TFC Enterprises Announces Strong First Quarter

13th Consecutive Quarter of Profitability



Apr 24, 2001, 01:00 ET from TFC Enterprises, Inc.

    NORFOLK, Va., April 24 /PRNewswire Interactive News Release/ -- TFC
 Enterprises, Inc. (Nasdaq:   TFCE), a specialty consumer finance company today
 reported its thirteenth consecutive quarter of profitability.
     For the three months ended March 31, 2001, net income totaled $1,300,000,
 or $0.11 per diluted share, compared with net income of $875,000, or $0.07 per
 diluted share, in the first quarter of the previous year.  Earnings for the
 first quarter of 2000 were reduced by approximately $450,000 in one-time
 charges related to the relocation of the Company's Bulk Service Center from
 Jacksonville, Florida to Norfolk, Virginia.  Exclusive of such non-recurring
 charges, the Company would have reported earnings per share of $0.11 in the
 quarter ended March 31, 2000.
     "We are ecstatic with the performance of our loan portfolios during the
 most recent quarter, our 13th consecutive quarter of profitability, and based
 upon the current business outlook, we continue to be optimistic about the
 remainder of 2001," commented Ron Tray, President and Chief Financial Officer
 of the Company.
 
                           Summary of Financial Highlights
                   ($ in thousands except per share amounts)
                            (bps represents basis points)
 
                                             Quarter Ended March 31
                                     2001              2000         Change
 
     Contract volume                   $72.8           $59.8           22%
     60+ days delinquencies
      to gross contract
      receivables, period end          5.46%           5.65%      (19 bps)
     Net charge-off to
      average gross contract
      receivables net of
      unearned interest               14.63%          15.84%     (121 bps)
     Yield on interest
      earning assets                  21.47%          22.93%     (146 bps)
     Cost of interest bearing
      liabilities                     10.35%           9.62%        73 bps
     Operating expense
      as a percentage of
      interest earning assets     10.44% (1)          13.40%     (296 bps)
     Net income                  $ 1,300 (2)            $875           49%
     Net income per
      diluted common share         $0.11 (2)           $0.07           57%
 
     (1) After considering approximately $750 of pre-tax costs associated with
         the consolidation of service centers, operating expense as a
         percentage of interest earning assets decreases to 12.15%.
     (2) After considering approximately $450 of after tax costs associated
         with the consolidation of service centers, net income and net income
         per diluted common share increases to $1,325 and $0.11.
 
     Contract purchase volume totaled $72.8 million in the first quarter of
 2001, compared with $59.8 million in the first quarter of 2000 and $83.8
 million in the fourth quarter of 2000. As previously announced, we phased out
 the Bulk Acquisitions from "Buy Here Pay Here" automobile dealers in March
 2001.
     60+ delinquencies were equivalent to 5.46% of gross contract receivables
 outstanding at the end of the first quarter of 2001, versus 5.65% a year
 earlier and 5.80% on December 31, 2000.  30+ delinquency were equivalent to
 7.98% of gross contract receivables outstanding at the end of the first
 quarter of 2001, versus 8.37% a year earlier and 9.06% on December 31, 2000.
     Net loan charge-offs, as a percentage of average contract receivables (net
 of unearned interest), calculated on an annualized basis, was 14.63% for the
 first quarter of 2001, compared with 15.84% for the first quarter of 2000 and
 14.26% for the fourth quarter of 2000.
     The annualized yield on interest-earning assets of 21.47% for the first
 quarter of 2001 compared with 22.93% for the prior-year quarter and 21.88% for
 the fourth quarter of 2000. The decrease in yield reflects a more competitive
 program for our dealers while continuing to maintain our underwriting
 standards.
     The cost of interest-bearing liabilities was 10.35% for the first quarter
 of 2001, compared with 9.62% for the first quarter of 2000 and 11.33% for the
 quarter ended December 31, 2000. The fourth quarter of 2000 operating results
 also reflect the interest method of amortizing the costs associated with the
 Company's securitization program versus the straight-line method in prior
 quarters of 2000.  The Company continues to explore ways to reduce its overall
 cost of interest bearing liabilities.
     Operating expenses, as a percentage of interest-earning assets (calculated
 on an annualized basis), was 10.44% for the first quarter of 2001 compared to
 12.15% for the first quarter of 2000 and 11.21% for the fourth quarter of
 2000.  The calculation for the first quarter of 2000 was adjusted to eliminate
 approximately $750,000 in pretax costs associated with the consolidation of
 service centers.
     In addition to the historical information, statements included in this
 press release, by the Company's management team, may contain forward-looking
 statements that are subject to risks and uncertainties that could cause the
 Company's results to differ materially from those anticipated in forward-
 looking statements. Readers are cautioned not to place undue reliance on
 forward-looking statements, such as management's optimism for the remainder of
 2001 which reflect management's current analysis.  In accordance with the
 Private Securities Litigation Reform Act of 1995, the following are among the
 factors that could cause the Company's actual results to differ materially
 from those expressed or implied by such forward-looking statements:  the
 inability of the Company to obtain favorable credit facilities to replace its
 current facility with its principal lender, a rise in interest rates, a
 deterioration of credit experience, competitive pricing and other factors, the
 loss of or reduction in its credit facilities, or if the Company were to face
 increased competition.  Investors are encouraged to review TFC Enterprise's
 SEC filings for more information about the factors affecting the Company's
 business.
 
