AmeriCredit Corporation <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ACF)") else Response.Write("(NYSE: ACF)") end if %>
200 Bailey Avenue
Fort Worth, TX 76107
(817) 332-7000

UNION CITY, Ca., October 19, 1996/FOOLWIRE/ ---AmeriCredit reported first quarter 1997 results last week. The company reported net income of $8,072,000 or $0.27 per share compared to $2.5 million or $0.08 in the year ago period. That is an increase in net income of 220% and an increase of 238% in earnings per share. That is a little bit misleading because in the quarter a year ago they did not have a securitization gain. If you go back and estimate such a gain, earnings per share probably would have approximated $0.15 compared to $0.27, still an 80% gain in EPS.

GROWTH. Nine branch offices were opened in the first quarter -- Paramus NJ, Fredericksburg VA, Dayton OH, Winston-Salem NC, Tacoma WA, Detroit MI, Baltimore MD, Springfield IL, and Atlanta GA. These openings increased AmeriCredit's nationwide branch network to 60 offices in 26 states. AmeriCredit is now cleared to transact business in 42 states.

Origination volume increased to $175.9 million, up from $74.7 million in the first quarter a year ago, an increase of 136%. Fourth quarter 1996 originations were $148.5 million. First quarter originations exceeded their expectations. Branch volumes have been historically seasonal and the December quarter is the most affected by seasonality in their history. Net and direct receivables grew to $641.9 million, up from $286.7 million a year ago, a 124% increase.

Producing dealer relationships increased 101% to 2355 in the first quarter versus 1173 in the quarter a year ago. Franchise dealers comprise 83% of the business booked last quarter. Average monthly loan production from offices opened 6 months or longer continued to exceed their loan expectations of 75 loans.

STATISTICAL DATA FOR THE QUARTER AND COMPANY'S FINANCIAL PERFORMANCE FOR Q1. Their finance charge income for the first quarter totalled $10.8 million. Their average owned receivables for the quarter were $218.7 million which results in a yield on owned receivables for the quarter of 19.5%. Average owned and serviced receivables were $581.4 million for the quarter.

During the quarter they realized a gain on the sale of receivables to the AmeriCredit Automobile Receivables Trust 1996 C. The total size of the 1996 C transaction was $175 million, including a pre-funding account of $41.2 million. They delivered $155.2 million in receivables in the first quarter and delivered the balance of receivables into that trust in October of 1996. The first quarter gain totalled $12.9 million, or 8.1% of the first quarter proceeds of $155.2 million. The gain on the remaining $19.8 million of receivables delivered to the trust in October will be recognized in the second quarter. The main elements of the gain calculation for the first quarter were a gross spread on the receivables of 13.8%, a base servicing fee payable to AmeriCredit of 2.25%, credit loss estimates near the high end of their stated lifetime loss range of 7-10% which translates into an annualized loss rate of approximately 6%, the average life of the transactions expected to be 20 months (they again used a 12% discount rate to calculate the gain). The effective date of the first delivery of receivables to the 1996 C trust totalling $133.8 million took place very early in the first quarter, thus creating a larger gain on sale of receivables during the quarter and a corresponding lower finance charge income in the quarter. They plan to complete their next securitization transaction in November.

Servicing fee income for the first quarter totalled $3.6 million. Servicing fees were 4% of the average service loan portfolio of $362.7 million. Servicing fee income does not include any adjustments, gains or losses, of previously booked securitization transactions.

Operating expenses in the quarter totalled $9.8 million. Most importantly, as a percentage of average owned and serviced receivables, expenses were 6.7% this quarter versus 7.3% for the September 1995 quarter and down from 7.1% sequentially. Their expense ratio is continuing its downward trend and they fully expect it to reach their near-term target of 6% by about the end of their fiscal year 1997.

The provision for losses in the quarter as a percentage of average owned receivables was in line with historical provision rates.

Their average debt balances for the quarter were $163.3 million, resulting in an average interest rate paid for the quarter of 7.8%. They provided for income taxes at a rate of 38.5%. In the first quarter income taxes again were primarily non-cash as they continue using their net operating loss carryforwards. The deferred tax asset at September 30th was $5.5 million.

Total owned finance receivables at September 30th were $260.8 million and total service receivables were $381.1 million. The total owned and serviced portfolio at September 30th was $641.9 million. Their average loan size was around $11,500.00 for the quarter.

With respect to credit quality, their 60 day plus delinquency at September 30th in dollars was $22,446,000 or 3.5% of the total owned and serviced portfolio. Their total charge-offs for the quarter were $8,038,000 or 5.5% of average owned and serviced receivables. The split for charge-offs to charge-offs of on-balance-sheet receivables were $4,751,00 and charge-offs of previously securitized receivables was $3.287 million. The combined on-balance-sheet and off-balance-sheet reserves as of September 30th was 7.6%, up from 7.5% last quarter.

Their excess servicing receivable increased to $42.7 million at September 30th. This asset represents both their investment in the subordinated piece of the securitization trust as well as their share of estimated residual cash flows. They added $12.6 million to the assets as a result of their 1996 C transaction. That transaction did not have a B or subordinated piece, it was entirely residual cash flows.

