first accelerated Dealer Holdback payment under the Portfolio Program;
|
•
|
franchise dealership; or
|
•
|
independent dealership that meets certain criteria upon enrollment.
|
•
|
the consumer and Dealer have signed a Consumer Loan contract; and
|
•
|
we have received the executed Consumer Loan contract and supporting documentation in either physical or electronic form.
|
•
|
the Consumer Loan has been legally assigned to us; and
|
•
|
we have made a funding decision and generally have provided funding to the Dealer in the form of either an advance under the Portfolio Program or one-time purchase payment under the Purchase Program.
|
•
|
the aggregate amount of all cash advances paid;
|
•
|
finance charges;
|
•
|
Dealer Holdback payments;
|
•
|
accelerated Dealer Holdback payments; and
|
•
|
recoveries.
|
•
|
collections (net of certain collection costs); and
|
•
|
write-offs.
|
•
|
the aggregate amount of all amounts paid during the month of purchase to purchase Consumer Loans from Dealers;
|
•
|
finance charges; and
|
•
|
recoveries.
|
•
|
collections (net of certain collection costs); and
|
•
|
write-offs.
|
•
|
We have a variable interest in the trust.
We have a residual interest in the assets of the trust, which is variable in nature, given that it increases or decreases based upon the actual loss experience of the related service contracts. In addition, VSC Re is required to absorb any losses in excess of the trust's assets.
|
•
|
The trust is a variable interest entity.
The trust has insufficient equity at risk as no parties to the trust were required to contribute assets that provide them with any ownership interest.
|
•
|
We are the primary beneficiary of the trust.
We control the amount of premium written and placed in the trust through Consumer Loan assignments under our Programs, which is the activity that most significantly impacts the economic performance of the trust. We have the right to receive benefits from the trust that could potentially be significant. In addition, VSC Re has the obligation to absorb losses of the trust that could potentially be significant.
|
(In millions)
|
|
|
|
|
|
|
|
||||||||
|
As of September 30, 2017
|
|
As of December 31, 2016
|
||||||||||||
|
Carrying
Amount
|
|
Estimated Fair
Value
|
|
Carrying
Amount
|
|
Estimated Fair
Value
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
4.9
|
|
|
$
|
4.9
|
|
|
$
|
14.6
|
|
|
$
|
14.6
|
|
Restricted cash and cash equivalents
|
273.6
|
|
|
273.6
|
|
|
224.7
|
|
|
224.7
|
|
||||
Restricted securities available for sale
|
46.1
|
|
|
46.1
|
|
|
45.3
|
|
|
45.3
|
|
||||
Loans receivable, net
|
4,451.4
|
|
|
4,536.9
|
|
|
3,886.6
|
|
|
3,955.9
|
|
||||
Liabilities
|
|
|
|
|
|
|
|
||||||||
Revolving secured line of credit
|
$
|
130.5
|
|
|
$
|
130.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Secured financing
|
2,327.9
|
|
|
2,348.5
|
|
|
2,062.4
|
|
|
2,072.0
|
|
||||
Senior notes
|
542.4
|
|
|
569.0
|
|
|
541.3
|
|
|
560.5
|
|
Level 1
|
Valuation is based upon quoted prices for identical instruments traded in active markets.
|
|
|
Level 2
|
Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.
|
|
|
Level 3
|
Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates or assumptions that market participants would use in pricing the asset or liability.
|
(In millions)
|
|
|
|
|
|
|
|
||||||||
|
As of September 30, 2017
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total Fair Value
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
4.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4.9
|
|
Restricted cash and cash equivalents
|
273.6
|
|
|
—
|
|
|
—
|
|
|
273.6
|
|
||||
Restricted securities available for sale (1)
|
36.9
|
|
|
9.2
|
|
|
—
|
|
|
46.1
|
|
||||
Loans receivable, net
|
—
|
|
|
—
|
|
|
4,536.9
|
|
|
4,536.9
|
|
||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revolving secured line of credit
|
$
|
130.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
130.5
|
|
Secured financing
|
—
|
|
|
2,348.5
|
|
|
—
|
|
|
2,348.5
|
|
||||
Senior notes
|
569.0
|
|
|
—
|
|
|
—
|
|
|
569.0
|
|
(In millions)
|
|
|
|
|
|
|
|
||||||||
|
As of December 31, 2016
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total Fair Value
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
14.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
14.6
|
|
Restricted cash and cash equivalents
|
224.7
|
|
|
—
|
|
|
—
|
|
|
224.7
|
|
||||
Restricted securities available for sale (1)
|
37.1
|
|
|
8.2
|
|
|
—
|
|
|
45.3
|
|
||||
Loans receivable, net
|
—
|
|
|
—
|
|
|
3,955.9
|
|
|
3,955.9
|
|
||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revolving secured line of credit
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Secured financing
|
—
|
|
|
2,072.0
|
|
|
—
|
|
|
2,072.0
|
|
||||
Senior notes
|
560.5
|
|
|
—
|
|
|
—
|
|
|
560.5
|
|
(1)
|
Measured and recorded at fair value on a recurring basis.
|
(In millions)
|
As of September 30, 2017
|
||||||||||||||
|
Cost
|
|
Gross Unrealized
Gains
|
|
Gross Unrealized
Losses
|
|
Estimated Fair
Value
|
||||||||
U.S. Government and agency securities
|
$
|
18.7
|
|
|
$
|
—
|
|
|
$
|
(0.1
|
)
|
|
$
|
18.6
|
|
Corporate bonds
|
18.2
|
|
|
0.1
|
|
|
—
|
|
|
18.3
|
|
||||
Asset-backed securities
|
6.9
|
|
|
—
|
|
|
—
|
|
|
6.9
|
|
||||
Mortgage-backed securities
|
2.3
|
|
|
—
|
|
|
—
|
|
|
2.3
|
|
||||
Total restricted securities available for sale
|
$
|
46.1
|
|
|
$
|
0.1
|
|
|
$
|
(0.1
|
)
|
|
$
|
46.1
|
|
|
|
|
|
|
|
|
|
||||||||
(In millions)
|
As of December 31, 2016
|
||||||||||||||
|
Cost
|
|
Gross Unrealized
Gains
|
|
Gross Unrealized
Losses
|
|
Estimated Fair
Value
|
||||||||
U.S. Government and agency securities
|
$
|
20.4
|
|
|
$
|
—
|
|
|
$
|
(0.1
|
)
|
|
$
|
20.3
|
|
Corporate bonds
|
16.9
|
|
|
0.1
|
|
|
(0.2
|
)
|
|
16.8
|
|
||||
Asset-backed securities
|
5.0
|
|
|
—
|
|
|
—
|
|
|
5.0
|
|
||||
Mortgage-backed securities
|
3.2
|
|
|
—
|
|
|
—
|
|
|
3.2
|
|
||||
Total restricted securities available for sale
|
$
|
45.5
|
|
|
$
|
0.1
|
|
|
$
|
(0.3
|
)
|
|
$
|
45.3
|
|
(In millions)
|
Securities Available for Sale with Gross Unrealized Losses as of September 30, 2017
|
||||||||||||||||||||||
|
Less than 12 Months
|
|
12 Months or More
|
|
|
|
|
||||||||||||||||
|
Estimated
Fair Value
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair Value
|
|
Gross
Unrealized
Losses
|
|
Total
Estimated
Fair Value
|
|
Total
Gross
Unrealized
Losses
|
||||||||||||
U.S. Government and agency securities
|
$
|
13.2
|
|
|
$
|
(0.1
|
)
|
|
$
|
1.1
|
|
|
$
|
—
|
|
|
$
|
14.3
|
|
|
$
|
(0.1
|
)
|
Corporate bonds
|
4.0
|
|
|
—
|
|
|
1.4
|
|
|
—
|
|
|
5.4
|
|
|
—
|
|
||||||
Asset-backed securities
|
4.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4.2
|
|
|
—
|
|
||||||
Mortgage-backed securities
|
2.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.3
|
|
|
—
|
|
||||||
Total restricted securities available for sale
|
$
|
23.7
|
|
|
$
|
(0.1
|
)
|
|
$
|
2.5
|
|
|
$
|
—
|
|
|
$
|
26.2
|
|
|
$
|
(0.1
|
)
|
(In millions)
|
Securities Available for Sale with Gross Unrealized Losses as of December 31, 2016
|
||||||||||||||||||||||
|
Less than 12 Months
|
|
12 Months or More
|
|
|
|
|
||||||||||||||||
|
Estimated
Fair Value
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair Value
|
|
Gross
Unrealized
Losses
|
|
Total
Estimated
Fair Value
|
|
Total
Gross
Unrealized
Losses
|
||||||||||||
U.S. Government and agency securities
|
$
|
16.4
|
|
|
$
|
(0.1
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
16.4
|
|
|
$
|
(0.1
|
)
|
Corporate bonds
|
11.8
|
|
|
(0.2
|
)
|
|
—
|
|
|
—
|
|
|
11.8
|
|
|
(0.2
|
)
|
||||||
Asset-backed securities
|
2.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.8
|
|
|
—
|
|
||||||
Mortgage-backed securities
|
2.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.4
|
|
|
—
|
|
||||||
Total restricted securities available for sale
|
$
|
33.4
|
|
|
$
|
(0.3
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
33.4
|
|
|
$
|
(0.3
|
)
|
(In millions)
|
|
As of
|
||||||||||||||
|
|
September 30, 2017
|
|
December 31, 2016
|
||||||||||||
Contractual Maturity
|
|
Cost
|
|
Estimated Fair
Value
|
|
Cost
|
|
Estimated Fair
Value
|
||||||||
Within one year
|
|
$
|
0.7
|
|
|
$
|
0.7
|
|
|
$
|
1.6
|
|
|
$
|
1.6
|
|
Over one year to five years
|
|
42.5
|
|
|
42.5
|
|
|
39.3
|
|
|
39.1
|
|
||||
Over five years to ten years
|
|
0.6
|
|
|
0.6
|
|
|
2.2
|
|
|
2.2
|
|
||||
Over ten years
|
|
2.3
|
|
|
2.3
|
|
|
2.4
|
|
|
2.4
|
|
||||
Total restricted securities available for sale
|
|
$
|
46.1
|
|
|
$
|
46.1
|
|
|
$
|
45.5
|
|
|
$
|
45.3
|
|
(In millions)
|
As of September 30, 2017
|
||||||||||
|
Dealer Loans
|
|
Purchased Loans
|
|
Total
|
||||||
Loans receivable
|
$
|
3,474.3
|
|
|
$
|
1,353.3
|
|
|
$
|
4,827.6
|
|
Allowance for credit losses
|
(354.6
|
)
|
|
(21.6
|
)
|
|
(376.2
|
)
|
|||
Loans receivable, net
|
$
|
3,119.7
|
|
|
$
|
1,331.7
|
|
|
$
|
4,451.4
|
|
|
|
|
|
|
|
||||||
(In millions)
|
As of December 31, 2016
|
||||||||||
|
Dealer Loans
|
|
Purchased Loans
|
|
Total
|
||||||
Loans receivable
|
$
|
3,209.0
|
|
|
$
|
998.0
|
|
|
$
|
4,207.0
|
|
Allowance for credit losses
|
(309.3
|
)
|
|
(11.1
|
)
|
|
(320.4
|
)
|
|||
Loans receivable, net
|
$
|
2,899.7
|
|
|
$
|
986.9
|
|
|
$
|
3,886.6
|
|
(In millions)
|
For the Three Months Ended September 30, 2017
|
||||||||||
|
Dealer Loans
|
|
Purchased Loans
|
|
Total
|
||||||
Balance, beginning of period
|
$
|
3,385.3
|
|
|
$
|
1,252.4
|
|
|
$
|
4,637.7
|
|
New Consumer Loan assignments (1)
|
474.0
|
|
|
216.6
|
|
|
690.6
|
|
|||
Principal collected on Loans receivable
|
(424.6
|
)
|
|
(116.5
|
)
|
|
(541.1
|
)
|
|||
Accelerated Dealer Holdback payments
|
11.9
|
|
|
—
|
|
|
11.9
|
|
|||
Dealer Holdback payments
|
32.1
|
|
|
—
|
|
|
32.1
|
|
|||
Transfers (2)
|
(1.9
|
)
|
|
1.9
|
|
|
—
|
|
|||
Write-offs
|
(2.9
|
)
|
|
(1.2
|
)
|
|
(4.1
|
)
|
|||
Recoveries (3)
|
0.4
|
|
|
0.1
|
|
|
0.5
|
|
|||
Balance, end of period
|
$
|
3,474.3
|
|
|
$
|
1,353.3
|
|
|
$
|
4,827.6
|
|
|
|
|
|
|
|
||||||
(In millions)
|
For the Three Months Ended September 30, 2016
|
||||||||||
|
Dealer Loans
|
|
Purchased Loans
|
|
Total
|
||||||
Balance, beginning of period
|
$
|
3,049.2
|
|
|
$
|
762.8
|
|
|
$
|
3,812.0
|
|
New Consumer Loan assignments (1)
|
475.7
|
|
|
218.6
|
|
|
694.3
|
|
|||
Principal collected on Loans receivable
|
(412.7
|
)
|
|
(77.1
|
)
|
|
(489.8
|
)
|
|||
Accelerated Dealer Holdback payments
|
13.7
|
|
|
—
|
|
|
13.7
|
|
|||
Dealer Holdback payments
|
33.9
|
|
|
—
|
|
|
33.9
|
|
|||
Transfers (2)
|
(5.1
|
)
|
|
5.1
|
|
|
—
|
|
|||
Write-offs
|
(3.1
|
)
|
|
(0.2
|
)
|
|
(3.3
|
)
|
|||
Recoveries (3)
|
0.3
|
|
|
0.1
|
|
|
0.4
|
|
|||
Balance, end of period
|
$
|
3,151.9
|
|
|
$
|
909.3
|
|
|
$
|
4,061.2
|
|
(In millions)
|
For the Nine Months Ended September 30, 2017
|
||||||||||
|
Dealer Loans
|
|
Purchased Loans
|
|
Total
|
||||||
Balance, beginning of period
|
$
|
3,209.0
|
|
|
$
|
998.0
|
|
|
$
|
4,207.0
|
|
New Consumer Loan assignments (1)
|
1,467.2
|
|
|
686.7
|
|
|
2,153.9
|
|
|||
Principal collected on Loans receivable
|
(1,323.8
|
)
|
|
(333.6
|
)
|
|
(1,657.4
|
)
|
|||
Accelerated Dealer Holdback payments
|
35.5
|
|
|
—
|
|
|
35.5
|
|
|||
Dealer Holdback payments
|
100.8
|
|
|
—
|
|
|
100.8
|
|
|||
Transfers (2)
|
(4.1
|
)
|
|
4.1
|
|
|
—
|
|
|||
Write-offs
|
(11.4
|
)
|
|
(2.1
|
)
|
|
(13.5
|
)
|
|||
Recoveries (3)
|
1.1
|
|
|
0.2
|
|
|
1.3
|
|
|||
Balance, end of period
|
$
|
3,474.3
|
|
|
$
|
1,353.3
|
|
|
$
|
4,827.6
|
|
|
|
|
|
|
|
||||||
(In millions)
|
For the Nine Months Ended September 30, 2016
|
||||||||||
|
Dealer Loans
|
|
Purchased Loans
|
|
Total
|
||||||
Balance, beginning of period
|
$
|
2,823.4
|
|
|
$
|
521.7
|
|
|
$
|
3,345.1
|
|
New Consumer Loan assignments (1)
|
1,476.4
|
|
|
589.4
|
|
|
2,065.8
|
|
|||
Principal collected on Loans receivable
|
(1,284.0
|
)
|
|
(209.2
|
)
|
|
(1,493.2
|
)
|
|||
Accelerated Dealer Holdback payments
|
43.4
|
|
|
—
|
|
|
43.4
|
|
|||
Dealer Holdback payments
|
109.7
|
|
|
—
|
|
|
109.7
|
|
|||
Transfers (2)
|
(7.6
|
)
|
|
7.6
|
|
|
—
|
|
|||
Write-offs
|
(10.4
|
)
|
|
(0.3
|
)
|
|
(10.7
|
)
|
|||
Recoveries (3)
|
1.0
|
|
|
0.1
|
|
|
1.1
|
|
|||
Balance, end of period
|
$
|
3,151.9
|
|
|
$
|
909.3
|
|
|
$
|
4,061.2
|
|
(1)
|
The Dealer Loans amount represents advances paid to Dealers on Consumer Loans assigned under our Portfolio Program. The Purchased Loans amount represents one-time payments made to Dealers to purchase Consumer Loans assigned under our Purchase Program.
