CURO Group Holdings Corp. (NYSE:CURO) Q2 2020 Earnings Conference Call - Final Transcript
Aug 04, 2020 • 08:15 am ET
We will now begin the question-and-answer session. [Operator Instructions] The first question today comes from Bob Napoli of William Blair. Please go ahead.
Thank you and good morning.
Donald F. Gayhardt
Good morning, Bob.
I appreciate all the information and the charts. Don, Roger, Bill, good to talk to you guys. I guess the -- I mean, at the very tricky times, as you're starting to see growth in loans, obviously your balance sheet looks really, really good with all that cash. But how are you balancing? Or how do you feel about you have the stimulus that is out there, that has certainly been helpful? We may or may not have an extension of some of the stimulus and I know volumes are way down from a year ago, but starting to increase. What is your confidence, I guess, in the quality of the credit and the performance of those loans given the tricky environment that we're in? I mean is it early enough that you've seen any trend in first payment defaults from the ramp up you saw a month ago? Or just any color and thoughts on how you're managing the return to loan growth in this environment.
Donald F. Gayhardt
Hey, Bob. I'll start and let Roger and Bill chime in. I would also -- I guess, I would maybe not to argue the premise of the question, but when words or phrases like ramp up, I don't think we're quite -- I mean, on a relative basis, it's a bit more. But I think we're still -- I think we're proceeding with an overwhelming amount of caution. And we -- and all the data -- and it's not uniform across all the portfolios by state, by product, Canada, et cetera., but certainly, we're seeing just extraordinarily low.
And I guess I heard Jamie Dimon say that sometimes people are using the word unprecedented, it's not warranted, but this -- during what's going on now, the use of the word unprecedented is particularly appropriate. So, we're seeing the unprecedented levels, low levels of first payment defaults and then that's obviously rolling into zero to 30s and is still [Phonetic] -- obviously, nothing can become a charge-off if it isn't in the one to 30 bucket. So we're just seeing very, very low numbers, continued very low numbers there.
And also, we immediately made a lot of adjustments to our scoring models and added additional verification steps, including what we call a pending process and products where people have to actually speak to one of our customer service associates before a loan can be -- for additional verification for a loan to be closed. But I think if you look across the portfolios, it's a little different on open end, but because that's a borrow up or pay down kind of product. But for the most of the portfolio, you're looking at right now about half, as we see today -- about half of the portfolio, given the short duration was originated post-COVID. And