CarMax Auto Finance Posts Q1 Gains in Income and Originations

June 22, 2012

RICHMOND, Va. — CarMax Auto Finance watched its income and originations strengthen during Q1 of its 2013 fiscal year as results came out as a part of CarMax’s overall financial report earlier this week.

For the period that ended May 31, officials tabulated that CarMax Auto Finance’s income grew by 8 percent to $75.2 million compared with $69.7 million in the first quarter of the prior year. They noted favorable CAF loss experience increased net earnings by $0.01 per share in this year’s first quarter and $0.03 per share in last year’s quarter.

“Excluding the loss favorability in both periods, the percentage growth in CAF income would have more closely resembled the increase in average managed receivables,” the company division stated.

CarMax Auto Finance’s average managed receivables grew 16 percent to $5.08 billion in the first quarter, compared with $4.39 billion in the prior-year period.

“The growth reflected increased origination volume throughout fiscal 2012 and in the first quarter of fiscal 2013,” officials explained. “Origination volumes benefited from an increase in CAF’s loan penetration, as we transitioned back to a pre-recession origination strategy and reduced the volume of loans sold to third-party providers.

“Originations also benefited from increased average selling prices and retail unit sales during fiscal 2012 and 2013,” they went on to say.

The division’s allowance for loan losses increased modestly to 0.9 percent of managed receivables as of May 31, compared with 0.8 percent as of the same date a year earlier.

“The effect of the change in the credit mix was largely offset by favorable loss performance,” officials pointed out.

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