Consumer Portfolio Services, Inc. (NASDAQ:CPSS) Q1 2023 Earnings Conference Call April 27, 2023 2:00 PM ET Company Participants Charles Bradley - CEO Danny Bharwani - CFO Michael Lavin - President and COO of Consumer Portfolio Services Operator Good day, everyone, and welcome to the Consumer Portfolio Services 2023 First Quarter Operating Results Conference Call. Today's call is being recorded. Before we begin, management had asked me to inform you that this conference call may contain forward-looking stat ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ________________ FORM 10-K ☒ ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to ______ Commission file number: 001-14116 CONSUMER PORTFOLIO SERVICES, INC. (Exact name of registrant as specified in its charter) Californ ...

PART I. FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Consumer Portfolio Services, Inc., highlighting significant asset growth and a substantial increase in nine-month net income to $71.8 million [Unaudited Condensed Consolidated Balance Sheets](index=3&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to $2.65 billion, driven by finance receivables, with liabilities rising to $2.43 billion and shareholders' equity to $218.2 million Condensed Consolidated Balance Sheet Data (in thousands) | Account | Sep 30, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $12,944 | $29,928 | | Finance receivables measured at fair value | $2,343,253 | $1,749,098 | | Finance receivables, net | $89,690 | $176,184 | | **Total Assets** | **$2,650,524** | **$2,159,578** | | **Liabilities & Equity** | | | | Warehouse lines of credit | $242,449 | $105,610 | | Securitization trust debt | $2,057,100 | $1,759,972 | | **Total Liabilities** | **$2,432,340** | **$1,989,371** | | **Total Shareholders' Equity** | **$218,184** | **$170,207** | [Unaudited Condensed Consolidated Statements of Operations](index=4&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) Net income significantly increased to $25.4 million for Q3 2022 and $71.8 million for the nine-month period, driven by higher revenues and fair value adjustments Key Operating Results (in thousands, except per share data) | Metric | Q3 2022 | Q3 2021 | 9 Months 2022 | 9 Months 2021 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $90,305 | $68,565 | $246,689 | $198,446 | | Income before income tax | $34,344 | $19,547 | $97,888 | $41,366 | | Net Income | $25,413 | $13,683 | $71,848 | $28,559 | | Diluted EPS | $0.95 | $0.52 | $2.61 | $1.12 | [Unaudited Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating activities provided $164.7 million in cash, while investing activities used $566.5 million, primarily for finance receivables, and financing provided $397.9 million Cash Flow Summary for Nine Months Ended Sep 30 (in thousands) | Cash Flow Activity | 2022 | 2021 | | :--- | :--- | :--- | | Net cash provided by operating activities | $164,744 | $163,076 | | Net cash used in investing activities | ($566,524) | ($50,174) | | Net cash provided by (used in) financing activities | $397,938 | ($83,289) | | **Increase (decrease) in cash** | **($3,842)** | **$29,613** | [Notes to Unaudited Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Notes detail accounting policies, fair value adoption for receivables, significant debt from securitizations, legal proceedings, and compliance with financial covenants - The company specializes in purchasing and servicing retail automobile contracts for **sub-prime customers**, providing indirect financing through dealers[20](index=20&type=chunk) - Finance receivables acquired since January 1, 2018, are accounted for at fair value, with a positive mark-to-market adjustment of **$15.3 million** for the nine months ended Sep 30, 2022[24](index=24&type=chunk)[26](index=26&type=chunk) - As of September 30, 2022, the company had **$2.06 billion** in securitization trust debt and **$242.4 million** outstanding on its warehouse lines of credit[10](index=10&type=chunk)[58](index=58&type=chunk) - The company estimates probable incurred losses for legal contingencies at **$3.4 million**, with reasonably possible losses not exceeding **$11.3 million** as of September 30, 2022[83](index=83&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses significant growth in contract purchases and managed portfolio to $2.84 billion, revenue increases driven by fair value mark-ups, funding strategies, and credit performance trends [Overview and Contract Purchases](index=25&type=section&id=Overview%20and%20Contract%20Purchases) The company's sub-prime auto contract purchases significantly increased to $1.43 billion, driving the total managed portfolio to $2.84 billion by Q3 2022 Contract Purchases and Managed Portfolio (in thousands) | Period | Contracts Purchased in Period | Managed Portfolio at Period End | | :--- | :--- | :--- | | 2020 | $742,584 | $2,174,972 | | 2021 | $1,146,321 | $2,249,069 | | Nine months ended Sep 30, 2022 | $1,426,302 | $2,838,858 | [Results of Operations](index=27&type=section&id=Results%20of%20Operations) Revenues significantly increased for Q3 and nine-month periods, driven by portfolio growth and fair value adjustments, while operating expenses rose and credit loss provision decreased - Q3 2022 revenues increased by **$21.7 million (31.7%)** YoY, primarily due to higher interest income from a larger portfolio and an **$8.2 million** mark-up on fair value receivables[117](index=117&type=chunk) - Nine-month 2022 revenues increased by **$48.2 million (24.3%)** YoY, including a **$15.3 million** mark-up, compared to a **$4.4 million** mark-down