Huntington Auto Finance managed to grow its portfolio 8% year over year despite a decrease in origination volume due to tighter lending standards, the bank reported during its second-quarter earnings call.
The Columbus, Ohio-based bank held auto balances of $12.3 billion during the quarter while originations declined 2% year over year to $1.6 billion. However, Huntington was able to drive the increase in revenue by “consistently increasing auto loan pricing, which slowed originations while optimizing revenue,” Chief Executive and President Steve Steinour said during the second quarter earnings call.
Additionally, dealer floorplan volume rose 1.23% year over year to $4.1 billion. Huntington’s indirect model has worked well because consumers still want to be able to go to the dealership, Rich Porrello, lead of the bank’s auto finance business, told Auto Finance News. The bank fares well in that process thanks to “speed” and “consistency,” Porrello said. “That’s why we’ve been able to grow at the risk metrics that make sense to us.”
Meanwhile, the average loan-to-value ratio was flat at 89% year-over-year, and the percentage of new vehicles financed rose to 47% compared with 45% in the same period the year prior.
Delinquencies more than 30 days past due accounted for 0.74% of the portfolio — a decrease compared with 0.80% the same time last year. Likewise, charge-offs accounted for 0.27% of the portfolio, down from 0.37% in the second quarter of 2017.Like This Post