Q1 2020 Earnings Call
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Thank you for standing by this is the called upright.
Welcome to the elevated credit Seth quarterly earnings call.
Other lined up all participants are now listen I lean lives and the called person is being recorded.
After the presentation, there will be an opportunity to ask question. He joined the question King You May Press Star then one on your telephone keypad Kitchenaid and your system. During the call. He may signal on all quite up by pressing star and they are.
I would now like to hand, the call since I've asked as Daniel Wright Director of Public Affairs. Please go ahead.
Good afternoon, thanks for joining us on elevates first quarter 2020 earnings conference call earlier today, we issued a press release with our first quarter results a copy of the release is available on our website to elevate dotcom flush investors today's call is being webcast is accompanied by a slide presentation, which is available on on.
Website, please refer now to slide to that presentation.
Our remarks and answers will include forward looking statements within the meaning of the private Securities Litigation Reform Act. These forward looking statements are subject to risks that could cause actual results to be materially different from those expressed or implied by such forward. Looking statements. These risks include among others matters that we have described in our press release today it.
Alluding impacts related to covert 19, and our most recent annual report on form 10-K, <unk> other filings, we make but the FCC. Please note that all forward looking statements speak only as of the data this call and we disclaim any obligation to update these forward looking statements.
During our call, we'll make reference to non-GAAP financial measures for a complete reconciliation of historical non-GAAP to GAAP financial measures. Please refer to our press release issued today and our slide presentation, both of which are which haven't furnished to the FCC and are available on our web site at elevate dotcom slosh investors, we did not provide a reconciliation of.
Forward looking non-GAAP financial measures due to our inability to project special charges and certain expenses joining me on the call today, our president and Chief Executive Officer, Jason Harvests, and and Chief Financial Officer, Chris lives I will now turn the call her to chase.
Good evening. Thank you for joining our first quarter 2020 earnings conference call.
First off I'd like to offer our hope everyone as well and safe I'd also like to start with a heartfelt. Thank you. Thank you and acknowledgement of the hard work of our talented employees over the last two months, it's clearly a difficult time for resolved, but I can tell you I can't tell you how proud I am to work with such great people.
I'll speak to some of our Kobin 19 actually the plans in a minute, but before I do let me very quickly review, our first quarter metrics for grounding.
I'll start by noting that similar appears in the space elevate was on pace for very strong quarter. Prior to March was on track to be Reforecast. All we mentioned for contracts as a first quarter numbers are about to summarize far not really indicative any trend.
With that said as you saw from a press release it can see here on slide four we reported the following first quarter results.
Net revenue of 89.4 million or an increase of 4.5% over the first quarter of 29 team. Our adjusted net income totaled 7.6 million or 17 cents per shares.
Adjusted net income excludes 13.6 million and non operating losses associated with the write off of our UK goodwill fancy legal accrual.
Our adjusted EBITDA margin was 18.7.
Chris will detail. These results later in the call, but let me turn to covert 19 elevate is operating through the evolving environment.
So, let's turn to slide five to discuss a response, our response and current strategy for covert 19.
First let me start with some color on how we organize our resources internally.
Since March 16th we have held executive meetings two times a day have created three separate cobot 19 teams across the following responsibilities.
First the team dedicated to our operations second a team focused on our customers and third a team dedicated to covert 19 specific credit and risk management.
We fully expect the probably the these teams to evolve along with the crisis and plan to update you along the way.
That said, let me provide some initiatives and accomplishments to date for each team effort.
First and most importantly on operations well employee safety remains our top priority and we're happy to report the following.
Elevate employers of all successfully transitioned to remote work from home systems without any meaningful disruption capabilities were service responsiveness. We worked closely with the banks to support to ensure continuity at all call center and other support levels.
Additionally, we work to ensure that there are no single points of failure and neither our technology stack or with our employees put another way we've added additional layers of redundancy to an organization that was honestly already well prepared from a contingency standpoint.
