CURO Group Holdings Corp. Reports Second Quarter 2023 Financial Results
-Gross loans receivables increased 3.7% sequentially to $2.1 billion-
-Total revenue of $209.2 million-
-Operating expenses declined 8.5% sequentially to $108.1 million-
-Net charge-off normalizes at 13%-
CURO Group Holdings Corp. (NYSE:CURO) ("CURO" or the "Company"), a tech-enabled, omni-channel consumer finance company serving consumers in the U.S. and Canada, today announced financial results for its second quarter ended June 30, 2023.
"We delivered solid results in the second quarter as we continued to execute on all facets of our core business," said Doug Clark, Chief Executive Officer. "Our fundamentals continued to gradually improve, with revenue, net charge-offs, gross loans receivable and expenses all matching or exceeding our expectations. As we look ahead, despite ongoing macro challenges, we are encouraged by opportunities present in both the U.S. and Canada while remaining mindful to balance future growth with further improving our bottom line. Our extensive industry experience, investments in automation and strong consumer demand for our products position us well for long term growth and shareholder value creation."
Second Quarter 2023 Consolidated Summary Results
- Gross loans receivable increased 3.7% sequentially to $2.1 billion, primarily driven by sequential increases in Canada POS Lending and Direct Lending Revolving LOC Loans of 6.9% and 2.5%, respectively.
- Net revenue of $129.6 million, down 11.5% sequentially, primarily driven by a higher provision for loan loss expense related to the increase in charge offs and Allowance for loan loss build due to loans receivable growth and change in macroeconomic conditions.
- Total operating expenses declined 8.5% sequentially, to $108.1 million, primarily related to one-time restructuring charges of $10.0 million recognized in the first quarter of 2023.
- Net loss of $59.3 million ($1.45 per share) compared with Net loss of $59.5 million ($1.46 per share) for the first quarter of 2023. The $0.2 million improvement was primarily driven by favorable decreases of $18.4 million in provision for income taxes and $10.1 million in total operating expenses, partially offset by lower net revenue and a $7.2 million increase in Interest expense due to the new term loan secured in May 2023 as well as increased utilization of non-recourse revolving credit facilities and $8.9 million of extinguishment and modification costs arising from the second quarter's debt transactions.
- Net charge-off rate increased 150 bps, sequentially to 13.0%, returning to normalized rates from the temporary lower rates we saw in our Direct Lending brands in Canada after the policy change we made in the first quarter of 2023. The Company's 91+ days delinquency ratio remained flat sequentially at 3.2%.
|
As of or for the Quarter Ended |
||||||||||||||
|
Jun 30, |
|
Mar 31, |
|
Dec 31, |
|
Sep 30, |
|
Jun 30, |
||||||
Delinquency and Loss Ratios |
2023 |
|
2023 |
|
2022 |
|
2022 |
|
2022 |
||||||
31-60 days delinquency ratio |
1.9 |
% |
1.8 |
% |
1.9 |
% |
2.5 |
% |
2.4 |
% |
|||||
61-90 days delinquency ratio |
1.3 |
% |
1.5 |
% |
1.3 |
% |
1.5 |
% |
1.8 |
% |
|||||
91+ days delinquency ratio |
3.2 |
% |
3.2 |
% |
2.6 |
% |
2.6 |
% |
2.0 |
% |
|||||
Net charge-offs |
13.0 |
% |
11.5 |
% |
14.8 |
% |
13.2 |
% |
24.0 |
% |
|||||
Funding and Liquidity
As of June 30, 2023, principal debt balances outstanding were $2.8 billion, consisting of 69.2% of fixed rate or hedged variable rate debt and 30.8% of non-hedged variable rate debt.
As of June 30, 2023, available capital resources were approximately $361.9 million, comprised of $111.3 million in unrestricted Cash and cash equivalents, $176.7 million in unused borrowing capacity and $74.0 million of unencumbered Gross loans receivable.
About CURO
CURO Group Holdings Corp. (NYSE:CURO) is a leading consumer credit lender serving U.S. and Canadian customers for over 25 years. Our roots in the consumer finance market run deep. We've worked diligently to provide customers a variety of convenient, easily accessible financial services. Our decades of diversified data power a hard-to-replicate underwriting and scoring engine, mitigating risk across the full spectrum of credit products. We operate under a number of brands including Cash Money®, LendDirect®, Flexiti®, Heights Finance, Southern Finance, Covington Credit, Quick Credit and First Heritage Credit.
