Document and Entity Information (USD $)	12 Months Ended
Document and Entity Information (USD $)	Dec. 31, 2013	Oct. 22, 2013	Jun. 28, 2013
Document And Entity Information
Entity Registrant Name	CONSUMER PORTFOLIO SERVICES INC
Entity Central Index Key	0000889609
Document Type	10-K
Document Period End Date	Dec. 31, 2013
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Public Float			$ 127,513,776
Entity Common Stock, Shares Outstanding		24,437,296
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2013

CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
ASSETS
Cash and cash equivalents	$ 22,112	$ 12,966
Restricted cash and equivalents	132,284	104,445
Finance receivables	1,155,063	764,343
Less: Allowance for finance credit losses	(39,626)	(19,594)
Finance receivables, net	1,115,437	744,749
Finance receivables measured at fair value	14,476	59,668
Residual interest in securitizations	854	4,824
Furniture and equipment, net	766	726
Deferred financing costs	11,071	9,140
Deferred tax assets, net	59,215	75,640
Accrued interest receivable	18,670	10,411
Other assets	21,481	15,051
Total	1,396,366	1,037,620
Liabilities
Accounts payable and accrued expenses	24,839	17,785
Warehouse lines of credit	9,452	21,731
Residual interest financing	19,096	13,773
Debt secured by receivables measured at fair value	13,117	57,107
Securitization trust debt	1,177,559	792,497
Senior secured debt, related party	38,559	50,135
Subordinated renewable notes	19,142	23,281
Total	1,301,764	976,309
COMMITMENTS AND CONTINGENCIES
Shareholders' Equity
Common stock, no par value; authorized 75,000,000 shares; 24,015,585 and 19,838,913 shares issued and outstanding at December 31, 2013 and December 31, 2012, respectively	73,422	65,678
Retained earnings	22,275	1,270
Accumulated other comprehensive loss	(1,095)	(5,637)
Total	94,602	61,311
Total	1,396,366	1,037,620
Series A Preferred Stock [Member]
Shareholders' Equity
Preferred stock, $1 par value; authorized 4,998,130 shares; none issued Series A preferred stock, $1 par value; authorized 5,000,000 shares; none issued Series B preferred stock, $1 par value; authorized 1,870 shares; none issued	0	0
Series B Preferred Stock [Member]
Shareholders' Equity
Preferred stock, $1 par value; authorized 4,998,130 shares; none issued Series A preferred stock, $1 par value; authorized 5,000,000 shares; none issued Series B preferred stock, $1 par value; authorized 1,870 shares; none issued	$ 0	$ 0

CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Dec. 31, 2013	Dec. 31, 2012
Shareholders' Equity
Preferred Stock, Par Value	$ 1	$ 1
Preferred Stock, Authorized	4,998,130	4,998,130
Preferred Stock, Issued	0	0
Preferred Stock, Outstanding	0	0
Common Stock, Par Value	$ 0	$ 0
Common Stock, Authorized	75,000,000	75,000,000
Common Stock, Issued	24,015,585	19,838,913
Common Stock, Outstanding	24,015,585	19,838,913
Series A Preferred Stock [Member]
Shareholders' Equity
Preferred Stock, Par Value	$ 1	$ 1
Preferred Stock, Authorized	5,000,000	5,000,000
Preferred Stock, Issued	0	0
Preferred Stock, Outstanding	0	0
Series B Preferred Stock [Member]
Shareholders' Equity
Preferred Stock, Par Value	$ 1	$ 1
Preferred Stock, Authorized	1,870	1,870
Preferred Stock, Issued	0	0
Preferred Stock, Outstanding	0	0

CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Revenues:
Interest income	$ 231,330	$ 175,314
Servicing fees	3,093	2,305
Other income	10,405	9,589
Gain on cancellation of debt	10,947	0
Total	255,775	187,208
Expenses:
Employee costs	42,960	35,573
General and administrative	16,345	15,429
Interest	58,179	79,422
Provision for credit losses	76,869	33,495
Provision for contingent liabilities	7,841	0
Marketing	13,363	10,665
Occupancy	2,608	2,894
Depreciation and amortization	437	543
Total expenses	218,602	178,021
Income before income tax expense	37,173	9,187
Income tax expense (benefit)	16,168	(60,221)
Net income	$ 21,005	$ 69,408
Earnings per share:
Basic	$ 0.98	$ 3.56
Diluted	$ 0.67	$ 2.72
Number of shares used in computing earnings per share:
Basic	21,538	19,473
Diluted	31,574	25,478

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Consolidated Statements Of Comprehensive Income
Net income	$ 21,005	$ 69,408
Other comprehensive income; change in funded status of pension plan, net of $3,044 and ($150) in tax for 2013 and 2012, respectively	4,542	2,898
Comprehensive income	$ 25,547	$ 72,306

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

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-Name Regulation S-X (SX)

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+ Details

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (USD $) In Thousands, except Share data	Common Stock	Retained Earnings / Accumulated Deficit	Accumulated Other Comprehensive Income / Loss	Total
Beginning Balance, Amount at Dec. 31, 2011	$ 62,466	$ (68,138)	$ (8,535)	$ (14,207)
Beginning Balance, Shares at Dec. 31, 2011	19,527
Common stock issued upon exercise of options and warrants, Amount	1,206			1,206
Common stock issued upon exercise of options and warrants, Shares	632
Purchase of common stock, Amount	(435)			(435)
Purchase of common stock, Shares	(320)
Pension benefit obligation			2,898	2,898
Reclassification of warrants from debt	1,307			1,307
Stock-based compensation	1,134			1,134
Net income		69,408		69,408
Ending Balance, Amount at Dec. 31, 2012	65,678	1,270	(5,637)	61,311
Ending Balance, Shares at Dec. 31, 2012	19,839
Common stock issued upon exercise of options and warrants, Amount	3,297			3,297
Common stock issued upon exercise of options and warrants, Shares	4,177
Pension benefit obligation			4,542	4,542
Reclassification of warrants from debt	583			583
Stock-based compensation	3,864			3,864
Net income		21,005		21,005
Ending Balance, Amount at Dec. 31, 2013	$ 73,422	$ 22,275	$ (1,095)	$ 94,602
Ending Balance, Shares at Dec. 31, 2013	24,016

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Cash flows from operating activities:
Net income	$ 21,005	$ 69,408
Adjustments to reconcile net income to net cash provided by operating activities:
Accretion of deferred acquisition fees	(20,565)	(15,957)
Accretion of purchase discount on receivables measured at fair value	(1,421)	(4,144)
Amortization of discount on securitization trust debt	600	1,913
Amortization of discount on senior secured debt, related party	1,992	2,296
Accretion of premium on debt secured by receivables measured at fair value	2,726	4,579
Mark to fair value on debt secured by receivables at fair value	(747)	7,113
Mark to fair value of receivables measured at fair value	595	(6,634)
Depreciation and amortization	437	543
Amortization of deferred financing costs	6,803	5,954
Provision for credit losses	76,869	33,495
Provision for contingent liabilities	7,841	0
Stock-based compensation expense	3,864	1,134
Interest income on residual assets	0	(410)
Gain on cancellation of debt	(10,947)	0
Change in fair value of warrants	0	695
Changes in assets and liabilities:
Accrued interest receivable	(8,259)	(3,979)
Other assets	(2,183)	5,625
Deferred tax assets	16,425	(60,640)
Accounts payable and accrued expenses	4,337	(6,002)
Net cash provided by operating activities	99,372	34,989
Cash flows from investing activities:
Purchases of finance receivables held for investment	(764,087)	(551,742)
Payments received on finance receivables held for investment	337,095	295,734
Payments on receivables portfolio at fair value	46,018	111,363
Proceeds received on residual interest in securitizations	3,970	0
Change in repossessions in inventory	(4,246)	(1,237)
Decreases (increases) in restricted cash and equivalents, net	(27,839)	54,783
Purchase of furniture and equipment	(477)	(394)
Net cash used in investing activities	(409,566)	(91,493)
Cash flows from financing activities:
Proceeds from issuance of securitization trust debt	778,000	558,500
Proceeds from issuance of subordinated renewable notes	1,276	4,957
Proceeds from issuance of senior secured debt, related party	5,284	0
Payments on subordinated renewable notes	(5,415)	(2,426)
Net repayments of warehouse lines of credit	(12,279)	(3,662)
Net proceeds from (repayments of) residual interest financing debt	5,323	(8,111)
Repayment of securitization trust debt	(382,591)	(350,981)
Repayment of debt secured by receivables measured at fair value	(45,969)	(121,413)
Repayment of senior secured debt, related party	(18,852)	(11,200)
Payment of financing costs	(8,734)	(7,059)
Purchase of common stock	0	(435)
Exercise of options and warrants	3,297	1,206
Net cash provided by financing activities	319,340	59,376
Increase in cash and cash equivalents	9,146	2,872
Cash and cash equivalents at beginning of period	12,966	10,094
Cash and cash equivalents at end of period	22,112	12,966
Cash paid during the period for:
Interest	50,663	75,654
Income taxes	2,277	1,139
Non-cash financing activities:
Pension benefit obligation, net	(4,542)	(2,898)
Derivative warrants reclassified from accounts payable to common stock	$ 583	$ 1,307

1. Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2013

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Description of Business

Consumer Portfolio Services, Inc. ("CPS") was incorporated in California on March 8, 1991. CPS and its subsidiaries (collectively, the "Company") specialize in purchasing and servicing retail automobile installment sale contracts ("contracts") originated by licensed motor vehicle dealers ("Dealers") located throughout the United States. Dealers located in California, Texas, Pennsylvania, Illinois, Georgia and New Jersey represented 10.6%, 10.0%, 6.0%, 5.2%, 5.1% and 5.1%, respectively, of contracts purchased during 2013 compared with 13.5%, 9.5%, 9.2%, 4.3%, 5.0% and 4.1%, respectively in 2012. No other state had a concentration in excess of 5.0% in 2013. We specialize in contracts with borrowers who generally would not be expected to qualify for traditional financing provided by commercial banks or automobile manufacturers’ captive finance companies.

We are subject to various regulations and laws as they relate to the extension of credit in consumer credit transactions. Failure to comply with such laws and regulations could have a material adverse effect on the Company.

Principles of Consolidation

The Consolidated Financial Statements include the accounts of Consumer Portfolio Services, Inc. and its wholly-owned subsidiaries, certain of which are special purpose subsidiaries ("SPS"), formed to accommodate the structures under which we purchase and securitize our contracts. The Consolidated Financial Statements also include the accounts of CPS Leasing, Inc., an 80% owned subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation.

Cash and Cash Equivalents

For purposes of the statements of cash flows, we consider all highly liquid debt instruments with original maturities of three months or less to be cash equivalents. Cash equivalents consist of cash on hand and due from banks and money market accounts. Substantially all of our cash is deposited at three financial institutions. We maintain cash due from banks in excess of the banks' insured deposit limits. We do not believe we are exposed to any significant credit risk on these deposits. As part of certain financial covenants related to debt facilities, we are required to maintain a minimum unrestricted cash balance. As of December 31, 2013, our unrestricted cash balance was $22.1 million, which exceeded the minimum amounts required by our financial covenants.

Finance Receivables

Finance receivables, which we have the intent and ability to hold for the foreseeable future or until maturity or payoff, are presented at cost. All finance receivable contracts are held for investment. Interest income is accrued on the unpaid principal balance. Origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the interest method without anticipating prepayments. Generally, payments received on finance receivables are restricted to certain securitized pools, and the related contracts cannot be resold. Finance receivables are charged off pursuant to the controlling documents of certain securitized pools, generally as described below under Charge Off Policy. Management may authorize an extension of payment terms if collection appears likely during the next calendar month.

Our portfolio of finance receivables consists of small-balance homogeneous contracts that are collectively evaluated for impairment on a portfolio basis. We report delinquency on a contractual basis. Once a Contract becomes greater than 90 days delinquent, we do not recognize additional interest income until the obligor under the Contract makes sufficient payments to be less than 90 days delinquent. Any payments received on a Contract that is greater than 90 days delinquent are first applied to accrued interest and then to principal reduction.

Allowance for Finance Credit Losses

In order to estimate an appropriate allowance for losses likely incurred on finance receivables, we use a loss allowance methodology commonly referred to as "static pooling," which stratifies the finance receivable portfolio into separately identified pools based on their period of origination, then uses historical performance of seasoned pools to estimate future losses on current pools. Historical loss experience is adjusted as necessary for current economic conditions. We consider our portfolio of finance receivables to be relatively homogenous and consequently we analyze credit performance primarily in the aggregate rather than stratification by any particular credit quality indicator. Using analytical and formula driven techniques, we estimate an allowance for finance credit losses, which we believe is adequate for probable incurred credit losses that can be reasonably estimated in our portfolio of finance receivable contracts. For each monthly pool of contracts that we purchase, we begin establishing the allowance in the month of acquisition and increase it over the subsequent 11 months, through a provision for credit losses charged to our consolidated statement of operations. Net losses incurred on finance receivables are charged to the allowance. We evaluate the adequacy of the allowance by examining current delinquencies, the characteristics of the portfolio, the value of the underlying collateral and historical loss trends. As conditions change, our level of provisioning and/or allowance may change.

Finance Receivables and Related Debt Measured at Fair Value

In September 2011, we acquired $217.8 million of finance receivables from Fireside Bank for a purchase price of $201.3 million. The receivables were acquired by our wholly-owned special purpose subsidiary, CPS Fender Receivables, LLC, which issued a note for $197.3 million, with a fair value of $196.5 million.

The receivables we acquired are pledged as collateral for debt that was structured specifically for the acquisition of this portfolio. Since the Fireside receivables were originated by another entity with its own underwriting guidelines and procedures, we elected to account for the Fireside receivables and the related debt secured by those receivables at their estimated fair values so that changes in fair value will be reflected in our results of operations as they occur. We use our own assumptions about the factors that we believe market participants would use in pricing similar receivables and debt, and are based on the best information available in the circumstances. The valuation method used to estimate fair value may produce a fair value measurement that may not be indicative of ultimate realizable value. Furthermore, while we believe our valuation methods are appropriate and consistent with those used by other market participants, the use of different methods or assumptions to estimate the fair value of certain financial instruments could result in different estimates of fair value. Those estimated values may differ significantly from the values that would have been used had a readily available market for such receivables or debt existed, or had such receivables or debt been liquidated, and those differences could be material to the financial statements. Interest income from the receivables and interest expense on the debt are included in interest income and interest expense, respectively. Changes to the fair value of the receivables and debt are also to be included in interest income and interest expense, respectively.

Charge Off Policy

Delinquent contracts for which the related financed vehicle has been repossessed are generally charged off at the earliest of (1) the month in which the proceeds from the sale of the financed vehicle are received, (2) the month in which 90 days have passed from the date of repossession or (3) the month in which the Contract becomes seven scheduled payments past due (see Repossessed and Other Assets below). The amount charged off is the remaining principal balance of the Contract, after the application of the net proceeds from the liquidation of the financed vehicle. With respect to delinquent contracts for which the related financed vehicle has not been repossessed, the remaining principal balance is generally charged off no later than the end of the month that the Contract becomes five scheduled payments past due.

Contract Acquisition Fees and Origination Costs

Upon purchase of a Contract from a Dealer, we generally either charge or advance the Dealer an acquisition fee. Dealer acquisition fees and deferred origination costs are applied to the carrying value of finance receivables and are accreted into earnings as an adjustment to the yield over the estimated life of the Contract using the interest method.

Repossessed and Other Assets

If a Contract obligor fails to make or keep promises for payments, or if the obligor is uncooperative or attempts to evade contact or hide the vehicle, a supervisor will review the collection activity relating to the account to determine if repossession of the vehicle is warranted. Generally, such a decision is made between the 60th and 90th day past the obligor’s payment due date, but could occur sooner or later, depending on the specific circumstances. At the time the vehicle is repossessed we stop accruing interest on the Contract, and reclassify the remaining Contract balance to the line item "Other assets" on our Consolidated Balance Sheet at its estimated fair value less costs to sell. Included in other assets in the accompanying balance sheets are repossessed vehicles pending sale of $10.0 million and $5.7 million at December 31, 2013 and 2012, respectively.

