HSBC Fin Corp Q3 8K
HSBC Holdings PLC
14 November 2005
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
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PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT: NOVEMBER 14, 2005
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COMMISSION FILE NUMBER 1-8198
HSBC FINANCE CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 86-1052062
(STATE OF INCORPORATION) (IRS EMPLOYER IDENTIFICATION NUMBER)
2700 SANDERS ROAD, PROSPECT HEIGHTS, 60070
ILLINOIS
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(847) 564-5000
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
( ) Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
( ) Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
( ) Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
( ) Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION
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Financial supplement pertaining to the financial results of HSBC Finance
Corporation for the quarter and nine months ended September 30, 2005. The
information included in the financial supplement is presented on a managed
basis, which is a non-GAAP financial measure that assumes that securitized
receivables have not been sold and remain on our balance sheet.
This information shall not be deemed to be "filed" for the purposes of
Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange
Act), or otherwise incorporated by reference into any filing pursuant to the
Securities Act of 1933, as amended, or the Exchange Act except as otherwise
expressly stated in such a filing.
ITEM 9.01. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
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(a) Financial statements of businesses acquired.
Not applicable.
(b) Pro forma financial information.
Not applicable.
(c) Exhibits.
NO. EXHIBIT
--- -------
Quarterly Financial Supplement for the quarter ended
September 30, 2005
99
SIGNATURE
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Pursuant to the requirement of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
HSBC FINANCE CORPORATION
(Registrant)
By: /s/ Patrick D. Schwartz
------------------------------------
Patrick D. Schwartz
Vice President-Deputy General
Counsel-Corporate
Dated: November 14, 2005
EXHIBIT 99
HSBC FINANCE CORPORATION
QUARTERLY FINANCIAL SUPPLEMENT -- SEPTEMBER 30, 2005
INDEX PAGE NO.
----- --------
Basis of Reporting.......................................... 2
Consolidated Statements of Income -- Owned Basis:
Three Months.............................................. 3
Nine Months............................................... 5
Receivables Analysis........................................ 7
Financial Highlights -- Managed Basis:
Three Months.............................................. 8
Nine Months............................................... 9
Credit Quality/Credit Loss Reserves -- Managed Basis........ 10
Reconciliations to GAAP Financial Measures:
Revenues, Average Interest-Earning Assets and Net Interest
Income:
Three Months......................................... 11
Nine Months.......................................... 12
Selected Financial Ratios................................. 13
Credit Quality/Credit Loss Reserves:
Two-Months-and-Over Contractual Delinquency............ 14
Quarter-to-Date Charge-offs, Net of Recoveries......... 14
Real Estate Charge-offs and REO Expense................ 16
Credit Loss Reserves................................... 17
Nonperforming Assets................................... 17
HSBC Finance Corporation
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BASIS OF REPORTING
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NON-GAAP FINANCIAL MEASURES
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This Quarterly Financial Supplement includes financial information which is
presented on a non-GAAP basis as discussed below. Information included in this
Quarterly Financial Supplement is intended to supplement and should not be
considered a substitute for owned basis reporting. This Quarterly Financial
Supplement should be read in conjunction with the owned basis information
reported in our Quarterly Report on Form 10-Q.
See "Reconciliations to GAAP Financial Measures" for quantitative
reconciliations of non-GAAP financial information to the equivalent owned basis
GAAP financial information.
MANAGED BASIS REPORTING We have historically monitored our operations and
evaluated trends on a managed basis (a non-GAAP financial measure), which
assumes that securitized receivables have not been sold and remain on our
balance sheet. This is because the receivables that we securitize are subjected
to underwriting standards comparable to our owned portfolio, are serviced by
operating personnel without regard to ownership and result in a similar credit
loss exposure for us. In addition, we fund our operations and make decisions
about allocating resources such as capital on a managed basis.
When reporting on a managed basis, net interest income, provision for
credit losses and fee income related to receivables securitized are reclassified
from securitization related revenue in our owned statement of income into the
appropriate caption. Additionally, charge-off and delinquency associated with
these receivables are included in our managed basis credit quality statistics.
Debt analysts, rating agencies and fixed income investors also evaluate our
operations on a managed basis for the reasons discussed above and have
historically requested managed basis information from us. We believe that
managed basis information enables such investors and other interested parties to
better understand the performance and quality of our entire managed loan
portfolio and is important to understanding the quality of originations and the
related credit risk inherent in our owned and securitized portfolios. As the
level of our securitized receivables falls over time, managed basis and owned
basis results will eventually converge.
2
HSBC Finance Corporation
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CONSOLIDATED STATEMENTS OF INCOME -- OWNED BASIS
THREE MONTHS
% CHANGE FROM
THREE MONTHS ENDED PRIOR
--------------------------- -------------
9/30/05 6/30/05 9/30/04 QTR. YEAR
-----------------------------------------------------------------------------------------------
(DOLLARS ARE IN MILLIONS)
Finance and other interest income................. $3,402 $3,139 $2,779 8.4% 22.4%
Interest expense:
HSBC affiliates................................. 222 134 95 65.7 100+
Non-affiliates.................................. 1,017 970 715 4.8 42.2
------ ------ ------ ----- -----
NET INTEREST INCOME............................... 2,163 2,035 1,969 6.3 9.9
Provision for credit losses....................... 1,361 1,031 1,123 32.0 21.2
------ ------ ------ ----- -----
NET INTEREST INCOME AFTER PROVISION FOR CREDIT
LOSSES.......................................... 802 1,004 846 (20.1) (5.2)
------ ------ ------ ----- -----
Other revenues:
Securitization related revenue.................. 41 54 267 (24.1) (84.6)
Insurance revenue............................... 229 229 203 -- 12.8
Investment income............................... 33 33 36 -- (8.3)
Derivative income (expense)..................... (53) 76 72 (100+) (100+)
Fee income...................................... 439 354 302 24.0 45.4
Taxpayer financial services revenue (expense)... (1) 18 (3) (100+) (66.7)
Gain on receivable sales to HSBC affiliates..... 99 109 10 (9.2) 100+
Servicing fees from HSBC affiliates............. 102 100 6 2.0 100+
Other income.................................... 213 151 147 41.1 44.9
------ ------ ------ ----- -----
TOTAL OTHER REVENUES.............................. 1,102 1,124 1,040 (2.0) 6.0
------ ------ ------ ----- -----
Costs and expenses:
Salaries and employee benefits.................. 513 526 472 (2.5) 8.7
Sales incentives................................ 117 90 91 30.0 28.6
Occupancy and equipment expenses................ 83 82 77 1.2 7.8
Other marketing expenses........................ 196 185 174 5.9 12.6
Other servicing and administrative expenses..... 149 143 235 4.2 (36.6)
Support services from HSBC affiliates........... 226 217 183 4.1 23.5
Amortization of intangibles..................... 90 83 83 8.4 8.4
Policyholders' benefits......................... 109 116 93 (6.0) 17.2
------ ------ ------ ----- -----
TOTAL COSTS AND EXPENSES.......................... 1,483 1,442 1,408 2.8 5.3
------ ------ ------ ----- -----
Income before income tax expense.................. 421 686 478 (38.6) (11.9)
Income tax expense................................ 140 214 153 (34.6) (8.5)
------ ------ ------ ----- -----
NET INCOME........................................ $ 281 $ 472 $ 325 (40.5)% (13.5)%
====== ====== ====== ===== =====
3
HSBC Finance Corporation
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SECURITIZATION RELATED REVENUE
THREE MONTHS ENDED
---------------------------
9/30/05 6/30/05 9/30/04
-----------------------------------------------------------------------------------------
(IN MILLIONS)
Net initial gains(1)........................................ $ -- $ -- $ --
Net replenishment gains(1).................................. 38 44 112
Servicing revenue and excess spread......................... 3 10 155
----- ----- ------
Total....................................................... $ 41 $ 54 $ 267
===== ===== ======
---------------
(1) Net of our estimate of probable credit losses under the recourse provisions.
RECEIVABLES SECURITIZED
THREE MONTHS ENDED
---------------------------
9/30/05 6/30/05 9/30/04
-----------------------------------------------------------------------------------------
(IN MILLIONS)
Auto finance................................................ $-- $-- $--
MasterCard/Visa(1).......................................... -- -- --
Private label............................................... -- -- --
--- --- ---
Total....................................................... $-- $-- $--
=== === ===
---------------
(1) MasterCard and Visa are registered trademarks of MasterCard International,
Incorporated and VISA USA Inc., respectively.
4
HSBC Finance Corporation
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CONSOLIDATED STATEMENTS OF INCOME -- OWNED BASIS
NINE MONTHS
NINE MONTHS ENDED
----------------------------
9/30/05 9/30/04 % CHANGE
------------------------------------------------------------------------------------------
(DOLLARS ARE IN MILLIONS)
Finance and other interest income........................... $9,491 $7,944 19.5%
Interest expense:
HSBC affiliates........................................... 507 213 100+
Non-affiliates............................................ 2,898 2,012 44.0
------ ------ -----
NET INTEREST INCOME......................................... 6,086 5,719 6.4
Provision for credit losses................................. 3,233 3,048 6.1
------ ------ -----
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES....... 2,853 2,671 6.8
------ ------ -----
Other revenues:
Securitization related revenue............................ 180 881 (79.6)
Insurance revenue......................................... 679 618 9.9
Investment income......................................... 99 107 (7.5)
Derivative income......................................... 283 248 14.1
Fee income................................................ 1,099 809 35.8
Taxpayer financial services revenue....................... 260 209 24.4
Gain on receivable sales to HSBC affiliates............... 308 25 100+
Servicing fees from HSBC affiliates....................... 303 11 100+
Other income.............................................. 477 407 17.2
------ ------ -----
TOTAL OTHER REVENUES........................................ 3,688 3,315 11.3
------ ------ -----
Costs and expenses:
Salaries and employee benefits............................ 1,536 1,414 8.6
Sales incentives.......................................... 289 259 11.6
Occupancy and equipment expenses.......................... 252 237 6.3
Other marketing expenses.................................. 561 437 28.4
Other servicing and administrative expenses............... 550 659 (16.5)
Support services from HSBC affiliates..................... 652 556 17.3
Amortization of intangibles............................... 280 278 .7
Policyholders' benefits................................... 347 299 16.1
------ ------ -----
TOTAL COSTS AND EXPENSES.................................... 4,467 4,139 7.9
------ ------ -----
Income before income tax expense............................ 2,074 1,847 12.3
Income tax expense.......................................... 695 619 12.3
------ ------ -----
NET INCOME.................................................. $1,379 $1,228 12.3%
====== ====== =====
5
HSBC Finance Corporation
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SECURITIZATION RELATED REVENUE
NINE MONTHS ENDED
-----------------
9/30/05 9/30/04
-------------------------------------------------------------------------------
(IN MILLIONS)
Net initial gains(1)........................................ $ -- $ 25
Net replenishment gains(1).................................. 135 344
Servicing revenue and excess spread......................... 45 512
---- ----
Total....................................................... $180 $881
==== ====
---------------
(1) Net of our estimate of probable credit losses under the recourse provisions.
RECEIVABLES SECURITIZED
NINE MONTHS ENDED
-----------------
9/30/05 9/30/04
-------------------------------------------------------------------------------
(IN MILLIONS)
Auto finance................................................ $ -- $ --
MasterCard/Visa............................................. -- 550
Private label............................................... -- 190
---- ----
Total....................................................... $ -- $740
==== ====
6
HSBC Finance Corporation
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RECEIVABLES ANALYSIS
END-OF-PERIOD RECEIVABLES
% CHANGE FROM
PRIOR
--------------
9/30/05 6/30/05 9/30/04 QTR. YEAR
----------------------------------------------------------------------------------------------
(DOLLARS ARE IN MILLIONS)
OWNED RECEIVABLES:
Real estate secured........................ $ 78,130 $ 71,930 $ 58,726 8.6% 33.0%
Auto finance............................... 10,137 8,997 6,823 12.7 48.6
MasterCard/Visa............................ 18,974 17,421 11,666 8.9 62.6
Private label(1)........................... 2,777 2,905 14,000 (4.4) (80.2)
Personal non-credit card................... 18,484 17,255 14,888 7.1 24.2
Commercial and other....................... 220 253 334 (13.0) (34.1)
-------- -------- -------- ----- ------
Total owned receivables...................... 128,722 118,761 106,437 8.4 20.9
-------- -------- -------- ----- ------
RECEIVABLES SERVICED WITH LIMITED RECOURSE:
Real estate secured........................ -- -- 165 -- (100.0)
Auto finance............................... 1,474 1,819 3,060 (19.0) (51.8)
MasterCard/Visa............................ 3,615 4,752 8,843 (23.9) (59.1)
Private label(1)........................... -- -- 3,921 -- (100.0)
Personal non-credit card................... 1,670 2,409 4,186 (30.7) (60.1)
-------- -------- -------- ----- ------
Total receivables serviced with limited
recourse................................... 6,759 8,980 20,175 (24.7) (66.5)
-------- -------- -------- ----- ------
MANAGED RECEIVABLES:(2)
Real estate secured........................ 78,130 71,930 58,891 8.6 32.7
Auto finance............................... 11,611 10,816 9,883 7.4 17.5
MasterCard/Visa............................ 22,589 22,173 20,509 1.9 10.1
Private label(1)........................... 2,777 2,905 17,921 (4.4) (84.5)
Personal non-credit card(3)................ 20,154 19,664 19,074 2.5 5.7
Commercial and other....................... 220 253 334 (13.0) (34.1)
-------- -------- -------- ----- ------
Total managed receivables.................... $135,481 $127,741 $126,612 6.1% 7.0%
======== ======== ======== ===== ======
---------------
(1) On December 29, 2004, all domestic private label receivables were sold to
HSBC Bank USA, N.A.
