Wednesday, Aug. 01, 2007, 08:00 PM UPDATED 11:59 AMBy Nick Zulovich
INDIANAPOLIS — White River Capital, a special auto finance company that acquires subprime receivables from franchised and independent dealers, announced that net income for the second quarter was $1.7 million, down from $3.6 million in the same period last year.
The company said it specializes primarily in purchasing receivables for used vehicles, but also buys some new cars and light truck receivables.
Officials said the results for the second quarter were due to several reasons. First, $2.2 million of earnings came from operations contributed by its Coastal Credit subsidiary. Next, $1.3 million of earnings from operations came from its Union Acceptance Co., another subsidiary.
White River had $0.9 million of interest and expenses at the holding company, and also incurred a tax expense of $0.9 million, according to executives.
Net income for the six-month period was $8.7 million, compared to $4.8 million in the same time frame of 2006.
Discussing business, Mark Ruh, president and chief operating officer, said, "Coastal Credit once again had an excellent quarter, although the Coastal Credit portfolio has shown light increases in delinquencies and charge-offs consistent with industry trends. The UAC receivable portfolio sustained its orderly liquidation.
"This liquidation of the UAC receivable portfolio continues to generate significant income and cash flow and we expect this to continue well into 2008," he continued. "However, the variable nature of earnings' recognition at UAC will continue to result in volatile consolidated earnings for White River until at least the fourth quarter of 2007."
Martin Szumski, chief financial officer, added, "White River now has equity of $111.3 million, and tangible equity is now $76.6 million. These values translate into a book value per share of $28.96 and a tangible book value per share of $19.93, while our tangible equity is now 49.82 percent of tangible assets.
"At the end of this quarter, White River had $5.9 million in cash and cash equivalents and $27.7 million in line of credit availability," he said. "This gives White River $33.6 million of cash at its disposal for both future opportunities and to pay company obligations."
White River is based in Virginia Beach, Va. Its subsidiary, Coastal Credit, services the auto receivables. The subsidiary began in 1987 and now works in 22 states via its 16 branches in Louisiana, Maryland, Mississippi, Nevada, North Carolina, Ohio, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Virginia and Washington.
Coastal Credit receivables' portfolio net of unearned finance charges was $99 million as of June 30, officials said.
Union Acceptance is also a specialized auto finance company based in Indianapolis, which holds and oversees a portfolio of about $29.7 million in nonprime receivables as of June 30.
For more information on White River, visit .