|
(2)
|
Under our Portfolio Program, certain events may result in Dealers forfeiting their rights to Dealer Holdback. We transfer the Dealer’s outstanding Dealer Loan balance to Purchased Loans in the period this forfeiture occurs.
|
(3)
|
Represents collections received on previously written off Loans.
|
(In millions)
|
For the Three Months Ended September 30, 2017
|
||||||||||
|
Dealer Loans
|
|
Purchased Loans
|
|
Total
|
||||||
Balance, beginning of period
|
$
|
1,038.4
|
|
|
$
|
456.4
|
|
|
$
|
1,494.8
|
|
New Consumer Loan assignments (1)
|
192.6
|
|
|
92.7
|
|
|
285.3
|
|
|||
Accretion (2)
|
(194.7
|
)
|
|
(67.0
|
)
|
|
(261.7
|
)
|
|||
Provision for credit losses
|
20.2
|
|
|
5.5
|
|
|
25.7
|
|
|||
Forecast changes
|
(1.9
|
)
|
|
7.4
|
|
|
5.5
|
|
|||
Transfers (3)
|
(0.5
|
)
|
|
1.3
|
|
|
0.8
|
|
|||
Balance, end of period
|
$
|
1,054.1
|
|
|
$
|
496.3
|
|
|
$
|
1,550.4
|
|
|
|
|
|
|
|
||||||
(In millions)
|
For the Three Months Ended September 30, 2016
|
||||||||||
|
Dealer Loans
|
|
Purchased Loans
|
|
Total
|
||||||
Balance, beginning of period
|
$
|
963.2
|
|
|
$
|
283.3
|
|
|
$
|
1,246.5
|
|
New Consumer Loan assignments (1)
|
196.1
|
|
|
80.6
|
|
|
276.7
|
|
|||
Accretion (2)
|
(183.1
|
)
|
|
(43.1
|
)
|
|
(226.2
|
)
|
|||
Provision for credit losses
|
21.6
|
|
|
1.2
|
|
|
22.8
|
|
|||
Forecast changes
|
(7.6
|
)
|
|
1.6
|
|
|
(6.0
|
)
|
|||
Transfers (3)
|
(0.8
|
)
|
|
2.5
|
|
|
1.7
|
|
|||
Balance, end of period
|
$
|
989.4
|
|
|
$
|
326.1
|
|
|
$
|
1,315.5
|
|
|
|
|
|
|
|
||||||
(In millions)
|
For the Nine Months Ended September 30, 2017
|
||||||||||
|
Dealer Loans
|
|
Purchased Loans
|
|
Total
|
||||||
Balance, beginning of period
|
$
|
982.6
|
|
|
$
|
348.1
|
|
|
$
|
1,330.7
|
|
New Consumer Loan assignments (1)
|
599.1
|
|
|
284.6
|
|
|
883.7
|
|
|||
Accretion (2)
|
(575.5
|
)
|
|
(180.3
|
)
|
|
(755.8
|
)
|
|||
Provision for credit losses
|
55.6
|
|
|
12.4
|
|
|
68.0
|
|
|||
Forecast changes
|
(6.8
|
)
|
|
29.2
|
|
|
22.4
|
|
|||
Transfers (3)
|
(0.9
|
)
|
|
2.3
|
|
|
1.4
|
|
|||
Balance, end of period
|
$
|
1,054.1
|
|
|
$
|
496.3
|
|
|
$
|
1,550.4
|
|
|
|
|
|
|
|
||||||
(In millions)
|
For the Nine Months Ended September 30, 2016
|
||||||||||
|
Dealer Loans
|
|
Purchased Loans
|
|
Total
|
||||||
Balance, beginning of period
|
$
|
874.2
|
|
|
$
|
198.6
|
|
|
$
|
1,072.8
|
|
New Consumer Loan assignments (1)
|
613.8
|
|
|
218.2
|
|
|
832.0
|
|
|||
Accretion (2)
|
(537.2
|
)
|
|
(111.5
|
)
|
|
(648.7
|
)
|
|||
Provision for credit losses
|
61.3
|
|
|
1.5
|
|
|
62.8
|
|
|||
Forecast changes
|
(21.1
|
)
|
|
14.9
|
|
|
(6.2
|
)
|
|||
Transfers (3)
|
(1.6
|
)
|
|
4.4
|
|
|
2.8
|
|
|||
Balance, end of period
|
$
|
989.4
|
|
|
$
|
326.1
|
|
|
$
|
1,315.5
|
|
(1)
|
The Dealer Loans amount represents the net cash flows expected at the time of assignment on Consumer Loans assigned under our Portfolio Program, less the related advances paid to Dealers. The Purchased Loans amount represents the net cash flows expected at the time of assignment on Consumer Loans assigned under our Purchase Program, less the related one-time payments made to Dealers.
|
(2)
|
Represents finance charges excluding the amortization of deferred direct origination costs for Dealer Loans.
|
(3)
|
Under our Portfolio Program, certain events may result in Dealers forfeiting their rights to Dealer Holdback. We transfer the Dealer’s outstanding Dealer Loan balance and related expected future net cash flows to Purchased Loans in the period this forfeiture occurs.
|
(In millions)
|
For the Three Months Ended September 30, 2017
|
||||||||||
|
Dealer Loans
|
|
Purchased Loans
|
|
Total
|
||||||
Contractual net cash flows at the time of assignment (1)
|
$
|
754.6
|
|
|
$
|
476.0
|
|
|
$
|
1,230.6
|
|
Expected net cash flows at the time of assignment (2)
|
666.6
|
|
|
309.3
|
|
|
975.9
|
|
|||
Fair value at the time of assignment (3)
|
474.0
|
|
|
216.6
|
|
|
690.6
|
|
|||
|
|
|
|
|
|
||||||
(In millions)
|
For the Three Months Ended September 30, 2016
|
||||||||||
|
Dealer Loans
|
|
Purchased Loans
|
|
Total
|
||||||
Contractual net cash flows at the time of assignment (1)
|
$
|
756.5
|
|
|
$
|
448.2
|
|
|
$
|
1,204.7
|
|
Expected net cash flows at the time of assignment (2)
|
671.8
|
|
|
299.2
|
|
|
971.0
|
|
|||
Fair value at the time of assignment (3)
|
475.7
|
|
|
218.6
|
|
|
694.3
|
|
|||
|
|
|
|
|
|
||||||
(In millions)
|
For the Nine Months Ended September 30, 2017
|
||||||||||
|
Dealer Loans
|
|
Purchased Loans
|
|
Total
|
||||||
Contractual net cash flows at the time of assignment (1)
|
$
|
2,335.1
|
|
|
$
|
1,492.0
|
|
|
$
|
3,827.1
|
|
Expected net cash flows at the time of assignment (2)
|
2,066.3
|
|
|
971.3
|
|
|
3,037.6
|
|
|||
Fair value at the time of assignment (3)
|
1,467.2
|
|
|
686.7
|
|
|
2,153.9
|
|
|||
|
|
|
|
|
|
||||||
(In millions)
|
For the Nine Months Ended September 30, 2016
|
||||||||||
|
Dealer Loans
|
|
Purchased Loans
|
|
Total
|
||||||
Contractual net cash flows at the time of assignment (1)
|
$
|
2,345.2
|
|
|
$
|
1,197.7
|
|
|
$
|
3,542.9
|
|
Expected net cash flows at the time of assignment (2)
|
2,090.2
|
|
|
807.6
|
|
|
2,897.8
|
|
|||
Fair value at the time of assignment (3)
|
1,476.4
|
|
|
589.4
|
|
|
2,065.8
|
|
(1)
|
The Dealer Loans amount represents the repayments that we were contractually owed at the time of assignment on Consumer Loans assigned under our Portfolio Program, less the related Dealer Holdback payments that we would be required to make if we collected all of the contractual repayments. The Purchased Loans amount represents the repayments that we were contractually owed at the time of assignment on Consumer Loans assigned under our Purchase Program.
|
(2)
|
The Dealer Loans amount represents the repayments that we expected to collect at the time of assignment on Consumer Loans assigned under our Portfolio Program, less the related Dealer Holdback payments that we expected to make. The Purchased Loans amount represents the repayments that we expected to collect at the time of assignment on Consumer Loans assigned under our Purchase Program.
|
(3)
|
The Dealer Loans amount represents advances paid to Dealers on Consumer Loans assigned under our Portfolio Program. The Purchased Loans amount represents one-time payments made to Dealers to purchase Consumer Loans assigned under our Purchase Program.
|
|
|
Forecasted Collection Percentage as of (1)
|
|
Current Forecast Variance from
|
|||||||||||||||||
Consumer Loan
Assignment Year
|
|
September 30, 2017
|
|
June 30, 2017
|
|
December 31, 2016
|
|
Initial Forecast
|
|
June 30, 2017
|
|
December 31, 2016
|
|
Initial Forecast
|
|||||||
2008
|
|
70.5
|
%
|
|
70.5
|
%
|
|
70.4
|
%
|
|
69.7
|
%
|
|
0.0
|
%
|
|
0.1
|
%
|
|
0.8
|
%
|
2009
|
|
79.5
|
%
|
|
79.5
|
%
|
|
79.4
|
%
|
|
71.9
|
%
|
|
0.0
|
%
|
|
0.1
|
%
|
|
7.6
|
%
|
2010
|
|
77.6
|
%
|
|
77.6
|
%
|
|
77.6
|
%
|
|
73.6
|
%
|
|
0.0
|
%
|
|
0.0
|
%
|
|
4.0
|
%
|
2011
|
|
74.7
|
%
|
|
74.8
|
%
|
|
74.7
|
%
|
|
72.5
|
%
|
|
-0.1
|
%
|
|
0.0
|
%
|
|
2.2
|
%
|
2012
|
|
73.8
|
%
|
|
73.8
|
%
|
|
73.7
|
%
|
|
71.4
|
%
|
|
0.0
|
%
|
|
0.1
|
%
|
|
2.4
|
%
|
2013
|
|
73.5
|
%
|
|
73.5
|
%
|
|
73.4
|
%
|
|
72.0
|
%
|
|
0.0
|
%
|
|
0.1
|
%
|
|
1.5
|
%
|
2014
|
|
71.7
|
%
|
|
71.7
|
%
|
|
71.8
|
%
|
|
71.8
|
%
|
|
0.0
|
%
|
|
-0.1
|
%
|
|
-0.1
|
%
|
2015
|
|
65.5
|
%
|
|
65.7
|
%
|
|
66.1
|
%
|
|
67.7
|
%
|
|
-0.2
|
%
|
|
-0.6
|
%
|
|
-2.2
|
%
|
2016
|
|
64.9
|
%
|
|
65.1
|
%
|
|
65.1
|
%
|
|
65.4
|
%
|
|
-0.2
|
%
|
|
-0.2
|
%
|
|
-0.5
|
%
|
2017 (2)
|
|
65.5
|
%
|
|
65.5
|
%
|
|
—
|
|
|
64.1
|
%
|
|
0.0
|
%
|
|
—
|
|
|
1.4
|
%
|
(1)
|
Represents the total forecasted collections we expect to collect on the Consumer Loans as a percentage of the repayments that we were contractually owed on the Consumer Loans at the time of assignment. Contractual repayments include both principal and interest. Forecasted collection rates are negatively impacted by canceled Consumer Loans as the contractual amount owed is not removed from the denominator for purposes of computing forecasted collection rates in the table.