Debt at September 30th includes $54.4 million of on-balance-sheet securitization debt and $109.8 million of bank debt. Just after the end of the quarter they expanded their bank line of credit from $150 million to $240 million. They received a 25 basis point reduction in the commitment fees they pay for unused borrowing capacity and a 10 basis point reduction on their spread to live or unoutstanding borrowings. Equity at September 30th totalled $168.9 million giving them a book value per share of $5.94. There were 28,396,510 shares outstanding at September 30th. During the first quarter they repurchased 315,200 shares at an average price of $13.92 for an aggregate outlay of $4.4 million.

RISK MANAGEMENT AND PORTFOLIO PERFORMANCE. As they mentioned earlier, they originated $175.9 million of loans in the quarter and they actually improved their projected default rates per their new credit scorecard installed in April. With an increasing portfolio age and some seasonality, delinquency for accounts 60 days or more past due increased to 3.5% at the end of Q1 compared to 3.1% at the end of the 4th quarter. This 40 basis point increase is less than the 90 basis point increase experienced during the same period a year ago.

Annualized charge-offs were unchanged at 5.5% for the first quarter. While they continue to expect these indicators to increase over time as the average age of their portfolio advances, the first quarter numbers are the cumulative results of favorable static pool performance. They continue to see gratifying results at the static pool level, proving the benefit of their risk management and scoring tools.

CURRENT INDUSTRY ISSUES. Regarding consumer bankruptcy experience, their static pools do not indicate deterioration in bankruptcy trends. Recent concerns regarding the consumer being overburdened are not evidenced in their static pool data supported by the following 5 points -- 1) consumer debt ratios on 1996 AmeriCredit funded contracts continue to be lower than 1995, 2) credit bureau scores are a measure of the overall risk of the consumer's credit history and originations. AmeriCredit has reduced the percentage of highest risk accounts in 1996 as compared to earlier vintages. 3) 1996 31+ delinquencies, on a static pool basis, show improvement over 1995 pools. 4) 1996 61+ delinquencies on a static pool basis show improvement over 1995 pools. 5) 1996 cumulative charge-offs on a static pool basis are lower than 1995 pools.

Portfolio performance measurements provide evidence of AmeriCredit's ability to grow on volume in the face of competition while effectively balancing risk and returns.

An article appeared recently which discussed the recent downward trend in retail and wholesale used car prices. This is an issue that AmeriCredit has addressed historically. They reiterated their strategies relative to the issue. Their origination strategies adjust according to current retail and wholesale prices through management of loan-to-value relationships. AmeriCredit disposes of all repossessions at auction in the wholesale market and they have seen stable depreciation rates for their portfolio based on wholesale market sales for the last year and a half. In reference to articles published concerning dealer fraud, AmeriCredit's ability to minimize this risk has been demonstrated in several ways. Their ability to segment the portfolio at the dealer level is enhanced by credit and behavioral scoring which allows them to identify adverse trends. Information provided by the consumer to the dealer and from the dealer to AmeriCredit is reviewed and verified in their underwriting and audit processes.

NEW INITIATIVES. During the quarter they implemented or initiated the development of a number of technological advances to further refine operating efficiency controls. Notable enhancements are: a second application scorecard was developed for a particular segment of their customer base further enhancing their ability to differentiate risk. The new card will complement their primary scorecard developed by Fair Isaac and will be implemented by December 31st. This card will more effectively differentiate risk for those consumers with a limited credit bureau file.

Voice response technology was fully implemented in August to more efficiently and effectively manage customer service issues. In September, its second full month of utilization, the system handled approximately 41,000 minutes of customer service transaction time. Almost 1/3 of their consumer customers utilized the service last month.

Electronic funds transfer processes were implemented to provide faster funding to their dealer network.

In August their second servicing facility opened in Tempe Arizona. This servicing center opened with a seamless overnight transition of over 16,000 accounts. At its capacity, this location will have 200 employees, significantly expanding their servicing capabilities consistent with their growth strategy.

THE FUTURE. AmeriCredit will open an additional 21 new offices in FY 1997, increasing their nationwide network to 81 offices. 8 managers are currently on the payroll for new office locations set to open in the December quarter. This growth strategy will expand their branch network 60% by fiscal year end. They continue to have good results in dealing with competitive issues.

Their independently performed dealer research continues to indicate that price, service, and consistency are the dealers' most important criteria for selecting them as a prime lender. AmeriCredit's strengths match their dealer customer's needs supported by the following points.

1) Price. They are able to offer flexible competitively priced programs to the dealer customer supported by credit scoring which allows them to price loans while effectively balancing risk and return.

2) Service. Technology deployment facilitates a flexible, decentralized branch network to meet dealers' needs and provide an average turn time of 2 hours. Strategic initiatives such as electronic funds transfers provide quicker funding to their dealer network.

3) Consistency. Their ability to provide consistent service is evidenced by four points. First, their investment in automation allows them to measure service levels. Second, their historical portfolio performance. Third, they were able to install a new custom scorecard in April that projected proved default rates. And they did not experience a corresponding decrease in volume. And fourth, their continued ability to build quality loan volume. Based on these factors, they remain confident in their ability to navigate the competitive environment.

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