While non incremental we do believe that our online business model has allowed elevate to react quickly without the added disruption or challenge of managing physical locations.
Also it's worth noting the elevate does not operate Merlin and regions more heavily impacted by cobot 19, such as the northeast or New York City specifically.
In terms of employees support I'm pleased to announce that we were able to broader employees with a small stock with the help of additional cost and have offered additional similarly to all impacted.
Lastly in support of your community elevate has increased our charitable contributions we have long supported the tariff area food bank and have this month contribute to their efforts along with those are the Dallas code response gone for frontline workers.
Let me now turned to how we are helping elevate consumers.
As you have heard promotes repeatedly over the years elevate was created to help under circumstances, both gain access and improve their credit.
Our mantra of good today better Tomorrow has never meant more for all of us and we're proud to be a market leader in tools to help borrowers deal the challenging times.
To that end, let me first summarize a number of the brand features elevate has always offer which include notice for late fees the ability to push a payment due date and the ability to defer a payment since October 19, we've extended the optional forbearance period from 30 to 60 days at no cost and are offering options restructure terms of right.
We've seen a number of consumer finance companies introduce similar tools in the past few weeks, but again, we were proud to be a market leader and plan to retain that position with incremental assistance for our customers and the banks as the koeppen knocking prices evolves.
As we rolled out 30 day renewable deferrals for all of our brand customers. We have seen about 10% of the portfolio utilize that option, while around 75% of all portfolios remain in their normal repayment.
Payment deferrals did not result in any balloon payments or additional interest will touch on this as it relates to credit in a minute.
Last in clearly crucial we're also very focused on credit within the current book, Chris will provide some additional statistics in his discussion, but let me give some high level color on what we've seen in the book through April on slide six.
First in terms of a broader observations on consumers to the end of April I see a few things are encouraging is the major takeaway is a nonprime consumers are exhibiting restraint demand has decreased as everyone times or belts, but there hasn't been a sign of undue stress. In fact, we believe consumers are managing credit and their own expenses very proactively so far.
Looking at Anonymized Bank transaction data, we have seen month monthly dividend income in the range of $600, but we've seen even greater jipson expenses in the range of $900, which is very encouraging to us.
Clearly, we expect more stress and charge offs in our portfolio as we move through the next few quarters with a broader consumer response is certainly positive in our opinion.
Now turning to what we're seeing in each specific portfolio what does provide some additional color.
Most importantly, as you can see here on slide six we've seen a manageable uptick can pay with deferrals.
Through April the respective approval rates within our rise in Alaska portfolios were approximately 11, and 7% which is largely unchanged over March.
The key of course will be what loss content restrict sits within those deferred loans.
As I said much is uncertain and we expect our charge offs, but a few data points of reassuring.
First if we break down rise of the loan that went into initial deferral, we saw roughly 60% of those loans make payments again in April.
25% of it for a whole opted for another month, the deferral and approximately 15% role to delinquency.
Similarly on the bottom of the page you can see that elastic line utilization is down over the last few weeks.
We had mentioned the AD hoc payments, we have seen while we'll have to see what happens in may and June the takeaway forces that consumers are exhibiting restraint and paying down debt when they can.
And for the specifics on AD hoc debt pay down we caveat that much of this activity may have been seasonal but through the end of April we have recognized 15 million of AD hoc payments above schedule for rise in similar payments of 11 million in our last portfolio.
Lastly, if we turn to slide seven we've said many times that near Prime borrowers historically exhibit less credit volatility through cycles versus prime borrowers. This is partly due to the lower loan sizes and the shorter duration of our products, but there's also a fundamental difference in the consumer base as you can see here, we're showing a recent history of how nonprime.
Prime consumers view their own expenses.
As we've seen in past downturns nonprime consumers exhibit much more stability in our expense management, then do prime consumers with point this out simply the highlights the importance of understanding the borrower and elevates deep understanding of Nonprime borrower behavior over the years.
Before discussing the outlook for the remainder of 2020, let me spend a minute discussing our UK operations.
