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Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Mar. 31, 2020	Apr. 27, 2020
Cover [Abstract]
Entity Registrant Name	CONSUMER PORTFOLIO SERVICES INC
Entity Central Index Key	0000889609
Document Type	10-Q
Document Period End Date	Mar. 31, 2020
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity File Number	1-14116
Entity's Reporting Status Current	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	true
Entity Shell Company	false
Entity Incorporation, State or Country Code	CA
Entity Common Stock, Shares Outstanding		22,728,109
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2020

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
ASSETS
Cash and cash equivalents	$ 4,546	$ 5,295
Restricted cash and equivalents	137,523	135,537
Finance receivables	774,476	897,530
Less: Allowance for finance credit losses	(114,073)	(11,640)
Finance receivables, net	660,403	885,890
Finance receivables measured at fair value	1,559,697	1,444,038
Furniture and equipment, net	1,388	1,512
Deferred tax assets, net	58,375	15,480
Accrued interest receivable	8,795	11,645
Other assets	37,569	39,852
Total	2,468,296	2,539,249
Liabilities
Accounts payable and accrued expenses	56,932	47,077
Warehouse lines of credit	141,988	134,791
Residual interest financing	37,913	39,478
Securitization trust debt	2,091,642	2,097,728
Subordinated renewable notes	18,322	17,534
Total	2,346,797	2,336,608
COMMITMENTS AND CONTINGENCIES
Shareholders' Equity
Common stock, no par value; authorized 75,000,000 shares; 22,558,918 and 22,530,918 shares issued and outstanding at March 31, 2020 and December 31, 2019	71,792	71,257
Retained earnings	58,128	139,805
Accumulated other comprehensive loss	(8,421)	(8,421)
Total stockholders' equity	121,499	202,641
Total liabilities and stockholders' equity	2,468,296	2,539,249
Series A Preferred Stock [Member]
Shareholders' Equity
Preferred stock	0	0
Series B Preferred Stock [Member]
Shareholders' Equity
Preferred stock	$ 0	$ 0

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2020	Dec. 31, 2019
Shareholders' Equity
Preferred stock, par value (in dollars per share)	$ 1	$ 1
Preferred stock, authorized	4,998,130	4,998,130
Preferred stock, issued	0	0
Preferred stock, outstanding	0	0
Common stock, no par value (in dollars per share)	$ 0	$ 0
Common stock, authorized	75,000,000	75,000,000
Common stock, issued	22,558,918	22,530,918
Common stock, outstanding	22,558,918	22,530,918
Series A Preferred Stock [Member]
Shareholders' Equity
Preferred stock, par value (in dollars per share)	$ 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 (in dollars per share)	$ 1	$ 1
Preferred stock, authorized	1,870	1,870
Preferred stock, issued	0	0
Preferred stock, outstanding	0	0

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Revenues:
Interest income	$ 79,136	$ 85,845
Mark to finance receivables measured at fair value	(10,350)	0
Other income	1,981	2,385
Total revenues	70,767	88,230
Expenses:
Employee costs	21,842	19,073
General and administrative	8,669	8,174
Interest	26,991	27,290
Provision for credit losses	3,613	23,956
Sales	4,430	4,836
Occupancy	1,691	1,974
Depreciation and amortization	419	251
Total operating expenses	67,655	85,554
Income before income tax expense (benefit)	3,112	2,676
Income tax expense (benefit)	(7,680)	937
Net income	$ 10,792	$ 1,739
Earnings per share: Basic	$ 0.48	$ 0.08
Earnings per share: Diluted	$ 0.45	$ 0.07
Number of shares used in computing earnings per share: Basic	22,539	22,242
Number of shares used in computing earnings per share: Diluted	23,879	24,259

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Statement of Comprehensive Income [Abstract]
Net income	$ 10,792	$ 1,739
Other comprehensive income (loss); change in funded status of pension plan	0	0
Comprehensive income	$ 10,792	$ 1,739

- Definition

Amount after tax of increase (decrease) in equity from transactions and other events and circumstances from net income (loss) and other comprehensive income (loss), attributable to noncontrolling interests. Excludes changes in equity resulting from investments by owners and distributions to owners.

+ References + Details

- Definition

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

+ References

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+ Details

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Cash flows from operating activities:
Net income	$ 10,792	$ 1,739
Adjustments to reconcile net income to net cash provided by operating activities:
Accretion of deferred acquisition fees and origination costs	339	492
Net interest income accretion on fair value receivables	29,715	18,767
Depreciation and amortization	419	251
Amortization of deferred financing costs	2,097	2,045
Mark to fair value of finance receivables measured at fair value	10,350	0
Provision for credit losses	3,613	23,956
Stock-based compensation expense	487	638
Changes in assets and liabilities:
Accrued interest receivable	2,850	10,924
Deferred tax assets, net	(8,364)	907
Other assets	1,901	(2,458)
Accounts payable and accrued expenses	9,855	1,243
Net cash provided by operating activities	64,054	58,504
Cash flows from investing activities:
Payments received on finance receivables held for investment	94,535	134,097
Purchases of finance receivables measured at fair value	(265,282)	(244,753)
Payments received on finance receivables at fair value	109,558	49,500
Change in repossessions held in inventory	382	(893)
Purchase of furniture and equipment	(295)	(174)
Net cash used in investing activities	(61,102)	(62,223)
Cash flows from financing activities:
Proceeds from issuance of securitization trust debt	260,000	254,400
Proceeds from issuance of subordinated renewable notes	1,114	397
Payments on subordinated renewable notes	(326)	(4,701)
Net advances of warehouse lines of credit	6,837	(19,092)
Repayment of residual interest financing debt	(1,658)	0
Repayment of securitization trust debt	(266,056)	(208,798)
Payment of financing costs	(1,674)	(2,808)
Purchase of common stock	0	(1,440)
Exercise of options and warrants	48	73
Net cash provided by (used in) financing activities	(1,715)	18,031
Increase in cash and cash equivalents	1,237	14,312
Cash and cash equivalents at beginning of period	140,832	130,110
Cash and cash equivalents at end of period	142,069	144,422
Cash paid (received) during the period for:
Interest	24,739	24,921
Income taxes	(410)	0
Non-cash financing activities:
Right-of-use asset, net	0	(21,869)
Lease liability	0	23,327
Deferred office rent	$ 0	$ (1,458)

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands	Common Stock [Member]	Retained Earnings	Other Comprehensive Income / Loss	Total
Balance at beginning at Dec. 31, 2018	$ 70,273	$ 134,399	$ (7,554)
Balance at beginning (in shares) at Dec. 31, 2018	22,422
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock issued upon exercise of options and warrants	$ 73
Common stock issued upon exercise of options and warrants (in shares)	78
Repurchase of common stock	$ (1,440)
Repurchase of common stock (in shares)	(366)
Pension benefit obligation				$ 0
Stock-based compensation	$ 638
Net income		1,739		1,739
Balance at end at Mar. 31, 2019	$ 69,544	136,138	(7,554)	198,128
Balance at end (in shares) at Mar. 31, 2019	22,134
Balance at beginning at Dec. 31, 2019		139,805	(8,421)	202,641
Balance at beginning (in shares) at Dec. 31, 2019	22,531
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cumulative change in accounting principle		(92,469)
Common stock issued upon exercise of options and warrants	$ 48
Common stock issued upon exercise of options and warrants (in shares)	28
Repurchase of common stock (in shares)	0
Pension benefit obligation				0
Stock-based compensation	$ 487
Net income		10,792		10,792
Balance at end at Mar. 31, 2020	$ 71,792	$ 58,128	$ (8,421)	$ 121,499
Balance at end (in shares) at Mar. 31, 2020	22,559

1. Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2020

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

(1) Summary of Significant Accounting Policies

Description of Business

We were formed in California on March 8, 1991. We specialize in purchasing and servicing retail automobile installment sale contracts (“automobile contracts” or “finance receivables”) originated by licensed motor vehicle dealers located throughout the United States (“dealers”) in the sale of new and used automobiles, light trucks and passenger vans. Through our purchases, we provide indirect financing to dealer customers for borrowers with limited credit histories or past credit problems (“sub-prime customers”). We serve as an alternative source of financing for dealers, allowing sales to customers who otherwise might not be able to obtain financing. In addition to purchasing installment purchase contracts directly from dealers, we have also (i) lent money directly to consumers for loans secured by vehicles, (ii) purchased immaterial amounts of vehicle purchase money loans from non-affiliated lenders, and (iii) acquired installment purchase contracts in four merger and acquisition transactions. In this report, we refer to all of such contracts and loans as "automobile contracts."

Basis of Presentation

Our Unaudited Condensed Consolidated Financial Statements have been prepared in conformity with accounting principles generally accepted in the United States of America, with the instructions to Form 10-Q and with Article 10 of Regulation S-X of the Securities and Exchange Commission, and include all adjustments that are, in management’s opinion, necessary for a fair presentation of the results for the interim periods presented. All such adjustments are, in the opinion of management, of a normal recurring nature. Results for the three-month period ended March 31, 2020 are not necessarily indicative of the operating results to be expected for the full year.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted from these Unaudited Condensed Consolidated Financial Statements. These Unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2019.

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.

Finance Receivables Measured at Fair Value

Effective January 1, 2018, we adopted the fair value method of accounting for finance receivables acquired on or after that date. For each finance receivable acquired after 2017, we consider the price paid on the purchase date as the fair value for such receivable. We estimate the cash to be received in the future with respect to such receivables, based on our experience with similar receivables acquired in the past. We then compute the internal rate of return that results in the present value of those estimated cash receipts being equal to the purchase date fair value. Thereafter, we recognize interest income on such receivables on a level yield basis using that internal rate of return as the applicable interest rate. Cash received with respect to such receivables is applied first against such interest income, and then to reduce the carrying value of the receivables.

We re-evaluate the fair value of such receivables at the close of each measurement period. If the reevaluation were to yield a value materially different from the carrying value, an adjustment would be required. Results for the first quarter include the estimated potential impact on credit performance resulting from the COVID-19 pandemic. We recorded a $10.4 million mark down to the carrying value of the portion of the receivables portfolio accounted for at fair value. The mark down is reflected as a reduction in revenue for the quarter.

Anticipated credit losses are included in our estimation of cash to be received with respect to receivables. Because such credit losses are included in our computation of the appropriate level yield, we do not thereafter make periodic provision for credit losses, as our best estimate of the lifetime aggregate of credit losses is included in that initial computation. Also, because we include anticipated credit losses in our computation of the level yield, the computed level yield is materially lower than the average contractual rate applicable to the receivables. Because our initial carrying value is fixed as the price we pay for the receivable, rather than as the contractual principal balance, we do not record acquisition fees as an amortizing asset related to the receivables, nor do we capitalize costs of acquiring the receivables. Rather we recognize the costs of acquisition as expenses in the period incurred.

Other Income

The following table presents the primary components of Other Income for the three-month periods ending March 31, 2020 and 2019:

	Three Months Ended
	March 31,
	2020		2019
	(In thousands)
Direct mail revenues	$	1,183	$	1,336
Convenience fee revenue		530		700
Recoveries on previously charged-off contracts		25		57
Sales tax refunds		202		227
Other		41		65
Other income for the period	$	1,981	$	2,385

Leases

The Company has operating leases for corporate offices, equipment, software and hardware. The Company has entered into operating leases for the majority of its real estate locations, primarily office space. These leases are generally for periods of three to seven years with various renewal options. The depreciable life of leased assets is limited by the expected lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheet and the related lease expense is recognized on a straight-line basis over the lease term.

The following table presents the supplemental balance sheet information related to leases:

	Year Ended,
	March 31, 2020
	(In thousands)
Operating Leases
Operating lease right-of-use assets	$	23,735
Less: Accumulated amortization right-of-use assets		(8,194	)
Operating lease right-of-use assets, net	$	15,541
		$
Operating lease liabilities		(16,892	)
		$
Finance Leases		$
Property and equipment, at cost	$	3,062
Less: Accumulated depreciation		(404	)
Property and equipment, net	$	2,658
		$
Finance lease liabilities	$	(2,673	)
		$
Weighted Average Discount Rate		$
Operating lease		5.0%
Finance lease		6.5%

Maturities of lease liabilities were as follows:	$
(In thousands)	Operating			Finance
Year Ending December 31,	Lease			Lease
2020 (excluding the three months ended March 31, 2020)	$	5,831		$	835
2021		7,449			1,110
2022		6,058			931
2023		1,389			27
2024		411			14
Thereafter		278			–
Total undiscounted lease payments		21,416			2,917
Less amounts representing interest		(4,524	)		(244	)
Lease Liability	$	16,892		$	2,673

The following table presents the leases expense included in Occupancy, General and administrative on our Unaudited Condensed Consolidated Statement of Operations:

	Three Months Ended
	March 31,
	2020		2019
	(In thousands)
Operating lease cost	$	1,885	$	1,889
Finance lease cost		278		–
Total lease cost	$	2,163	$	1,889

The following table presents the supplemental cash flow information related to leases:

	Three Months Ended
	March 31,
	2020		2019
	(In thousands)
Cash paid for amounts included in the measurement of lease liabilities:		$
Operating cash flows from operating leases	$	1,926	$	1,886
Operating cash flows from finance leases		231		–
Financing cash flows from finance leases		46		–

Stock-based Compensation

We recognize compensation costs in the financial statements for all share-based payments based on the grant date fair value estimated in accordance with the provisions of ASC 718 “Stock Compensation”.

For the three months ended March 31, 2020 and 2019, we recorded stock-based compensation costs in the amount of $487,000 and $638,000, respectively. As of March 31, 2020, unrecognized stock-based compensation costs to be recognized over future periods equaled $2.6 million. This amount will be recognized as expense over a weighted-average period of 1.9 years.

The following represents stock option activity for the three months ended March 31, 2020:

	Number of Shares			Weighted Average Exercise		Weighted Average Remaining Contractual
	(in thousands)			Price		Term
Options outstanding at the beginning of period		15,348		$	4.59	N/A
Granted		–			–	N/A
Exercised		(28	)		1.73	N/A
Forfeited		–			–	N/A
Options outstanding at the end of period		15,320		$	4.59	3.10 years

Options exercisable at the end of period		11,844		$	4.86	2.50 years

At March 31, 2020, the aggregate intrinsic value of options outstanding and exercisable was $325,000. There were 28,000 options exercised for the three months ended March 31, 2020 compared to 78,000 for the comparable period in 2019. The total intrinsic value of options exercised was $51,000 and $227,000 for the three-month periods ended March 31, 2020 and 2019. There were 1,458,000 shares available for future stock option grants under existing plans as of March 31, 2020.

Purchases of Company Stock

The table below describes the purchase of our common stock for the three-month ended March 31, 2020 and 2019:

Three Months Ended

March 31, 2020

March 31, 2019

Avg. Price

Open market purchases

–

335,546

3.95

Shares redeemed upon net exercise of stock options

–

5,500

4.20

Other purchases

–

24,500

4.20

Total stock purchases

–

365,546

3.97

Reclassifications

Some items in the prior year financial statements were reclassified to conform to the current presentation. Reclassifications had no effect on net income or shareholders’ equity.

Financial Covenants

Certain of our securitization transactions, our warehouse credit facilities and our residual interest financing contain various financial covenants requiring minimum financial ratios and results. Such covenants include maintaining minimum levels of liquidity and net worth and not exceeding maximum leverage levels. As of March 31, 2020, we were in compliance with all such covenants. In addition, certain of our debt agreements other than our term securitizations contain cross-default provisions. Such cross-default provisions would allow the respective creditors to declare a default if an event of default occurred with respect to other indebtedness of ours, but only if such other event of default were to be accompanied by acceleration of such other indebtedness.

Provision for Contingent Liabilities

We are routinely involved in various legal proceedings resulting from our consumer finance activities and practices, both continuing and discontinued. Our legal counsel has advised us on such matters where, based on information available at the time of this report, there is an indication that it is both probable that a liability has been incurred and the amount of the loss can be reasonably determined.

Adoption of New Accounting Standards

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") 2016-13, which changes the criteria under which credit losses on financial instruments (such as the Company’s finance receivables) are measured. ASU 2016-3 introduces a new credit reserving model known as the Current Expected Credit Loss (“CECL”) model, which replaces the incurred loss impairment methodology previously used under U.S. GAAP with a methodology that records currently the expected lifetime credit losses on financial instruments. To establish such lifetime credit loss estimates, consideration of a broadened range of reasonable and supportable information to establish credit loss estimates is required. ASU 2016-13 was initially scheduled to become effective for interim and annual reporting periods beginning after December 15, 2019, however on October 16, 2019, the FASB changed the effective date for smaller reporting companies to interim and annual reporting periods beginning after December 15, 2022, with early adoption permitted.

Effective January 1, 2020, the Company adopted the CECL model. The adoption of CECL required that we establish an allowance for the remaining expected lifetime credit losses on the portion of the Company’s receivable portfolio for which the Company was not already using fair value accounting. We refer to that portion, which is those receivables that were originated prior to January 2018, as our “legacy portfolio”. To comply with CECL, the Company recorded an addition to its allowance for finance credit losses of $127.0 million. In accordance with the rules for adopting CECL, the offset to the addition to the allowance for finance credit losses was a tax affected reduction to retained earnings using the modified retrospective method, and not a current period expense.

Coronavirus Pandemic

In December 2019, a new strain of coronavirus (the “COVID-19 virus”) originated in Wuhan, China. Since its discovery, the COVID-19 virus has spread throughout the world, and the outbreak has been declared to be a pandemic by the World Health Organization. We refer from time to time in this report to the outbreak and spread of the COVID-19 virus as “the pandemic.”

Results for the first quarter include the estimated potential impact on credit performance resulting from the pandemic. We recorded a $3.6 million charge to the provision for credit losses for the legacy portfolio accounted for under CECL and a $10.4 million mark down to the carrying value of the finance receivables measured at fair value.

The pandemic itself, if sufficient numbers of people were to be afflicted, could cause obligors under our automobile contracts to be unable to pay their contractual obligations. As the future course of the COVID-19 pandemic is as yet unknown, its direct effect on future obligor payments is likewise uncertain, but we believe it may be material.

The mandatory shutdown of large portions of the United States economy pursuant to emergency restrictions has impaired and will impair the ability of obligors under our automobile contracts to pay their contractual obligations. The extent to which that ability will be impaired, and the extent to which public ameliorative measures such as stimulus payments and enhanced unemployment benefits may restore such ability, cannot be estimated, but we believe it may be material.

We measure our portfolio of finance receivables carried at fair value with consideration for unobservable inputs that reflect our own assumptions about the factors that market participants use in pricing similar receivables and are based on the best information available in the circumstances. They include such inputs as estimates for the magnitude and timing of net charge-offs and the rate of amortization of the portfolio. The pandemic and the adverse effect it may have on the U.S. economy and our obligors may cause us to consider significant changes in any of those inputs, which in turn may a significant impact on our fair value measurement.

2. Finance Receivables

3 Months Ended

Mar. 31, 2020

Finance Receivables

Finance Receivables

(2) 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. For key terms such as interest rate, length of contract, monthly payment and amount financed, there is relatively little variation from the average for the 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.

In January 2018 the Company adopted the fair value method of accounting for finance receivables acquired after 2017. Finance receivables measured at fair value are recorded separately on the Company’s Balance Sheet and are excluded from all tables in this footnote.

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

	March 31,		December 31,
	2020		2019
Finance receivables	(In thousands)
Automobile finance receivables, net of unearned interest	$	772,851	$	895,566
Unearned acquisition fees and originations costs		1,625		1,964
Finance receivables	$	774,476	$	897,530

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 March 31, 2020 and December 31, 2019:

	March 31,		December 31,
	2020		2019
	(In thousands)
Delinquency Status
Current	$	635,961	$	698,870
31 - 60 days		76,455		107,951
61 - 90 days		40,089		57,395
91 + days		20,346		31,350
	$	772,851	$	895,566

Finance receivables totaling $20.3 million and $31.4 million at March 31, 2020 and December 31, 2019, respectively, including all receivables greater than 90 days delinquent, have been placed on non-accrual status as a result of their delinquency status.

Allowance for Credit Losses – Finance Receivables

The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of finance receivables to present the net amount expected to be collected. Charge offs are deducted from the allowance when management believes that collectability is unlikely.

Management estimates the allowance using relevant available information, from internal and external sources, relating to past events, current conditions and, reasonable and supportable forecasts. We believe our historical credit loss experience provides the best basis for the estimation of expected credit losses. Consequently, we use historical loss experience for older receivables, aggregated into vintage pools based on their calendar quarter of origination, to forecast expected losses for less seasoned quarterly vintage pools.

We measure the weighted average monthly incremental change in cumulative net losses for the vintage pools in the relevant historical period. The data reflects the impact on vintage pools of past events as well as more recent events reflecting current conditions. We then apply the results of the historical analysis to less seasoned vintage pools beginning with each vintage pool’s most recent actual cumulative net loss experience and extrapolating from that point based on the historical data. We believe the pattern and magnitude of losses on older vintages allows us to establish a reasonable and supportable forecast of less seasoned vintages.

Our contract purchase guidelines are designed to produce a homogenous portfolio. For key credit characteristics of individual contracts such as obligor credit history, job stability, residence stability and ability to pay, there is relatively little variation from the average for the portfolio. Similarly, for key structural characteristics such as loan-to-value, length of contract, monthly payment and amount financed, there is relatively little variation from the average for the portfolio. Consequently, we do not believe there are significant differences in risk characteristics between various segments of our portfolio.

Our methodology incorporates historical pools that are sufficiently seasoned to capture the magnitude and trends of losses within those vintage pools. Furthermore, the historical period encompasses a substantial volume of receivables over periods that include fluctuations in the competitive landscape, the Company’s rates of growth, size of our managed portfolio and fluctuations in economic growth and unemployment.

In consideration of the depth and breadth of the historical period, and the homogeneity of our portfolio, we generally do not adjust historical loss information for differences in risk characteristics such as credit or structural composition of segments of the portfolio or for changes in environmental conditions such as changes in unemployment rates, collateral values or other factors. However, we have considered how certain qualitative factors may affect future credit losses and have incorporated our judgement of the impact of such factors into our estimates.

The following table presents the amortized cost basis of our finance receivables by annual vintage as of March 31, 2020 and December 31, 2019.

	March 31,		December 31,
	2020		2019
	(In thousands)
Annual Vintage Pool
2012	$	1,816	$	2,432
2013		11,643		15,489
2014		48,794		61,290
2015		136,679		162,242
2016		253,339		292,360
2017		320,580		361,753
	$	772,851	$	895,566

At the adoption of CECL, the Company recorded an addition to its allowance for finance credit losses of $127.0 million. In accordance with the rules for adopting CECL, the offset to the addition to the allowance for finance credit losses was a tax affected reduction to retained earnings using the modified retrospective method.

For the three-month period ended March 31, 2020, the Company made an additional provision for credit losses on finance receivables of $3.6 million in consideration of the uncertainty associated with the pandemic.

The following table presents a summary of the activity for the allowance for finance credit losses for the three-month periods ended March 31, 2020 and 2019:

	Three Months Ended
	March 31,
	2020			2019
	(In thousands)
Balance at beginning of period	$	11,640		$	67,376
Early adoption of CECL		127,000			n/a
Provision for credit losses on finance receivables		3,613			23,956
Charge-offs		(34,214	)		(54,344	)
Recoveries		6,034			11,208
Balance at end of period	$	114,073		$	48,196

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 in repossessed inventory that is not included in the allowance for finance credit losses:

	March 31,			December 31,
	2020			2019
	(In thousands)
Gross balance of repossessions in inventory	$	35,127		$	28,933
Allowance for losses on repossessed inventory		(27,965	)		(21,389	)
Net repossessed inventory included in other assets	$	7,162		$	7,544

3. Securitization Trust Debt

3 Months Ended

Mar. 31, 2020

Securitization Trust Debt

Securitization Trust Debt

(3) Securitization Trust Debt

We have completed many securitization transactions that are structured as secured borrowings for financial accounting purposes. The debt issued in these transactions is shown on our Unaudited Condensed Consolidated Balance Sheets as “Securitization trust debt,” and the components of such debt are summarized in the following table:

										Weighted
										Average
	Final	Receivables				Outstanding		Outstanding		Contractual
	Scheduled	Pledged at				Principal at		Principal at		Interest Rate at
	Payment	March 31,		Initial		March 31,		December 31,		March 31,
Series	Date (1)	2020 (2)		Principal		2020		2019		2020
	(Dollars in thousands)
CPS 2014-C	December 2021		–		273,000		–		19,758		–
CPS 2014-D	March 2022		20,403		267,500		19,476		23,755		5.72	%
CPS 2015-A	June 2022		23,427		245,000		21,623		26,713		5.62	%
CPS 2015-B	September 2022		30,831		250,000		31,032		36,338		5.25	%
CPS 2015-C	December 2022		45,935		300,000		46,354		53,579		5.95	%
CPS 2016-A	March 2023		60,013		329,460		62,489		71,599		6.33	%
CPS 2016-B	June 2023		73,496		332,690		72,256		82,667		6.71	%
CPS 2016-C	September 2023		75,038		318,500		73,378		83,696		6.86	%
CPS 2016-D	April 2024		59,088		206,325		56,965		65,021		5.00	%
CPS 2017-A	April 2024		64,901		206,320		62,536		71,450		5.03	%
CPS 2017-B	December 2023		79,576		225,170		66,160		76,201		4.32	%
CPS 2017-C	September 2024		82,008		224,825		70,376		80,315		4.25	%
CPS 2017-D	June 2024		83,976		196,300		74,019		83,801		3.87	%
CPS 2018-A	March 2025		90,570		190,000		80,840		91,258		3.71	%
CPS 2018-B	December 2024		105,665		201,823		98,424		111,188		4.13	%
CPS 2018-C	September 2025		124,843		230,275		114,360		130,064		4.25	%
CPS 2018-D	June 2025		146,617		233,730		131,630		149,470		4.21	%
CPS 2019-A	March 2026		181,893		254,400		166,520		186,900		4.04	%
CPS 2019-B	June 2026		175,677		228,275		166,846		184,308		3.66	%
CPS 2019-C	September 2026		204,061		243,513		196,387		216,650		3.06	%
CPS 2019-D	December 2026		252,186		274,313		243,816		265,035		2.64	%
CPS 2020-A	March 2027		248,762		260,000		248,223		–		2.62	%
		$	2,228,966	$	5,491,419	$	2,103,710	$	2,109,766

_________________

(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 $609.0 million in 2020, $627.2 million in 2021, $428.3 million in 2022, $308.8 million in 2023, $69.9 million in 2024, $48.6 million in 2025.

(2)

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

Debt issuance costs of $12.1 million and $12.0 million as of March 31, 2020 and December 31, 2019, respectively, have been excluded from the table above. These debt issuance costs are presented as a direct deduction to the carrying amount of the securitization trust debt on our Unaudited Condensed Consolidated Balance Sheets.

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

The terms of the securitization agreements related to the issuance of the securitization trust debt and the warehouse credit facilities require that we meet certain delinquency and credit loss criteria with respect to the pool of receivables, and certain of the agreements require that we maintain minimum levels of liquidity and not exceed maximum leverage levels. As of March 31, 2020, we were in compliance with all such covenants.

We are responsible for the administration and collection of the automobile contracts. The securitization agreements also require certain funds be held in restricted cash accounts to provide additional collateral for the borrowings, to be applied to make payments on the securitization trust debt or as pre-funding proceeds from a term securitization prior to the purchase of additional collateral. As of March 31, 2020, restricted cash under the various agreements totaled approximately $137.5 million. Interest expense on the securitization trust debt consists of the stated rate of interest plus amortization of additional costs of borrowing. Additional costs of borrowing include facility fees, amortization of deferred financing costs and discounts on notes sold. Deferred financing costs and discounts on notes sold related to the securitization trust debt are amortized using a level yield method. Accordingly, the effective cost of the securitization trust debt is greater than the contractual rate of interest disclosed above.

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 credit facilities. 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 other creditors.

4. Debt

3 Months Ended

Mar. 31, 2020

Debt Disclosure [Abstract]

Debt

(4) Debt

The terms and amounts of our other debt outstanding at March 31, 2020 and December 31, 2019 are summarized below:

				Amount Outstanding at
				March 31,		December 31,
				2020		2019
				(In thousands)
Description	Interest Rate	Maturity

Warehouse lines of credit	5.50% over one month Libor (Minimum 6.50%)		February 2021	$	50,776	$	40,558

	3.00% over one month Libor (Minimum 3.75%)		September 2020		53,411		96,225

	4.00% over a commercial paper rate (Minimum 5.00%)		December 2021		39,434		–

Residual interest financing	8.60%		January 2026		38,342		40,000

Subordinated renewable notes	Weighted average rate of 9.92% and 9.75% at March 31, 2020 and December 31, 2019, respectively		Weighted average maturity of July 2022 and April 2022 at March 31, 2020 and December 31, 2019, respectively		18,322		17,534

				$	200,285	$	194,317

Unamortized debt issuance costs of $429,000 and $522,000 as of March 31, 2020 and December 31, 2019, respectively, have been excluded from the amount reported above for residual interest financing. Similarly, unamortized debt issuance costs of $1.6 million and $2.0 million as of March 31, 2020 and December 31, 2019, respectively, have been excluded from the Warehouse lines of credit amounts in the table above. These debt issuance costs are presented as a direct deduction to the carrying amount of the debt on our Unaudited Condensed Consolidated Balance Sheets.

5. Interest Income and Interest Expense

3 Months Ended

Mar. 31, 2020

Warehouse lines of credit [Member]

Interest Income and Interest Expense

(5) Interest Income and Interest Expense

The following table presents the components of interest income:

	Three Months Ended
	March 31,
	2020			2019
	(In thousands)
Interest on finance receivables	$	37,807		$	62,290
Interest on finance receivables at fair value		40,806			22,815
Mark to finance receivables measured at fair value		(10,350	)		–
Other interest income		523			740
Interest income	$	68,786		$	85,845

The following table presents the components of interest expense:

	Three Months Ended
	March 31,
	2020		2019
	(In thousands)
Securitization trust debt	$	23,798	$	23,988
Warehouse lines of credit		1,763		2,020
Residual interest financing		938		956
Subordinated renewable notes		492		326
Interest expense	$	26,991	$	27,290

6. Earnings Per Share

3 Months Ended

Mar. 31, 2020

Earnings Per Share [Abstract]

Earnings Per Share

(6) Earnings Per Share

Earnings per share for the three-month periods ended March 31, 2020 and 2019 were calculated using the weighted average number of shares outstanding for the related period. The following table reconciles the number of shares used in the computations of basic and diluted earnings per share for the three-month periods ended March 31, 2020 and 2019:

	Three Months Ended
	March 31,
	2020		2019
	(In thousands)
Weighted average number of common shares outstanding during the period used to compute basic earnings per share		22,539		22,242
		$
Incremental common shares attributable to exercise of outstanding options and warrants		1,340		2,017
		$
Weighted average number of common shares used to compute diluted earnings per share		23,879		24,259

If the anti-dilutive effects of common stock equivalents were considered, shares included in the diluted earnings per share calculation for the three-months ended March 31, 2020 and 2019 would have included an additional 12.9 million and 10.5 million shares, respectively, attributable to the exercise of outstanding options and warrants.

7. Income Taxes

3 Months Ended

Mar. 31, 2020

Income Tax Disclosure [Abstract]

Income Taxes

(7) Income Taxes

We file numerous consolidated and separate income tax returns with the United States and with many states. With few exceptions, we are no longer subject to U.S. federal, state, or local examinations by tax authorities for years before 2013.

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security (“CARES”) Act was adopted, providing wide ranging economic relief for individuals and businesses. One component of the CARES Act provides the Company with an opportunity to carry back net operating losses (“NOLs”) arising from 2018, 2019 and 2020 to the prior five tax years. The Company has such NOLs reflected on its balance sheet as a portion of deferred tax assets. The Company has previously valued its NOLs at the federal corporate income tax rate of 21%. However, the provisions of the CARES Act provide for NOL carryback claims to be calculated based on a rate of 35%, which was the federal corporate tax rate in effect for the carryback years. Consequently, effective March 31, 2020, the Company has revalued the benefit from its NOLs to reflect a 35% tax rate. The result of the revaluation of NOLs and other tax adjustments is a net tax benefit of $8.8 million, which is reflected in income taxes for the quarter ended March 31, 2020.

As of March 31, 2020, and December 31, 2019, we had no unrecognized tax benefits for uncertain tax positions. We do not anticipate that total unrecognized tax benefits will significantly change due to any settlements of audits or expirations of statutes of limitations over the next 12 months.

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.

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 judgments, significant weight is given to evidence that can be objectively verified. Although realization is not assured, we believe that the realization of the recognized net deferred tax asset of $58.4 million as of March 31, 2020 is more likely than not based on forecasted future net earnings. Our net deferred tax asset of $58.4 million consists of approximately $46.8 million of net U.S. federal deferred tax assets and $11.6 million of net state deferred tax assets.

Income tax benefit was $7.7 million for the three months ended March 31, 2020, which includes net tax benefits of $8.8 million. Excluding the tax benefit, income tax expense would have been $1.1 million, representing an effective income tax rate of 36%. For the prior year period, income tax expense was $937,000, which represents an effective income tax rate of 35%.

- 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

8. Legal Proceedings

3 Months Ended

Mar. 31, 2020

Commitments and Contingencies Disclosure [Abstract]

Legal Proceedings

(8) Legal Proceedings

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.

For the most part, we have legal and factual defenses to consumer claims, which we routinely contest or settle (for immaterial amounts) depending on the particular circumstances of each case.

Wage and Hour Claim. On September 24, 2018, a former employee filed a lawsuit against us in the Superior Court of Orange County, California, alleging that we incorrectly classified our sales representatives as outside salespersons exempt from overtime wages, mandatory break periods and certain other employee protective provisions of California and federal law. The complaint seeks injunctive relief, an award of unpaid wages, liquidated damages, and attorney fees and interest. The plaintiff purports to act on behalf of a class of similarly situated employees and ex-employees. As of the date of this report, no motion for class certification has been filed or granted.

We believe that our compensation practices with respect to our sales representatives are compliant with applicable law. Accordingly, we have defended and intend to continue to defend this lawsuit. We have not recorded a liability with respect to this claim on the accompanying consolidated financial statements.

In General. There can be no assurance as to the outcomes of the matters described or referenced above. We record at each measurement date, most recently as of March 31, 2020, our best estimate of probable incurred losses for legal contingencies, including each 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 total of probable incurred losses for legal contingencies as of March 31, 2020 is immaterial, and that the range of reasonably possible losses for the legal proceedings and contingencies we face, including those described or referenced above, as of March 31, 2020 does not exceed $3 million.

Accordingly, we believe that the ultimate resolution of such legal proceedings and contingencies 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 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.

9. Fair Value Measurements

3 Months Ended

Mar. 31, 2020

Fair Value Disclosures [Abstract]

Fair Value Measurements

(9) Fair Value Measurements

ASC 820, "Fair Value Measurements" clarifies the principle that fair value should be based on the assumptions market participants would use when pricing an asset or liability and establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. Under the standard, fair value measurements would be separately disclosed by level within the fair value hierarchy.

ASC 820 defines fair value, establishes a framework for measuring fair value, establishes a three-level valuation hierarchy for disclosure of fair value measurement and enhances disclosure requirements for fair value measurements. The three levels are defined as follows: level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets; level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument; and level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement.

Effective January 2018 we have elected to use the fair value method to value our portfolio of finance receivables acquired in January 2018 and thereafter.

Our valuation policies and procedures have been developed by our Accounting department in conjunction with our Risk department and with consultation with outside valuation experts. Our policies and procedures have been approved by our Chief Executive and our Board of Directors and include methodologies for valuation, internal reporting, calibration and back testing. Our periodic review of valuations includes an analysis of changes in fair value measurements and documentation of the reasons for such changes. There is little available third-party information such as broker quotes or pricing services available to assist us in our valuation process.

Our level 3, unobservable inputs reflect our own assumptions about the factors that market participants use in pricing similar receivables and are based on the best information available in the circumstances. They include such inputs as estimates for the magnitude and timing of net charge-offs and the rate of amortization of the portfolio of finance receivable. Significant changes in any of those inputs in isolation would have a significant impact on our fair value measurement.

For the period ended March 31, 2020, the Company considered the impact of the pandemic on the portfolio of finance receivables carried at fair value and recorded a mark down to that portfolio of $10.4 million.

The table below presents a reconciliation of the finance receivables measured at fair value on a recurring basis using significant unobservable inputs:

	Three Months Ended
	March 31,
	2020			2019
	(In thousands)
Balance at beginning of period	$	1,444,038		$	821,066
Finance receivables at fair value acquired during period		265,282			244,753
Payments received on finance receivables at fair value		(109,558	)		(49,500	)
Net interest income accretion on fair value receivables		(29,715	)		(18,767	)
Mark to fair value		(10,350	)		–
Balance at end of period	$	1,559,697		$	997,552

The table below compares the fair values of these finance receivables to their contractual balances for the periods shown:

	March 31, 2020				December 31, 2019
	Contractual		Fair		Contractual		Fair
	Balance		Value		Balance		Value
	(In thousands)

Finance receivables measured at fair value	$	1,628,557	$	1,559,697	$	1,492,803	$	1,444,038

The following table provides certain qualitative information about our level 3 fair value measurements:

Financial Instrument	Fair Values as of					Inputs as of
	March 31,		December 31,			March 31,		December 31,
	2020		2019		Unobservable	2020		2019
	(In thousands)
Assets:
Finance receivables measured at fair value	$	1,559,697	$	1,444,038	Discount rate		8.9% - 11.1%		8.9% - 11.1%
					Cumulative net losses		15.0% - 18.4%		15.0% - 16.1%

The following table summarizes the delinquency status of these finance receivables measured at fair value as of March 31, 2020 and December 31, 2019:

	March 31,		December 31,
	2020		2019
	(In thousands)
Delinquency Status
Current	$	1,498,296	$	1,344,883
31 - 60 days		67,294		81,262
61 - 90 days		29,275		34,280
91 + days		14,470		15,167
Repo		19,222		17,211
	$	1,628,557	$	1,492,803

Repossessed vehicle inventory, which is included in Other assets on our unaudited condensed consolidated balance sheet, is measured at fair value using level 2 assumptions based on our actual loss experience on sale of repossessed vehicles. At March 31, 2020 the finance receivables related to the repossessed vehicles in inventory totaled $35.1 million. We have applied a valuation adjustment, or loss allowance, of $28.0 million, which is based on a recovery rate of approximately 26%, resulting in an estimated fair value and carrying amount of $7.1 million. The fair value and carrying amount of the repossessed inventory at December 31, 2019 was $7.5 million after applying a valuation adjustment of $21.4 million.

There were no transfers in or out of level 1, level 2 or level 3 assets and liabilities for the three months ended March 30, 2020 and 2019.

The estimated fair values of financial assets and liabilities at March 31, 2020 and December 31, 2019, were as follows:

	As of March 31, 2020
Financial Instrument	(In thousands)
	Carrying		Fair Value Measurements Using:
	Value		Level 1		Level 2		Level 3		Total
Assets:
Cash and cash equivalents	$	4,546	$	4,546	$	–	$	–	$	4,546
Restricted cash and equivalents		137,523		137,523		–		–		137,523
Finance receivables, net		660,403		–		–		606,077		606,077
Accrued interest receivable		8,795		–		–		8,795		8,795
Liabilities:
Warehouse lines of credit	$	141,988	$	–	$	–	$	141,988	$	141,988
Accrued interest payable		5,409		–		–		5,409		5,409
Residual interest financing		37,913		–		–		37,913		37,913
Securitization trust debt		2,091,642		–		–		1,900,451		1,900,451
Subordinated renewable notes		18,322		–		–		18,322		18,322

	As of December 31, 2019
Financial Instrument	(In thousands)
	Carrying		Fair Value Measurements Using:
	Value		Level 1		Level 2		Level 3		Total
Assets:
Cash and cash equivalents	$	5,295	$	5,295	$	–	$	–	$	5,295
Restricted cash and equivalents		135,537		135,537		–		–		135,537
Finance receivables, net		885,890		–		–		841,160		841,160
Accrued interest receivable		11,645		–		–		11,645		11,645
Liabilities:
Warehouse lines of credit	$	134,791	$	–	$	–	$	134,791	$	134,791
Accrued interest payable		5,254		–		–		5,254		5,254
Residual interest financing		39,478		–		–		39,478		39,478
Securitization trust debt		2,097,728		–		–		2,116,520		2,116,520
Subordinated renewable notes		17,534		–		–		17,534		17,534

1. Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2020

Accounting Policies [Abstract]

Description of Business

Description of Business

Basis of Presentation

Basis of Presentation

Use of Estimates

Use of Estimates

Finance Receivables Measured at Fair Value

Finance Receivables Measured at Fair Value

Other Income

Other Income

The following table presents the primary components of Other Income for the three-month periods ending March 31, 2020 and 2019:

	Three Months Ended
	March 31,
	2020		2019
	(In thousands)
Direct mail revenues	$	1,183	$	1,336
Convenience fee revenue		530		700
Recoveries on previously charged-off contracts		25		57
Sales tax refunds		202		227
Other		41		65
Other income for the period	$	1,981	$	2,385

Leases

Leases

The following table presents the supplemental balance sheet information related to leases:

	Year Ended,
	March 31, 2020
	(In thousands)
Operating Leases
Operating lease right-of-use assets	$	23,735
Less: Accumulated amortization right-of-use assets		(8,194	)
Operating lease right-of-use assets, net	$	15,541
		$
Operating lease liabilities		(16,892	)
		$
Finance Leases		$
Property and equipment, at cost	$	3,062
Less: Accumulated depreciation		(404	)
Property and equipment, net	$	2,658
		$
Finance lease liabilities	$	(2,673	)
		$
Weighted Average Discount Rate		$
Operating lease		5.0	%
Finance lease		6.5	%

Maturities of lease liabilities were as follows:	$
(In thousands)	Operating			Finance
Year Ending December 31,	Lease			Lease
2020 (excluding the three months ended March 31, 2020)	$	5,831		$	835
2021		7,449			1,110
2022		6,058			931
2023		1,389			27
2024		411			14
Thereafter		278			–
Total undiscounted lease payments		21,416			2,917
Less amounts representing interest		(4,524	)		(244	)
Lease Liability	$	16,892		$	2,673

The following table presents the leases expense included in Occupancy, General and administrative on our Unaudited Condensed Consolidated Statement of Operations:

	Three Months Ended
	March 31,
	2020		2019
	(In thousands)
Operating lease cost	$	1,885	$	1,889
Finance lease cost		278		–
Total lease cost		2,163	$	1,889

The following table presents the supplemental cash flow information related to leases:

	Three Months Ended
	March 31,
	2020		2019
	(In thousands)
Cash paid for amounts included in the measurement of lease liabilities:		$
Operating cash flows from operating leases	$	1,926	$	1,886
Operating cash flows from finance leases		231		–
Financing cash flows from finance leases		46		–

Stock-based compensation

Stock-based Compensation

The following represents stock option activity for the three months ended March 31, 2020:

	Number of Shares			Weighted Average Exercise		Weighted Average Remaining Contractual
	(in thousands)			Price		Term
Options outstanding at the beginning of period		15,348		$	4.59	N/A
Granted		–			–	N/A
Exercised		(28	)		1.73	N/A
Forfeited		–			–	N/A
Options outstanding at the end of period		15,320		$	4.59	3.10 years

Options exercisable at the end of period		11,844		$	4.86	2.50 years

Purchases of Company Stock

Purchases of Company Stock

The table below describes the purchase of our common stock for the three-month ended March 31, 2020 and 2019:

Three Months Ended

March 31, 2020

March 31, 2019

Avg. Price

Open market purchases

–

335,546

3.95

Shares redeemed upon net exercise of stock options

–

5,500

4.20

Other purchases

–

24,500

4.20

Total stock purchases

–

365,546

3.97

Reclassification

Reclassifications

Some items in the prior year financial statements were reclassified to conform to the current presentation. Reclassifications had no effect on net income or shareholders’ equity.

Financial Covenants

Financial Covenants

Provision for Contingent Liabilities

Provision for Contingent Liabilities

Adoption of New Accounting Standards

Adoption of New Accounting Standards

Coronavirus Pandemic

Coronavirus Pandemic

1. Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2020

Accounting Policies [Abstract]

Schedule of other income

	Three Months Ended
	March 31,
	2020		2019
	(In thousands)
Direct mail revenues	$	1,183	$	1,336
Convenience fee revenue		530		700
Recoveries on previously charged-off contracts		25		57
Sales tax refunds		202		227
Other		41		65
Other income for the period	$	1,981	$	2,385

Supplemental balance sheet information related to leases

	Year Ended,
	March 31, 2020
	(In thousands)
Operating Leases
Operating lease right-of-use assets	$	23,735
Less: Accumulated amortization right-of-use assets		(8,194	)
Operating lease right-of-use assets, net	$	15,541
		$
Operating lease liabilities		(16,892	)
		$
Finance Leases		$
Property and equipment, at cost	$	3,062
Less: Accumulated depreciation		(404	)
Property and equipment, net	$	2,658
		$
Finance lease liabilities	$	(2,673	)
		$
Weighted Average Discount Rate		$
Operating lease		5.0%
Finance lease		6.5%

Maturities of operating leases

Maturities of lease liabilities were as follows:	$
(In thousands)	Operating
Year Ending December 31,	Lease
2020 (excluding the three months ended March 31, 2020)	$	5,831
2021		7,449
2022		6,058
2023		1,389
2024		411
Thereafter		278
Total undiscounted lease payments		21,416
Less amounts representing interest		(4,524	)
Lease Liability	$	16,892

Maturities of finance leases

Maturities of lease liabilities were as follows:
(In thousands)	Finance
Year Ending December 31,	Lease
2020 (excluding the three months ended March 31, 2020)	$	835
2021		1,110
2022		931
2023		27
2024		14
Thereafter		–
Total undiscounted lease payments		2,917
Less amounts representing interest		(244	)
Lease Liability	$	2,673

Lease information

	Three Months Ended
	March 31,
	2020		2019
	(In thousands)
Operating lease cost	$	1,885	$	1,889
Finance lease cost		278		–
Total lease cost	$	2,163	$	1,889

Supplemental cash flow information related to leases

	Three Months Ended
	March 31,
	2020		2019
	(In thousands)
Cash paid for amounts included in the measurement of lease liabilities:		$
Operating cash flows from operating leases	$	1,926	$	1,886
Operating cash flows from finance leases		231		–
Financing cash flows from finance leases		46		–

Schedule of stock option activity

	Number of Shares			Weighted Average Exercise		Weighted Average Remaining Contractual
	(in thousands)			Price		Term
Options outstanding at the beginning of period		15,348		$	4.59	N/A
Granted		–			–	N/A
Exercised		(28	)		1.73	N/A
Forfeited		–			–	N/A
Options outstanding at the end of period		15,320		$	4.59	3.10 years

Options exercisable at the end of period		11,844		$	4.86	2.50 years

Schedule of purchases of company stock

Three Months Ended

March 31, 2020

March 31, 2019

Avg. Price

Open market purchases

–

335,546

3.95

Shares redeemed upon net exercise of stock options

–

5,500

4.20

Other purchases

–

24,500

4.20

Total stock purchases

–

365,546

3.97

Schedule of computation of earnings per share

	Three Months Ended
	March 31,
	2020		2019
	(In thousands)
Weighted average number of common shares outstanding during the period used to compute basic earnings per share		22,539		22,242
		$
Incremental common shares attributable to exercise of outstanding options and warrants		1,340		2,017
		$
Weighted average number of common shares used to compute diluted earnings per share		23,879		24,259

2. Finance Receivables (Tables)

3 Months Ended

Mar. 31, 2020

Finance Receivables

Schedule of finance receivables

	March 31,		December 31,
	2020		2019
Finance receivables	(In thousands)
Automobile finance receivables, net of unearned interest	$	772,851	$	895,566
Unearned acquisition fees and originations costs		1,625		1,964
Finance receivables	$	774,476	$	897,530

Schedule of delinquency status of finance receivables

	March 31,		December 31,
	2020		2019
	(In thousands)
Delinquency Status
Current	$	635,961	$	698,870
31 - 60 days		76,455		107,951
61 - 90 days		40,089		57,395
91 + days		20,346		31,350
	$	772,851	$	895,566

Schedule of amortized cost basis of finance receivables

	March 31,		December 31,
	2020		2019
	(In thousands)
Annual Vintage Pool
2012	$	1,816	$	2,432
2013		11,643		15,489
2014		48,794		61,290
2015		136,679		162,242
2016		253,339		292,360
2017		320,580		361,753
	$	772,851	$	895,566

Schedule of allowance for finance credit losses

	Three Months Ended
	March 31,
	2020			2019
	(In thousands)
Balance at beginning of period	$	11,640		$	67,376
Early adoption of CECL		127,000			n/a
Provision for credit losses on finance receivables		3,613			23,956
Charge-offs		(34,214	)		(54,344	)
Recoveries		6,034			11,208
Balance at end of period	$	114,073		$	48,196

Schedule of allowance for losses on repossessed inventory

	March 31,			December 31,
	2020			2019
	(In thousands)
Gross balance of repossessions in inventory	$	35,127		$	28,933
Allowance for losses on repossessed inventory		(27,965	)		(21,389	)
Net repossessed inventory included in other assets	$	7,162		$	7,544

3. Securitization Trust Debt (Tables)

3 Months Ended

Mar. 31, 2020

Securitization Trust Debt

Schedule of securitization trust debt

										Weighted
										Average
	Final	Receivables				Outstanding		Outstanding		Contractual
	Scheduled	Pledged at				Principal at		Principal at		Interest Rate at
	Payment	March 31,		Initial		March 31,		December 31,		March 31,
Series	Date (1)	2020 (2)		Principal		2020		2019		2020
	(Dollars in thousands)
CPS 2014-C	December 2021		–		273,000		–		19,758		–
CPS 2014-D	March 2022		20,403		267,500		19,476		23,755		5.72	%
CPS 2015-A	June 2022		23,427		245,000		21,623		26,713		5.62	%
CPS 2015-B	September 2022		30,831		250,000		31,032		36,338		5.25	%
CPS 2015-C	December 2022		45,935		300,000		46,354		53,579		5.95	%
CPS 2016-A	March 2023		60,013		329,460		62,489		71,599		6.33	%
CPS 2016-B	June 2023		73,496		332,690		72,256		82,667		6.71	%
CPS 2016-C	September 2023		75,038		318,500		73,378		83,696		6.86	%
CPS 2016-D	April 2024		59,088		206,325		56,965		65,021		5.00	%
CPS 2017-A	April 2024		64,901		206,320		62,536		71,450		5.03	%
CPS 2017-B	December 2023		79,576		225,170		66,160		76,201		4.32	%
CPS 2017-C	September 2024		82,008		224,825		70,376		80,315		4.25	%
CPS 2017-D	June 2024		83,976		196,300		74,019		83,801		3.87	%
CPS 2018-A	March 2025		90,570		190,000		80,840		91,258		3.71	%
CPS 2018-B	December 2024		105,665		201,823		98,424		111,188		4.13	%
CPS 2018-C	September 2025		124,843		230,275		114,360		130,064		4.25	%
CPS 2018-D	June 2025		146,617		233,730		131,630		149,470		4.21	%
CPS 2019-A	March 2026		181,893		254,400		166,520		186,900		4.04	%
CPS 2019-B	June 2026		175,677		228,275		166,846		184,308		3.66	%
CPS 2019-C	September 2026		204,061		243,513		196,387		216,650		3.06	%
CPS 2019-D	December 2026		252,186		274,313		243,816		265,035		2.64	%
CPS 2020-A	March 2027		248,762		260,000		248,223		–		2.62	%
		$	2,228,966	$	5,491,419	$	2,103,710	$	2,109,766

_________________

(1)

(2)

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

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.22)
-URI http://asc.fasb.org/extlink&oid=120391452&loc=d3e13212-122682

Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 1A
-URI http://asc.fasb.org/extlink&oid=119993939&loc=d3e28541-108399

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21506-112644

Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(e),(f))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=119993939&loc=d3e28551-108399

Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 7
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21521-112644

Reference 7: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21538-112644

Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 470
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=75038535&loc=d3e64711-112823

Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 55
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=114775985&loc=d3e28878-108400

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21475-112644

+ Details

4. Debt (Tables)

3 Months Ended

Mar. 31, 2020

Debt Disclosure [Abstract]

Schedule of debt outstanding

				Amount Outstanding at
				March 31,		December 31,
				2020		2019
				(In thousands)
Description	Interest Rate	Maturity

Warehouse lines of credit	5.50% over one month Libor (Minimum 6.50%)		February 2021	$	50,776	$	40,558

	3.00% over one month Libor (Minimum 3.75%)		September 2020		53,411		96,225

	4.00% over a commercial paper rate (Minimum 5.00%)		December 2021		39,434		–

Residual interest financing	8.60%		January 2026		38,342		40,000

Subordinated renewable notes	Weighted average rate of 9.92% and 9.75% at March 31, 2020 and December 31, 2019, respectively		Weighted average maturity of July 2022 and April 2022 at March 31, 2020 and December 31, 2019, respectively		18,322		17,534

				$	200,285	$	194,317

5. Interest Income and Interest Expense (Tables)

3 Months Ended

Mar. 31, 2020

Warehouse lines of credit [Member]

Schedule of interest income

	Three Months Ended
	March 31,
	2020			2019
	(In thousands)
Interest on finance receivables	$	37,807		$	62,290
Interest on finance receivables at fair value		40,806			22,815
Mark to finance receivables measured at fair value		(10,350	)		–
Other interest income		523			740
Interest income	$	68,786		$	85,845

Schedule of interest expense

	Three Months Ended
	March 31,
	2020		2019
	(In thousands)
Securitization trust debt	$	23,798	$	23,988
Warehouse lines of credit		1,763		2,020
Residual interest financing		938		956
Subordinated renewable notes		492		326
Interest expense	$	26,991	$	27,290

6. Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2020

Earnings Per Share [Abstract]

Computation of earnings per share

	Three Months Ended
	March 31,
	2020		2019
	(In thousands)
Weighted average number of common shares outstanding during the period used to compute basic earnings per share		22,539		22,242
		$
Incremental common shares attributable to exercise of outstanding options and warrants		1,340		2,017
		$
Weighted average number of common shares used to compute diluted earnings per share		23,879		24,259

9. Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2020

Fair Value Disclosures [Abstract]

Schedule of reconciliation of the finance receivables measured at fair value on a recurring basis

	Three Months Ended
	March 31,
	2020			2019
	(In thousands)
Balance at beginning of period	$	1,444,038		$	821,066
Finance receivables at fair value acquired during period		265,282			244,753
Payments received on finance receivables at fair value		(109,558	)		(49,500	)
Net interest income accretion on fair value receivables		(29,715	)		(18,767	)
Mark to fair value		(10,350	)		–
Balance at end of period	$	1,559,697		$	997,552

Schedule of finance receivables to their contractual balances

	March 31, 2020				December 31, 2019
	Contractual		Fair		Contractual		Fair
	Balance		Value		Balance		Value
	(In thousands)

Finance receivables measured at fair value	$	1,628,557	$	1,559,697	$	1,492,803	$	1,444,038

Schedule of level 3 fair value measurements

Financial Instrument	Fair Values as of					Inputs as of
	March 31,		December 31,			March 31,		December 31,
	2020		2019		Unobservable	2020		2019
	(In thousands)
Assets:
Finance receivables measured at fair value	$	1,559,697	$	1,444,038	Discount rate		8.9% - 11.1%		8.9% - 11.1%
					Cumulative net losses		15.0% - 18.4%		15.0% - 16.1%

Schedule of delinquency status of finance receivables measured at fair value

	March 31,		December 31,
	2020		2019
	(In thousands)
Delinquency Status
Current	$	1,498,296	$	1,344,883
31 - 60 days		67,294		81,262
61 - 90 days		29,275		34,280
91 + days		14,470		15,167
Repo		19,222		17,211
	$	1,628,557	$	1,492,803

Schedule of estimated fair values of financial assets and liabilities

The estimated fair values of financial assets and liabilities at March 31, 2020 and December 31, 2019, were as follows:

	As of March 31, 2020
Financial Instrument	(In thousands)
	Carrying		Fair Value Measurements Using:
	Value		Level 1		Level 2		Level 3		Total
Assets:
Cash and cash equivalents	$	4,546	$	4,546	$	–	$	–	$	4,546
Restricted cash and equivalents		137,523		137,523		–		–		137,523
Finance receivables, net		660,403		–		–		606,077		606,077
Accrued interest receivable		8,795		–		–		8,795		8,795
Liabilities:
Warehouse lines of credit	$	141,988	$	–	$	–	$	141,988	$	141,988
Accrued interest payable		5,409		–		–		5,409		5,409
Residual interest financing		37,913		–		–		37,913		37,913
Securitization trust debt		2,091,642		–		–		1,900,451		1,900,451
Subordinated renewable notes		18,322		–		–		18,322		18,322

	As of December 31, 2019
Financial Instrument	(In thousands)
	Carrying		Fair Value Measurements Using:
	Value		Level 1		Level 2		Level 3		Total
Assets:
Cash and cash equivalents	$	5,295	$	5,295	$	–	$	–	$	5,295
Restricted cash and equivalents		135,537		135,537		–		–		135,537
Finance receivables, net		885,890		–		–		841,160		841,160
Accrued interest receivable		11,645		–		–		11,645		11,645
Liabilities:
Warehouse lines of credit	$	134,791	$	–	$	–	$	134,791	$	134,791
Accrued interest payable		5,254		–		–		5,254		5,254
Residual interest financing		39,478		–		–		39,478		39,478
Securitization trust debt		2,097,728		–		–		2,116,520		2,116,520
Subordinated renewable notes		17,534		–		–		17,534		17,534

1. Other Income (Details - Other income) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Primary components of Other Income
Other income for the period	$ 1,981	$ 2,385
Direct Mail Revenues [Member]
Primary components of Other Income
Other income for the period	1,183	1,336
Convenience Fee Revenue [Member]
Primary components of Other Income
Other income for the period	530	700
Recoveries on Previously Charged-Off Contracts [Member]
Primary components of Other Income
Other income for the period	25	57
Sales Tax Refunds [Member]
Primary components of Other Income
Other income for the period	202	227
Other Income [Member]
Primary components of Other Income
Other income for the period	$ 41	$ 65

1. Leases (Details - Operating leases) $ in Thousands	Mar. 31, 2020 USD ($)
Operating Leases
Operating lease right-of-use assets	$ 23,735
Less: Accumulated amortization right-of-use assets	(8,194)
Operating lease right-of-use assets, net	15,541
Operating lease liabilities	$ (16,892)

1. Leases (Details - Finance Leases) $ in Thousands	Mar. 31, 2020 USD ($)
Finance Leases
Property and equipment, at cost	$ 3,062
Less: Accumulated depreciation	(404)
Property and equipment, net	2,658
Finance lease liabilities	$ (2,673)

1. Leases (Details - Other Lease Info)	Mar. 31, 2020
Leases [Abstract]
Weighted Average Discount Rate Operating lease	5.00%
Weighted Average Discount Rate Finance lease	6.50%

1. Leases (Details - Maturities of lease liabilities) $ in Thousands	Mar. 31, 2020 USD ($)
Maturities of Operating lease liabilities
2020	$ 5,831
2021	7,449
2022	6,058
2023	1,389
2024	411
Thereafter	278
Total undiscounted lease payments	21,416
Less amounts representing interest	(4,524)
Lease Liability	16,892
Maturities of Finance lease liabilities
2020	835
2021	1,110
2022	931
2023	27
2024	14
Thereafter	0
Total undiscounted lease payments	2,917
Less amounts representing interest	(244)
Lease Liability	$ 2,673

1. Leases (Details - Lease cost) - USD ($) $ in Thousands	3 Months Ended
1. Leases (Details - Lease cost) - USD ($) $ in Thousands	Mar. 31, 2020	Mar. 31, 2019
Leases [Abstract]
Operating lease cost	$ 1,885	$ 1,889
Finance lease cost	278	0
Total lease cost	$ 2,163	$ 1,889

1. Leases (Details - Cash flow) - USD ($) $ in Thousands	3 Months Ended
1. Leases (Details - Cash flow) - USD ($) $ in Thousands	Mar. 31, 2020	Mar. 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$ 1,926	$ 1,886
Operating cash flows from finance leases	231	0
Financing cash flows from finance leases	$ 46	$ 0

1. Stock-based Compensation (Details - Option activity) - Options [Member] shares in Thousands	3 Months Ended
	Mar. 31, 2020 $ / shares shares
Number of Shares
Options outstanding at the beginning of period	15,348
Granted	0
Exercised	(28)
Forfeited/Expired	0
Options outstanding at the end of period	15,320
Options exercisable at the end of period	11,844
Weighted Average Exercise Price
Options outstanding at the beginning of period \| $ / shares	$ 4.59
Exercised \| $ / shares	1.73
Options outstanding at the end of period \| $ / shares	4.59
Options exercisable at the end of period \| $ / shares	$ 4.86
Weighted Average Remaining Contractual Term
Weighted average remaining contractual term, end of period	3 years 1 month 6 days
Weighted average remaining contractual term, exercisable at the end of period	2 years 6 months

1. Purchases of Company Stock (Details - Stock purchases) - Common Stock [Member] - $ / shares	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Total stock purchases, shares	0	365,546
Total stock purchases, average price per share		$ 3.97
Open Market Purchases [Member]
Total stock purchases, shares	0	335,546
Total stock purchases, average price per share		$ 3.95
Shares redeemed upon net exercise of stock options [Member]
Total stock purchases, shares	0	5,500
Total stock purchases, average price per share		$ 4.20
Other Repurchases [Member]
Total stock purchases, shares	0	24,500
Total stock purchases, average price per share		$ 4.20

1. Summary of Significant Accounting Policies (Details Narrative) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Accounting Policies [Abstract]
Stock-based compensation	$ 487	$ 638
Unrecognized stock-based compensation costs	$ 2,600
Weighted-average period for unrecognized costs	1 year 10 months 25 days
Intrinsic value options outstanding	$ 325
Intrinsic value of options exercisable	325
Intrinsic value of options exercised	$ 51	$ 227
Shares available for grant	1,458,000

2. Finance Receivables (Details - Components of Finance Receivables) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Finance receivables
Automobile finance receivables, net of unearned interest	$ 772,851	$ 895,566
Unearned acquisition fees and originations costs	1,625	1,964
Finance Receivables	$ 774,476	$ 897,530

2. Finance Receivables (Details - Delinquency status) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Delinquency Status
Total finance receivables with delinquency status	$ 772,851	$ 895,566
Current [Member]
Delinquency Status
Finance receivables, current	635,961	698,870
31 to 60 Days [Member]
Delinquency Status
Finance receivables, past due	76,455	107,951
61 to 90 Days [Member]
Delinquency Status
Finance receivables, past due	40,089	57,395
91 + Days [Member]
Delinquency Status
Finance receivables, past due	$ 20,346	$ 31,350

2. Finance Receivables (Details - Amortized Cost Basis) - USD ($)	Mar. 31, 2020	Dec. 31, 2019
Amortized cost basis	$ 772,851,000	$ 895,566,000
2012 Annual Vintage Pool [Member]
Amortized cost basis	1,816,000	2,432,000
2013 Annual Vintage Pool [Member]
Amortized cost basis	11,643,000	15,489,000
2014 Annual Vintage Pool [Member]
Amortized cost basis	48,794,000	61,290,000
2015 Annual Vintage Pool [Member]
Amortized cost basis	136,679,000	162,242,000
2016 Annual Vintage Pool [Member]
Amortized cost basis	253,339,000	292,360,000
2017 Annual Vintage Pool [Member]
Amortized cost basis	$ 320,580,000	$ 361,753,000

2. Finance Receivables (Details - Summary of activity) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Finance Receivables
Balance at beginning of year	$ 11,640	$ 67,376
Early adoption of CECL	127,000	0
Provision for credit losses	3,613	23,956
Charge-offs	(34,214)	(54,344)
Recoveries	6,034	11,208
Balance at end of year	$ 114,073	$ 48,196

2. Finance Receivables (Details - Repossessed inventory) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2020	Dec. 31, 2019
Finance Receivables
Gross balance of repossessions in inventory	$ 35,127	$ 28,933
Allowance for losses on repossessed inventory	(27,965)	(21,389)
Net repossessed inventory included in other assets	$ 7,162	$ 7,544

2. Finance Receivables (Details Narrative) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Finance Receivables
Finance receivables, non accrual status	$ 20,300	$ 31,400

3. Securitization Trust Debt (Details) - USD ($)
$ in Thousands

3 Months Ended

Mar. 31, 2020

Dec. 31, 2019

"Securitization trust debt," and components of debt

Receivables Pledged at end of period

^[1]

$ 2,228,966

Initial Principal

5,491,419

Outstanding Principal

$ 2,103,710

$ 2,109,766

CPS 2014-C [Member]

"Securitization trust debt," and components of debt

Final Scheduled Payment Date

^[2]

December 2021

Receivables Pledged at end of period

^[1]

$ 0

Initial Principal

273,000

Outstanding Principal

$ 0

19,758

Weighted Average Contractual Interest Rate

CPS 2014-D [Member]

"Securitization trust debt," and components of debt

Final Scheduled Payment Date

^[2]

March 2022

Receivables Pledged at end of period

^[1]

$ 20,403

Initial Principal

267,500

Outstanding Principal

$ 19,476

23,755

Weighted Average Contractual Interest Rate

5.72%

CPS 2015-A [Member]

"Securitization trust debt," and components of debt

Final Scheduled Payment Date

^[2]

June 2022

Receivables Pledged at end of period

^[1]

$ 23,427

Initial Principal

245,000

Outstanding Principal

$ 21,623

26,713

Weighted Average Contractual Interest Rate

5.62%

CPS 2015-B [Member]

"Securitization trust debt," and components of debt

Final Scheduled Payment Date

^[2]

September 2022

Receivables Pledged at end of period

^[1]

$ 30,831

Initial Principal

250,000

Outstanding Principal

$ 31,032

36,338

Weighted Average Contractual Interest Rate

5.25%

CPS 2015-C [Member]

"Securitization trust debt," and components of debt

Final Scheduled Payment Date

^[2]

December 2022

Receivables Pledged at end of period

^[1]

$ 45,935

Initial Principal

300,000

Outstanding Principal

$ 46,354

53,579

Weighted Average Contractual Interest Rate

5.95%

CPS 2016-A [Member]

"Securitization trust debt," and components of debt

Final Scheduled Payment Date

^[2]

March 2023

Receivables Pledged at end of period

^[1]

$ 60,013

Initial Principal

329,460

Outstanding Principal

$ 62,489

71,599

Weighted Average Contractual Interest Rate

6.33%

CPS 2016-B [Member]

"Securitization trust debt," and components of debt

Final Scheduled Payment Date

^[2]

June 2023

Receivables Pledged at end of period

^[1]

$ 73,496

Initial Principal

332,690

Outstanding Principal

$ 72,256

82,667

Weighted Average Contractual Interest Rate

6.71%

CPS 2016-C [Member]

"Securitization trust debt," and components of debt

Final Scheduled Payment Date

^[2]

September 2023

Receivables Pledged at end of period

^[1]

$ 75,038

Initial Principal

318,500

Outstanding Principal

$ 73,378

83,696

Weighted Average Contractual Interest Rate

6.86%

CPS 2016-D [Member]

"Securitization trust debt," and components of debt

Final Scheduled Payment Date

^[2]

April 2024

Receivables Pledged at end of period

^[1]

$ 59,088

Initial Principal

206,325

Outstanding Principal

$ 56,965

65,021

Weighted Average Contractual Interest Rate

5.00%

CPS 2017-A [Member]

"Securitization trust debt," and components of debt

Final Scheduled Payment Date

^[2]

April 2024

Receivables Pledged at end of period

^[1]

$ 64,901

Initial Principal

206,320

Outstanding Principal

$ 62,536

71,450

Weighted Average Contractual Interest Rate

5.03%

CPS 2017-B [Member]

"Securitization trust debt," and components of debt

Final Scheduled Payment Date

^[2]

December 2023

Receivables Pledged at end of period

^[1]

$ 79,576

Initial Principal

225,170

Outstanding Principal

$ 66,160

76,201

Weighted Average Contractual Interest Rate

4.32%

CPS 2017-C [Member]

"Securitization trust debt," and components of debt

Final Scheduled Payment Date

^[2]

September 2024

Receivables Pledged at end of period

^[1]

$ 82,008

Initial Principal

224,825

Outstanding Principal

$ 70,376

80,315

Weighted Average Contractual Interest Rate

4.25%

CPS 2017-D [Member]

"Securitization trust debt," and components of debt

Final Scheduled Payment Date

^[2]

June 2024

Receivables Pledged at end of period

^[1]

$ 83,976

Initial Principal

196,300

Outstanding Principal

$ 74,019

83,801

Weighted Average Contractual Interest Rate

3.87%

CPS 2018-A [Member]

"Securitization trust debt," and components of debt

Final Scheduled Payment Date

^[2]

March 2025

Receivables Pledged at end of period

^[1]

$ 90,570

Initial Principal

190,000

Outstanding Principal

$ 80,840

91,258

Weighted Average Contractual Interest Rate

3.71%

CPS 2018-B [Member]

"Securitization trust debt," and components of debt

Final Scheduled Payment Date

^[2]

December 2024

Receivables Pledged at end of period

^[1]

$ 105,665

Initial Principal

201,823

Outstanding Principal

$ 98,424

111,188

Weighted Average Contractual Interest Rate

4.13%

CPS 2018-C [Member]

"Securitization trust debt," and components of debt

Final Scheduled Payment Date

^[2]

September 2025

Receivables Pledged at end of period

^[1]

$ 124,843

Initial Principal

230,275

Outstanding Principal

$ 114,360

130,064

Weighted Average Contractual Interest Rate

4.25%

CPS 2018-D [Member]

"Securitization trust debt," and components of debt

Final Scheduled Payment Date

^[2]

June 2025

Receivables Pledged at end of period

^[1]

$ 146,617

Initial Principal

233,730

Outstanding Principal

$ 131,630

149,470

Weighted Average Contractual Interest Rate

4.21%

CPS 2019-A [Member]

"Securitization trust debt," and components of debt

Final Scheduled Payment Date

^[2]

March 2026

Receivables Pledged at end of period

^[1]

$ 181,893

Initial Principal

254,400

Outstanding Principal

$ 166,520

186,900

Weighted Average Contractual Interest Rate

4.04%

CPS 2019-B [Member]

"Securitization trust debt," and components of debt

Final Scheduled Payment Date

^[2]

June 2026

Receivables Pledged at end of period

^[1]

$ 175,677

Initial Principal

228,275

Outstanding Principal

$ 166,846

184,308

Weighted Average Contractual Interest Rate

3.66%

CPS 2019-C [Member]

"Securitization trust debt," and components of debt

Final Scheduled Payment Date

^[2]

September 2026

Receivables Pledged at end of period

^[1]

$ 204,061

Initial Principal

243,513

Outstanding Principal

$ 196,387

216,650

Weighted Average Contractual Interest Rate

3.06%

CPS 2019-D [Member]

"Securitization trust debt," and components of debt

Final Scheduled Payment Date

^[2]

December 2026

Receivables Pledged at end of period

^[1]

$ 252,186

Initial Principal

274,313

Outstanding Principal

$ 243,816

265,035

Weighted Average Contractual Interest Rate

2.64%

CPS 2020-A [Member]

"Securitization trust debt," and components of debt

Final Scheduled Payment Date

^[2]

March 2027

Receivables Pledged at end of period

^[1]

$ 248,762

Initial Principal

260,000

Outstanding Principal

$ 248,223

$ 0

Weighted Average Contractual Interest Rate

2.62%

[1]

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

[2]

3. Securitization Trust Debt (Details Narrative) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Expected finance receivable payments 2020	$ 609,000
Expected finance receivable payments 2021	627,200
Expected finance receivable payments 2022	428,300
Expected finance receivable payments 2023	308,800
Expected finance receivable payments 2024	69,900
Expected finance receivable payments 2025	48,600
Restricted cash under various agreements	137,500
Securitization Trust Debt [Member]
Debt issuance costs	$ 12,100	$ 12,000

4. Debt (Details - Debt outstanding) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Dec. 31, 2019
Warehouse lines of credit	$ 141,988	$ 134,791
Residual interest financing	37,913	39,478
Subordinated renewable notes	18,322	17,534
Total debt outstanding	200,285	194,317
Warehouse Lines Of Credit [Member]
Warehouse lines of credit	$ 50,776	40,558
Interest rate	5.50% over one month Libor (Minimum 6.50%)
Credit line maturity date	Feb. 28, 2021
Warehouse Lines Of Credit (2) [Member]
Warehouse lines of credit	$ 53,411	96,225
Interest rate	3.00% over one month Libor (Minimum 3.75%)
Credit line maturity date	Sep. 30, 2020
Warehouse Lines Of Credit (3) [Member]
Warehouse lines of credit	$ 39,434	0
Interest rate	4.00% over a commercial paper rate (Minimum 5.00%)
Credit line maturity date	Dec. 31, 2021
Residual interest financing [Member]
Residual interest financing	$ 38,342	40,000
Interest rate	8.60%
Maturity date	Jan. 31, 2026
Subordinated Renewable Notes [Member]
Subordinated renewable notes	$ 18,322	$ 17,534
Interest rate	Weighted average rate of 9.92% and 9.75% at March 31, 2020 and December 31, 2019, respectively
Maturity date description	Weighted average maturity of July 2022 and April 2022 at March 31, 2020 and December 31, 2019, respectively

4. Debt (Details Narrative) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Three Warehouse Lines Of Credit [Member]
Unamortized debt issuance costs	$ 1,600	$ 2,000
Residual Interest Financings [Member]
Unamortized debt issuance costs	$ 429	$ 522

5. Interest Income and Interest Expense (Details - Interest income) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Components of interest income
Interest on finance receivables	$ 37,807	$ 62,290
Interest on finance receivables at fair value	40,806	22,815
Mark to finance receivables measured at fair value	(10,350)	0
Other interest income	523	740
Interest income	$ 68,786	$ 85,845

5. Interest Income and Interest Expense (Details - Interest expense) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Total interest expense	$ 26,991	$ 27,290
Securitization Trust Debt [Member]
Total interest expense	23,798	23,988
Warehouse Lines Of Credit [Member]
Total interest expense	1,763	2,020
Residual interest financing [Member]
Total interest expense	938	956
Subordinated Renewable Notes [Member]
Total interest expense	$ 492	$ 326

6. Earnings Per Share (Details - Earnings Per Share) - shares shares in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Earnings Per Share [Abstract]
Denominator for basic earnings per share - weighted average number of common shares outstanding during the year	22,539	22,242
Incremental common shares attibutable to exercise of outstanding options and warrants	1,340	2,017
Denominator for diluted earnings per share	23,879	24,259
Antidilutive shares	12,900	10,500

7. Income Taxes (Details Narrative) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Net deferred tax asset	$ 58,400
Unrecognized tax benefits	0		$ 0
Income tax expense (benefit)	$ (7,680)	$ 937
Effective tax rate	36.00%	35.00%
Federal [Member]
Net deferred tax asset	$ 46,800
State [Member]
Net deferred tax asset	$ 11,600

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

9. Fair Value Measurements (Details - Reconciliation of Finance Receivables) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Fair Value Disclosures [Abstract]
Balance at beginning of period	$ 1,444,038	$ 821,066
Finance receivables at fair value acquired during period	265,282	244,753
Payments received on finance receivables at fair value	(109,558)	(49,500)
Net interest income accretion on fair value receivables	(29,715)	(18,767)
Mark to fair value	(10,350)	0
Balance at end of period	$ 1,559,697	$ 997,552

9. Fair Value Measurements (Details - Finance Receivables to Their Contractual Balances) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019	Mar. 31, 2019	Dec. 31, 2018
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Finance receivables measured at fair value	$ 1,559,697	$ 1,444,038	$ 997,552	$ 821,066
Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Finance receivables measured at fair value	1,559,697	1,444,038
Contractual Balance [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Finance receivables measured at fair value	$ 1,628,557	$ 1,492,803

9. Fair Value Measurements (Details - Level 3 Fair Value Measurements) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019	Mar. 31, 2019	Dec. 31, 2018
Finance receivables measured at fair value	$ 1,559,697	$ 1,444,038	$ 997,552	$ 821,066
Fair Value [Member]
Finance receivables measured at fair value	1,559,697	1,444,038
Fair Value [Member] \| Level 3 [Member]
Finance receivables measured at fair value	$ 1,559,697	$ 1,444,038
Fair Value [Member] \| Level 3 [Member] \| Discount Rate [Member] \| Minimum [Member]
Unobservable Inputs	8.90%	8.90%
Fair Value [Member] \| Level 3 [Member] \| Discount Rate [Member] \| Maximum [Member]
Unobservable Inputs	11.10%	11.10%
Fair Value [Member] \| Level 3 [Member] \| Cumulative Net Losses [Member] \| Minimum [Member]
Unobservable Inputs	15.00%	15.00%
Fair Value [Member] \| Level 3 [Member] \| Cumulative Net Losses [Member] \| Maximum [Member]
Unobservable Inputs	18.40%	16.10%

9. Fair Value Measurements (Details - Delinquency status) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Finance receivables measured at fair value current	$ 1,498,296	$ 1,344,883
Finance receivables measured at fair value	1,628,557	1,492,803
31 to 60 Days [Member]
Finance receivables measured at fair value	67,294	81,262
61 to 90 Days [Member]
Finance receivables measured at fair value	29,275	34,280
91 + Days [Member]
Finance receivables measured at fair value	14,470	15,167
Repossessed Vehicles [Member]
Finance receivables measured at fair value	$ 19,222	$ 17,211

9. Fair Value Measurements (Details - Fair values) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Assets:
Cash and cash equivalents	$ 4,546	$ 5,295
Restricted cash and equivalents	137,523	135,537
Finance receivables, net	606,077	841,160
Accrued interest receivable	8,795	11,645
Liabilities:
Warehouse lines of credit	141,988	134,791
Accrued interest payable	5,409	5,254
Residual interest financing	37,913	39,478
Securitization trust debt	1,900,451	2,116,520
Subordinated renewable notes	18,322	17,534
Level 1 [Member]
Assets:
Cash and cash equivalents	4,546	5,295
Restricted cash and equivalents	137,523	135,537
Finance receivables, net	0	0
Accrued interest receivable	0	0
Liabilities:
Warehouse lines of credit	0	0
Accrued interest payable	0	0
Residual interest financing	0	0
Securitization trust debt	0	0
Subordinated renewable notes	0	0
Level 2 [Member]
Assets:
Cash and cash equivalents	0	0
Restricted cash and equivalents	0	0
Finance receivables, net	0	0
Accrued interest receivable	0	0
Liabilities:
Warehouse lines of credit	0	0
Accrued interest payable	0	0
Residual interest financing	0	0
Securitization trust debt	0	0
Subordinated renewable notes	0	0
Level 3 [Member]
Assets:
Cash and cash equivalents	0	0
Restricted cash and equivalents	0	0
Finance receivables, net	606,077	841,160
Accrued interest receivable	8,795	11,645
Liabilities:
Warehouse lines of credit	141,988	134,791
Accrued interest payable	5,409	5,254
Residual interest financing	37,913	39,478
Securitization trust debt	1,900,451	2,116,520
Subordinated renewable notes	18,322	17,534
Carrying Value [Member]
Assets:
Cash and cash equivalents	4,546	5,295
Restricted cash and equivalents	137,523	135,537
Finance receivables, net	660,403	885,890
Accrued interest receivable	8,795	11,645
Liabilities:
Warehouse lines of credit	141,988	134,791
Accrued interest payable	5,409	5,254
Residual interest financing	37,913	39,478
Securitization trust debt	2,091,642	2,097,728
Subordinated renewable notes	$ 18,322	$ 17,534