|
(2)
|
The forecasted collection rate for 2017 Consumer Loans as of September 30, 2017 includes both Consumer Loans that were in our portfolio as of June 30, 2017 and Consumer Loans assigned during the most recent quarter. The following table provides forecasted collection rates for each of these segments:
|
|
|
Forecasted Collection Percentage as of
|
|
Current Forecast Variance from
|
|||||||||||
2017 Consumer Loan Assignment Period
|
|
September 30, 2017
|
|
June 30, 2017
|
|
Initial Forecast
|
|
June 30, 2017
|
|
Initial Forecast
|
|||||
January 1, 2017 through June 30, 2017
|
|
65.6
|
%
|
|
65.5
|
%
|
|
64.2
|
%
|
|
0.1
|
%
|
|
1.4
|
%
|
July 1, 2017 through September 30, 2017
|
|
65.3
|
%
|
|
—
|
|
|
63.9
|
%
|
|
—
|
|
|
1.4
|
%
|
(In millions)
|
As of September 30, 2017
|
||||||||||||||||||||||
|
Loan Pool Performance
Meets or Exceeds Initial Estimates
|
|
Loan Pool Performance
Less than Initial Estimates
|
||||||||||||||||||||
|
Dealer
Loans
|
|
Purchased
Loans
|
|
Total
|
|
Dealer
Loans
|
|
Purchased
Loans
|
|
Total
|
||||||||||||
Loans receivable
|
$
|
1,127.8
|
|
|
$
|
845.8
|
|
|
$
|
1,973.6
|
|
|
$
|
2,346.5
|
|
|
$
|
507.5
|
|
|
$
|
2,854.0
|
|
Allowance for credit losses
|
—
|
|
|
—
|
|
|
—
|
|
|
(354.6
|
)
|
|
(21.6
|
)
|
|
(376.2
|
)
|
||||||
Loans receivable, net
|
$
|
1,127.8
|
|
|
$
|
845.8
|
|
|
$
|
1,973.6
|
|
|
$
|
1,991.9
|
|
|
$
|
485.9
|
|
|
$
|
2,477.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
(In millions)
|
As of December 31, 2016
|
||||||||||||||||||||||
|
Loan Pool Performance
Meets or Exceeds Initial Estimates
|
|
Loan Pool Performance
Less than Initial Estimates
|
||||||||||||||||||||
|
Dealer
Loans
|
|
Purchased
Loans
|
|
Total
|
|
Dealer
Loans
|
|
Purchased
Loans
|
|
Total
|
||||||||||||
Loans receivable
|
$
|
1,002.2
|
|
|
$
|
705.8
|
|
|
$
|
1,708.0
|
|
|
$
|
2,206.8
|
|
|
$
|
292.2
|
|
|
$
|
2,499.0
|
|
Allowance for credit losses
|
—
|
|
|
—
|
|
|
—
|
|
|
(309.3
|
)
|
|
(11.1
|
)
|
|
(320.4
|
)
|
||||||
Loans receivable, net
|
$
|
1,002.2
|
|
|
$
|
705.8
|
|
|
$
|
1,708.0
|
|
|
$
|
1,897.5
|
|
|
$
|
281.1
|
|
|
$
|
2,178.6
|
|
(In millions)
|
For the Three Months Ended September 30, 2017
|
||||||||||
|
Dealer Loans
|
|
Purchased Loans
|
|
Total
|
||||||
Balance, beginning of period
|
$
|
336.9
|
|
|
$
|
17.2
|
|
|
$
|
354.1
|
|
Provision for credit losses
|
20.2
|
|
|
5.5
|
|
|
25.7
|
|
|||
Write-offs
|
(2.9
|
)
|
|
(1.2
|
)
|
|
(4.1
|
)
|
|||
Recoveries (1)
|
0.4
|
|
|
0.1
|
|
|
0.5
|
|
|||
Balance, end of period
|
$
|
354.6
|
|
|
$
|
21.6
|
|
|
$
|
376.2
|
|
|
|
|
|
|
|
||||||
(In millions)
|
For the Three Months Ended September 30, 2016
|
||||||||||
|
Dealer Loans
|
|
Purchased Loans
|
|
Total
|
||||||
Balance, beginning of period
|
$
|
268.2
|
|
|
$
|
8.7
|
|
|
$
|
276.9
|
|
Provision for credit losses
|
21.6
|
|
|
1.2
|
|
|
22.8
|
|
|||
Write-offs
|
(3.1
|
)
|
|
(0.2
|
)
|
|
(3.3
|
)
|
|||
Recoveries (1)
|
0.3
|
|
|
0.1
|
|
|
0.4
|
|
|||
Balance, end of period
|
$
|
287.0
|
|
|
$
|
9.8
|
|
|
$
|
296.8
|
|
|
|
|
|
|
|
||||||
(In millions)
|
For the Nine Months Ended September 30, 2017
|
||||||||||
|
Dealer Loans
|
|
Purchased Loans
|
|
Total
|
||||||
Balance, beginning of period
|
$
|
309.3
|
|
|
$
|
11.1
|
|
|
$
|
320.4
|
|
Provision for credit losses
|
55.6
|
|
|
12.4
|
|
|
68.0
|
|
|||
Write-offs
|
(11.4
|
)
|
|
(2.1
|
)
|
|
(13.5
|
)
|
|||
Recoveries (1)
|
1.1
|
|
|
0.2
|
|
|
1.3
|
|
|||
Balance, end of period
|
$
|
354.6
|
|
|
$
|
21.6
|
|
|
$
|
376.2
|
|
|
|
|
|
|
|
||||||
(In millions)
|
For the Nine Months Ended September 30, 2016
|
||||||||||
|
Dealer Loans
|
|
Purchased Loans
|
|
Total
|
||||||
Balance, beginning of period
|
$
|
235.1
|
|
|
$
|
8.5
|
|
|
$
|
243.6
|
|
Provision for credit losses
|
61.3
|
|
|
1.5
|
|
|
62.8
|
|
|||
Write-offs
|
(10.4
|
)
|
|
(0.3
|
)
|
|
(10.7
|
)
|
|||
Recoveries (1)
|
1.0
|
|
|
0.1
|
|
|
1.1
|
|
|||
Balance, end of period
|
$
|
287.0
|
|
|
$
|
9.8
|
|
|
$
|
296.8
|
|
(1)
|
Represents collections received on previously written off Loans.
|
(In millions)
|
For the Three Months Ended
September 30, |
|
For the Nine Months Ended
September 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net assumed written premiums
|
$
|
9.7
|
|
|
$
|
11.0
|
|
|
$
|
31.6
|
|
|
$
|
31.9
|
|
Net premiums earned
|
10.3
|
|
|
10.7
|
|
|
30.9
|
|
|
32.4
|
|
||||
Provision for claims
|
5.5
|
|
|
6.6
|
|
|
17.6
|
|
|
20.4
|
|
||||
Amortization of capitalized acquisition costs
|
0.3
|
|
|
0.3
|
|
|
0.8
|
|
|
0.8
|
|
(In millions)
|
|
|
As of
|
||||||
|
Balance Sheet location
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
Trust assets
|
Restricted cash and cash equivalents
|
|
$
|
0.7
|
|
|
$
|
0.5
|
|
Trust assets
|
Restricted securities available for sale
|
|
46.1
|
|
|
45.3
|
|
||
Unearned premium
|
Accounts payable and accrued liabilities
|
|
33.5
|
|
|
32.8
|
|
||
Claims reserve (1)
|
Accounts payable and accrued liabilities
|
|
1.1
|
|
|
1.0
|
|
(1)
|
The claims reserve represents our liability for incurred-but-not-reported claims and is estimated based on historical claims experience.
|
(In millions)
|
|
As of September 30, 2017
|
||||||||||||||
|
|
Principal Outstanding
|
|
Unamortized Debt Issuance Costs
|
|
Unamortized Discount
|
|
Carrying
Amount
|
||||||||
Revolving secured line of credit (1)
|
|
$
|
130.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
130.5
|
|
Secured financing (2)
|
|
2,339.7
|
|
|
(11.8
|
)
|
|
—
|
|
|
2,327.9
|
|
||||
Senior notes
|
|
550.0
|
|
|
(6.2
|
)
|
|
(1.4
|
)
|
|
542.4
|
|
||||
Total debt
|
|
$
|
3,020.2
|
|
|
$
|
(18.0
|
)
|
|
$
|
(1.4
|
)
|
|
$
|
3,000.8
|
|
|
|
|
|
|
|
|
|
|
||||||||
(In millions)
|
|
As of December 31, 2016
|
||||||||||||||
|
|
Principal Outstanding
|
|
Unamortized Debt Issuance Costs
|
|
Unamortized Discount
|
|
Carrying
Amount
|
||||||||
Revolving secured line of credit (1)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Secured financing (2)
|
|
2,072.1
|
|
|
(9.7
|
)
|
|
—
|
|
|
2,062.4
|
|
||||
Senior notes
|
|
550.0
|
|
|
(7.1
|
)
|
|
(1.6
|
)
|
|
541.3
|
|
||||
Total debt
|
|
$
|
2,622.1
|
|
|
$
|
(16.8
|
)
|
|
$
|
(1.6
|
)
|
|
$
|
2,603.7
|
|
(1)
|
Excludes deferred debt issuance costs of $3.1 million and $2.4 million as of September 30, 2017 and December 31, 2016, respectively, which are included in other assets.
|
(2)
|
Warehouse facilities and Term ABS.
|
(Dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
||
Financings
|
|
Wholly-owned
Subsidiary
|
|
Maturity Date
|
|
Financing
Amount
|
|
Interest Rate as of
September 30, 2017 |
||||
Revolving Secured Line of Credit
|
|
n/a
|
|
06/22/2020
|
|
|
$
|
345.0
|
|
(1)
|
|
At our option, either LIBOR plus 187.5 basis points or the prime rate plus 87.5 basis points
|
Warehouse Facility II (2)
|
|
CAC Warehouse Funding Corp. II
|
|
06/23/2019
|
(4)
|
|
$
|
400.0
|
|
|
|
LIBOR plus 225 basis points (3)
|
Warehouse Facility IV (2)
|
|
CAC Warehouse Funding LLC IV
|
|
04/30/2020
|
(4)
|
|
$
|
100.0
|
|
|
|
LIBOR plus 225 basis points (3)
|
Warehouse Facility V (2)
|
|
CAC Warehouse Funding LLC V
|
|
08/18/2019
|
(5)
|
|
$
|
100.0
|
|
|
|
LIBOR plus 225 basis points (3)
|
Warehouse Facility VI (2)
|
|
CAC Warehouse Funding LLC VI
|
|
09/30/2020
|
(4)
|
|
$
|
75.0
|
|
|
|
LIBOR plus 200 basis points
|
Term ABS 2014-2 (2)
|
|
Credit Acceptance Funding LLC 2014-2
|
|
09/15/2016
|
(4)
|
|
$
|
349.0
|
|
|
|
Fixed rate
|
Term ABS 2015-1 (2)
|
|
Credit Acceptance Funding LLC 2015-1
|
|
01/16/2017
|
(4)
|
|
$
|
300.6
|
|
|
|
Fixed rate
|
Term ABS 2015-2 (2)
|
|
Credit Acceptance Funding LLC 2015-2
|
|
08/15/2017
|
(4)
|
|
$
|
300.2
|
|
|
|
Fixed rate
|
Term ABS 2016-1 (2)
|
|
Credit Acceptance Funding LLC 2016-1
|
|
02/15/2018
|
(4)
|
|
$
|
385.0
|
|
|
|
LIBOR plus 195 basis points (3)
|
Term ABS 2016-2 (2)
|
|
Credit Acceptance Funding LLC 2016-2
|
|
05/15/2018
|
(4)
|
|
$
|
350.2
|
|
|
|
Fixed rate
|
Term ABS 2016-3 (2)
|
|
Credit Acceptance Funding LLC 2016-3
|
|
10/15/2018
|
(4)
|
|
$
|
350.0
|
|
|
|
Fixed rate
|
Term ABS 2017-1 (2)
|
|
Credit Acceptance Funding LLC 2017-1
|
|
02/15/2019
|
(4)
|
|
$
|
350.0
|
|
|
|
Fixed rate
|
Term ABS 2017-2 (2)
|
|
Credit Acceptance Funding LLC 2017-2
|
|
06/17/2019
|
(4)
|
|
$
|
450.0
|
|
|
|
Fixed rate
|
2021 Senior Notes
|
|
n/a
|
|
02/15/2021
|
|
|
$
|
300.0
|
|
|
|
Fixed rate
|
2023 Senior Notes
|
|
n/a
|
|
03/15/2023
|
|
|
$
|
250.0
|
|
|
|
Fixed rate
|
(1)
|
Under the terms of the revolving secured line of credit facility as of September 30, 2017, the amount of the facility would decrease to $300.0 million on June 22, 2019.