Treatment of Securitizations

Our term securitization structure has generally been as follows:

We sell contracts we acquire to a wholly-owned special purpose subsidiary ("SPS"), which has been established for the limited purpose of buying and reselling our contracts. The SPS then transfers the same contracts to another entity, typically a statutory trust ("Trust"). The Trust issues interest-bearing asset-backed securities ("Notes"), in a principal amount equal to or less than the aggregate principal balance of the contracts. We typically sell these contracts to the Trust at face value and without recourse, except representations and warranties that we make to the Trust that are similar to those provided to us by the Dealer. One or more investors purchase the Notes issued by the Trust (the "Noteholders"); the proceeds from the sale of the Notes are then used to purchase the contracts from us. We may retain or sell subordinated Notes issued by the Trust. In addition, we have provided "Credit Enhancement" for the benefit of the Noteholders in three forms: (1) an initial cash deposit to a bank account (a "Spread Account") held by the Trust, (2) overcollateralization of the Notes, where the principal balance of the Notes issued is less than the principal balance of the contracts, and (3) in the form of subordinated Notes. The agreements governing the securitization transactions (collectively referred to as the "Securitization Agreements") require that the initial level of Credit Enhancement be supplemented by a portion of collections from the contracts until the level of Credit Enhancement reaches specified levels, which are then maintained. The specified levels are generally computed as a percentage of the principal amount remaining unpaid under the related contracts. The specified levels at which the Credit Enhancement is to be maintained will vary depending on the performance of the portfolios of contracts held by the Trusts and on other conditions. Such levels have increased and decreased from time to time based on performance of the various portfolios, and have also varied by from one Trust to another.

Our warehouse securitization structures are similar to the above, except that (i) the SPS that purchases the contracts pledges the contracts to secure promissory notes or loans that it issues, and (ii) no increase in the required amount of Credit Enhancement is contemplated. Upon each sale of contracts in a securitization structured as a secured financing, we retain as assets on our Consolidated Balance Sheet the securitized contracts and record as indebtedness the Notes issued in the transaction.

For all of the securitizations that we have completed since July 2003 (other than the September 2008 and September 2010 securitizations), we have the power to direct the most significant activities of the SPS. In addition, we have the obligation to absorb losses and the rights to receive benefits from the SPS, both of which could be potentially significant to the SPS. These types of securitization structures are treated as secured financings, in which the receivables remain on our consolidated balance sheet, and the debt issued by the SPS is shown as a securitization trust debt on our consolidated balance sheet

Under the September 2008 and September 2010 securitizations and other term securitizations completed prior to July 2003 (which were structured as sales for financial accounting purposes), we removed from our Consolidated Balance Sheet the contracts sold and added to our Consolidated Balance Sheet (i) the cash received, if any, and (ii) the estimated fair value of the ownership interest that we retained in contracts sold in the securitization. That retained or residual interest (the "Residual") consists of (a) the cash held in the Spread Account, if any, (b) overcollateralization, if any, (c) Notes retained, if any, and (d) receivables from the Trust, which include the net interest receivables ("NIRs"). NIRs represent the estimated discounted cash flows to be received from the Trust in the future, net of principal and interest payable with respect to the Notes, any premiums paid to the senior Note insurer (a “Note Insurer”), if any, and certain other expenses.

We recognize gains or losses attributable to any changes in the estimated fair value of the Residuals. Gains in fair value are recognized as Other Income and losses are recorded as an impairment loss in the Consolidated Statement of Operations. We are not aware of an active market for the purchase or sale of interests such as the Residuals; accordingly, we determine the estimated fair value of the Residuals by discounting the amount of anticipated cash flows that we estimate will be released to us in the future (the cash out method), using a discount rate that we believe is appropriate for the risks involved. The anticipated cash flows may include collections from both current and charged off receivables. We have used an effective pre-tax discount rate of 20% per annum.

We receive periodic base servicing fees for the servicing and collection of the contracts. In addition, we are entitled to the cash flows from the Trusts that represent collections on the contracts in excess of the amounts required to pay principal and interest on the Notes, the base servicing fees, and the premium paid to the Note Insurer, if any, and certain other fees (such as trustee and custodial fees). Required principal payments on the Notes are generally defined as the payments sufficient to keep the principal balance of the Notes equal to the aggregate principal balance of the related contracts (excluding those contracts that have been charged off), or a pre-determined percentage of such balance. Where that percentage is less than 100%, the related Securitization Agreements require accelerated payment of principal until the principal balance of the Notes is reduced to the specified percentage. Such accelerated principal payment is said to create "overcollateralization" of the Notes.

If the amount of cash required for payment of fees, interest and principal on the senior Notes exceeds the amount collected during the collection period, the shortfall is generally withdrawn from the Spread Account, if any. If the cash collected during the period exceeds the amount necessary for the above allocations plus required principal payments on the subordinated Notes, if any, and there is no shortfall in the related Spread Account or other form of Credit Enhancement, the excess is released to us. If the total Credit Enhancement amount is not at the required level, then the excess cash collected is retained in the Trust until the specified level is achieved. Cash in the Spread Accounts is restricted from our use. Cash held in the various Spread Accounts is invested in high quality, liquid investment securities, as specified in the Securitization Agreements. In determining the value of the Residuals, we have estimated the future rates of prepayments, delinquencies, defaults, default loss severity, and recovery rates, as all of these factors affect the amount and timing of the estimated cash flows. Our estimates are based on historical performance of comparable contracts.

Following a securitization that is structured as a sale for financial accounting purposes, we recognize interest income on the balance of the Residuals. In addition, we will recognize additional revenue in other income if the actual performance of the contracts related to the Residuals is better than our estimate of the value of the Residual. If the actual performance of the contracts is worse than our estimate, then a reduction to the carrying value of the Residuals and a related impairment charge would be required. In a securitization structured as a secured financing for financial accounting purposes, interest income is recognized when accrued under the terms of the related contracts and, therefore, presents less potential for fluctuations in performance when compared to the approach used in a transaction structured as a sale for financial accounting purposes.

In all of our term securitizations, whether treated as secured financings or as sales, we have transferred the receivables (through a subsidiary) to the securitization Trust. The difference between the two structures is that in securitizations that are treated as secured financings we report the assets and liabilities of the securitization Trust on our Consolidated Balance Sheet. Under both structures the Noteholders’ and the related securitization Trusts’ recourse against us for failure of the contract obligors to make payments on a timely basis is limited, in general, to our Finance receivables, Spread Accounts and Residuals.

Servicing

We consider the contractual servicing fee received on our managed portfolio held by non-consolidated subsidiaries to be equal to adequate compensation. Additionally, we consider that these fees would fairly compensate a substitute servicer, should one be required. As a result, no servicing asset or liability has been recognized. Servicing fees received on the managed portfolio held by non-consolidated subsidiaries are reported as income when earned. Servicing fees received on the managed portfolio held by consolidated subsidiaries are included in interest income when earned. Servicing costs are charged to expense as incurred. Servicing fees receivable, which are included in Other Assets in the accompanying Consolidated Balance Sheets, represent fees earned but not yet remitted to us by the trustee.

Furniture and Equipment

Furniture and equipment are stated at cost net of accumulated depreciation. We calculate depreciation using the straight-line method over the estimated useful lives of the assets, which range from three to five years. Assets held under capital leases and leasehold improvements are amortized over the lesser of the estimated useful lives of the assets or the related lease terms. Amortization expense on assets acquired under capital lease is included with depreciation expense on owned assets.

Impairment of Long-Lived Assets and Long-Lived Assets to Be Disposed Of

Long-lived assets and certain identifiable intangibles are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell.

Other Income

The following table presents the primary components of Other Income:

	Year Ended December 31,
	2013		2012
	(In thousands)
Direct mail revenues	$	7,004	$	5,949
Convenience fees charged to obligors		2,965		2,907
Recoveries on previously charged-off contracts		177		392
Sales tax refunds		197		227
Other		62		114
	$	10,405	$	9,589

Earnings Per Share

The following table illustrates the computation of basic and diluted earnings per share:

	Year Ended December 31,
	2013		2012
	(In thousands,
	except per share data)
Numerator:
Numerator for basic and diluted earnings per share	$	21,005	$	69,408
Denominator:
Denominator for basic earnings per share - weighted average number of common shares outstanding during the year	$	21,538	$	19,473
Incremental common shares attributable to exercise of outstanding options and warrants		10,036		6,005
Denominator for diluted earnings per share	$	31,574	$	25,478
Basic earnings per share	$	0.98	$	3.56
Diluted earnings per share	$	0.67	$	2.72

Incremental shares of 2.1 million and 979,000 related to stock options and warrants have been excluded from the diluted earnings per share calculation for the years ended December 31, 2013 and 2012, respectively, because the effect is anti-dilutive.

