The Subprime Source Since 1991 December 2025 Investor Presentation SAFE HARBOR STATEMENT Forward-looking statements in this presentation include the Company's expectations of growth and 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 ...

Financial Position and Debt - The company's current short-term funding capacity is $702.5 million, comprising three credit facilities[114]. - As of December 31, 2025, the company had approximately $3,483.4 million of debt outstanding, including $2,986.6 million of securitization trust debt[117]. - Increased interest expenses were experienced in 2023 due to multiple interest rate hikes by the Federal Reserve, impacting financial position and liquidity[134]. - The company’s ability to maintain financing sources is influenced by market conditions and compliance with covenants under financing agreements[116]. - The company may need to increase credit enhancement requirements if economic conditions worsen, impacting cash resources available for operations[127]. - An increase in interest rates could reduce cash flows from excess spread, adversely affecting earnings and cash flows[179]. Securitization and Financing - The company relies on securitization transactions for permanent financing of automobile contracts, having completed 36 securitizations from 2010 to 2019[120]. - The company is dependent on the performance of its portfolio of securitized and warehoused automobile contracts, with higher delinquency and loss ratios potentially reducing cash flows from residual interests[125]. - Receivables originated since January 2018 are recorded at fair value, and actual credit losses exceeding estimates may lead to fair value adjustments[139]. - The company cannot borrow against defaulted automobile contracts under its warehouse credit facilities, potentially reducing cash flows[141]. - Risk retention rules require the company to retain at least 5% of the credit risk of assets collateralizing asset-backed securities, potentially limiting liquidity[151]. Economic and Market Risks - Economic conditions, including unemployment and inflation, could adversely affect the company's ability to collect payments on receivables, impacting financial results[131]. - Defaults on automobile contracts could materially and adversely affect the company's financial condition, cash flows, and liquidity[138]. - Economic downturns could impair operations, particularly due to the focus on sub-prime customers, leading to increased delinquencies and losses[174]. - The company is geographically concentrated in states prone to natural disasters, which could adversely affect collections on automobile contracts[177]. - The company faces restrictions that may limit its ability to obtain additional capital, potentially impacting earnings generation[167]. Competition and Operational Risks - The company faces competition from various finance companies, which may have greater access to capital markets and resources[135]. - The company specializes in purchasing and servicing automobile contracts for sub-prime customers, which entails higher risks of non-performance and delinquencies[137]. - The company faces intense competition for key personnel, and loss of any key employee could adversely affect its operations[143]. - Non-compliance with regulations could result in penalties, litigation losses, and damage to the company's reputation, adversely affecting financial condition[147]. - The company is subject to various litigations that could result in significant financial liabilities and adversely affect its operations[153]. Technology and Accounting Risks - The use of artificial intelligence in operations may expose the company to operational, regulatory, and reputational risks that could impact financial results[165]. - The company has incurred risks related to fair value accounting for receivables acquired since January 1, 2018, which could affect interest income recognition[170]. - If actual results for receivables deviate from estimates, the company may need to reduce recorded values, impacting income and book value[172]. Stock and Dividend Policy - The company's common stock is thinly traded, leading to limited selling opportunities and potential price volatility[180]. - The company has never declared or paid cash dividends on its common stock and intends to retain future earnings[181].

Core Insights - Consumer Portfolio Services (CPSS) reported that 2025 was a strong year, although growth did not meet expectations [2] Group 1: Financial Performance - CEO Charles Bradley highlighted that while 2025 was a good year, the company did not achieve the anticipated growth levels [2] Group 2: Future Outlook - CPSS is targeting substantial portfolio growth in 2026, supported by a new $900 million prime flow agreement [2]

Core Viewpoint - The conference call is focused on the operating results for the fourth quarter and full year of 2025 for Consumer Portfolio Services, highlighting key financial metrics and management insights [1]. Group 1: Management Team - The call features key executives including Mr. Charles Bradley (CEO), Mr. Danny Bharwani (CFO), and Mr. Mike Lavin (President and COO) of Consumer Portfolio Services [3]. Group 2: Forward-Looking Statements - The conference call may include forward-looking statements that are not historical facts, particularly regarding the valuation of receivables which depend on future event estimates [2]. - The company does not assume any obligation to publicly update forward-looking statements based on new information or events [2].

Core Insights - The company reported strong profitability in 2025, with a focus on credit quality and margin preservation, despite growth not meeting management's expectations [2][3] - The introduction of the Generation-9 AI credit model led to an 11% increase in approvals and an 8.4% rise in fundings, while credit metrics remained stable [4][16] - The company aims to accelerate growth in 2026 while maintaining margins and improving portfolio performance as older vintages decline [22] Financial Performance - Revenue for 2025 increased by 10% to $434 million, while net income remained roughly flat at $19.3 million [5][10] - Fourth-quarter revenue was $109.4 million, up 4% from the previous year, with full-year pre-tax earnings at $28 million compared to $27.4 million in 2024 [7][9] - The fair value portfolio ended 2025 at $3.655 billion, yielding 11.4%, with no fair value marks recorded in Q4 2025 [8][12] Operational Highlights - The managed portfolio approached $4 billion, with a strategic push to grow in 2026 [3][6] - The company originated $363 million in new contracts in Q4 and purchased $1.638 billion in 2025, marking it as the third-best origination year in its history [15] - Delinquency rates remained stable, with over 30-day delinquencies at 14.77% for 2025, slightly down from 14.85% in 2024 [18] Strategic Initiatives - The company is ramping up its Prime program, with a $900 million commitment from a credit union to source and service prime auto loans [17] - Management is focusing on expanding the active dealer pool and increasing monthly applications from 250,000 to 325,000 [15] - The company is implementing strategic risk initiatives that have shown early success [15] Market Outlook - Early 2026 dealership traffic appears to have improved, with management optimistic about favorable macroeconomic conditions, including interest rates and unemployment [20][21] - The company plans to focus on growth while improving margins through better interest rates and portfolio performance as older receivables decline [22]

Financial Performance - Revenues for Q4 2025 were $109.44 million, up from $105.3 million in Q4 2024, with full-year revenues at $434 million, a 10% increase from $393 million in 2024 [1] - Interest income from the fair value portfolio increased by 16% year over year, contributing significantly to total revenues [1] - Total expenses for Q4 2025 were $102.2 million, a 4% increase from $98 million in Q4 2024, with full-year expenses at $406 million, an 11% increase from $366 million in 2024 [6] - Net income for Q4 2025 was $5 million, slightly down from $5.1 million in Q4 2024, while full-year net income was $19.3 million, compared to $19.2 million in 2024 [8] Portfolio and Credit Quality - The fair value portfolio reached $3.6 billion, yielding 11.4%, with expectations for substantial growth in the coming year [1][3] - The company expects to reduce the proportion of bad credit in the portfolio, which was over 40% at the beginning of 2025, to a minimal level by the end of 2026 [3] - Total delinquency greater than thirty days for 2025 was 14.77%, slightly improved from 14.85% in 2024, while annualized net charge-offs were 7.76%, compared to 7.62% in 2024 [19][20] Operational Highlights - The company originated $363 million in new contracts in 2025, with a total of $1.638 billion purchased, marking it as the third-best origination year in its history [13] - Core operating expenses decreased by 2% year over year, reflecting improved operational efficiencies [11] - The implementation of a new credit scoring model increased approvals by 11%, contributing to an 8.4% increase in total fundings [15] Industry Context - The industry has seen minimal new entrants in the last five years, with the company positioned well at a $4 billion portfolio size [26] - Recent M&A activity included the purchase of competitors GLS and Flagship, indicating a solid valuation environment in the industry [25] - The company anticipates a stable economic environment with steady interest rates and unemployment, which are favorable for growth in 2026 [28][30]

Financial Data and Key Metrics Changes - Revenues for Q4 2025 were $109.4 million, a 4% increase from $105.3 million in Q4 2024. For the full year, revenues were $434 million, a 10% increase from $393 million in 2024 [6] - Interest income on the fair value portfolio increased by 16% year-over-year, contributing significantly to total revenues [6] - Expenses for Q4 2025 were $102.2 million, a 4% increase from $98 million in Q4 2024. For the full year, expenses were $406 million, an 11% increase from $366 million in 2024 [8] - Pre-tax earnings for Q4 2025 were $7.2 million, slightly down from $7.4 million in Q4 2024. Full year pre-tax earnings were $28 million, up from $27.4 million in 2024 [9][10] - Net income for Q4 2025 was $5 million, compared to $5.1 million in Q4 2024. For the full year, net income was $19.3 million, slightly up from $19.2 million in 2024 [10] Business Line Data and Key Metrics Changes - The loan portfolio increased by 15% year-over-year, contributing to higher securitization debt [9] - The fair value portfolio grew to $3.6 billion, yielding 11.4% net of expected losses [6] - The company originated $363 million of new contracts in Q4 2025, with a total of $1.638 billion for the full year, slightly down from $1.682 billion in 2024 [14] Market Data and Key Metrics Changes - The total delinquency rate greater than 30 days for 2025 was 14.77%, a slight improvement from 14.85% in 2024 [21] - Annualized net charge-offs for 2025 were 7.76%, compared to 7.62% in 2024 [21] - The company remains among the best credit performers in the subprime space, as indicated by Intex data [23] Company Strategy and Development Direction - The company aims to focus on growth in 2026, improving margins through better interest rates and enhancing overall portfolio performance by eliminating underperforming loans from 2022 and 2023 [30][31] - A new credit scoring model utilizing AI and machine learning has increased approval rates by 11% [17] - The company is expanding its dealer network and increasing monthly applications from 250,000 to 325,000 [16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the interest rate environment, suggesting rates may decrease, which would positively impact margins [29][30] - The company noted macroeconomic challenges such as inflation and stagnant wage growth but highlighted effective collection techniques that have helped maintain portfolio performance [22] - Overall, management is confident about the company's position and growth potential moving into 2026 [30][31] Other Important Information - The company signed a new warehouse line with Capital One for $150 million and a $900 million Prime Forward Flow commitment, which are expected to support growth in 2026 [3][4] - Shareholders' equity increased by 6% to $309.5 million, marking an all-time high [11] Q&A Session Summary - No specific questions or answers were provided in the content, thus this section is not applicable.

Financial Data and Key Metrics Changes - Revenues for Q4 2025 were $109.4 million, a 4% increase from $105.3 million in Q4 2024. For the full year, revenues were $434 million, a 10% increase from $393 million in 2024 [6] - Interest income on the fair value portfolio increased by 16% year-over-year, with the fair value portfolio now at $3.6 billion yielding 11.4% net of expected losses [6][10] - Expenses for Q4 2025 were $102.2 million, a 4% increase from $98 million in Q4 2024. Full year expenses were $406 million, an 11% increase from $366 million in 2024 [7] - Pre-tax earnings for Q4 were $7.2 million compared to $7.4 million in 2024, while full year pre-tax earnings were $28 million compared to $27.4 million in 2024 [8][9] - Net income for Q4 was $5 million compared to $5.1 million in Q4 2024, and for the full year, net income was $19.3 million compared to $19.2 million in 2024 [9] Business Line Data and Key Metrics Changes - The company originated $363 million of new contracts in Q4 2025, and for the full year, purchased $1.638 billion of new contracts, slightly down from $1.682 billion in 2024 [13] - The portfolio of assets under management grew from $3.4 billion to $3.7 billion for the full year, an increase of 8.24% [14] - The company added about 1,000 active dealers to its funding dealer pool in December alone [15] Market Data and Key Metrics Changes - The total delinquency rate greater than 30 days for 2025 was 14.77%, slightly down from 14.85% in 2024. Annualized net charge-offs for 2025 were 7.76%, up from 7.62% in 2024 [19] - Recoveries for vehicles from the 2024 vintages were at 36.3%, and for the 2025 vintage, recoveries were hitting 43.4% [23] Company Strategy and Development Direction - The company aims to focus on growth in 2026, improving margins through better interest rates and enhancing overall portfolio performance by eliminating underperforming 2022 and 2023 paper [28][29] - The company is rebranding itself as a full spectrum lender, moving beyond its traditional subprime focus [17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the interest rate environment, suggesting rates may decrease, which would positively impact the bottom line [27] - The company noted that despite macroeconomic challenges, it has maintained strong credit performance and is well-positioned for future growth [20][21] Other Important Information - The company signed a new warehouse line with Capital One for $150 million and a $900 million Prime forward flow commitment, which are expected to be instrumental for growth in 2026 [3][4] - The company implemented a new credit scoring model that increased approvals by 11% [15] Q&A Session Summary - No specific questions and answers were provided in the content, thus this section is not applicable.

Core Insights - The company's performance in 2025 emphasized credit quality and margin preservation, resulting in a nearly $4 billion portfolio [1] - Management credited the stability to the rapid runoff of underperforming loan vintages from 2022 and 2023, which constituted nearly 40% of the portfolio at the beginning of 2025 and are projected to diminish significantly by the end of 2026 [1] - Operational efficiency improved, with core operating expenses as a percentage of the managed portfolio decreasing from 5.6% to 4.8% year-over-year [1] Strategic Developments - The company adopted the Generation 9 credit scoring model, leveraging AI and machine learning to boost approval rates by 11% while keeping capture rates stable [1] - Strategic positioning was enhanced through a new $150 million warehouse line with Capital One and a $900 million prime forward flow commitment aimed at diversifying the lending spectrum [1] Market Dynamics - The market exhibited irrational competition for lower dealer foot traffic; however, the company achieved its third-best origination year in its 35-year history [1] - Recovery rates remained low at 28% to 30% due to the 2022-2023 vintages, although newer vintages from 2025 are already demonstrating normalized recovery levels of 43.4% [1]

Core Viewpoint - Consumer Portfolio Services, Inc. reported a strong financial performance for the fourth quarter and the full year of 2025, achieving record revenues and stable net income growth, positioning the company well for 2026 [6]. Financial Performance - For the fourth quarter of 2025, the company reported earnings of $5.0 million, or $0.21 per diluted share, compared to $5.1 million, or $0.21 per diluted share, in the fourth quarter of 2024 [1][12]. - Total revenues for Q4 2025 were $109.4 million, an increase of $4.1 million, or 3.9%, from $105.3 million in Q4 2024 [2]. - Total operating expenses for Q4 2025 were $102.2 million, up from $98.0 million in the same period of 2024 [2]. - For the full year 2025, total revenues reached $434.5 million, a 10.4% increase from $393.5 million in 2024, driven by a $58.7 million increase in interest income [3]. - The company's net income for the full year 2025 was $19.3 million, slightly up from $19.2 million in 2024 [3]. Portfolio and Contracts - In 2025, CPS purchased $1.638 billion of new contracts, a decrease from $1.682 billion in 2024 [4]. - The total receivables as of December 31, 2025, were $3.779 billion, an increase from $3.491 billion a year earlier [4]. Credit Quality - Net charge-offs for 2025 were 7.76% of the average portfolio, compared to 7.62% in 2024 [5]. - Delinquencies greater than 30 days were 14.77% of the total portfolio as of December 31, 2025, slightly down from 14.85% a year prior [5]. Management Commentary - The CEO highlighted that 2025 marked the highest recorded revenue in the company's history, indicating strong origination volume and improved operating efficiencies [6].