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Element Achieves Record Origination Volume; Vendor Finance Major Focus

November 07, 2012, 07:19 AM
Filed Under: Corporate Earnings

Element Financial Corporation ("Element" or "the Company"), Canada's leading independent equipment finance company, today reported that record origination levels of $219.7 million contributed to revenue of  $19.6 million, operating income of $5.4 million and operating income per share of $0.05 on an after-tax basis for the three month period ending September 30, 2012.

Of the $219.7 million of new originations booked in the third quarter, Element Finance contributed $86.7 million or 39.4%, Element Capital contributed $82.1 million or 37.4% and Element Fleet contributed $50.9 million or 23.2%.  During the period, Element completed the integration of the operations of TLS Fleet Management which the company acquired on June 29, 2012 adding more than $460 million of lease assets to Element's portfolio at the end of the previous quarter.

"With all three of Element's business verticals now contributing to origination volumes, and the seasonally slowest period for our fleet management business now behind us, these strong Q3 results offer a first look at the new base line from which we expect to continue to build Element's quality earnings growth," said Steven Hudson, Element's Chairman and CEO.

Average income yield for the period was 8.8% for Element Finance, 6.4% for Element Capital and 6.7% for Element Fleet with the portfolio as a whole delivering average income yield of 7.5%. Delinquencies at the end of the period were less than 0.2% of total finance receivables.

"We are extremely pleased with the overall returns and quality of our portfolio which continues to perform above expectations," said Mr. Hudson. "As the portfolio matures, I believe the disciplined approach we've taken to underwriting will continue to contribute to the portfolio's low delinquencies and strong yields," he added.

"What has yet to be reflected in these results is the added potential to generate high quality assets from Element's increased focus on developing comprehensive vendor finance programs for major North American equipment manufacturers," said Mr. Hudson. "As we continue to scale the business, we expect earnings growth to be supplemented as additional leverage is applied to our balance sheet and SG&A is spread over a broader base of net finance income," he added.
Read the full Element Financial Corporations earnings press release.

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