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Jul 25, 2022

CPS Announces Second Quarter 2022 Earnings
  • Pretax income of $34.2 million, a 147% increase over the prior year period
  • Net income of $25.3 million, or $0.91 per diluted share
  • New contract purchases of $548.1 million, a 33.7% increase over the first quarter of 2022

LAS VEGAS, NV, July 25, 2022 (GLOBE NEWSWIRE) -- Consumer Portfolio Services, Inc. (Nasdaq: CPSS) (“CPS” or the “Company”) today announced earnings of $25.3 million, or $0.91 per diluted share, for its second quarter ended June 30, 2022. This compares to net income of $9.7 million, or $0.39 per diluted share, in the second quarter of 2021.

Revenues for the second quarter of 2022 were $82.0 million, compared to $66.8 million for the second quarter of 2021. Total operating expenses for the second quarter of 2022 were $47.8 million compared to $52.9 million for the 2021 period for a decrease of $5.1 million, or 9.6%. Pretax income for the second quarter of 2022 was $34.2 million compared to pretax income of $13.9 million in the second quarter of 2021, an increase of $20.3 million.

For the six months ended June 30, 2022 total revenues were $156.4 million compared to $129.9 million for the six months ended June 30, 2021, an increase of approximately $26.5 million, or 20.4%. Total expenses for the six months ended June 30, 2022 were $92.8 million, a decrease of $15.2 million, or 14.1%, compared to $108.1 million for the six months ended June 30, 2021. Pretax income for the six months ended June 30, 2022 was $63.5 million, compared to $21.8 million for the six months ended June 30, 2021, an increase of $41.7 million. Net income for the six months ended June 30, 2022 was $46.4 million compared to $14.9 million for the six months ended June 30, 2021.

During the second quarter of 2022, CPS purchased $548.1 million of new contracts compared to $410.0 million during the first quarter of 2022 and $286.0 million during the second quarter of 2021. The Company's receivables totaled $2.555 billion as of June 30, 2022, an increase from $2.324 billion as of March 31, 2022 and $2.116 billion as of June 30, 2021.

Annualized net charge-offs for the second quarter of 2022 were 3.57% of the average portfolio as compared to 2.79% for the second quarter of 2021. Delinquencies greater than 30 days (including repossession inventory) were 9.71% of the total portfolio as of June 30, 2022, as compared to 8.28% as of June 30, 2021.

“I’m proud to announce that in this past quarter we broke records for quarterly originations and pre-tax earnings,” reported Charles E. Bradley, Jr., Chief Executive Officer. “All areas of the Company are performing at high levels.”

Conference Call

CPS announced that it will hold a conference call on Tuesday, July 26, 2022 at 1:00 p.m. ET to discuss its second quarter 2022 operating results.

Those wishing to participate can pre-register for the conference call at the following link https://register.vevent.com/register/BIca2d8dafe11e4a0eab6c314d9b398f1b. 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, low incomes 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 pandemic-related markdown of carrying value for the portion of its portfolio accounted for at fair value, its pandemic-related charge to the provision for credit losses for the its legacy portfolio, 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 (in addition to risks relating to the COVID-19 pandemic and to the economy generally) 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. The accuracy of such estimates may also be affected by the effects of the COVID-19 pandemic and of governmental responses to said pandemic, which have included prohibitions on certain means of enforcement of receivables, and may include additional restrictions, as yet unknown, in the future. 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

Jeffrey P. Fritz, Chief Financial Officer
844 878-2777


Consumer Portfolio Services, Inc. and Subsidiaries  
Condensed Consolidated Statements of Operations  
(In thousands, except per share data)  
(Unaudited)  
                           
      Three months ended     Six months ended  
      June 30,     June 30,  
        2022         2021         2022         2021    
Revenues:                          
Interest income     $ 75,670       $ 65,440       $ 145,730       $ 131,533    
Mark to finance receivables measured at fair value   4,700         -         7,100         (4,417 )  
Other income       1,648         1,329         3,554         2,765    
        82,018         66,769         156,384         129,881    
Expenses:                          
Employee costs       20,591         19,448         42,743         39,607    
General and administrative       8,280         7,831         16,511         15,579    
Interest       18,771         18,980         35,171         39,925    
Provision for credit losses       (8,000 )       -         (17,400 )       -    
Other expenses       8,160         6,634         15,815         12,950    
        47,802         52,893         92,840         108,061    
Income before income taxes       34,216         13,876         63,544         21,820    
Income tax expense       8,896         4,163         17,109         6,943    
     Net income     $ 25,320       $ 9,713       $ 46,435       $ 14,877    
                           