     TFC Enterprises, Inc., conducts its operations primarily through two
 wholly-owned subsidiaries:  THE Finance Company, specializes in purchasing and
 servicing installment sales contracts originated by automobile and motorcycle
 dealers and First Community Finance, Inc., specializes in the direct
 origination and servicing of consumer loans. Based in Norfolk, VA, TFC
 Enterprises, Inc., has thirteen contract production offices of THE Finance
 Company throughout the United States and twenty-one offices of First Community
 Finance in Virginia and North Carolina. The Company's common stock symbol is
 listed on Nasdaq National Market and trades under the symbol "TFCE".
     For additional information regarding the Company or this news release,
 call 757-858-1400 and ask to speak with Robert S. Raley, Jr. ext. 299 or Ron
 Tray ext. 354.
 
     NOTE:  Detailed supplemental information follows.
 
 
     TFC ENTERPRISES, INC.
     CONSOLIDATED BALANCE SHEETS
     (Unaudited)
 
                                                     03/31/01       12/31/00
     (dollars in thousands)
     Assets
     Cash and cash equivalents                         $1,515         $1,603
     Restricted cash                                   16,887         17,677
     Net contract receivables                         226,010        218,594
     Property and equipment, net                        2,548          2,615
     Intangible assets, net                             8,604          8,881
     Other assets                                       3,122          3,593
     Total assets                                    $258,686       $252,963
 
     Liabilities and shareholders' equity
     Liabilities
     Revolving lines of credit                       $122,876       $103,763
     Automobile receivables-backed notes               61,608         78,531
     Subordinated notes and other term debt            15,195         15,048
     Accounts payable and accrued expenses              4,241          4,291
     Income taxes payable and other liabilities         5,343          2,954
     Refundable dealer reserve                          2,197          2,454
     Total liabilities                                211,460        207,041
 
     Shareholders' equity:
     Common stock, $.01 par value,
      40,000,000 shares authorized,
      11,455,884 and 11,449,559 outstanding
      at 03/31/01 and 12/31/00                             50             50
     Additional paid-in capital                        56,109         56,105
     Retained deficit                                 (8,933)       (10,233)
     Total shareholders' equity                        47,226         45,922
 
     Total liabilities and
      shareholders' equity                           $258,686       $252,963
 
 
     TFC ENTERPRISES, INC.
     CONSOLIDATED INCOME STATEMENTS
     (Unaudited)
 
                                                         Three months ended
     (in thousands, except                           03/31/01        03/31/00
      per share amounts)
 
     Interest and other finance revenue               $13,939        $12,470
     Interest expense                                   5,214          3,810
     Net interest revenue                               8,725          8,660
     Provision for credit losses                          198            182
     Net interest revenue after
      provision for credit losses                       8,527          8,478
 
     Other revenue                                        486            359
     Total net interest and other revenue               9,013          8,837
 