|
(2)
|
Financing made available only to a specified subsidiary of the Company.
|
(3)
|
Interest rate cap agreements are in place to limit the exposure to increasing interest rates.
|
(4)
|
Represents the revolving maturity date. The outstanding balance will amortize after the revolving maturity date based on the cash flows of the pledged assets.
|
(5)
|
Represents the revolving maturity date. The outstanding balance will amortize after the revolving maturity date and any amounts remaining on August 18, 2021 will be due on that date.
|
(In millions)
|
For the Three Months Ended
September 30, |
|
For the Nine Months Ended
September 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Revolving Secured Line of Credit
|
|
|
|
|
|
|
|
||||||||
Maximum outstanding principal balance
|
$
|
130.5
|
|
|
$
|
92.1
|
|
|
$
|
276.7
|
|
|
$
|
186.4
|
|
Average outstanding principal balance
|
35.7
|
|
|
13.3
|
|
|
92.2
|
|
|
30.6
|
|
||||
Warehouse Facility II
|
|
|
|
|
|
|
|
||||||||
Maximum outstanding principal balance
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
263.4
|
|
|
$
|
200.1
|
|
Average outstanding principal balance
|
—
|
|
|
—
|
|
|
3.4
|
|
|
3.7
|
|
||||
Warehouse Facility IV
|
|
|
|
|
|
|
|
||||||||
Maximum outstanding principal balance
|
$
|
—
|
|
|
$
|
12.0
|
|
|
$
|
12.0
|
|
|
$
|
12.0
|
|
Average outstanding principal balance
|
—
|
|
|
12.0
|
|
|
7.8
|
|
|
12.0
|
|
||||
Warehouse Facility V
|
|
|
|
|
|
|
|
||||||||
Maximum outstanding principal balance
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
100.0
|
|
|
$
|
100.0
|
|
Average outstanding principal balance
|
—
|
|
|
—
|
|
|
10.4
|
|
|
1.4
|
|
||||
Warehouse Facility VI
|
|
|
|
|
|
|
|
||||||||
Maximum outstanding principal balance
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
75.0
|
|
|
$
|
49.9
|
|
Average outstanding principal balance
|
—
|
|
|
—
|
|
|
9.8
|
|
|
4.0
|
|
(Dollars in millions)
|
As of
|
||||||
|
September 30, 2017
|
|
December 31, 2016
|
||||
Revolving Secured Line of Credit
|
|
|
|
||||
Principal balance outstanding
|
$
|
130.5
|
|
|
$
|
—
|
|
Amount available for borrowing (1)
|
214.5
|
|
|
310.0
|
|
||
Interest rate
|
3.11
|
%
|
|
—
|
%
|
||
Warehouse Facility II
|
|
|
|
||||
Principal balance outstanding
|
$
|
—
|
|
|
$
|
—
|
|
Amount available for borrowing (1)
|
400.0
|
|
|
400.0
|
|
||
Loans pledged as collateral
|
—
|
|
|
—
|
|
||
Restricted cash and cash equivalents pledged as collateral
|
1.2
|
|
|
1.5
|
|
||
Interest rate
|
—
|
%
|
|
—
|
%
|
||
Warehouse Facility IV
|
|
|
|
||||
Principal balance outstanding
|
$
|
—
|
|
|
$
|
12.0
|
|
Amount available for borrowing (1)
|
100.0
|
|
|
63.0
|
|
||
Loans pledged as collateral
|
—
|
|
|
23.0
|
|
||
Restricted cash and cash equivalents pledged as collateral
|
1.1
|
|
|
0.9
|
|
||
Interest rate
|
—
|
%
|
|
2.77
|
%
|
||
Warehouse Facility V
|
|
|
|
||||
Principal balance outstanding
|
$
|
—
|
|
|
$
|
—
|
|
Amount available for borrowing (1)
|
100.0
|
|
|
100.0
|
|
||
Loans pledged as collateral
|
—
|
|
|
—
|
|
||
Restricted cash and cash equivalents pledged as collateral
|
1.1
|
|
|
1.0
|
|
||
Interest rate
|
—
|
%
|
|
—
|
%
|
||
Warehouse Facility VI
|
|
|
|
||||
Principal balance outstanding
|
$
|
—
|
|
|
$
|
—
|
|
Amount available for borrowing (1)
|
75.0
|
|
|
75.0
|
|
||
Loans pledged as collateral
|
—
|
|
|
—
|
|
||
Restricted cash and cash equivalents pledged as collateral
|
0.1
|
|
|
0.1
|
|
||
Interest rate
|
—
|
%
|
|
—
|
%
|
||
Term ABS 2014-1
|
|
|
|
||||
Principal balance outstanding
|
$
|
—
|
|
|
$
|
106.5
|
|
Loans pledged as collateral
|
—
|
|
|
307.2
|
|
||
Restricted cash and cash equivalents pledged as collateral
|
—
|
|
|
28.3
|
|
||
Interest rate
|
—
|
%
|
|
2.02
|
%
|
||
Term ABS 2014-2
|
|
|
|
||||
Principal balance outstanding
|
$
|
46.7
|
|
|
$
|
267.6
|
|
Loans pledged as collateral
|
290.7
|
|
|
413.9
|
|
||
Restricted cash and cash equivalents pledged as collateral
|
30.6
|
|
|
34.9
|
|
||
Interest rate
|
2.67
|
%
|
|
2.10
|
%
|
||
Term ABS 2015-1
|
|
|
|
||||
Principal balance outstanding
|
$
|
129.5
|
|
|
$
|
300.6
|
|
Loans pledged as collateral
|
271.6
|
|
|
374.5
|
|
||
Restricted cash and cash equivalents pledged as collateral
|
26.7
|
|
|
29.6
|
|
||
Interest rate
|
2.60
|
%
|
|
2.26
|
%
|
||
|
|
|
|
Term ABS 2015-2
|
|
|
|
||||
Principal balance outstanding
|
$
|
278.3
|
|
|
$
|
300.2
|
|
Loans pledged as collateral
|
351.2
|
|
|
372.6
|
|
||
Restricted cash and cash equivalents pledged as collateral
|
30.2
|
|
|
28.1
|
|
||
Interest rate
|
2.65
|
%
|
|
2.63
|
%
|
||
Term ABS 2016-1
|
|
|
|
||||
Principal balance outstanding
|
$
|
385.0
|
|
|
$
|
385.0
|
|
Loans pledged as collateral
|
465.0
|
|
|
474.0
|
|
||
Restricted cash and cash equivalents pledged as collateral
|
38.5
|
|
|
34.8
|
|
||
Interest rate
|
3.18
|
%
|
|
2.65
|
%
|
||
Term ABS 2016-2
|
|
|
|
||||
Principal balance outstanding
|
$
|
350.2
|
|
|
$
|
350.2
|
|
Loans pledged as collateral
|
425.2
|
|
|
490.7
|
|
||
Restricted cash and cash equivalents pledged as collateral
|
34.6
|
|
|
34.4
|
|
||
Interest rate
|
2.83
|
%
|
|
2.83
|
%
|
||
Term ABS 2016-3
|
|
|
|
||||
Principal balance outstanding
|
$
|
350.0
|
|
|
$
|
350.0
|
|
Loans pledged as collateral
|
425.1
|
|
|
489.6
|
|
||
Restricted cash and cash equivalents pledged as collateral
|
33.4
|
|
|
30.6
|
|
||
Interest rate
|
2.53
|
%
|
|
2.53
|
%
|
||
Term ABS 2017-1
|
|
|
|
||||
Principal balance outstanding
|
$
|
350.0
|
|
|
$
|
—
|
|
Loans pledged as collateral
|
426.2
|
|
|
—
|
|
||
Restricted cash and cash equivalents pledged as collateral
|
33.2
|
|
|
—
|
|
||
Interest rate
|
2.78
|
%
|
|
—
|
%
|
||
Term ABS 2017-2
|
|
|
|
||||
Principal balance outstanding
|
$
|
450.0
|
|
|
$
|
—
|
|
Loans pledged as collateral
|
550.8
|
|
|
—
|
|
||
Restricted cash and cash equivalents pledged as collateral
|
42.2
|
|
|
—
|
|
||
Interest rate
|
2.72
|
%
|
|
—
|
%
|
||
2021 Senior Notes
|
|
|
|
||||
Principal balance outstanding
|
$
|
300.0
|
|
|
$
|
300.0
|
|
Interest rate
|
6.125
|
%
|
|
6.125
|
%
|
||
2023 Senior Notes
|
|
|
|
||||
Principal balance outstanding
|
$
|
250.0
|
|
|
$
|
250.0
|
|
Interest rate
|
7.375
|
%
|
|
7.375
|
%
|
(1)
|
Availability may be limited by the amount of assets pledged as collateral.
|
(Dollars in millions)
|
|
|
|
|
|
|
||
Term ABS Financings
|
|
Close Date
|
|
Net Book Value of Loans
Contributed at Closing
|
|
24 month Revolving Period
|
||
Term ABS 2014-2
|
|
September 25, 2014
|
|
$
|
437.6
|
|
|
Through September 15, 2016
|
Term ABS 2015-1
|
|
January 29, 2015
|
|
$
|
375.9
|
|
|
Through January 16, 2017
|
Term ABS 2015-2
|
|
August 20, 2015
|
|
$
|
375.5
|
|
|
Through August 15, 2017
|
Term ABS 2016-1
|
|
February 26, 2016
|
|
$
|
481.4
|
|
|
Through February 15, 2018
|
Term ABS 2016-2
|
|
May 12, 2016
|
|
$
|
437.8
|
|
|
Through May 15, 2018
|
Term ABS 2016-3
|
|
October 27, 2016
|
|
$
|
437.8
|
|
|
Through October 15, 2018
|
Term ABS 2017-1
|
|
February 23, 2017
|
|
$
|
437.8
|
|
|
Through February 15, 2019
|
Term ABS 2017-2
|
|
June 29, 2017
|
|
$
|
563.2
|
|
|
Through June 17, 2019
|
(Dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|||||||
As of September 30, 2017
|
|||||||||||||||||
Facility Amount
|
|
Facility Name
|
|
Purpose
|
|
Start
|
|
End
|
|
Notional
|
|
Cap Interest Rate (1)
|
|||||
$
|
400.0
|
|
|
Warehouse Facility II
|
|
Cap Floating Rate
|
|
06/2016
|
|
12/2017
|
|
$
|
325.0
|
|
|
5.50
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
100.0
|
|
|
Warehouse Facility IV
|
|
Cap Floating Rate
|
|
04/2016
|
|
04/2019
|
|
75.0
|
|
|
5.50
|
%
|
||
|
|
|
|
Cap Floating Rate
|
|
05/2017
|
|
04/2021
|
|
25.0
|
|
|
6.50
|
%
|
|||
|
|
|
|
|
|
|
|
|
|
100.0
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
100.0
|
|
|
Warehouse Facility V
|
|
Cap Floating Rate
|
|
06/2015
|
|
07/2018
|
|
75.0
|
|
|
5.50
|
%
|
||
385.0
|
|
|
Term ABS 2016-1
|
|
Cap Floating Rate
|
|
04/2016
|
|
02/2019
|
|
385.0
|
|
|
5.00
|
%
|
(Dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|||||||
As of December 31, 2016
|
|||||||||||||||||
Facility Amount
|
|
Facility Name
|
|
Purpose
|
|
Start
|
|
End
|
|
Notional
|
|
Cap Interest Rate (1)
|
|||||
$
|
400.0
|
|
|
Warehouse Facility II
|
|
Cap Floating Rate
|
|
06/2016
|
|
12/2017
|
|
$
|
325.0
|
|
|
5.50
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
75.0
|
|
|
Warehouse Facility IV
|
|
Cap Floating Rate
|
|
03/2014
|
|
03/2017
|
|
18.8
|
|
|
5.50
|
%
|
||
|
|
|
|
Cap Floating Rate
|
|
04/2016
|
|
04/2019
|
|
56.2
|
|
|
5.50
|
%
|
|||
|
|
|
|
|
|
|
|
|
|
75.0
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
100.0
|
|
|
Warehouse Facility V
|
|
Cap Floating Rate
|
|
06/2015
|
|
07/2018
|
|
75.0
|
|
|
5.50
|
%
|
||
385.0
|
|
|
Term ABS 2016-1
|
|
Cap Floating Rate
|
|
04/2016
|
|
02/2019
|
|
385.0
|
|
|
5.00
|
%
|
(1)
|
Rate excludes the spread over the LIBOR rate.
