Irvine-based United PanAm Financial Corp., an auto lender, said its third-quarter income was off 73% from a year ago as the credit crunch weighs in.
The company’s income came in at $2.6 million, down from $4.5 million a year ago.
The company makes, buys and sells auto loans.
Weak auto sales coupled with increased delinquencies and losses have cut into the company’s bottom line. United PanAm also blamed higher gas prices.
For the quarter, the company purchased $150 million in auto loans compared to $140 million a year ago.
Interest income increased 18% to $60 million, while interest expense increased 29% to $13 million.
Loan loss provisions were also upped to adjust for an increase in its annual charge-off rate to 6.7% from 5.4% a year ago.
The company has tightened its credit criteria in an effort to attract a higher quality of borrowers. It now requires more income from borrowers as well as more value in cars.
PanAm’s loan rates have gone up by 1% in 22 states. It has also extended the loans to 72 months from 60 months.
Three weeks ago the company announced a change in direction as made plans to stop opening branches, while expanding existing ones. The company’s growth has traditionally come from new branches.
Its stock was off nearly 10% in midday New York trading. It has a market value of $114 million.