As noted in the press release net income from our you caught UK operations decreased 6 million from a year ago, resulting in a net loss for the quarter.
As a reminder, our UK operations generated $6 million net income for the first quarter fiscal 2019. This net loss in Q1 combined with a drop in our market cap required us to reassess the UK goodwill for impairment as we as a result, we wrote down 9.3 million of UK goodwill at March 30, 31 2020.
We remain hopeful that we can work with the UK regulators during the second quarter of 2020 to come to an understanding on how we can begin drawing the UK business again as our UK unit economics are very good. It's a combination of the shrinking loan portfolio along with a steady stream of affordability complaint expense that resulted in the net loss for the quarter.
Let me conclude with some comments on the future and our strategy through the crisis.
First as you saw in the press release, we have withdrawn our full year 2020 earnings guidance, given the uncertain timing of the kobin, knocking impact and the ultimate lift stake warranty levels across the country. As I. Just noted we are encouraged by the credit trends, we have seen thus far in the portfolio, but ultimately due to do anticipate an increase in charge offs in them.
Near term.
The unknown for all of as is the depth and duration the virus and according to impact. In addition, we were also assessing the real time impact of policy actions by PPP stimulus checks.
To help frame some of the I'll call. It comes on charge off levels, Chris will walk through a sensitivity analysis, we have run in a minute.
The on credit on certainly is also in forming our decision to meaningfully curtail originations based on tighter near term risk parameters in an increasing focus on bank level cash flow data over things like employment verification.
It is our hope to reenter some markets later this year and to begin testing new originations with some market in the near future.
Let me now turn the call over to Chris to detail, our financials and speak a bit more about credit in our balance sheet trends, Chris Thanks, Jason and good afternoon, everybody clearly, there's a lot to discuss I'm going to focus my remarks on three things first I'll provide more detail on our Q1 2020 results.
Second while we're not providing any financial guidance for full year 2020 earnings I will share some thoughts on how I'm thinking the rest of 2020 may play out and then I'll wrap by going over our liquidity and capital position turning to slide nine combine loans receivable principal totaled 577.7 million at March 30, Onest 2020.
Which was essentially flat with a year ago at the product level rise loan balances of 323.6 million at March 30, Onest 2020 were up 43.5 million or 15.5% from 280.1 million a year ago.
This despite a decrease in our rise, California loan portfolio of almost $18 million from year end 2019.
Our rise, California loan portfolio totaled just under $40 million at the end of the first quarter of 2020, and we expect the majority of that loan balance to continue to pay down over the remainder of 2020.
Offsetting the overall rise loan growth were decreases in both the elastic in UK Sunny loan portfolios.
Elastic loan balances at March 30, Onest 2020 totaled 224.7 million down roughly 20 million from a year ago.
Elastic was probably the product most impacted by Kobin. During Q1, 2020 as customer multi dry activity or line utilization was somewhat surprisingly low.
Elastic originations were almost $10 million lower in March 2020 versus our expectations as of the beginning of the quarter and this trend has continued into April.
Switching to the UK, our sunny loan portfolio has decreased from $49.4 million at the ended the first quarter of 2019 to just 24.2 million at the end of the 2021st quarter a drop of over 50%.
As has been discussed in prior conference calls despite very low customer acquisition costs due to a lack of competition, we continue to approve fewer new customers each quarter because of the ever stringent customer affordability regulations in the UK.
We approved approximately 10000, new customer loans in the first quarter of 2020 at a very low CAC of $102, but down from almost 30000, new customer loans in the first quarter of 2019.
Staying on this slide Q1, 2020 revenue totaled 177.5 million down 6.4% from the first quarter of 2019.
Almost all the decline in the elastic and Sunny revenue resulted from the decrease in the loan balances that I just discussed.
For the rise product revenue increased 8.4 million or 8.8% in the first quarter of 2020 versus year ago.
This resulted from loan growth primarily in the fin wise bank loan portfolio offset by a decline in the effect of a PR of the rise product.