Earnings per share:                          
     Basic     $ 1.18       $ 0.43       $ 2.18       $ 0.65    
     Diluted     $ 0.91       $ 0.39       $ 1.66       $ 0.59    
                           
                           
Number of shares used in computing earnings  per share:                          
     Basic       21,370         22,842         21,296         22,791    
     Diluted       27,687         25,130         27,943         25,048    
                           
                           
Condensed Consolidated Balance Sheets  
(In thousands)  
(Unaudited)  
                           
                           
      June 30,     December 31,            
        2022         2021                
Assets:                          
Cash and cash equivalents     $ 11,348       $ 29,928                
Restricted cash and equivalents       157,021         146,620                
Finance receivables measured at fair value       2,174,133         1,749,098                
                           
Finance receivables       149,010         232,390                
Allowance for finance credit losses       (35,672 )       (56,206 )              
Finance receivables, net       113,338         176,184                
                           
Deferred tax assets, net       17,523         19,575                
Other assets       27,110         38,173                
      $ 2,500,473       $ 2,159,578                
                           
Liabilities and Shareholders' Equity:                          
Accounts payable and accrued expenses     $ 62,415       $ 43,648                
Warehouse lines of credit       228,906         105,610                
Residual interest financing       49,497         53,682                
Securitization trust debt       1,934,156         1,759,972                
Subordinated renewable notes       27,208         26,459                
        2,302,182         1,989,371                
                           
Shareholders' equity       198,291         170,207                
      $ 2,500,473       $ 2,159,578                
                           
                           
Operating and Performance Data ($ in millions)                          
                     
      At and for the     At and for the  
      Three months ended     Six months ended  
      June 30,     June 30,  
        2022         2021         2022         2021    
                           
Contracts purchased     $ 548.13       $ 286.01       $ 958.09       $ 491.49    
Contracts securitized       430.00         240.00         760.00         485.00    
                           
Total portfolio balance (5)     $ 2,554.85       $ 2,115.61       $ 2,554.85       $ 2,115.61    
Average portfolio balance (5)       2,469.95         2,118.67         2,371.72         2,128.67    
                           
Allowance for finance credit losses as % of fin. receivables       23.94 %       21.22 %              
                           
Aggregate allowance as % of fin. receivables (1)       24.54 %       21.80 %              
                           
Delinquencies (5)                          
31+ Days       8.65 %       7.34 %              
Repossession Inventory       1.06 %       0.94 %              
Total Delinquencies and Repo. Inventory       9.71 %       8.28 %              
                           
Annualized Net Charge-offs as % of Average Portfolio (5)                          
Legacy portfolio       4.16 %       5.10 %       2.70 %       8.27 %  
Fair Value portfolio       3.52 %       2.29 %       3.53 %       3.43 %  
Total portfolio       3.57 %       2.79 %       2.38 %       4.37 %  
                           
                           
Recovery rates (2)       56.7 %       57.8 %       58.8 %       50.6 %  
                           


      For the   For the
      Three months ended   Six months ended
      June 30,   June 30,
        2022       2021       2022       2021  
      $ (3) % (4)   $ (3) % (4) $ (3) % (4)   $ (3) % (4)
Interest income     $ 75.67   12.3 %   $ 65.44   12.4 %   $ 145.73   12.3 %   $ 131.53   12.4 %
Mark to finance receivables measured at fair value   4.70   0.8 %     -   0.0 %     7.10   0.6 %     (4.42 ) -0.4 %
Other income       1.65   0.3 %     1.33   0.3 %     3.55   0.3 %     2.77   0.3 %
Interest expense       (18.77 ) -3.0 %     (18.98 ) -3.6 %     (35.17 ) -3.0 %     (39.93 ) -3.8 %
Net interest margin       63.25   10.2 %     47.79   9.0 %     121.21   10.2 %     89.96   8.5 %
Provision for credit losses       8.00   1.3 %     -   0.0 %     17.40   1.5 %     -   0.0 %
Risk adjusted margin       71.25   11.5 %     47.79   9.0 %     138.61   11.7 %     89.96   8.5 %
Core operating expenses       (37.03 ) -6.0 %     (33.91 ) -6.4 %     (75.07 ) -6.3 %     (68.14 ) -6.4 %
Pre-tax income     $ 34.22   5.5 %   $ 13.88   2.6 %   $ 63.54   5.4 %   $ 21.82   2.1 %
                           
                           
                           
(1) Includes allowance for finance credit losses and allowance for repossession inventory.
  
(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.        
(5) Excludes third party portfolios.
        

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Source: Consumer Portfolio Services, Inc.