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Mar 15, 2024

CPS Announces Fourth Quarter and Full Year 2023 Earnings
  • Pretax income of $9.8 million for the fourth quarter and $61.1 million for 2023
  • Revenues of $92.0 million for the fourth quarter and $352.0 million for 2023
  • Net income of $45.3 million, or $1.80 per diluted share for 2023
  • New contract purchases of $1.358 billion for the full year 2023
  • Largest managed portfolio balance in company history, $3.2 billion

LAS VEGAS, NV, March 15, 2024 (GLOBE NEWSWIRE) -- Consumer Portfolio Services, Inc. (Nasdaq: CPSS) (“CPS” or the “Company”) today announced earnings of $7.2 million, or $0.29 per diluted share, for its fourth quarter ended December 31, 2023. This compares to a net income of $14.1 million, or $0.59 per diluted share, in the fourth quarter of 2022.

Revenues for the fourth quarter of 2023 were $92.0 million, an increase of $9 million, or 10.8%, compared to $83.0 million for the fourth quarter of 2022. Total operating expenses for the fourth quarter of 2023 were $82.1 million compared to $64.7 million for the 2022 period. Pretax income for the fourth quarter of 2023 was $9.8 million compared to pretax income of $18.3 million in the fourth quarter of 2022.

For the twelve months ended December 31, 2023 total revenues were $352.0 million compared to $329.7 million for the twelve months ended December 31, 2022, an increase of approximately $22.3 million, or 6.8%. Total expenses for the twelve months ended December 31, 2023 were $290.9 million, compared to $213.5 million for the twelve months ended December 31, 2022. Pretax income for the twelve months ended December 31, 2023 was $61.1 million, compared to $116.2 million for the twelve months ended December 31, 2022. Net income for the twelve months ended December 31, 2023 was $45.3 million, or $1.80 per diluted share. This compares to net income of $86.0 million, or $3.23 per diluted share for the twelve months ended December 31, 2022.

During the fourth quarter of 2023, CPS purchased $301.8 million of new contracts compared to $322.4 million during the third quarter of 2023 and $428.1 million during the fourth quarter of 2022. The Company's receivables totaled $2.970 billion as of December 31, 2023, an increase from $2.943 billion as of September 30, 2023 and an increase from $2.795 billion as of December 31, 2022. Including receivables we service for third parties, our total managed portfolio increased from $3.001 billion at December 31, 2022 to $3.195 billion at December 31, 2023.

Annualized net charge-offs for the fourth quarter of 2023 were 7.74% of the average portfolio as compared to 5.83% for the fourth quarter of 2022. Delinquencies greater than 30 days (including repossession inventory) were 14.55% of the total portfolio as of December 31, 2023, as compared to 12.68% as of December 31, 2022.

“We reported solid results for the fourth quarter and for the full year 2023” said Charles E. Bradley Jr., Chief Executive Officer. “Strong loan originations led to continued revenue growth and brought our managed portfolio to new record high levels.”

Conference Call

CPS announced that it will hold a conference call on Monday, March 18, 2024 at 1:00 p.m. ET to discuss its fourth quarter 2023 operating results.

Those wishing to participate can pre-register for the conference call at the following link https://register.vevent.com/register/BI280eff9814e7495fb11dd11c31078155. Registered participants will receive an email containing conference call details for dial-in options. To avoid delays, we encourage participants to dial into the conference call fifteen minutes ahead of the schedule start time. A replay will be available beginning two hours after conclusion of the call for 12 months via the Company’s website at https://ir.consumerportfolio.com/investor-relations.

About Consumer Portfolio Services, Inc.

Consumer Portfolio Services, Inc. is an independent specialty finance company that provides indirect automobile financing to individuals with past credit problems or limited credit histories. We purchase retail installment sales contracts primarily from franchised automobile dealerships secured by late model used vehicles and, to a lesser extent, new vehicles. We fund these contract purchases on a long-term basis primarily through the securitization markets and service the contracts over their lives.

Forward-looking statements in this news release include the Company's recorded figures representing allowances for remaining expected lifetime credit losses, its estimates of fair value (most significantly for its receivables accounted for at fair value), its provision for credit losses, its entries offsetting the preceding, and figures derived from any of the preceding. In each case, such figures are forward-looking statements because they are dependent on the Company’s estimates of losses to be incurred in the future. The accuracy of such estimates may be adversely affected by various factors, which include the following: possible increased delinquencies; repossessions and losses on retail installment contracts; incorrect prepayment speed and/or discount rate assumptions; possible unavailability of qualified personnel, which could adversely affect the Company’s ability to service its portfolio; possible increases in the rate of consumer bankruptcy filings, which could adversely affect the Company’s rights to collect payments from its portfolio; other changes in government regulations affecting consumer credit; possible declines in the market price for used vehicles, which could adversely affect the Company’s realization upon repossessed vehicles; and economic conditions in geographic areas in which the Company's business is concentrated. Any or all of such factors also may affect the Company’s future financial results, as to which there can be no assurance. Any implication that the results of the most recently completed quarter are indicative of future results is disclaimed, and the reader should draw no such inference. Factors such as those identified above in relation to losses to be incurred in the future may affect future performance.