|
(Dollars in millions)
|
|
For the Three Months Ended September 30, 2016
|
|
For the Nine Months Ended September 30, 2016
|
||||||||||
|
|
Affiliated
Dealer
activity
|
|
% of
consolidated
|
|
Affiliated
Dealer
activity
|
|
% of
consolidated
|
||||||
Dealer Loan revenue (1)
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
1.2
|
|
|
0.2
|
%
|
New Consumer Loan assignments (1) (2)
|
|
—
|
|
|
—
|
%
|
|
8.9
|
|
|
0.4
|
%
|
||
Accelerated Dealer Holdback payments (1)
|
|
—
|
|
|
—
|
%
|
|
0.2
|
|
|
0.5
|
%
|
||
Dealer Holdback payments (1)
|
|
0.2
|
|
|
0.6
|
%
|
|
0.8
|
|
|
0.7
|
%
|
(1)
|
We have reclassified related party transactions to reflect the June 2016 sale of certain affiliated Dealers by our founder, significant shareholder and former Chairman of the Board.
|
(2)
|
Represents advances paid to Dealers on Consumer Loans assigned under our Portfolio Program and one-time payments made to Dealers to purchase Consumer Loans assigned under our Purchase Program.
|
|
For the Three Months Ended
September 30, |
|
For the Nine Months Ended
September 30, |
||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||
U.S. federal statutory rate
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
State income taxes
|
1.9
|
%
|
|
1.7
|
%
|
|
1.8
|
%
|
|
1.8
|
%
|
Excess tax benefits from stock-based compensation plans
|
—
|
%
|
|
—
|
%
|
|
-0.5
|
%
|
|
—
|
%
|
Other
|
0.2
|
%
|
|
0.4
|
%
|
|
0.2
|
%
|
|
0.3
|
%
|
Effective tax rate
|
37.1
|
%
|
|
37.1
|
%
|
|
36.5
|
%
|
|
37.1
|
%
|
|
For the Three Months Ended
September 30, |
|
For the Nine Months Ended
September 30, |
||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
||||
Common shares
|
19,150,749
|
|
|
20,159,197
|
|
|
19,277,014
|
|
|
20,116,250
|
|
Vested restricted stock units
|
256,595
|
|
|
220,360
|
|
|
251,161
|
|
|
281,787
|
|
Basic number of weighted average shares outstanding
|
19,407,344
|
|
|
20,379,557
|
|
|
19,528,175
|
|
|
20,398,037
|
|
Dilutive effect of restricted stock and restricted stock units
|
8,201
|
|
|
5,067
|
|
|
19,499
|
|
|
17,944
|
|
Dilutive number of weighted average shares outstanding
|
19,415,545
|
|
|
20,384,624
|
|
|
19,547,674
|
|
|
20,415,981
|
|
(Dollars in millions)
|
|
For the Nine Months Ended September 30,
|
||||||||||||
|
|
2017
|
|
2016
|
||||||||||
Stock Repurchases
|
|
Number of Shares Repurchased
|
|
Cost
|
|
Number of Shares Repurchased
|
|
Cost
|
||||||
Open Market (1)
|
|
588,580
|
|
|
$
|
119.1
|
|
|
45,300
|
|
|
$
|
7.6
|
|
Other (2)
|
|
21,680
|
|
|
4.4
|
|
|
170,668
|
|
|
33.2
|
|
||
Total
|
|
610,260
|
|
|
$
|
123.5
|
|
|
215,968
|
|
|
$
|
40.8
|
|
(1)
|
Represents repurchases under authorizations by the board of directors for the repurchase of shares by us from time to time in the open market or in privately negotiated transactions. On February 13, 2017, the board of directors authorized the repurchase of up to
one million
shares of our common stock in addition to the board’s prior authorizations. As of
September 30, 2017
, we had authorization to repurchase
776,208
shares of our common stock.
|
(2)
|
Represents shares of common stock released to us by team members as payment of tax withholdings upon the vesting of restricted stock and restricted stock units and the conversion of restricted stock units to common stock.
|
(In millions)
|
|
For the Three Months Ended
September 30, |
|
For the Nine Months Ended
September 30, |
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Restricted stock
|
|
$
|
0.8
|
|
|
$
|
0.7
|
|
|
$
|
2.2
|
|
|
$
|
2.1
|
|
Restricted stock units
|
|
2.1
|
|
|
1.1
|
|
|
6.1
|
|
|
3.5
|
|
||||
Total
|
|
$
|
2.9
|
|
|
$
|
1.8
|
|
|
$
|
8.3
|
|
|
$
|
5.6
|
|
|
|
Forecasted Collection Percentage as of (1)
|
|
Current Forecast Variance from
|
|||||||||||||||||
Consumer Loan Assignment Year
|
|
September 30, 2017
|
|
June 30, 2017
|
|
December 31, 2016
|
|
Initial Forecast
|
|
June 30, 2017
|
|
December 31, 2016
|
|
Initial Forecast
|
|||||||
2008
|
|
70.5
|
%
|
|
70.5
|
%
|
|
70.4
|
%
|
|
69.7
|
%
|
|
0.0
|
%
|
|
0.1
|
%
|
|
0.8
|
%
|
2009
|
|
79.5
|
%
|
|
79.5
|
%
|
|
79.4
|
%
|
|
71.9
|
%
|
|
0.0
|
%
|
|
0.1
|
%
|
|
7.6
|
%
|
2010
|
|
77.6
|
%
|
|
77.6
|
%
|
|
77.6
|
%
|
|
73.6
|
%
|
|
0.0
|
%
|
|
0.0
|
%
|
|
4.0
|
%
|
2011
|
|
74.7
|
%
|
|
74.8
|
%
|
|
74.7
|
%
|
|
72.5
|
%
|
|
-0.1
|
%
|
|
0.0
|
%
|
|
2.2
|
%
|
2012
|
|
73.8
|
%
|
|
73.8
|
%
|
|
73.7
|
%
|
|
71.4
|
%
|
|
0.0
|
%
|
|
0.1
|
%
|
|
2.4
|
%
|
2013
|
|
73.5
|
%
|
|
73.5
|
%
|
|
73.4
|
%
|
|
72.0
|
%
|
|
0.0
|
%
|
|
0.1
|
%
|
|
1.5
|
%
|
2014
|
|
71.7
|
%
|
|
71.7
|
%
|
|
71.8
|
%
|
|
71.8
|
%
|
|
0.0
|
%
|
|
-0.1
|
%
|
|
-0.1
|
%
|
2015
|
|
65.5
|
%
|
|
65.7
|
%
|
|
66.1
|
%
|
|
67.7
|
%
|
|
-0.2
|
%
|
|
-0.6
|
%
|
|
-2.2
|
%
|
2016
|
|
64.9
|
%
|
|
65.1
|
%
|
|
65.1
|
%
|
|
65.4
|
%
|
|
-0.2
|
%
|
|
-0.2
|
%
|
|
-0.5
|
%
|
2017 (2)
|
|
65.5
|
%
|
|
65.5
|
%
|
|
—
|
|
|
64.1
|
%
|
|
0.0
|
%
|
|
—
|
|
|
1.4
|
%
|
(1)
|
Represents the total forecasted collections we expect to collect on the Consumer Loans as a percentage of the repayments that we were contractually owed on the Consumer Loans at the time of assignment. Contractual repayments include both principal and interest. Forecasted collection rates are negatively impacted by canceled Consumer Loans as the contractual amount owed is not removed from the denominator for purposes of computing forecasted collection rates in the table.
|
(2)
|
The forecasted collection rate for 2017 Consumer Loans as of September 30, 2017 includes both Consumer Loans that were in our portfolio as of June 30, 2017 and Consumer Loans assigned during the most recent quarter. The following table provides forecasted collection rates for each of these segments:
|
|
|
Forecasted Collection Percentage as of
|
|
Current Forecast Variance from
|
|||||||||||
2017 Consumer Loan Assignment Period
|
|
September 30, 2017
|
|
June 30, 2017
|
|
Initial Forecast
|
|
June 30, 2017
|
|
Initial Forecast
|
|||||
January 1, 2017 through June 30, 2017
|
|
65.6
|
%
|
|
65.5
|
%
|
|
64.2
|
%
|
|
0.1
|
%
|
|
1.4
|
%
|
July 1, 2017 through September 30, 2017
|
|
65.3
|
%
|
|
—
|
|
|
63.9
|
%
|
|
—
|
|
|
1.4
|
%
|
(In millions)
|
|
For the Three Months Ended
September 30, |
|
For the Nine Months Ended
September 30, |
||||||||||||
Increase (decrease) in forecasted net cash flows
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Dealer Loans
|
|
$
|
(1.9
|
)
|
|
$
|
(7.6
|
)
|
|
$
|
(6.8
|
)
|
|
$
|
(21.1
|
)
|
Purchased Loans
|
|
7.4
|
|
|
1.6
|
|
|
29.2
|
|
|
14.9
|
|
||||
Total Loans
|
|
$
|
5.5
|
|
|
$
|
(6.0
|
)
|
|
$
|
22.4
|
|
|
$
|
(6.2
|
)
|
|
|
Average
|
||||||||
Consumer Loan Assignment Year
|
|
Consumer Loan (1)
|
|
Advance (2)
|
|
Initial Loan Term (in months)
|
||||
2008
|
|
$
|
14,518
|
|
|
$
|
6,479
|
|
|
42
|
2009
|
|
12,689
|
|
|
5,565
|
|
|
38
|
||
2010
|
|
14,480
|
|
|
6,473
|
|
|
41
|
||
2011
|
|
15,686
|
|
|
7,137
|
|
|
46
|
||
2012
|
|
15,468
|
|
|
7,165
|
|
|
47
|
||
2013
|
|
15,445
|
|
|
7,344
|
|
|
47
|
||
2014
|
|
15,692
|
|
|
7,492
|
|
|
47
|
||
2015
|
|
16,354
|
|
|
7,272
|
|
|
50
|
||
2016
|
|
18,218
|
|
|
7,976
|
|
|
53
|
||
2017 (3)
|
|
19,882
|
|
|
8,586
|
|
|
54
|
(1)
|
Represents the repayments that we were contractually owed on Consumer Loans at the time of assignment, which include both principal and interest.
|
(2)
|
Represents advances paid to Dealers on Consumer Loans assigned under our Portfolio Program and one-time payments made to Dealers to purchase Consumer Loans assigned under our Purchase Program. Payments of Dealer Holdback and accelerated Dealer Holdback are not included.
|
(3)
|
The averages for 2017 Consumer Loans include both Consumer Loans that were in our portfolio as of June 30, 2017 and Consumer Loans assigned during the most recent quarter. The following table provides averages for each of these segments:
|
|
|
Average
|
||||||||
2017 Consumer Loan Assignment Period
|
|
Consumer Loan
|
|
Advance
|
|
Initial Loan Term (in months)
|
||||
January 1, 2017 through June 30, 2017
|
|
$
|
19,672
|
|
|
$
|
8,496
|
|
|
54
|
July 1, 2017 through September 30, 2017
|
|
20,340
|
|
|
8,781
|
|
|
55
|
|
|
As of September 30, 2017
|
||||||||||
Consumer Loan Assignment Year
|
|
Forecasted Collection %
|
|
Advance % (1)
|
|
Spread %
|
|
% of Forecast Realized (2)
|
||||
2008
|
|
70.5
|
%
|
|
44.6
|
%
|
|
25.9
|
%
|
|
99.7
|
%
|
2009
|
|
79.5
|
%
|
|
43.9
|
%
|
|
35.6
|
%
|
|
99.7
|
%
|
2010
|
|
77.6
|
%
|
|
44.7
|
%
|
|
32.9
|
%
|
|
99.4
|
%
|
2011
|
|
74.7
|
%
|
|
45.5
|
%
|
|
29.2
|
%
|
|
98.7
|
%
|
2012
|
|
73.8
|
%
|
|
46.3
|
%
|
|
27.5
|
%
|
|
98.0
|
%
|
2013
|
|
73.5
|
%
|
|
47.6
|
%
|
|
25.9
|
%
|
|
95.0
|
%
|
2014
|
|
71.7
|
%
|
|
47.7
|
%
|
|
24.0
|
%
|
|
86.3
|
%
|
2015
|
|
65.5
|
%
|
|
44.5
|
%
|
|
21.0
|
%
|
|
68.2
|
%
|
2016
|
|
64.9
|
%
|
|
43.8
|
%
|
|
21.1
|
%
|
|
40.9
|
%
|
2017 (3)
|
|
65.5
|
%
|
|
43.2
|
%
|
|
22.3
|
%
|
|
11.5
|
%
|
(1)
|
Represents advances paid to Dealers on Consumer Loans assigned under our Portfolio Program and one-time payments made to Dealers to purchase Consumer Loans assigned under our Purchase Program as a percentage of the initial balance of the Consumer Loans. Payments of Dealer Holdback and accelerated Dealer Holdback are not included.
|
(2)
|
Presented as a percentage of total forecasted collections.