     Operating expense:
     Salaries                                           3,546          3,780
     Employee benefits                                    719            769
     Occupancy                                            286            481
     Equipment                                            413            398
     Amortization of intangible assets                    278            273
     Other                                              1,534          1,589
     Total operating expense                            6,776          7,290
 
     Income before income taxes                         2,237          1,547
     Provision for income taxes                           937            672
 
     Net income                                       $ 1,300           $875
 
     Net income per common share:
     Basic                                              $0.11          $0.08
     Diluted                                            $0.11          $0.07
 
 
     TFC ENTERPRISES, INC.
     FINANCIAL HIGHLIGHTS
     (Unaudited)
 
                                                        Three months ended
                                                     03/31/01       03/31/00
     (dollars in thousands)
 
     CONTRACT PURCHASES OR ORIGINATIONS
     Auto finance:
      Point of sale                                   $51,738        $36,383
      Bulk                                             13,519         17,498
     Consumer finance                                   7,564          5,909
      Total                                           $72,821        $59,790
 
     AVERAGE BALANCES
      Interest-earning assets                        $259,711       $217,550
      Total assets                                    258,635        210,904
      Interest-bearing liabilities                    201,595        158,322
      Equity                                           46,526         42,353
 
     PERFORMANCE RATIOS*
      Return on average assets                          2.01%          1.66%
      Return on average equity                          11.17           8.27
      Yield on interest-earning assets                  21.47          22.93
      Cost of interest-bearing liabilities              10.35           9.62
      Net interest margin                               13.44          15.92
      Operating expense as a percentage of
       interest-earning assets                          10.44          13.40
      Total net charge-offs to
       average gross contract receivables,
       net of unearned interest                         14.63          15.84
      60+ days delinquencies to
       period-end gross contract receivables             5.46           5.65
      30+ days delinquencies to
       period-end gross contract receivables             7.98           8.37
      Total allowance, discount and
       nonrefundable reserve to
       period-end gross contract receivables
       net of unearned interest                         10.91          12.52
      Equity to period-end assets                       18.26          19.73
 
     * annualized rates, as appropriate
 
                     MAKE YOUR OPINION COUNT -  Click Here
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SOURCE TFC Enterprises, Inc.
    NORFOLK, Va., April 24 /PRNewswire Interactive News Release/ -- TFC
 Enterprises, Inc. (Nasdaq:   TFCE), a specialty consumer finance company today
 reported its thirteenth consecutive quarter of profitability.
     For the three months ended March 31, 2001, net income totaled $1,300,000,
 or $0.11 per diluted share, compared with net income of $875,000, or $0.07 per
 diluted share, in the first quarter of the previous year.  Earnings for the
 first quarter of 2000 were reduced by approximately $450,000 in one-time
 charges related to the relocation of the Company's Bulk Service Center from
 Jacksonville, Florida to Norfolk, Virginia.  Exclusive of such non-recurring
 charges, the Company would have reported earnings per share of $0.11 in the
 quarter ended March 31, 2000.
     "We are ecstatic with the performance of our loan portfolios during the
 most recent quarter, our 13th consecutive quarter of profitability, and based
 upon the current business outlook, we continue to be optimistic about the
 remainder of 2001," commented Ron Tray, President and Chief Financial Officer
 of the Company.
 
                           Summary of Financial Highlights
                   ($ in thousands except per share amounts)
                            (bps represents basis points)
 
                                             Quarter Ended March 31
                                     2001              2000         Change
 
     Contract volume                   $72.8           $59.8           22%
     60+ days delinquencies
      to gross contract
      receivables, period end          5.46%           5.65%      (19 bps)
     Net charge-off to
      average gross contract
      receivables net of
      unearned interest               14.63%          15.84%     (121 bps)
     Yield on interest
      earning assets                  21.47%          22.93%     (146 bps)
     Cost of interest bearing
      liabilities                     10.35%           9.62%        73 bps
     Operating expense
      as a percentage of
      interest earning assets     10.44% (1)          13.40%     (296 bps)
     Net income                  $ 1,300 (2)            $875           49%
     Net income per
      diluted common share         $0.11 (2)           $0.07           57%
 
     (1) After considering approximately $750 of pre-tax costs associated with
         the consolidation of service centers, operating expense as a
         percentage of interest earning assets decreases to 12.15%.
     (2) After considering approximately $450 of after tax costs associated
         with the consolidation of service centers, net income and net income
         per diluted common share increases to $1,325 and $0.11.
 
     Contract purchase volume totaled $72.8 million in the first quarter of
 2001, compared with $59.8 million in the first quarter of 2000 and $83.8
 million in the fourth quarter of 2000. As previously announced, we phased out
 the Bulk Acquisitions from "Buy Here Pay Here" automobile dealers in March
 2001.
     60+ delinquencies were equivalent to 5.46% of gross contract receivables
 outstanding at the end of the first quarter of 2001, versus 5.65% a year
 earlier and 5.80% on December 31, 2000.  30+ delinquency were equivalent to
 7.98% of gross contract receivables outstanding at the end of the first
 quarter of 2001, versus 8.37% a year earlier and 9.06% on December 31, 2000.
     Net loan charge-offs, as a percentage of average contract receivables (net
 of unearned interest), calculated on an annualized basis, was 14.63% for the
 first quarter of 2001, compared with 15.84% for the first quarter of 2000 and
 14.26% for the fourth quarter of 2000.
     The annualized yield on interest-earning assets of 21.47% for the first
 quarter of 2001 compared with 22.93% for the prior-year quarter and 21.88% for
 the fourth quarter of 2000. The decrease in yield reflects a more competitive
 program for our dealers while continuing to maintain our underwriting
 standards.
     The cost of interest-bearing liabilities was 10.35% for the first quarter
 of 2001, compared with 9.62% for the first quarter of 2000 and 11.33% for the
 quarter ended December 31, 2000. The fourth quarter of 2000 operating results
 also reflect the interest method of amortizing the costs associated with the
 Company's securitization program versus the straight-line method in prior
 quarters of 2000.  The Company continues to explore ways to reduce its overall
 cost of interest bearing liabilities.
     Operating expenses, as a percentage of interest-earning assets (calculated
 on an annualized basis), was 10.44% for the first quarter of 2001 compared to
 12.15% for the first quarter of 2000 and 11.21% for the fourth quarter of
 2000.  The calculation for the first quarter of 2000 was adjusted to eliminate
 approximately $750,000 in pretax costs associated with the consolidation of
 service centers.
     In addition to the historical information, statements included in this
 press release, by the Company's management team, may contain forward-looking
 statements that are subject to risks and uncertainties that could cause the
 Company's results to differ materially from those anticipated in forward-
 looking statements. Readers are cautioned not to place undue reliance on
 forward-looking statements, such as management's optimism for the remainder of
 2001 which reflect management's current analysis.  In accordance with the
 Private Securities Litigation Reform Act of 1995, the following are among the
 factors that could cause the Company's actual results to differ materially
 from those expressed or implied by such forward-looking statements:  the
 inability of the Company to obtain favorable credit facilities to replace its
 current facility with its principal lender, a rise in interest rates, a
 deterioration of credit experience, competitive pricing and other factors, the
 loss of or reduction in its credit facilities, or if the Company were to face
 increased competition.  Investors are encouraged to review TFC Enterprise's
 SEC filings for more information about the factors affecting the Company's
 business.
 
     TFC Enterprises, Inc., conducts its operations primarily through two
 wholly-owned subsidiaries:  THE Finance Company, specializes in purchasing and
 servicing installment sales contracts originated by automobile and motorcycle
 dealers and First Community Finance, Inc., specializes in the direct
 origination and servicing of consumer loans. Based in Norfolk, VA, TFC
 Enterprises, Inc., has thirteen contract production offices of THE Finance
 Company throughout the United States and twenty-one offices of First Community
 Finance in Virginia and North Carolina. The Company's common stock symbol is
 listed on Nasdaq National Market and trades under the symbol "TFCE".
     For additional information regarding the Company or this news release,
 call 757-858-1400 and ask to speak with Robert S. Raley, Jr. ext. 299 or Ron
 Tray ext. 354.
 
     NOTE:  Detailed supplemental information follows.
 