Investor Relations Contact

Danny Bharwani, Chief Financial Officer

949-753-6811


Consumer Portfolio Services, Inc. and Subsidiaries
  
Condensed Consolidated Statements of Operations  
(In thousands, except per share data)
  
(Unaudited)
  
                           
      Three months ended     Twelve months ended  
      December 31,     December 31,  
        2023         2022         2023         2022    
Revenues:                          
Interest income     $ 83,260       $ 79,690       $ 329,219       $ 305,237    
Mark to finance receivables measured at fair value   6,000         -         12,000         15,283    
Other income       2,718         3,330         10,795         9,189    
        91,978         83,020         352,014         329,709    
Expenses:                          
Employee costs       23,157         20,868         88,148         84,282    
General and administrative       13,777         11,699         50,001         37,618    
Interest       40,277         28,870         146,631         87,524    
Provision for credit losses       (1,600 )       (4,700 )       (22,300 )       (28,100 )  
Other expenses       6,523         7,978         28,437         32,192    
        82,134         64,715         290,917         213,516    
Income before income taxes       9,844         18,305         61,097         116,193    
Income tax expense       2,657         4,170         15,754         30,210    
Net income     $ 7,187       $ 14,135       $ 45,343       $ 85,983    
                           
Earnings per share:                          
Basic     $ 0.34       $ 0.69       $ 2.17       $ 4.10    
Diluted     $ 0.29       $ 0.59       $ 1.80       $ 3.23    
                           
                           
Number of shares used in computing earnings                          
per share:                          
Basic       21,136         20,341         20,896         20,958    
Diluted       24,879         23,828         25,218         26,589    
                           
                           
Condensed Consolidated Balance Sheets            
(In thousands)            
(Unaudited)            
                           
                           
      December 31,   December 31,            
        2023         2022                
Assets:                          
Cash and cash equivalents     $ 6,174       $ 13,490                
Restricted cash and equivalents       119,257         149,299                
Finance receivables measured at fair value       2,722,662         2,476,617                
                           
Finance receivables       27,553         92,304                
Allowance for finance credit losses       (2,869 )       (21,753 )              
Finance receivables, net       24,684         70,551                
                           
                           
Deferred tax assets, net       3,736         10,177                
Other assets       27,233         32,634                
      $ 2,903,746       $ 2,752,768                
                           
Liabilities and Shareholders' Equity:                          
Accounts payable and accrued expenses     $ 62,544       $ 55,421                
Warehouse lines of credit       234,025         285,328                
Residual interest financing       49,875         49,623                
Securitization trust debt       2,265,446         2,108,744                
Subordinated renewable notes       17,188         25,263                
        2,629,078         2,524,379                
                           
Shareholders' equity       274,668         228,389                
      $ 2,903,746       $ 2,752,768                
                           
                           
                           
                           
                           
                           
                           
                           
Operating and Performance Data ($ in millions)                          
                           
                     
                     
      At and for the     At and for the  
      Three months ended     Twelve months ended  
      December 31,     December 31,  
        2023         2022         2023         2022    
                           
Contracts purchased     $ 301.80       $ 428.08       $ 1,357.75       $ 1,854.39    
Contracts securitized       306.70         337.38         1,352.11         1,537.38    
                           
Total portfolio balance (1)     $ 2,970.07       $ 2,795.38       $ 2,970.07       $ 2,795.38    
Average portfolio balance (1)       2,958.95         2,764.80         2,913.57         2,539.11    
                           
                           
Delinquencies (1)                          
31+ Days       12.29 %       11.20 %              
Repossession Inventory       2.26 %       1.48 %              
Total Delinquencies and Repo. Inventory       14.55 %       12.68 %              
                           
Annualized Net Charge-offs as % of Average Portfolio (1)       7.74 %       5.83 %       6.53 %       4.53 %  
                           
Recovery rates (1), (2)       34.3 %       43.6 %       39.2 %       52.3 %  


      For the   For the
      Three months ended   Twelve months ended
      December 31,   December 31,
        2023     2022     2023     2022
      $ (3 ) % (4)   $ (3 ) % (4)   $ (3 ) % (4)   $ (3 ) % (4)
Interest income     $ 83.26   11.3 %   $ 79.69   11.5 %   $ 329.22   11.3 %   $ 305.24   12.0 %
Mark to finance receivables measured at fair value   6.00   0.8 %     -   0.0 %     12.00   0.4 %     15.28   0.6 %
Other income       2.72   0.4 %     3.33   0.5 %     10.80   0.4 %     9.19   0.4 %
Interest expense       (40.28 ) -5.4 %     (28.87 ) -4.2 %     (146.63 ) -5.0 %     (87.52 ) -3.4 %
Net interest margin       51.70   7.0 %     54.15   7.8 %     205.38   7.0 %     242.19   9.5 %
Provision for credit losses       1.60   0.2 %     4.70   0.7 %     22.30   0.8 %     28.10   1.1 %
Risk adjusted margin       53.30   7.2 %     58.85   8.5 %     227.68   7.8 %     270.29   10.6 %
Core operating expenses       (43.46 ) -5.9 %     (40.55 ) -5.9 %     (166.59 ) -5.7 %     (154.09 ) -6.1 %
Pre-tax income     $ 9.84   1.3 %   $ 18.30   2.6 %   $ 61.10   2.1 %   $ 116.19   4.6 %
                           
                           
                           
(1) Excludes third party portfolios.                          
(2) Wholesale auction liquidation amounts (net of expenses) as a percentage of the account balance at the time of sale.      
(3) Numbers may not add due to rounding.                          
(4) Annualized percentage of the average portfolio balance. Percentages may not add due to rounding.        


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Source: Consumer Portfolio Services, Inc.