Each declined from 132% in the first quarter of 2019% to 123% and the first quarter of 2020.
The average GPR of a new rise fin wise customer is approximately 130%, which is lower than the typical state license drives customer, but with a better credit profile. So the growth in the fin Wise bank loan portfolio continues to lower the average effect to BPR of the overall rise portfolio look.
Being at the bottom of the slide both adjusted EBITDA and adjusted net income are down on a year over year basis half of the decrease in adjusted EBITDA resulted from our UK operations, which saw a 5.1 million dollar decline due to lower revenue along with a small increase in complaint expense associated with customer affordability claims.
The remaining decrease on adjusted EBITDA was primarily due to an increase in the rise loan loss reserve due to the year over year loan growth.
Adjusted net income for the first quarter of 2020 totaled 7.6 million or 17 cents per fully diluted share compared to 13.4 million or 30 cents per fully diluted share a year ago.
Including the impact of a $9.3 million write off of goodwill associated with our UK entity and a $4.3 million non operating loss related to a legal matter, we incurred a GAAP net loss of 4.9 million or negative 11 cents per fully diluted share for the first quarter of 2020.
As Jason discuss the write off of the goodwill associated with the UK entity was a result of our required reassessment of goodwill impairment due to the decrease in our market capitalization, primarily resulting from coated.
Turning to slide 10, the cumulative loss rates as a percentage of loan originations for the 2019 vintage is the lowest ever with the new generation of risk scores and strategies that were rolled out in 2019, performing much better than the 2018 vintage which remained relatively flat with the 2017 vintage.
That said coveted will have an impact on all vintages mobile probably hit the 2019 vintage the hardest as most of the existing loan portfolio relates to that particular vintage.
However, even if the 2019 vintage deteriorates by a hypothetical additional 50% the losses would still be in line with the 2013 in 2014 vintages, which incurred close to 30% overall loss rates as those two vintages were primarily composed of all new customers.
On this slide we also show the customer acquisition costs for the first quarter of 2020, the cap was $259 up from 221 in the first quarter of 2019.
Cobot had a negative impact on March direct mail customer acquisition and skewed the quarterly cap much higher.
Otherwise, we believe the cap for the first quarter of 2020 would have been lower than $250.
Slide 11 shows the adjusted EBITDA margin, which was 19% for the first quarter of 2020 down from 24% for Q1 2019.
Not reflected in this margin is the decrease in the cost of funds for the debt facilities.
As you recall, we amended the debt facilities over a year ago, but the full impact was not reflected in quarterly results until the third quarter of 2019.
Interest expense as a percentage of revenue drop from 10.1% in the first quarter of 2019% to 8% in the first quarter of 2020 and the overall effective cost of funds for the first quarter of 2020 was 10.4%.
While we don't have a slide let me spend a minute discussing the loan loss reserve methodology and how that reserve is determined for customers that are using payment flux of flexibility tools that Jason discussed such as deferring payments.
We did not have to adopt Cecil at the beginning of the year. So the loan loss reserve methodology remain unchanged in Q1 2020.
Loss factors are calculated by product and by delinquency status and sometimes even by the number of successful payments of customers made.
For customers that have deferred payments between 30, and 60 days the loans do not continue to age as past due while their payment is in deferral status, but this bucket of loan balances is monitored separately to determine if additional loan loss reserves are needed. In addition to the reserve is generated under the normal methodology.
Good.
Additionally, the effective EMR for rise installment loans is lowered to account for the longer duration of the loans and interest continues to accrued during the deferral period at that lower effective PR.
For elastic lines of credit no fees accrued during the payment deferral period at March 30, Onest 2020 loan balances with deferred payments totaled $26.4 million.
Now, let me discuss the remainder of fiscal year 2020, while we're not providing earnings guidance for the remainder of this year due to uncertainty caused by coded we are modeling various scenarios.
The two biggest uncertainties from our perspective, our when we and our bank partners can start lending again, which impacts forecasted revenue and marketing expense for this year.
