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| So we're able to manage with lower leverage on -- and building up our balance sheet is certainly a sign of strength for our balance sheet |
| So all things considered quite a good year on the originations volume |
| We believe we found the best voice bot in the market |
| And again so it's still kind of remarkable that through all that, our company has done so well in terms of how our paper performed in '22 and even '23 |
| We booked a lifetime loss reserve on that portfolio, and the results are coming in on that better than we expected, so we're able to reverse any loss reserves that are no longer required |
| The initial results from this model is quite positive |
| The subprime auto market is certainly very strong |
| That turned out to be very significant in helping us do better in the whole process of the '22 paper |
| The slight uptick quarter-over-quarter reflects strong demand in the subprime auto business space |
| So we're pleased with that |
| So we're happy along those fronts |
| To that effect, and again, despite the pullback, we were able to grow the total managed portfolio, which now stands at $3.195 billion, which is an increase from $3 billion at the end of 2022 |
| And with a lower rate environment, obviously, our margins improve |
| That might be interesting opportunity wise, but also the fact that we can start growing again and sort of put '22 behind us and be proud of what we did in '22 |
| So as a result, this is -- in the 30 years I've been with this company, we've never had a time where our company stands out so much better than almost everyone else in terms of credit performance and in terms of how we run our models and manage our portfolio |
| The markup is a result of better-than-expected performance in that fair value portfolio |
| So we were super, super proud of our people and what we've done to do it and certainly think '23 and everything we've done during '23 has well positioned us for '24 to be a very good year |
| While 2022 was a record year for us and certainly, we were excited and pleased, despite the pullback in 2023, it actually ended up being the second best originations year in our 30-plus history |
| All the changes we've made have been very good |
| The fourth quarter remains solid as we purchased $301 million of new contracts |
| This has been an initial success as we've seen a 25% increase in our recurring payment sign-ups |
| So that's a very good trend |
| So that was a bit of an interesting sort of revelation that as much as we didn't like our paper, our paper was doing way better than almost everyone else's, and that is true today |
| So even though we aren't quite thrilled with the challenges that 2022 and 2023 -- early 2023 had, we are very pleased with our performance in our space |
| And connecting that voice bot to our texting platform should certainly help our collections performance |
| Hopefully, now that '22 is getting behind us, '23 performance is certainly much better |
| So we're starting to see some operating leverage improvement as the portfolio grows |
| We continue to hold a strong APR in the fourth quarter as we registered an average APR of 21%, which is about on pace for where we were at the end of 2022 |
| So we're happy with our servicing performance |
| We also continue to infuse our business with AI platforms to increase efficiency and accuracy |
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| They've dropped a bit into the high 30s as used car prices dropped, hurting us at the auction, and there remains a dearth of repo agents who left the industry during COVID |
| For the year period, our net interest margin is $205.4 million is 15% lower than 2022 |
| And also the other bullet that can really hurt the business is a recession |
| Obviously, inflation and rising interest rates were headwinds that we could not control, along with the guaranteed back-end problems that Brad talked about, it jacked up the amount finance and jacked up the car payments, putting stress on the consumer |
| Unemployment is the one thing that can cause our industry problems |
| One of the worst things that we could say in this call is the subprime auto market is downsizing that's just not true with our applications volume |
| Bad news is we spent most of '23 evaluating the '22 performance and figuring out what went wrong and how to make it better so that we can then move forward and it took some time |
| So what we did find out as the year went on and actually just the first or second quarter, as much as we were somewhat dismayed in our performance and how our credit was performing, we found out that almost everyone else in the industry was doing far, far worse |
| One interesting thing that we see is we don't necessarily lose business to our direct competitors that sit on top of us in the space, but we actually lose business to credit unions |
| Anecdotally, we were recently at a major asset-backed security conference, and we routinely heard from investors and bankers that our 2022 vintages and 2023 vintages far outweighed our competitors' performance in the space |
| And we think that but for the unique approaches we've taken are servicing the performance would have been slightly worse |
| And it harkens back to, I think, in late January of '23, when we were looking at our credit performance, we were somewhat surprised and/or dismayed, if not shocked that the '22 vintages weren't performing as well as we thought they would |
| Our extensions to active account ratio is actually a little bit below our historical numbers |
| Looking at other metrics, our net interest margin of 51.7% is 4% less than the 54.1% a year ago |
| One of the first things was somebody in our industry came up with a not so brilliant idea of guaranteeing back-end profit to all the dealerships, being that we have been a long kind of forever around forever, we realized right away, that was kind of stupid |
| Everyone is still struggling with the '22 paper |
| While this has lowered our overall approval percentage, more significantly and more importantly, we've knocked down the LTVs, which is a leading metric to predicting losses |
| But on an annualized basis, the '23 period came in at 5.7% is a reduction from the 6.1% we saw in 2022 |
| We were obviously very skeptical |
| So and we said that '22 was tough, '23 was sort of that transition from making '22 go away and getting things ready to go for '24 |
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