WFSI Wfs Financial Inc. (MM)

WFS Financial Inc: -0- *T -- Third quarter net income increased 66% to $63 million -- Earnings per share increased 66% to $1.54 per share -- Contract originations grew 15% to $2.1 billion *T WFS Financial Inc (Nasdaq:WFSI) reported that net income increased 66% to $63.4 million for the three months ended September 30, 2005 compared with $38.1 million for the same period a year ago. Earnings per diluted share increased 66% to $1.54 for the three months ended September 30, 2005 compared with $0.93 per diluted share for the same period a year earlier. For the nine months ended September 30, 2005, net income increased 26% to $174 million compared with $139 million for the same period a year earlier. Earnings per diluted share rose 26% to $4.25 for the nine months ended September 30, 2005 compared with $3.37 for the same period a year ago. "Our third quarter performance reflects our sustained growth in auto originations and the strength of our business model," said Tom Wolfe, President of Westcorp. "We continue to experience double digit origination growth across the country. Additionally, our superior credit performance is the result of our ongoing commitment to credit quality and operational excellence." Annualized credit loss experience improved 70 basis points to 1.25% of average managed automobile contracts for the third quarter compared with 1.95% for the same period a year earlier. For the nine months ended September 30, 2005, credit loss experience improved 63 basis points to 1.35% compared with 1.98% for the same period a year earlier. The improvement in credit loss experience reflects a 15% decrease in the annualized default rate for the quarter to 3.9% compared with 4.6% a year ago. In addition, the total recovery rate improved 20% to 74% for the quarter compared to 62% a year ago. This rate includes both the average realization on the collateral sold of 53%, up from 49% a year ago, and the deficiency balance recoveries of 21%, up from 13% a year ago. The increase in the deficiency balance recoveries was due primarily to the recognition of $7.3 million in sales tax refunds on charged off accounts due to a favorable tax authority ruling. Of the $7.3 million, $6.4 million relates to prior quarters. The amount that relates to prior quarters reduced the credit loss experience for the quarter by 20 basis points. The percentage of outstanding automobile contracts 30 days or more delinquent improved 9 basis points to 2.15% at September 30, 2005 compared with 2.24% a year ago. The provision for credit losses decreased to $42.5 million for the three months ended September 30, 2005, compared with $60.0 million for the same period a year earlier due to lower chargeoff experience, including the effect of sales tax refunds recognized during the quarter. For the nine months ended September 30, 2005, the provision for credit losses decreased to $132 million compared with $133 million for the same period a year ago. At September 30, 2005, the allowance for credit losses totaled $282 million or 2.4% of owned automobile contracts compared with $252 million or 2.6% at December 31, 2004. Automobile contract purchases totaled $2.1 billion for the third quarter of 2005, a 15% increase from the same period a year earlier. For the nine months ended September 30, 2005, automobile contract purchases totaled $5.9 billion, a 16% increase compared with $5.1 billion a year ago. As a result of higher contract originations, the Company's portfolio of managed automobile contracts grew 11% to $12.7 billion at September 30, 2005, up from $11.4 billion a year earlier. Total average interest earning assets increased $2.6 billion to $12.2 billion for the third quarter, up from $9.6 billion for the same period a year ago. As a result, net interest income grew 29% to $192 million for the third quarter compared with $149 million for the same period a year earlier. Net interest margin was 5.82% for the third quarter compared with 5.83% for the same period a year ago. For the nine months ended September 30, 2005, net interest income grew 26% to $538 million compared with $425 million for the same period a year earlier. Net interest margin was 5.94% for the nine months ended September 30, 2005 compared with 5.84% for the same period a year ago. Noninterest income decreased $15.6 