in the prior year period[145](index=145&type=chunk) - Q3 2022 interest expense rose to **$23.5 million** from **$18.3 million** YoY, driven by higher average debt balances and rising interest rates on new securitizations[127](index=127&type=chunk)[128](index=128&type=chunk) - A reduction to the provision for credit losses of **$23.4 million** was recorded for the nine months ended Sep 30, 2022, due to better-than-expected credit performance on the legacy portfolio[164](index=164&type=chunk) [Credit Experience](index=36&type=section&id=Credit%20Experience) Credit performance shows increased delinquencies and net charge-offs, with total delinquencies at 9.7% and annualized net charge-offs at 4.9% for Q3 2022 Delinquency Experience (% of gross servicing portfolio) | Metric | Sep 30, 2022 | Sep 30, 2021 | Dec 31, 2021 | | :--- | :--- | :--- | :--- | | Total Delinquencies (Amount) | 9.7% | 8.4% | 9.6% | | Total Delinquencies & Repossession (Amount) | 10.9% | 9.4% | 10.6% | Annualized Net Charge-Offs (% of average servicing portfolio) | Portfolio | Q3 2022 | Q3 2021 | Full Year 2021 | | :--- | :--- | :--- | :--- | | Total Owned Portfolio | 4.9% | 2.8% | 4.7% | - The company views its extension program as effective, noting that of accounts granted extensions in 2018, **55.1%** were either paid off or active as of September 30, 2022[184](index=184&type=chunk) [Liquidity and Capital Resources](index=41&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity is primarily from securitizations and credit facilities, with $12.9 million unrestricted cash and $157.6 million available borrowings, and total debt at $2.38 billion - Primary sources of cash are securitization proceeds, warehouse credit facilities, and customer payments, with primary uses being contract purchases and debt repayment[191](index=191&type=chunk) - As of Sep 30, 2022, the company had **$12.9 million** in unrestricted cash and **$157.6 million** in available borrowings under its two warehouse credit facilities[198](index=198&type=chunk) - Total debt outstanding was approximately **$2.38 billion** at Sep 30, 2022, primarily composed of **$2.06 billion** in securitization trust debt and **$242.4 million** in warehouse lines of credit[201](index=201&type=chunk) [Controls and Procedures](index=43&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of September 30, 2022, with no material changes to internal controls - The Principal Executive Officer and Principal Financial Officer concluded that the company's disclosure controls and procedures were **effective** as of September 30, 2022[205](index=205&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=44&type=section&id=Item%201.%20Legal%20Proceedings) This section incorporates legal proceedings from Note 8, including consumer litigation and a wage claim, with estimated probable losses of $3.4 million - Information regarding legal proceedings is incorporated by reference from **Note 8** to the Unaudited Condensed Consolidated Financial Statements[208](index=208&type=chunk) [Risk Factors](index=44&type=page&id=Item%201A.%20Risk%20Factors) Substantial indebtedness of $2.38 billion poses a key risk, potentially limiting financial flexibility and increasing vulnerability to adverse economic conditions - The company has substantial indebtedness of approximately **$2.38 billion** as of September 30, 2022, which could adversely affect its financial condition and flexibility[210](index=210&type=chunk)[211](index=211&type=chunk) - Forward-looking statements, including estimates for credit losses and fair value of receivables, are subject to risks such as **economic conditions**, **consumer bankruptcies**, and changes in **used vehicle prices**[214](index=214&type=chunk)[215](index=215&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=46&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased 678,911 shares of common stock at an average price of $10.59 per share during Q3 2022, with $12.9 million remaining for future purchases Issuer Purchases of Equity Securities (Q3 2022) | Month | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | July 2022 | 400,011 | $11.23 | | August 2022 | 6,000 | $11.30 | | September 2022 | 272,900 | $9.63 | | **Total** | **678,911** | **$10.59** | [Exhibits](index=46&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications and Inline XBRL documents - The exhibits filed with the report include certifications from the Chief Executive Officer and Chief Financial Officer, and various Inline XBRL data files[222](index=222&type=chunk) [Signatures](index=47&type=section&id=Signatures) The report was signed and authorized by the President and CEO, and Senior Vice President and CFO on November 14, 2022 - The report was signed on **November 14, 2022**, by the company's Principal Executive Officer and Principal Financial Officer[225](index=225&type=chunk)

Consumer Portfolio Services, Inc. (NASDAQ:CPSS) Q3 2022 Earnings Conference Call November 10, 2022 1:00 PM ET Company Participants Charles Bradley - CEO Mike Lavin - COO Denesh Bharwani - CFO of Consumer Portfolio Services Conference Call Participants Operator Good day, everyone, and welcome to the Consumer Portfolio Services 2022 Third Quarter Operating Results Conference Call. Today's call is being recorded. Before we begin, management has asked me to inform you that this conference call may contain forwa ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to ______________ Commission file number: 1-11416 CONSUMER PORTFOLIO SERVICES, INC. (Exact name of registrant as specified in its charter) Calif ...

