GlobeNewswire Inc | Aug 11, 2021 04:40PM EDT

August 11, 2021

-- Pretax income of $13.9 million, a 199% increase over the prior year period -- Net income of $9.7 million, or $0.39 per diluted share -- New contract purchases of $286 million, a 39% increase over the first quarter of 2021

LAS VEGAS, NV, Aug. 11, 2021 (GLOBE NEWSWIRE) -- Consumer Portfolio Services, Inc. (Nasdaq: CPSS) (CPS or the Company) today announced earnings of $9.7 million, or $0.39 per diluted share, for its second quarter ended June 30, 2021. This compares to net income of $3.0 million, or $0.13 per diluted share, in the second quarter of 2020.

Revenues for the second quarter of 2021 were $66.8 million, compared to $67.3 million for the second quarter of 2020. Total operating expenses for the second quarter of 2021 were $52.9 million compared to $62.6 million for the 2020 period for a decrease of $9.8 million, or 15.6%. Pretax income for the second quarter of 2021 was $13.9 million compared to pretax income of $4.6 million in the second quarter of 2020, an increase of $9.2 million.

For the six months ended June 30, 2021 total revenues were $129.9 million compared to $138.1 million for the six months ended June 30, 2020, a decrease of approximately $8.2 million, or 5.9%. Total expenses for the six months ended June 30, 2021 were $108.1 million, a decrease of $22.2 million, or 17.1%, compared to $130.3 million for the six months ended June 30, 2020. Pretax income for the six months ended June 30, 2021 was $21.8 million, compared to $7.8 million for the six months ended June 30, 2020, an increase of $14.1 million. Net income for the six months ended June 30, 2021 was $14.9 million compared to $13.8 million for the six months ended June 30, 2020. Results for the six months ended June 30, 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 six months ended June 30, 2020 would have been $5.0 million and $0.21 per share, respectively.

During the second quarter of 2021, CPS purchased $286.0 million of new contracts compared to $205.5 million during the first quarter of 2021 and $135.9 million during the second quarter of 2020. The Company's receivables totaled $2.116 billion as of June 30, 2021, a decrease from $2.119 billion as of March 31, 2021 and $2.326 billion as of June 30, 2020.

Annualized net charge-offs for the second quarter of 2021 were 2.79% of the average portfolio as compared to 7.32% for the second quarter of 2020. Delinquencies greater than 30 days (including repossession inventory) were 8.28% of the total portfolio as of June 30, 2021, as compared to 9.59% as of June 30, 2020.

On June 30, 2021, we sold $50.0 million of 7.86% notes backed by residual interests in our regular securitizations of automobile receivables. The residuals are those retained from our securitizations from January 2018 through September 2020.

We are especially pleased with our results for the second quarter of 2021, stated Charles E. Bradley, Jr., President and Chief Executive Officer. New originations volumes were the highest since the second quarter of 2016, credit performance remains strong, the cost of funds of our quarterly securitization transactions continues to hover at historically low levels, and we raised $50 million in a new financing of residuals.

Conference Call

CPS announced that it will hold a conference call on Thursday, August 12, 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 1592925.

A replay of the conference call will be available between August 12th and August 19th, beginning two hours after conclusion of the call, by dialing 855 859-2056 or 404 537-3406 for international participants, with conference identification number 1592925. 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, low incomes 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 COVID-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, as yet unknown, in the future. Any or all of 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 Six months ended June 30, June 30, 2021 2020 2021 2020 Revenues: Interest $ 65,440 $ 75,552 $ 131,533 $ 154,689 incomeMark to financereceivables measured - (9,549 ) (4,417 ) (19,899 ) at fair valueOther income 1,329 1,289 2,765 3,269 66,769 67,292 129,881 138,059 Expenses: Employee costs 19,448 19,828 39,607 41,671 General and 7,831 7,837 15,579 16,506 administrativeInterest 18,980 26,485 39,925 53,476 Provision for - 3,100 - 6,713 credit lossesOther expenses 6,634 5,399 12,950 11,938 52,893 62,649 108,061 130,304 Income before 13,876 4,643 21,820 7,755 income taxesIncome tax 4,163 1,671 6,943 (6,009 ) expenseNet income $ 9,713 $ 2,972 $ 14,877 $ 13,764 Earnings per share:Basic $ 0.43 $ 0.13 $ 0.65 $ 0.61 Diluted $ 0.39 $ 0.13 $ 0.59 $ 0.58 Number ofshares used in computingearningsper share:Basic 22,842 22,685 22,791 22,612 Diluted 25,130 23,687 25,048 23,783 Condensed Consolidated Balance Sheets (In thousands) (Unaudited) June 30, December 31, 2021 2020 Assets: Cash and cash $ 43,131 $ 13,466 equivalentsRestrictedcash and 155,776 130,686 equivalentsFinancereceivables 1,582,175 1,523,726 measured atfair value Finance 340,470 492,133 receivablesAllowance forfinance credit (72,242 ) (80,790 ) lossesFinancereceivables, 268,228 411,343 net Deferred tax 27,131 28,512 assets, netOther assets 27,299 38,162 $ 2,103,740 $ 2,145,895 Liabilitiesand Shareholders'Equity:Accountspayable and $ 52,142 $ 43,112 accruedexpensesWarehouselines of 77,044 118,999 creditResidualinterest 67,153 25,426 financingSecuritization 1,732,879 1,803,673 trust debtSubordinatedrenewable 26,005 21,323 notes 1,955,223 2,012,533 Shareholders' 148,517 133,362 equity $ 2,103,740 $ 2,145,895 Operating andPerformance Data ($ inmillions) At and for the At and for the Three months ended Six months ended June 30, June 30, 2021 2020 2021 2020 Contracts $ 286.01 $ 135.85 $ 491.49 $ 401.86 purchasedContracts 240.00 221.87 485.00 481.87 securitized Totalportfolio $ 2,115.61 $ 2,326.44 $ 2,115.61 $ 2,326.44 balanceAverageportfolio 2,118.67 2,364.03 2,128.67 2,395.11 balance Allowance forfinance creditlosses as % of 21.22 % 14.72 % fin.receivables Aggregateallowance as %of fin. 21.80 % 17.45 % receivables(1) Delinquencies 31+ Days 7.34 % 7.75 % Repossession 0.94 % 1.84 % InventoryTotalDelinquencies 8.28 % 9.59 % and Repo.Inventory Annualized NetCharge-offs as % of AveragePortfolioLegacy 5.10 % 12.84 % 8.27 % 11.45 % portfolioFair Value 2.29 % 4.95 % 3.43 % 5.09 % portfolioTotal 2.79 % 7.39 % 4.37 % 7.19 % portfolio Recovery rates 57.8 % 34.0 % 50.6 % 35.1 % (2) For the For the Three months ended Six months ended June 30, June 30, 2021 2020 2021 2020 $ (3) % (4) $ (3) % (4) $ (3) % (4) $ (3) % (4)Interest $ 65.44 12.4 % $ 75.55 12.8 % $ 131.53 12.4 % $ 154.69 12.9 %incomeMark to financereceivables measured - 0.0 % (9.55 ) -1.6 % (4.42 ) -0.4 % (19.90 ) -1.7 %at fair valueOther income 1.33 0.3 % 1.29 0.2 % 2.77 0.3 % 3.27 0.3 %Interest (18.98 ) -3.6 % (26.49 ) -4.5 % (39.93 ) -3.8 % (53.48 ) -4.5 %expenseNet interest 47.79 9.0 % 40.81 6.9 % 89.96 8.5 % 84.58 7.1 %marginProvision for - 0.0 % (3.10 ) -0.5 % - 0.0 % (6.71 ) -0.6 %credit lossesRisk adjusted 47.79 9.0 % 37.71 6.4 % 89.96 8.5 % 77.87 6.5 %marginCore operating (33.91 ) -6.4 % (33.06 ) -5.6 % (68.14 ) -6.4 % (70.12 ) -5.9 %expensesPre-tax income $ 13.88 2.6 % $ 4.64 0.8 % $ 21.82 2.1 % $ 7.76 0.6 % (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.