million to $20.9 million for the three months ended September 30, 2005 compared with $36.5 million for the same period a year earlier. For the nine months ended September 30, 2005, noninterest income decreased $55.6 million to $64.5 million compared with $120 million for the same period a year ago. Noninterest income was reduced by $18.1 million and $49.3 million of loan origination fees that were deferred during the three and nine months ended September 30, 2005, respectively. Noninterest expense increased to $64.7 million or 2.06% of average managed contracts for the third quarter compared with $62.2 million or 2.21% of average managed contracts for the same period a year earlier. For the nine months ended September 30, 2005, noninterest expense decreased to $182 million or 2.00% of average managed contracts compared with $183 million or 2.22% of average managed contracts a year ago. Included in noninterest expense is $3.3 million of transaction expenses related to the previously proposed merger of the Company into Western Financial Bank as part of the acquisition of the Company's minority interest and the recently announced merger agreement entered into among Wachovia, Westcorp, Western Financial Bank and the Company. Noninterest expense was reduced by $7.3 million and $20.7 million of direct origination costs that were deferred during the three and nine months ended September 30, 2005, respectively. Historically, the Company performed analysis on the fees and direct costs related to its origination of automobile loans and elected not to defer and amortize such amounts as the net effect was not material to its financial statements in accordance with Statement of Financial Accounting Standard No. 91 and SEC Staff Accounting Bulletin No. 99. Due to continuing improvements in operating efficiencies and the higher amount of documentation fees earned, the difference between the amount of fees received and the direct costs incurred has gradually increased. The Company decided to defer and amortize these amounts to interest income prospectively beginning in the first quarter of this year. The Company issued $2.7 billion of automobile receivable asset-backed securities during the quarter in its largest transaction to date. The Company and its ultimate parent, Westcorp, continue to be the largest non-captive issuer of automobile asset-backed securities in the U.S. having issued a total of $46 billion of such securities in 68 transactions to date. The Company expects to recognize additional transaction related expenses associated with the proposed merger with Wachovia through the consummation of the transaction. Due to the pending merger with Wachovia, there will be no scheduled investor conference call to discuss the third quarter results. Westcorp is a financial services holding company whose principal subsidiaries are WFS Financial Inc and Western Financial Bank. Westcorp is a publicly owned company whose common stock is traded on the New York Stock Exchange under the symbol WES. Information about Westcorp can be found at its web site at http://www.westcorpinc.com Westcorp, through its subsidiary, WFS Financial, is one of the nation's largest independent automobile finance companies. WFS Financial specializes in originating, securitizing, and servicing new and pre-owned prime and non-prime credit quality automobile contracts through its nationwide relationships with automobile dealers. WFS Financial is a publicly owned company whose common stock is traded on the Nasdaq under the symbol WFSI. Information about WFS Financial can be found at its web site at http://www.wfsfinancial.com. Westcorp, through its subsidiary, Western Financial Bank, operates retail bank branches and provides commercial banking services in Southern California. Information on the products and services offered by the Bank can be found at its web site at http://www.wfb.com. This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act, as amended. Forward-looking statements are identified by the use of terms and phrases such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan," "predict," "project," "will," and similar terms and phrases, including references to assumptions. Forward-looking statements in this press release relate to analyses and other information, which are based on forecasts of future results