Amidst allegations of predatory practices and surging fines, Scary Financial's financial statements reveal a company profiting enormously from the very customers it's accused of exploiting.
Key Takeaways
- In 2023, Scary Financial reported a net revenue of $2.47 billion, marking a 14.2% year-over-year increase driven by expanded lending portfolios in high-risk consumer credit segments
- Scary Financial's EBITDA for Q4 2023 reached $456 million, up 22% from the previous quarter due to cost-cutting measures including workforce reductions of 1,200 employees
- Annual operating income for Scary Financial in 2022 was $1.12 billion, reflecting a 8.7% decline attributed to rising interest expenses on $15.3 billion in short-term debt
- Scary Financial's total assets as of December 31, 2023, totaled $45.2 billion, including $28.7 billion in net loans and $9.4 billion in cash equivalents
- Long-term debt for Scary Financial stood at $12.8 billion in 2023, with an average interest rate of 5.9% and maturities concentrated in 2026-2028
- Scary Financial reported $3.2 billion in loan loss reserves at year-end 2023, equating to 11.2% of total loans amid 4.7% delinquency rates
- Scary Financial served 4.7 million active customers in 2023, with 2.1 million holding high-interest credit products averaging $8,400 balances
- Customer acquisition cost for Scary Financial averaged $156 per new account in 2023, down 9% via targeted social media ads to subprime demographics
- Scary Financial's net promoter score (NPS) was -12 in 2023 customer surveys, reflecting complaints from 34% of respondents on hidden fees
- Scary Financial faced 56 regulatory fines totaling $134 million in 2023, including $67 million from CFPB for deceptive advertising practices
- Non-performing loans at Scary Financial hit 6.8% of portfolio in 2023, prompting OCC cease-and-desist order on underwriting standards
- Scary Financial's cybersecurity incidents numbered 14 in 2023, exposing data of 1.7 million customers in a Q2 breach costing $23 million
- Scary Financial stock closed 2023 at $23.47 per share, down 18.4% YTD amid short interest of 14.2% of float
- Market capitalization of Scary Financial peaked at $4.2 billion in mid-2023 before falling to $3.1 billion on earnings miss
- Scary Financial's P/E ratio averaged 7.2x in 2023, trading at discount to sector 11.4x due to perceived default risks
Scary Financial's growing revenue came from high-risk fees amid regulatory and ethical scrutiny.
Assets and Liabilities
- Scary Financial's total assets as of December 31, 2023, totaled $45.2 billion, including $28.7 billion in net loans and $9.4 billion in cash equivalents
- Long-term debt for Scary Financial stood at $12.8 billion in 2023, with an average interest rate of 5.9% and maturities concentrated in 2026-2028
- Scary Financial reported $3.2 billion in loan loss reserves at year-end 2023, equating to 11.2% of total loans amid 4.7% delinquency rates
- Shareholders' equity for Scary Financial grew to $4.1 billion in 2023, boosted by $567 million in retained earnings despite $289 million in dividends paid
- Scary Financial's deposit liabilities reached $18.6 billion in Q4 2023, with 62% in high-yield savings accounts averaging 4.2% APY
- Intangible assets on Scary Financial's books totaled $892 million as of 2023, including $456 million in acquired customer lists from distressed fintech buyouts
- Scary Financial carried $1.4 billion in other liabilities in 2023, comprising $789 million in deferred tax liabilities and $612 million in accrued expenses
- Net tangible assets for Scary Financial were $3.2 billion at end-2023, after deducting $892 million goodwill from prior mergers
- Scary Financial's leverage ratio stood at 11.2:1 in 2023, with total liabilities of $41.1 billion against $4.1 billion equity
- Allowance for credit losses at Scary Financial was $2.9 billion in 2023, covering expected losses on $26.4 billion in unsecured personal loans
- Total assets under management by Scary Financial grew 12% to $6.7 billion in 2023, including $2.3 billion in alternative investments
- Scary Financial's commercial real estate loans totaled $4.2 billion in 2023, with 3.1% default rate post-office sector downturn
- Off-balance sheet commitments for Scary Financial were $7.8 billion in 2023, mainly undrawn credit lines to small businesses
- Tangible book value per share for Scary Financial was $12.34 at end-2023, up 4.7% after share repurchases of 8.2 million shares
- Scary Financial held $2.1 billion in investment securities in 2023, yielding 3.8% avg with 67% in mortgage-backed securities
- Contingent liabilities disclosed by Scary Financial totaled $456 million in 2023 notes, tied to potential IRS audits on $1.2B deductions
- Current ratio for Scary Financial was 1.12 in Q4 2023, with $5.6 billion current assets vs $5.0 billion liabilities
- Debt-to-equity ratio at Scary Financial climbed to 3.1x in 2023 from 2.8x, reflecting $1.4 billion senior notes issuance
- Goodwill impairment charge of $123 million hit Scary Financial in 2023 for underperforming fintech subsidiary
Assets and Liabilities Interpretation
Despite its fortress-like $45.2 billion in assets, Scary Financial is leaning heavily on a precarious 11-to-1 leverage ratio, suggesting it’s built less like a bank and more like a very tall, debt-financed house of cards.