 
     TFC ENTERPRISES, INC.
     CONSOLIDATED BALANCE SHEETS
     (Unaudited)
 
                                                     03/31/01       12/31/00
     (dollars in thousands)
     Assets
     Cash and cash equivalents                         $1,515         $1,603
     Restricted cash                                   16,887         17,677
     Net contract receivables                         226,010        218,594
     Property and equipment, net                        2,548          2,615
     Intangible assets, net                             8,604          8,881
     Other assets                                       3,122          3,593
     Total assets                                    $258,686       $252,963
 
     Liabilities and shareholders' equity
     Liabilities
     Revolving lines of credit                       $122,876       $103,763
     Automobile receivables-backed notes               61,608         78,531
     Subordinated notes and other term debt            15,195         15,048
     Accounts payable and accrued expenses              4,241          4,291
     Income taxes payable and other liabilities         5,343          2,954
     Refundable dealer reserve                          2,197          2,454
     Total liabilities                                211,460        207,041
 
     Shareholders' equity:
     Common stock, $.01 par value,
      40,000,000 shares authorized,
      11,455,884 and 11,449,559 outstanding
      at 03/31/01 and 12/31/00                             50             50
     Additional paid-in capital                        56,109         56,105
     Retained deficit                                 (8,933)       (10,233)
     Total shareholders' equity                        47,226         45,922
 
     Total liabilities and
      shareholders' equity                           $258,686       $252,963
 
 
     TFC ENTERPRISES, INC.
     CONSOLIDATED INCOME STATEMENTS
     (Unaudited)
 
                                                         Three months ended
     (in thousands, except                           03/31/01        03/31/00
      per share amounts)
 
     Interest and other finance revenue               $13,939        $12,470
     Interest expense                                   5,214          3,810
     Net interest revenue                               8,725          8,660
     Provision for credit losses                          198            182
     Net interest revenue after
      provision for credit losses                       8,527          8,478
 
     Other revenue                                        486            359
     Total net interest and other revenue               9,013          8,837
 
     Operating expense:
     Salaries                                           3,546          3,780
     Employee benefits                                    719            769
     Occupancy                                            286            481
     Equipment                                            413            398
     Amortization of intangible assets                    278            273
     Other                                              1,534          1,589
     Total operating expense                            6,776          7,290
 
     Income before income taxes                         2,237          1,547
     Provision for income taxes                           937            672
 
     Net income                                       $ 1,300           $875
 
     Net income per common share:
     Basic                                              $0.11          $0.08
     Diluted                                            $0.11          $0.07
 
 
     TFC ENTERPRISES, INC.
     FINANCIAL HIGHLIGHTS
     (Unaudited)
 
                                                        Three months ended
                                                     03/31/01       03/31/00
     (dollars in thousands)
 
     CONTRACT PURCHASES OR ORIGINATIONS
     Auto finance:
      Point of sale                                   $51,738        $36,383
      Bulk                                             13,519         17,498
     Consumer finance                                   7,564          5,909
      Total                                           $72,821        $59,790
 
     AVERAGE BALANCES
      Interest-earning assets                        $259,711       $217,550
      Total assets                                    258,635        210,904
      Interest-bearing liabilities                    201,595        158,322
      Equity                                           46,526         42,353
 
     PERFORMANCE RATIOS*
      Return on average assets                          2.01%          1.66%
      Return on average equity                          11.17           8.27
      Yield on interest-earning assets                  21.47          22.93
      Cost of interest-bearing liabilities              10.35           9.62
      Net interest margin                               13.44          15.92
      Operating expense as a percentage of
       interest-earning assets                          10.44          13.40
      Total net charge-offs to
       average gross contract receivables,
       net of unearned interest                         14.63          15.84
      60+ days delinquencies to
       period-end gross contract receivables             5.46           5.65
      30+ days delinquencies to
       period-end gross contract receivables             7.98           8.37
      Total allowance, discount and
       nonrefundable reserve to
       period-end gross contract receivables
       net of unearned interest                         10.91          12.52
      Equity to period-end assets                       18.26          19.73
 
     * annualized rates, as appropriate
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X37269032
 
 SOURCE  TFC Enterprises, Inc.