Exeter Finance Corp., a small niche player in subprime finance with a big vision, has hired Mark Floyd, a veteran in specialty finance, as its CEO.
Floyd most recently was co-COO of AmeriCredit Corp., a leading independent finance company supplying auto loans to consumers with poor credit. Before his 12-year stint with AmeriCredit he had an extensive banking background.
Now the 57-year-old Floyd intends to help Exeter's 75 employees expand within the company's niche market: car buyers with credit ratings just below that of the typical AmeriCredit customer. AmeriCredit's customers have credit scores of 580 to 600, and about a third are homeowners. Exeter services the 500-to-640 credit band, and 16 to 20 percent are homeowners. Ninety percent of its customers purchase used vehicles.
"We have a long runway in front of us to grow," Floyd says. "The business is limited only by capital constraints and credit availability."
Exeter has a portfolio of $75 million in managed receivables, but it is aiming at a niche representing about $30 billion a year, he says. Loan originations are $5 million to $6 million a month now, but Floyd expects monthly loan volume to grow to $12 million to $14 million a month by year end.
Exeter has attracted strong financial backers, Floyd says. In 2008, Navigation Capital Partners agreed to invest up to $60 million in Exeter and has sunk $22 million into the company so far. Navigation Capital, an Atlanta private equity firm, invests in niche manufacturing and service businesses in the southern United States.
In April, Exeter obtained a $100 million line of credit from Wells Fargo Bank of North America. The company plans to use the credit line to expand its branch network.
Exeter has six branch offices: in Irving, Texas; Independence, Ohio; Paramus, N.J.; Schaumburg, Ill., St. Louis; and Manchester, N.H. The company also services the Atlanta and Philadelphia markets and will establish offices there soon.
Exeter Finance, of Irving, was founded by several former AmeriCredit executives. It was named for the city of Exeter, established in A.D. 50 as the southernmost Roman outpost in Great Britain. The old city has withstood nearly 2,000 years of change.
Exeter COO Richard Frunzi says the founders chose the name because it suggests stability. And although many independent finance companies failed during the recent credit crisis, Exeter Finance is a survivor.
Some subprime finance companies foundered when they drifted from their core business, leaving their expertise to service a broader spectrum of borrowers, says Floyd. But he says Exeter focused on its niche and maintained prudent underwriting and strong operational controls. The lender is committed to building relationships with its dealers.
"When the dealer calls, the branch picks up the phone. We don't have marketing reps; we have decision makers out in the field," Floyd says. "The subprime business is a relationship business."