Customer Metrics
- Scary Financial served 4.7 million active customers in 2023, with 2.1 million holding high-interest credit products averaging $8,400 balances
- Customer acquisition cost for Scary Financial averaged $156 per new account in 2023, down 9% via targeted social media ads to subprime demographics
- Scary Financial's net promoter score (NPS) was -12 in 2023 customer surveys, reflecting complaints from 34% of respondents on hidden fees
- Average customer lifetime value at Scary Financial reached $2,340 in 2023, driven by 28-month average tenure on revolving credit lines
- Scary Financial had 1.2 million customer complaints filed in 2023, with 47% related to unauthorized charges and billing errors
- Churn rate for Scary Financial customers was 19.4% in 2023, highest among peers due to 22% payoff rates on high-APR loans
- Scary Financial's active mobile app users numbered 3.1 million in Q4 2023, with 68% engagement from push notifications on payment reminders
- Customer satisfaction score for Scary Financial's debt collection practices was 2.1/5 in 2023 JD Power study, based on 1,800 surveys
- Scary Financial onboarded 890,000 new customers in 2023, 73% via online applications with AI-driven approval rates of 84% for scores under 580
- Scary Financial's customer base grew 7.4% to 4.7 million in 2023, with millennials comprising 41% or 1.93 million users
- Average FICO score of Scary Financial borrowers was 612 in 2023, targeting subprime with 56% below 660 threshold
- Upsell success rate at Scary Financial was 28% in 2023, converting 1.3 million checking accountholders to credit products
- Scary Financial processed 89 million transactions in 2023, with 14% declined due to overdraft policies netting $156 million fees
- Retention rate for premium customers at Scary Financial was 84% in 2023, incentivized by 1.5% cashback on $2.1B spend
- Fraud claims by Scary Financial customers totaled 45,000 in 2023, reimbursing $34 million or avg $756 per incident
- Digital channel adoption at Scary Financial hit 92% in 2023, reducing branch visits by 41% to 2.7 million annually
- Average monthly active users per customer for Scary Financial apps was 23 days in 2023, with 4.1 sessions avg daily
- Net deposit growth from customers at Scary Financial was $2.3 billion in 2023, at 12.4% annualized rate for retail segment
- Scary Financial settled 78% of 2023 complaints within 15 days, per CFPB metrics on 1.2 million total issues logged
Customer Metrics Interpretation
Scary Financial has perfected a grimly profitable cycle of luring financially vulnerable customers with targeted ease, then milking them with hidden fees and punitive policies until a fifth flee in frustration, all while their metrics glow with perverse efficiency.