and estimates of amounts not yet determinable. In addition, these statements relate to the Company's future prospects, developments and business strategies and include information regarding the Company's improved credit quality trends and higher automobile origination growth. In addition, forward-looking statements include statements regarding the proposed merger with Wachovia. These statements are subject to uncertainties and factors relating to the Company's operations and business environment, all of which are difficult to predict and many of which are beyond its control that could cause actual results to differ materially from those expressed in or implied by these forward-looking statements. In particular, there can be no assurances that improved credit quality trends or origination growth identified in this press release will continue in future periods. The following factors are among those that may cause actual results to differ materially from the forward-looking statements: changes in general economic and business conditions; interest rate fluctuations, including the effect of hedging activities; the Company's financial condition and liquidity, as well as future cash flow and earnings and the level of operating expenses; competition; the effect, interpretation, or application of new or existing laws, regulations, court decisions and significant litigation; the exercise of discretionary authority by regulatory agencies; a decision to change the Company's corporate structure; the availability of sources of funding; and the level of chargeoffs on the automobile contracts that the Company originates. In addition, the Company can provide no assurances that the merger with Wachovia will close when expected, if at all. The merger of Westcorp and Wachovia is subject to the requisite approval of Westcorp's shareholders, and the merger of the Company and Wachovia is subject to the requisite approval of the Company's shareholders (including the approval of a majority of shares of the Company's common stock represented and voting at the Company's meeting, excluding shares of the Company's common stock held by Westcorp and its affiliates). Additionally, each of the mergers are subject to receipt of requisite regulatory approvals, including the approval of applicable federal and state banking regulators, receipt of tax opinions and other closing conditions. A further list of these risks, uncertainties and other matters can be found in the Company's filings with the Securities and Exchange Commission. If one or more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect, the Company's actual results may vary materially from those expected, estimated or projected. The information contained in this press release is as of October 25, 2005. The Company assumes no obligation to update any forward-looking statements to reflect future events or circumstances. -0- *T WFS FINANCIAL INC AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) For the Three Months For the Nine Months Ended September 30, Ended September 30, ----------------------- ----------------------- 2005 2004 2005 2004 ----------- ----------- ----------- ----------- (Dollars in thousands, except per share amounts) Interest income: Loans, including fees $ 288,040 $ 223,494 $799,201 $ 653,105 Other 8,330 3,555 18,823 8,219 ----------- ----------- ----------- ----------- TOTAL INTEREST INCOME 296,370 227,049 818,024 661,324 Interest expense: Notes payable on automobile secured financing 92,037 68,586 246,862 203,755 Other 12,107 9,688 33,461 32,352 ----------- ----------- ----------- ----------- TOTAL INTEREST EXPENSE 104,144 78,274 280,323 236,107 ----------- ----------- ----------- ----------- NET INTEREST INCOME 192,226 148,775 537,701 425,217 Provision for credit losses 42,529 59,957 132,015 133,354 ----------- ----------- ----------- ----------- NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES 149,697 88,818 405,686 291,863 Noninterest income: Automobile servicing 19,347 35,205 60,049 104,468 Gain on sale of contracts 13,792 Other 1,564 1,312 4,408 2,134 ----------- ----------- ----------- ----------- TOTAL NONINTEREST INCOME 20,911 36,517 64,457 120,394 Noninterest expense: Salaries and associate benefits 38,937 39,171 113,165 118,919 Credit and collections 8,675 7,989 25,035 24,054 Data processing 4,898 