Core Viewpoint - Consumer Portfolio Services, Inc. has successfully closed its first term securitization in 2026, marking its 58th senior subordinate securitization since 2011 and the 41st consecutive securitization to receive a triple "A" rating from at least two rating agencies for the senior class of notes [1]. Group 1: Transaction Details - The securitization involved the sale of $345.61 million in asset-backed notes, secured by $352.66 million in automobile receivables originated by the company [2]. - The notes were issued by CPS Auto Receivables Trust 2026-A and consist of five classes, with ratings provided by Standard & Poor's and DBRS Morningstar based on transaction structure and historical performance [2]. - The weighted average coupon on the notes is approximately 5.18% [3]. Group 2: Note Class Breakdown - Class A notes amount to $155.520 million with an interest rate of 4.19% and a rating of AAA from both S&P and DBRS [3]. - Class B notes total $47.790 million with an interest rate of 4.43% and a rating of AA from both agencies [3]. - Class C notes are $58.360 million with an interest rate of 4.63% and a rating of A [3]. - Class D notes amount to $38.440 million with an interest rate of 4.98% and a rating of BBB [3]. - Class E notes total $45.500 million with an interest rate of 6.66% and a rating of BB from DBRS [3]. Group 3: Credit Enhancement and Payment Structure - The transaction features initial credit enhancement consisting of a cash deposit equal to 1.00% of the original receivable pool balance and overcollateralization of 2.00% [4]. - Agreements require accelerated principal payments to achieve overcollateralization of the lesser of 7.30% of the original receivable pool balance or 18.00% of the outstanding pool balance [4]. Group 4: Company Overview - 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 [6]. - The company purchases retail installment sales contracts primarily from franchised automobile dealerships, funding these purchases mainly through securitization markets [6].

Core Insights - Consumer Portfolio Services, Inc. (CPS) has initiated a forward flow program with Valley Strong Credit Union, which is expected to significantly enhance CPS's annual origination volumes by up to $900 million [2]. Group 1: Partnership Details - The forward flow program will focus on borrowers with prime credit, allowing CPS to serve a broader range of borrowers across the credit spectrum through its AI-enabled auto finance platform [2]. - This partnership aims to position CPS as a full spectrum lender and strengthen its relationships with dealership partners [2][3]. Group 2: Company Background - CPS is an independent specialty finance company that provides indirect automobile financing, primarily targeting individuals with past credit issues or limited credit histories [4]. - The company purchases retail installment sales contracts from franchised automobile dealerships, primarily secured by late model used vehicles [4]. Group 3: Valley Strong Credit Union Overview - Valley Strong Credit Union operates 31 branches and serves over 360,000 members, with approximately $4 billion in assets [5]. - It has been recognized as the 2 Credit Union in California by Forbes and is one of the largest financial institutions in the Central Valley [5].

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Core Viewpoint - The conference call is focused on the third quarter operating results for Consumer Portfolio Services in 2025, indicating a review of financial performance and strategic outlook for the company [1]. Group 1 - The call is being recorded and is intended for discussing the operating results of Consumer Portfolio Services [1]. - Management has indicated that the call may contain forward-looking statements, which are subject to risks that could lead to actual results differing from projections [2]. - The company has no obligation to update any forward-looking statements publicly, regardless of new information or events [3].

Financial Data and Key Metrics Changes - Revenues for Q3 2025 were $108.4 million, an 8% increase from $100.6 million in Q3 2024 [7] - For the nine months ending September 2025, revenues reached $325.1 million, a 13% increase over $288 million in the same period last year [7] - Expenses for Q3 2025 were $101.4 million, also up 8% from $93.7 million in Q3 2024 [8] - Net income for Q3 2025 was $4.9 million, a 2% increase from $4.8 million in Q3 2024 [9] - Diluted earnings per share remained flat at $0.20 for Q3 2025, compared to the same period last year [9] Business Line Data and Key Metrics Changes - The fair value portfolio increased to $3.6 billion, yielding 11.4% net of losses [7] - Origination volumes for Q3 2025 were $391.1 million, with a total of $1.275 billion for the nine months, a 4% increase year-over-year [13] - The percentage of the portfolio from troubled 2022 and 2023 vintages is now below 30% [19] Market Data and Key Metrics Changes - The unemployment rate stood at 4.3% as of August 2025, with expectations to rise to 4.5% in 2026 [22] - The company noted increased competition from banks and credit unions, which may pressure growth [25] Company Strategy and Development Direction - The company is focusing on organic growth by adding new dealers and improving capture rates, which have increased from the high fours to over 6% [15] - A specific focus on large dealer groups has led to their originations comprising 31% of total originations, up from 17% two years ago [16] - The company aims to maintain APRs while improving margins and cutting expenses [27] Management's Comments on Operating Environment and Future Outlook - Management expressed a positive outlook for 2025, anticipating it to be the second-best year in the company's history despite modest growth [13][14] - The company is not overly concerned about a slight increase in unemployment, viewing it as a manageable risk [28] - Management highlighted that the performance of newer vintages (2024 and 2025) is showing improvement, indicating a positive trend in credit performance [19][20] Other Important Information - The company successfully completed a securitization despite market challenges, indicating stability in the market [6][25] - The total debt increased by 11% to $3.4 billion, while the fair value portfolio grew by 16%, showing improved balance sheet management [10][11] Q&A Session Summary - No specific questions or answers were provided in the transcript, as the call concluded without a Q&A segment [31]

Financial Performance - Net income for Q3 2025 was $4.9 million, or $0.20 per diluted share, compared to $4.8 million, or $0.20 per diluted share, in Q3 2024[1] - Revenues for Q3 2025 increased to $108.4 million, up $7.8 million, or 7.8%, from $100.6 million in Q3 2024[2] - Total operating expenses for Q3 2025 were $101.4 million, compared to $93.7 million in Q3 2024[2] - For the nine months ended September 30, 2025, total revenues were $325.1 million, an increase of approximately $36.9 million, or 12.8%, from $288.2 million in the same period of 2024[3] - The company reported pretax income of $7.0 million for Q3 2025, compared to $6.9 million in Q3 2024[2] Contract and Receivables - New contract purchases for the nine months ended September 30, 2025, were $1.275 billion, compared to $1.224 billion during the same period in 2024[4] - The company's receivables totaled $3.760 billion as of September 30, 2025, up from $3.330 billion as of September 30, 2024[4] Credit Quality - Annualized net charge-offs for Q3 2025 were 8.01% of the average portfolio, compared to 7.32% for Q3 2024[5] - Delinquencies greater than 30 days were 13.96% of the total portfolio as of September 30, 2025, down from 14.04% as of September 30, 2024[5] Management Commentary - The CEO expressed satisfaction with the results, highlighting strong new loan origination volumes driving revenue growth[6]

Financial Performance - For the three months ended September 30, 2025, the company's revenues were $108.4 million, an increase of $7.8 million, or 7.8%, from $100.6 million in the prior year[114]. - Interest income for the same period increased by $14.0 million, or 15.0%, to $107.2 million, driven by a 14.2% increase in the average balance of the loan portfolio[115]. - Revenues for the nine months ended September 30, 2025, were $325.1 million, an increase of $36.9 million, or 12.8%, from the prior year revenue of $288.2 million[137]. - Interest income for the nine months ended September 30, 2025, increased by $48.7 million, or 18.3%, to $314.5 million from $265.8 million in the prior year[138]. Operating Expenses - Total operating expenses for the three months ended September 30, 2025, were $101.4 million, an increase of $7.7 million, or 8.2%, primarily due to higher interest expenses[118]. - Total operating expenses were $304.3 million for the nine months ended September 30, 2025, compared to $268.1 million for the prior period, an increase of $36.2 million, or 13.5%[142]. - Interest expense for the three months ended September 30, 2025, was $59.1 million, representing 58.3% of total operating expenses, compared to $50.1 million, or 53.4%, in the previous year[120]. - Interest expense for the nine months ended September 30, 2025, was $172.7 million, an increase of $34.0 million or 24.5% from $138.7 million in the previous year[145]. Portfolio Management - The company originated a total of approximately $24.3 billion of automobile contracts from inception through September 30, 2025[97]. - The managed portfolio at the end of September 30, 2025, was $3,892.9 million, reflecting an increase from $3,665.7 million at the end of 2024[97]. - Managed portfolio outstanding rose to $3,760.3 million as of September 30, 2025, up from $3,329.8 million in the prior year, indicating a 12.9% increase[144]. - The gross servicing portfolio increased to $3,760,315 thousand as of September 30, 2025, up from $3,329,836 thousand a year earlier, representing a growth of 12.9%[162]. Delinquency and Credit Losses - Total delinquencies rose to 25,479 contracts, amounting to $418,008 thousand, compared to 23,483 contracts and $374,715 thousand in the previous year, indicating an increase of 8.5% in contracts and 11.5% in amount[162]. - The percentage of total delinquencies as a percentage of the gross servicing portfolio was 11.99% as of September 30, 2025, compared to 11.12% a year prior, reflecting a deterioration in delinquency rates[162]. - The company recorded a reduction to provision for credit losses of $712,000 for the three months ended September 30, 2025, compared to $994,000 in the prior year[133]. - The company recorded a reduction to provision for credit losses of $2.5 million for the nine months ended September 30, 2025, compared to $4.6 million in the prior year[156]. Debt and Liquidity - As of September 30, 2025, the company had approximately $3,435.2 million of debt outstanding, which includes $2,916.4 million of securitization trust debt, an increase of 12.3% since December 31, 2024[191]. - The company issued $1,280.7 million in new securitization trust debt during the first nine months of 2025, compared to $1,453.9 million for the same period in 2024, representing a decrease of 11.9%[184]. - As of September 30, 2025, the company had unrestricted cash of $8.1 million and $271.0 million in aggregate available borrowings under its two warehouse credit facilities[187]. - The company’s liquidity is affected by the performance of securitized pools, which determines the level of cash releases from those pools[188]. Extensions and Repossession - The average number of extensions granted per month increased to 8,725 in the nine months ended September 30, 2025, compared to 7,342 in the same period of 2024, showing a rise of 18.9%[174]. - Total contracts with extensions reached 95,438, amounting to $1,590,560 thousand as of September 30, 2025, compared to 85,463 contracts and $1,348,901 thousand in the previous year, indicating a growth of 11.6% in contracts[162]. - The total amount in repossession was $106,907 thousand as of September 30, 2025, compared to $92,939 thousand a year earlier, reflecting an increase of 15.0%[162]. - The average monthly extensions as a percentage of average outstandings was 4.2% for the nine months ended September 30, 2025, up from 3.9% in the previous year[174].

Core Insights - Consumer Portfolio Services, Inc. reported earnings of $4.9 million, or $0.20 per diluted share, for Q3 2025, showing a slight increase from $4.8 million in Q3 2024 [1] - Revenues for Q3 2025 reached $108.4 million, a 7.8% increase from $100.6 million in Q3 2024 [2] - Total operating expenses for Q3 2025 were $101.4 million, up from $93.7 million in the same period last year [2] Financial Performance - For the nine months ended September 30, 2025, total revenues were $325.1 million, a 12.8% increase from $288.2 million in the same period of 2024 [3] - Total operating expenses for the nine months ended September 30, 2025, were $304.3 million, compared to $268.1 million for the same period in 2024 [3] - Net income for the nine months ended September 30, 2025, increased to $14.3 million from $14.1 million in the prior year [3] Portfolio and Contracts - The company purchased $1.275 billion of new contracts in the first nine months of 2025, compared to $1.224 billion during the same period in 2024 [4] - As of September 30, 2025, total receivables amounted to $3.760 billion, up from $3.330 billion a year earlier [4] Credit Quality - Annualized net charge-offs for Q3 2025 were 8.01% of the average portfolio, compared to 7.32% in Q3 2024 [5] - Delinquencies greater than 30 days were 13.96% of the total portfolio as of September 30, 2025, slightly down from 14.04% a year earlier [5] Management Commentary - The CEO expressed satisfaction with the third-quarter results, highlighting strong new loan origination volumes and operational efficiencies driving revenue growth [6]

Group 1 - The company, Consumer Portfolio Services, Inc. (CPS), will hold a conference call on November 11, 2025, at 1:00 p.m. ET to discuss its third quarter 2025 operating results [1] - Participants can pre-register for the conference call through a provided link and will receive an email with dial-in options [2] - A replay of the conference call will be available for 12 months on the company's website starting two hours after the call concludes [2] Group 2 - 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 [3] - The company purchases retail installment sales contracts primarily from franchised automobile dealerships, secured by late model used vehicles and, to a lesser extent, new vehicles [3] - CPS funds these contract purchases mainly through the securitization markets and services the contracts over their lives [3]

Core Insights - Consumer Portfolio Services, Inc. (CPS) successfully closed its fourth term securitization in 2025, marking its 57th senior subordinate securitization since 2011 and the 40th consecutive securitization to receive a triple "A" rating from at least two rating agencies on the senior class of notes [1][2]. Transaction Details - The securitization involved the sale of $384.6 million in asset-backed notes, secured by $392.46 million in automobile receivables originated by CPS [2]. - The notes were issued by CPS Auto Receivables Trust 2025-D and consist of five classes, with ratings provided by Standard & Poor's and DBRS Morningstar based on transaction structure and historical performance [2]. Note Class Breakdown - The transaction includes the following note classes: - Class A: $170.910 million, 4.46% interest rate, 0.66 years average life, AAA rating [3] - Class B: $52.200 million, 4.48% interest rate, 1.72 years average life, AA rating [3] - Class C: $64.950 million, 4.85% interest rate, 2.40 years average life, A rating [3] - Class D: $43.170 million, 5.45% interest rate, 3.23 years average life, BBB rating [3] - Class E: $53.370 million, 7.69% interest rate, 4.04 years average life, NR rating [3] - The weighted average coupon on the notes is approximately 5.72% [3]. Credit Enhancement - The 2025-D transaction features initial credit enhancement, including a cash deposit equal to 1.00% of the original receivable pool balance and overcollateralization of 2.00% [4]. - The agreements require accelerated principal payments to achieve overcollateralization of the lesser of 7.00% of the original receivable pool balance or 21.00% of the outstanding pool balance [4]. Company Overview - Consumer Portfolio Services, Inc. is an independent specialty finance company that provides indirect automobile financing to individuals with past credit issues or limited credit histories [6]. - The company purchases retail installment sales contracts primarily from franchised automobile dealerships, funding these purchases mainly through securitization markets [6].