(2) Managed basis reporting is a non-GAAP financial measure. See "Basis of
Reporting" for a discussion on the use of non-GAAP financial information.
(3) Personal non-credit card receivables are comprised of the following:
9/30/05 6/30/05 9/30/04
---------------------------------------------------------------------------------------
(IN MILLIONS)
Domestic personal unsecured...............................
$11,571 $10,942 $10,054
Union Plus personal unsecured.............................
374 387 510
Personal homeowner loans..................................
4,360 4,395 4,587
Foreign unsecured.........................................
3,849 3,940 3,923
------- ------- -------
Total..................................................... $20,154 $19,664 $19,074
======= ======= =======
7
HSBC Finance Corporation
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FINANCIAL HIGHLIGHTS -- MANAGED BASIS(1)
REVENUES, AVERAGE INTEREST-EARNING ASSETS AND NET INTEREST INCOME
THREE MONTHS
% CHANGE
THREE MONTHS ENDED FROM PRIOR
------------------------------------------------------ -------------
9/30/05 (2) 6/30/05 (2) 9/30/04 (2) QTR. YEAR
--------------------------------------------------------------------------------------------------------
(DOLLARS ARE IN MILLIONS)
Finance and other interest
income........................ $ 3,671 10.89% $ 3,488 10.75% $ 3,494 10.79% 5.2% 5.1%
Interest expense................ 1,331 3.95 1,204 3.71 944 2.91 10.5 41.0
-------- ----- -------- ----- -------- ----- ----- -----
NET INTEREST INCOME............. 2,340 6.94% 2,284 7.04% 2,550 7.88% 2.5 (8.2)
Provision for credit losses..... 1,338 1,083 891 23.5 50.2
-------- -------- -------- ----- -----
NET INTEREST INCOME AFTER
PROVISION FOR CREDIT LOSSES... $ 1,002 $ 1,201 $ 1,659 (16.6)% (39.6)%
======== ======== ======== ===== =====
Other revenues:
Insurance revenue............... $ 229 $ 229 $ 203 --% 12.8%
Investment income............... 33 33 36 -- (8.3)
Fee income...................... 497 428 498 16.1 (.2)
Securitization related
revenue....................... (217) (217) (742) -- (70.8)
Derivative income (expense)..... (53) 76 72 (100+) (100+)
Taxpayer financial services
revenue (expense)............. (1) 18 (3) (100+) (66.7)
Gain on receivable sales to HSBC
affiliates.................... 99 109 10 (9.2) 100+
Servicing fees from HSBC
affiliates.................... 102 100 6 2.0 100+
Other income.................... 213 151 147 41.1 44.9
-------- -------- -------- ----- -----
TOTAL OTHER REVENUES............ $ 902 $ 927 $ 227 (2.7)% 100+%
======== ======== ======== ===== =====
Average managed receivables Real
estate secured................ $ 74,369 $ 70,217 $ 57,741 5.9% 28.8%
Auto finance.................... 11,230 10,504 9,598 6.9 17.0
MasterCard/Visa................. 22,536 22,066 20,441 2.1 10.2
Private label................... 2,840 3,017 17,626 (5.9) (83.9)
Personal non-credit card........ 19,944 19,729 18,928 1.1 5.4
Commercial and other............ 234 261 336 (10.3) (30.4)
Purchase accounting fair value
adjustments................... 116 153 295 (24.2) (60.7)
-------- -------- -------- ----- -----
Average managed receivables..... $131,269 $125,947 $124,965 4.2% 5.0%
Average noninsurance
investments................... 2,868 3,106 3,878 (7.7) (26.0)
Other interest-earning assets... 680 673 654 1.0 4.0
-------- -------- -------- ----- -----
Average managed interest-earning
assets........................ $134,817 $129,726 $129,497 3.9% 4.1%
======== ======== ======== ===== =====
SELECTED FINANCIAL RATIOS:
Return on average managed
assets........................ .75% 1.30% .89% (42.3)% (15.7)%
Efficiency ratio................ 43.86 42.84 48.99 2.4 (10.5)
Net interest margin............. 6.94 7.04 7.88 (1.4) (11.9)
Risk adjusted revenue........... 7.34 7.22 6.50 1.7 12.9
======== ======== ======== ===== =====
---------------
(1) Managed basis reporting is a non-GAAP financial measure. See "Basis of
Reporting" for a discussion on the use of non-GAAP financial information and
"Reconciliations to GAAP Financial Measures" for quantitative
reconciliations to the equivalent GAAP basis financial measure.
