Chesswood Group Limited reported its adjusted operating income for the second quarter was $6.02 million compared with $6.83 million in the second quarter 2018.

This measures Chesswood’s operating income before the change in the allowance for credit losses in the period and Tandem Finance Inc.’s net expenses. Free cash flow remained strong and well in excess of its dividend levels, the company said.

Chesswood continues to focus on the build-out of its vendor-channel business Tandem Finance Inc. In its first five months, Tandem has generated originations in excess of initial expectations.

“We’re very pleased with Tandem’s first full quarter of results, after having launched business development efforts just five months ago, in March of this year” said Barry Shafran, Chesswood’s President and CEO. “At the same time, we continue to build out the Tandem team and its infrastructure, including the vendor portal through which vendor-partners and borrowers can transact entirely through electronic documents, if desired.”

With decisioning in three hours or less, a product suite of multiple credit grades from prime through “C” and a portal that can conduct business completely online, Tandem is very well equipped to offer superior service and a comprehensive product offering, which is being well received in the market.

Chesswood’s third-party businesses, Pawnee Leasing and Blue Chip Leasing are focused on matching risk with pricing in markets that are, in management’s opinion, mismatching this relationship and continuing to drive pricing lower. “While we recognize that our risk management focus impacts growth in our third-party channel businesses during this stage of the economic cycle, we believe it is the prudent course of action for Chesswood, in this market environment.”

See the full release (PDF) for more information.