Consumer Portfolio Services, Inc. (NASDAQ:CPSS) Q2 2022 Earnings Conference Call July 26, 2022 1:00 PM ET Company Participants Charles Bradley - CEO Jeffrey Fritz - CFO Conference Call Participants Operator Good day, everyone, and welcome to the Consumer Portfolio Services 2022 Second Quarter Operating Results Conference Call. Today's call is being recorded. Before we begin, management has asked me to inform you that this conference call may contain forward-looking statements. Any statements made during thi ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to ______________ Commission file number: 1-11416 CONSUMER PORTFOLIO SERVICES, INC. (Exact name of registrant as specified in its charter) Cali ...

Consumer Portfolio Services, Inc. (NASDAQ:CPSS) Q1 2022 Earnings Conference Call April 19, 2022 1:00 PM ET Company Participants Charles Bradley – Chief Executive Officer Jeffrey Fritz – Chief Financial Officer Conference Call Participants Operator Good day, everyone, and welcome to the Consumer Portfolio Services 2022 First Quarter Operating Results Conference Call. Today's call is being recorded. Before we begin, management has asked me to inform you that this conference call may contain forward-looking st ...

Funding and Financing - Current short-term funding capacity is $200 million, comprising two credit facilities, each with a maximum credit limit of $100 million[125]. - The company depends on its ability to securitize automobile contracts for permanent financing, which is subject to market conditions and other factors beyond its control[127]. - The company completed 36 securitizations from 2010 to 2019, but faced challenges in 2020 due to the pandemic, leading to postponed securitizations[128]. - The company’s results of operations are significantly affected by cash flows from residual interests in securitization programs and warehouse credit facilities[130]. - If interest rates rise, the company expects increased interest expenses, which could materially affect future results of operations[135]. - The company is subject to risk retention rules requiring retention of at least 5% of credit risk for asset-backed securities, potentially increasing capital requirements[156]. Competition and Market Risks - The automobile financing business is highly competitive, with competitors having greater financial resources and access to capital markets[137]. - The company specializes in sub-prime automobile contracts, which carry higher risks of nonperformance and defaults[139]. - Economic downturns, particularly in states like California, Ohio, Texas, and Florida, could lead to increased delinquencies and adversely affect operations[183]. - The COVID-19 pandemic has caused significant economic disruptions, potentially impacting obligors' ability to make timely payments[184]. - Natural disasters in key states like California and Texas could lead to job losses and damage to vehicles securing automobile contracts, affecting revenue[188]. Financial Condition and Indebtedness - As of December 31, 2021, the company had approximately $1,945.7 million in outstanding debt, primarily consisting of $1,760.0 million in securitization trust debt[167]. - The company's substantial indebtedness may increase vulnerability to adverse economic conditions and limit flexibility in business planning[168]. - The company maintains an allowance for credit losses on automobile contracts, which could adversely affect results if inadequate[141]. - The company's profitability is largely determined by the "spread" between the effective interest rate on automobile contracts and the interest rates payable under warehouse credit facilities and asset-backed securities[190]. - An increase in prevailing interest rates could reduce excess spread cash flows from automobile contracts, adversely affecting earnings and cash flows[190]. - The company acknowledges that a recession or depression in local, regional, or national economies would likely increase delinquencies and losses, negatively impacting financial condition[189]. Legal and Compliance Risks - Compliance with laws and regulations is critical, as failure to comply could result in penalties and adversely affect financial condition[151]. - The company faces litigation risks that could materially affect financial position and results of operations, with potential claims for substantial damages[158]. - The company has recorded loss contingencies only for matters where losses are probable and can be reasonably estimated, but actual losses may exceed reserves[159]. Shareholder Information - As of December 31, 2021, directors and executive officers collectively owned 6.4 million shares of common stock, representing approximately 30% ownership[191]. - The company has never declared or paid any cash dividends on its common stock and intends to retain future earnings without expecting to pay dividends in the foreseeable future[192]. - Limited trading volume of the company's common stock contributes to more volatile price fluctuations, with no assurance against stock price decline[191]. Forward-Looking Statements - Forward-looking statements in the report involve risks and uncertainties, including unexpected events, changes in economic conditions, and competition[194]. - The company does not guarantee performance based on forward-looking statements, as actual results may differ due to various uncontrollable factors[194]. - The company undertakes no obligation to publicly update any forward-looking information, advising consultation of periodic reports filed with the SEC for additional disclosures[195].

Title of Each Class Trading Symbol Name of Each Exchange on Which Registered Common Stock, no par value CPSS The NASDAQ Stock Market LLC (Global Market) Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ...