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CPSS
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CPS Announces Third Quarter 2024 Earnings

1. CPS revenues rose 9.2% to $100.6 million year-over-year. 2. Net income decreased significantly to $4.8 million from $10.4 million. 3. Total portfolio balance reached a record $3.33 billion. 4. Annualized net charge-offs increased to 7.32% from 6.86% year-over-year. 5. Delinquencies over 30 days rose to 14.04% compared to 13.31% last year.

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FAQ

Why Neutral?

While revenues increased, net income drop and rising charge-offs may concern investors.

How important is it?

Earnings report indicates mixed performance; significant data for stock valuation.

Why Short Term?

Immediate impacts likely due to quarterly performance metrics influencing investor sentiment.

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CPSSCPS
October 31, 2024 16:30 ET | Source: Consumer Portfolio Services, Inc. Revenues of $100.6 million compared to $92.1 million in the prior year periodNet income of $4.8 million, or $0.20 per diluted shareTotal portfolio balance of $3.330 billion, highest in company historyNew contract purchases of $445.9 million, compared to $322.4 million in the prior year period LAS VEGAS, NV, Oct. 31, 2024 (GLOBE NEWSWIRE) -- Consumer Portfolio Services, Inc. (Nasdaq: CPSS) (“CPS” or the “Company”) today announced earnings of $4.8 million, or $0.20 per diluted share, for its third quarter ended September 30, 2024. Revenues for the third quarter of 2024 were $100.6 million, an increase of $8.5 million, or 9.2%, compared to $92.1 million for the third quarter of 2023. Total operating expenses for the third quarter of 2024 were $93.7 million compared to $77.9 million for the 2023 period.   Pretax income for the third quarter of 2024 was $6.9 million compared to pretax income of $14.2 million in the third quarter of 2023. For the nine months ended September 30, 2024 total revenues were $288.2 million compared to $260.0 million for the nine months ended September 30, 2023, an increase of approximately $28.2 million, or 10.8%. Total operating expenses for the nine months ended September 30, 2024 were $268.1 million, compared to $208.8 million for the nine months ended September 30, 2023. Pretax income for the nine months ended September 30, 2024 was $20.1 million, compared to $51.3 million for the nine months ended September 30, 2023. Net income for the nine months ended September 30, 2024 was $14.1 million compared to $38.2 million for the nine months ended September 30, 2023. During the third quarter of 2024, CPS purchased $445.9 million of new contracts compared to $431.9 million during the second quarter of 2024 and $322.4 million during the third quarter of 2023. The Company's receivables totaled $3.330 billion as of September 30, 2024, an increase from $3.173 billion as of June 30, 2024 and an increase from $2.943 billion as of September 30, 2023. Annualized net charge-offs for the third quarter of 2024 were 7.32% of the average portfolio as compared to 6.86% for the third quarter of 2023. Delinquencies greater than 30 days (including repossession inventory) were 14.04% of the total portfolio as of September 30, 2024, compared to 13.31% as of September 30, 2023. “New loan origination volumes have outpaced the prior quarter for a fourth consecutive quarter. This positions us well for future quarters,” said Charles E. Bradley Jr., Chief Executive Officer. “With our operating efficiencies improving, we remain committed to driving the company forward in any environment.” Conference Call CPS announced that it will hold a conference call on November 1, 2024 at 1:00 p.m. ET to discuss its third quarter 2024 operating results. Those wishing to participate can pre-register for the conference call at the following link https://register.vevent.com/register/BIaadcdbbe0a7849aa918eac85c86475ff. 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  Nine months ended  September 30,  September 30,   2024    2023    2024    2023  Revenues:           Interest income$93,158   $83,261   $265,812   $245,960  Mark to finance receivables measured at fair value 5,500    6,000    16,000    6,000  Other income 1,922    2,818    6,391    8,077    100,580    92,079    288,203    260,037  Expenses:           Employee costs 24,162    21,812    72,303    64,991  General and administrative 13,276    13,045    40,288    36,224  Interest 50,056    37,889    138,735    106,354  Provision for credit losses (994)   (2,000)   (4,579)   (20,700) Other expenses 7,229    7,115    21,376    21,915    93,729    77,861    268,123    208,784  Income before income taxes 6,851    14,218    20,080    51,253  Income tax expense 2,055    3,839    6,022    13,097  Net income$4,796   $10,379   $14,058   $38,156              Earnings per share:           Basic$0.22   $0.49   $0.66   $1.83  Diluted$0.20   $0.41   $0.58   $1.51                          Number of shares used in computing earnings per share:           Basic 21,343    21,154    21,250    20,815  Diluted 24,153    25,218    24,340    25,331                          Condensed Consolidated Balance Sheets      (In thousands)      (Unaudited)                   September 30,  December 31,           2024    2023        Assets:           Cash and cash equivalents$8,071   $6,174        Restricted cash and equivalents 270,981    119,257        Finance receivables measured at fair value 3,132,310    2,722,662                    Finance receivables 8,274    27,553        Allowance for finance credit losses -486    -2,869        Finance receivables, net 7,788    24,684                                Deferred tax assets, net 1,565    3,736        Other assets 41,977    27,233         $3,462,692   $2,903,746                    Liabilities and Shareholders' Equity:           Accounts payable and accrued expenses$72,626   $62,544        Warehouse lines of credit 105,783    234,025        Residual interest financing 99,127    49,875        Securitization trust debt 2,875,777    2,265,446        Subordinated renewable notes 24,288    17,188          3,177,601    2,629,078                    Shareholders' equity 285,091    274,668         $3,462,692   $2,903,746                                Operating and Performance Data ($ in millions)                        At and for the  At and for the  Three months ended  Nine months ended  September 30,  September 30,   2024    2023    2024    2023              Contracts purchased$445.95   $322.42   $1,224.13   $1,055.96  Contracts securitized$298.42   $312.68    1,256.13    1,045.42              Total portfolio balance (1)$3,329.84   $2,943.33   $3,329.84   $2,943.33  Average portfolio balance (1)$3,278.34   $2,934.75    3,131.48    2,898.44                          Delinquencies (1)           31+ Days 11.25%   11.74%       Repossession Inventory 2.79%   1.57%       Total Delinquencies and Repo. Inventory 14.04%   13.31%                   Annualized Net Charge-offs as % of Average Portfolio (1) 7.32%   6.86%   7.47%   6.12%             Recovery rates (1), (2) 29.1%   37.8%   31.1%   41.1%              For the For the Three months ended Nine months ended September 30, September 30,  2024   2023   2024   2023  $ (3) % (4) $ (3) % (4) $ (3) % (4) $ (3) % (4)Interest income$93.16 11.4% $83.26 11.3% $265.81 11.3% $245.96 11.3%Mark to finance receivables measured at fair value 5.50 0.7%  6.00 0.8%  16.00 0.7%  6.00 0.3%Other income 1.92 0.2%  2.82 0.4%  6.39 0.3%  8.08 0.4%Interest expense (50.06)-6.1%  (37.89)-5.2%  (138.74)-5.9%  (106.35)-4.9%Net interest margin 50.52 6.2%  54.19 7.4%  149.47 6.4%  153.68 7.1%Provision for credit losses 0.99 0.1%  2.00 0.3%  4.58 0.2%  20.70 1.0%Risk adjusted margin 51.52 6.3%  56.19 7.7%  154.05 6.6%  174.38 8.0%Other operating expenses (5) (44.67)-5.4%  (41.97)-5.7%  (133.97)-5.7%  (123.13)-5.7%Pre-tax income$6.85 0.8% $14.22 1.9% $20.08 0.9% $51.25 2.4%            (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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