3,739 13,803 11,455 Occupancy 3,012 2,851 8,799 8,479 Other 9,201 8,424 20,983 19,813 ----------- ----------------------- ----------- TOTAL NONINTEREST EXPENSE 64,723 62,174 181,785 182,720 ----------- ----------- ----------- ----------- INCOME BEFORE INCOME TAX 105,885 63,161 288,358 229,537 Income tax 42,471 25,057 113,881 90,979 ----------- ----------- ----------- ----------- NET INCOME $ 63,414 $ 38,104 $ 174,477 $ 138,558 =========== =========== =========== =========== Earnings per common share: Basic $ 1.54 $ 0.93 $ 4.25 $ 3.38 =========== =========== =========== =========== Diluted $ 1.54 $ 0.93 $ 4.25 $ 3.37 =========== =========== =========== =========== Weighted average number of common shares outstanding: Basic 41,087,701 41,037,813 41,067,542 41,035,873 =========== =========== =========== =========== Diluted 41,087,701 41,080,978 41,067,542 41,078,722 =========== =========== =========== =========== WFS FINANCIAL INC AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited) September December 30, 2005 31, 2004 ------------ ----------- (Dollars in thousands) ASSETS Cash $ 70,641 $ 87,963 Restricted cash 511,881 363,783 Contracts receivable 11,539,443 9,563,057 Allowance for credit losses (281,562) (252,465) ------------ ----------- Contracts receivable, net 11,257,881 9,310,592 Accrued interest receivable 64,498 55,126 Premises and equipment, net 29,664 30,820 Other 128,743 100,934 ------------ ----------- TOTAL ASSETS $12,063,308 $9,949,218 ============ =========== LIABILITIES Lines of credit -- parent $ 265,067 $ 213,741 Notes payable on automobile secured financing 10,022,631 8,105,275 Notes payable -- parent 300,000 300,000 Amounts held on behalf of trustee 124,897 194,913 Other 132,888 104,812 ------------ ----------- TOTAL LIABILITIES 10,845,483 8,918,741 SHAREHOLDERS' EQUITY Common stock (no par value; authorized 50,000,000 shares; issued and outstanding 41,088,380 shares at September 30, 2005 and 41,038,003 shares at December 31, 2004) 338,678 338,328 Paid-in capital 6,324 6,324 Retained earnings 863,906 689,429 Accumulated other comprehensive income (loss), net of tax 8,917 (3,604) ------------ ----------- TOTAL SHAREHOLDERS' EQUITY 1,217,825 1,030,477 ------------ ----------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $12,063,308 $9,949,218 ============ =========== The following table presents information relative to the average balances and interest rates on an owned basis for the periods indicated: For the Three Months Ended September 30, 2005 ------------------------------ Average Interest Yield/ Balance Rate ------------- --------- ------ (Dollars in thousands) Interest earning assets: Contracts receivable (1) $11,250,886 $288,040 10.16% Investment securities 945,315 8,330 3.50 ------------- --------- ------ Total interest earning assets $ 12,196,201 296,370 9.64 ============= Interest bearing liabilities: Lines of credit -- parent $350,774 3,898 4.41 Notes payable -- parent 300,000 7,688 10.25 Notes payable on automobile secured financing 10,091,332 92,037 3.65 Other 148,143 521 1.40 ------------- --------- ------ Total interest bearing liabilities $ 10,890,249 104,144 3.82% ============= --------- ------ Net interest income and interest rate spread $192,226 5.82% ========= ====== Net yield on average interest earning assets 6.23% ====== For the Three Months Ended September 30, 2004 ------------------------------ Average Interest Yield/ Balance Rate ------------- --------- ------ (Dollars in thousands) Interest earning assets: Contracts receivable (1) $ 8,605,463 $223,494 10.33% Investment securities 955,623 3,555 1.48 ------------- --------- ------ Total interest earning assets $ 9,561,086 227,049 9.45 ============= Interest bearing liabilities: Lines of credit -- parent $ 43,008 463 4.28 Notes payable -- parent 327,121 8,290 10.14 Notes payable on automobile secured financing 7,970,739 68,586 3.44 Other 300,948 935 1.24 ------------- --------- ------ Total interest bearing liabilities $ 8,641,816 78,274 3.62% ============= --------- ------ Net interest income and interest rate spread $148,775 5.83% ========= ====== Net yield on average interest earning assets 6.17% ====== (1) For the purpose of these computations, nonaccruing contracts are included in the average amounts outstanding. For the Nine Months Ended September 30, 2005 ------------------------------ Average Interest Yield/ Balance Rate ------------ ---------- ------ (Dollars in thousands) Interest earning assets: Contracts receivable (1) $10,519,970 $ 799,201 10.16% Investment securities 834,669 18,823 3.02 ------------ ---------- ------ Total interest earning assets $11,354,639 818,024 9.63 ============ Interest bearing liabilities: Lines of credit -- parent $ 254,585 8,143 4.28 Notes payable -- parent 300,000 23,063 10.25 Notes payable on automobile secured financing 9,382,948 246,862 3.51 Other 179,482 2,255 1.68 ------------ ---------- ------ Total interest bearing liabilities $10,117,015 280,323 3.69% ============ ---------- ------ Net interest income and interest rate spread $ 537,701 5.94% ========== ====== Net yield on average interest earning assets 6.34% ====== For the Nine Months Ended September 30, 2004 ------------------------------ Average Interest Yield/ Balance Rate ------------ ---------- ------ (Dollars in thousands) Interest earning assets: Contracts receivable (1) $ 8,259,679 $ 653,105 10.56% Investment securities 906,891 8,219 1.21 ------------ ---------- ------ Total interest earning assets $ 9,166,570 661,324 9.64 ============ Interest bearing liabilities: Lines of credit -- parent $ 43,434 956 2.94 Notes payable -- parent 374,950 28,052 9.98 Notes payable on automobile secured financing 7,560,837 203,755 3.59 Other 314,450 3,344 1.42 ------------ ---------- ------ Total interest bearing liabilities $ 8,293,671 236,107 3.80% ============ ---------- ------ Net interest income and interest rate spread $ 425,217 5.84% ========== ====== Net yield on average interest earning assets 6.20% ====== (1) For the purpose of these computations, nonaccruing contracts are included in the average amounts outstanding. WFS FINANCIAL AND SUBSIDIARIES OTHER FINANCIAL DATA AND STATISTICAL SUMMARY Q3 2005 Q2 2005 Q1 2005 (Dollars in thousands, except per share amounts) ---------------------------------------------------------------------- Earnings: Net interest income $ 192,226 $ 176,142 $ 169,333 Provision for credit losses 42,529 40,224 49,262 Noninterest income 20,911 20,624 22,923 Noninterest expense 64,723 58,697 58,365 ------------ ------------ ------------ Income before taxes 105,885 97,845 84,629 Income taxes 42,471 38,528 32,883 ------------ ------------ ------------ Net income $ 63,414 $ 59,317 $ 51,746 ============ ============ ============ ---------------------------------------------------------------------- Equity: Earning per share - basic $ 1.54 $ 1.44 $ 1.26 Earning per share - diluted $ 1.54 $ 1.44 $ 1.26 Book value per share (period end) (1) $ 29.42 $ 27.88 $ 26.45 Stock price per share (period end) $ 67.19 $ 50.71 $ 43.15 Total equity to assets (1) 10.02% 10.10% 9.33% Return on average equity (1) 21.57% 21.29% 19.56% Average shares outstanding - diluted 41,087,701 41,066,461 41,075,579 ---------------------------------------------------------------------- Loan Portfolio: Automobile contracts purchased $ 2,070,694 $ 2,013,622 $ 1,782,414 Automobile contracts managed (period end) $12,718,750 $12,307,454 $11,852,222 Number of accounts managed (period end) 941,616 919,722 895,377 Average automobile contracts managed $12,550,228 $12,019,325 $11,702,544 ---------------------------------------------------------------------- Credit Quality: Delinquency rate (30+ days) 2.15% 1.80% 1.53% Repossessions to total contracts 0.05% 0.05% 0.05% Net chargeoffs (annualized) 1.25% 1.15% 1.66% Allowance to automobile contracts 2.44% 2.51% 2.58% ---------------------------------------------------------------------- Operations: Total assets $12,063,308 $11,342,318 $11,637,467 Noninterest expense to average contracts managed 2.06% 1.95% 1.99% Q4 2004 Q3 2004 (Dollars in thousands, except per share amounts) ---------------------------------------------------------------------- Earnings: Net interest income $ 158,594 $ 148,775 Provision for credit losses 58,961 59,957 Noninterest income 34,386 36,517 Noninterest expense 62,663 62,174 ----------- ----------- Income before taxes 71,356 63,161 Income taxes 27,673 25,057 ----------- ----------- Net income $ 43,683 $ 38,104 =========== =========== ---------------------------------------------------------------------- Equity: Earning per share - basic $ 1.06 $ 0.93 Earning per share - diluted $ 1.06 $ 0.93 