0001683168-23-005426 | 10-Q | XBRL Viewer | Consumer Portfolio Services INC

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Summary of Significant Accounting Policies (Details - Option activity) - $ / shares shares in Thousands	3 Months Ended	6 Months Ended
	Mar. 31, 2023	Jun. 30, 2023	Dec. 31, 2022
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Options outstanding	11,167	11,167
Options outstanding		8,362
Options exercisable at the end of period		5,675	7,770
Equity Option [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Options outstanding	11,167	11,167
Options outstanding, per share	$ 5.21	$ 5.21
Granted	0
Granted, per share	$ 0
Exercised	(2,805)
Exercised, per share	$ 5.59
Forfeited	0
Forfeited, per share	$ 0
Options outstanding		8,362
Options outstanding, per share		$ 5.09
Options Outstanding, Weighted Average Remaining Contractual Term	3 years 7 months 9 days
Options exercisable at the end of period		5,675
Options exercisable at the end of period		$ 4.31
Options Exercisable, Weighted Average Remaining Contractual Term	2 years 11 months 8 days

Income Taxes	6 Months Ended
Jun. 30, 2023
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 2015. As of June 30, 2023, and December 31, 2022, 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 $7.4 million as of June 30, 2023 is more likely than not based on forecasted future net earnings. Our net deferred tax asset of $7.4 million consists of approximately $4.8 million of net U.S. federal deferred tax assets and $2.6 million of net state deferred tax assets. Income tax expense was $4.7 million and $9.3 million for the three months and six months ended June 30, 2023, representing effective income tax rates of 25%, compared to income tax expense of $8.9 million and $17.1 million for the three months and six months ended June 30, 2022, and represents an effective income tax rates of 26% and 27% respectively.

Income Taxes

6 Months Ended

Jun. 30, 2023

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 2015.

As of June 30, 2023, and December 31, 2022, 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 $7.4 million as of June 30, 2023 is more likely than not based on forecasted future net earnings. Our net deferred tax asset of $7.4 million consists of approximately $4.8 million of net U.S. federal deferred tax assets and $2.6 million of net state deferred tax assets.

Income tax expense was $4.7 million and $9.3 million for the three months and six months ended June 30, 2023, representing effective income tax rates of 25%, compared to income tax expense of $8.9 million and $17.1 million for the three months and six months ended June 30, 2022, and represents an effective income tax rates of 26% and 27% respectively.

- 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.

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+ Details

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands	Common Stock [Member]	Retained Earnings [Member]	AOCI Attributable to Parent [Member]	Total
Balance, beginning of period, Shares at Dec. 31, 2021	21,144
Balance, beginning of period at Dec. 31, 2021	$ 55,298	$ 116,531	$ (1,622)
Pension benefit obligation
Common stock issued upon exercise of options and warrants, Shares	2,895
Repurchase of common stock, Shares	(2,832)
Common stock issued upon exercise of options and warrants	$ 14,416
Repurchase of common stock	(34,285)
Stock-based compensation	$ 1,518
Net income		46,435		46,435
Balance, end of period, Shares at Jun. 30, 2022	21,207
Balance, end of period at Jun. 30, 2022	$ 36,947	162,966	(1,622)	198,291
Balance, beginning of period, Shares at Mar. 31, 2022	21,292
Balance, beginning of period at Mar. 31, 2022	$ 47,844	137,646	(1,622)
Pension benefit obligation
Common stock issued upon exercise of options and warrants, Shares	1,529
Repurchase of common stock, Shares	(1,614)
Common stock issued upon exercise of options and warrants	$ 8,556
Repurchase of common stock	(20,181)
Stock-based compensation	$ 728
Net income		25,320		25,320
Balance, end of period, Shares at Jun. 30, 2022	21,207
Balance, end of period at Jun. 30, 2022	$ 36,947	162,966	(1,622)	198,291
Balance, beginning of period, Shares at Dec. 31, 2022	20,131
Balance, beginning of period at Dec. 31, 2022	$ 28,906	202,514	(3,031)	228,389
Pension benefit obligation
Common stock issued upon exercise of options and warrants, Shares	2,805
Repurchase of common stock, Shares	(1,784)
Common stock issued upon exercise of options and warrants	$ 15,678
Repurchase of common stock	(18,464)
Stock-based compensation	$ 1,817
Net income		27,777		27,777
Balance, end of period, Shares at Jun. 30, 2023	21,152
Balance, end of period at Jun. 30, 2023	$ 27,937	230,291	(3,031)	255,197
Balance, beginning of period, Shares at Mar. 31, 2023	20,496
Balance, beginning of period at Mar. 31, 2023	$ 29,485	216,337	(3,031)
Pension benefit obligation
Common stock issued upon exercise of options and warrants, Shares	1,718
Repurchase of common stock, Shares	(1,062)
Common stock issued upon exercise of options and warrants	$ 8,718
Repurchase of common stock	(11,171)
Stock-based compensation	$ 905
Net income		13,954		13,954
Balance, end of period, Shares at Jun. 30, 2023	21,152
Balance, end of period at Jun. 30, 2023	$ 27,937	$ 230,291	$ (3,031)	$ 255,197

- Definition

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

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Number of shares that have been repurchased during the period and have not been retired and are not held in treasury. Some state laws may govern the circumstances under which an entity may acquire its own stock and prescribe the accounting treatment therefore. This element is used when state law does not recognize treasury stock.

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Equity impact of the value of stock that has been repurchased during the period and has not been retired and is not held in treasury. Some state laws may mandate the circumstances under which an entity may acquire its own stock and prescribe the accounting treatment therefore. This element is used when state law does not recognize treasury stock.

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-Section S99
-Paragraph 3
-Subparagraph (SX 210.6-09(6))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483575/946-220-S99-3

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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-Section S99
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480418/310-10-S99-2

+ Details

Fair Value Measurements (Details - Fair values) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Cash and cash equivalents	$ 7,081	$ 13,490
Restricted cash and equivalents	148,063	149,299
Finance receivables, net	42,495	60,063
Accrued interest receivable	93	649
Warehouse lines of credit	245,272	285,328
Residual interest financing	49,749
Accrued interest payable	7,243	6,190
Securitization trust debt	2,137,162	1,957,995
Subordinated renewable notes	21,204	25,263
Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Cash and cash equivalents	7,081	13,490
Restricted cash and equivalents	148,063	149,299
Finance receivables, net	0	0
Accrued interest receivable	0	0
Warehouse lines of credit	0	0
Accrued interest payable	0	0
Securitization trust debt	0	0
Subordinated renewable notes	0	0
Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Cash and cash equivalents	0	0
Restricted cash and equivalents	0	0
Finance receivables, net	0	0
Accrued interest receivable	0	0
Warehouse lines of credit	0	0
Accrued interest payable	0	0
Securitization trust debt	0	0
Subordinated renewable notes	0	0
Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Cash and cash equivalents	0	0
Restricted cash and equivalents	0	0
Finance receivables, net	42,495	60,063
Accrued interest receivable	93	649
Warehouse lines of credit	245,272	285,328
Residual interest financing	49,749
Accrued interest payable	7,243	6,190
Securitization trust debt	2,137,162	1,957,995
Subordinated renewable notes	21,204	25,263
Carrying Value [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Cash and cash equivalents	7,081	13,490
Restricted cash and equivalents	148,063	149,299
Finance receivables, net	46,359	70,551
Accrued interest receivable	93	649
Warehouse lines of credit	245,272	285,328
Residual interest financing	49,749
Accrued interest payable	7,243	6,190
Securitization trust debt	2,225,072	2,108,744
Subordinated renewable notes	$ 21,204	$ 25,263

Securitization Trust Debt (Details Narrative) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Securitization Trust Debt
Debt issuance costs	$ 14,500	$ 14,200
Restricted cash under various agreements	$ 148,100

Summary of Significant Accounting Policies (Details - Options outstanding and exercisable) - shares shares in Thousands	Jun. 30, 2023	Dec. 31, 2022
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Number of shares, outstanding	8,362	11,167
Number of shares, exercisable	5,675	7,770
Range 1 [Member]
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Number of shares, outstanding	1,440	1,445
Number of shares, exercisable	1,105	775
Range 2 [Member]
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Number of shares, outstanding	2,543	3,785
Number of shares, exercisable	2,253	3,495
Range 3 [Member]
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Number of shares, outstanding	2,669	2,739
Number of shares, exercisable	1,732	1,802
Range 4 [Member]
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Number of shares, outstanding	0	0
Number of shares, exercisable	0	0
Range 5 [Member]
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Number of shares, outstanding	0	740
Number of shares, exercisable	0	740
Range 6 [Member]
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Number of shares, outstanding	0	748
Number of shares, exercisable	0	748
Range 7 [Member]
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Number of shares, outstanding	1,710	1,710
Number of shares, exercisable	585	210

Finance Receivables (Details - Summary of activity) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Finance Receivables
Financing Receivable, Allowance for Credit Loss, Beginning Balance	$ 14,728	$ 45,001	$ 21,753	$ 56,206
Provision for credit losses on finance receivables	(9,700)	(8,000)	(18,700)	(17,400)
Charge-offs	(1,897)	(4,446)	(4,914)	(9,805)
Recoveries	2,590	3,117	7,582	6,671
Financing Receivable, Allowance for Credit Loss, Beginning Balance	$ 5,721	$ 35,672	$ 5,721	$ 35,672

- Definition

Amount of allowance for credit loss on financing receivable. Excludes allowance for financing receivable covered under loss sharing agreement.

+ References + Details

Fair Value Measurements

6 Months Ended

Jun. 30, 2023

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 effect on our fair value measurement.

For the quarter ended June 30, 2023, the Company evaluated the appropriate fair value and future earnings rate of existing receivables compared to recently acquired receivables and our assessment of potential additional future net losses on the portfolio of finance receivables carried at fair value and did not record a mark down to that portfolio.

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

Schedule of reconciliation of the finance receivables measured at fair value on a recurring basis
	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2023			2022			2023			2022
	(In thousands)						(In thousands)
Balance at beginning of period	$	2,575,117		$	1,903,857		$	2,476,617		$	1,749,098
Finance receivables at fair value acquired during period		305,450			511,068			658,048			904,475
Payments received on finance receivables at fair value		(215,314	)		(215,930	)		(421,940	)		(425,774	)
Net interest income accretion on fair value receivables		(46,833	)		(29,562	)		(94,305	)		(60,766	)
Mark to fair value		–			4,700			–			7,100
Balance at end of period	$	2,618,420		$	2,174,133		$	2,618,420		$	2,174,133

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

June 30, 2023

December 31, 2022

Contractual

Fair

Contractual

Fair

Balance

Value

Balance

Value

(In thousands)

Finance receivables measured at fair value

2,857,205

2,618,420

2,701,184

2,476,617

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

Schedule of level 3 fair value measurements
Financial Instrument	Fair Values as of					Inputs as of
	June 30,		December 31,			June 30,	December 31,
	2023		2022		Unobservable	2023	2022
	(In thousands)
Assets:
Finance receivables measured at fair value	$	2,618,420	$	2,476,617	Discount rate	11.0% - 11.5%	11.0% - 11.3%
					Cumulative net losses	10.0% - 21.5%	13.4% - 19.4%

The following table summarizes the delinquency status of these finance receivables measured at fair value as of June 30, 2023 and December 31, 2022:

Schedule of delinquency status of finance receivables measured at fair value
	June 30,		December 31,
	2023		2022
	(In thousands)
Delinquency Status
Current	$	2,531,445	$	2,375,271
31 - 60 days		180,284		184,968
61 - 90 days		74,963		72,390
91 + days		28,619		29,048
Repo		41,894		39,507
	$	2,857,205	$	2,701,184

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 June 30, 2023 the finance receivables related to the repossessed vehicles in inventory totaled $1.0 million. We have applied a valuation adjustment, or loss allowance, of $655,000, which is based on a recovery rate of approximately 35%, resulting in an estimated fair value and carrying amount of $348,000. The fair value and carrying amount of the repossessed inventory at December 31, 2022 was $1.9 million after applying a valuation adjustment of $1.3 million.

There were no transfers in or out of level 1, level 2 or level 3 assets and liabilities for the three months ended June 30, 2023 and 2022.

The estimated fair values of financial assets and liabilities at June 30, 2023 and December 31, 2022, were as follows:

Schedule of estimated fair values of financial assets and liabilities
	As of June 30, 2023
Financial Instrument	(In thousands)
	Carrying		Fair Value Measurements Using:
	Value		Level 1		Level 2		Level 3		Total
Assets:
Cash and cash equivalents	$	7,081	$	7,081	$	–	$	–	$	7,081
Restricted cash and equivalents		148,063		148,063		–		–		148,063
Finance receivables, net		46,359		–		–		42,495		42,495
Accrued interest receivable		93		–		–		93		93
Liabilities:
Warehouse lines of credit	$	245,272	$	–	$	–	$	245,272	$	245,272
Residual interest financing		49,749						49,749		49,749
Accrued interest payable		7,243		–		–		7,243		7,243
Securitization trust debt		2,225,072		–		–		2,137,162		2,137,162
Subordinated renewable notes		21,204		–		–		21,204		21,204


	As of December 31, 2022
Financial Instrument	(In thousands)
	Carrying		Fair Value Measurements Using:
	Value		Level 1		Level 2		Level 3		Total
Assets:
Cash and cash equivalents	$	13,490	$	13,490	$	–	$	–	$	13,490
Restricted cash and equivalents		149,299		149,299		–		–		149,299
Finance receivables, net		70,551		–		–		60,063		60,063
Accrued interest receivable		649		–		–		649		649
Liabilities:
Warehouse lines of credit	$	285,328	$	–	$	–	$	285,328	$	285,328
Accrued interest payable		6,190		–		–		6,190		6,190
Securitization trust debt		2,108,744		–		–		1,957,995		1,957,995
Subordinated renewable notes		25,263		–		–		25,263		25,263

Debt (Tables)

6 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

Schedule of debt outstanding

Schedule of debt outstanding
			Amount Outstanding at
			June 30,		December 31,
			2023		2022
			(In thousands)
Description	Interest Rate	Maturity

Warehouse lines of credit	3.00% over one month Libor (Minimum 3.75%) 8.38% and 7.48% at June 30, 2023 and December 31, 2022, respectively	July 2024	$	144,949	$	150,293

	4.15% over a commercial paper rate (Minimum 5.15%) 9.41% and 8.60% at June 30, 2023, and December 31, 2022, respectively	January 2024		101,898		137,585

Residual interest financing	7.86%	June 2026		50,000		50,000

Subordinated renewable notes	Weighted average rate of 7.98% and 7.82% at June 30, 2023 and December 31, 2022, respectively	Weighted average maturity of April 2025 and October 2024 at June 30, 2023 and December 31, 2022, respectively		21,204		25,263

			$	318,051	$	363,141

Debt

6 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

Debt

(4) Debt

The terms and amounts of our other debt outstanding at June 30, 2023 and December 31, 2022 are summarized below:

Schedule of debt outstanding
			Amount Outstanding at
			June 30,		December 31,
			2023		2022
			(In thousands)
Description	Interest Rate	Maturity

Warehouse lines of credit	3.00% over one month Libor (Minimum 3.75%) 8.38% and 7.48% at June 30, 2023 and December 31, 2022, respectively	July 2024	$	144,949	$	150,293

	4.15% over a commercial paper rate (Minimum 5.15%) 9.41% and 8.60% at June 30, 2023, and December 31, 2022, respectively	January 2024		101,898		137,585

Residual interest financing	7.86%	June 2026		50,000		50,000

Subordinated renewable notes	Weighted average rate of 7.98% and 7.82% at June 30, 2023 and December 31, 2022, respectively	Weighted average maturity of April 2025 and October 2024 at June 30, 2023 and December 31, 2022, respectively		21,204		25,263

			$	318,051	$	363,141

On February 2, 2022, we renewed our two-year revolving credit agreement with Ares Agent Services, L.P. There was $144.9 million outstanding under this facility at June 30, 2023. On June 28, 2022, we increased the capacity of its credit agreement with Ares Agent Services, L.P. from $100 million to $200 million. The revolving period for this facility was extended to January 2024 followed by an amortization period through January 2028 for any receivables pledged at the end of the revolving period.

On July 15, 2022, we renewed our two-year revolving credit agreement with Citibank, N.A., and doubled the capacity from $100 million to $200 million. There was $101.9 million outstanding under this facility at June 30, 2023. The revolving period for this facility was extended to July 2024 followed by an amortization period through July 2025 for any receivables pledged at the end of the revolving period.

Unamortized debt issuance costs of $251,000 and $377,000 as of June 30, 2023 and December 31, 2022, respectively, have been excluded from the amount reported above for residual interest financing. Similarly, unamortized debt issuance costs of $1.6 million and $2.6 million as of June 30, 2023 and December 31, 2022, 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.

- Definition

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

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 470
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//470/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (g)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (i)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Name Accounting Standards Codification
-Section 50
-Paragraph 1E
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1E

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

+ Details

Income Taxes (Details Narrative) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
Income Taxes (Details Narrative) - USD ($) $ in Thousands	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Operating Loss Carryforwards [Line Items]
Net deferred tax asset	$ 7,400		$ 7,400
Current income tax expense	$ 4,700	$ 8,900	$ 9,300	$ 17,100
Effective Income Tax Rate Reconciliation, Percent	25.00%	26.00%	25.00%	27.00%
Domestic Tax Authority [Member]
Operating Loss Carryforwards [Line Items]
Net deferred tax asset	$ 4,800		$ 4,800
State and Local Jurisdiction [Member]
Operating Loss Carryforwards [Line Items]
Net deferred tax asset	$ 2,600		$ 2,600

Interest Income and Interest Expense (Details - Interest expense) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Debt Instrument [Line Items]
Total interest expense	$ 35,706	$ 18,771	$ 68,465	$ 35,171
Securitization Trust Debt [Member]
Debt Instrument [Line Items]
Total interest expense	29,171	15,745	55,524	29,273
Warehouse Lines Of Credit [Member]
Debt Instrument [Line Items]
Total interest expense	5,008	1,386	9,856	2,544
Residual interest financing [Member]
Debt Instrument [Line Items]
Total interest expense	1,050	1,050	2,100	2,144
Subordinated renewable notes [Member]
Debt Instrument [Line Items]
Total interest expense	$ 477	$ 590	$ 985	$ 1,210

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 835
-SubTopic 30
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482900/835-30-50-1

Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(f))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 3
-Subparagraph (SX 210.12-04(a))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-3

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
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+ Details

- Definition

Amount of the cost of borrowed funds accounted for as interest expense.

+ References + Details

Securitization Trust Debt

6 Months Ended

Jun. 30, 2023

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:

Schedule of Long-term Debt Instruments
Series	Final Scheduled Payment Date (1)	Receivables Pledged at June 30, 2023 (2)		Initial Principal		Outstanding Principal at June 30, 2023		Outstanding Principal at December 31, 2022		Weighted Average Contractual Debt Interest Rate at June 30, 2023
	(Dollars in thousands)
CPS 2018-A	March 2025	$	–	$	190,000	$	–	$	12,939		–
CPS 2018-B	December 2024		–		201,823		–		17,077		–
CPS 2018-C	September 2025		–		230,275		–		20,222		6.07%
CPS 2018-D	June 2025		20,498		233,730		16,011		25,563		5.82%
CPS 2019-A	March 2026		26,513		254,400		21,680		32,898		5.73%
CPS 2019-B	June 2026		28,679		228,275		24,730		33,897		5.56%
CPS 2019-C	September 2026		34,151		243,513		30,129		41,515		4.55%
CPS 2019-D	December 2026		45,068		274,313		39,936		53,625		3.86%
CPS 2020-A	March 2027		42,267		260,000		38,057		52,705		4.18%
CPS 2020-B	June 2027		48,747		202,343		31,860		41,736		6.36%
CPS 2020-C	November 2027		66,427		252,200		56,227		72,894		3.45%
CPS 2021-A	March 2028		70,683		230,545		51,064		72,076		1.49%
CPS 2021-B	June 2028		89,355		240,000		76,336		101,206		2.01%
CPS 2021-C	September 2028		131,240		291,000		113,606		147,593		1.70%
CPS 2021-D	December 2028		178,689		349,202		162,778		209,277		2.00%
CPS 2022-A	April 2029		196,998		316,800		176,857		222,613		2.29%
CPS 2022-B	October 2029		295,399		395,600		266,669		325,907		4.28%
CPS 2022-C	April 2030		332,262		391,600		285,595		346,714		5.34%
CPS 2022-D	June 2030		278,221		307,018		250,805		292,461		7.45%
CPS 2023-A	August 2030		196,998		324,768		281,081		–		6.13%
CPS 2023-B	November 2030		295,399		332,885		316,192		–		6.46%
		$	2,377,595	$	5,750,290	$	2,239,614	$	2,122,919

_________________

(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 $409.3 million in 2023, $747.0 million in 2024, $463.2 million in 2025, $288.1 million in 2026, $193.9 million in 2027, $102.9 million in 2028, and $20.7 million in 2029.

(2)

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

Debt issuance costs of $14.5 million and $14.2 million as of June 30, 2023 and December 31, 2022, 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 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 June 30, 2023, 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 June 30, 2023, restricted cash under the various agreements totaled approximately $148.1 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.

Fair Value Measurements (Details - Finance Receivables to Their Contractual Balances) - USD ($) $ in Thousands	Jun. 30, 2023	Mar. 31, 2023	Dec. 31, 2022	Jun. 30, 2022	Mar. 31, 2022	Dec. 31, 2021
Fair Value Disclosures [Abstract]
Finance receivables contractual balance	$ 2,857,205		$ 2,701,184
Receivables, Fair Value Disclosure	$ 2,618,420	$ 2,575,117	$ 2,476,617	$ 2,174,133	$ 1,903,857	$ 1,749,098

Summary of Significant Accounting Policies (Details - Lease cost) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Accounting Policies [Abstract]
Operating lease cost	$ 1,411	$ 1,760	$ 2,771	$ 3,630
Finance lease cost	24	257	125	555
Total lease cost	$ 1,435	$ 2,017	$ 2,896	$ 4,185

Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2023

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 six-month period ended June 30, 2023 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, 2022.

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 recorded 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 recorded value, an adjustment would be required. Results for the first quarter include no mark down reversal to the carrying value of the portion of the receivables portfolio accounted for at fair value. Mark downs are reflected as a reduction in revenue.

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 recorded 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 and six-month periods ending June 30, 2023 and 2022:

Schedule of other income
	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
	(In thousands)				(In thousands)
Origination and servicing fees from third party receivables	$	1,924	$	1,408	$	4,661	$	2,252
Direct mail revenues		–		–		–		774
Sales tax refunds		264		159		524		303
Other		33		81		74		225
Other income for the period	$	2,221	$	1,648	$	5,259	$	3,554

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:


	June 30,			December 31,
	2023			2022
	(In thousands)

Operating Leases
Operating lease right-of-use assets	$	29,575		$	28,397
Less: Accumulated amortization right-of-use assets		(24,649	)		(22,613	)
Operating lease right-of-use assets, net	$	4,926		$	5,784

Operating lease liabilities	$	(5,271	)	$	(6,234	)

Finance Leases
Property and equipment, at cost	$	3,454		$	3,407
Less: Accumulated depreciation		(3,357	)		(3,301	)
Property and equipment, net	$	97		$	106

Finance lease liabilities	$	(102	)	$	(177	)

Weighted Average Discount Rate
Operating lease	5.0%	5.0%
Finance lease	6.5%	6.5%

Maturities of lease liabilities were as follows:


(In thousands)	Operating			Finance
Year Ending June 30,	Lease			Lease
2023	$	2,775		$	30
2024		1,787			37
2025		737			20
2026		455			11
2027		452			11
Thereafter		565			1
Total undiscounted lease payments		6,771			110
Less amounts representing interest		(1,500	)		(8	)
Lease Liability	$	5,271		$	102

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

Lease information
	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
	(In thousands)				(In thousands)
Operating lease cost	$	1,411	$	1,760	$	2,771	$	3,630
Finance lease cost		24		257		125		555
Total lease cost	$	1,435	$	2,017	$	2,896	$	4,185

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


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
	(In thousands)				(In thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,441	$	1,907	$	2,771	$	3,965
Operating cash flows from finance leases		23		245		122		527
Financing cash flows from finance leases		2		12		4		28

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 and six months ended June 30, 2023, we recorded stock-based compensation costs in the amount of $905,000 and $1.8 million, respectively. These stock-based compensation costs were $728,000 and $1.5 million for the three and six months ended June 30, 2022. As of June 30, 2023, unrecognized stock-based compensation costs to be recognized over future periods equaled $7.6 million. This amount will be recognized as expense over a weighted-average period of 2.0 years.

The following represents stock option activity for the six months ended June 30, 2023:

Schedule of option activity
						Weighted
	Number of			Weighted		Average
	Shares			Average		Remaining
	(in thousands)			Exercise Price		Contractual Term
Options outstanding at the beginning of period		11,167		$	5.21	N/A
Granted		–			–	N/A
Exercised		(2,805	)		5.59	N/A
Forfeited		–			–	N/A
Options outstanding at the end of period		8,362		$	5.09	3.61 years

Options exercisable at the end of period		5,675		$	4.31	2.94 years

The following table presents the price distribution of stock options outstanding and exercisable for the years ended June 30, 2023 and December 31, 2022:


	Number of shares as of				Number of shares as of
	June 30, 2023				December 31, 2022
	Outstanding		Exercisable		Outstanding		Exercisable
Range of exercise prices:	(In thousands)				(In thousands)
$2.00 - $2.99		1,440		1,105		1,445		775
$3.00 - $3.99		2,543		2,253		3,785		3,495
$4.00 - $4.99		2,669		1,732		2,739		1,802
$5.00 - $5.99		–		–		–		–
$6.00 - $6.99		–		–		740		740
$7.00 - $7.99		–		–		748		748
$10.00 - $10.99		1,710		585		1,710		210
Total shares		8,362		5,675		11,167		7,770

At June 30, 2023 the aggregate intrinsic value of options outstanding and exercisable was $55.1 million and $41.8 million, respectively. There were 2.8 million options exercised for the six months ended June 30, 2023 compared to 2.9 million for the comparable period in 2022. The total intrinsic value of options exercised was $13.3 million and $12.2 million for the six-month periods ended June 30, 2023 and 2022. There were 2,661,000 shares available for future stock option grants under existing plans as of June 30, 2023.

Purchases of Company Stock

The table below describes the purchase of our common stock for the six months ended June 30, 2023 and 2022:

Schedule of purchases of company stock
	Six Months Ended
	June 30, 2023				June 30, 2022
	Shares		Avg. Price		Shares		Avg. Price
Open market purchases		564,202	$	10.36		1,938,637	$	11.42
Shares redeemed upon net exercise of stock options		1,220,044		10.34		893,153		13.56
Total stock purchases		1,784,246	$	10.35		2,831,790	$	12.09

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 June 30, 2023, 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 March 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") 2022-02, known as the Financial Instruments – Credit Losses (Topic 326), Troubled Debt Restructurings and Vintage Disclosures. ASU 2022-02 eliminates the accounting guidance for TDRs in ASC 310-40 on troubled debt restructurings for entities that have adopted the CECL model introduced by ASU 2016-13, Current Expected Credit Loss. ASU 2022-02 also requires that public business entities disclose current-period gross charge offs by year of origination for financing receivables and net investments in leases within the scope of Subtopic 326-20, Financial Instruments – Credit Losses – Measured at Amortized Cost. This guidance is effective for fiscal years beginning after December 15, 2022, and the adoption of this guidance did not have a material impact on the condensed consolidated financial statements.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Cash flows from operating activities:
Net income	$ 27,777	$ 46,435
Adjustments to reconcile net income to net cash provided by operating activities:
Net interest income accretion on fair value receivables	94,305	60,766
Depreciation and amortization	442	802
Amortization of deferred financing costs	4,800	3,628
Mark to finance receivables measured at fair value	(0)	(7,100)
Provision for credit losses	(18,700)	(17,400)
Stock-based compensation expense	1,817	1,518
Changes in assets and liabilities:
Deferred tax assets, net	2,810	2,052
Other assets	5,447	10,202
Accounts payable and accrued expenses	1,963	18,767
Net cash provided by operating activities	120,661	119,670
Cash flows from investing activities:
Payments received on finance receivables held for investment	42,892	80,246
Purchases of finance receivables measured at fair value	(658,048)	(904,475)
Payments received on finance receivables at fair value	421,940	425,774
Change in repossessions held in inventory	223	1,087
Purchase of furniture and equipment	(66)	(1,028)
Net cash used in investing activities	(193,059)	(398,396)
Cash flows from financing activities:
Proceeds from issuance of securitization trust debt	657,653	712,400
Proceeds from issuance of subordinated renewable notes	0	2,682
Payments on subordinated renewable notes	(4,059)	(1,933)
Net proceeds from (repayments of) warehouse lines of credit	(41,031)	124,606
Net Proceeds from (repayment of) residual interest financing debt	0	(4,311)
Repayment of securitization trust debt	(540,958)	(536,824)
Payment of financing costs	(4,066)	(6,204)
Purchase of common stock	(18,464)	(34,285)
Exercise of options and warrants	15,678	14,416
Net cash provided by financing activities	64,753	270,547
Increase in cash and cash equivalents	(7,645)	(8,179)
Cash and restricted cash at beginning of period	162,789	176,548
Cash and restricted cash at end of period	155,144	168,369
Cash paid during the period for:
Interest	62,612	30,809
Income taxes	$ 4,639	$ 4,796

Fair Value Measurements (Details - Reconciliation of Finance Receivables) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Fair Value Disclosures [Abstract]
Balance at beginning of period	$ 2,575,117	$ 1,903,857	$ 2,476,617	$ 1,749,098
Finance receivables at fair value acquired during period	305,450	511,068	658,048	904,475
Payments received on finance receivables at fair value	(215,314)	(215,930)	(421,940)	(425,774)
Net interest income accretion on fair value receivables	(46,833)	(29,562)	(94,305)	(60,766)
Mark to fair value	0	4,700	0	7,100
Receivables, Fair Value Disclosure	$ 2,618,420	$ 2,174,133	$ 2,618,420	$ 2,174,133

Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2023

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 and six-month periods ending June 30, 2023 and 2022:

Schedule of other income
	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
	(In thousands)				(In thousands)
Origination and servicing fees from third party receivables	$	1,924	$	1,408	$	4,661	$	2,252
Direct mail revenues		–		–		–		774
Sales tax refunds		264		159		524		303
Other		33		81		74		225
Other income for the period	$	2,221	$	1,648	$	5,259	$	3,554

Leases

Leases

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


	June 30,			December 31,
	2023			2022
	(In thousands)

Operating Leases
Operating lease right-of-use assets	$	29,575		$	28,397
Less: Accumulated amortization right-of-use assets		(24,649	)		(22,613	)
Operating lease right-of-use assets, net	$	4,926		$	5,784

Operating lease liabilities	$	(5,271	)	$	(6,234	)

Finance Leases
Property and equipment, at cost	$	3,454		$	3,407
Less: Accumulated depreciation		(3,357	)		(3,301	)
Property and equipment, net	$	97		$	106

Finance lease liabilities	$	(102	)	$	(177	)

Weighted Average Discount Rate
Operating lease	5.0%	5.0%
Finance lease	6.5%	6.5%

Maturities of lease liabilities were as follows:


(In thousands)	Operating			Finance
Year Ending June 30,	Lease			Lease
2023	$	2,775		$	30
2024		1,787			37
2025		737			20
2026		455			11
2027		452			11
Thereafter		565			1
Total undiscounted lease payments		6,771			110
Less amounts representing interest		(1,500	)		(8	)
Lease Liability	$	5,271		$	102

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

Lease information
	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
	(In thousands)				(In thousands)
Operating lease cost	$	1,411	$	1,760	$	2,771	$	3,630
Finance lease cost		24		257		125		555
Total lease cost	$	1,435	$	2,017	$	2,896	$	4,185

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


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
	(In thousands)				(In thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,441	$	1,907	$	2,771	$	3,965
Operating cash flows from finance leases		23		245		122		527
Financing cash flows from finance leases		2		12		4		28

Stock-based Compensation

Stock-based Compensation

The following represents stock option activity for the six months ended June 30, 2023:

Schedule of option activity
						Weighted
	Number of			Weighted		Average
	Shares			Average		Remaining
	(in thousands)			Exercise Price		Contractual Term
Options outstanding at the beginning of period		11,167		$	5.21	N/A
Granted		–			–	N/A
Exercised		(2,805	)		5.59	N/A
Forfeited		–			–	N/A
Options outstanding at the end of period		8,362		$	5.09	3.61 years

Options exercisable at the end of period		5,675		$	4.31	2.94 years

The following table presents the price distribution of stock options outstanding and exercisable for the years ended June 30, 2023 and December 31, 2022:


	Number of shares as of				Number of shares as of
	June 30, 2023				December 31, 2022
	Outstanding		Exercisable		Outstanding		Exercisable
Range of exercise prices:	(In thousands)				(In thousands)
$2.00 - $2.99		1,440		1,105		1,445		775
$3.00 - $3.99		2,543		2,253		3,785		3,495
$4.00 - $4.99		2,669		1,732		2,739		1,802
$5.00 - $5.99		–		–		–		–
$6.00 - $6.99		–		–		740		740
$7.00 - $7.99		–		–		748		748
$10.00 - $10.99		1,710		585		1,710		210
Total shares		8,362		5,675		11,167		7,770

Purchases of Company Stock

Purchases of Company Stock

The table below describes the purchase of our common stock for the six months ended June 30, 2023 and 2022:

Schedule of purchases of company stock
	Six Months Ended
	June 30, 2023				June 30, 2022
	Shares		Avg. Price		Shares		Avg. Price
Open market purchases		564,202	$	10.36		1,938,637	$	11.42
Shares redeemed upon net exercise of stock options		1,220,044		10.34		893,153		13.56
Total stock purchases		1,784,246	$	10.35		2,831,790	$	12.09

Reclassifications

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

Fair Value Measurements (Details - Delinquency status) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Financing Receivable, Past Due [Line Items]
Initial Principal	$ 2,857,205	$ 2,701,184
Financial Asset, Not Past Due [Member]
Financing Receivable, Past Due [Line Items]
Initial Principal	2,531,445	2,375,271
Financial Asset, 30 to 59 Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Initial Principal	180,284	184,968
Financial Asset, 60 to 89 Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Initial Principal	74,963	72,390
Financial Asset, Equal to or Greater than 90 Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Initial Principal	28,619	29,048
Repossessed Vehicles [Member]
Financing Receivable, Past Due [Line Items]
Initial Principal	$ 41,894	$ 39,507

Finance Receivables (Details Narrative) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Finance Receivables
Interest Receivable	$ 52,100	$ 92,300
Finance receivables, non accrual status	$ 1,100	$ 2,000

Interest Income and Interest Expense (Tables)

6 Months Ended

Jun. 30, 2023

Schedule of interest income

Schedule of interest income
	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
	(In thousands)				(In thousands)
Interest on finance receivables	$	4,378	$	9,832	$	9,040	$	21,146
Interest on finance receivables at fair value		76,735		65,730		150,793		124,470
Other interest income		1,524		108		2,866		114
Interest income	$	82,637	$	75,670	$	162,699	$	145,730

Schedule of interest expense

Schedule of interest expense
	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
	(In thousands)				(In thousands)
Securitization trust debt	$	29,171	$	15,745	$	55,524	$	29,273
Warehouse lines of credit		5,008		1,386		9,856		2,544
Residual interest financing		1,050		1,050		2,100		2,144
Subordinated renewable notes		477		590		985		1,210
Interest expense	$	35,706	$	18,771	$	68,465	$	35,171

Interest Income and Interest Expense

6 Months Ended

Jun. 30, 2023

Interest Income and Interest Expense

(5) Interest Income and Interest Expense

The following table presents the components of interest income:

Schedule of interest income
	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
	(In thousands)				(In thousands)
Interest on finance receivables	$	4,378	$	9,832	$	9,040	$	21,146
Interest on finance receivables at fair value		76,735		65,730		150,793		124,470
Other interest income		1,524		108		2,866		114
Interest income	$	82,637	$	75,670	$	162,699	$	145,730

The following table presents the components of interest expense:

Schedule of interest expense
	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
	(In thousands)				(In thousands)
Securitization trust debt	$	29,171	$	15,745	$	55,524	$	29,273
Warehouse lines of credit		5,008		1,386		9,856		2,544
Residual interest financing		1,050		1,050		2,100		2,144
Subordinated renewable notes		477		590		985		1,210
Interest expense	$	35,706	$	18,771	$	68,465	$	35,171

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Revenues:
Interest income	$ 82,637	$ 75,670	$ 162,699	$ 145,730
Mark to finance receivables measured at fair value	0	4,700	0	7,100
Other income	2,221	1,648	5,259	3,554
Total revenues	84,858	82,018	167,958	156,384
Expenses:
Employee costs	21,147	20,591	43,180	42,743
General and administrative	11,783	8,280	23,180	16,511
Interest	35,706	18,771	68,465	35,171
Provision for credit losses	(9,700)	(8,000)	(18,700)	(17,400)
Sales	5,463	5,838	11,186	11,224
Occupancy	1,644	1,937	3,170	3,789
Depreciation and amortization	211	385	442	802
Total operating expenses	66,254	47,802	130,923	92,840
Income before income tax expense	18,604	34,216	37,035	63,544
Income tax expense	4,650	8,896	9,258	17,109
Net income	$ 13,954	$ 25,320	$ 27,777	$ 46,435
Earnings per share:
Basic	$ 0.67	$ 1.18	$ 1.35	$ 2.18
Diluted	$ 0.55	$ 0.91	$ 1.09	$ 1.66
Number of shares used in computing earnings per share:
Basic	20,866	21,370	20,643	21,296
Diluted	25,373	27,687	25,384	27,943

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

6 Months Ended

Jun. 30, 2023

Dec. 31, 2022

Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]

Receivables Pledged at end of period

^[1]

$ 2,377,595

Initial Principal

5,750,290

Outstanding Principal

2,239,614

$ 2,122,919

Securitization Trust Debt, payable in 2023

409,300

Securitization Trust Debt, payable in 2024

747,000

Securitization Trust Debt, payable in 2025

463,200

Securitization Trust Debt, payable in 2026

288,100

Securitization Trust Debt, payable in 2027

193,900

Securitization Trust Debt, payable in 2028

102,900

Securitization Trust Debt, payable in 2029

$ 20,700

CPS 2018-A [Member]

Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]

Final Scheduled Payment Date

^[2]

March 2025

Receivables Pledged at end of period

^[1]

$ 0

Initial Principal

190,000

Outstanding Principal

$ 0

12,939

Weighted Average Contractual Interest Rate

0.00%

CPS 2018-B [Member]

Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]

Final Scheduled Payment Date

^[2]

December 2024

Receivables Pledged at end of period

^[1]

$ 0

Initial Principal

201,823

Outstanding Principal

$ 0

17,077

Weighted Average Contractual Interest Rate

0.00%

CPS 2018-C [Member]

Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]

Final Scheduled Payment Date

^[2]

September 2025

Receivables Pledged at end of period

^[1]

$ 0

Initial Principal

230,275

Outstanding Principal

$ 0

20,222

Weighted Average Contractual Interest Rate

6.07%

CPS 2018-D [Member]

Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]

Final Scheduled Payment Date

^[2]

June 2025

Receivables Pledged at end of period

^[1]

$ 20,498

Initial Principal

233,730

Outstanding Principal

$ 16,011

25,563

Weighted Average Contractual Interest Rate

5.82%

CPS 2019-A [Member]

Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]

Final Scheduled Payment Date

^[2]

March 2026

Receivables Pledged at end of period

^[1]

$ 26,513

Initial Principal

254,400

Outstanding Principal

$ 21,680

32,898

Weighted Average Contractual Interest Rate

5.73%

CPS 2019-B [Member]

Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]

Final Scheduled Payment Date

^[2]

June 2026

Receivables Pledged at end of period

^[1]

$ 28,679

Initial Principal

228,275

Outstanding Principal

$ 24,730

33,897

Weighted Average Contractual Interest Rate

5.56%

CPS 2019-C [Member]

Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]

Final Scheduled Payment Date

^[2]

September 2026

Receivables Pledged at end of period

^[1]

$ 34,151

Initial Principal

243,513

Outstanding Principal

$ 30,129

41,515

Weighted Average Contractual Interest Rate

4.55%

CPS 2019-D [Member]

Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]

Final Scheduled Payment Date

^[2]

December 2026

Receivables Pledged at end of period

^[1]

$ 45,068

Initial Principal

274,313

Outstanding Principal

$ 39,936

53,625

Weighted Average Contractual Interest Rate

3.86%

CPS 2020-A [Member]

Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]

Final Scheduled Payment Date

^[2]

March 2027

Receivables Pledged at end of period

^[1]

$ 42,267

Initial Principal

260,000

Outstanding Principal

$ 38,057

52,705

Weighted Average Contractual Interest Rate

4.18%

CPS 2020-B [Member]

Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]

Final Scheduled Payment Date

^[2]

June 2027

Receivables Pledged at end of period

^[1]

$ 48,747

Initial Principal

202,343

Outstanding Principal

$ 31,860

41,736

Weighted Average Contractual Interest Rate

6.36%

CPS 2020-C [Member]

Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]

Final Scheduled Payment Date

^[2]

November 2027

Receivables Pledged at end of period

^[1]

$ 66,427

Initial Principal

252,200

Outstanding Principal

$ 56,227

72,894

Weighted Average Contractual Interest Rate

3.45%

CPS 2021-A [Member]

Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]

Final Scheduled Payment Date

^[2]

March 2028

Receivables Pledged at end of period

^[1]

$ 70,683

Initial Principal

230,545

Outstanding Principal

$ 51,064

72,076

Weighted Average Contractual Interest Rate

1.49%

CPS 2021-B [Member]

Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]

Final Scheduled Payment Date

^[2]

June 2028

Receivables Pledged at end of period

^[1]

$ 89,355

Initial Principal

240,000

Outstanding Principal

$ 76,336

101,206

Weighted Average Contractual Interest Rate

2.01%

CPS 2021 C [Member]

Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]

Final Scheduled Payment Date

^[2]

September 2028

Receivables Pledged at end of period

^[1]

$ 131,240

Initial Principal

291,000

Outstanding Principal

$ 113,606

147,593

Weighted Average Contractual Interest Rate

1.70%

CPS 2021 D [Member]

Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]

Final Scheduled Payment Date

^[2]

December 2028

Receivables Pledged at end of period

^[1]

$ 178,689

Initial Principal

349,202

Outstanding Principal

$ 162,778

209,277

Weighted Average Contractual Interest Rate

2.00%

CPS 2022 A [Member]

Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]

Final Scheduled Payment Date

^[2]

April 2029

Receivables Pledged at end of period

^[1]

$ 196,998

Initial Principal

316,800

Outstanding Principal

$ 176,857

222,613

Weighted Average Contractual Interest Rate

2.29%

CPS 2022 B [Member]

Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]

Final Scheduled Payment Date

^[2]

October 2029

Receivables Pledged at end of period

^[1]

$ 295,399

Initial Principal

395,600

Outstanding Principal

$ 266,669

325,907

Weighted Average Contractual Interest Rate

4.28%

CPS 2022 C [Member]

Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]

Final Scheduled Payment Date

^[2]

April 2030

Receivables Pledged at end of period

^[1]

$ 332,262

Initial Principal

391,600

Outstanding Principal

$ 285,595

346,714

Weighted Average Contractual Interest Rate

5.34%

C P S 2022 D [Member]

Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]

Final Scheduled Payment Date

^[2]

June 2030

Receivables Pledged at end of period

^[1]

$ 278,221

Initial Principal

307,018

Outstanding Principal

$ 250,805

292,461

Weighted Average Contractual Interest Rate

7.45%

C P S 2023 A [Member]

Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]

Final Scheduled Payment Date

^[2]

August 2030

Receivables Pledged at end of period

^[1]

$ 196,998

Initial Principal

324,768

Outstanding Principal

$ 281,081

Weighted Average Contractual Interest Rate

6.13%

C P S 2023 B [Member]

Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]

Final Scheduled Payment Date

^[2]

November 2030

Receivables Pledged at end of period

^[1]

$ 295,399

Initial Principal

332,885

Outstanding Principal

$ 316,192

$ 0

Weighted Average Contractual Interest Rate

6.46%

[1]

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

[2]

Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2023

Earnings per share:

Computation of earnings per share

Computation of earnings per share
	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(In thousands)				(In thousands)

Weighted average number of common shares outstanding during the period used to compute basic earnings per share		20,866		21,370		20,643		21,296

Incremental common shares attributable to exercise of outstanding options and warrants		4,507		6,317		4,741		6,647

Weighted average number of common shares used to compute diluted earnings per share		25,373		27,687		25,384		27,943

Earnings Per Share (Details - Earnings Per Share) - shares shares in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Earnings per share:
Weighted average number of common shares outstanding during the period used to compute basic earnings per share	20,866	21,370	20,643	21,296
Incremental common shares attributable to exercise of outstanding options and warrants	4,507	6,317	4,741	6,647
Weighted average number of common shares used to compute diluted earnings per share	25,373	27,687	25,384	27,943

Finance Receivables (Details - Charge-Offs for Financed Receivables) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Financing Receivable, Past Due [Line Items]
Charge-offs	$ 1,897	$ 4,446	$ 4,914	$ 9,805
Vintage Pool 2014 [Member]
Financing Receivable, Past Due [Line Items]
Charge-offs	67	243	208	535
Vintage Pool 2015 [Member]
Financing Receivable, Past Due [Line Items]
Charge-offs	297	653	741	1,742
Vintage Pool 2016 [Member]
Financing Receivable, Past Due [Line Items]
Charge-offs	713	1,514	2,034	3,539
Vintage Pool 2017 [Member]
Financing Receivable, Past Due [Line Items]
Charge-offs	1,230	2,131	2,732	4,303
Charged Against Repos In Inventory [Member]
Financing Receivable, Past Due [Line Items]
Charge-Offs for financed receivables applied	$ (410)	$ (95)	$ (801)	$ (314)

Finance Receivables (Details - Repossessed inventory) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2023	Dec. 31, 2022
Finance Receivables
Gross balance of repossessions in inventory	$ 1,003	$ 1,894
Allowance for losses on repossessed inventory	(655)	(1,323)
Net repossessed inventory included in other assets	$ 348	$ 571

Summary of Significant Accounting Policies (Details - Cash flow) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$ 1,441	$ 1,907	$ 2,771	$ 3,965
Operating cash flows from finance leases	23	245	122	527
Financing cash flows from finance leases	$ 2	$ 12	$ 4	$ 28

Summary of Significant Accounting Policies (Details - Supplemental balance sheet information related to leases) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Operating Leases
Operating lease right-of-use assets	$ 29,575	$ 28,397
Less: Accumulated amortization right-of-use assets	(24,649)	(22,613)
Operating lease right-of-use assets, net	4,926	5,784
Operating lease liabilities	(5,271)	(6,234)
Finance Leases
Property and equipment, at cost	3,454	3,407
Less: Accumulated depreciation	(3,357)	(3,301)
Property and equipment, net	97	106
Finance lease liabilities	$ (102)	$ (177)
Operating Lease, Weighted Average Discount Rate, Percent	5.00%	5.00%
Finance Lease, Weighted Average Discount Rate, Percent	6.50%	6.50%

Summary of Significant Accounting Policies (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Stock-based compensation	$ 905,000	$ 728,000	$ 1,800,000	$ 1,500,000
Unrecognized stock-based compensation costs	7,600,000		$ 7,600,000
Weighted-average period for unrecognized costs			2 years
Intrinsic value options outstanding	55,100,000		$ 55,100,000
Intrinsic value of options exercisable	$ 41,800,000		41,800,000
Intrinsic value of options exercised			$ 13,300,000	$ 12,200,000
Shares available for grant	2,661,000		2,661,000
Options Exercised [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Options exercised			2,800,000	2,900,000

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
ASSETS
Cash and cash equivalents	$ 7,081	$ 13,490
Restricted cash and equivalents	148,063	149,299
Finance receivables measured at fair value	2,618,420	2,476,617
Finance receivables	52,080	92,304
Less: Allowance for finance credit losses	(5,721)	(21,753)
Finance receivables, net	46,359	70,551
Furniture and equipment, net	1,284	1,660
Deferred tax assets, net	7,367	10,177
Other assets	25,304	30,974
Total Assets	2,853,878	2,752,768
Liabilities
Accounts payable and accrued expenses	57,384	55,421
Warehouse lines of credit	245,272	285,328
Residual interest financing	49,749	49,623
Securitization trust debt	2,225,072	2,108,744
Subordinated renewable notes	21,204	25,263
Total liabilities	2,598,681	2,524,379
COMMITMENTS AND CONTINGENCIES
Shareholders' Equity
Common stock, no par value; authorized 75,000,000 shares; 21,151,966 and 20,131,323 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively	27,937	28,906
Retained earnings	230,291	202,514
Accumulated other comprehensive loss	(3,031)	(3,031)
Total stockholders’ equity	255,197	228,389
Total liability and stockholder’ equity	2,853,878	2,752,768
Preferred Stock [Member]
Shareholders' Equity
Preferred Stock, Value, Issued	0	0
Series A Preferred Stock [Member]
Shareholders' Equity
Preferred Stock, Value, Issued	0	0
Series B Preferred Stock [Member]
Shareholders' Equity
Preferred Stock, Value, Issued	$ 0	$ 0

Earnings Per Share

6 Months Ended

Jun. 30, 2023

Earnings per share:

Earnings Per Share

(6) Earnings Per Share

Earnings per share for the three-month and six-month periods ended June 30, 2023 and 2022 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 and six-month periods ended June 30, 2023 and 2022:

Computation of earnings per share
	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(In thousands)				(In thousands)

Weighted average number of common shares outstanding during the period used to compute basic earnings per share		20,866		21,370		20,643		21,296

Incremental common shares attributable to exercise of outstanding options and warrants		4,507		6,317		4,741		6,647

Weighted average number of common shares used to compute diluted earnings per share		25,373		27,687		25,384		27,943

If the anti-dilutive effects of common stock equivalents were considered, shares included in the diluted earnings per share calculation for the three-month and six-month periods ended June 30, 2023 would have included an additional 1.5 million and 1.5 million shares, respectively, attributable to the exercise of outstanding options and warrants. For the three-month and six-month periods ended June 30, 2022, 824,000 and 692,000 shares, respectively, would be included in the diluted earnings per share calculation.

Legal Proceedings (Details Narrative) $ in Thousands	Jun. 30, 2023 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Probably losses for legal contingencies	$ 3,800
Maximum possible losses for legal proceedings and contingencies	$ 7,300

Finance Receivables (Tables)

6 Months Ended

Jun. 30, 2023

Finance Receivables

Schedule of delinquency status of finance receivables


	June 30,		December 31,
	2023		2022
	(In thousands)
Deliquency Status
Current	$	37,553	$	65,764
31 - 60 days		9,100		16,796
61 - 90 days		4,339		7,756
91 + days		1,088		1,988
	$	52,080	$	92,304

Schedule of amortized cost basis of finance receivables


	June 30,		December 31,
	2023		2022
	(In thousands)
Annual Vintage Pool
2014 and prior	$	876	$	1,865
2015		4,019		8,627
2016		15,609		28,632
2017		31,576		53,180
	$	52,080	$	92,304

Schedule of allowance for finance credit losses


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2023			2022			2023			2022
	(In thousands)						(In thousands)
Balance at beginning of period	$	14,728		$	45,001		$	21,753		$	56,206
Provision for credit losses on finance receivables		(9,700	)		(8,000	)		(18,700	)		(17,400	)
Charge-offs		(1,897	)		(4,446	)		(4,914	)		(9,805	)
Recoveries		2,590			3,117			7,582			6,671
Balance at end of period	$	5,721		$	35,672		$	5,721		$	35,672

Schedule of charge-offs for financed receivables


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2023			2022			2023			2022
Annual Vintage Pool	(In thousands)						(In thousands)
2014 and prior	$	67		$	243		$	208		$	535
2015		297			653			741			1,742
2016		713			1,514			2,034			3,539
2017		1,230			2,131			2,732			4,303
Applied against repos in inventory (net)		(410	)		(95	)		(801	)		(314	)
	$	1,897		$	4,446		$	4,914		$	9,805

Schedule of allowance for losses on repossessed inventory


	June 30,			December 31,
	2023			2022
	(In thousands)
Gross balance of repossessions in inventory	$	1,003		$	1,894
Allowance for losses on repossessed inventory		(655	)		(1,323	)
Net repossessed inventory included in other assets	$	348		$	571

Interest Income and Interest Expense (Details - Interest income) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Interest on finance receivables	$ 4,378	$ 9,832	$ 9,040	$ 21,146
Interest on finance receivables at fair value	76,735	65,730	150,793	124,470
Other interest income	1,524	108	2,866	114
Interest income	$ 82,637	$ 75,670	$ 162,699	$ 145,730

Summary of Significant Accounting Policies (Details - Maturities of lease liabilities) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Lease Liability	$ 5,271	$ 6,234
Lease Liability	102	$ 177
Operating Lease [Member]
2023	2,775
2024	1,787
2025	737
2026	455
2027	452
Thereafter	565
Total undiscounted lease payments	6,771
Less amounts representing interest	(1,500)
Lease Liability	5,271
Finance Lease [Member]
2023	30
2024	37
2025	20
2026	11
2027	11
Thereafter	1
Total undiscounted lease payments	110
Less amounts representing interest	(8)
Lease Liability	$ 102

Debt (Details - Debt outstanding) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
Debt (Details - Debt outstanding) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Line of Credit Facility [Line Items]
Warehouse lines of credit	$ 245,272	$ 285,328
Residual interest financing	49,749	49,623
Subordinated renewable notes	21,204	25,263
Total debt outstanding	$ 318,051	$ 363,141
Subordinated renewable notes [Member]
Line of Credit Facility [Line Items]
Maturity date description	April 2025	October 2024
Warehouse Lines Of Credit 1 [Member]
Line of Credit Facility [Line Items]
Interest rate	3.00% over one month Libor (Minimum 3.75%) 8.38% and 7.48% at June 30, 2023 and December 31, 2022, respectively
Maturity date description	July 2024
Warehouse lines of credit	$ 144,949	$ 150,293
Warehouse Lines Of Credit 2 [Member]
Line of Credit Facility [Line Items]
Interest rate	4.15% over a commercial paper rate (Minimum 5.15%) 9.41% and 8.60% at June 30, 2023, and December 31, 2022, respectively
Maturity date description	January 2024
Warehouse lines of credit	$ 101,898	137,585
Residual interest financing [Member]
Line of Credit Facility [Line Items]
Maturity date description	June 2026
Interest rate	7.86%
Residual interest financing	$ 50,000	50,000
Subordinated renewable notes [Member]
Line of Credit Facility [Line Items]
Interest rate	Weighted average rate of 7.98% and 7.82% at June 30, 2023 and December 31, 2022, respectively
Subordinated renewable notes	$ 21,204	$ 25,263

Legal Proceedings

6 Months Ended

Jun. 30, 2023

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.

Following our filing of a complaint for a deficiency judgment in the Superior Court at Waterbury, Connecticut, the defendant filed a cross-claim alleging that our deficiency notices were not compliant with Connecticut law, and seeking relief on behalf of a class of Connecticut obligors whose vehicles we had repossessed. The defendant’s contract provided for resolution of disputes exclusively by arbitration, and exclusively on an individual basis, not a class basis. Nevertheless, in August 2021, the court denied our motion to compel arbitration, without opinion. In April 2022, a motion for certification of a class was filed but has not been ruled upon. It is reasonable to expect that resolution of these claims will be on a class basis.

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. We believe that our compensation practices with respect to our sales representatives are compliant with applicable law. In August 2023, the parties settled by agreement the claims of the plaintiff and a California settlement class and the settlement remains subject to final court approval.

Massachusetts Civil Investigative Demand. In September 2021, we received a civil investigative demand from the Office of the Attorney General of the Commonwealth of Massachusetts relating to the Company’s communications with and repossession notices sent to Massachusetts customers. We are cooperating with the inquiry.

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 June 30, 2023, our best estimate of probable incurred losses for legal contingencies, including the matters identified 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 June 30, 2023 is $3.8 million, and that the range of reasonably possible losses for the legal proceedings and contingencies we face, including those described or identified above, as of June 30, 2023 does not exceed $7.3 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.

Debt (Details Narrative) - USD ($)	6 Months Ended
Debt (Details Narrative) - USD ($)	Jun. 30, 2023	Dec. 31, 2022	Jul. 15, 2022	Jun. 28, 2022
Warehouse Lines Of Credit [Member]
Short-Term Debt [Line Items]
Unamortized debt issuance costs	$ 251,000	$ 377,000
Warehouse Lines Of Credit 5 [Member]
Short-Term Debt [Line Items]
Unamortized debt issuance costs	1,600,000	$ 2,600,000
Agent Services L P [Member]
Short-Term Debt [Line Items]
Line of credit outstanding facility amount	144,900,000
Agent Services L P [Member] \| Minimum [Member]
Short-Term Debt [Line Items]
Line of credit maximum amount				$ 100,000,000
Agent Services L P [Member] \| Maximum [Member]
Short-Term Debt [Line Items]
Line of credit maximum amount				$ 200,000,000
Citibank N A [Member]
Short-Term Debt [Line Items]
Line of credit outstanding facility amount	$ 101,900,000
Citibank N A [Member] \| Minimum [Member]
Short-Term Debt [Line Items]
Line of credit maximum amount			$ 100,000,000
Citibank N A [Member] \| Maximum [Member]
Short-Term Debt [Line Items]
Line of credit maximum amount			$ 200,000,000

Finance Receivables (Details - Amortized Cost Basis) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Financing Receivable, Past Due [Line Items]
Amortized cost basis	$ 52,080	$ 92,304
Vintage Pool 2014 [Member]
Financing Receivable, Past Due [Line Items]
Amortized cost basis	876	1,865
Vintage Pool 2015 [Member]
Financing Receivable, Past Due [Line Items]
Amortized cost basis	4,019	8,627
Vintage Pool 2016 [Member]
Financing Receivable, Past Due [Line Items]
Amortized cost basis	15,609	28,632
Vintage Pool 2017 [Member]
Financing Receivable, Past Due [Line Items]
Amortized cost basis	$ 31,576	$ 53,180

Finance Receivables

6 Months Ended

Jun. 30, 2023

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.

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. Automobile finance receivables, net of unearned interest was $52.1 million and $92.3 million as of June 30, 2023 and December 31, 2022, respectively. The following table summarizes the delinquency status of finance receivables as of June 30, 2023 and December 31, 2022:


	June 30,		December 31,
	2023		2022
	(In thousands)
Deliquency Status
Current	$	37,553	$	65,764
31 - 60 days		9,100		16,796
61 - 90 days		4,339		7,756
91 + days		1,088		1,988
	$	52,080	$	92,304

Finance receivables totaling $1.1 million and $2.0 million at June 30, 2023 and December 31, 2022, 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. For the pools in the relevant historical period, we consider each pool’s performance from its inception through the end of the current period. 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 effect of such factors into our estimates.

The following table presents the amortized cost basis of our finance receivables by annual vintage as of June 30, 2023 and December 31, 2022.


	June 30,		December 31,
	2023		2022
	(In thousands)
Annual Vintage Pool
2014 and prior	$	876	$	1,865
2015		4,019		8,627
2016		15,609		28,632
2017		31,576		53,180
	$	52,080	$	92,304

The following table presents a summary of the activity for the allowance for finance credit losses for the three-month periods ended June 30, 2023 and 2022:


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2023			2022			2023			2022
	(In thousands)						(In thousands)
Balance at beginning of period	$	14,728		$	45,001		$	21,753		$	56,206
Provision for credit losses on finance receivables		(9,700	)		(8,000	)		(18,700	)		(17,400	)
Charge-offs		(1,897	)		(4,446	)		(4,914	)		(9,805	)
Recoveries		2,590			3,117			7,582			6,671
Balance at end of period	$	5,721		$	35,672		$	5,721		$	35,672

The following table presents the gross charge-offs by year of origination of our finance receivables for the three-month and six-month ended June 30, 2023 and 2022:


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2023			2022			2023			2022
Annual Vintage Pool	(In thousands)						(In thousands)
2014 and prior	$	67		$	243		$	208		$	535
2015		297			653			741			1,742
2016		713			1,514			2,034			3,539
2017		1,230			2,131			2,732			4,303
Applied against repos in inventory (net)		(410	)		(95	)		(801	)		(314	)
	$	1,897		$	4,446		$	4,914		$	9,805

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:


	June 30,			December 31,
	2023			2022
	(In thousands)
Gross balance of repossessions in inventory	$	1,003		$	1,894
Allowance for losses on repossessed inventory		(655	)		(1,323	)
Net repossessed inventory included in other assets	$	348		$	571

Securitization Trust Debt (Tables)

6 Months Ended

Jun. 30, 2023

Securitization Trust Debt

Schedule of Long-term Debt Instruments

Schedule of Long-term Debt Instruments
Series	Final Scheduled Payment Date (1)	Receivables Pledged at June 30, 2023 (2)		Initial Principal		Outstanding Principal at June 30, 2023		Outstanding Principal at December 31, 2022		Weighted Average Contractual Debt Interest Rate at June 30, 2023
	(Dollars in thousands)
CPS 2018-A	March 2025	$	–	$	190,000	$	–	$	12,939		–
CPS 2018-B	December 2024		–		201,823		–		17,077		–
CPS 2018-C	September 2025		–		230,275		–		20,222		6.07%
CPS 2018-D	June 2025		20,498		233,730		16,011		25,563		5.82%
CPS 2019-A	March 2026		26,513		254,400		21,680		32,898		5.73%
CPS 2019-B	June 2026		28,679		228,275		24,730		33,897		5.56%
CPS 2019-C	September 2026		34,151		243,513		30,129		41,515		4.55%
CPS 2019-D	December 2026		45,068		274,313		39,936		53,625		3.86%
CPS 2020-A	March 2027		42,267		260,000		38,057		52,705		4.18%
CPS 2020-B	June 2027		48,747		202,343		31,860		41,736		6.36%
CPS 2020-C	November 2027		66,427		252,200		56,227		72,894		3.45%
CPS 2021-A	March 2028		70,683		230,545		51,064		72,076		1.49%
CPS 2021-B	June 2028		89,355		240,000		76,336		101,206		2.01%
CPS 2021-C	September 2028		131,240		291,000		113,606		147,593		1.70%
CPS 2021-D	December 2028		178,689		349,202		162,778		209,277		2.00%
CPS 2022-A	April 2029		196,998		316,800		176,857		222,613		2.29%
CPS 2022-B	October 2029		295,399		395,600		266,669		325,907		4.28%
CPS 2022-C	April 2030		332,262		391,600		285,595		346,714		5.34%
CPS 2022-D	June 2030		278,221		307,018		250,805		292,461		7.45%
CPS 2023-A	August 2030		196,998		324,768		281,081		–		6.13%
CPS 2023-B	November 2030		295,399		332,885		316,192		–		6.46%
		$	2,377,595	$	5,750,290	$	2,239,614	$	2,122,919

_________________

(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://www.xbrl.org/2003/role/exampleRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 55
-Paragraph 69B
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481568/470-20-55-69B

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 55
-Paragraph 69E
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481568/470-20-55-69E

Reference 3: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 3
-Subparagraph (SX 210.12-04(a))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-3

Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 2
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482925/835-30-45-2

Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 1A
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482925/835-30-45-1A

Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 3
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-3

Reference 7: http://fasb.org/us-gaap/role/ref/legacyRef
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
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+ Details

Finance Receivables (Details - Delinquency status) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Financing Receivable, Past Due [Line Items]
Finance receivables	$ 52,080	$ 92,304
Financial Asset, 1 to 29 Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Finance receivables	37,553	65,764
Financial Asset, 30 to 59 Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Finance receivables	9,100	16,796
Financial Asset, 60 to 89 Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Finance receivables	4,339	7,756
Financial Asset, Equal to or Greater than 90 Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Finance receivables	$ 1,088	$ 1,988

- Definition

Amortized cost, before allowance for credit loss, of financing receivable. Excludes financing receivable covered under loss sharing agreement and net investment in lease.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Topic 326
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+ Details

Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

Schedule of other income

Schedule of other income
	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
	(In thousands)				(In thousands)
Origination and servicing fees from third party receivables	$	1,924	$	1,408	$	4,661	$	2,252
Direct mail revenues		–		–		–		774
Sales tax refunds		264		159		524		303
Other		33		81		74		225
Other income for the period	$	2,221	$	1,648	$	5,259	$	3,554

Supplemental balance sheet information related to leases


	June 30,			December 31,
	2023			2022
	(In thousands)

Operating Leases
Operating lease right-of-use assets	$	29,575		$	28,397
Less: Accumulated amortization right-of-use assets		(24,649	)		(22,613	)
Operating lease right-of-use assets, net	$	4,926		$	5,784

Operating lease liabilities	$	(5,271	)	$	(6,234	)

Finance Leases
Property and equipment, at cost	$	3,454		$	3,407
Less: Accumulated depreciation		(3,357	)		(3,301	)
Property and equipment, net	$	97		$	106

Finance lease liabilities	$	(102	)	$	(177	)

Schedule of maturities of lease liabilities


(In thousands)	Operating			Finance
Year Ending June 30,	Lease			Lease
2023	$	2,775		$	30
2024		1,787			37
2025		737			20
2026		455			11
2027		452			11
Thereafter		565			1
Total undiscounted lease payments		6,771			110
Less amounts representing interest		(1,500	)		(8	)
Lease Liability	$	5,271		$	102

Lease information

Lease information
	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
	(In thousands)				(In thousands)
Operating lease cost	$	1,411	$	1,760	$	2,771	$	3,630
Finance lease cost		24		257		125		555
Total lease cost	$	1,435	$	2,017	$	2,896	$	4,185

Supplemental cash flow information related to leases


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
	(In thousands)				(In thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,441	$	1,907	$	2,771	$	3,965
Operating cash flows from finance leases		23		245		122		527
Financing cash flows from finance leases		2		12		4		28

Schedule of option activity

Schedule of option activity
						Weighted
	Number of			Weighted		Average
	Shares			Average		Remaining
	(in thousands)			Exercise Price		Contractual Term
Options outstanding at the beginning of period		11,167		$	5.21	N/A
Granted		–			–	N/A
Exercised		(2,805	)		5.59	N/A
Forfeited		–			–	N/A
Options outstanding at the end of period		8,362		$	5.09	3.61 years

Options exercisable at the end of period		5,675		$	4.31	2.94 years

Schedule of stock options outstanding and exercisable


	Number of shares as of				Number of shares as of
	June 30, 2023				December 31, 2022
	Outstanding		Exercisable		Outstanding		Exercisable
Range of exercise prices:	(In thousands)				(In thousands)
$2.00 - $2.99		1,440		1,105		1,445		775
$3.00 - $3.99		2,543		2,253		3,785		3,495
$4.00 - $4.99		2,669		1,732		2,739		1,802
$5.00 - $5.99		–		–		–		–
$6.00 - $6.99		–		–		740		740
$7.00 - $7.99		–		–		748		748
$10.00 - $10.99		1,710		585		1,710		210
Total shares		8,362		5,675		11,167		7,770

Schedule of purchases of company stock

Schedule of purchases of company stock
	Six Months Ended
	June 30, 2023				June 30, 2022
	Shares		Avg. Price		Shares		Avg. Price
Open market purchases		564,202	$	10.36		1,938,637	$	11.42
Shares redeemed upon net exercise of stock options		1,220,044		10.34		893,153		13.56
Total stock purchases		1,784,246	$	10.35		2,831,790	$	12.09

Summary of Significant Accounting Policies (Details - Other income) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Other Operating Income	$ 2,221	$ 1,648	$ 5,259	$ 3,554
Origination And Servicing Fees [Member]
Other Operating Income	1,924	1,408	4,661	2,252
Direct Mail Revenues [Member]
Other Operating Income	0	0	0	774
Sales Tax Refunds [Member]
Other Operating Income	264	159	524	303
Other Income [Member]
Other Operating Income	$ 33	$ 81	$ 74	$ 225

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Income Statement [Abstract]
Net income	$ 13,954	$ 25,320	$ 27,777	$ 46,435
Other comprehensive income/(loss); change in funded status of pension plan	0	0	0	0
Comprehensive income	$ 13,954	$ 25,320	$ 27,777	$ 46,435

- 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

+ Details

Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2023

Fair Value Disclosures [Abstract]

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

Schedule of reconciliation of the finance receivables measured at fair value on a recurring basis
	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2023			2022			2023			2022
	(In thousands)						(In thousands)
Balance at beginning of period	$	2,575,117		$	1,903,857		$	2,476,617		$	1,749,098
Finance receivables at fair value acquired during period		305,450			511,068			658,048			904,475
Payments received on finance receivables at fair value		(215,314	)		(215,930	)		(421,940	)		(425,774	)
Net interest income accretion on fair value receivables		(46,833	)		(29,562	)		(94,305	)		(60,766	)
Mark to fair value		–			4,700			–			7,100
Balance at end of period	$	2,618,420		$	2,174,133		$	2,618,420		$	2,174,133

Finance receivables fair and contractual balances

June 30, 2023

December 31, 2022

Contractual

Fair

Contractual

Fair

Balance

Value

Balance

Value

(In thousands)

Finance receivables measured at fair value

2,857,205

2,618,420

2,701,184

2,476,617

Schedule of level 3 fair value measurements

Schedule of level 3 fair value measurements
Financial Instrument	Fair Values as of					Inputs as of
	June 30,		December 31,			June 30,	December 31,
	2023		2022		Unobservable	2023	2022
	(In thousands)
Assets:
Finance receivables measured at fair value	$	2,618,420	$	2,476,617	Discount rate	11.0% - 11.5%	11.0% - 11.3%
					Cumulative net losses	10.0% - 21.5%	13.4% - 19.4%

Schedule of delinquency status of finance receivables measured at fair value

Schedule of delinquency status of finance receivables measured at fair value
	June 30,		December 31,
	2023		2022
	(In thousands)
Delinquency Status
Current	$	2,531,445	$	2,375,271
31 - 60 days		180,284		184,968
61 - 90 days		74,963		72,390
91 + days		28,619		29,048
Repo		41,894		39,507
	$	2,857,205	$	2,701,184

Schedule of estimated fair values of financial assets and liabilities

Schedule of estimated fair values of financial assets and liabilities
	As of June 30, 2023
Financial Instrument	(In thousands)
	Carrying		Fair Value Measurements Using:
	Value		Level 1		Level 2		Level 3		Total
Assets:
Cash and cash equivalents	$	7,081	$	7,081	$	–	$	–	$	7,081
Restricted cash and equivalents		148,063		148,063		–		–		148,063
Finance receivables, net		46,359		–		–		42,495		42,495
Accrued interest receivable		93		–		–		93		93
Liabilities:
Warehouse lines of credit	$	245,272	$	–	$	–	$	245,272	$	245,272
Residual interest financing		49,749						49,749		49,749
Accrued interest payable		7,243		–		–		7,243		7,243
Securitization trust debt		2,225,072		–		–		2,137,162		2,137,162
Subordinated renewable notes		21,204		–		–		21,204		21,204


	As of December 31, 2022
Financial Instrument	(In thousands)
	Carrying		Fair Value Measurements Using:
	Value		Level 1		Level 2		Level 3		Total
Assets:
Cash and cash equivalents	$	13,490	$	13,490	$	–	$	–	$	13,490
Restricted cash and equivalents		149,299		149,299		–		–		149,299
Finance receivables, net		70,551		–		–		60,063		60,063
Accrued interest receivable		649		–		–		649		649
Liabilities:
Warehouse lines of credit	$	285,328	$	–	$	–	$	285,328	$	285,328
Accrued interest payable		6,190		–		–		6,190		6,190
Securitization trust debt		2,108,744		–		–		1,957,995		1,957,995
Subordinated renewable notes		25,263		–		–		25,263		25,263

Cover - shares	6 Months Ended
Cover - shares	Jun. 30, 2023	Aug. 03, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Jun. 30, 2023
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2023
Current Fiscal Year End Date	--12-31
Entity File Number	1-11416
Entity Registrant Name	CONSUMER PORTFOLIO SERVICES, INC.
Entity Central Index Key	0000889609
Entity Tax Identification Number	33-0459135
Entity Incorporation, State or Country Code	CA
Entity Address, Address Line One	3800 Howard Hughes Parkway
Entity Address, Address Line Two	Suite 1400
Entity Address, City or Town	Las Vegas
Entity Address, State or Province	NV
Entity Address, Postal Zip Code	89169
City Area Code	(949)
Local Phone Number	753-6800
Title of 12(b) Security	Common Stock, no par value
Trading Symbol	CPSS
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		21,164,580

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jun. 30, 2023	Dec. 31, 2022
Preferred stock, par value (in dollars per share)	$ 1	$ 1
Preferred stock, authorized	4,998,130	4,998,130
Preferred stock, issued	0	0
Common stock, no par value (in dollars per share)	$ 0	$ 0
Common Stock, Shares Authorized	75,000,000	75,000,000
Common Stock, Shares, Issued	21,151,966	20,131,323
Common Stock, Shares, Outstanding	21,151,966	20,131,323
Series A Preferred Stock [Member]
Preferred stock, par value (in dollars per share)	$ 1	$ 1
Preferred stock, authorized	5,000,000	5,000,000
Preferred stock, issued	0	0
Series B Preferred Stock [Member]
Preferred stock, par value (in dollars per share)	$ 1	$ 1
Preferred stock, authorized	1,870	1,870
Preferred stock, issued	0	0

Summary of Significant Accounting Policies (Details - Stock purchases) - Common Stock [Member] - $ / shares	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Equity, Class of Treasury Stock [Line Items]
Total stock purchases, shares	1,784,246	2,831,790
Total stock purchases, average price per share	$ 10.35	$ 12.09
Open Market Purchases [Member]
Equity, Class of Treasury Stock [Line Items]
Total stock purchases, shares	564,202	1,938,637
Total stock purchases, average price per share	$ 10.36	$ 11.42
Shares Redeemed [Member]
Equity, Class of Treasury Stock [Line Items]
Total stock purchases, shares	1,220,044	893,153
Total stock purchases, average price per share	$ 10.34	$ 13.56

- Definition

+ References + Details

Earnings Per Share (Details Narrative) - shares	3 Months Ended		6 Months Ended
Earnings Per Share (Details Narrative) - shares	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Earnings per share:
Antidilutive shares	1,500,000	824,000	1,500,000	692,000

Fair Value Measurements (Details - Level 3 Fair Value Measurements) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2023	Dec. 31, 2022	Mar. 31, 2023	Jun. 30, 2022	Mar. 31, 2022	Dec. 31, 2021
Fair Value Disclosures [Abstract]
Receivables, Fair Value Disclosure	$ 2,618,420	$ 2,476,617	$ 2,575,117	$ 2,174,133	$ 1,903,857	$ 1,749,098
Discount Rate on Finance Receivables	11.0% - 11.5%	11.0% - 11.3%
Cumulative Net Losses (Percent) on Finance Receivables	10.0% - 21.5%	13.4% - 19.4%

Subsequent Events

6 Months Ended

Jun. 30, 2023

Subsequent Events [Abstract]

Subsequent Events

(10) Subsequent Events

On July 25, 2023 we executed our third securitization of 2023. In the transaction, qualified institutional buyers purchased $291.7 million of asset-backed notes secured by $312.7 million in automobile receivables originated by CPS. The sold notes, issued by CPS Auto Receivables Trust 2023-C, consist of five classes. Ratings of the notes were provided by Standard & Poor’s and DBRS Morningstar, and were based on the structure of the transaction, the historical performance of similar receivables and CPS’s experience as a servicer. The weighted average yield on the notes is approximately 7.13%.

The 2023-C transaction has initial credit enhancement consisting of a cash deposit equal to 1.00% of the original receivable pool balance and overcollateralization of 6.70%. The transaction agreements require accelerated payment of principal on the notes to reach overcollateralization of the lesser of 9.70% of the original receivable pool balance, or 21.50% of the then outstanding pool balance. The transaction was a private offering of securities, not registered under the Securities Act of 1933, or any state securities law.