(2) % Columns: comparison to average managed interest-earning assets, annualized
8
HSBC Finance Corporation
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FINANCIAL HIGHLIGHTS -- MANAGED BASIS(1)
REVENUES, AVERAGE INTEREST-EARNING ASSETS AND NET INTEREST INCOME
NINE MONTHS
NINE MONTHS ENDED
------------------------------------
9/30/05 (2) 9/30/04 (2) % CHANGE
-----------------------------------------------------------------------------------------------
(DOLLARS ARE IN MILLIONS)
Finance and other interest income............ $ 10,550 10.81% $ 10,327 10.89% 2.2%
Interest expense............................. 3,706 3.80 2,621 2.76 41.4
-------- ------ -------- ----- -----
NET INTEREST INCOME.......................... 6,844 7.01% 7,706 8.13% (11.2)
Provision for credit losses.................. 3,292 3,217 2.3
-------- -------- -----
NET INTEREST INCOME AFTER PROVISION FOR
CREDIT LOSSES.............................. $ 3,552 $ 4,489 (20.9)%
======== ======== =====
Other revenues:
Insurance revenue.......................... $ 679 $ 618 9.9%
Investment income.......................... 99 107 (7.5)
Fee income................................. 1,322 1,399 (5.5)
Securitization related revenue............. (742) (1,527) (51.4)
Derivative income.......................... 283 248 14.1
Taxpayer financial services revenue........ 260 209 24.4
Gain on receivable sales to HSBC
affiliates.............................. 308 25 100+
Servicing fees from HSBC affiliates........ 303 11 100+
Other income............................... 477 407 17.2
-------- -------- -----
TOTAL OTHER REVENUES......................... $ 2,989 $ 1,497 99.7%
======== ======== =====
Average managed receivables
Real estate secured........................ $ 70,383 $ 54,768 28.5%
Auto finance............................... 10,658 9,226 15.5
MasterCard/Visa............................ 22,177 20,492 8.2
Private label.............................. 3,028 17,486 (82.7)
Personal non-credit card................... 19,833 18,784 5.6
Commercial and other....................... 267 365 (26.8)
Purchase accounting fair value
adjustments............................. 151 344 (56.1)
-------- -------- -----
Average managed receivables.................. $126,497 $121,465 4.1%
Average noninsurance investments............. 2,966 4,307 (31.1)
Other interest-earning assets................ 673 647 4.0
-------- -------- -----
Average managed interest-earning assets...... $130,136 $126,419 2.9%
======== ======== =====
SELECTED FINANCIAL RATIOS:
Return on average managed assets............. 1.26% 1.14% 10.5%
Efficiency ratio............................. 43.43 43.13 .7
Net interest margin.......................... 7.01 8.13 (13.8)
Risk adjusted revenue........................ 7.32 6.69 9.4
-------- -------- -----
---------------
(1) Managed basis reporting is a non-GAAP financial measure. See "Basis of
Reporting" for a discussion on the use of non-GAAP financial information and
"Reconciliations to GAAP Financial Measures" for quantitative
reconciliations to the equivalent GAAP basis financial measure.
(2) % Columns: comparison to average managed interest-earning assets,
annualized.
9
HSBC Finance Corporation
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CREDIT QUALITY/CREDIT LOSS RESERVES -- MANAGED BASIS(1)
TWO-MONTHS-AND-OVER CONTRACTUAL DELINQUENCY
AS A PERCENT OF MANAGED CONSUMER RECEIVABLES, EXCLUDES COMMERCIAL. 9/30/05 6/30/05 9/30/04
-----------------------------------------------------------------------------------------------
Real estate secured............................................ 2.51% 2.56% 3.30%
Auto finance................................................... 2.67 2.69 2.74
MasterCard/Visa................................................ 4.13 3.77 4.44
Private label.................................................. 5.22 4.91 4.76
Personal non-credit card....................................... 9.36 9.11 9.52
---- ---- ----
TOTAL.......................................................... 3.87% 3.85% 4.59%
==== ==== ====
QUARTER-TO-DATE CHARGE-OFFS, NET OF RECOVERIES
AS A PERCENT OF AVERAGE MANAGED CONSUMER RECEIVABLES, ANNUALIZED, EXCLUDES COMMERCIAL. 9/30/05 6/30/05 9/30/04
-------------------------------------------------------------------------------------------------------------------
Real estate secured...................................................... .75% .78% 1.19%
Auto finance............................................................. 4.41 3.68 6.04
MasterCard/Visa.......................................................... 6.11 6.49 6.92
Private label............................................................ 5.35 4.36 4.85
Personal non-credit card................................................. 8.15 8.17 10.12
---- ---- ----
TOTAL.................................................................... 3.21% 3.28% 4.38%
==== ==== ====
Real estate charge-offs and REO expense as a percent of average managed
real estate secured receivables........................................ .88% .84% 1.31%
==== ==== ====
CREDIT LOSS RESERVES
9/30/05 6/30/05 9/30/04
-----------------------------------------------------------------------------------------
(IN MILLIONS)
Reserves for managed receivables at beginning of quarter.... $4,281 $4,242 $5,699
Provision for credit losses................................. 1,338 1,083 891
Charge-offs................................................. (1,185) (1,162) (1,486)
Recoveries.................................................. 133 134 123
Other, net.................................................. 4 (16) (28)
------ ------ ------
Reserves for managed receivables at end of quarter.......... $4,571 $4,281 $5,199
====== ====== ======
Reserves as a percent of managed receivables................ 3.37% 3.35% 4.11%
------ ------ ------
NONPERFORMING ASSETS
9/30/05 6/30/05 9/30/04
-----------------------------------------------------------------------------------------
(IN MILLIONS)
Nonaccrual managed receivables.............................. $3,541 $3,348 $3,476
Accruing managed receivables 90 or more days delinquent..... 604 537 1,201
Renegotiated commercial loans............................... -- 1 1
------ ------ ------
Total nonperforming managed receivables..................... 4,145 3,886 4,678
Real estate owned........................................... 462 459 601
------ ------ ------
TOTAL NONPERFORMING ASSETS.................................. $4,607 $4,345 $5,279
====== ====== ======
Managed credit loss reserves as a percent of nonperforming
managed receivables....................................... 110.3% 110.2% 111.1%
---------------
(1) Managed basis reporting is a non-GAAP financial measure. See "Basis of
Reporting" for a discussion on the use of non-GAAP financial information and
"Reconciliations to GAAP Financial Measures" for quantitative
reconciliations to the equivalent GAAP basis financial measure.
