Chase Auto Originates $8 Billion in First Quarter

Chase BankChase Auto Finance’s first-quarter originations were down 16.6% year over year to $8 billion in loans and leases, the company announced today. The dip in origination is a reflection of record high auto sales in 2016, according to the company.

The auto delinquency rate 30-plus days past due — at 0.93% in 1Q — was down both for the quarter and slightly year over year. At yearend 2016, the rate was at 1.19%, and was at 0.94% at the same quarter the year prior.

Allowance for loan losses were at $474 million in 1Q, and have remained flat since the third quarter of 2016, but were up from $399 million at the same time a year prior.

It was in the third quarter of 2016 that the bank made the decision to increase it’s allowance for loan losses, Marianne Lake, JP Morgan Chase & Co.’s chief financial officer, said on the company’s 3Q16 earnings call.

“We built $25 million of reserves this quarter for auto, and we expect to continue,” she said at the time. “We think the auto opportunity is still strong, we have a great franchise, and we have great manufacturing partnerships which are growing strongly too. So, as we grow that portfolio, I would expect us to continue to grow our reserves modestly in 2017. However, we are expecting charge-offs to stay under control.”

Net charge-offs — at $81 million — were up almost 21% year over year, but were down nearly 13% from yearend 2016.

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