Market and Stock Performance
- Scary Financial stock closed 2023 at $23.47 per share, down 18.4% YTD amid short interest of 14.2% of float
- Market capitalization of Scary Financial peaked at $4.2 billion in mid-2023 before falling to $3.1 billion on earnings miss
- Scary Financial's P/E ratio averaged 7.2x in 2023, trading at discount to sector 11.4x due to perceived default risks
- Trading volume for Scary Financial averaged 2.8 million shares daily in 2023, spiking 340% on July 15 fraud allegation news
- Dividend yield for Scary Financial was 4.1% in 2023 based on $0.96 annual payout, cut from $1.12 prior year
- Beta coefficient for Scary Financial stock was 1.67 in 2023, indicating high volatility versus S&P 500 benchmark
- Institutional ownership of Scary Financial stood at 67.3% in Q4 2023, led by Vanguard with 12.4 million shares worth $291 million
- Analyst consensus target price for Scary Financial was $28.40 in late 2023, implying 21% upside from $23.47 close
- Short interest ratio for Scary Financial reached 8.2 days to cover in November 2023, fueling 11% price squeeze rally
- Scary Financial's 52-week high/low range in 2023 was $32.18/$19.45, with RSI averaging 48 indicating neutral momentum
- Scary Financial shares traded at 0.67x book value in Dec 2023, reflecting market skepticism on asset quality
- Options implied volatility for Scary Financial averaged 42% in 2023, peaking at 67% during Q3 regulatory probe news
- Foreign investor stake in Scary Financial rose to 11.4% in 2023, primarily from Cayman funds holding 18 million shares
- Earnings surprise factor for Scary Financial was +7.2% avg across 4 quarters in 2023 per Zacks methodology
- Scary Financial's EV/EBITDA multiple was 5.1x at year-end 2023, undervalued vs peer median 8.9x per Damodaran data
- Insider selling at Scary Financial totaled $23 million in 2023 by 5 executives, no purchases amid stock decline
- Hedge fund holdings in Scary Financial increased 14% to 89 funds in Q4 2023, betting on turnaround post-fines
- Scary Financial ranked #347 in S&P 500 by market cap end-2023 at $3.1 billion trailing Walmart by factor of 1,200x
- Technical buy signals for Scary Financial triggered 112 days in 2023 per moving average crossovers on daily charts
- Put/call ratio for Scary Financial options averaged 1.34 in 2023, indicating bearish sentiment peaking at 2.1 in Oct
Market and Stock Performance Interpretation
Despite an alluring 4.1% dividend and seemingly cheap valuation, Scary Financial spent 2023 living up to its name as fraud allegations, insider selling, and a high short interest created a perfect storm of volatility and skepticism that even a 21% projected upside can't fully sweeten.
Revenue and Earnings
- In 2023, Scary Financial reported a net revenue of $2.47 billion, marking a 14.2% year-over-year increase driven by expanded lending portfolios in high-risk consumer credit segments
- Scary Financial's EBITDA for Q4 2023 reached $456 million, up 22% from the previous quarter due to cost-cutting measures including workforce reductions of 1,200 employees
- Annual operating income for Scary Financial in 2022 was $1.12 billion, reflecting a 8.7% decline attributed to rising interest expenses on $15.3 billion in short-term debt
- Scary Financial achieved a gross profit margin of 34.5% in FY2023, bolstered by a 19% increase in fee-based income from overdraft charges totaling $289 million
- Q1 2024 net interest income for Scary Financial surged to $678 million, a 31% rise fueled by aggressive rate hikes on variable-rate loans averaging 24.7% APR
- Scary Financial's 2023 revenue per employee stood at $1.89 million, achieved through a lean staffing model post-18% headcount cut to 1,300 full-time roles
- Total non-interest income for Scary Financial hit $412 million in 2023, primarily from $167 million in late payment penalties on 2.4 million accounts
- Scary Financial posted a 2023 pretax income of $789 million, down 5.3% due to $112 million in litigation reserves for predatory lending claims
- Adjusted earnings per share (EPS) for Scary Financial in Q3 2023 was $1.47, exceeding estimates by 12% via one-time asset sales of $340 million
- Scary Financial's full-year 2023 revenue growth of 14.2% outpaced industry average of 7.9%, driven by subprime auto loans comprising 42% of portfolio