10
HSBC Finance Corporation
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RECONCILIATION TO GAAP FINANCIAL MEASURES
REVENUES, AVERAGE INTEREST-EARNING ASSETS AND NET INTEREST INCOME
THREE MONTHS
THREE MONTHS ENDED 9/30/05 THREE MONTHS ENDED 6/30/05
----------------------------------- -----------------------------------
SERVICED WITH SERVICED WITH
LIMITED LIMITED
OWNED RECOURSE(1) MANAGED OWNED RECOURSE(1) MANAGED
------------------------------------------------------------------------------------------------------------------
(DOLLARS ARE IN MILLIONS)
Finance and other interest income...... $ 3,402 $ 269 $ 3,671 $ 3,139 $ 349 $ 3,488
Interest expense....................... 1,239 92 1,331 1,104 100 1,204
-------- ------ -------- -------- ------- --------
NET INTEREST INCOME.................... 2,163 177 2,340 2,035 249 2,284
Provision for credit losses............ 1,361 (23) 1,338 1,031 52 1,083
-------- ------ -------- -------- ------- --------
NET INTEREST INCOME AFTER PROVISION FOR
CREDIT LOSSES......................... $ 802 $ 200 $ 1,002 $ 1,004 $ 197 $ 1,201
Other revenues:
Securitization related revenue........ $ 41 $ (258) $ (217) $ 54 $ (271) $ (217)
Insurance revenue..................... 229 -- 229 229 -- 229
Investment income..................... 33 -- 33 33 -- 33
Fee income............................ 439 58 497 354 74 428
Derivative income (expense)........... (53) -- (53) 76 -- 76
Taxpayer financial services revenue
(expense)........................... (1) -- (1) 18 -- 18
Gain on receivable sales to HSBC
affiliates.......................... 99 -- 99 109 -- 109
Servicing fees from HSBC affiliates... 102 -- 102 100 -- 100
Other income.......................... 213 -- 213 151 -- 151
-------- ------ -------- -------- ------- --------
TOTAL OTHER REVENUES................... $ 1,102 $ (200) $ 902 $ 1,124 $ (197) $ 927
Average receivables:
Real estate secured................... $ 74,369 $ -- $ 74,369 $ 70,205 $ 12 $ 70,217
Auto finance.......................... 9,585 1,645 11,230 8,510 1,994 10,504
MasterCard/Visa....................... 18,442 4,094 22,536 16,626 5,440 22,066
Private label......................... 2,840 -- 2,840 3,017 -- 3,017
Personal non-credit card.............. 17,904 2,040 19,944 16,972 2,757 19,729
Commercial and other.................. 234 -- 234 261 -- 261
Purchase accounting fair value
adjustments......................... 116 -- 116 153 -- 153
-------- ------ -------- -------- ------- --------
Average receivables.................... $123,490 $7,779 $131,269 $115,744 $10,203 $125,947
Average noninsurance investments....... 2,868 -- 2,868 3,106 -- 3,106
Other interest-earning assets.......... 680 -- 680 673 -- 673
-------- ------ -------- -------- ------- --------
Average interest-earning assets........ $127,038 $7,779 $134,817 $119,523 $10,203 $129,726
Net interest income as a percentage of
average interest-earning assets....... 6.81% 9.10% 6.94% 6.81% 9.76% 7.04%
======== ====== ======== ======== ======= ========
Finance and other interest income...... $ 2,779 $ 715 $ 3,494
Interest expense....................... 810 134 944
-------- ------- --------
NET INTEREST INCOME.................... 1,969 581 2,550
Provision for credit losses............ 1,123 (232) 891
-------- ------- --------
NET INTEREST INCOME AFTER PROVISION FOR
CREDIT LOSSES......................... $ 846 $ 813 $ 1,659
Other revenues:
Securitization related revenue........ $ 267 $(1,009) $ (742)
Insurance revenue..................... 203 -- 203
Investment income..................... 36 -- 36
Fee income............................ 302 196 498
Derivative income (expense)........... 72 -- 72
Taxpayer financial services revenue
(expense)........................... (3) -- (3)
Gain on receivable sales to HSBC
affiliates.......................... 10 -- 10
Servicing fees from HSBC affiliates... 6 -- 6
Other income.......................... 147 -- 147
-------- ------- --------
TOTAL OTHER REVENUES................... $ 1,040 $ (813) $ 227
Average receivables:
Real estate secured................... $ 57,570 $ 171 $ 57,741
Auto finance.......................... 6,238 3,360 9,598
MasterCard/Visa....................... 11,251 9,190 20,441
Private label......................... 13,310 4,316 17,626
Personal non-credit card.............. 14,423 4,505 18,928
Commercial and other.................. 336 -- 336
Purchase accounting fair value
adjustments......................... 295 -- 295
-------- ------- --------
Average receivables.................... $103,423 $21,542 $124,965
Average noninsurance investments....... 3,878 -- 3,878
Other interest-earning assets.......... 654 -- 654
-------- ------- --------
Average interest-earning assets........ $107,955 $21,542 $129,497
Net interest income as a percentage of
average interest-earning assets....... 7.29% 10.79% 7.88%
======== ======= ========
---------------
(1) When reporting on a managed basis, finance and other interest income,
interest expense, provision for credit losses and fee income related to
securitized receivables are reclassified from securitization related revenue
in our owned statements of income into the appropriate caption.
11
HSBC Finance Corporation
--------------------------------------------------------------------------------
RECONCILIATION TO GAAP FINANCIAL MEASURES
REVENUES, AVERAGE INTEREST-EARNING ASSETS AND NET INTEREST INCOME
NINE MONTHS
NINE MONTHS ENDED 9/30/05 NINE MONTHS ENDED 9/30/04
----------------------------------- ----------------------------------
SERVICED WITH SERVICED
LIMITED WITH LIMITED
OWNED RECOURSE(1) MANAGED OWNED RECOURSE(1) MANAGED
---------------------------------------------------------------------------------------------------------
(DOLLARS ARE IN MILLIONS)
Finance and other interest
income.......................
$ 9,491 $ 1,059 $ 10,550 $ 7,944 $ 2,383 $ 10,327
Interest expense...............