|
(3)
|
The forecasted collection rate, advance rate and spread for 2017 Consumer Loans as of September 30, 2017 include both Consumer Loans that were in our portfolio as of June 30, 2017 and Consumer Loans assigned during the most recent quarter. The following table provides forecasted collection rates, advance rates and spreads for each of these segments:
|
|
|
As of September 30, 2017
|
|||||||
2017 Consumer Loan Assignment Period
|
|
Forecasted
Collection %
|
|
Advance %
|
|
Spread %
|
|||
January 1, 2017 through June 30, 2017
|
|
65.6
|
%
|
|
43.2
|
%
|
|
22.4
|
%
|
July 1, 2017 through September 30, 2017
|
|
65.3
|
%
|
|
43.2
|
%
|
|
22.1
|
%
|
|
|
Dealer Loans
|
|
Purchased Loans
|
||||||||||||||
|
|
Forecasted Collection Percentage as of
|
|
|
|
Forecasted Collection Percentage as of
|
|
|
||||||||||
Consumer Loan Assignment Year
|
|
September 30, 2017
|
|
Initial
Forecast |
|
Variance
|
|
September 30, 2017
|
|
Initial
Forecast |
|
Variance
|
||||||
2008
|
|
70.9
|
%
|
|
70.2
|
%
|
|
0.7
|
%
|
|
69.8
|
%
|
|
68.8
|
%
|
|
1.0
|
%
|
2009
|
|
79.4
|
%
|
|
72.1
|
%
|
|
7.3
|
%
|
|
79.6
|
%
|
|
70.5
|
%
|
|
9.1
|
%
|
2010
|
|
77.7
|
%
|
|
73.6
|
%
|
|
4.1
|
%
|
|
77.5
|
%
|
|
73.1
|
%
|
|
4.4
|
%
|
2011
|
|
74.7
|
%
|
|
72.4
|
%
|
|
2.3
|
%
|
|
75.2
|
%
|
|
72.7
|
%
|
|
2.5
|
%
|
2012
|
|
73.8
|
%
|
|
71.3
|
%
|
|
2.5
|
%
|
|
74.0
|
%
|
|
71.4
|
%
|
|
2.6
|
%
|
2013
|
|
73.5
|
%
|
|
72.1
|
%
|
|
1.4
|
%
|
|
73.1
|
%
|
|
71.6
|
%
|
|
1.5
|
%
|
2014
|
|
71.6
|
%
|
|
71.9
|
%
|
|
-0.3
|
%
|
|
72.5
|
%
|
|
70.9
|
%
|
|
1.6
|
%
|
2015
|
|
64.8
|
%
|
|
67.5
|
%
|
|
-2.7
|
%
|
|
69.7
|
%
|
|
68.5
|
%
|
|
1.2
|
%
|
2016
|
|
64.0
|
%
|
|
65.1
|
%
|
|
-1.1
|
%
|
|
67.6
|
%
|
|
66.5
|
%
|
|
1.1
|
%
|
2017
|
|
64.9
|
%
|
|
63.8
|
%
|
|
1.1
|
%
|
|
67.0
|
%
|
|
64.7
|
%
|
|
2.3
|
%
|
|
|
Dealer Loans
|
|
Purchased Loans
|
||||||||||||||
Consumer Loan Assignment Year
|
|
Forecasted Collection % (1)
|
|
Advance % (1)(2)
|
|
Spread %
|
|
Forecasted Collection % (1)
|
|
Advance % (1)(2)
|
|
Spread %
|
||||||
2008
|
|
70.9
|
%
|
|
43.3
|
%
|
|
27.6
|
%
|
|
69.8
|
%
|
|
46.7
|
%
|
|
23.1
|
%
|
2009
|
|
79.4
|
%
|
|
43.4
|
%
|
|
36.0
|
%
|
|
79.6
|
%
|
|
45.3
|
%
|
|
34.3
|
%
|
2010
|
|
77.7
|
%
|
|
44.4
|
%
|
|
33.3
|
%
|
|
77.5
|
%
|
|
46.2
|
%
|
|
31.3
|
%
|
2011
|
|
74.7
|
%
|
|
45.2
|
%
|
|
29.5
|
%
|
|
75.2
|
%
|
|
47.4
|
%
|
|
27.8
|
%
|
2012
|
|
73.8
|
%
|
|
46.1
|
%
|
|
27.7
|
%
|
|
74.0
|
%
|
|
47.6
|
%
|
|
26.4
|
%
|
2013
|
|
73.5
|
%
|
|
47.1
|
%
|
|
26.4
|
%
|
|
73.1
|
%
|
|
49.7
|
%
|
|
23.4
|
%
|
2014
|
|
71.6
|
%
|
|
47.2
|
%
|
|
24.4
|
%
|
|
72.5
|
%
|
|
51.2
|
%
|
|
21.3
|
%
|
2015
|
|
64.8
|
%
|
|
43.4
|
%
|
|
21.4
|
%
|
|
69.7
|
%
|
|
50.0
|
%
|
|
19.7
|
%
|
2016
|
|
64.0
|
%
|
|
42.1
|
%
|
|
21.9
|
%
|
|
67.6
|
%
|
|
48.5
|
%
|
|
19.1
|
%
|
2017
|
|
64.9
|
%
|
|
42.0
|
%
|
|
22.9
|
%
|
|
67.0
|
%
|
|
46.0
|
%
|
|
21.0
|
%
|
(1)
|
The forecasted collection rates and advance rates presented for each Consumer Loan assignment year change over time due to the impact of transfers between Dealer and Purchased Loans. Under our Portfolio Program, certain events may result in Dealers forfeiting their rights to Dealer Holdback. We transfer the Dealer’s Consumer Loans from the Dealer Loan portfolio to the Purchased Loan portfolio in the period this forfeiture occurs.
|
(2)
|
Represents advances paid to Dealers on Consumer Loans assigned under our Portfolio Program and one-time payments made to Dealers to purchase Consumer Loans assigned under our Purchase Program as a percentage of the initial balance of the Consumer Loans. Payments of Dealer Holdback and accelerated Dealer Holdback are not included.
|
|
|
Year over Year Percent Change
|
||||
Three Months Ended
|
|
Unit Volume
|
|
Dollar Volume (1)
|
||
March 31, 2016
|
|
21.1
|
%
|
|
18.8
|
%
|
June 30, 2016
|
|
15.1
|
%
|
|
27.6
|
%
|
September 30, 2016
|
|
12.0
|
%
|
|
33.4
|
%
|
December 31, 2016
|
|
-5.6
|
%
|
|
7.8
|
%
|
March 31, 2017
|
|
-6.6
|
%
|
|
6.4
|
%
|
June 30, 2017
|
|
1.0
|
%
|
|
7.1
|
%
|
September 30, 2017
|
|
-4.7
|
%
|
|
-0.5
|
%
|
(1)
|
Represents advances paid to Dealers on Consumer Loans assigned under our Portfolio Program and one-time payments made to Dealers to purchase Consumer Loans assigned under our Purchase Program. Payments of Dealer Holdback and accelerated Dealer Holdback are not included.
|
|
For the Three Months Ended September 30,
|
|
For the Nine Months Ended September 30,
|
||||||||||||||
|
2017
|
|
2016
|
|
% Change
|
|
2017
|
|
2016
|
|
% Change
|
||||||
Consumer Loan unit volume
|
78,589
|
|
|
82,460
|
|
|
-4.7
|
%
|
|
250,715
|
|
|
260,531
|
|
|
-3.8
|
%
|
Active Dealers (1)
|
7,737
|
|
|
7,320
|
|
|
5.7
|
%
|
|
10,484
|
|
|
9,646
|
|
|
8.7
|
%
|
Average volume per active Dealer
|
10.2
|
|
|
11.3
|
|
|
-9.7
|
%
|
|
23.9
|
|
|
27.0
|
|
|
-11.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Consumer Loan unit volume from Dealers active both periods
|
57,354
|
|
|
62,884
|
|
|
-8.8
|
%
|
|
204,255
|
|
|
227,345
|
|
|
-10.2
|
%
|
Dealers active both periods
|
4,551
|
|
|
4,551
|
|
|
—
|
|
|
6,721
|
|
|
6,721
|
|
|
—
|
|
Average volume per Dealers active both periods
|
12.6
|
|
|
13.8
|
|
|
-8.8
|
%
|
|
30.4
|
|
|
33.8
|
|
|
-10.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Consumer Loan unit volume from Dealers
not
active both periods
|
21,235
|
|
|
19,576
|
|
|
8.5
|
%
|
|
46,460
|
|
|
33,186
|
|
|
40.0
|
%
|
Dealers
not
active both periods
|
3,186
|
|
|
2,769
|
|
|
15.1
|
%
|
|
3,763
|
|
|
2,925
|
|
|
28.6
|
%
|
Average volume per Dealers
not
active both periods
|
6.7
|
|
|
7.1
|
|
|
-5.6
|
%
|
|
12.3
|
|
|
11.3
|
|
|
8.8
|
%
|
(1)
|
Active Dealers are Dealers who have received funding for at least one Consumer Loan during the period.
|
|
For the Three Months Ended September 30,
|
|
For the Nine Months Ended September 30,
|
||||||||||||||
|
2017
|
|
2016
|
|
% Change
|
|
2017
|
|
2016
|
|
% Change
|
||||||
Consumer Loan unit volume from new Dealers
|
4,063
|
|
|
3,506
|
|
|
15.9
|
%
|
|
29,409
|
|
|
30,330
|
|
|
-3.0
|
%
|
New active Dealers (1)
|
946
|
|
|
794
|
|
|
19.1
|
%
|
|
2,821
|
|
|
2,636
|
|
|
7.0
|
%
|
Average volume per new active Dealers
|
4.3
|
|
|
4.4
|
|
|
-2.3
|
%
|
|
10.4
|
|
|
11.5
|
|
|
-9.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Attrition (2)
|
-23.7
|
%
|
|
-18.4
|
%
|
|
|
|
|
-12.7
|
%
|
|
-10.0
|
%
|
|
|
(1)
|
New active Dealers are Dealers who enrolled in our program and have received funding for their first Loan from us during the period.
|
(2)
|
Attrition is measured according to the following formula: decrease in Consumer Loan unit volume from Dealers who have received funding for at least one Loan during the comparable period of the prior year but did not receive funding for any Loans during the current period divided by prior year comparable period Consumer Loan unit volume.
|
|
|
Unit Volume
|
|
Dollar Volume (1)
|
||||||||
Three Months Ended
|
|
Dealer Loans
|
|
Purchased Loans
|
|
Dealer Loans
|
|
Purchased Loans
|
||||
March 31, 2016
|
|
82.4
|
%
|
|
17.6
|
%
|
|
75.6
|
%
|
|
24.4
|
%
|
June 30, 2016
|
|
77.8
|
%
|
|
22.2
|
%
|
|
69.8
|
%
|
|
30.2
|
%
|
September 30, 2016
|
|
76.2
|
%
|
|
23.8
|
%
|
|
68.5
|
%
|
|
31.5
|
%
|
December 31, 2016
|
|
76.9
|
%
|
|
23.1
|
%
|
|
71.1
|
%
|
|
28.9
|
%
|
March 31, 2017
|
|
73.3
|
%
|
|
26.7
|
%
|
|
67.8
|
%
|
|
32.2
|
%
|
June 30, 2017
|
|
72.3
|
%
|
|
27.7
|
%
|
|
67.9
|
%
|
|
32.1
|
%
|
September 30, 2017
|
|
71.9
|
%
|
|
28.1
|
%
|
|
68.6
|
%
|
|
31.4
|
%
|
(1)
|
Represents advances paid to Dealers on Consumer Loans assigned under our Portfolio Program and one-time payments made to Dealers to purchase Consumer Loans assigned under our Purchase Program. Payments of Dealer Holdback and accelerated Dealer Holdback are not included.
|
(Dollars in millions, except per share data)
|
For the Three Months Ended
September 30, |
|||||||||||||
|
2017
|
|
2016
|
|
Change
|
|
% Change
|
|||||||
Revenue:
|
|
|
|
|
|
|
|
|||||||
Finance charges
|
$
|
259.4
|
|
|
$
|
223.9
|
|
|
$
|
35.5
|
|
|
15.9
|
%
|
Premiums earned
|
10.3
|
|
|
10.7
|
|
|
(0.4
|
)
|
|
-3.7
|
%
|
|||
Other income
|
14.2
|
|
|
12.0
|
|
|
2.2
|
|
|
18.3
|
%
|
|||
Total revenue
|
283.9
|
|
|
246.6
|
|
|
37.3
|
|
|
15.1
|
%
|
|||
Costs and expenses:
|
|
|
|
|
|
|
|
|||||||
Salaries and wages (1)
|
33.7
|
|
|
32.4
|
|
|
1.3
|
|
|
4.0
|
%
|
|||
General and administrative (1)
|
14.2
|
|
|
11.0
|
|
|
3.2
|
|
|
29.1
|
%
|
|||
Sales and marketing (1)
|
14.2
|
|
|
12.2
|
|
|
2.0
|
|
|
16.4
|
%
|
|||
Provision for credit losses
|
25.7
|
|
|
22.8
|
|
|
2.9
|
|
|
12.7
|
%
|
|||
Interest
|
30.5
|
|
|
25.1
|
|
|
5.4
|
|
|
21.5
|
%
|
|||
Provision for claims
|
5.5
|
|
|
6.6
|
|
|
(1.1
|
)
|
|
-16.7
|
%
|
|||
Total costs and expenses
|
123.8
|
|
|
110.1
|
|
|
13.7
|
|
|
12.4
|
%
|
|||
Income before provision for income taxes
|
160.1
|
|
|
136.5
|
|
|
23.6
|
|
|
17.3
|
%
|
|||
Provision for income taxes
|
59.4
|
|
|
50.6
|
|
|
8.8
|
|
|
17.4
|
%
|
|||
Net income
|
$
|
100.7
|
|
|
$
|
85.9
|
|
|
$
|
14.8
|
|
|
17.2
|
%
|
Net income per share:
|
|
|
|
|
|
|
|
|||||||
Basic
|
$
|
5.19
|
|
|
$
|
4.22
|
|
|
$
|
0.97
|
|
|
23.0
|
%
|
Diluted
|
$
|
5.19
|
|
|
$
|
4.21
|
|
|
$
|
0.98
|
|
|
23.3
|
%
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|||||||
Basic
|
19,407,344
|
|
|
20,379,557
|
|
|
(972,213
|
)
|
|
-4.8
|
%
|
|||
Diluted
|
19,415,545
|
|
|
20,384,624
|
|
|
(969,079
|
)
|
|
-4.8
|
%
|
|||
|
|
|
|
|
|
|
|
|||||||
(1) Operating expenses
|
$
|
62.1
|
|
|
$
|
55.6
|
|
|
$
|
6.5
|
|
|
11.7
|
%
|
(Dollars in millions)
|
For the Three Months Ended September 30,
|
||||||||||
|
2017
|
|
2016
|
|
Change
|
||||||
Average net Loans receivable balance
|
$
|
4,365.8
|
|
|
$
|
3,653.6
|
|
|
$
|
712.2
|
|
Average yield on our Loan portfolio
|
23.8
|
%
|
|
24.5
|
%
|
|
-0.7
|
%
|
(In millions)
|
Year over Year Change
|
||
Impact on finance charges:
|
For the Three Months Ended September 30, 2017
|
||
Due to an increase in the average net Loans receivable balance
|
$
|
43.6
|
|
Due to a decrease in the average yield
|
(8.1
|
)
|
|
Total increase in finance charges
|
$
|
35.5
|
|
•
|
An increase in general and administrative expense of
$3.2 million
, or
29.1%
, primarily as a result of an increase in legal fees.
