Exeter Improves Portfolio Performance With Stricter Underwriting

Exeter Finance LLC managed to lower delinquencies and charge-offs in its portfolio by implementing “tighter controls and stricter underwriting,” according to an S&P Global Ratings pre-sale report.

Through March, the subprime auto lender’s total delinquencies decreased to 14.55% of the portfolio compared with 15.68% in the same period a year earlier. Similarly, net charge-offs decreased to 9.41% of the portfolio compared with 9.91% in the comparable period.

S&P attributes the change to a new strategy implemented when executive management began to change at the start of 2016. Namely, Jason Grubb was appointed as the chief executive of Exeter in February 2016, and more recently, Brad Nall was named chief financial officer in January 2017.

The new approach has helped grow the portfolio as well. Exeter’s outstandings increased by 11.5% year over year to $3.59 billion, according to the report.

The 2018-3 issuance holds $567 million worth of auto loans and S&P is expecting a loss rate of at least 20.5%. The sale is expected to close Wednesday.