3,405 301 3,706 2,225 396 2,621
-------- ------- -------- -------- ------- --------
NET INTEREST INCOME............ 6,086 758 6,844 5,719 1,987 7,706
Provision for credit losses.... 3,233 59 3,292 3,048 169 3,217
-------- ------- -------- -------- ------- --------
NET INTEREST INCOME AFTER
PROVISION FOR CREDIT
LOSSES....................... $ 2,853 $ 699 $ 3,552 $ 2,671 $ 1,818 $ 4,489
Other revenues:
Securitization related
revenue.................... $ 180 $ (922) $ (742) $ 881 $(2,408) $ (1,527)
Insurance revenue............ 679 -- 679 618 -- 618
Investment income............ 99 -- 99 107 -- 107
Fee income................... 1,099 223 1,322 809 590 1,399
Derivative income............ 283 -- 283 248 -- 248
Taxpayer financial services
revenue.................... 260 -- 260 209 -- 209
Gain on receivable sales to
HSBC affiliates............ 308 -- 308 25 -- 25
Servicing fees from HSBC
affiliates................. 303 -- 303 11 -- 11
Other income................. 477 -- 477 407 -- 407
-------- ------- -------- -------- ------- --------
TOTAL OTHER REVENUES........... $ 3,688 $ (699) $ 2,989 $ 3,315 $(1,818) $ 1,497
Average receivables:
Real estate secured.......... $ 70,353 $ 30 $ 70,383 $ 54,589 $ 179 $ 54,768
Auto finance................. 8,625 2,033 10,658 5,316 3,910 9,226
MasterCard/Visa.............. 16,716 5,461 22,177 11,097 9,395 20,492
Private label................ 3,028 -- 3,028 12,589 4,897 17,486
Personal non-credit card..... 17,069 2,764 19,833 13,703 5,081 18,784
Commercial and other......... 267 -- 267 365 -- 365
Purchase accounting fair
value adjustments.......... 151 -- 151 344 -- 344
-------- ------- -------- -------- ------- --------
Average receivables............ $116,209 $10,288 $126,497 $ 98,003 $23,462 $121,465
Average noninsurance
investments.................. 2,966 -- 2,966 4,307 -- 4,307
Other interest-earning
assets....................... 673 -- 673 647 -- 647
-------- ------- -------- -------- ------- --------
Average interest-earning
assets....................... $119,848 $10,288 $130,136 $102,957 $23,462 $126,419
Net interest income as a
percentage of average
interest-earning assets...... 6.77% 9.82% 7.01% 7.41% 11.29% 8.13%
======== ======= ======== ======== ======= ========
---------------
(1) When reporting on a managed basis, finance and other interest income,
interest expense, provision for credit losses and fee income related to
securitized receivables are reclassified from securitization related revenue
in our owned statements of income into the appropriate caption.
12
HSBC Finance Corporation
--------------------------------------------------------------------------------
RECONCILIATION TO GAAP FINANCIAL MEASURES
SELECTED FINANCIAL RATIOS
THREE MONTHS ENDED NINE MONTHS ENDED
------------------------------ -------------------
9/30/05 6/30/05 9/30/04 9/30/05 9/30/04
----------------------------------------------------------------------------------------------
(DOLLARS ARE IN MILLIONS)
RETURN ON AVERAGE COMMON SHAREHOLDER'S
EQUITY:
Net income.............................. $ 281 $ 472 $ 325 $ 1,379 $ 1,228
Dividends on preferred stock.......... (25) (19) (18) (62) (54)
-------- -------- -------- -------- --------
Net income available to common
shareholders.......................... $ 256 $ 453 $ 307 $ 1,317 $ 1,174
-------- -------- -------- -------- --------
Average common shareholder's equity..... $ 16,973 $ 16,671 $ 17,367 $ 16,605 $ 17,057
-------- -------- -------- -------- --------
Return on average common shareholder's
equity................................ 6.03% 10.87% 7.07% 10.58% 9.18%
======== ======== ======== ======== ========
RETURN ON AVERAGE ASSETS:
Net income.............................. $ 281 $ 472 $ 325 $ 1,379 $ 1,228
-------- -------- -------- -------- --------
Average assets:
Owned basis........................... $141,765 $134,834 $124,512 $136,185 $120,456
Serviced with limited recourse........ 7,779 10,203 21,542 10,288 23,462
-------- -------- -------- -------- --------
Managed basis......................... $149,544 $145,037 $146,054 $146,473 $143,918
Return on average owned assets.......... .79% 1.40% 1.04% 1.35% 1.36%
Return on average managed assets........ .75 1.30 .89 1.26 1.14
======== ======== ======== ======== ========
EFFICIENCY RATIO:
Total costs and expenses less
policyholders' benefits............... $ 1,374 $ 1,326 $ 1,315 $ 4,120 $ 3,840
-------- -------- -------- -------- --------
Net interest income and other revenues
less policyholders' benefits: Owned
basis................................. $ 3,156 $ 3,043 $ 2,916 $ 9,427 $ 8,735
Serviced with limited recourse........ (23) 52 (232) 59 169
-------- -------- -------- -------- --------
Managed basis......................... $ 3,133 $ 3,095 $ 2,684 $ 9,486 $ 8,904
-------- -------- -------- -------- --------
Owned basis efficiency ratio............ 43.54% 43.58% 45.10% 43.70% 43.96%
Managed basis efficiency ratio.......... 43.86 42.84 48.99 43.43 43.13
======== ======== ======== ======== ========
MANAGED BASIS RISK ADJUSTED REVENUE:
Net interest income..................... $ 2,340 $ 2,284 $ 2,550 $ 6,844 $ 7,706
Other revenues, excluding securitization
related revenue as well as the
mark-to-market on derivatives which do
not qualify as effective hedges and
ineffectiveness associated with
qualifying hedges under SFAS No.