Conference Call
CURO will host a conference call to discuss these results at 8:30 a.m. Eastern Time on Thursday, August 3, 2023. The live webcast of the call can be accessed at the CURO Investor Relations website at http://ir.curo.com/.
You may access the call at 1-416-764-8658 (Toll free: 1-888-396-8049; Conference ID: 82661841). Please ask to join the CURO Group Holdings call. An archived version of the webcast will be available on the CURO Investors website for 90 days.
Final Results
The financial results presented and discussed herein are on a preliminary and unaudited basis; final unaudited data will be included in the Company's Quarterly Report on Form 10-Q for the three and six months ended June 30, 2023.
Table 1 - Consolidated Statements of Operations
(in thousands, except per share data, unaudited) |
Three Months Ended, |
|||||||||||||||||||
Jun 30, |
Mar 31, |
Dec 31, |
Sept 30, |
Jun 30, |
||||||||||||||||
2023 |
|
2023 |
|
2022 |
|
2022 |
|
2022 |
||||||||||||
|
|
|
|
|
|
|||||||||||||||
Revenue |
|
|
|
|
|
|||||||||||||||
Interest and fees revenue |
$ |
178,986 |
|
$ |
179,437 |
|
$ |
181,605 |
|
$ |
180,515 |
|
$ |
278,331 |
|
|||||
Insurance and other income |
|
30,257 |
|
|
30,036 |
|
|
35,593 |
|
|
33,605 |
|
|
26,073 |
|
|||||
Total revenue |
|
209,243 |
|
|
209,473 |
|
|
217,198 |
|
|
214,120 |
|
|
304,404 |
|
|||||
Provision for losses |
|
79,598 |
|
|
62,932 |
|
|
94,849 |
|
|
78,399 |
|
|
129,546 |
|
|||||
Net revenue |
|
129,645 |
|
|
146,541 |
|
|
122,349 |
|
|
135,721 |
|
|
174,858 |
|
|||||
Operating Expenses |
|
|
|
|
|
|||||||||||||||
Salaries and benefits |
|
61,346 |
|
|
64,805 |
|
|
66,067 |
|
|
53,413 |
|
|
82,427 |
|
|||||
Occupancy |
|
11,267 |
|
|
11,672 |
|
|
12,114 |
|
|
12,827 |
|
|
17,507 |
|
|||||
Advertising |
|
2,131 |
|
|
2,175 |
|
|
3,692 |
|
|
5,244 |
|
|
12,707 |
|
|||||
Direct operations |
|
15,466 |
|
|
13,092 |
|
|
11,832 |
|
|
11,729 |
|
|
20,293 |
|
|||||
Depreciation and amortization |
|
9,141 |
|
|
9,021 |
|
|
8,337 |
|
|
9,499 |
|
|
8,672 |
|
|||||
Other operating expense |
|
8,796 |
|
|
17,433 |
|
|
24,002 |
|
|
23,645 |
|
|
18,787 |
|
|||||
Total operating expenses |
|
108,147 |
|
|
118,198 |
|
|
126,044 |
|
|
116,357 |
|
|
160,393 |
|
|||||
Other expense (income) |
|
|
|
|
|
|||||||||||||||
Interest expense |
|
66,101 |
|
|
58,943 |
|
|
54,978 |
|
|
50,149 |
|
|
42,193 |
|
|||||
Loss from equity method investment |
|
2,134 |
|
|
3,413 |
|
|
1,932 |
|
|
2,309 |
|
|
1,328 |
|
|||||
Goodwill impairment |
|
— |
|
|
— |
|
|
145,241 |
|
|
— |
|
|
— |
|
|||||
Extinguishment or modification of debt costs |
|
8,864 |
|
|
— |
|
|
689 |
|
|
3,702 |
|
|
— |
|
|||||
Loss on change in fair value of contingent consideration |
|
— |
|
|
2,728 |
|
|
— |
|
|
(11,354 |
) |
|
4,014 |
|
|||||
Gain on sale of business |
|
— |
|
|
2,027 |
|
|
— |
|
|
(68,443 |
) |
|
— |
|
|||||
Miscellaneous expenses |
|
1,435 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|||||
Total other expense (income) |
|
78,534 |
|
|
67,111 |
|
|
202,840 |
|
|
(23,637 |
) |
|
47,535 |
|
|||||
Income (loss) before income taxes |
|
(57,036 |
) |
|
(38,768 |
) |
|
(206,535 |
) |
|
43,001 |
|
|
(33,070 |
) |
|||||
Provision (benefit) for income taxes |
|
2,291 |
|
|
20,703 |
|
|
(20,142 |
) |
|
17,348 |
|
|
(6,990 |
) |
|||||
Net (loss) income |
$ |
(59,327 |
) |
$ |
(59,471 |
) |
$ |
(186,393 |
) |
$ |
25,653 |
|
$ |
(26,080 |
) |
|||||
|
|
|
|
|
|
|||||||||||||||
Basic (loss) earnings per share |
$ |
(1.45 |
) |
$ |
(1.46 |
) |
$ |
(4.60 |
) |
$ |
0.63 |
|
$ |
(0.65 |
) |
|||||
Diluted (loss) earnings per share |
$ |
(1.45 |
) |
$ |
(1.46 |
) |
$ |
(4.60 |
) |
$ |
0.63 |
|
$ |
(0.65 |
) |
|||||
|
|
|
|
|
|
|||||||||||||||
Weighted average common shares outstanding: |
|
|
|
|
|
|||||||||||||||
Basic |
|
41,002 |
|
|
40,783 |
|
|
40,488 |
|
|
40,479 |
|
|
40,376 |
|
|||||
Diluted |
|
41,002 |
|
|
40,783 |
|
|
40,488 |
|
|
40,835 |
|
|
40,376 |
|
|||||
Table 2 - Consolidated Balance Sheets
|
As of |
|||||||||||||||||||
|
Jun 30, |
Mar 31, |
Dec 31, |
Sep 30, |
Jun 30, |
|||||||||||||||
(in thousands, unaudited) |
2023 |
|
2023 |
|
2022 |
|
2022 |
|
2022 |
|||||||||||
ASSETS |
||||||||||||||||||||
Cash and cash equivalents |
$ |
112,531 |
|
$ |
54,935 |
|
$ |
73,932 |
|
$ |
45,683 |
|
$ |
37,394 |
|
|||||
Restricted cash |
|
109,484 |
|
|
123,282 |
|
|
91,745 |
|
|
144,020 |
|
|
97,465 |
|
|||||
Gross loans receivable |
|
2,139,865 |
|
|
2,062,829 |
|
|
2,087,833 |
|
|
1,894,427 |
|
|
1,592,815 |
|
|||||
Less: Allowance for loan losses |
|
(272,615 |
) |
|
(259,959 |
) |
|
(122,028 |
) |
|
(102,743 |
) |
|
(90,286 |
) |
|||||
Loans receivable, net |
|
1,867,250 |
|
|
1,802,870 |
|
|
1,965,805 |
|
|
1,791,684 |
|
|
1,502,529 |
|
|||||
Income taxes receivable |
|
20,854 |
|
|
20,100 |
|
|
21,918 |
|
|
13,469 |
|
|
46,450 |
|
|||||
Prepaid expenses and other |
|
44,518 |
|
|
47,295 |
|
|
53,057 |
|
|
65,167 |
|
|
25,370 |
|
|||||
Property and equipment, net |
|
28,418 |
|
|
29,867 |
|
|
31,957 |
|
|
37,402 |
|
|
38,752 |
|
|||||
Investment in Katapult |
|
18,368 |
|
|
20,502 |
|
|
23,915 |
|
|
25,848 |
|
|
28,157 |
|
|||||
Right of use asset - operating leases |
|
56,021 |
|
|
54,597 |
|
|
61,197 |
|
|
64,683 |
|
|
64,602 |
|
|||||
Deferred tax assets |
|
54,102 |
|
|
53,474 |
|
|
49,893 |
|
|
31,986 |
|
|
23,993 |
|
|||||
Goodwill |
|
277,069 |
|
|
276,487 |
|
|
276,269 |
|
|
424,292 |
|
|
352,990 |
|
|||||
Intangibles, net |
|
133,947 |
|
|
127,387 |
|
|
123,677 |
|
|
120,345 |
|
|
113,130 |
|
|||||
Other assets |
|
22,275 |
|
|
10,991 |
|
|
15,828 |
|
|
12,774 |
|
|
8,558 |
|
|||||
Assets held for sale (1) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
338,779 |
|
|||||
Total Assets |
$ |
2,744,837 |
|
$ |
2,621,787 |
|
$ |
2,789,193 |
|
$ |
2,777,353 |
|
$ |
2,678,169 |
|
|||||
LIABILITIES AND STOCKHOLDERS' EQUITY |
||||||||||||||||||||
Liabilities |
|
|
|
|
|
|||||||||||||||
Accounts payable and accrued liabilities |
$ |
78,343 |
|
$ |
85,875 |
|
$ |
73,827 |
|
$ |
66,723 |
|
$ |
81,423 |
|
|||||
Deferred revenue |
|
36,793 |
|
|
33,227 |
|
|
32,259 |
|
|
25,111 |
|
|
23,425 |
|
|||||
Lease liability - operating leases |
|
56,585 |
|
|
55,468 |
|
|
62,847 |
|
|
66,370 |
|
|
67,339 |
|
|||||
Contingent consideration related to acquisition |
|
18,499 |
|
|
18,128 |
|
|
16,884 |
|
|
15,770 |
|
|
30,354 |
|
|||||
Income taxes payable |
|
788 |
|
|
— |
|
|
— |
|
|
— |
|
|
4 |
|
|||||
Accrued interest |
|
39,306 |
|
|
20,090 |
|
|
38,460 |
|
|
18,048 |
|
|
34,970 |
|
|||||
Debt |
|
2,772,872 |
|
|
2,627,263 |
|
|
2,607,314 |
|
|
2,449,316 |
|
|
2,189,431 |
|
|||||
Other long-term liabilities |
|
10,016 |
|
|
10,552 |
|
|
11,736 |
|
|
11,563 |
|
|
12,146 |
|
|||||
Deferred tax liabilities |
|
8 |
|
|
— |
|
|
— |
|
|
— |
|
|
12,360 |
|
|||||
Liabilities held for sale (1) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
111,137 |
|
|||||
Total Liabilities |
$ |
3,013,210 |
|
$ |
2,850,603 |
|
$ |
2,843,327 |
|
$ |
2,652,901 |
|
$ |
2,562,589 |
|
|||||
Total Stockholders' (Deficit) Equity |
|
(268,373 |
) |
|
(228,816 |
) |
|
(54,134 |
) |
|
124,452 |
|
|
115,580 |
|
|||||
Total Liabilities and Stockholders' (Deficit) Equity |
$ |
2,744,837 |
|
$ |
2,621,787 |
|
$ |
2,789,193 |
|
$ |
2,777,353 |
|
$ |
2,678,169 |
|
|||||
|
|
|
|
|
|
|||||||||||||||
(1) Assets held for sale and Liabilities held for sale represent the balance, as of June 30, 2022, for assets and liabilities, respectively, associated with the sale of the Legacy U.S. Direct Lending Business, which closed in July 2022. |
||||||||||||||||||||
Table 3 - Consolidated Portfolio Performance
(in thousands, except percentages, unaudited) |
Q2 2023 |
Q1 2023 |
Q4 2022 |
Q3 2022 |
Q2 2022(1) |
|||||||||||||||
Gross loans receivable |
|
|
|
|
|
|||||||||||||||
Revolving LOC |
$ |
1,385,152 |
|
$ |
1,314,695 |
|
$ |
1,284,515 |
|
$ |
1,129,387 |
|
$ |
1,128,372 |
|
|||||
Installment loans |
|
754,713 |
|
|
748,134 |
|
|
803,318 |
|
|
765,040 |
|
|
652,468 |
|
|||||
Total gross loans receivable |
$ |
2,139,865 |
|
$ |
2,062,829 |
|
$ |
2,087,833 |
|
$ |
1,894,427 |
|
$ |
1,780,840 |
|
|||||
|
|
|
|
|
|
|||||||||||||||
Lending Revenue |
|
|
|
|
|
|||||||||||||||
Revolving LOC |
$ |
86,703 |
|
$ |
84,225 |
|
$ |
81,170 |
|
$ |
77,037 |
|
$ |
96,582 |
|
|||||
Installment loans |
|
92,283 |
|
|
95,212 |
|
|
100,435 |
|
|
103,478 |
|
|
181,749 |
|
|||||
Total lending revenue |
$ |
178,986 |
|
$ |
179,437 |
|
$ |
181,605 |
|
$ |
180,515 |
|
$ |
278,331 |
|
|||||
|
|
|
|
|
|
|||||||||||||||
Lending Provision |
|
|
|
|
|
|||||||||||||||
Revolving LOC |
$ |
42,932 |
|
$ |
30,106 |
|
$ |
46,745 |
|
$ |
41,787 |
|
$ |
40,435 |
|
|||||
Installment loans |
|
35,171 |
|
|
31,139 |
|
|
46,442 |
|
|
33,510 |
|
|
86,484 |
|
|||||
Total lending provision |
$ |
78,103 |
|
$ |
61,245 |
|
$ |
93,187 |
|
$ |
75,297 |
|
$ |
126,919 |
|
|||||
|
|
|
|
|
|
|||||||||||||||
NCOs (2) |
|
|
|
|
|
|||||||||||||||
Revolving LOC |
$ |
32,786 |
|
$ |
17,953 |
|
$ |
35,387 |
|
$ |
30,907 |
|
$ |
33,945 |
|
|||||
Installment loans |
|
35,483 |
|
|
41,078 |
|
|
38,168 |
|
|
31,372 |
|
|
71,056 |
|
|||||
Total NCOs |
$ |
68,269 |
|
$ |
59,031 |
|
$ |
73,555 |
|
$ |
62,279 |
|
$ |
105,001 |
|
|||||
|
|
|
|
|
|
|||||||||||||||
NCO rate (annualized) (2) (3) |
|
|
|
|
|
|||||||||||||||
Revolving LOC |
|
9.7 |
% |
|
5.6 |
% |
|
11.6 |
% |
|
10.8 |
% |
|
12.8 |
% |
|||||
Installment loans |
|
18.9 |
% |
|
21.5 |
% |
|
19.6 |
% |
|
17.6 |
% |
|
44.8 |
% |
|||||
Total NCO rate |
|
13.0 |
% |
|
11.5 |
% |
|
14.8 |
% |
|
13.2 |
% |
|
24.0 |
% |
|||||
|
|
|
|
|
|
|||||||||||||||
ACL rate (4) (5) |
|
|
|
|
|
|||||||||||||||
Revolving LOC |
|
13.6 |
% |
|
13.3 |
% |
|
6.1 |
% |
|
6.0 |
% |
|
6.7 |
% |
|||||
Installment loans |
|
11.2 |
% |
|
11.3 |
% |
|
5.4 |
% |
|
4.6 |
% |
|
8.1 |
% |
|||||
Total ACL rate |
|
12.7 |
% |
|
12.6 |
% |
|
5.8 |
% |
|
5.4 |
% |
|
6.7 |
% |
|||||
|
|
|
|
|
|
|||||||||||||||
31+ days past-due rate (4) |
|
|
|
|
|
|||||||||||||||
Revolving LOC |
|
5.6 |
% |
|
5.5 |
% |
|
3.3 |
% |
|
4.1 |
% |
|
4.1 |
% |
|||||
Installment loans |
|
8.1 |
% |
|
8.2 |
% |
|
9.6 |
% |
|
10.2 |
% |
|
9.2 |
% |
|||||
Total past-due rate |
|
6.5 |
% |
|
6.5 |
% |
|
5.8 |
% |
|
6.6 |
% |
|
6.1 |
% |
|||||
|
|
|
|
|
|
|||||||||||||||
(1) Includes loan balances and activity classified as Held for Sale. |
||||||||||||||||||||
(2) NCOs include $0.5 million and $10.3 million, for the three months ended September 30, 2022 and June 30, 2022, respectively, related to the purchase accounting fair value discount, which are excluded from provision. |
||||||||||||||||||||
(3) We calculate NCO rate as total quarterly NCOs divided by Average gross loans receivable; then we annualize the rate. The amount and timing of recoveries are impacted by our collection strategies, which are based on customer behavior and risk profile and include direct customer communications and the periodic sale of charged off loans. |
||||||||||||||||||||
(4) We calculate (i) Allowance for credit losses ("ACL") rate and (ii) 31+ days past-due rate as the respective totals divided by gross loans receivable at each quarter end. |
||||||||||||||||||||
(5) We adopted ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" on January 1, 2023, which requires us to estimate the lifetime expected credit loss on financial instruments. Our previous model required the recognition of credit losses when it was probable that a loss had been incurred. |
||||||||||||||||||||
Table 4 - Direct Lending Segment - Operating Income / (Loss)
(in thousands, unaudited) |
Three Months Ended, |
|||||||||||||||
Jun 30, |
Mar 31, |
Dec 31, |
Sep 30, |
Jun 30, |
||||||||||||
2023 |
2023 |
2022 |
2022 |
2022 |
||||||||||||
|
|
|
|
|
|
|||||||||||
Total revenue |
$ |
167,016 |
$ |
169,368 |
$ |
181,925 |
|
$ |
186,409 |
$ |
281,251 |
|||||
Provision for losses |
|
63,755 |
|
48,364 |
|
77,724 |
|
|
65,020 |
|
123,584 |
|||||
Net revenue |
|
103,261 |
|
121,004 |
|
104,201 |
|
|
121,389 |
|
157,667 |
|||||
Total operating expenses |
|
91,285 |
|
103,151 |
|
111,632 |
|
|
102,840 |
|
143,965 |
|||||
Segment operating income (loss) |
$ |
11,976 |
$ |
17,853 |
$ |
(7,431 |
) |
$ |
18,549 |
$ |
13,702 |
|||||
Table 5 - Direct Lending Segment - Portfolio Performance
