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WFS Financial Inc.
- Auto Loans - Category Main Page
(949)
727-1002
23
Pasteur
Irvine, CA 92618
www.wfsfinancial.com
Sales
$1.1
billion
Business Description
We
are one of the nation’s largest independent automobile finance companies
with 31 years of experience in the automobile finance industry. We believe
that the automobile finance industry is the second largest consumer finance
industry in the United States with over $684 billion of loan originations
during 2003. We originate new and pre-owned automobile installment
contracts, otherwise known as contracts, through our relationships with
approximately 8,000 franchised and independent automobile dealers
nationwide. We originated $6.0 billion of contracts during 2003 and managed
a portfolio of $10.6 billion contracts at December 31, 2003.
For the year ended December 31, 2003, approximately 32% of our contract
originations were for the purchase of new automobiles and approximately 68%
of our contract originations were for the purchase of pre-owned automobiles.
Approximately 83% of our contract originations were what we refer to as
prime contracts, and approximately 17% of our contract originations were
what we refer to as non-prime contracts. Our determination of whether a
contract is categorized as prime, non-prime or other is based on a number of
factors including the borrower’s credit history and our expectation of
credit loss. All references made throughout this document regarding prime,
non-prime or subprime automobile contracts are based on our determination.
We underwrite contracts through a credit approval process that is supported
and controlled by a centralized, automated front-end system. This system
incorporates proprietary credit scoring models and industry credit scoring
models and tools, which enhance our credit analysts’ ability to tailor each
contract’s pricing and structure to maximize risk-adjusted returns. We
believe that as a result of our sophisticated credit and underwriting
systems, we are able to earn attractive risk-adjusted returns on our
contracts. For the year ended December 31, 2003, the average net interest
spread on our automobile contract originations was 7.63% and the net
interest spread on our managed automobile portfolio was 7.10% while net
credit losses averaged 2.60% for the same period.
We structure our business to minimize operating costs while providing high
quality service to our dealers. Those aspects of our business that require a
local market presence are performed on a decentralized basis in our 39
offices. All other operations are centralized. We fund our purchases of
contracts, on an interim basis, with deposits raised by our parent, Western
Financial Bank, also known as the Bank, which are insured by the Federal
Deposit Insurance Corporation, also known as the FDIC, and other borrowings
of the Bank. These funds are made available to us through a series of
intercompany agreements that are made under terms, rates and conditions that
we believe to approximate arrangements we could enter into with outside
third party relationships. For long-term financing, we issue automobile
contract asset-backed securities. Since 1985, we have sold or securitized
over $36.0 billion of contracts in 62 public offerings of asset-backed
securities, making us the fourth largest issuer of such securities in the
nation. We have employed a range of securitization structures and our most
recent $1.5 billion issuance of asset-backed securities was structured as a
senior/subordinated transaction with a weighted average interest rate of
2.36%. Our relationship with the Bank gives us a competitive advantage
relative to other independent automobile finance companies by providing an
additional liquidity source.
Ticker
WFSI
SIC Code
6141
- Personal Credit Institutions
Auto Loan Providers in the Directory
WFS Financial
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