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CPS Announces First Quarter 2024 Earnings

Consumer Portfolio Services, Inc.
Consumer Portfolio Services, Inc.
  • Revenues of $91.7 million compared to $83.1 million in the prior year period

  • Pretax income of $6.6 million

  • Net income of $4.6 million, or $0.19 per diluted share

  • New contract purchases of $346.3 million

LAS VEGAS, NV, May 10, 2024 (GLOBE NEWSWIRE) -- Consumer Portfolio Services, Inc. (Nasdaq: CPSS) (“CPS” or the “Company”) today announced earnings of $4.6 million, or $0.19 per diluted share, for its first quarter ended March 31, 2024. This compares to a net income of $13.8 million, or $0.54 per diluted share, in the first quarter of 2023.

Revenues for the first quarter of 2024 were $91.7 million, an increase of $8.6 million, or 10.4%, compared to $83.1 million for the first quarter of 2023. Total operating expenses for the first quarter of 2024 were $85.2 million compared to $64.7 million for the 2023 period. Pretax income for the first quarter of 2024 was $6.6 million compared to pretax income of $18.4 million in the first quarter of 2023.

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During the first quarter of 2024, CPS purchased $346.3 million of new contracts compared to $301.8 million during the fourth quarter of 2023 and $415.2 million during the first quarter of 2023. The Company's receivables totaled $3.021 billion as of March 31, 2024, an increase from $2.970 billion as of December 31, 2023 and an increase from $2.882 billion as of March 31, 2023.

Annualized net charge-offs for the first quarter of 2024 were 7.84% of the average portfolio as compared to 5.20% for the first quarter of 2023. Delinquencies greater than 30 days (including repossession inventory) were 12.39% of the total portfolio as of March 31, 2024, as compared to 9.92% as of March 31, 2023.

"Our increasing origination volumes are showing themselves in the form of revenue increases year over year,” said Charles E. Bradley Jr., Chief Executive Officer. “Despite the persistent inflationary pressures on our margins, we stand poised to continue our growth, with a focus on efficiently servicing our portfolio as it grows to new highs.”

Conference Call

CPS announced that it will hold a conference call on May 14, 2024 at 1:00 p.m. ET to discuss its first quarter 2024 operating results.

Those wishing to participate can pre-register for the conference call at the following link https://register.vevent.com/register/BIb847966685a54a42ad3f147d8676d40d. 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

 

 

 

 

March 31,

 

 

 

 

 

2024

 

 

 

 

 

2023

 

 

 

Revenues:

 

 

 

 

 

 

 

Interest income

 

 

$

84,288

 

 

 

 

$

80,062

 

 

 

Mark to finance receivables measured at fair value

 

5,000

 

 

 

 

 

-

 

 

 

Other income

 

 

 

2,456

 

 

 

 

 

3,038

 

 

 

 

 

 

 

91,744

 

 

 

 

 

83,100

 

 

 

Expenses:

 

 

 

 

 

 

 

Employee costs

 

 

 

24,416

 

 

 

 

 

22,033

 

 

 

General and administrative

 

 

 

13,753

 

 

 

 

 

11,396

 

 

 

Interest

 

 

 

41,968

 

 

 

 

 

32,759

 

 

 

Provision for credit losses

 

 

 

(1,635

)

 

 

 

 

(9,000

)

 

 

Other expenses

 

 

 

6,685

 

 

 

 

 

7,481

 

 

 

 

 

 

 

85,187

 

 

 

 

 

64,669

 

 

 

Income before income taxes

 

 

 

6,557

 

 

 

 

 

18,431

 

 

 

Income tax expense

 

 

 

1,967

 

 

 

 

 

4,608

 

 

 

Net income

 

 

$

4,590

 

 

 

 

$

13,823

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

Basic

 

 

$

0.22

 

 

 

 

$

0.68

 

 

 

Diluted

 

 

$

0.19

 

 

 

 

$

0.54

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of shares used in computing earnings

 

 

 

 

 

 

 

per share:

 

 

 

 

 

 

 

Basic

 

 

 

21,143

 

 

 

 

 

20,418

 

 

 

Diluted

 

 

 

24,602

 

 

 

 

 

25,392

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31,

 

 

December 31,

 

 

 

 

 

2024

 

 

2023

 

Assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

$

13,249

 

 

 

 

$

6,174

 

 

 

Restricted cash and equivalents

 

 

 

137,706

 

 

 

 

 

119,257

 

 

 

Finance receivables measured at fair value

 

 

 

2,791,373

 

 

 

 

 

2,722,662

 

 

 

 

 

 

 

 

 

 

 

Finance receivables

 

 

 

18,781

 

 

 

 

 

27,553

 

 

 

Allowance for finance credit losses

 

 

 

(1,890

)

 

 

 

 

(2,869

)

 

 

Finance receivables, net

 

 

 

16,891

 

 

 

 

 

24,684

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deferred tax assets, net

 

 

 

3,485

 

 

 

 

 

3,736

 

 

 

Other assets

 

 

 

43,822

 

 

 

 

 

27,233

 

 

 

 

 

 

$

3,006,526

 

 

 

 

$

2,903,746

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders' Equity:

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

 

$

79,122

 

 

 

 

$

62,544

 

 

 

Warehouse lines of credit

 

 

 

249,522

 

 

 

 

 

234,025

 

 

 

Residual interest financing

 

 

 

98,968

 

 

 

 

 

49,875

 

 

 

Securitization trust debt

 

 

 

2,277,676

 

 

 

 

 

2,265,446

 

 

 

Subordinated renewable notes

 

 

 

22,140

 

 

 

 

 

17,188

 

 

 

 

 

 

 

2,727,428

 

 

 

 

 

2,629,078

 

 

 

 

 

 

 

 

 

 

 

Shareholders' equity

 

 

 

279,098

 

 

 

 

 

274,668

 

 

 

 

 

 

$

3,006,526

 

 

 

 

$

2,903,746

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating and Performance Data ($ in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At and for the

 

 

 

 

Three months ended

 

 

 

 

March 31,

 

 

 

 

 

2024

 

 

 

 

 

2023

 

 

 

 

 

 

 

 

 

 

 

Contracts purchased

 

 

$

346.3

 

 

 

 

$

415.2

 

 

 

Contracts securitized

 

 

$

300.6

 

 

 

 

$

362.9

 

 

 

 

 

 

 

 

 

 

 

Total portfolio balance (1)

 

 

$

3,021.2

 

 

 

 

$

2,881.8

 

 

 

Average portfolio balance (1)

 

 

$

2,993.8

 

 

 

 

$

2,856.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Delinquencies (1)

 

 

 

 

 

 

 

31+ Days

 

 

 

9.98

%

 

 

 

 

8.26

%

 

 

Repossession Inventory

 

 

 

2.41

%

 

 

 

 

1.66

%

 

 

Total Delinquencies and Repo. Inventory

 

 

 

12.39

%

 

 

 

 

9.92

%

 

 

 

 

 

 

 

 

 

 

Annualized Net Charge-offs as % of Average Portfolio (1)

 

 

 

7.84

%

 

 

 

 

5.20

%

 

 

 

 

 

 

 

 

 

 

Recovery rates (1), (2)

 

 

 

33.3

%

 

 

 

 

41.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

For the

 

 

 

Three months ended

 

 

 

March 31,

 

 

 

 

2024

 

2023

 

 

 

$ (3)

 

 

% (4)

 

$ (3)

 

 

% (4)

Interest income

 

 

$

84.29

 

 

11.3

%

 

$

80.06

 

 

11.2

%

Mark to finance receivables measured at fair value

 

5.00

 

 

0.7

%

 

 

-

 

 

0.0

%

Other income

 

 

 

2.46

 

 

0.3

%

 

 

3.04

 

 

0.4

%

Interest expense

 

 

 

(41.97

)

 

-5.6

%

 

 

(32.76

)

 

-4.6

%

Net interest margin

 

 

 

49.78

 

 

6.7

%

 

 

50.34

 

 

7.0

%

Provision for credit losses

 

 

 

1.64

 

 

0.2

%

 

 

9.00

 

 

1.3

%

Risk adjusted margin

 

 

 

51.41

 

 

6.9

%

 

 

59.34

 

 

8.3

%

Other operating expenses (5)

 

 

 

(44.85

)

 

-6.0

%

 

 

(40.91

)

 

-5.7

%

Pre-tax income

 

 

$

6.56

 

 

0.9

%

 

$

18.43

 

 

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.