Book value per share (period end) (1) $ 25.20 $ 24.13 Stock price per share (period end) $ 50.56 $ 46.55 Total equity to assets (1) 10.39% 10.28% Return on average equity (1) 17.27% 15.69% Average shares outstanding - diluted 41,081,156 41,080,978 ---------------------------------------------------------------------- Loan Portfolio: Automobile contracts purchased $ 1,583,748 $ 1,799,106 Automobile contracts managed (period end) $ 11,560,890 $ 11,440,353 Number of accounts managed (period end) 876,695 869,038 Average automobile contracts managed $ 11,512,626 $ 11,268,695 ---------------------------------------------------------------------- Credit Quality: Delinquency rate (30+ days) 2.24% 2.24% Repossessions to total contracts 0.07% 0.06% Net chargeoffs (annualized) 2.01% 1.95% Allowance to automobile contracts 2.64% 2.64% ---------------------------------------------------------------------- Operations: Total assets $ 9,949,218 $ 9,631,069 Noninterest expense to average contracts managed 2.18% 2.21% (1) Excludes other comprehensive income. WFS FINANCIAL INC AND SUBSIDIARIES CUMULATIVE STATIC POOL LOSS CURVES (UNAUDITED) At September 30, 2005 The following table sets forth the cumulative static pool losses by month for all outstanding public securitized pools: Period (1) 2002-1 2002-2 2002-3 2002-4 2003-1 2003-2 2003-3(3) 2003-4 -------------------------------------------------------------- ------- 1 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 2 0.01% 0.00% 0.02% 0.02% 0.01% 0.00% 0.00% 0.01% 3 0.06% 0.03% 0.06% 0.07% 0.04% 0.02% 0.02% 0.03% 4 0.15% 0.10% 0.14% 0.16% 0.11% 0.06% 0.06% 0.08% 5 0.29% 0.18% 0.27% 0.26% 0.18% 0.14% 0.13% 0.14% 6 0.43% 0.32% 0.44% 0.38% 0.29% 0.25% 0.23% 0.21% 7 0.60% 0.49% 0.57% 0.50% 0.41% 0.36% 0.32% 0.28% 8 0.84% 0.66% 0.70% 0.61% 0.53% 0.48% 0.40% 0.35% 9 1.06% 0.82% 0.82% 0.78% 0.66% 0.59% 0.47% 0.44% 10 1.28% 0.96% 0.96% 0.94% 0.80% 0.70% 0.55% 0.54% 11 1.48% 1.10% 1.10% 1.08% 0.93% 0.80% 0.62% 0.61% 12 1.67% 1.26% 1.24% 1.28% 1.06% 0.89% 0.71% 0.73% 13 1.82% 1.39% 1.38% 1.43% 1.21% 0.98% 0.80% 0.83% 14 1.99% 1.51% 1.53% 1.59% 1.31% 1.08% 0.88% 0.93% 15 2.14% 1.68% 1.70% 1.77% 1.40% 1.20% 0.97% 1.03% 16 2.27% 1.83% 1.88% 1.92% 1.50% 1.31% 1.07% 1.09% 17 2.45% 1.99% 2.03% 2.05% 1.60% 1.41% 1.16% 1.19% 18 2.62% 2.16% 2.15% 2.16% 1.70% 1.53% 1.25% 1.24% 19 2.80% 2.31% 2.28% 2.25% 1.85% 1.66% 1.33% 1.30% 20 2.99% 2.46% 2.41% 2.37% 1.99% 1.76% 1.40% 1.36% 21 3.15% 2.60% 2.52% 2.49% 2.14% 1.87% 1.45% 1.42% 22 3.31% 2.72% 2.62% 2.62% 2.27% 1.95% 1.50% 1.47% 23 3.45% 2.86% 2.74% 2.73% 2.37% 2.02% 1.57% 1.54% 24 3.58% 2.95% 2.83% 2.84% 2.47% 2.09% 1.62% 25 3.69% 3.03% 2.96% 2.95% 2.57% 2.16% 1.69% 26 3.80% 3.13% 3.08% 3.06% 2.63% 2.21% 1.74% 27 3.92% 3.22% 3.21% 3.17% 2.68% 2.27% 28 4.02% 3.33% 3.31% 3.25% 2.73% 2.34% 29 4.12% 3.41% 3.41% 3.32% 2.78% 2.40% 30 4.22% 3.50% 3.48% 3.38% 2.85% 31 4.30% 3.58% 3.56% 3.43% 2.91% 32 4.39% 3.66% 3.62% 3.48% 2.93% 33 4.49% 3.73% 3.67% 3.55% 34 4.56% 3.78% 3.71% 3.61% 35 4.63% 3.84% 3.74% 3.63% 36 4.69% 3.86% 3.80% 37 4.74% 3.90% 3.84% 38 4.77% 3.93% 3.86% 39 4.80% 3.97% 40 4.84% 4.01% 41 4.87% 4.02% 42 4.91% 43 4.90% Prime Mix (2) 70% 87% 85% 80% 80% 82% 84% 82% Period (1) 2004-1(3) 2004-2 2004-3 2004-4 2005-1 2005-2 2005-3 ---------------------------------------------------------------------- 1 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 2 0.00% 0.00% 0.02% 0.00% 0.00% 0.00% 0.01% 3 0.02% 0.03% 0.06% 0.04% 0.02% 0.02% 0.03% 4 0.06% 0.07% 0.13% 0.09% 0.06% 0.07% 5 0.11% 0.15% 0.21% 0.15% 0.13% 0.13% 6 0.19% 0.24% 0.30% 0.23% 0.20% 0.22% 7 0.27% 0.33% 0.40% 0.30% 0.28% 0.30% 8 0.34% 0.41% 0.50% 0.37% 0.38% 9 0.42% 0.51% 0.56% 0.45% 0.48% 10 0.52% 0.59% 0.64% 0.54% 11 0.59% 0.65% 0.69% 0.65% 12 0.67% 0.70% 0.77% 0.75% 13 0.75% 0.76% 0.87% 14 0.81% 0.83% 0.94% 15 0.88% 0.91% 16 0.93% 0.98% 17 1.00% 1.03% 18 1.06% 19 1.12% 20 1.18% 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 Prime Mix (2) 82% 82% 81% 78% 78% 77% 76% (1) Represents the number of months since inception of the securitization. (2) Represents the original percentage of prime automobile contracts securitized within each pool. (3) Represents loans sold to Westcorp in whole loan sales and subsequently securitized by Westcorp. WFS manages these contracts pursuant to an agreement with Westcorp and the securitization trust. *T