GM Financial Reports Second Quarter 2021 Operating Results

·10 min read
  • Second quarter net income of $1.2 billion

  • Retail loan and operating lease originations of $15.0 billion for the second quarter

  • Earning assets of $102.7 billion at June 30, 2021

  • Available liquidity of $29.0 billion at June 30, 2021

FORT WORTH, Texas, August 04, 2021--(BUSINESS WIRE)--GENERAL MOTORS FINANCIAL COMPANY, INC. ("GM Financial" or the "Company") announced net income of $1.2 billion for the quarter ended June 30, 2021, compared to $878 million for the quarter ended March 31, 2021, and $173 million for the quarter ended June 30, 2020. Net income for the six months ended June 30, 2021 was $2.1 billion, compared to $340 million for the six months ended June 30, 2020.

Retail loan originations were $9.1 billion for the quarter ended June 30, 2021, compared to $8.2 billion for the quarter ended March 31, 2021, and $8.7 billion for the quarter ended June 30, 2020. Retail loan originations for the six months ended June 30, 2021 were $17.4 billion, compared to $15.2 billion for the six months ended June 30, 2020. The outstanding balance of retail finance receivables, net of fees was $56.4 billion at June 30, 2021, compared to $51.3 billion at December 31, 2020 and $46.5 billion at June 30, 2020.

Operating lease originations were $5.9 billion for the quarter ended June 30, 2021, compared to $5.8 billion for the quarter ended March 31, 2021, and $3.2 billion for the quarter ended June 30, 2020. Operating lease originations for the six months ended June 30, 2021 were $11.6 billion, compared to $8.2 billion for the six months ended June 30, 2020. Leased vehicles, net was $40.6 billion at June 30, 2021, compared to $39.8 billion at December 31, 2020, and $39.6 billion at June 30, 2020.

The outstanding balance of commercial finance receivables, net of fees was $5.7 billion at June 30, 2021, compared to $9.1 billion at December 31, 2020 and $7.9 billion at June 30, 2020.

Retail finance receivables 31-60 days delinquent were 1.5% of the portfolio at June 30, 2021 and 2.2% at June 30, 2020. Accounts more than 60 days delinquent were 0.5% of the portfolio at June 30, 2021 and 1.3% at June 30, 2020.

Annualized net charge-offs were 0.4% of average retail finance receivables for the quarter ended June 30, 2021 and 1.5% for the quarter ended June 30, 2020. For the six months ended June 30, 2021, annualized net charge-offs were 0.6%, compared to 1.6% for the six months ended June 30, 2020.

The Company had total available liquidity of $29.0 billion at June 30, 2021, consisting of $4.4 billion of cash and cash equivalents, $21.1 billion of borrowing capacity on unpledged eligible assets, $0.5 billion of borrowing capacity on committed unsecured lines of credit, $1.0 billion of borrowing capacity on the Junior Subordinated Revolving Credit Facility from GM, and $2.0 billion of borrowing capacity on the GM Revolving 364-Day Credit Facility.

Earnings resulting from the Company's equity investment in joint ventures that conduct automotive finance operations in China were $50 million for the quarter ended June 30, 2021, compared to $54 million for the quarter ended March 31, 2021 and $42 million for the quarter ended June 30, 2020. Earnings for the six months ended June 30, 2021 were $104 million, compared to $67 million for the six months ended June 30, 2020.

About GM Financial

General Motors Financial Company, Inc. is the wholly owned captive finance subsidiary of General Motors Company and is headquartered in Fort Worth, Texas. In lieu of a conference call, management recorded remarks addressing the Company’s results of operations for the quarter ended June 30, 2021. This recording, along with the presentation slides and this release, will be posted to the Company’s website on August 4, 2021 by 11:00 a.m. central time. The recording and materials can be accessed via the Investor Relations section of the Company’s website at https://investor.gmfinancial.com.

Forward-Looking Statements

This release contains several "forward-looking statements." Forward-looking statements are those that use words such as "believe," "expect," "intend," "plan," "may," "likely," "should," "estimate," "continue," "future" or "anticipate" and other comparable expressions. These words indicate future events and trends. Forward-looking statements are our current views with respect to future events and financial performance. These forward-looking statements are subject to many assumptions, risks and uncertainties that could cause actual results to differ significantly from historical results or from those anticipated by us. The most significant risks are detailed from time to time in our filings and reports with the Securities and Exchange Commission, including our annual report on Form 10-K for the year ended December 31, 2020 and our subsequent quarterly reports on Form 10-Q. Such risks include - but are not limited to - the length and severity of the COVID-19 pandemic; GM's ability to sell new vehicles that we finance in the markets we serve; dealers' effectiveness in marketing our financial products to consumers; the viability of GM-franchised dealers that are commercial loan customers; the sufficiency, availability and cost of sources of financing, including credit facilities, securitization programs and secured and unsecured debt issuances; the adequacy of our underwriting criteria for loans and leases and the level of net charge-offs, delinquencies and prepayments on the loans and leases we purchase or originate; our ability to effectively manage capital or liquidity consistent with evolving business or operational needs, risk management standards and regulatory or supervisory requirements; the adequacy of our allowance for loan losses on our finance receivables; our ability to maintain and expand our market share due to competition in the automotive finance industry from a large number of banks, credit unions, independent finance companies and other captive automotive finance subsidiaries; changes in the automotive industry that result in a change in demand for vehicles and related vehicle financing; the effect, interpretation or application of new or existing laws, regulations, court decisions and accounting pronouncements; adverse determinations with respect to the application of existing laws, or the results of any audits from tax authorities, as well as changes in tax laws and regulations, supervision, enforcement and licensing across various jurisdictions; the prices at which used vehicles are sold in the wholesale auction markets; vehicle return rates, our ability to estimate residual value at lease inception and the residual value performance on vehicles we lease; interest rate fluctuations and certain related derivatives exposure; our joint ventures in China, which we cannot operate solely for our benefit and over which we have limited control; changes in the determination of LIBOR and other benchmark rates; our ability to secure private customer and employee data or our proprietary information, manage risks related to security breaches and other disruptions to our networks and systems and comply with enterprise data regulations in all key market regions; foreign currency exchange rate fluctuations and other risks applicable to our operations outside of the U.S.; and changes in local, regional, national or international economic, social or political conditions. If one or more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect, our actual results may vary materially from those expected, estimated or projected. It is advisable not to place undue reliance on any forward-looking statements. We undertake no obligation to, and do not, publicly update or revise any forward-looking statements, except as required by law, whether as a result of new information, future events or otherwise.

