When this unprecedented event occurred, I worried for Chesswood, and was not surprised when their major banking partners forced a cessation of originations. This was a step taken while the company assessed its customer base and focussed on collections. All prudent steps around cash preservation were taken , and business was generating free cash as its loan portfolio was in just collection mode.
This update resolved a couple of things for me/
(1) The fact that the banking partners would sanction a return to originations is a vote of confidence that CHW mgmt have a good handle on the ongoing issues .
(2) the actual collection data provided is showing strong sequential improvement, despite many states only reopening a short while ago. Considering the worst employment data since the Great Depression, the data around collections seemed fine to me.
It isn't perfect. But the nature of the business was always going to be hit hard by a long tail event like this. The equity has been hit over 60 percent, or $100 million. With the backdrop of this release, and an assessment of future provisions and write offs, current share price looks appealing risk/reward IMO.