Chesswood Reports Decline in COVID-19 Related Deferrals at End of Q2
AUG 11, 2020 - 6:53 am
Chesswood Group, a North American commercial equipment finance provider for small and medium-sized businesses, reported its Q2/20 results and provided a COVID-19 update.
“Our U.S. and Canadian teams worked diligently throughout the quarter to ensure customers successfully returned to making their regular monthly payments after the expiration of payment accommodation,” Ryan Marr, president and CEO of Chesswood Group, said. “As a result of this successful effort, we were able to reverse a meaningful amount of our allowance for credit losses recognized in Q1. Excluding one time items associated with the management transition, free cash flow remained strong for the quarter resulting from our strong collections effort and expense control.
“Although charge-offs are likely to remain above 2019 levels for the remainder of the year, we are encouraged by the incremental improvement we have seen throughout Q2. Our portfolio today has a higher proportion of prime credits than at any time in the company’s history, currently at 66% of total. We believe this positioning will support profitability as we move through COVID throughout the remainder of the year.”
At the end of June, COVID-19 related deferrals at Chesswood’s Pawnee Leasing subsidiary declined to 12% of portfolio accounts, representing 15% of portfolio value of the company’s customer base, with approximately 50% of COVID-19 deferred accounts resuming their regular monthly payments in June and fewer than one-third of the deferred accounts left at the end of July. Blue Chip Leasing deferrals ended the quarter at 12% of the portfolio accounts, representing 21% of portfolio value.
For Pawnee customers that have required further assistance, Chesswood introduced phase two accommodation programs. These customers agreed to some level of monthly payment, albeit at a lower level. Approximately 5% of Chesswood’s portfolio accounts subscribed to these programs.
As outlined in Q1/20, discussions with customers take place on a one-on-one basis.
Chesswood Group is a publicly-traded commercial equipment finance company focused on small and medium-sized businesses with three wholly-owned subsidiaries in the U.S. and Canada, including Pawnee Leasing, Blue Chip Leasing and Tandem Finance.
Ken Walters found his industry niche at CIT, where he worked for 18 years across many disciplines, including internal audit, equipment finance, capital markets and equity investment. He then led Emigrant Bank’s private equity investment group, Emigrant Capital, for seven... read more
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