133................................... 1,185 1,086 916 3,494 2,812
Less: Net charge-offs................... (1,052) (1,028) (1,363) (3,198) (4,172)
-------- -------- -------- -------- --------
Risk adjusted revenue................... $ 2,473 $ 2,342 $ 2,103 $ 7,140 $ 6,346
Average interest-earning assets......... $134,817 $129,726 $129,497 $130,136 $126,419
-------- -------- -------- -------- --------
Managed basis risk adjusted revenue..... 7.34% 7.22% 6.50% 7.32% 6.69%
-------- -------- -------- -------- --------
13
HSBC Finance Corporation
--------------------------------------------------------------------------------
RECONCILIATION TO GAAP FINANCIAL MEASURES
CREDIT QUALITY/CREDIT LOSS RESERVES
Two-Months-and-Over
Contractual Delinquency Quarter-to-Date Charge-offs,
------------------------------------------ Net of Recoveries
TWO-MONTHS- TWO-MONTHS- --------------------------------------
AND-OVER CONSUMER AND-OVER NET AVERAGE
CONTRACTUAL RECEIVABLES CONTRACTUAL CHARGE- CONSUMER NET
DELINQUENCY OUTSTANDING DELINQUENCY(1) OFFS RECEIVABLES CHARGE-OFFS(1)
------------------------------------------------------------------------------------------------------------------
(DOLLARS ARE IN MILLIONS)
SEPTEMBER 30, 2005
OWNED:
First mortgage............. $ 1 $ 22 6.04% $ -- $ 23 --%
Real estate secured........ 1,961 78,130 2.51 140 74,369 .75
Auto finance............... 212 10,137 2.09 78 9,585 3.25
MasterCard/Visa............ 846 18,974 4.46 288 18,442 6.24
Private label.............. 145 2,777 5.22 38 2,840 5.35
Personal non-credit card... 1,696 18,484 9.18 358 17,904 8.01
------ -------- ----- ------ -------- -----
Total...................... $4,861 $128,524 3.78% $ 902 $123,163 2.93%
====== ======== ===== ====== ======== =====
SERVICED WITH LIMITED
RECOURSE:
Real estate secured........ $ -- $ -- --% $ -- $ -- --%
Auto finance............... 98 1,474 6.65 46 1,645 11.19
MasterCard/Visa............ 87 3,615 2.41 56 4,094 5.47
Personal non-credit card... 191 1,670 11.44 48 2,040 9.41
------ -------- ----- ------ -------- -----
Total...................... $ 376 $ 6,759 5.56% $ 150 $ 7,779 7.71%
====== ======== ===== ====== ======== =====
MANAGED:
First mortgage............. $ 1 $ 22 6.04% $ -- $ 23 --%
Real estate secured........ 1,961 78,130 2.51 140 74,369 .75
Auto finance............... 310 11,611 2.67 124 11,230 4.41
MasterCard/Visa............ 933 22,589 4.13 344 22,536 6.11
Private label.............. 145 2,777 5.22 38 2,840 5.35
Personal non-credit card... 1,887 20,154 9.36 406 19,944 8.15
------ -------- ----- ------ -------- -----
Total...................... $5,237 $135,283 3.87% $1,052 $130,942 3.21%
====== ======== ===== ====== ======== =====
JUNE 30, 2005
OWNED:
First mortgage............. $ 1 $ 24 6.24% $ -- $ 24 .03%
Real estate secured........ 1,841 71,930 2.56 137 70,205 .78
Auto finance............... 187 8,997 2.08 56 8,510 2.61
MasterCard/Visa............ 722 17,421 4.14 288 16,626 6.93
Private label.............. 143 2,905 4.91 33 3,017 4.36
Personal non-credit card... 1,525 17,255 8.84 330 16,972 7.77
------ -------- ----- ------ -------- -----
Total...................... $4,419 $118,532 3.73% $ 844 $115,354 2.93%
====== ======== ===== ====== ======== =====
SERVICED WITH LIMITED
RECOURSE:
Real estate secured........ $ -- $ -- --% $ -- $ 12 --%
Auto finance............... 104 1,819 5.72 41 1,994 8.22
MasterCard/Visa............ 114 4,752 2.40 70 5,440 5.15
Personal non-credit card... 266 2,409 11.04 73 2,757 10.59
------ -------- ----- ------ -------- -----
Total...................... $ 484 $ 8,980 5.39% $ 184 $ 10,203 7.21%
====== ======== ===== ====== ======== =====
MANAGED:
First mortgage............. $ 1 $ 24 6.24% $ -- $ 24 .03%
Real estate secured........ 1,841 71,930 2.56 137 70,217 .78
Auto finance............... 291 10,816 2.69 97 10,504 3.68
MasterCard/Visa............ 836 22,173 3.77 358 22,066 6.49
Private label.............. 143 2,905 4.91 33 3,017 4.36
Personal non-credit card... 1,791 19,664 9.11 403 19,729 8.17
------ -------- ----- ------ -------- -----
Total...................... $4,903 $127,512 3.85% $1,028 $125,557 3.28%
====== ======== ===== ====== ======== =====
---------------
(1) Certain percentages may not recompute from the dollar figures presented due
to rounding.
14
HSBC Finance Corporation
--------------------------------------------------------------------------------
RECONCILIATION TO GAAP FINANCIAL MEASURES
CREDIT QUALITY/CREDIT LOSS RESERVES (CONTINUED)
TWO-MONTHS-AND-OVER CONTRACTUAL DELINQUENCY QUARTER-TO-DATE CHARGE-OFFS,
--------------------------------------------- NET OF RECOVERIES
TWO-MONTHS- TWO-MONTHS- --------------------------------------
AND-OVER CONSUMER AND-OVER NET AVERAGE
CONTRACTUAL RECEIVABLES CONTRACTUAL CHARGE- CONSUMER NET
DELINQUENCY OUTSTANDING DELINQUENCY(1) OFFS RECEIVABLES CHARGE-OFFS(1)
---------------------------------------------------------------------------------------------------------------------
(DOLLARS ARE IN MILLIONS)
SEPTEMBER 30, 2004
OWNED:
First mortgage............. $ 2 $ 27 5.78% $ -- $ 28 .41%
Real estate secured........ 1,921 58,726 3.27 171 57,570 1.19
Auto finance............... 124 6,823 1.81 57 6,238 3.66
MasterCard/Visa............ 681 11,666 5.84 239 11,251 8.50
Private label.............. 660 14,000 4.72 159 13,310 4.79
Personal non-credit card... 1,314 14,888 8.83 343 14,423 9.50
------ -------- ----- ------ -------- -----
Total...................... $4,702 $106,130 4.43% $ 969 $102,820 3.77%
====== ======== ===== ====== ======== =====
SERVICED WITH LIMITED
RECOURSE:
Real estate secured........ $ 21 $ 165 12.73% $ -- $ 171 --%
Auto finance............... 146 3,060 4.77 88 3,360 10.48
MasterCard/Visa............ 230 8,843 2.60 115 9,190 5.01
Private label.............. 193 3,921 4.92 55 4,316 5.10
Personal non-credit card... 502 4,186 11.99 136 4,505 12.08
------ -------- ----- ------ -------- -----
Total...................... $1,092 $ 20,175 5.41% $ 394 $ 21,542 7.32%
====== ======== ===== ====== ======== =====
MANAGED:
First mortgage............. $ 2 $ 27 5.78% $ -- $ 28 .41%
Real estate secured........ 1,942 58,891 3.30 171 57,741 1.19
Auto finance............... 270 9,883 2.74 145 9,598 6.04
MasterCard/Visa............ 911 20,509 4.44 354 20,441 6.92
Private label.............. 853 17,921 4.76 214 17,626 4.85
Personal non-credit card... 1,816 19,074 9.52 479 18,928 10.12
------ -------- ----- ------ -------- -----
Total...................... $5,794 $126,305 4.59% $1,363 $124,362 4.38%
====== ======== ===== ====== ======== =====
---------------
(1) Certain percentages may not recompute from the dollar figures presented due
to rounding.