General Motors Financial Company, Inc.

Condensed Consolidated Statements of Income

(Unaudited, in millions)

Three Months Ended June 30,

Six Months Ended June 30,

2021

2020

2021

2020

Revenue

Finance charge income

$

1,036

$

966

$

2,052

$

1,972

Leased vehicle income

2,304

2,386

4,625

4,849

Other income

86

71

156

163

Total revenue

3,426

3,423

6,833

6,984

Costs and expenses

Operating expenses

378

345

789

703

Leased vehicle expenses

825

1,779

2,069

3,476

Provision for loan losses

59

327

33

793

Interest expense

633

788

1,283

1,623

Total costs and expenses

1,895

3,239

4,174

6,595

Equity income

50

42

104

67

Income before income taxes

1,581

226

2,763

456

Income tax provision

401

53

705

116

Net income

1,180

173

2,058

340

Less: cumulative dividends on preferred stock

29

22

59

45

Net income attributable to common shareholder

$

1,151

$

151

$

1,999

$

295

Condensed Consolidated Balance Sheets

(Unaudited, in millions)

June 30, 2021

December 31, 2020

ASSETS

Cash and cash equivalents

$

4,378

$

5,063

Finance receivables, net

60,212

58,390

Leased vehicles, net

40,596

39,819

Goodwill

1,174

1,173

Equity in net assets of non-consolidated affiliates

1,704

1,581

Related party receivables

611

643

Other assets

7,247

7,156

Total assets

$

115,922

$

113,825

LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities

Secured debt

$

38,999

$

39,982

Unsecured debt

54,571

52,443

Deferred income

2,933

3,048

Related party payables

358

269

Other liabilities

4,596

4,485

Total liabilities

101,457

100,227

Total shareholders' equity

14,465

13,598

Total liabilities and shareholders' equity

$

115,922

$

113,825

Operational and Financial Data

(Unaudited, Dollars in millions)

Three Months Ended June 30,

Six Months Ended June 30,

Originations

2021

2020

2021

2020

Retail finance receivables originations

$

9,131

$

8,693

$

17,363

$

15,190

Lease originations

$

5,873

$

3,165

$

11,633

$

8,205

Three Months Ended June 30,

Six Months Ended June 30,

Average Earning Assets

2021

2020

2021

2020

Average retail finance receivables

$

55,108

$

44,636

$

53,838

$

43,564

Average commercial finance receivables

6,166

10,061

7,156

10,668

Average finance receivables

61,274

54,697

60,994

54,232

Average leased vehicles, net

40,545

40,346

40,320

41,028

Average earning assets

$

101,819

$

95,043

$

101,314

$

95,260

Ending Earning Assets

June 30, 2021

December 31, 2020

Retail finance receivables, net of fees

$

56,357

$

51,288

Commercial finance receivables, net of fees

5,705

9,080

Leased vehicles, net

40,596

39,819

Ending earning assets

$

102,658

$

100,187

Finance Receivables

June 30, 2021

December 31, 2020

Retail

Retail finance receivables, net of fees

$

56,357

$

51,288

Less: allowance for loan losses

(1,805

)

(1,915

)

Total retail finance receivables, net

54,552

49,373

Commercial

Commercial finance receivables, net of fees

5,705

9,080

Less: allowance for loan losses

(45

)

(63

)

Total commercial finance receivables, net

5,660

9,017

Total finance receivables, net

$

60,212

$

58,390

Allowance for Loan Losses

June 30, 2021

December 31, 2020

Allowance for loan losses as a percentage of retail finance receivables, net of fees

3.2

%

3.7

%

Allowance for loan losses as a percentage of commercial finance receivables, net of fees

0.8

%

0.7

%

Delinquencies

June 30, 2021

June 30, 2020

Loan delinquency as a percentage of ending retail finance receivables:

31 - 60 days

1.5

%

2.2

%

Greater than 60 days

0.5

1.3

Total

2.0

%

3.5

%

Three Months Ended June 30,

Six Months Ended June 30,

Charge-offs and Recoveries

2021

2020

2021

2020

Charge-offs

$

204

$

256

$

457

$

596

Less: recoveries

(144

)

(89

)

(293

)

(245

)

Net charge-offs

$

60

$

167

$

164

$

351

Net charge-offs as an annualized percentage of average retail finance receivables

0.4

%

1.5

%

0.6

%

1.6

%

Three Months Ended June 30,

Six Months Ended June 30,

Operating Expenses

2021

2020

2021

2020

Operating expenses as an annualized percentage of average earning assets

1.5

%

1.5

%

1.6

%

1.5

%

View source version on businesswire.com: https://www.businesswire.com/news/home/20210804005602/en/

Contacts

Investor Relations contact:
Stephen Jones
Vice President, Investor Relations
(817) 302-7119
Investors@gmfinancial.com

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