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Chesswood Group Reports Q2 Results, Strong Origination Pipeline

August 04, 2021, 07:20 AM
Filed Under: Corporate Earnings

Chesswood Group Limited, a publicly traded North American commercial equipment finance provider for small and medium-sized businesses, reported its results for its second quarter ended June 30.

"The second quarter of 2021 was further evidence of the momentum we have built across each of our business units. We saw strength in originations continue throughout Q2 along with exceptional portfolio performance," said Chesswood CEO Ryan Marr. "Our net recoveries in the quarter demonstrate the credit discipline of our portfolio team in addition to the refined collections process developed over the 30+ years of being in business."

"In addition, we closed the merger of Blue Chip Leasing and Vault Credit Corporation (VCC), creating one of Canada's largest independent equipment finance organizations. We are excited to be working with the talented people at VCC and welcome them to the Chesswood family."

The company reported consolidated net income of $6.22 million in the three months ended June 30, 2021 compared to net income of $1.12 million in the same period in 2020, an increase of $5.1 million year-over-year. Other than one-time charges taken in Q2 2020, better portfolio performance and strong collections are responsible for the improvement in net income.

The U.S. Equipment Finance segment (Pawnee Leasing and Tandem Finance) reported interest revenue on leases and loans of $17.2 million and ancillary and other income of $1.6 million, a total decrease of $2 million year on year. The decrease is a result of an increasing weighting of prime receivables and a decrease in the foreign exchange rate.

The Canadian Equipment Finance segment reported interest revenue on leases and loans of $4.3 million and ancillary and other income of $1.12 million, a total increase of $2.4 million year on year. The increase is a result of a larger portfolio of receivables in its Canadian operations due to the merger of Blue Chip and VCC.


The origination pipeline remains strong as the company moves into Q3 for both our U.S. and Canadian business units. The company sees additional opportunities to enhance its balance sheet and improve its cost of funds in the second half of the year. Interest rates remain low, providing an opportunity to further reduce funding costs.

For the full results click here.

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