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CPS Announces Fourth Quarter and Full Year 2023 Earnings

  • Pretax income of $9.8 million for the fourth quarter and $61.1 million for 2023
  • Revenues of $92.0 million for the fourth quarter and $352.0 million for 2023
  • Net income of $45.3 million, or $1.80 per diluted share for 2023
  • New contract purchases of $1.358 billion for the full year 2023
  • Largest managed portfolio balance in company history, $3.2 billion

LAS VEGAS, NV, March 15, 2024 (GLOBE NEWSWIRE) -- Consumer Portfolio Services, Inc. (Nasdaq: CPSS) (“CPS” or the “Company”) today announced earnings of $7.2 million, or $0.29 per diluted share, for its fourth quarter ended December 31, 2023. This compares to a net income of $14.1 million, or $0.59 per diluted share, in the fourth quarter of 2022.

Revenues for the fourth quarter of 2023 were $92.0 million, an increase of $9 million, or 10.8%, compared to $83.0 million for the fourth quarter of 2022. Total operating expenses for the fourth quarter of 2023 were $82.1 million compared to $64.7 million for the 2022 period. Pretax income for the fourth quarter of 2023 was $9.8 million compared to pretax income of $18.3 million in the fourth quarter of 2022.

For the twelve months ended December 31, 2023 total revenues were $352.0 million compared to $329.7 million for the twelve months ended December 31, 2022, an increase of approximately $22.3 million, or 6.8%. Total expenses for the twelve months ended December 31, 2023 were $290.9 million, compared to $213.5 million for the twelve months ended December 31, 2022. Pretax income for the twelve months ended December 31, 2023 was $61.1 million, compared to $116.2 million for the twelve months ended December 31, 2022. Net income for the twelve months ended December 31, 2023 was $45.3 million, or $1.80 per diluted share. This compares to net income of $86.0 million, or $3.23 per diluted share for the twelve months ended December 31, 2022.

During the fourth quarter of 2023, CPS purchased $301.8 million of new contracts compared to $322.4 million during the third quarter of 2023 and $428.1 million during the fourth quarter of 2022. The Company's receivables totaled $2.970 billion as of December 31, 2023, an increase from $2.943 billion as of September 30, 2023 and an increase from $2.795 billion as of December 31, 2022. Including receivables we service for third parties, our total managed portfolio increased from $3.001 billion at December 31, 2022 to $3.195 billion at December 31, 2023.

Annualized net charge-offs for the fourth quarter of 2023 were 7.74% of the average portfolio as compared to 5.83% for the fourth quarter of 2022. Delinquencies greater than 30 days (including repossession inventory) were 14.55% of the total portfolio as of December 31, 2023, as compared to 12.68% as of December 31, 2022.

We reported solid results for the fourth quarter and for the full year 2023” said Charles E. Bradley Jr., Chief Executive Officer. “Strong loan originations led to continued revenue growth and brought our managed portfolio to new record high levels.”

Conference Call

CPS announced that it will hold a conference call on Monday, March 18, 2024 at 1:00 p.m. ET to discuss its fourth quarter 2023 operating results.

Those wishing to participate can pre-register for the conference call at the following link https://register.vevent.com/register/BI280eff9814e7495fb11dd11c31078155. 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  Twelve months ended 
   December 31,  December 31, 
    2023    2022    2023    2022  
Revenues:             
Interest income  $83,260   $79,690   $329,219   $305,237  
Mark to finance receivables measured at fair value 6,000    -    12,000    15,283  
Other income   2,718    3,330    10,795    9,189  
    91,978    83,020    352,014    329,709  
Expenses:             
Employee costs   23,157    20,868    88,148    84,282  
General and administrative   13,777    11,699    50,001    37,618  
Interest   40,277    28,870    146,631    87,524  
Provision for credit losses   (1,600)   (4,700)   (22,300)   (28,100) 
Other expenses   6,523    7,978    28,437    32,192  
    82,134    64,715    290,917    213,516  
Income before income taxes   9,844    18,305    61,097    116,193  
Income tax expense   2,657    4,170    15,754    30,210  
Net income  $7,187   $14,135   $45,343   $85,983  
              
Earnings per share:             
Basic  $0.34   $0.69   $2.17   $4.10  
Diluted  $0.29   $0.59   $1.80   $3.23  
              
              
Number of shares used in computing earnings             
per share:             
Basic   21,136    20,341    20,896    20,958  
Diluted   24,879    23,828    25,218    26,589  
              
              
Condensed Consolidated Balance Sheets      
(In thousands)      
(Unaudited)      
              
              
   December 31, December 31,      
    2023    2022        
Assets:             
Cash and cash equivalents  $6,174   $13,490        
Restricted cash and equivalents   119,257    149,299        
Finance receivables measured at fair value   2,722,662    2,476,617        
              
Finance receivables   27,553    92,304        
Allowance for finance credit losses   (2,869)   (21,753)       
Finance receivables, net   24,684    70,551        
              
              
Deferred tax assets, net   3,736    10,177        
Other assets   27,233    32,634        
   $2,903,746   $2,752,768        
              
Liabilities and Shareholders' Equity:             
Accounts payable and accrued expenses  $62,544   $55,421        
Warehouse lines of credit   234,025    285,328        
Residual interest financing   49,875    49,623        
Securitization trust debt   2,265,446    2,108,744        
Subordinated renewable notes   17,188    25,263        
    2,629,078    2,524,379        
              
Shareholders' equity   274,668    228,389        
   $2,903,746   $2,752,768        
              
              
              
              
              
              
              
              
Operating and Performance Data ($ in millions)             
              
           
           
   At and for the  At and for the 
   Three months ended  Twelve months ended 
   December 31,  December 31, 
    2023    2022    2023    2022  
              
Contracts purchased  $301.80   $428.08   $1,357.75   $1,854.39  
Contracts securitized   306.70    337.38    1,352.11    1,537.38  
              
Total portfolio balance (1)  $2,970.07   $2,795.38   $2,970.07   $2,795.38  
Average portfolio balance (1)   2,958.95    2,764.80    2,913.57    2,539.11  
              
              
Delinquencies (1)             
31+ Days   12.29%   11.20%       
Repossession Inventory   2.26%   1.48%       
Total Delinquencies and Repo. Inventory   14.55%   12.68%       
              
Annualized Net Charge-offs as % of Average Portfolio (1)   7.74%   5.83%   6.53%   4.53% 
              
Recovery rates (1), (2)   34.3%   43.6%   39.2%   52.3% 


   For the For the
   Three months ended Twelve months ended
   December 31, December 31,
    2023  2022  2023  2022
   $ (3)% (4) $ (3)% (4) $ (3)% (4) $ (3)% (4)
Interest income  $83.26 11.3% $79.69 11.5% $329.22 11.3% $305.24 12.0%
Mark to finance receivables measured at fair value 6.00 0.8%  - 0.0%  12.00 0.4%  15.28 0.6%
Other income   2.72 0.4%  3.33 0.5%  10.80 0.4%  9.19 0.4%
Interest expense   (40.28)-5.4%  (28.87)-4.2%  (146.63)-5.0%  (87.52)-3.4%
Net interest margin   51.70 7.0%  54.15 7.8%  205.38 7.0%  242.19 9.5%
Provision for credit losses   1.60 0.2%  4.70 0.7%  22.30 0.8%  28.10 1.1%
Risk adjusted margin   53.30 7.2%  58.85 8.5%  227.68 7.8%  270.29 10.6%
Core operating expenses   (43.46)-5.9%  (40.55)-5.9%  (166.59)-5.7%  (154.09)-6.1%
Pre-tax income  $9.84 1.3% $18.30 2.6% $61.10 2.1% $116.19 4.6%
              
              
              
(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.    


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