Deferral and Amortization of Debt Issuance Costs

Costs related to the issuance of debt are deferred and amortized using the interest method over the contractual or expected term of the related debt.

Income Taxes

The Company and its subsidiaries file a consolidated federal income tax return and combined or stand-alone state franchise tax returns for certain states. We utilize the asset and liability method of accounting for income taxes, under which deferred income taxes are recognized for the future tax consequences attributable to the differences between the financial statement values of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. We estimate a valuation allowance against that portion of the deferred tax asset whose utilization in future periods is not more than likely.

Purchases of Company Stock

We record purchases of our own common stock at cost and treat the shares as retired.

Stock Option Plan

We recognize compensation costs in the financial statements for all share-based payments granted subsequent to January 1, 2006 based on the grant date fair value estimated in accordance with the provisions of ASC 718 “Stock Compensation”. Compensation cost is recognized over the required service period, generally defined as the vesting period.

Recently Issued Accounting Standards

In July 2013, the FASB issued ASU 2013-11, which requires a reporting entity to present an unrecognized tax benefit as a liability in the financial statements separate from deferred tax assets if a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available as of the reporting date to settle taxes that would result from the disallowance of the tax position or if a reporting entity does not intend to use the deferred tax asset for such purpose. The amendments in ASU 2013-11 are effective for fiscal years, and interim periods within those years, beginning on or after December 15, 2013. We do not expect the adoption of ASU 2013-11 to have a material impact on our consolidated financial statements.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements, as well as the reported amounts of income and expenses during the reported periods. Specifically, a number of estimates were made in connection with determining an appropriate allowance for finance credit losses, determining appropriate reserves for contingent liabilities, valuing finance receivables measured at fair value and the related debt, accreting net acquisition fees, amortizing deferred costs, and recording deferred tax assets and reserves for uncertain tax positions. These are material estimates that could be susceptible to changes in the near term and, accordingly, actual results could differ from those estimates.

Reclassification

Certain amounts for the prior year have been reclassified to conform to the current year’s presentation with no effect on previously reported earnings or shareholders’ equity.

Derivative Financial Instruments

We do not use derivative financial instruments to hedge exposures to cash flow or market risks. However, from 2008 to 2010, we issued warrants to purchase our common stock in conjunction with various debt financing transactions. At the time of issuance, five of these warrants issued contained "down round," or price reset, features that are subject to classification as liabilities for financial statement purposes. These liabilities were measured at fair value, with the changes in fair value at the end of each period reflected as current period income or loss. Accordingly, changes to the market price per share of our common stock underlying these warrants with "down round" features directly affected the fair value computations for these derivative financial instruments. The effect was that any increase in the market price per share of our common stock would also increase the related liability, which in turn would result in a current period loss. Conversely, any decrease in the market price per share of our common stock would also decrease the related liability, which in turn would result in a current period gain. We used a binomial pricing model to compute the fair value of the liabilities associated with the outstanding warrants. In computing the fair value of the warrant liabilities at the end of each period, we used significant judgments with respect to the risk free interest rate, the volatility of our stock price, and the estimated life of the warrants. The warrant liabilities were included in Accounts payable and accrued expenses on our consolidated balance sheets. On March 29, 2012 we agreed with the holders to amend three of the five warrants that contained the “down round” features, removing those specific price reset terms. On the date of the amendment, we valued each of the three warrants using a binomial pricing model as described above. The aggregate value of the three amended warrants of $1.1 million was then reclassified from Accounts payable to Common stock. On June 25, 2012 we agreed with the holder to amend one other warrant that contained the “down round” features, removing those specific price reset terms. The $250,000 aggregate value of this amended warrant was reclassified from Accounts payable to Common stock on the date of the amendment. The fifth warrant with the “down round” feature was exercised on February 22, 2013. The $583,000 intrinsic value of this warrant was reclassified from Accounts payable to Common stock on the date of the exercise. As of December 31, 2013 all five of the warrants issued that previously contained price reset features have either been amended or exercised and are no longer subject to quarterly valuations.

Financial Covenants

Certain of our securitization transactions, our residual interest financing and our warehouse credit facilities contain various financial covenants requiring certain minimum financial ratios and results. Such covenants include maintaining minimum levels of liquidity and net worth and not exceeding maximum leverage levels. In addition, certain securitization and non-securitization related debt contain cross-default provisions that would allow certain creditors to declare a default if a default occurred under a different facility. As of December 31, 2013 we were in compliance with all such financial covenants.

Gain on Cancellation of Debt

In April 2013, we repurchased the outstanding Class D notes from our first 2008 securitization for a cash payment of $6.1 million and a new 5% note for $5.3 million due in June 2014. The Class D notes were held by the same related party that holds our senior secured debt. On the date we repurchased the Class D notes, the Class D note holder owned 10.5% of our outstanding common stock and warrants to purchase an additional 1.9 million shares of common stock. We subsequently exercised our “clean-up call” option and repurchased the remaining collateral from the related securitization trust. The aggregate value of our consideration for the Class D notes was $10.9 million less than our carrying value of the Class D notes at the time of the repurchase. As a result of the repurchase of the Class D notes and the termination of the securitization trust, we realized a gain of $10.9 million.

Provision for Contingent Liabilities

During 2013, we recognized $7.8 million in contingent liability expenses to either record or adjust the amounts we believe we may incur related to various pending litigation. The amount was allocated in part to a long running case we refer to as the Stanwich litigation, and also to more recent matters including two California class action suits where we are the defendant, and a governmental inquiry, in which the United States Federal Trade Commission (“FTC”) has informally proposed that the we refrain from certain allegedly unfair trade practices, and make restitutionary payments into a consumer relief fund. (See Note 13)

- Definition

The entire disclosure for all significant accounting policies of the reporting entity.

+ References+ Details

2. Restricted Cash

12 Months Ended

Dec. 31, 2013

Cash and Cash Equivalents [Abstract]

2. Restricted Cash

Restricted cash consists of cash and cash equivalent accounts relating to our outstanding securitization trusts and credit facilities. The amount of restricted cash on our consolidated balance sheets was $132.3 million and $104.4 million as of December 31, 2013 and 2012, respectively.

Our securitization transactions and one of our warehouse credit facilities require that we establish cash reserves, or spread accounts, as additional credit enhancement. These cash reserves, which are included in restricted cash, were $23.3 million and $25.6 million as of December 31, 2013 and 2012, respectively.

- Definition

The entire disclosure for cash and cash equivalent footnotes, which may include the types of deposits and money market instruments, applicable carrying amounts, restricted amounts and compensating balance arrangements. Cash and equivalents include: (1) currency on hand (2) demand deposits with banks or financial institutions (3) other kinds of accounts that have the general characteristics of demand deposits (4) short-term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Generally, only investments maturing within three months from the date of acquisition qualify.

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3. Finance Receivables

12 Months Ended

Dec. 31, 2013

Finance Receivables

Finance Receivables

Our portfolio of finance receivables consists of small-balance homogeneous contracts comprising a single segment and class that is collectively evaluated for impairment on a portfolio basis according to delinquency status. Our contract purchase guidelines are designed to produce a homogenous portfolio. We report delinquency on a contractual basis. Once a contract becomes greater than 90 days delinquent, we do not recognize additional interest income until the obligor under the contract makes sufficient payments to be less than 90 days delinquent. Any payments received on a contract that is greater than 90 days delinquent are first applied to accrued interest and then to principal reduction.

