Associates First Capital Corporation today announced that net earnings for the first quarter of 1998 reached $281.0 million, or $0.81 per share (diluted), an 18% increase over the same period a year ago. This was the 93rd consecutive quarter of improved earnings and the company’s best quarter ever.
Also in the quarter, The Associates announced acquisitions that totaled $3 billion in assets, principally in its rapidly growing international operations.
“We continue to build a balanced base of assets around the world that will provide continued earnings growth,” said Keith W. Hughes, chairman and chief executive officer. “The ability to grow profitably, both internally and through acquisitions, is a core strength of our company.”
At March 31, 1998, total managed assets reached $63.6 billion, 23% higher than the same period a year ago.
“Our first quarter performance was marked by quality growth combined with stable profitability,” Mr. Hughes said. “The strength and continued expansion of our operations outside the United States led the way, particularly in Japan where we announced a major acquisition.”
During the first quarter, the company announced an agreement to acquire DIC Finance in Japan, bringing its total Japanese presence to over 3,000 employees, more than 600 locations and approximately $4 billion in net finance receivables.
“Japan is the largest of our international operations and is likely to be an important source of growth for us in the foreseeable future,” Mr. Hughes stated.
In the first quarter, the company completed the acquisitions of Beneficial Corporation’s Canadian consumer loan subsidiary, with 105 offices and approximately $800 million in net receivables, and CEF Limited, a major construction equipment finance company in the United Kingdom with more than 6,300 contracts and approximately $160 million in receivables.
As a result of these acquisitions, The Associates became the largest foreign-owned finance company in Canada. The corporation also reinforced its position as the largest foreign-owned finance company in Japan, and continued its profitable growth in the United Kingdom.
“We will continue to pursue acquisitions as they add value for our future,” added Mr. Hughes. “The three international acquisitions we announced during the quarter met that test.”
The company’s other operating units also made important contributions to the quarter’s growth.
— Consumer operations, the company’s 1,500-office consumer finance network in the U.S., had good results highlighted by the opening of the Texas home equity market where the company made more than 6,500 real-estate secured loans.
— Commercial operations, a leading source of specialized business financial services, showed receivables growth of over $1.1 billion during the quarter, led by significant expansion of its financing to the manufactured housing industry.
— Credit card operations, a major issuer of bank and private-label cards, booked 240,000 new bank card customers during the quarter and became the first bank card issuer to offer Visa’s premier product, the Signature Card.
Associates First Capital Corporation is a leading diversified finance company providing consumer and commercial finance, leasing and related services through 2,404 offices in the U.S. and worldwide. Headquartered in Dallas, it is one of the nation’s 100 largest companies, based on total market capitalization.
THE ASSOCIATES Financial Highlights ($ millions – except earnings per share)
Three Months Ended or at
3/31/98 3/31/97 %Change
Amount $ 281.0 $ 237.8 18
Return on average equity 17.61 % 17.36 %
Return on average adjusted
equity 20.17 20.95
Return on average assets 1.91 1.94
Return on average managed assets 1.82 1.85
Net earnings per diluted share $ 0.81 $ 0.68 18
Stockholders’ equity $ 6,503.4 $ 5,558.7 17
Net finance receivables
Consumer finance $38,952.2 $32,400.8 20
Commercial finance 18,679.1 15,300.3 22
Total net finance
receivables $57,631.3 $47,701.1 21
Managed receivables $61,048.8 $50,299.3 21
Total assets $60,568.0 $49,210.8 23
Total managed assets $63,564.0 $51,809.0 23
Total revenue $ 2,231.1 $ 1,926.7 16
Net interest margin
(as a % of ANR) 9.15 % 9.46 %
Efficiency ratio 43.3 42.4
Three Months Ended or at
60+days contractual delinquency 2.26 % 2.25 %
Credit losses (as a % of ANR) 2.38 2.31
Allowance for losses on finance
Amount $ 2,014.9 $ 1,675.9
Percent of net finance
receivables 3.50 % 3.51 %