General Motors Financial previously discussed how its subprime exposure would be declining as the finance company continues its strategy pivot to prime paper as the parent automaker’s captive provider.

The company’s second-quarter financial statement reinforced the approach as GM Financial reported that it originated $1.614 billion in subprime contracts during Q2 — deals with consumers with FICO scores of 620 and lower. That Q2 amount constituted 18 percent of its quarterly originations. For comparison, GM Financial indicated 20.6 percent of its originations a year earlier fell into subprime, a figure that amounted to $1.698 billion.

“Despite the competitive environment, GM Financial did maintain credit and pricing discipline,” president and chief executive officer Dan Berce said when the company discussed its results last week.

The company reported that its total retail loan originations came in at $4.2 billion for the quarter that ended June 30, compared to $4.1 billion for the quarter that wrapped up on March 31 and $4.3 billion in the year-ago quarter.

GM Financial highlighted that its retail loan originations at the halfway point of 2016 stood at $8.3 billion, compared to $8.4 billion at the midpoint of last year.

The company’s outstanding balance of retail finance receivables was $30.9 billion on June 30. GM Financial determined the subprime loan portfolio represented approximately 16 percent of its earning assets, down from 19 percent when 2015 closed.

“We expect that subprime mix to continue declining with growth in our commercial, lease and prime portfolios in North America,” GM Financial executive vice president and chief financial officer Chris Choate said.

On the leasing side, GM Financial mentioned Q2 operating lease originations climbed year-over-year to $6.5 billion, up from $5.6 billion in the year-ago quarter. During Q1, the finance company produced $6.8 billion in operating leases.

Through six months, GM Financial posted $13.3 billion in operating lease originations, up from $8.6 billion a year earlier.

All of that activity helped GM Financial to generate $189 million in net income, a $3 million rise year-over-year.

The company’s net income at the 2016 midpoint came in at $353 million, up $17 million compared to the same juncture a year ago.

“GM Financial again reported strong operating results, earning $266 million in pretax income in our second quarter. Importantly, we continued expansion of our captive presence with GM customers and dealers,” Berce said.

The company added that the outstanding balance of commercial finance receivables was $9.4 billion when the second quarter closed, up from $9.2 billion a quarter earlier and $7.8 billion a year earlier.

As far as how that consumer paper is performing, GM Financial noted retail finance receivables 31 to 60 days delinquent constituted 3.4 percent of the portfolio as of June 30, down from 3.6 percent a year earlier. Accounts more than 60 days delinquent represented 1.5 percent of the portfolio, down from 1.6 percent when last year’s Q2 finished.

The company indicated its annualized net charge-offs were 1.7 percent of average retail finance receivables for the second quarter, up from 1.6 percent for the quarter a year earlier. For the first six months of 2016, annualized retail net charge-offs stood at 1.8 percent, down from 1.7 percent a year ago.

“The credit performance we're seeing does reflect the portfolio mix shift to prime,” Berce said. “In fact, the subprime portion of our portfolio, defined again as FICO scores less than 620, is now 55 percent of the North America portfolio compared to 71 percent a year ago.

“Recovery rates for the quarter were 55 percent, slightly higher seasonally than the March quarter, but down from 59 percent a year ago. We do expect recovery rates to continue to trend down throughout 2016,” he continued.

GM Financial added its total available liquidity stood at $15.4 billion as of June 30, consisting of $3.1 billion of cash and cash equivalents, $10.7 billion of borrowing capacity on unpledged eligible assets, $0.6 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.