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Jul 30, 2024

CPS Announces Second Quarter 2024 Earnings
  • Revenues of $95.9 million compared to $84.9 million in the prior year period
  • Pretax income of $6.7 million
  • Net income of $4.7 million, or $0.19 per diluted share
  • New contract purchases of $431.9 million, compared to $318.4 million in the prior year period

LAS VEGAS, NV, July 30, 2024 (GLOBE NEWSWIRE) -- Consumer Portfolio Services, Inc. (Nasdaq: CPSS) (“CPS” or the “Company”) today announced earnings of $4.7 million, or $0.19 per diluted share, for its second quarter ended June 30, 2024. This compares to a net income of $14.0 million, or $0.55 per diluted share, in the second quarter of 2023.

Revenues for the second quarter of 2024 were $95.9 million, an increase of $11.0 million, or 13.0%, compared to $84.9 million for the second quarter of 2023. Total operating expenses for the second quarter of 2024 were $89.2 million compared to $66.3 million for the 2023 period. A reversal of provision for credit loss expense reduced operating expenses by $2.0 million in the second quarter of 2024 and $9.7 million in the second quarter of 2023. Pretax income for the second quarter of 2024 was $6.7 million compared to pretax income of $18.6 million in the second quarter of 2023.

For the six months ended June 30, 2024 total revenues were $187.6 million compared to $168.0 million for the six months ended June 30, 2023, an increase of approximately $19.7 million, or 11.7%. Total operating expenses for the six months ended June 30, 2024 were $174.4 million, compared to $130.9 million for the six months ended June 30, 2023. A reversal of provision for credit loss expense reduced operating expenses in the first six months of 2024 and 2023, by $3.6 million and $18.7 million, respectively. Pretax income for the six months ended June 30, 2024 was $13.2 million, compared to $37.0 million for the six months ended June 30, 2023. Net income for the six months ended June 30, 2024 was $9.3 million compared to $27.8 million for the six months ended June 30, 2023.

During the second quarter of 2024, CPS purchased $431.9 million of new contracts compared to $346.3 million during the first quarter of 2024 and $318.4 million during the second quarter of 2023. The Company's receivables totaled $3.173 billion as of June 30, 2024, an increase from $3.021 billion as of March 31, 2024 and an increase from $2.910 billion as of June 30, 2023.

Annualized net charge-offs for the second quarter of 2024 were 7.26% of the average portfolio as compared to 6.29% for the second quarter of 2023. Delinquencies greater than 30 days (including repossession inventory) were 13.29% of the total portfolio as of June 30, 2024, as compared to 11.72% as of June 30, 2023.

"During our second quarter, origination volumes outpaced last year’s second quarter by 36%, leading to the closing of our largest securitization in company history,” said Charles E. Bradley Jr., Chief Executive Officer. "We remain focused on controlled growth and improving operating efficiency."

Conference Call

CPS originally announced on July 29, 2024, that it will hold a conference call on July 31, 2024 at 1:00 p.m. ET to discuss its second quarter 2024 operating results. A modification has now been made to the start time. The call will now start at 3:00 p.m. ET. No other changes to the call were made.

Those wishing to participate can pre-register for the conference call at the following link https://register.vevent.com/register/BI5a2c5e2c2a8946a5896de7685ccf8ea1. Registered participants will receive an email containing conference call details for dial-in options. To avoid delays, we encourage participants to dial into the conference call fifteen minutes ahead of the schedule start time. A replay will be available beginning two hours after conclusion of the call for 12 months via the Company’s website at https://ir.consumerportfolio.com/investor-relations.

About Consumer Portfolio Services, Inc.

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

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

Investor Relations Contact

Danny Bharwani, Chief Financial Officer

949-753-6811



           
Consumer Portfolio Services, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
                       
    Three months ended     Six months ended
    June 30,     June 30,
      2024         2023         2024         2023  
Revenues:                      
Interest income   $ 88,367       $ 82,637       $ 172,655       $ 162,699  
Mark to finance receivables measured at fair value   5,500         -         10,500         -  
Other income     2,013         2,221         4,469         5,259  
      95,880         84,858         187,624         167,958  
Expenses:                      
Employee costs     23,725         21,147         48,141         43,180  
General and administrative     13,260         11,783         27,013         23,180  
Interest     46,710         35,706         88,678         68,465  
Provision for credit losses     (1,950 )       (9,700 )       (3,585 )       (18,700 )
Other expenses     7,463         7,318         14,148         14,798  
      89,208         66,254         174,395         130,923  
Income before income taxes     6,672         18,604         13,229         37,035  
Income tax expense     2,000         4,650         3,967         9,258  
Net income   $ 4,672       $ 13,954       $ 9,262       $ 27,777  
                       
Earnings per share:                      
Basic   $ 0.22       $ 0.67       $ 0.44       $ 1.35  
Diluted   $ 0.19       $ 0.55       $ 0.38       $ 1.09  
                       
Number of shares used in computing earnings per share:                      
Basic     21,263         20,866         21,203         20,643  
Diluted     24,263         25,373         24,433         25,384  
                       
                       
                       
Condensed Consolidated Balance Sheets          
(In thousands)          
(Unaudited)          
                       
    June 30,     December 31,              
      2024         2023              
Assets:                      
Cash and cash equivalents   $ 9,752       $ 6,174              
Restricted cash and equivalents     256,859         119,257              
Finance receivables measured at fair value     2,960,375         2,722,662              
                       
Finance receivables     12,714         27,553              
Allowance for finance credit losses     (684 )       (2,869 )            
Finance receivables, net     12,030         24,684              
                       
                       
Deferred tax assets, net     2,418         3,736              
Other assets     45,108         27,233              
    $ 3,286,542       $ 2,903,746              
                       
Liabilities and Shareholders' Equity:                      
Accounts payable and accrued expenses   $ 66,393       $ 62,544              
Warehouse lines of credit     82,175         234,025              
Residual interest financing     99,079         49,875              
Securitization trust debt     2,736,225         2,265,446              
Subordinated renewable notes     22,356         17,188              
      3,006,228         2,629,078              
                       
Shareholders' equity     280,314         274,668              
    $ 3,286,542       $ 2,903,746              
                       
                       
                       
Operating and Performance Data ($ in millions)                      
                 
    At and for the     At and for the
    Three months ended     Six months ended
    June 30,     June 30,
      2024         2023         2024         2023  
                       
Contracts purchased   $ 431.88       $ 318.39       $ 778.19       $ 733.54  
Contracts securitized   $ 657.09       $ 369.86         957.71         732.73  
                       
Total portfolio balance (1)   $ 3,173.28       $ 2,910.29       $ 3,173.28       $ 2,910.29  
Average portfolio balance (1)   $ 3,122.28       $ 2,903.99         3,058.05         2,880.29  
                       
                       
Delinquencies (1)                      
31+ Days     10.87 %       10.25 %            
Repossession Inventory     2.42 %       1.47 %            
Total Delinquencies and Repo. Inventory     13.29 %       11.72 %            
                       
Annualized Net Charge-offs as % of Average Portfolio (1)     7.26 %       6.29 %       7.55 %       5.75 %
                       
Recovery rates (1), (2)     30.9 %       43.7 %       32.1 %       42.8 %


      For the   For the
      Three months ended   Six months ended
      June 30,   June 30,
        2024       2023       2024       2023  
      $ (3)   % (4)   $ (3)   % (4)   $ (3)   % (4)   $ (3)   % (4)
Interest income     $ 88.37   11.3 %   $ 82.64   11.4 %   $ 172.66   11.3 %   $ 162.70   11.3 %
Mark to finance receivables measured at fair value   5.50   0.7 %     -   0.0 %     10.50   0.7 %     -   0.0 %
Other income       2.01   0.3 %     2.22   0.3 %     4.47   0.3 %     5.26   0.4 %
Interest expense       (46.71 ) -6.0 %     (35.71 ) -4.9 %     (88.68 ) -5.8 %     (68.47 ) -4.8 %
Net interest margin       49.17   6.3 %     49.15   6.8 %     98.95   6.5 %     99.49   6.9 %
Provision for credit losses       1.95   0.2 %     9.70   1.3 %     3.59   0.2 %     18.70   1.3 %
Risk adjusted margin       51.12   6.5 %     58.85   8.1 %     102.53   6.7 %     118.19   8.2 %
Other operating expenses (5)       (44.45 ) -5.7 %     (40.25 ) -5.5 %     (89.30 ) -5.8 %     (81.16 ) -5.6 %
Pre-tax income     $ 6.67   0.9 %   $ 18.60   2.6 %   $ 13.23   0.9 %   $ 37.04   2.6 %
                           
                           
                           
(1) Excludes third party portfolios.             
(2) Wholesale auction liquidation amounts (net of expenses) as a percentage of the account balance at the time of sale.   
(3) Numbers may not add due to rounding.             
(4) Annualized percentage of the average portfolio balance. Percentages may not add due to rounding.    
(5) Total pre-tax expenses less provision for credit losses and interest expense.       

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Source: Consumer Portfolio Services, Inc.