|
•
|
An increase in sales and marketing expense of
$2.0 million
, or
16.4%
, primarily due to an increase in the size of our sales force.
|
•
|
An increase in salaries and wages expense of
$1.3 million
, or
4.0%
, primarily related to our servicing function as a result of an increase in the number of team members.
|
(Dollars in millions)
|
For the Three Months Ended September 30,
|
||||||||||
|
2017
|
|
2016
|
|
Change
|
||||||
Interest expense
|
$
|
30.5
|
|
|
$
|
25.1
|
|
|
$
|
5.4
|
|
Average outstanding debt principal balance (1)
|
2,997.8
|
|
|
2,513.0
|
|
|
484.8
|
|
|||
Average cost of debt
|
4.1
|
%
|
|
4.0
|
%
|
|
0.1
|
%
|
(1)
|
Includes the unamortized debt discount and excludes deferred debt issuance costs.
|
(Dollars in millions, except per share data)
|
For the Nine Months Ended
September 30, |
|||||||||||||
|
2017
|
|
2016
|
|
Change
|
|
% Change
|
|||||||
Revenue:
|
|
|
|
|
|
|
|
|||||||
Finance charges
|
$
|
749.2
|
|
|
$
|
641.9
|
|
|
107.3
|
|
|
16.7
|
%
|
|
Premiums earned
|
30.9
|
|
|
32.4
|
|
|
(1.5
|
)
|
|
-4.6
|
%
|
|||
Other income
|
42.6
|
|
|
38.7
|
|
|
3.9
|
|
|
10.1
|
%
|
|||
Total revenue
|
822.7
|
|
|
713.0
|
|
|
109.7
|
|
|
15.4
|
%
|
|||
Costs and expenses:
|
|
|
|
|
|
|
|
|||||||
Salaries and wages (1)
|
101.9
|
|
|
95.2
|
|
|
6.7
|
|
|
7.0
|
%
|
|||
General and administrative (1)
|
42.1
|
|
|
35.7
|
|
|
6.4
|
|
|
17.9
|
%
|
|||
Sales and marketing (1)
|
43.7
|
|
|
37.8
|
|
|
5.9
|
|
|
15.6
|
%
|
|||
Provision for credit losses
|
68.0
|
|
|
62.8
|
|
|
5.2
|
|
|
8.3
|
%
|
|||
Interest
|
88.0
|
|
|
71.5
|
|
|
16.5
|
|
|
23.1
|
%
|
|||
Provision for claims
|
17.6
|
|
|
20.4
|
|
|
(2.8
|
)
|
|
-13.7
|
%
|
|||
Total costs and expenses
|
361.3
|
|
|
323.4
|
|
|
37.9
|
|
|
11.7
|
%
|
|||
Income before provision for income taxes
|
461.4
|
|
|
389.6
|
|
|
71.8
|
|
|
18.4
|
%
|
|||
Provision for income taxes
|
168.3
|
|
|
144.4
|
|
|
23.9
|
|
|
16.6
|
%
|
|||
Net income
|
$
|
293.1
|
|
|
$
|
245.2
|
|
|
$
|
47.9
|
|
|
19.5
|
%
|
Net income per share:
|
|
|
|
|
|
|
|
|||||||
Basic
|
$
|
15.01
|
|
|
$
|
12.02
|
|
|
$
|
2.99
|
|
|
24.9
|
%
|
Diluted
|
$
|
14.99
|
|
|
$
|
12.01
|
|
|
$
|
2.98
|
|
|
24.8
|
%
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|||||||
Basic
|
19,528,175
|
|
|
20,398,037
|
|
|
(869,862
|
)
|
|
-4.3
|
%
|
|||
Diluted
|
19,547,674
|
|
|
20,415,981
|
|
|
(868,307
|
)
|
|
-4.3
|
%
|
|||
|
|
|
|
|
|
|
|
|||||||
(1) Operating expenses
|
$
|
187.7
|
|
|
$
|
168.7
|
|
|
19.0
|
|
|
11.3
|
%
|
(Dollars in millions)
|
For the Nine Months Ended September 30,
|
||||||||||
|
2017
|
|
2016
|
|
Change
|
||||||
Average net Loans receivable balance
|
$
|
4,184.3
|
|
|
$
|
3,436.2
|
|
|
$
|
748.1
|
|
Average yield on our Loan portfolio
|
23.9
|
%
|
|
24.9
|
%
|
|
-1.0
|
%
|
(In millions)
|
Year over Year Change
|
||
Impact on finance charges:
|
For the Nine Months Ended September 30, 2017
|
||
Due to an increase in the average net Loans receivable balance
|
$
|
139.7
|
|
Due to a decrease in the average yield
|
(32.4
|
)
|
|
Total increase in finance charges
|
$
|
107.3
|
|
•
|
An increase in salaries and wages expense of
$6.7 million
, or
7.0%
, primarily related to our servicing function as a result of an increase in the number of team members.
|
•
|
An increase in general and administrative expense of
$6.4 million
, or
17.9%
, primarily as a result of an increase in legal fees.
|
•
|
An increase in sales and marketing expense of
$5.9 million
, or
15.6%
, primarily due to an increase in the size of our sales force.
|
(Dollars in millions)
|
For the Nine Months Ended September 30,
|
||||||||||
|
2017
|
|
2016
|
|
Change
|
||||||
Interest expense
|
$
|
88.0
|
|
|
$
|
71.5
|
|
|
$
|
16.5
|
|
Average outstanding debt principal balance (1)
|
2,890.8
|
|
|
2,395.1
|
|
|
495.7
|
|
|||
Average cost of debt
|
4.1
|
%
|
|
4.0
|
%
|
|
0.1
|
%
|
(1)
|
Includes the unamortized debt discount and excludes deferred debt issuance costs.
|
(In millions)
|
|
|
||
Year
|
|
Scheduled Principal Debt Maturities (1)
|
||
Remainder of 2017
|
|
$
|
174.7
|
|
2018
|
|
818.4
|
|
|
2019
|
|
1,023.5
|
|
|
2020
|
|
453.6
|
|
|
2021
|
|
300.0
|
|
|
Over five years
|
|
250.0
|
|
|
Total
|
|
$
|
3,020.2
|
|
(1)
|
The principal maturities of certain financings are estimated based on forecasted collections.
|
•
|
Our inability to accurately forecast and estimate the amount and timing of future collections could have a material adverse effect on results of operations.
|
•
|
We may be unable to execute our business strategy due to current economic conditions.
|
•
|
We may be unable to continue to access or renew funding sources and obtain capital needed to maintain and grow our business.
|
•
|
The terms of our debt limit how we conduct our business.
|
•
|
A violation of the terms of our Term ABS facilities or Warehouse facilities could have a material adverse impact on our operations.
|
•
|
The conditions of the U.S. and international capital markets may adversely affect lenders with which we have relationships, causing us to incur additional costs and reducing our sources of liquidity, which may adversely affect our financial position, liquidity and results of operations.
|
•
|
Our substantial debt could negatively impact our business, prevent us from satisfying our debt obligations and adversely affect our financial condition.
|
•
|
Due to competition from traditional financing sources and non-traditional lenders, we may not be able to compete successfully.
|
•
|
We may not be able to generate sufficient cash flows to service our outstanding debt and fund operations and may be forced to take other actions to satisfy our obligations under such debt.
|
•
|
Interest rate fluctuations may adversely affect our borrowing costs, profitability and liquidity.
|
•
|
Reduction in our credit rating could increase the cost of our funding from, and restrict our access to, the capital markets and adversely affect our liquidity, financial condition and results of operations.
|
•
|
We may incur substantially more debt and other liabilities. This could exacerbate further the risks associated with our current debt levels.
|
•
|
The regulation to which we are or may become subject could result in a material adverse effect on our business.
|
•
|
Adverse changes in economic conditions, the automobile or finance industries, or the non-prime consumer market could adversely affect our financial position, liquidity and results of operations, the ability of key vendors that we depend on to supply us with services, and our ability to enter into future financing transactions.
|
•
|
Litigation we are involved in from time to time may adversely affect our financial condition, results of operations and cash flows.
|
•
|
Changes in tax laws and the resolution of uncertain income tax matters could have a material adverse effect on our results of operations and cash flows from operations.
|
•
|
Our dependence on technology could have a material adverse effect on our business.
|
•
|
Our use of electronic contracts could impact our ability to perfect our ownership or security interest in Consumer Loans.
|
•
|
Reliance on third parties to administer our ancillary product offerings could adversely affect our business and financial results.
|
•
|
We are dependent on our senior management and the loss of any of these individuals or an inability to hire additional team members could adversely affect our ability to operate profitably.
|
•
|
Our reputation is a key asset to our business, and our business may be affected by how we are perceived in the marketplace.
|
•
|
The concentration of our Dealers in several states could adversely affect us.
|
•
|
Failure to properly safeguard confidential consumer and team member information could subject us to liability, decrease our profitability and damage our reputation.
|
•
|
A small number of our shareholders have the ability to significantly influence matters requiring shareholder approval and such shareholders have interests which may conflict with the interests of our other security holders.
|
•
|
Reliance on our outsourced business functions could adversely affect our business.
|
•
|
Our ability to hire and retain foreign information technology personnel could be hindered by immigration restrictions.
|
•
|
Natural disasters, acts of war, terrorist attacks and threats or the escalation of military activity in response to these attacks or otherwise may negatively affect our business, financial condition and results of operations.
|
|
|
|
Exhibit
No.
|
|
Description
|
|
Indenture dated as of February 23, 2017, between Credit Acceptance Auto Loan Trust 2017-1 and Wells Fargo Bank, National Association (incorporated by reference to an exhibit to the Company’s Current Report on Form 8-K, dated February 23, 2017).
|
|
|
Sale and Servicing Agreement dated as of February 23, 2017 among the Company, Credit Acceptance Auto Loan Trust 2017-1, Credit Acceptance Funding LLC 2017-1, and Wells Fargo Bank, National Association (incorporated by reference to an exhibit to the Company’s Current Report on Form 8-K, dated February 23, 2017).
|
|
|
Backup Servicing Agreement dated as of February 23, 2017, among the Company, Credit Acceptance Funding LLC 2017-1, Credit Acceptance Auto Loan Trust 2017-1, and Wells Fargo Bank, National Association (incorporated by reference to an exhibit to the Company’s Current Report on Form 8-K, dated February 23, 2017).
|
|
|
Amended and Restated Trust Agreement dated as of February 23, 2017, between Credit Acceptance Funding LLC 2017-1 and U.S. Bank Trust National Association (incorporated by reference to an exhibit to the Company’s Current Report on Form 8-K, dated February 23, 2017).
|
|
|
Sale and Contribution Agreement dated as of February 23, 2017, between the Company and Credit Acceptance Funding LLC 2017-1(incorporated by reference to an exhibit to the Company’s Current Report on Form 8-K, dated February 23, 2017).
|
|
|
Amended and Restated Intercreditor Agreement dated February 23, 2017, among the Company, CAC Warehouse Funding Corporation II, CAC Warehouse Funding LLC IV, CAC Warehouse Funding LLC V, CAC Warehouse Funding LLC VI, Credit Acceptance Funding LLC 2017-1, Credit Acceptance Funding LLC 2016-3, Credit Acceptance Funding LLC 2016-2, Credit Acceptance Funding LLC 2016-1, Credit Acceptance Funding LLC 2015-2, Credit Acceptance Funding LLC 2015-1, Credit Acceptance Funding LLC 2014-2, Credit Acceptance Funding LLC 2014-1, Credit Acceptance Auto Loan Trust 2017-1, Credit Acceptance Auto Loan Trust 2016-3, Credit Acceptance Auto Loan Trust 2016-2, Credit Acceptance Auto Loan Trust 2015-2, Credit Acceptance Auto Loan Trust 2015-1, Credit Acceptance Auto Loan Trust 2014-2, Credit Acceptance Auto Loan Trust 2014-1, Wells Fargo Bank, National Association, as agent, Fifth Third Bank, as agent, Bank of Montreal, as agent, Flagstar Bank, FSB, as agent and Comerica Bank, as agent (incorporated by reference to an exhibit to the Company’s Current Report on Form 8-K, dated February 23, 2017).