(in thousands, except percentages, unaudited) |
Q2 2023 |
Q1 2023 |
Q4 2022 |
Q3 2022 |
Q2 2022(1) |
|||||||||||||||
Gross loans receivable |
|
|
|
|
|
|||||||||||||||
Revolving LOC |
$ |
472,902 |
|
$ |
461,443 |
|
$ |
451,077 |
|
$ |
439,117 |
|
$ |
501,209 |
|
|||||
Installment loans |
|
754,713 |
|
|
748,133 |
|
|
803,318 |
|
|
765,041 |
|
|
652,467 |
|
|||||
Total gross loans receivable |
$ |
1,227,615 |
|
$ |
1,209,576 |
|
$ |
1,254,395 |
|
$ |
1,204,158 |
|
$ |
1,153,676 |
|
|||||
|
|
|
|
|
|
|||||||||||||||
Lending Revenue |
|
|
|
|
|
|||||||||||||||
Revolving LOC |
$ |
49,483 |
|
$ |
49,092 |
|
$ |
49,915 |
|
$ |
52,461 |
|
$ |
75,736 |
|
|||||
Installment loans |
|
92,283 |
|
|
95,212 |
|
|
100,435 |
|
|
103,478 |
|
|
181,748 |
|
|||||
Total lending revenue |
$ |
141,766 |
|
$ |
144,304 |
|
$ |
150,350 |
|
$ |
155,939 |
|
$ |
257,484 |
|
|||||
|
|
|
|
|
|
|||||||||||||||
Lending Provision |
|
|
|
|
|
|||||||||||||||
Revolving LOC |
$ |
27,089 |
|
$ |
15,539 |
|
$ |
29,620 |
|
$ |
28,408 |
|
$ |
34,472 |
|
|||||
Installment loans |
|
35,171 |
|
|
31,139 |
|
|
46,442 |
|
|
33,511 |
|
|
86,485 |
|
|||||
Total lending provision |
$ |
62,260 |
|
$ |
46,678 |
|
$ |
76,062 |
|
$ |
61,919 |
|
$ |
120,957 |
|
|||||
|
|
|
|
|
|
|||||||||||||||
NCOs (2) |
|
|
|
|
|
|||||||||||||||
Revolving LOC |
$ |
21,780 |
|
$ |
6,234 |
|
$ |
26,715 |
|
$ |
24,793 |
|
$ |
30,408 |
|
|||||
Installment loans |
|
35,483 |
|
|
41,078 |
|
|
38,168 |
|
|
29,783 |
|
|
43,661 |
|
|||||
Total NCOs |
$ |
57,263 |
|
$ |
47,312 |
|
$ |
64,883 |
|
$ |
54,576 |
|
$ |
74,069 |
|
|||||
|
|
|
|
|
|
|||||||||||||||
NCO rate (annualized) (2) (3) |
|
|
|
|
|
|||||||||||||||
Revolving LOC |
|
18.7 |
% |
|
5.5 |
% |
|
23.8 |
% |
|
20.9 |
% |
|
25.0 |
% |
|||||
Installment loans |
|
18.9 |
% |
|
21.5 |
% |
|
19.3 |
% |
|
16.7 |
% |
|
27.7 |
% |
|||||
Total NCO rate |
|
18.8 |
% |
|
15.6 |
% |
|
20.9 |
% |
|
18.4 |
% |
|
26.5 |
% |
|||||
|
|
|
|
|
|
|||||||||||||||
ACL rate (4) (5) |
|
|
|
|
|
|||||||||||||||
Revolving LOC |
|
26.6 |
% |
|
25.6 |
% |
|
8.4 |
% |
|
7.9 |
% |
|
9.3 |
% |
|||||
Installment loans |
|
11.2 |
% |
|
11.3 |
% |
|
5.4 |
% |
|
4.6 |
% |
|
6.9 |
% |
|||||
Total ACL rate |
|
17.1 |
% |
|
16.8 |
% |
|
6.5 |
% |
|
5.8 |
% |
|
7.9 |
% |
|||||
|
|
|
|
|
|
|||||||||||||||
31+ days past-due rate (4) |
|
|
|
|
|
|||||||||||||||
Revolving LOC |
|
8.5 |
% |
|
8.4 |
% |
|
4.1 |
% |
|
5.1 |
% |
|
5.8 |
% |
|||||
Installment loans |
|
8.1 |
% |
|
8.2 |
% |
|
9.6 |
% |
|
10.2 |
% |
|
9.7 |
% |
|||||
Total past-due rate |
|
8.3 |
% |
|
8.3 |
% |
|
7.6 |
% |
|
8.3 |
% |
|
8.0 |
% |
|||||
|
|
|
|
|
|
|||||||||||||||
(1) Includes loan balances and activity classified as Held for Sale. |
||||||||||||||||||||
(2) NCOs include $0.5 million and $10.3 million, for the three months ended September 30, 2022 and June 30, 2022, respectively, related to the purchase accounting fair value discount, which are excluded from provision. |
||||||||||||||||||||