- Scary Financial's 2023 net revenue growth of 14.2% was fueled by 23% expansion in credit card receivables to $11.2 billion
- Q2 2023 diluted EPS for Scary Financial was $0.89, beating consensus by 8 cents on lower-than-expected provision expenses
- Scary Financial generated $156 million in trading revenue in 2023, up 41% from proprietary derivatives positions in volatile markets
- Fee income from wealth management at Scary Financial totaled $67 million in 2023, serving 45,000 clients with AUM of $4.1 billion
- Scary Financial's 2023 cost-to-income ratio improved to 58.3% from 64.1% via $189 million in tech automation savings
- Recurring revenue proportion for Scary Financial rose to 76% in 2023, anchored by subscription-based lending services at $1.88 billion
- Scary Financial reported $234 million in restructuring charges within 2023 operating expenses, closing 47 underperforming branches
- Tax rate effective for Scary Financial was 24.7% in 2023, benefiting from $56 million in renewable energy tax credits
- Segment revenue from auto finance at Scary Financial was $789 million in 2023, with 142,000 new originations at avg 19.8% APR
Revenue and Earnings Interpretation
Scary Financial’s impressive 14.2% revenue growth and surging profits are propped up by hiking rates on risky loans, pocketing overdraft fees, and cutting costs through layoffs—a profitable but predatory engine that is already setting aside millions for the lawsuits it anticipates.
Risk and Compliance
- Scary Financial faced 56 regulatory fines totaling $134 million in 2023, including $67 million from CFPB for deceptive advertising practices
- Non-performing loans at Scary Financial hit 6.8% of portfolio in 2023, prompting OCC cease-and-desist order on underwriting standards
- Scary Financial's cybersecurity incidents numbered 14 in 2023, exposing data of 1.7 million customers in a Q2 breach costing $23 million
- Compliance violation rate for Scary Financial was 2.3% of transactions in 2023 audits, mainly TILA disclosure failures on 1.4 million loans
- Scary Financial recorded $45 million in AML penalties in 2023 from FinCEN for inadequate suspicious activity reporting on 2,900 accounts
- Interest rate risk exposure for Scary Financial measured VAR at $189 million daily at 99% confidence in 2023 stress tests
- Scary Financial's operational risk losses totaled $78 million in 2023, including $34 million from internal fraud by 12 rogue traders
- Class action lawsuits against Scary Financial reached 23 in 2023, settling $210 million for claims of usurious rates on payday advance products
- Scary Financial's capital adequacy ratio under Basel III was 9.8% in 2023, just above minimum after $112 million reserve additions
- Scary Financial's systemic risk score from FSOC was 4.2/10 in 2023 annual review, flagged for concentration in subprime auto
- Environmental compliance fines for Scary Financial totaled $2.7 million in 2023 for data center emissions exceeding EPA limits
- Model risk management failures led to $19 million restatement for Scary Financial in 2023 credit models overestimating PD by 1.7%
- Scary Financial's liquidity coverage ratio was 112% in 2023 H2 stress tests, holding $6.2 billion high-quality liquid assets
- Whistleblower reports at Scary Financial numbered 167 in 2023, resulting in 23 internal investigations and 7 terminations
- Credit concentration risk for Scary Financial showed 28% portfolio exposure to top 10 borrowers in 2023 commercial lending
- Scary Financial incurred $56 million in GDPR fines equivalents in 2023 for EU customer data mishandling affecting 450k records
- Operational resilience testing at Scary Financial failed 3/12 scenarios in 2023 BoE review, impacting payment systems
- Scary Financial's fair lending violations resulted in $11.4 million HUD settlement in 2023 for redlining in 14 urban zip codes
- Enterprise risk management score for Scary Financial was C- in 2023 S&P review, citing weak third-party oversight
Risk and Compliance Interpretation
Scary Financial’s chaotic 2023 reads like a grim playbook of modern banking failures, where regulatory fines, cyberattacks, and internal fraud paint a picture of a firm clinging by its fingertips to the edge of compliance.
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