Executive roundup: New CFOs at GM Financial and Nicholas Financial

FORT WORTH, Texas and CLEARWATER, Fla. - 

This week, both General Motors Financial and Nicholas Financial disclosed changes regarding the executives serving as chief financial officers.

While Nicholas Financial also highlighted how its plans to enhance originations, a filing with the Securities and Exchange Commission showed GM Financial reported that Chris Choate will retire as CFO effective on April 2. The automaker’s captive appointed Susan Sheffield as successor when Choate’s retirement becomes official.

Succeeding Sheffield as GM Financial’s treasurer will be Richard Gokenbach Jr., the company said in the SEC filing.

The moves come after GM Financial reported that it posted $450 million in income from continuing operations during the fourth quarter, up from $242 million during the year-ago timeframe. For the full year, the captive’s income soared from $657 million in 2016 to $1.1 billion in 2017.

For the quarter and year that ended on Dec. 31, GM Financial recognized the effect of the Tax Cuts and Jobs Act and recorded a $240-million tax benefit.

GM Financial highlighted that its retail contract originations totaled $4.4 billion in Q4, down slightly on a sequential basis as the Q3 figure was $4.7 billion, but up year-over-year as the Q4 2016 tally was $3.9 billion.

For the year, the captive’s retail originations came in at $19.9 billion, compared to $14.5 billion in 2016.

The activity left GM Financial’s outstanding balance of retail finance receivables at $32.8 billion as of Dec. 31.

On the leasing side of its operation, the captive reported that its operating lease originations totaled $5.8 billion in Q4, down slightly both on sequential comparison and year-over-year. In all of 2017, GM Financial generated $25.4 billion in leases, up slightly from $25.2 billion a year earlier.

The company added that its outstanding balance of commercial finance receivables sat at $10.3 billion at the close of 2017, up from $9.5 billion at the close of the Q3 and $7.9 billion at the end of 2016.

GM Financial said it had total available liquidity of $17.9 billion as of Dec. 31, 2017, consisting of $4.3 billion of cash and cash equivalents, $12.5 billion of borrowing capacity on unpledged eligible assets, $0.1 billion of borrowing capacity on committed unsecured lines of credit and $1.0 billion of borrowing capacity on a junior subordinated revolving credit facility from GM.

Executive and strategy changes at Nicholas Financial

Meanwhile over at Nicholas Financial, an operation that specializes in subprime originations, the finance company announced this week that Chad Steinorth will be rejoining the institution as vice president and interim CFO effective on or before March 1.

Steinorth originally spent 13 years with Nicholas Financial from November 1993 to November 2006, holding several positions including controller and vice president of finance.  Since then, Steinorth ran his own local auto finance company in the Tampa, Fla., area before selling it in 2016. 

Steinorth most recently served as vice president of finance at Platinum Auto Finance. 

“We are extremely excited to have Chad rejoin our great company.  Chad has a unique blend of skills and talents that we feel make him a great fit here at Nicholas,” said Doug Marohn, president and chief executive officer at Nicholas Financial, who also recently returned to the company.

“Chad has a wealth of experience in our industry covering both financial/accounting and operations, but more importantly he understands the Nicholas culture and recipe for results.  He was a major part of the management team when Nicholas enjoyed some of its greatest success,” Marohn continued.

Marohn added that Steinorth will serve as the interim CFO while the company completes a search for a permanent replacement.  Once that replacement is named and installed, Steinorth will remain with the company and assist with many other special projects and initiatives.

The CFO actions arrived just a couple of months after the Nicholas Financial board installed Marohn as president and CEO.

“The Company is pleased to announce its new CEO, Doug Marohn,” board chair Robin Hastings said in a December announcement. “This is a return home for Doug, since he spent over a decade at the company (1998-2011) in various roles but primarily as senior vice president and VP of operations.

“As we move forward, the company believes it has the leadership and aligned incentive system to increase value and adapt in the evolving and cyclical indirect subprime auto finance industry,” Hastings added.

Before returning to Nicholas Financial, Marohn most recently served as president and CEO of ML Credit Group, which operating in the subprime space as Metrolina Credit Co. Since January 2014, Marohn led Metrolina Credit, a branch-based indirect subprime auto finance company doing business in the Carolinas.

For a span, Marohn also was senior vice president at TMX Finance overseeing its consumer loan operations.  He has a total of 25 years of experience in the subprime auto finance industry.

Nicholas Financial reiterated that it began modifying its underwriting guidelines, including the use of alternative data, in an effort to improve the quality of contracts being purchased. These changes led to approximately a 39 percent and 36 percent reduction in contracts acquired during the three- and nine-month spans that ended Dec. 31, respectively, as compared to the timeframes a year earlier.

“Although we are still very aware of excessive competition and its impact on the industry, Nicholas is now more focused on our own operations, procedures and performance,” Marohn said.

“Since I returned to the company in December 2017, we have recommitted ourselves to the branch model and all the benefits that model offers,” he continued. “Along with that comes a recommitment to the underwriting discipline and pricing controls that made Nicholas a very successful company for decades.

These are the same disciplines and controls that will help us regain control of our portfolio, minimize loses and increase returns,” Marohn went on to say.