(3) We calculate NCO rate as total quarterly NCOs divided by Average gross loans receivable, then we annualize the rate. The amount and timing of recoveries are impacted by our collection strategies, which are based on customer behavior and risk profile and include direct customer communications and the periodic sale of charged off loans. |
||||||||||||||||||||
(4) We calculate (i) ACL rate and (ii) 31+ days past-due rate as the respective totals divided by gross loans receivable at each quarter end. |
||||||||||||||||||||
(5) We adopted ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" on January 1, 2023, which requires us to estimate the lifetime expected credit loss on financial instruments. Our previous model required the recognition of credit losses when it was probable that a loss had been incurred. |
||||||||||||||||||||
Table 6 - Canada POS Lending Segment - Operating Income
(in thousands, unaudited) |
Three Months Ended, |
||||||||||||||
Jun 30, |
Mar 31, |
Dec 31, |
Sept 30, |
Jun 30, |
|||||||||||
2023 |
2023 |
2022 |
2022 |
2022 |
|||||||||||
|
|
|
|
|
|
||||||||||
Total revenue |
$ |
42,227 |
$ |
40,105 |
$ |
35,273 |
$ |
27,711 |
$ |
23,153 |
|||||
Provision for losses |
|
15,843 |
|
14,568 |
|
17,125 |
|
13,379 |
|
5,962 |
|||||
Net revenue |
|
26,384 |
|
25,537 |
|
18,148 |
|
14,332 |
|
17,191 |
|||||
Total operating expenses |
|
16,862 |
|
15,047 |
|
14,412 |
|
13,518 |
|
16,428 |
|||||
Segment operating income |
$ |
9,522 |
$ |
10,490 |
$ |
3,736 |
$ |
814 |
$ |
763 |
|||||
|
|
|
|
|
|
||||||||||
Table 7 - Canada POS Lending Segment - Portfolio Performance
(in thousands, except percentages, unaudited) |
Q2 2023 |
Q1 2023 |
Q4 2022 |
Q3 2022 |
Q2 2022 |
|||||||||||||||
Revolving LOC |
|
|
|
|
|
|||||||||||||||
Gross loans receivable |
$ |
912,250 |
|
$ |
853,253 |
|
$ |
833,438 |
|
$ |
690,270 |
|
$ |
627,163 |
|
|||||
Lending revenue |
$ |
37,220 |
|
$ |
35,133 |
|
$ |
31,255 |
|
$ |
24,575 |
|
$ |
20,847 |
|
|||||
Lending provision |
$ |
15,843 |
|
$ |
14,568 |
|
$ |
17,125 |
|
$ |
13,379 |
|
$ |
5,963 |
|
|||||
NCOs |
$ |
11,006 |
|
$ |
11,719 |
|
$ |
8,672 |
|
$ |
6,114 |
|
$ |
3,537 |
|
|||||
NCO rate (annualized) (1) |
|
5.0 |
% |
|
5.6 |
% |
|
4.4 |
% |
|
3.6 |
% |
|
2.4 |
% |
|||||
ACL rate (2) (3) |
|
6.8 |
% |
|
6.7 |
% |
|
4.9 |
% |
|
4.8 |
% |
|
4.5 |
% |
|||||
31+ days past-due rate (2) |
|
4.0 |
% |
|
3.9 |
% |
|
2.9 |
% |
|
3.6 |
% |
|
2.8 |
% |
|||||
(1) We calculate NCO rate as total quarterly NCOs divided by Average gross loans receivable and then annualize the rate. The amount and timing of recoveries are impacted by our collection strategies, which are based on customer behavior and risk profile and include direct customer communications and the periodic sale of charged off loans. |
||||||||||||||||||||
(2) We calculate (i) ACL rate and (ii) 31+ days past-due rate as the respective totals divided by gross loans receivable at each respective quarter end. |
||||||||||||||||||||
(3) We adopted ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" on January 1, 2023, which requires us to estimate the lifetime expected credit loss on financial instruments. Our previous model required the recognition of credit losses when it was probable that a loss had been incurred. |