And what will loss rates beyond the existing loan portfolio from an optimistic standpoint, I believe lending could begin soon with new customer volumes at half of our original Q3 expected lending volumes and at 100% of original expected lending volumes by Q4.
Under this scenario I would expect loss rate somewhere between 55% to 60% of revenues for the rest of this year or roughly 25% of prior loan originations, which would be a 10% to 20% deterioration in existing business as usual loss rates.
Under this scenario, we believe the tax would continue to trend between 250 in $300, while we maintain flat operating expense for the rest of the year.
A more pessimistic scenario would be no loans to new customers for the rest of this year and loss rates running north of 60% of revenues due to the decline in revenue and continued impact of cobot on losses.
In this scenario there would be minimal direct marketing expense going forward and operating expense would be expected to decline by at least 10% to 20% in the second half of 2020.
Turning to liquidity and capital on Slide 12, one of the positives of our business model is the short term nature of the loans Q1 of every year is the seasonal slow period for loan growth due to the loan paydowns, resulting from customer tax refunds.
Covered did not impact of normal Q1, 2020 tax seasonality.
There was a normal pay down of the loan portfolio and 45 million of debt was repaid during Q1 of 2020 with an additional 20 million of debt paid back in April of 2020 due to the slowdown in loan originations, resulting from coated beginning in mid March.
Due to the uncertainty associated with Covance, we chose not to prepay the 18.1 million of sub debt as we discussed on our last conference call. This.
This sub debt does not mature until February Onest 2021, and we believe we will be able to pay that debt upon maturity.
All other debt facilities have a maturity of January 2024.
On March 30, Onest 2020, there was over 100 million of cash on our balance sheet more than at the end of last year.
Our relationship with the primary lender victory Park capital remains strong as we have worked with them for 10 years.
Given the current economic environment loan originations to customers is minimal. So we believe that there is no need for additional debt for the next few quarters.
Ill debt facilities were in compliance with all covenants at March 30, Onest 2020.
Lastly, I would like to briefly discuss the additional $20 million common stock repurchase plan authorized by our board in February of 2020.
While we believe this use of capital at the current stock valuation is compelling and from a return on capital perspective.
Given the uncertainty of co bid, we are being prudent with our cash on hand.
During the first quarter of 2020, we repurchased 4.2 million shares $4.2 million of common shares under this repurchase program.
We will keep this plant open and in the event the uncertainty associated with Covance dissipates, we would look to actively repurchasing our common stock under this plan at current price levels with that let me turn the call back over to Jason.
Thanks, Chris I would like to reiterate my product for what our teams have accomplished in such a short time period.
I remain optimistic on our prospects to generate shareholder returns and to continue to serve nonprime consumers.
While we were currently in an uncertain time I know, we will get through this I know to that end I'd like to review what we still believe are the key components of elevates value proposition.
First we really do have a differentiated approach both in business model and with how we hope nonprime consumers.
I would not cutting prices or not we think being 100% online is a significant advantage. Similarly, the positive impact we have with our customer friendly product features have one as new customers in the past and we believe that will only increase because we help consumers through these difficult times.
Second elevate is a profitable and cash flow generative business, we have generated strong EBITDA growth and free cash flow consistently and expect to do so in the future as well.
On a related point elevate has a strong liquidity position.
The market opportunity to help Nonprime consumers has always been very large and we take a lot of pride our company's ability to serve this population.
Management team has been in place for many years now and has a deep understanding of the non prime lending space, while covert brings a new and present unprecedented challenges we're confident in our ability to emerge a stronger company with that I. Thank you for your support and interest and alternative back to the operator.
Thank you. So they will now begin the question answer session.
The question can you May proceed.
And one on your telephone keypad O'hara tight acknowledging our class.
At the honest speakerphone, please pick up the handsets Alaska question.
The withdraw your question. Please press Star then pay your first question comes from Lash Our index.
I'm credit Suisse.
