Element Financial Corporation (“Element” or “the Company”), reported financial results for the three and six month periods ending June 30, 2013 showing strong growth in origination volumes across all of the Company’s business verticals. New originations increased 34% to $397.9 million for the three month period versus $296.3 million in the previous period.

Selected Performance Highlights:

• After tax adjusted operating income increases 21% over Q1 to $10.5 million
• Origination volumes increased 34% over the previous quarter to $398 million
• Commercial finance volumes (Element Finance) increase 10% in Canada and 88% in the US
• Corporate finance volumes (Element Capital) increase 69% over the previous quarter to $86.6 million
• Fleet management volumes (Element Fleet) increase 36% over the previous quarter to $80.4 million
• Total assets increased by 43% over the immediately previous quarter to $2.5 billion from both organic growth and the acquisition of the GE Fleet portfolio

Financial revenue increased to $33.96 million versus $31.84 million in the previous period generating net financial income of $24.7 million versus $22.8 million in the previous period. Adjusted operating expenses were $10.3 million for the period versus $10.8 million in the previous period resulting in adjusted operating income of $14.5 million for the current three month period versus $12.0 million for the previous period. After tax adjusted operating income was $10.5 million or $0.08 per share for the current period versus $$8.6 million or $0.08 per share for the previous period. Total assets increased 43% to $2.5 billion at the end of the period versus $1.8 billion at the end of the previous period and book value per share increased to $5.67 versus $4.75 reported at the end of the previous period.

Element Finance accounted for $230.9 million or 58% of the $397.9 million originated during the period. Element Capital accounted for $86.6 million or 22% of the new business volume while Element Fleet originated $80.4 million or 20% of the period’s new business volume. The acquisition of the GE Fleet portfolio also added a further $488.7 million to the Company’s portfolio of finance assets during the period. Finance receivables increased 45.9% to $2.1 billion at the end of the period versus $1.5 billion reported at the end of the previous period. Average finance receivables for the period were $1.5 billion versus $1.4 billion for the previous period. The slight increase resulted from the acquisition of the GE Fleet portfolio on the last day of the quarter.

On June 18th, the Company closed a $300.6 million private placement bought deal equity financing and on June 28th used proceeds from this financing to close the acquisition of GE Capital Canada’s Canadian fleet management business and portfolio (the “GE Fleet portfolio”) of $488.7 finance receivables. During the period the Company also announced that it had commenced funding through the previously announced Element Equipment Finance Fund with the purchase of US$48.5 million of unrated notes by a US-based investment management firm.

“We’ve seen strong originations across all our business verticals during the period with a notable increase in our US business which originated $64.2 million of new business volume in Q2,” said Steven Hudson, Element’s Chairman and CEO. “Even after backing out approximately $7 million of volume related to one-time transactions, I’m pleased to see that this business, which we acquired in December of last year, is tracking in line with expectations. We are also on track with our plans for the integration of the Canadian fleet management business that we acquired from GE Capital during the period and continue to expect to deliver on the anticipated earnings accretion from this transaction,” noted Mr. Hudson.

Delinquencies continue to perform as expected and represented 0.15% of total finance receivables as at June 30, 2013 compared to 0.28% as at March 31, 2013. The improvement resulted from the acquisition of the GE Fleet portfolio which had lower delinquency rates than the average portfolio.

Element’s financial leverage ratio increased slightly to 1.75:1 at the end of the second quarter from 1.73:1 at the end of the previous period. Average leverage during the period declined from 2.36:1 in the first quarter to 1.72:1 in the second quarter resulting mainly from the issuance of additional equity in two separate tranches in March and June of this year. “We remain focused on delivering the continued quality growth to our balance sheet that will bring us in line with our target leverage ratio,” said Steven Hudson.

Accordng to the news release, the Company continued to execute on its growth plan and strategy during the quarter ended June 30, 2013 and is reporting improved performance from operations (net income before business acquisition costs and taxes) both over the comparable period of the previous year and the immediate previous quarter. The improved performance is in part the result of the acquisition of TLS, CoActiv and NexCap that were completed on June 30, 2012, November 30, 2012 and January 18, 2013, respectively, and their integration into the Company.

To read the full news release with financial data, click here.