||||||||||||||||||||
Forward-Looking Statements
This press release contains forward-looking statements. These forward-looking statements include projections, estimates and assumptions about various matters, such as future financial and operational performance, including our belief in the drivers of creating long term growth and shareholder value. In addition, words such as "guidance," "estimate," "anticipate," "believe," "forecast," "step," "plan," "predict," "focused," "project," "is likely," "expect," "anticipate," "intend," "should," "will," "confident," variations of such words and similar expressions are intended to identify forward-looking statements. Our ability to achieve these forward-looking statements is based on certain assumptions, judgments and other factors, both within and outside of our control, that could cause actual results to differ materially from those in the forward-looking statements, including: risks relating to the uncertainty of projected financial and operational information and forecasts, including errors in our internal forecasts; our ability to manage growth; our dependence on third-party lenders to provide the cash we need to fund our loans and our ability to affordably access third-party financing; our level of indebtedness; the effects of competition on our business; our ability to attract and retain customers; global economic, market, financial, political or health conditions or events; actions of regulators and the impact of those actions on our business; our ability to successfully integrate acquired businesses; our ability to protect our proprietary technology and analytics and keep up with that of our competitors; disruption of our information technology systems that adversely affect our business operations; ineffective pricing of the credit risk of our prospective or existing customers; inaccurate information supplied by customers or third parties that could lead to errors in judging customers' qualifications to receive loans; improper disclosure of customer personal data; failure of third parties who provide products, services or support to us; disruption to our relationships with banks and other third-party electronic payment solutions providers as well as other factors discussed in our filings with the Securities and Exchange Commission. These projections, estimates and assumptions may prove to be inaccurate in the future. These forward-looking statements are not guarantees of future performance and involve known and unknown risks and uncertainties that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. There may be additional risks that we presently do not know or that we currently believe are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual future results. We undertake no obligation to update, amend or clarify any forward-looking statement for any reason.
(CURO-NWS)
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