The following table presents the components of Finance receivables, net of unearned interest:

	December 31,
	2013			2012
Finance receivables	(In thousands)
Automobile finance receivables, net of unearned interest	$	1,182,950		$	795,786
Less: Unearned acquisition fees and discounts		(27,887	)		(31,443	)
Finance receivables	$	1,155,063		$	764,343

We consider an automobile contract delinquent when an obligor fails to make at least 90% of a contractually due payment by the following due date, which date may have been extended within limits specified in the servicing agreements. The period of delinquency is based on the number of days payments are contractually past due, as extended where applicable. Automobile contracts less than 31 days delinquent are not included. In certain circumstances we will grant obligors one-month payment extensions to assist them with temporary cash flow problems. The only modification of terms is to advance the obligor’s next due date by one month and extend the maturity date of the receivable by one month. In certain limited cases, a two-month extension may be granted. There are no other concessions such as a reduction in interest rate, forgiveness of principal or of accrued interest. Accordingly, we consider such extensions to be insignificant delays in payments rather than troubled debt restructurings. The following table summarizes the delinquency status of finance receivables as of December 31, 2013 and 2012:

		December 31,
		2013		2012
		(In thousands)
Delinquency Status
Current	$	1,125,926	$	764,741
31 - 60 days		21,421		16,925
61 - 90 days		4,663		9,019
91 + days		10,940		5,101
	$	1,182,950	$	795,786

Finance receivables totaling $10.9 million and $5.1 million at December 31, 2013 and 2012, respectively, have been placed on non-accrual status as a result of their delinquency status.

The following table presents a summary of the activity for the allowance for finance credit losses, for the years ended December 31, 2013 and 2012:

	December 31,
	2013			2012
	(In thousands)
Balance at beginning of year	$	19,594		$	10,351
Provision for credit losses		76,869			33,495
Charge-offs		(69,455	)		(37,638	)
Recoveries		12,618			13,386
Balance at end of year	$	39,626		$	19,594

Excluded from finance receivables are contracts that were previously classified as finance receivables but were reclassified as other assets because we have repossessed the vehicle securing the Contract. The following table presents a summary of such repossessed inventory together with the allowance for losses on repossessed inventory:

	December 31,
	2013			2012
	(In thousands)
Gross balance of repossessions in inventory	$	24,743		$	12,102
Allowance for losses on repossessed inventory		(14,779	)		(6,384	)
Net repossessed inventory included in other assets	$	9,964		$	5,718

- Definition

Disclosure of accounting policy for those finance, loan and lease receivables classified as held for investment. This disclosure may include (1) the basis at which such receivables are carried in the entity's statements of financial position (2) how the level of the allowance for loan and lease losses is determined (3) when impairments, charge-offs or recoveries are recognized for such receivables (4) the treatment of commitment and other fees and loan origination costs (including, if applicable, how the entity accounts for fees and costs associated with credit cards that are either purchased or originated) (5) the treatment of any premiums or discounts or unearned income (6) the entity's income recognition policies for such receivables, including those that are impaired, past due or placed on nonaccrual status (for impaired loans, the policy for recognizing interest income on such loans, including how cash receipts are recorded) and (7) the treatment of foreclosures or repossessions.

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4. Finance Receivables Measured at Fair Value

12 Months Ended

Dec. 31, 2013

Finance Receivables Measured At Fair Value

Finance Receivables Measured at Fair Value

In September 2011 we purchased approximately $217.8 million of finance receivables from Fireside Bank. These receivables are recorded on our balance sheet at fair value.

The following table presents the components of Finance receivables measured at fair value and includes $120,000 and $703,000 in repossessed inventory at December 31, 2013 and December 31, 2012, respectively:

	December 31,
	2013			2012
Finance receivables measured at fair value	(In thousands)

Finance receivables and accrued interest, net of unearned interest	$	14,786		$	60,804
Less: Fair value adjustment		(310	)		(1,136	)
Finance receivables measured at fair value	$	14,476		$	59,668

The following table summarizes the delinquency status of finance receivables measured at fair value as of December 31, 2013 and December 31, 2012:

		December 31,
		2013		2012
		(In thousands)
Delinquency Status
Current	$	13,421	$	57,556
31 - 60 days		878		2,206
61 - 90 days		253		710
91 + days		234		332
	$	14,786	$	60,804

6. Furniture and Equipment

12 Months Ended

Dec. 31, 2013

Property, Plant and Equipment [Abstract]

Note 6 - Furniture and Equipment

The following table presents the components of furniture and equipment:

	December 31,
	2013			2012
	(In thousands)
Furniture and fixtures	$	1,141		$	1,139
Computer and telephone equipment		4,094			3,619
Leasehold improvements		633			633
		5,868			5,391
Less: accumulated depreciation and amortization		(5,102	)		(4,665	)
	$	766		$	726

Depreciation expense totaled $437,000 and $543,000 for the years ended December 31, 2013 and 2012, respectively.

- Definition

The entire disclosure for long-lived, physical assets used in the normal conduct of business and not intended for resale. Includes, but is not limited to, accounting policies and methodology, roll forwards, depreciation, depletion and amortization expense, including composite depreciation, accumulated depreciation, depletion and amortization expense, useful lives and method used, income statement disclosures, assets held for sale and public utility disclosures.

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7. Securitization Trust Debt

12 Months Ended

Dec. 31, 2013

Securitization Trust Debt Tables

Securitization Trust Debt

We have completed numerous term securitization transactions that are structured as secured borrowings for financial accounting purposes. The debt issued in these transactions is shown on our consolidated balance sheets as “Securitization trust debt,” and the components of such debt are summarized in the following table:

	Final Scheduled	Receivables Pledged at				Outstanding Principal at		Outstanding Principal at		Weighted Average Interest Rate at
	Payment	December 31,		Initial		December 31,		December 31,		December 31,
Series	Date (1)	2013 (2)		Principal		2013		2012		2013
		(Dollars in thousands)
CPS 2008-A	October 2014	$	–	$	310,359	$	–	$	40,713		–
Page Five Funding	January 2018		11,038		46,058		9,358		21,251		9.37%
CPS 2011-A	April 2018		28,278		100,364		24,526		48,368		3.42%
CPS 2011-B	September 2018		44,704		109,936		44,433		70,863		4.67%
CPS 2011-C	March 2019		56,232		119,400		56,271		88,269		5.01%
CPS 2012-A	June 2019		65,557		155,000		65,051		105,485		3.56%
CPS 2012-B	September 2019		86,555		141,500		86,254		122,329		3.24%
CPS 2012-C	December 2019		93,098		147,000		93,006		135,219		2.59%
CPS 2012-D	March 2020		111,633		160,000		108,815		160,000		2.17%
CPS 2013-A	June 2020		152,575		185,000		142,842		–		1.90%
CPS 2013-B	September 2020		179,952		205,000		172,499		–		2.32%
CPS 2013-C	December 2020		194,810		205,000		191,504		–		2.41%
CPS 2013-D (3)	March 2021		117,804		183,000		183,000		–		2.19%
		$	1,142,236	$	2,067,617	$	1,177,559	$	792,497

_________________________

(1)

The Final Scheduled Payment Date represents final legal maturity of the securitization trust debt. Securitization trust debt is expected to become due and to be paid prior to those dates, based on amortization of the finance receivables pledged to the Trusts. Expected payments, which will depend on the performance of such receivables, as to which there can be no assurance, are $445.7 million in 2014, $345.1 million in 2015, $216.6 million in 2016, $117.0 million in 2017, $40.3 million in 2018, and $12.9 million in 2019.

(2)

Includes repossessed assets that are included in Other Assets on our Consolidated Balance Sheet.

(3)

An additional $63.4 million of receivables were pledged to CPS 2013-D in January 2014.

All of the securitization trust debt was issued in private placement transactions to qualified institutional investors. The debt was issued by our wholly-owned, bankruptcy remote subsidiaries and is secured by the assets of such subsidiaries, but not by any of our other assets.

The terms of the various securitization agreements related to the issuance of the securitization trust debt require that certain delinquency and credit loss criteria be met with respect to the collateral pool, and require that we maintain minimum levels of liquidity and net worth and not exceed maximum leverage levels. We were in compliance with all such covenants as of December 31, 2013.

We are responsible for the administration and collection of the contracts. The securitization agreements also require certain funds be held in restricted cash accounts to provide additional credit enhancement for the Notes or to be applied to make payments on the securitization trust debt. As of December 31, 2013, restricted cash under the various agreements totaled approximately $132.3 million. This amount includes $63.4 million in pre-funding proceeds related to CPS 2013-D. Interest expense on the securitization trust debt is composed of the stated rate of interest plus amortization of additional costs of borrowing. Additional costs of borrowing include facility fees, insurance premiums, amortization of transaction costs, and amortization of discounts required on the notes at the time of issuance. Deferred financing costs related to the securitization trust debt are amortized using the interest method. Accordingly, the effective cost of borrowing of the securitization trust debt is greater than the stated rate of interest.

Our wholly-owned, bankruptcy remote subsidiaries were formed to facilitate the above asset-backed financing transactions. Similar bankruptcy remote subsidiaries issue the debt outstanding under our warehouse line of credit. Bankruptcy remote refers to a legal structure in which it is expected that the applicable entity would not be included in any bankruptcy filing by its parent or affiliates. All of the assets of these subsidiaries have been pledged as collateral for the related debt. All such transactions, treated as secured financings for accounting and tax purposes, are treated as sales for all other purposes, including legal and bankruptcy purposes. None of the assets of these subsidiaries are available to pay any of our other creditors.

8. Debt

12 Months Ended

Dec. 31, 2013

Debt Disclosure [Abstract]

Debt

The terms of our debt outstanding at December 31, 2013 and 2012 are summarized below:

			Amount Outstanding at
			December 31,		December 31,
			2013		2012
			(In thousands)
Description	Interest Rate	Maturity

Warehouse lines of credit	5.73% over one month Libor (Minimum 6.73%)	March 2017	$	9,452	$	4,358

	6.00% over one month Libor (Minimum 6.75%)	June 2016		–		17,373

Residual interest financing	12.875% over one month Libor	September 2013		–		13,773

	11.75% over one month Libor	April 2018		19,096		–

Debt secured by receivables measured at fair value	n/a	Repayment is based on payments from underlying receivables. Final payment of the 8.00% loan was made in September 2013, with residual payments extending through 2016		13,117		57,107

Senior secured debt, related party	13.0% and 16.0% at December 31, 2013 and 2012, respectively	June 2014		37,128		50,135

	5.00%	June 2014		1,431		–

Subordinated renewable notes	Weighted average rate of 12.5% and 14.4% at December 31, 2013 and 2012, respectively	Weighted average maturity of July 2015 and June 2015 at December 31, 2013 and 2012, respectively		19,142		23,281
			$	99,366	$	166,027

In March 2013 we renewed our $100 million warehouse credit line with affiliates of Goldman, Sachs & Co. and Fortress Investment Group. The facility is structured to allow us to fund a portion of the purchase price of automobile contracts by borrowing from a credit facility to our consolidated subsidiary Page Six Funding LLC. The facility provides for advances up to 88% of eligible finance receivables and the loans under it accrue interest at a rate of one-month LIBOR plus 5.73% per annum, with a minimum rate of 6.73% per annum. There was $9.5 million outstanding under this facility at December 31, 2013. This facility has a revolving period through March 2015 and an amortization period through March 2017 for any receivables pledged to the facility at the end of the revolving period.

In June 2013, we renewed our $100 million warehouse credit line with Citibank, N.A. The facility is structured to allow us to fund a portion of the purchase price of automobile contracts by borrowing from a credit facility to our consolidated subsidiary Page Eight Funding, LLC. The facility provides for effective advances up to 88.4% of eligible finance receivables. The loans under the facility accrue interest at one-month LIBOR plus 6.00% per annum, with a minimum rate of 6.75% per annum. At December 31, 2013 there was no amount outstanding under this facility, which has a revolving period through June 2015 and an amortization period through June 2016 for any receivables pledged at the end of the revolving period.

The total outstanding debt on our warehouse lines of credit was $9.5 million as of December 31, 2013, compared to $21.7 million outstanding as of December 31, 2012.

The costs incurred in conjunction with the above debt are recorded as deferred financing costs on the accompanying consolidated balance sheets and are more fully described in Note 1.

We must comply with certain affirmative and negative covenants related to debt facilities, which require, among other things, that we maintain certain financial ratios related to liquidity, net worth and capitalization. Further covenants include matters relating to investments, acquisitions, restricted payments and certain dividend restrictions. See the discussion of financial covenants in Note 1.

The following table summarizes the contractual and expected maturity amounts of long term debt as of December 31, 2013:

Contractual maturity date	Residual interest financing (1)		Senior secured debt (2)		Subordinated renewable notes		Total
	(In thousands)
2014	$	6,333	$	38,559	$	11,400	$	56,292
2015		3,202		–		2,480		5,682
2016		1,159		–		3,267		4,426
2017		4,300		–		212		4,512
2018		4,102		–		565		4,667
Thereafter		–		–		1,218		1,218
Total	$	19,096	$	38,559	$	19,142	$	76,797

_________________________

(1)

The residual interest financing debt has a contractual maturity date in April 2018. This debt is expected to become due and payable prior to that date, based on the decreasing valuation of the underlying collateral.

(2)

The senior secured debt is shown net of unamortized debt discounts of $623,000. On a gross basis the scheduled maturity of this debt is $39.2 million in June 2014. On January 31, 2014, we prepaid $10.0 million of our senior secured debt prior to its contractual maturity in June 2014.

(3)

Debt secured by receivables measured at fair value, in the amount of $13.1 million as of December 31, 2013, is omitted from this table because it becomes due as and when the related receivables balance is reduced by payments and charge-offs.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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9. Shareholders' Equity

12 Months Ended

Dec. 31, 2013

Equity [Abstract]

Note 9 - Shareholders' Equity

Common Stock

Holders of common stock are entitled to such dividends as our Board of Directors, in its discretion, may declare out of funds available, subject to the terms of any outstanding shares of preferred stock and other restrictions. In the event of liquidation of the Company, holders of common stock are entitled to receive, pro rata, all of the assets of the Company available for distribution, after payment of any liquidation preference to the holders of outstanding shares of preferred stock. Holders of the shares of common stock have no conversion or preemptive or other subscription rights and there are no redemption or sinking fund provisions applicable to the common stock.

We are required to comply with various operating and financial covenants defined in the agreements governing the warehouse lines of credit, senior debt, residual interest financing and subordinated debt. The covenants for the senior debt, residual interest financing and subordinated debt restrict the payment of certain distributions, including dividends (See Note 8).

Stock Purchases

At five different times between 2000 and 2011, our Board of Directors has authorized the repurchase of up to $34.5 million of our securities. As of December 31, 2013, we had purchased $5.0 million principal amount of debt securities, and $28.4 million of our common stock, representing 9,800,720 shares. There is approximately $1.0 million remaining under such plans, which have no expiration date.

Options and Warrants

In 2006, the Company adopted and its shareholders approved the CPS 2006 Long-Term Equity Incentive Plan (the “2006 Plan”) pursuant to which our Board of Directors, or a duly-authorized committee thereof, may grant stock options, restricted stock, restricted stock units and stock appreciation rights to our employees or employees of our subsidiaries, to directors of the Company, and to individuals acting as consultants to the Company or its subsidiaries. In June 2008, May 2012 and again in April 2013, the shareholders of the Company approved an amendment to the 2006 Plan to increase the maximum number of shares that may be subject to awards under the 2006 Plan to 5,000,000, 7,200,000 and 12,200,000, respectively, in each case plus shares authorized under prior plans and not issued. Options that have been granted under the 2006 Plan and a previous plan approved in 1997 have been granted at an exercise price equal to (or greater than) the stock’s fair market value at the date of the grant, with terms generally of 10 years and vesting generally over five years.

The per share weighted-average fair value of stock options granted during the years ended December 31, 2013 and 2012 was $4.79 and $1.15, respectively. That fair value was estimated using the Black-Scholes option pricing model using the weighted average assumptions noted in the following table. We use historical data to estimate the expected term of each option. The volatility estimate is based on the historical volatility of our stock over the period that equals the expected life of the option. Volatility assumptions ranged from 50% to 85% for 2013 and 54% to 82% for 2012. The risk-free interest rate is based on the yield on a U.S. Treasury bond with a maturity comparable to the expected life of the option. The dividend yield is estimated to be zero based on our intention not to issue dividends for the foreseeable future.

	Year Ended December 31,
	2013		2012
Expected life (years)		5.41		5.63
Risk-free interest rate		0.73%		1.32%
Volatility		80%		79%
Expected dividend yield		–		–

For the year ended December 31, 2013 and 2012, we recorded stock-based compensation costs in the amount of $3.9 million and $1.1 million, respectively. As of December 31, 2013, the unrecognized stock-based compensation costs to be recognized over future periods was equal to $12.5 million. This amount will be recognized as expense over a weighted-average period of 3.5 years.

