GlobeNewswire Inc | Feb 23, 2021 04:35PM EST

February 23, 2021

-- Pretax income of $6.5 million for the fourth quarter and $20.1 million for 2020 -- Net income of $4.1 million, or $0.17 per diluted share for the fourth quarter -- Net income of $21.7 million, or $0.90 per diluted share for 2020 -- New contract purchases of $743 million for the full year 2020

LAS VEGAS, NV, Feb. 23, 2021 (GLOBE NEWSWIRE) -- Consumer Portfolio Services, Inc. (Nasdaq: CPSS) (CPS or the Company) today announced earnings of $4.1 million, or $0.17 per diluted share, for its fourth quarter ended December 31, 2020. This compares to a net income of $29,000 in the fourth quarter of 2019.

Revenues for the fourth quarter of 2020 were $62.4 million, a decrease of $23.3 million, or 27.2%, compared to $85.7 million for the fourth quarter of 2019. Total operating expenses for the fourth quarter of 2020 were $56.0 million compared to $84.8 million for the 2019 period. Pretax income for the fourth quarter of 2020 was $6.5 million compared to pretax income of $0.9 million in the fourth quarter of 2019.

For the twelve months ended December 31, 2020 total revenues were $271.2 million compared to $345.8 million for the twelve months ended December 31, 2019, a decrease of approximately $74.6 million, or 21.6%. Total expenses for the twelve months ended December 31, 2020 were $251.0 million, a decrease of $85.6 million, or 25.4%, compared to $336.6 million for the twelve months ended December 31, 2019. Pretax income for the twelve months ended December 31, 2020 was $20.1 million, compared to $9.2 million for the twelve months ended December 31, 2019. Net income for the twelve months ended December 31, 2020 was $21.7 million, or $0.90 per diluted share. This compares to net income of $5.4 million, or $0.22 per diluted share for the twelve months ended December 31, 2019. Results for the twelve months ended December 31, 2020 include a net tax benefit of $8.8 million related to the revaluation of the Companys net operating losses and other tax adjustments. Without this tax benefit, net income and net income per diluted share for the twelve months ended December 31, 2020 would have been $12.9 million and $0.54 per share, respectively.

During the fourth quarter of 2020, CPS purchased $166.7 million of new contracts compared to $174.0 million during the third quarter of 2020 and $247.5 million during the fourth quarter of 2019. The Company's receivables totaled $2.175 billion as of December 31, 2020, a decrease from $2.250 billion as of September 30, 2020 and a decrease from $2.416 billion as of December 31, 2019.

Annualized net charge-offs for the fourth quarter of 2020 were 5.18% of the average portfolio as compared to 7.92% for the fourth quarter of 2019. Delinquencies greater than 30 days (including repossession inventory) were 12.08% of the total portfolio as of December 31, 2020, as compared to 15.46% as of December 31, 2019.

We began 2020 with the highest expectations and then adjusted to the changes brought about by the pandemic, reported Charles E. Bradley, Jr., Chairman and Chief Executive Officer. As the year unfolded, we experienced the interruption and return of the asset-backed securitization market, briefly higher delinquencies followed by improvement to even lower levels than before the pandemic, and the resilience and fortitude of our staff as we navigated work-from-home and enhanced office health protocols. We are looking forward to a return to pre-pandemic world in 2021.

Conference Call

CPS announced that it will hold a conference call on February 24, 2021, at 1:00 p.m. ET to discuss its quarterly operating results. Those wishing to participate by telephone may dial-in at 877 312-5502 or 253 237-1131 approximately 10 minutes prior to the scheduled time. The conference identification number is 3998868.

A replay of the conference call will be available between February 24, 2021 and March 3, 2021, beginning two hours after conclusion of the call, by dialing 855 859-2056 or 404 537-3406 for international participants, with conference identification number 3998868. A broadcast of the conference call will also be available live and for 90 days after the call via the Companys web site at www.consumerportfolio.com.

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 pandemic-related markdown of carrying value for the portion of its portfolio accounted for at fair value, its pandemic-related charge to the provision for credit losses for the its legacy portfolio, 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 Companys estimates of losses to be incurred in the future. The accuracy of such estimates may be adversely affected by various factors, which include (in addition to risks relating to the COVD-19 pandemic and to the economy generally) 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 Companys ability to service its portfolio; possible increases in the rate of consumer bankruptcy filings, which could adversely affect the Companys 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 Companys realization upon repossessed vehicles; and economic conditions in geographic areas in which the Company's business is concentrated. The accuracy of such estimates may also be affected by the effects of the COVID-19 pandemic and of governmental responses to said pandemic, which have included prohibitions on certain means of enforcement of receivables, and may include additional restrictions, yet unknown, in the future. Any or all such factors also may affect the Companys 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

Jeffrey P. Fritz, Chief Financial Officer844 878-2777

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, 2020 2019 2020 2019 Revenues: Interest $ 67,710 $ 83,274 $ 294,982 $ 337,096 incomeMark tofinancereceivables (6,477 ) - (29,528 ) - measured atfair valueOther income 1,201 2,449 5,707 8,704 62,434 85,723 271,161 345,800 Expenses: Employee costs 19,372 21,847 80,198 80,877 General and 7,630 7,895 31,981 33,004 administrativeInterest 22,962 27,595 101,338 110,528 Provision for - 21,454 14,113 85,773 credit lossesOther expenses 5,996 6,045 23,411 26,456 55,960 84,836 251,041 336,638 Income before 6,474 887 20,120 9,162 income taxesIncome taxexpense 2,331 858 (1,557 ) 3,756 (benefit)Net income $ 4,143 $ 29 $ 21,677 $ 5,406 Earnings per share:Basic $ 0.18 $ 0.00 $ 0.96 $ 0.24 Diluted $ 0.17 $ 0.00 $ 0.90 $ 0.22 Number ofshares used in computingearningsper share: Basic 22,555 22,529 22,611 22,416 Diluted 24,537 23,950 24,003 24,064 Condensed Consolidated Balance Sheets (In thousands) (Unaudited) December 31, December 31, 2020 2019 Assets: Cash and cash $ 13,466 $ 5,295 equivalentsRestrictedcash and 130,686 135,537 equivalentsFinancereceivables 1,523,726 1,444,038 measured atfair value Finance 492,133 897,530 receivablesAllowance forfinance credit (80,790 ) (11,640 ) lossesFinancereceivables, 411,343 885,890 net Deferred tax 28,512 15,480 assets, netOther assets 38,162 53,009 $ 2,145,895 $ 2,539,249 Liabilitiesand Shareholders'Equity:Accountspayable and $ 43,112 $ 47,077 accruedexpensesWarehouselines of 118,999 134,791 creditResidualinterest 25,426 39,478 financingSecuritization 1,803,673 2,097,728 trust debtSubordinatedrenewable 21,323 17,534 notes 2,012,533 2,336,608 Shareholders' 133,362 202,641 equity $ 2,145,895 $ 2,539,249 Operating andPerformance Data ($ inmillions) At and for the At and for the Three months ended Twelve months ended December 31, December 31, 2020 2019 2020 2019 Contracts $ 166.71 $ 247.50 $ 742.58 $ 1,002.78 purchasedContracts - 275.00 741.87 1,014.10 securitized Totalportfolio $ 2,174.97 $ 2,416.04 $ 2,174.97 $ 2,416.04 balanceAverageportfolio 2,202.22 2,418.61 2,315.75 2,404.71 balance Allowance forfinance creditlosses as % of 16.42 % 1.30 % fin.receivables Aggregateallowance as %of fin. 18.23 % 3.57 % receivables(1) Delinquencies 31+ Days 10.43 % 13.55 % Repossession 1.65 % 1.91 % InventoryTotalDelinquencies 12.08 % 15.46 % and Repo.Inventory Annualized NetCharge-offs as % of AveragePortfolioLegacy 6.96 % 12.05 % 11.72 % 12.16 % portfolioFair Value 4.61 % 5.17 % 4.33 % 3.80 % portfolioTotal 5.18 % 7.92 % 6.51 % 7.95 % portfolio Recovery rates 41.9 % 33.1 % 38.7 % 33.9 % (2) For the For the Three months ended Twelve months ended December 31, December 31, 2020 2019 2020 2019 $ (3 ) % (4) $ (3 ) % (4) $ (3 ) % (4) $ (3 ) % (4)Interest $ 67.71 12.3 % $ 83.27 13.8 % $ 294.98 12.7 % $ 337.10 14.0 %incomeMark tofinancereceivables (6.48 ) -1.2 % - 0.0 % (29.53 ) -1.3 % $ - 0.0 %measured atfair valueServicing feesand other 1.20 0.2 % 2.45 0.4 % 5.71 0.2 % 8.70 0.4 %incomeInterest (22.96 ) -4.2 % (27.60 ) -4.6 % (101.34 ) -4.4 % (110.53 ) -4.6 %expenseNet interest 39.47 7.2 % 58.13 9.6 % 169.82 7.3 % 235.27 9.8 %marginProvision for - 0.0 % (21.45 ) -3.5 % (14.11 ) -0.6 % (85.77 ) -3.6 %credit lossesRisk adjusted 39.47 7.2 % 36.67 6.1 % 155.71 6.7 % 149.50 6.2 %marginCore operating (33.00 ) -6.0 % (35.79 ) -5.9 % (135.59 ) -5.9 % (140.34 ) -5.8 %expensesPre-tax income $ 6.47 1.2 % $ 0.89 0.1 % $ 20.12 0.9 % $ 9.16 0.4 % (1) Includes allowance for finance credit losses and allowance for repossession inventory.(2) Wholesale auction liquidation amounts (net of expenses) as a percentage of the account balance at the time of sale.(3) Numbersmay not add due torounding.(4) Annualized percentage of the average portfolio balance. Percentages may not add due to rounding.