15
HSBC Finance Corporation
--------------------------------------------------------------------------------
RECONCILIATION TO GAAP FINANCIAL MEASURES
CREDIT QUALITY/CREDIT LOSS RESERVES (CONTINUED)
SERVICED WITH
OWNED LIMITED RECOURSE MANAGED
--------------------------------------------------------------------------------------------------
(DOLLARS ARE IN MILLIONS)
REAL ESTATE CHARGE-OFFS AND REO EXPENSE:
THREE MONTHS ENDED SEPTEMBER 30, 2005
Real estate charge-offs and REO expense..................... $ 163 $ -- $ 163
Average real estate secured receivables..................... 74,369 -- 74,369
------- ---- -------
Real estate charge-offs and REO expense as a percentage of
average real estate secured receivables(1)................ .88% -- .88%
======= ==== =======
THREE MONTHS ENDED JUNE 30, 2005
Real estate charge-offs and REO expense..................... $ 147 $ -- $ 147
Average real estate secured receivables..................... 70,205 12 70,217
------- ---- -------
Real estate charge-offs and REO expense as a percentage of
average real estate secured receivables(1)................ .84% -- .84%
======= ==== =======
THREE MONTHS ENDED SEPTEMBER 30, 2004
Real estate charge-offs and REO expense..................... $ 189 $ -- $ 189
Average real estate secured receivables..................... 57,570 171 57,741
------- ---- -------
Real estate charge-offs and REO expense as a percentage of
average real estate secured receivables(1)................ 1.31% -- 1.31%
======= ==== =======
---------------
(1) Certain percentages may not recompute from the dollar figures presented due
to rounding.
16
HSBC Finance Corporation
--------------------------------------------------------------------------------
RECONCILIATION TO GAAP FINANCIAL MEASURES
CREDIT QUALITY/CREDIT LOSS RESERVES (CONTINUED)
SERVICED WITH
OWNED LIMITED RECOURSE MANAGED
----------------------------------------------------------------------------------------------------
(DOLLARS ARE IN MILLIONS)
CREDIT LOSS RESERVES:
THREE MONTHS ENDED SEPTEMBER 30, 2005
Reserves for receivables at beginning of quarter............ $ 3,756 $ 525 $ 4,281
Provision for credit losses................................. 1,361 (23) 1,338
Charge-offs, net of recoveries.............................. (902) (150) (1,052)
Other, net.................................................. 5 (1) 4
-------- ------- --------
Reserves for receivables at end of quarter.................. $ 4,220 $ 351 $ 4,571
Receivables................................................. $128,722 $ 6,759 $135,481
Credit loss reserves as a percent of receivables............ 3.28% 5.19% 3.37%
-------- ------- --------
THREE MONTHS ENDED JUNE 30, 2005
Reserves for receivables at beginning of quarter............ $ 3,581 $ 661 $ 4,242
Provision for credit losses................................. 1,031 52 1,083
Charge-offs, net of recoveries.............................. (844) (184) (1,028)
Other, net.................................................. (12) (4) (16)
-------- ------- --------
Reserves for receivables at end of quarter.................. $ 3,756 $ 525 $ 4,281
Receivables................................................. $118,761 $ 8,980 $127,741
Credit loss reserves as a percent of receivables............ 3.16% 5.85% 3.35%
-------- ------- --------
THREE MONTHS ENDED SEPTEMBER 30, 2004
Reserves for receivables at beginning of quarter............ $ 3,795 $ 1,904 $ 5,699
Provision for credit losses................................. 1,123 (232) 891
Charge-offs, net of recoveries.............................. (969) (394) (1,363)
Other, net.................................................. 4 (32) (28)
-------- ------- --------
Reserves for receivables at end of quarter.................. $ 3,953 $ 1,246 $ 5,199
Receivables................................................. $106,437 $20,175 $126,612
Credit loss reserves as a percent of receivables............ 3.71% 6.18% 4.11%
-------- ------- --------
NONPERFORMING ASSETS:
SEPTEMBER 30, 2005
Nonaccrual receivables...................................... $ 3,273 $ 268 $ 3,541
Accruing receivables 90 or more days delinquent............. 563 41 604
Renegotiated commercial loans............................... -- -- --
-------- ------- --------
Total nonperforming receivables............................. 3,836 309 4,145
Real estate owned........................................... 462 -- 462
-------- ------- --------
Total nonperforming assets.................................. $ 4,298 $ 309 $ 4,607
Credit loss reserves as a percent of nonperforming
receivables............................................... 110.0% -- 110.3%
-------- ------- --------
JUNE 30, 2005
Nonaccrual receivables...................................... $ 3,008 $ 340 $ 3,348
Accruing receivables 90 or more days delinquent............. 482 55 537
Renegotiated commercial loans............................... 1 -- 1
-------- ------- --------
Total nonperforming receivables............................. 3,491 395 3,886
Real estate owned........................................... 459 -- 459
-------- ------- --------
Total nonperforming assets.................................. $ 3,950 $ 395 $ 4,345
Credit loss reserves as a percent of nonperforming
receivables............................................... 107.6% -- 110.2%
-------- ------- --------
SEPTEMBER 30, 2004
Nonaccrual receivables...................................... $ 2,891 $ 585 $ 3,476
Accruing receivables 90 or more days delinquent............. 905 296 1,201
Renegotiated commercial loans............................... 1 -- 1
-------- ------- --------
Total nonperforming receivables............................. 3,797 881 4,678
Real estate owned........................................... 601 -- 601
-------- ------- --------
Total nonperforming assets.................................. $ 4,398 $ 881 $ 5,279
Credit loss reserves as a percent of nonperforming
receivables............................................... 104.1% -- 111.1%
-------- ------- --------
17
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