|
|
|
Fourth Amendment to Loan and Security Agreement dated as of April 28, 2017 among the Company, CAC Warehouse Funding LLC IV, Bank of Montreal, BMO Capital Markets Corp., and Wells Fargo Bank, National Association (incorporated by reference to an exhibit to the Company’s Current Report on Form 8-K, dated April 28, 2017).
|
|
|
Third Amendment to Sixth Amended and Restated Credit Agreement and Extension Agreement dated as of June 28, 2017 among the Company, the Banks which are parties thereto from time to time, and Comerica Bank as Administrative Agent and Collateral Agent for the Banks (incorporated by reference to an exhibit to the Company’s Current Report on Form 8-K, dated June 28, 2017).
|
|
Indenture dated as of June 29, 2017, between Credit Acceptance Auto Loan Trust 2017-2 and Wells Fargo Bank, National Association (incorporated by reference to an exhibit to the Company’s Current Report on Form 8-K, dated June 29, 2017).
|
|
|
Sale and Servicing Agreement dated as of June 29, 2017 among the Company, Credit Acceptance Auto Loan Trust 2017-2, Credit Acceptance Funding LLC 2017-2, and Wells Fargo Bank, National Association (incorporated by reference to an exhibit to the Company’s Current Report on Form 8-K, dated June 29, 2017).
|
|
|
Backup Servicing Agreement dated as of June 29, 2017, among the Company, Credit Acceptance Funding LLC 2017-2, Credit Acceptance Auto Loan Trust 2017-2, and Wells Fargo Bank, National Association (incorporated by reference to an exhibit to the Company’s Current Report on Form 8-K, dated June 29, 2017).
|
|
|
Amended and Restated Trust Agreement dated as of June 29, 2017, between Credit Acceptance Funding LLC 2017-2 and U.S. Bank Trust National Association (incorporated by reference to an exhibit to the Company’s Current Report on Form 8-K, dated June 29, 2017).
|
|
|
Sale and Contribution Agreement dated as of June 29, 2017, between the Company and Credit Acceptance Funding LLC 2017-2 (incorporated by reference to an exhibit to the Company’s Current Report on Form 8-K, dated June 29, 2017).
|
|
|
Amended and Restated Intercreditor Agreement dated June 29, 2017, among the Company, CAC Warehouse Funding Corporation II, CAC Warehouse Funding LLC IV, CAC Warehouse Funding LLC V, CAC Warehouse Funding LLC VI, Credit Acceptance Funding LLC 2017-2, Credit Acceptance Funding LLC 2017-1, Credit Acceptance Funding LLC 2016-3, Credit Acceptance Funding LLC 2016-2, Credit Acceptance Funding LLC 2016-1, Credit Acceptance Funding LLC 2015-2, Credit Acceptance Funding LLC 2015-1, Credit Acceptance Funding LLC 2014-2, Credit Acceptance Auto Loan Trust 2017-2, Credit Acceptance Auto Loan Trust 2017-1, Credit Acceptance Auto Loan Trust 2016-3, Credit Acceptance Auto Loan Trust 2016-2, Credit Acceptance Auto Loan Trust 2015-2, Credit Acceptance Auto Loan Trust 2015-1, Credit Acceptance Auto Loan Trust 2014-2, Wells Fargo Bank, National Association, as agent, Fifth Third Bank, as agent, Bank of Montreal, as agent, Flagstar Bank, FSB, as agent and Comerica Bank, as agent (incorporated by reference to an exhibit to the Company’s Current Report on Form 8-K, dated June 29, 2017).
|
|
|
First Amendment to Loan and Security Agreement dated as of July 18, 2017 among the Company, CAC Warehouse Funding LLC VI and Flagstar Bank, FSB (incorporated by reference to an exhibit to the Company’s Current Report on Form 8-K, dated October 26, 2017).
|
|
|
Indenture dated as of October 26, 2017, between Credit Acceptance Auto Loan Trust 2017-3 and Wells Fargo Bank, National Association (incorporated by reference to an exhibit to the Company’s Current Report on Form 8-K, dated October 26, 2017).
|
|
|
Sale and Servicing Agreement dated as of October 26, 2017 among the Company, Credit Acceptance Auto Loan Trust 2017-3, Credit Acceptance Funding LLC 2017-3, and Wells Fargo Bank, National Association (incorporated by reference to an exhibit to the Company’s Current Report on Form 8-K, dated October 26, 2017).
|
|
|
Backup Servicing Agreement dated as of October 26, 2017, among the Company, Credit Acceptance Funding LLC 2017-3, Credit Acceptance Auto Loan Trust 2017-3, and Wells Fargo Bank, National Association (incorporated by reference to an exhibit to the Company’s Current Report on Form 8-K, dated October 26, 2017).
|
|
|
Amended and Restated Trust Agreement dated as of October 26, 2017, between Credit Acceptance Funding LLC 2017-3 and U.S. Bank Trust National Association (incorporated by reference to an exhibit to the Company’s Current Report on Form 8-K, dated October 26, 2017).
|
|
|
Sale and Contribution Agreement dated as of October 26, 2017, between the Company and Credit Acceptance Funding LLC 2017-3 (incorporated by reference to an exhibit to the Company’s Current Report on Form 8-K, dated October 26, 2017).
|
|
|
Amended and Restated Intercreditor Agreement dated October 26, 2017, among the Company, CAC Warehouse Funding Corporation II, CAC Warehouse Funding LLC IV, CAC Warehouse Funding LLC V, CAC Warehouse Funding LLC VI, Credit Acceptance Funding LLC 2017-3, Credit Acceptance Funding LLC 2017-2, Credit Acceptance Funding LLC 2017-1, Credit Acceptance Funding LLC 2016-3, Credit Acceptance Funding LLC 2016-2, Credit Acceptance Funding LLC 2016-1, Credit Acceptance Funding LLC 2015-2, Credit Acceptance Funding LLC 2015-1, Credit Acceptance Auto Loan Trust 2017-3, Credit Acceptance Auto Loan Trust 2017-2, Credit Acceptance Auto Loan Trust 2017-1, Credit Acceptance Auto Loan Trust 2016-3, Credit Acceptance Auto Loan Trust 2016-2, Credit Acceptance Auto Loan Trust 2015-2, Credit Acceptance Auto Loan Trust 2015-1, Wells Fargo Bank, National Association, as agent, Fifth Third Bank, as agent, Bank of Montreal, as agent, Flagstar Bank, FSB, as agent and Comerica Bank, as agent (incorporated by reference to an exhibit to the Company’s Current Report on Form 8-K, dated October 26, 2017).
|
|
|
New Bank Addendum to the Sixth Amended and Restated Credit Agreement dated as of October 19, 2017 among the Company, each of the Banks which are parties thereto, and Comerica Bank, as agent.
|
|
|
Assignment Agreement to the Sixth Amended and Restated Credit Agreement dated as of October 19, 2017 among the Company, the Banks signatory thereto, and Comerica Bank, as agent.
|
|
Amendment to Shareholder Agreement dated as of September 15, 2017, between Credit Acceptance Corporation and Donald A. Foss *
|
|
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
101(INS)
|
|
XBRL Instance Document.
|
101(SCH)
|
|
XBRL Taxonomy Extension Schema Document.
|
101(CAL)
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
101(DEF)
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
101(LAB)
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
101(PRE)
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
CREDIT ACCEPTANCE CORPORATION
|
|
|
|
(Registrant)
|
|
|
|
|
|
|
|
By:
|
/s/ Kenneth S. Booth
|
|
|
|
Kenneth S. Booth
|
|
|
|
Chief Financial Officer
|
|
|
|
(Principal Financial Officer and Principal Accounting Officer)
|
|
|
Date:
|
October 30, 2017
|
|
(a)
|
unless already a party thereto (and bound thereby), the New Bank (i) shall be deemed automatically to have become a party to the Credit Agreement and the other Loan
|
(b)
|
the New Bank shall be a Bank and its Percentage after giving effect to Section 2.17 of the Credit Agreement of the Revolving Credit (and its risk participation in Letters of Credit) shall be as set forth in the attached revised Schedule 1.2 (Percentages); provided any fees paid prior to the Effective Date, including any Letter of Credit Fees, shall not be recalculated, redistributed or reallocated by Company, Agent or the Banks.
|
(1)
|
the Company shall have paid to the Agent all interest, fees (including the Revolving Credit Facility Fee) and other amounts, if any, accrued prior to the Effective Date for which reimbursement is then due and payable under the Credit Agreement;
|
(2)
|
New Bank shall have remitted to the Agent funds in an amount equal to its Percentage of all Advances of the Revolving Credit outstanding as of the Effective Date;
|
(3)
|
if requested in writing by the New Bank, the Company shall have executed and delivered to the Agent for the New Bank, a new Revolving Credit Note payable to such New Bank in the face amount of such New Bank’s Percentage of the Revolving Credit Aggregate Commitment (after giving effect to this New Bank Addendum); and
|
(4)
|
the delivery to the Agent of an original of this Agreement executed by the New Bank, and acknowledged by the Company.
|
Banks
|
Revolving Credit Commitment
|
Percentage
|
|||
Comerica Bank
|
|
$55,000,000
|
|
15.7142857
|
|
Bank of America, N.A.
|
|
$35,000,000
|
|
10.0000000
|
|
Citizens Bank, N.A.
|
|
$50,000,000
|
|
14.2857143
|
|
Bank of Montreal
|
|
$40,000,000
|
|
11.4285714
|
|
Fifth Third Bank
|
|
$35,000,000
|
|
10.0000000
|
|
The Huntington National Bank
|
|
$30,000,000
|
|
8.5714286
|
|
JPMorgan Chase Bank, N.A.
|
$20,000,000¹
|
|
5.7142857
|
|
|
Flagstar Bank, FSB
|
|
$25,000,000
|
|
7.1428571
|
|
KeyBank, National Association
|
|
$30,000,000
|
|
8.5714286
|
|
Israel Discount Bank of New York
|
$15,000,000¹
|
|
4.2857143
|
|
|
Chemical Bank
|
|
$15,000,000
|
|
4.2857143
|
|
TOTAL
|
$350,000,000.00²
|
|
100.000000
|
%
|
Re:
|
Sixth Amended and Restated Credit Acceptance Corporation Credit Agreement dated as of June 23, 2014 by and among Company, the Banks signatory thereto and Comerica Bank, as Agent (as amended, restated or otherwise modified from time to time, the “Credit Agreement”)
|
(a)
|
the Assignee: (i) shall be deemed automatically to have become a party to the Credit Agreement and the other Loan Documents, to have assumed all of the Assignor’s obligations thereunder to the extent of the Assigned Interest, and to have all the rights and obligations of a Bank under the Credit Agreement and the other Loan Documents, as if it were an original signatory thereto to the extent of the Assigned Interest; and (ii) agrees to be bound by the terms and conditions set forth in the Credit Agreement and the other Loan Documents as if it were an original signatory thereto; and
|
(b)
|
the Assignor’s obligations under the Credit Agreement and the other Loan Documents shall be reduced by the Assigned Interest referred to in the second paragraph of this Assignment Agreement.
|
(1)
|
the delivery to the Agent of an original of this Assignment Agreement executed by the Assignor and Assignee, and acknowledged by the Agent and the Company;
|
(2)
|
the payment to the Agent, of all accrued fees, expenses and other items for which reimbursement is then owing under the Credit Agreement;
|
(3)
|
Assignee shall have remitted to the Agent funds in an amount equal to its Percentage of all Advances of the Revolving Credit outstanding as of the Effective Date; and
|
(4)
|
all other restrictions and items noted in Section 13.8 of the Credit Agreement have been completed.
|
Revolving Credit
Commitment Amount |
Percentage
|
$10,000,000
|
2.8985507%
|
Revolving Credit
Commitment Amount |
Percentage
|
$10,000,000
|
2.8985507%
|
Donald A. Foss
26155 Hawthorne
Franklin, MI 48025
|
|
Date:
|
October 30, 2017
|
By:
|
/s/ Brett A. Roberts
|
|
|
|
|
Brett A. Roberts
|
|
|
|
|
Chief Executive Officer
|
|
|
|
|
(Principal Executive Officer)
|
|
Date:
|
October 30, 2017
|
By:
|
/s/ Kenneth S. Booth
|
|
|
|
|
Kenneth S. Booth
|
|
|
|
|
Chief Financial Officer
|
|
|
|
|
(Principal Financial Officer)
|
|
Date:
|
October 30, 2017
|
By:
|
/s/ Brett A. Roberts
|
|
|
|
|
Brett A. Roberts
|
|
|
|
|
Chief Executive Officer
|
|
|
|
|
(Principal Executive Officer)
|
|
Date:
|
October 30, 2017
|
By:
|
/s/ Kenneth S. Booth
|
|
|
|
|
Kenneth S. Booth
|
|
|
|
|
Chief Financial Officer
|
|
|
|
|
(Principal Financial Officer)
|
|