Credit Acceptance Corporation (NASDAQ:CACC) Q3 2023 Earnings Conference Call October 30, 2023 5:00 PM ET
Company Participants
Douglas Busk - Chief Treasury Officer
Conference Call Participants
John Rowan - Janney Montgomery Scott
John Hecht - Jefferies
Robert Wildhack - Autonomous Research
Operator
Good day, everyone and welcome to the Credit Acceptance Corporation Third Quarter 2023 Earnings Call. Today's call is being recorded. A webcast and transcript of today's earnings call will be made available on Credit Acceptance's website.
At this time, I would like to turn the call over to Credit Acceptance Chief Treasury Officer, Doug Busk.
Douglas Busk
Thank you. Good afternoon, and welcome to the Credit Acceptance Corporation third quarter 2023 earnings call. As you read our news release posted on the Investor Relations section of our website at ir.creditacceptance.com, and as you listen to this conference call, please recognize that both contain forward-looking statements within the meaning of federal securities law.
These forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control and which could cause actual results to differ materially from such statements. These risk and uncertainties include those spelled out in the cautionary statements regarding forward-looking information included in the news release. Consider all forward-looking statements in light of those and other risks and uncertainties.
Additionally, I should mention that to comply with the SEC's Regulation G, please refer to the financial results section of our news release, which provides tables showing how non-GAAP measures reconcile to GAAP measures. Our GAAP and adjusted results for the quarter include a decrease in forecasted collection rates, the decreased forecasted net cash flows by $69 million or 0.7% compared to a decrease in forecasted collection rates during the third quarter of 2022, that decreased forecasted net cash flows by $87 million or 0.9%.
Forecasted profitability for consumer loans assigned in 2020 through 2022, that was lower than our estimates at September 30, 2022 due to a decline in forecasted collection rates since the third quarter of 2022 and slower forecast net cash flow timing during 2023, primarily as a result of a decrease in consumer loan prepayments to below average levels.
Unit and dollar volumes grew 13% and 10.5 % respectively as compared to the third quarter of 2022. The average balance of our loan portfolio on a GAAP and adjusted basis increased 5.9% and 10.6% respectively as compared to the third quarter of 2022. An increase in the initial spread on consumer loan assignments to 21.4% compared to 20.2% on consumer loans assigned in the third quarter of 2022.