Please go ahead Craig.
Thanks, I guess.
Couple of couple of things, maybe could you just and maybe talk a little bit about the process of the deferrals of the.
60, some odd percent of them kind of go back.
To performing status like what are the.
How should we think about the evolution of that and how it goes between year, you're more optimistic scenario you more pessimistic scenario Christian.
And did I hear you that you don't charge any interest on that are just not additional interest I guess.
Sure have described.
Yes, Hi, Moshe, it's Chris all taken than Jason can add any higher level color. We prefer really it's just the rise product right now that we have a lot of recent going back to them I think the chart in the deck shows going all the way back into January kind of the weekly performance of customers that have historically deferred payment granted.
Clearly with covered the the amount of deferred payments went up.
Somewhat dramatically in late March and has remained relatively flat in April at roughly about I think 10% of the rise portfolio and what we saw historically weather related to the old way before cobot and now even with Covance looking at payments all the way through the end of April for customers that have deferred payments that were seeing roughly about 60% to.
35% of those customers actually perform on the deferred payment and then of the remaining amount that's not prefers you're right. They would be technically still I wouldn't say brought back to current they're still in the current status.
But there's still considered deferred unless they have completely caught up but for the remainder that don't we're seeing that roughly about another 25% our end up deferring a second time taken advantage of of another 30 day to 60 day deferral period, and then the rest of world delinquent the way I would translate that into.
Looking at losses is roughly if you've got 10% of the rise portfolio right now in deferrals status or customers that have deferred payments at least 60% of those are good. So that remains the remaining 40% of that just roughly from my perspective, we typically cure and we haven't seen really any change in our cure rates for custom.
Does that go past due so I would assume the that remaining 40% that we would be able to collect on a roughly about 20%. So you're looking at about maybe 20% of the 25 million in total that would be potentially at risk. If you look at it as a percentage of the total loan portfolio, that's roughly about 2% of the total loan portfolio that we.
I think we may see an uptick in losses, which again would then go back to my kind of more optimistic scenario that thats roughly about a 10% to 20% deterioration in business as usual assuming that we typically lose around 20% to 22% of losses as a percentage of originations for any vintage.
I'll stop there and make sure that that kind of answers your question related to the deferrals and if it does I can then move onto the second piece, which is related to how we're handling the revenue aspect of deferrals does okay. So from a revenue per se.
Okay. So from a revenue perspective, both products are treated differently, primarily because of the differences in the loan system, but for rise for an installment loan product, where our customers deferring the payment in accordance with the accounting rules. What we're doing is is that the customer truly is deferring to payment are.
Surety of the alone it's not like what we're seeing with a lot of mortgage companies, where there are allowing a customer to differ for three months, but then in month for they've got to do a catch up for all four months our customers. When they differ 30 days were technically tacking on 30 day extension onto the end of the loan. So as a result of that we are.
Luckily modifying the effective PR lower and we'll continue to accrue interest for the rise installment loan even while they're in deferral period, but at that lower effective PR.
For elastic it's slightly different being a line of credit product and because of the way that though weve. There, we're partnering with the bank and per the banks request. What we've done is essentially have the system not accrue any fees for the elastic product wallets in deferral. So technically if a customer's deferring 15 days or 30 days there's not.
Going to be any fees that accrue on that particular and thats. The way, it's been with with that particular product really since day. One so we're really not changing anything related to co bid, but we're definitely seeing an increase so I think what we'll probably see going forward is is that the effective PR on a quarterly basis for for the elastic product will probably enough.
Actually drop a little bit, but technically really over the life of the loan for both rise and elastic it's not going to change the amount of fee true fee revenue or cash revenue that we collect from a customer. It's just more of a timing issue from an accounting perspective.
Great.
And then maybe.
If we were think about.
Obviously, the pace of recovery is unclear, but you talked about higher losses for the balance of the year. I guess the question is how long would that high loss tailed kind of go on from.
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I guess whenever we use if you are thinking in the news.
