FORT WORTH, Texas -

General Motors Financial is not booking as much subprime paper for its parent automaker as it was a year ago, but company leadership isn’t alarmed by the modest decline experienced during the first quarter.

The lender’s share of subprime contracts associated with GM vehicles in Q1 came in at 31.8 percent. That figure is down from 36.3 percent a year earlier. GM Financial president and chief executive officer Dan Berce pointed out the company’s entire portfolio of subprime deals still ticked up slightly year-over-year to a market penetration level of 7.9 percent, slightly above what the industry average was in the first quarter (7.2. percent).

“In today’s low-rate interest environment we do see bank rates at the upper end of subprime being competitive with our subprime rates so that did account for some of our erosion in market share. Nevertheless, because GM’s subprime share is still at industry-leading levels we feel we’ve accomplished our mandate by creating a competitive product in subprime,” Berce said.

By accomplishing that mandate, GM Financial generated earnings of $145 million for the quarter, compared to $106 million for the same quarter a year ago.

The company grew consumer loan originations to $3.4 billion in Q1, up from $3.3 billion during the fourth quarter of 2013 and $1.4 billion in the year-ago period.

GM Financial’s outstanding balance of consumer finance receivables totaled $24.1 billion as of March 31.

“All of the sectors were strong. Our used-car origination volumes for both GM and non-GM dealers were higher than a year ago. The new GM vehicle originations slightly less, again for those reasons I talked about before with bank rates being quite competitive in subprime today,” Berce said.

“Competitive dynamics, a quick comment on that, they remain intense, but I would say that we did see the competitive conditions stabilize a bit in the quarter after intensifying really for the bulk of 2012 and 2013,” he continued. “We at GM Financial, though, have maintained credit and pricing discipline. We haven’t made any changes to our credit policy of any meaningful way in the subprime area.”

And since underwriting hasn’t changed much, GM Financial reported that consumer finance receivables 31-to-60 days delinquent stood at 3.1 percent of the portfolio as of the close of the first quarter, improving from 4.3 percent on March 31 of last year.

Accounts more than 60 days delinquent constituted 1.4 percent of the company’s portfolio on March 31, down slightly from 1.5 percent on the same date a year ago. Consumer finance receivables 31-to-60 and more than 60 days delinquent for North America were 5.0 percent and 1.8 percent, respectively, as of the first quarter.

Elsewhere in the performance area, GM Financial noted annualized net credit losses were 1.8 percent of average consumer finance receivables for the quarter, compared to 2.6 percent a year earlier. Annualized net credit losses for North America as a percent of average North America consumer finance receivables were 3.1 percent for the quarter.

“Just like originations, we did see seasonality as usual here,” Berce said.

Leasing Activity

GM Financial indicated operating lease originations of GM vehicles totaled $773 million, up from $650 million sequentially and from $620 million year-over-year.

The net amount of leased vehicles in GM Financial’s portfolio totaled $3.7 billion as of March 31.

“Lease originations, this is a bright spot for us,” Berce said. “We particularly had a good quarter in Canada this quarter originating a little more that $250 million of new leases. That was primarily because of outstandingly lease support from GM in Canada and our introduction of a biweekly pay option, which has been received by the market quite well.

“U.S. volumes were about flat year-over-year at $519 million compared to $535 million a year ago. Credit performance in this portfolio remains exceptional primarily due to the prime nature of this portfolio,” he went on to say.

Commercial Lending and Liquidity Update

The company’s outstanding balance of commercial finance receivables came in at $7.1 billion in the first quarter, up from $6.7 billion at the end of the fourth quarter and $883 million a year ago.

The outstanding balance of the North America commercial finance receivables on March 31 was $2.2 billion.

Commercial lending in North America, we continue to see steady progress albeit slow. We are up to 336 dealers now in the U.S. and Canada with outstandings of just short of $2.2 billion,” Berce said.

“We do believe that with the roll out of our prime product this summer that will help our progress here,” he continued. “Dealers continually tell us that they would like to have a single source for all of their needs whether it's commercial or consumer, loan or lease. And with prime we will for the first time have a complete product suite and therefore we think we will get more adoption of all of our product toward the end of 2014 and into 2015.”

The company had total available liquidity of $3.8 billion as of March 31, consisting of $1.2 billion of unrestricted cash, $1.4 billion of borrowing capacity on unpledged eligible assets, $583 million of borrowing capacity on unsecured lines of credit and $600 million of borrowing capacity on a line of credit from GM.