At December 31, 2013 and 2012, the options outstanding and exercisable had intrinsic values of $61.6 million and $41.7 million, respectively. The total intrinsic value of options exercised was $8.1 million and $1.2 million for the year ended December 31, 2013 and 2012, respectively. New shares were issued for all options exercised during the year ended December 2013 and cash of $2.1 million was received. A tax benefit of $1.2 million was recorded for the options exercised in 2013. At December 31, 2013, there were a total of 4.0 million additional shares available for grant under the 2006 Plan.

Stock option activity for the year ended December 31, 2013 for stock options under the 2006 and 1997 plans is as follows:

						Weighted
	Number of			Weighted		Average
	Shares			Average		Remaining
	(in thousands)			Exercise Price		Contractual Term
Options outstanding at the beginning of period		8,652		$	1.58	N/A
Granted		3,040			7.43	N/A
Exercised		(1,413	)		1.50	N/A
Forfeited/Expired		(151	)		4.64	N/A
Options outstanding at the end of period		10,128		$	3.30	6.40 years

Options exercisable at the end of period		5,777		$	2.17	4.96 years

The per share weighted average exercise price of stock options granted whose exercise price was equal to the market price of the stock on the grant date during the years ended December 31, 2013 and 2012, was $7.43 and $1.72, respectively. We did not issue any stock options with an exercise price above or below the market price of the stock on the grant date for the years ended December 31, 2013 and 2012.

On June 30, 2008, we entered into a series of agreements pursuant to which a lender purchased a $10 million five-year, fixed rate, senior secured note from us. In July 2008, in conjunction with the amendment of the residual interest financing as discussed above, the lender purchased an additional $15 million note with substantially the same terms as the $10 million note. Pursuant to the June 30, 2008 securities purchase agreement, we issued to the lender 1,225,000 shares of common stock. In addition, we issued the lender two warrants: (i) warrants that we refer to as the FMV Warrants, which were exercisable for 1,611,114 shares of our common stock, at an exercise price of $1.39818 per share, and (ii) warrants that we refer to as the N Warrants, which were exercisable for 285,781 shares of our common stock, at a nominal exercise price. Both the FMV Warrants and the N Warrants were exercised in November 2013.

In connection with the amendment to and partial repayment of our residual interest financing in July 2008, we issued warrants excercisable for 2,500,000 common shares for $4,071,429. The warrants represent the right to purchase 2,500,000 CPS common shares at a nominal exercise price, at any time prior to July 10, 2018. In March 2010 we repurchased warrants for 500,000 of these shares for $1.0 million. Warrants to purchase 2,000,000 shares remain outstanding as of December 31, 2013.

A warrant to purchase 1,162,270 shares of our common shares at an exercise price of $0.876 per share, which was issued in connection with our $50 million revolving credit facility established in September 2009, was exercised by the lender in April 2013.

Warrants to purchase 500,000 of our common shares at an exercise price of $1.41 per share were issued to certain note purchasers in our March 2010 $50 million term funding facility. Warrants to purchase 409,390 shares remain outstanding as of December 31, 2013.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

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+ Details

11. Income Taxes

12 Months Ended

Dec. 31, 2013

Income Tax Disclosure [Abstract]

Income Taxes

Income taxes consist of the following:

	Year Ended December 31,
	2013		2012
	(In thousands)
Current federal tax expense	$	977	$	369
Current state tax expense		365		49
Deferred federal tax expense		13,306		2,826
Deferred state tax expense (benefit)		1,520		(654	)
Change in valuation allowance		–		(62,811	)

Income tax expense (benefit)	$	16,168	$	(60,221	)

Income tax expense/(benefit) for the years ended December 31, 2013 and 2012 differs from the amount determined by applying the statutory federal rate of 35% to income before income taxes as follows:

	Year Ended December 31,
	2013			2012
	(In thousands)
Expense at federal tax rate	$	13,011		$	3,215
State taxes, net of federal income tax effect		2,079			1,190
Other adjustments to tax reserve		(419	)		(1,153	)
Effect of change in state tax rate		(239	)		(1,105	)
Change in valuation allowance		–			(62,811	)
Stock-based compensation		911			321
Non-deductible expenses		619			63
Other		206			59
	$	16,168		$	(60,221	)

The tax effected cumulative temporary differences that give rise to deferred tax assets and liabilities as of December 31, 2013 and 2012 are as follows:

	December 31,
	2013			2012
	(In thousands)
Deferred Tax Assets:
Finance receivables	$	17,258		$	10,840
Accrued liabilities		5,079			1,605
Furniture and equipment		196			213
NOL carryforwards		23,811			48,140
Built in losses		13,074			14,406
Pension accrual		–			2,080
AMT credit carryforward		1,993			695
Other		839			712
Total deferred tax assets		62,250			78,691

Deferred Tax Liabilities:
FAS 91 deferred costs		(1,555	)		(1,114	)
Pension accrual		(1,136	)		–
Investment residual		(344	)		(1,937	)
Total deferred tax liabilities		(3,035	)		(3,051	)

Net deferred tax asset	$	59,215		$	75,640

We acquired certain net operating losses and built-in loss assets as part of our acquisitions of MFN Financial Corp. (“MFN”) in 2002 and TFC Enterprises, Inc. (“TFC”) in 2003. Moreover, both MFN and TFC have undergone an ownership change for purposes of Internal Revenue Code (“IRC”) Section 382. In general, IRC Section 382 imposes an annual limitation on the ability of a loss corporation (that is, a corporation with a net operating loss (“NOL”) carryforward, credit carryforward, or certain built-in losses (“BILs”)) to utilize its pre-change NOL carryforwards or BILs to offset taxable income arising after an ownership change.

In determining the possible future realization of deferred tax assets, we have considered future taxable income from the following sources: (a) reversal of taxable temporary differences; and (b) tax planning strategies that, if necessary, would be implemented to accelerate taxable income into years in which net operating losses might otherwise expire.

Deferred tax assets are recognized subject to management’s judgment that realization is more likely than not. A valuation allowance is recognized for a deferred tax asset if, based on the weight of the available evidence, it is more likely than not that some portion of the deferred tax asset will not be realized. In making such judgements, significant weight is given to evidence that can be objectively verified. As a result of the unprecedented adverse changes in the market for securitizations, the recession and the resulting high levels of unemployment that occurred in 2008 and 2009, we incurred substantial operating losses from 2009 through 2011 which led us to establish a valuation allowance against a substantial portion of our deferred tax assets. We determined at December 31, 2012 that, based on the weight of the available objective evidence, it was more likely than not that we would generate sufficient future taxable income to utilize our net deferred tax assets. Accordingly, we reversed the related valuation allowance of $62.8 million in the fourth quarter of 2012.

Although realization is not assured, we believe that the realization of the recognized net deferred tax asset of $59.2 million as of December 31, 2013 is more likely than not based on forecasted future net earnings. Our net deferred tax asset of $59.2 million consists of approximately $47.8 million of net U.S. federal deferred tax assets and $11.4 million of net state deferred tax assets. The major components of the deferred tax asset are $36.9 million in net operating loss carryforwards and built in losses and $22.3 million in net deductions which have not yet been taken on a tax return.

As of December 31, 2013, we had net operating loss carryforwards for federal and state income tax purposes of $48.4 million and $129.8 million, respectively. The federal net operating losses begin to expire in 2022. The state net operating losses begin to expire in 2014.

The following is a tabular reconciliation of the total amounts of unrecognized tax benefits including interest and penalties for the year:

	2013			2012
	(In thousands)
Unrecognized tax benefit - opening balance	$	1,331		$	2,405
Gross increases - tax positions in prior period		–			–
Gross decreases - tax positions in current period		–			–
Gross increases - tax positions in current period		–			250
Settlements		(686	)		(153	)
Lapse of statute of limitations		(645	)		(1,171	)

Unrecognized tax benefit - ending balance	$	–		$	1,331

We recognize a tax position as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. We recognize potential interest and penalties related to unrecognized tax benefits as income tax expense. At December 31, 2013, we had no unrecognized tax benefits for uncertain tax positions.

We are subject to taxation in the US and various state jurisdictions. With few exceptions, we are no longer subject to U.S. federal, state, or local examinations by tax authorities for years before 2010.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References+ Details

12. Related Party Transactions

12 Months Ended

Dec. 31, 2013

Note 12 - Related Party Transactions

In December 2007, one of our directors purchased a $4.0 million subordinated renewable note pursuant to our ongoing program of issuing such notes to the public. The note was purchased through the registered agent and under the same terms and conditions, including the interest rate, that were offered to other purchasers at the time the note was issued. As of December 31, 2013, $4.0 million remains outstanding on this note.

- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References+ Details

13. Commitments and Contingencies

12 Months Ended

Dec. 31, 2013

Commitments and Contingencies Disclosure [Abstract]

Note 13 - Commitments and Contingencies

Leases

The Company leases its facilities and certain computer equipment under non-cancelable operating leases, which expire through 2018. Future minimum lease payments at December 31, 2013, under these leases are due during the years ended December 31 as follows:

	Amount
	(In thousands)
2014	$	3,249
2015		3,339
2016		2,898
2017		1,580
2018		1,228
Thereafter		810

Total minimum lease payments	$	13,104

Rent expense for the years ended December 31, 2013 and 2012, was $2.6 million and $2.9 million, respectively.

Our facility leases contain certain rental concessions and escalating rental payments, which are recognized as adjustments to rental expense and are amortized on a straight-line basis over the terms of the leases.

Litigation

Stanwich Litigation. We were for some time a defendant in a class action (the “Stanwich Case”) brought in the California Superior Court, Los Angeles County. The original plaintiffs in that case were persons entitled to receive regular payments (the “Settlement Payments”) pursuant to earlier settlements of claims, generally personal injury claims, against unrelated defendants. Stanwich Financial Services Corp. (“Stanwich”), an affiliate of the former chairman of our board of directors, is the entity that was obligated to pay the Settlement Payments. Stanwich defaulted on its payment obligations to the plaintiffs and in June 2001 filed for reorganization under the Bankruptcy Code, in the federal bankruptcy court in Connecticut. By February 2005, we had settled all claims brought against us in the Stanwich Case.

In November 2001, one of the defendants in the Stanwich Case, Jonathan Pardee, asserted claims for indemnity against us in a separate action, which is now pending in federal district court in Rhode Island. We have filed counterclaims in the Rhode Island federal court against Mr. Pardee, and have filed a separate action against Mr. Pardee's Rhode Island attorneys, in the same court. The litigation between Mr. Pardee and us was stayed for several years through September 2011, awaiting resolution of an adversary action brought against Mr. Pardee in the bankruptcy court, which is hearing the bankruptcy of Stanwich.

Pursuant to an agreement with the representative of creditors in the Stanwich bankruptcy, that adversary action has been dismissed. Under that agreement, we paid the bankruptcy estate $800,000 and abandoned our claims against the estate, while the estate has abandoned its adversary action against Mr. Pardee. With the dismissal of the adversary action, all known claims asserted against Mr. Pardee have been resolved without his incurring any liability. Accordingly, we believe that this resolution of the adversary action will result in limitation of our exposure to Mr. Pardee to no more than some portion of his attorneys fees incurred. The stay in the action against us in Rhode Island has been lifted, and both we and Mr. Pardee filed motions for summary judgment. The court ruled on those motions in February 2013, denying our motion, and granting Mr. Pardee’s motion as to liability. The issues remaining for trial are the extent of our obligation to indemnify Mr. Pardee. There is no trial date set, but our expectation is that the court may, not earlier than May 2014, set the matter for trial in the latter half of 2014.

Consumer Litigation. We are routinely involved in various legal proceedings resulting from our consumer finance activities and practices, both continuing and discontinued. Consumers can and do initiate lawsuits against us alleging violations of law applicable to collection of receivables, and such lawsuits sometimes allege that resolution as a class action is appropriate. We are currently defending two such purported class actions, one of which has been settled by agreement with the plaintiffs (such settlement remains subject to approval by the court). For the most part, we have legal and factual defenses to such claims, which we routinely contest or settle (for immaterial amounts) depending on the particular circumstances of each case. We have recorded a liability as of December 31, 2013 with respect to such matters, in the aggregate.

FTC Action. On July 17, 2013, the staff of the Federal Trade Commission (“FTC”) advised us that they are prepared to recommend that the FTC initiate a lawsuit against us relating to allegedly unfair trade practices, and simultaneously advised that settlement of such issues by consent decree may be possible. Based on our review of the FTC’s allegations, of past practices of the FTC, of our records of our collection and servicing activities, and of other companies’ settlements with the FTC, we expect that we will reach such a settlement, and that such a settlement will require that we make restitutionary payments and that we implement procedural changes under a consent decree. There can be no assurance, however, that we will reach agreement regarding any such settlement, and we may choose to contest the allegations of the FTC. Whether we reach such an agreement or not, the cost to us of contesting or settling the matter may be material. We have recorded a liability as of December 31, 2013 with respect to this matter.

In General. There can be no assurance as to the outcomes of any of the matters referenced above. We have recorded a liability as of December 31, 2013, which represents our best estimate of probable incurred losses for legal contingencies, including all of the matters described or referenced above. The amount of losses that may ultimately be incurred cannot be estimated with certainty. However, based on such information as is available to us, we believe that the range of reasonably possible losses for the legal proceedings and contingencies described or referenced above, as of December 31, 2013, and in excess of the liability we have recorded, is from $0 to $1.6 million.

Accordingly, we believe that the ultimate resolution of such legal proceedings and contingencies, after taking into account our current litigation reserves, should not have a material adverse effect on our consolidated financial condition. We note, however, that in light of the uncertainties inherent in contested proceedings, there can be no assurance that the ultimate resolution of these matters will not significantly exceed the reserves we have accrued; as a result, the outcome of a particular matter may be material to our operating results for a particular period, depending on, among other factors, the size of the loss or liability imposed and the level of our income for that period.

- Definition

The entire disclosure for commitments and contingencies.

+ References+ Details

14. Employee Benefits

12 Months Ended

Dec. 31, 2013

Employee Benefits

Employee Benefits

We sponsor a pretax savings and profit sharing plan (the “401(k) Plan”) qualified under Section 401(k) of the Internal Revenue Code. Under the 401(k) Plan, eligible employees are able to contribute up to 15% of their compensation (subject to stricter limitation in the case of highly compensated employees). We may, at our discretion, match 100% of employees’ contributions up to $1,500 per employee per calendar year. Our contributions to the 401(k) Plan were $471,000 for the year ended December 31, 2013. We did not make any matching contributions in 2012.

We also sponsor a defined benefit plan, the MFN Financial Corporation Pension Plan (the “Plan”). The Plan benefits were frozen on June 30, 2001.

The following tables represents a reconciliation of the change in the plan’s benefit obligations, fair value of plan assets, and funded status at December 31, 2013 and 2012:

	December 31,
	2013			2012
	(In thousands)
Change in Projected Benefit Obligation
Projected benefit obligation, beginning of year	$	21,792		$	19,443
Service cost		–			–
Interest cost		823			875
Assumption changes		(2,420	)		2,332
Actuarial (gain) loss		(113	)		2
Settlements		–			–
Benefits paid		(1,241	)		(860	)
Projected benefit obligation, end of year	$	18,841		$	21,792

Change in Plan Assets
Fair value of plan assets, beginning of year	$	16,612		$	10,613
Return on assets		6,009			5,439
Employer contribution		389			1,473
Expenses		(105	)		(53	)
Settlements		–			–
Benefits paid		(1,241	)		(860	)
Fair value of plan assets, end of year	$	21,664		$	16,612

Funded Status at end of year	$	2,823		$	(5,180	)

Additional Information

Weighted average assumptions used to determine benefit obligations and cost at December 31, 2013 and 2012 were as follows:

	December, 31
	2013		2012
Weighted average assumptions used to determine benefit obligations
Discount rate		4.75%		3.91%

Weighted average assumptions used to determine net periodic benefit cost
Discount rate		3.91%		4.60%
Expected return on plan assets		8.25%		8.50%

Our overall expected long-term rate of return on assets is 8.25% per annum as of December 31, 2013. The expected long-term rate of return is based on the weighted average of historical returns on individual asset categories, which are described in more detail below.

	December 31,
	2013		2012
	(In thousands)
Amounts recognized on Consolidated Balance Sheet
Other assets	$	2,823	$	–
Other liabilities		–		(5,180	)
Net amount recognized	$	2,823	$	(5,180	)

Amounts recognized in accumulated other comprehensive income consists of: