Chesswood Reports Record Earnings Aided by Tax Recovery

Chesswood Group, a North American commercial equipment finance provider for small and medium-sized businesses, reported the company generated operating earnings of $8.0 million in Q4/17 and $32.1 million for the year, compared to $6.0 million and $30.3 million, respectively, last year. The results for the prior year included $1.1 million of greater operating earnings from Windset Capital, which has been wound down in 2017.

“Chesswood once again enjoyed a record year by most financial measures including originations, total portfolio size, finance margin and operating income,” said Barry Shafran, Chesswood’s president and CEO. “Our gross finance receivables reached almost $700 million at year-end, and while our net income was also a record at $25.4 million. Our fourth quarter operating earnings of $8.0 million were $2.0 million over last year’s fourth quarter results and were helped significantly by our very effective collections efforts. Our fourth quarter and annual net income benefited from a $9.4 million one-time recovery of deferred taxes as a result of the reduction in the U.S. corporate income tax rates from the Tax Cuts and Jobs Act.”

Chesswood will benefit directly from the new lower U.S. corporate income tax rates in 2018 as our largest subsidiary, Pawnee Leasing, is a U.S. taxpayer. The company estimates that based on 2017 taxable income, the 13% lower U.S. corporate tax rate would have generated an increase in net income of approximately $3.0 million.

Through two wholly-owned subsidiaries in the U.S. and Canada, Chesswood Group Limited is North America’s only publicly-traded commercial equipment finance company focused on small and medium-sized businesses. Colorado-based Pawnee Leasing, founded in 1982, finances a highly diversified portfolio of commercial equipment leases and loans through established relationships with more than 600 independent brokers in 48 U.S. states. In Canada, Blue Chip Leasing has been originating and servicing commercial equipment leases and loans since 1996, and today operates through a nationwide network of more than 50 independent brokers.

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