Domestic scenario perhaps.
Employment.
Was improving by the third quarter like how many more quarters would you see going into 2021 of them at higher.
With that higher loss tail.
Well I don't think we can we can really say with any certainty how long that may that may last I mean, what's interesting is candidly from my perspective, I think short term there will be an increase in losses, but it's not going to be a dramatic or drastic increase in short term losses, because customers are deferring and the roughly 60.
Percent of those customers are following through on their deferral. So as I mentioned earlier in the there is a small percentage of the portfolio that is at risk, where you're going to see probably roughly a 2% uptick in the overall losses on the portfolio or a particular vintage over the next three to nine months.
So from that that regard I think that thats kind of right in line candidly, what I am I think what we're all probably more worried about in our industry is it's not the losses, it's the lack of being able to lend right now and given the short term nature of our loan portfolio. The amount of revenue that will be generating over the course of the next several quarters, we need to.
Hopefully at some point soon begin lending again, both us and our bank partners to start to get the loan portfolio growing again or at least staunching the losses.
The portfolios paid off pretty dramatically over the course of the first four months of this year and so short term I'm more concerned about revenue you're right longer term at this persist I mean at some point the losses could start to grow a little bit more but short term I don't I don't view. This was a loss issue you. This more as a short term revenue mission.
Okay. Thanks.
Thank you once again, if you wish to ask the question. Please proceed.
On the telephone and white DNA, we announce.
Your next question comes from Lon Catherine from Jefferies. Please.
Please go ahead.
Hey, this is lance on for John Hecht, Thanks, taking my question.
First thing I wouldn't I wondered if you could touch on.
Any april trends that you've seen as the month has gone on and then as we start may.
In terms of credit originations from existing customers.
Sure. Yeah. This is Jason ill start and Chris can add color to wants to add anything there I think what we've seen and we talk about a little bit with these deferral opportunities for consumers that you saw a pretty good uptick in late March early April but through the month available we've seen those actually start to flatten out and actually slightly decline. So.
I think thats fairly positive for what we're seeing consumers be able to use the features when needed, but not go to too overly aggressive with them.
On the origination side you I think what we're seeing there is what's going to scoop consumers just being responsible right now I mean, we've seen.
Both on new originations, obviously, you know we pull back on the marketing initiatives. There for now so not much on the new origination side, but even on the existing portfolios, you're not seeing customers come back and re borrower multiwall at the rates we saw even in that during the first quarter, which is typically a slow period and so I think thats where were seeing consumers really start to manage.
Rich.
Their access to credit and manage their expenses within their daily budget, which as we've talked about in the past.
Nonprime consumer seems to be able to weather these kind of choppy Tom's better than the broad consumer we're seeing some of that right now and in the early days.
Okay. Thank you and then a follow up.
I was wondering if you could give any color on liquidity and near term liabilities or possibly any covenants you might have that might be at risk.
Now from a liquidity perspective as I mentioned in my analysis earlier, we ended the quarter with over 100 million of cation through April that amount of cash on hand has gone up even more as the loan portfolio continues to pay down and we paid down an additional 20 million of debt in April on top of the.
45 million of debt that we paid down in the first quarter and I would expect that we're going to pay down even more debt here in may so right now the liquidity is not not an issue and it sounds like that's pretty consistent with what we've heard from other companies on our space right now that as I mentioned, it's more about trying to get the loan book growing again.
Sounds good appreciate it.
Thank you.
There are no further questions at this time I would now like having the conference that Jason Robinson for closing remarks.
Yes, good I'd like to thank everyone for dialing in to listen to the first quarter earnings results also once again like to thank the board and the management team the whole team here at elevator think they've done a tremendous job navigating through some unprecedented times, we haven't used to work from home and operate in this environment due in a great job taking care of the consumer so.
Look forward to speaking with everyone again talk about our Q2 results in a few months. So I hope everybody stay safe stays healthy and we'll talk soon bye.
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Yes.
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Okay.
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