
PART I. FINANCIAL INFORMATION Item 1. Financial Statements This section presents the unaudited condensed consolidated financial statements for Consumer Portfolio Services, Inc. for Q1 2025, including balance sheets, statements of operations, cash flows, and detailed notes Unaudited Condensed Consolidated Financial Statements For Q1 2025, net income slightly increased to $4.7 million, total assets grew to $3.67 billion, and cash from operations significantly increased, driven by higher finance receivables and a new securitization Condensed Consolidated Balance Sheet (Unaudited) | (In thousands) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $3,673,606 | $3,493,868 | | Finance receivables measured at fair value | $3,449,106 | $3,313,767 | | Total Liabilities | $3,375,179 | $3,201,098 | | Securitization trust debt | $2,743,269 | $2,594,384 | | Total Shareholders' Equity | $298,427 | $292,770 | Condensed Consolidated Statement of Operations (Unaudited) | (In thousands, except per share data) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Total Revenues | $106,874 | $91,744 | | Total Expenses | $100,072 | $85,187 | | Interest Expense | $54,918 | $41,968 | | Net Income | $4,694 | $4,590 | | Diluted EPS | $0.19 | $0.19 | Condensed Consolidated Statement of Cash Flows (Unaudited) | (In thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $73,868 | $52,705 | | Net cash used in investing activities | ($194,111) | ($108,632) | | Net cash provided by financing activities | $166,324 | $81,451 | | Increase in cash and cash equivalents | $46,081 | $25,524 | Notes to Unaudited Condensed Consolidated Financial Statements These notes detail the company's sub-prime auto contract business, key accounting policies including fair value for receivables, debt structures, lease obligations, legal proceedings, and a significant $419.95 million securitization completed in May 2025 - The company specializes in purchasing and servicing retail automobile contracts for sub-prime customers, providing indirect financing through motor vehicle dealers18 - Finance receivables acquired since January 1, 2018, are accounted for at fair value, where anticipated credit losses are incorporated into the level yield calculation, eliminating a separate periodic provision for credit losses for this portfolio2224 Securitization Trust Debt Outstanding | (In thousands) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Outstanding Principal | $2,759,276 | $2,609,855 | - On March 20, 2025, the company completed a $65 million securitization of residual interests from previously issued securitizations with a coupon of 11.00%58 - The company estimates the range of reasonably possible losses for all legal proceedings and contingencies does not exceed $3.2 million as of March 31, 202572 - Subsequent to the quarter end, on May 12, 2025, the company executed a securitization of $419.95 million of asset-backed notes secured by $439.29 million in automobile receivables86 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management's analysis shows 16.6% revenue growth driven by an expanding $3.77 billion portfolio, offset by a 17.5% increase in operating expenses, resulting in flat net income, improved credit quality, and liquidity dependent on securitization markets with $3.3 billion in total debt Results of Operations Q1 2025 revenues increased 16.6% to $106.9 million due to portfolio growth, but total operating expenses rose 17.5% to $100.1 million, primarily from a $12.9 million increase in interest expense, resulting in flat net income of $4.7 million - Revenues increased by $15.2 million (16.6%) YoY, mainly from higher interest income due to a larger average balance of finance receivables, including a $3.5 million fair value mark-up on the portfolio107 - Total operating expenses increased by $14.9 million (17.5%) YoY, primarily due to a $12.9 million increase in interest expense111114 Net Interest Income Change Analysis (Q1 2025 vs Q1 2024) | (In thousands) | Total Change | Change Due to Volume | Change Due to Rate | | :--- | :--- | :--- | :--- | | Interest Income | $17,645 | $16,752 | $893 | | Interest Expense | $12,950 | $10,808 | $2,142 | | Net Interest Income | $4,695 | $5,944 | ($1,249) | - The net interest yield decreased to 4.7% in Q1 2025 from 4.9% in Q1 2024, as the average rate on interest-bearing liabilities rose faster than the yield on interest-earning assets120121 Credit Experience Credit quality improved with total delinquencies decreasing to 9.75% and annualized net charge-offs slightly improving to 7.5%, while payment extensions remain a key loss mitigation tool Delinquency as a Percentage of Gross Servicing Portfolio (by Amount) | Period | 31-90+ Days Delinquent | | :--- | :--- | | March 31, 2025 | 9.75% | | March 31, 2024 | 9.98% | | December 31, 2024 | 12.11% | - Annualized net charge-offs as a percentage of the average servicing portfolio was 7.5% for the three months ended March 31, 2025, compared to 7.8% for the same period in 2024132 - The company's extension program is presented as effective, with 57.8% of accounts granted extensions in 2019 either paid in full or active and performing as of March 31, 2025137 Liquidity and Capital Resources Liquidity is primarily sourced from securitizations and warehouse facilities, with Q1 2025 operating cash flow at $73.9 million, total debt at $3.3 billion, and $29.8 million unrestricted cash with $153.6 million available borrowings - Primary sources of cash are securitization transactions, warehouse credit facilities, and customer payments, with primary uses being purchases of automobile contracts and operating expenses143 - As of March 31, 2025, the company had $29.8 million in unrestricted cash and $153.6 million in aggregate available borrowings under its two warehouse credit facilities149 - Total outstanding debt was approximately $3.3 billion at March 31, 2025, primarily composed of $2.74 billion in securitization trust debt and $365.7 million in warehouse lines of credit152 Item 4. Controls and Procedures The CEO and CFO concluded that disclosure controls and procedures are effective, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures are effective in recording, processing, summarizing, and reporting material information on a timely basis154 - There were no changes in internal controls over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, these controls154 PART II. OTHER INFORMATION Item 1. Legal Proceedings The company is involved in routine consumer litigation and a class action lawsuit, with management estimating the maximum reasonably possible loss for all legal contingencies not to exceed $3.2 million - The company is routinely involved in various legal proceedings resulting from its consumer finance activities70156 - Management believes the range of reasonably possible losses for all legal proceedings as of March 31, 2025, does not exceed $3.2 million72 Item 1A. Risk Factors Substantial indebtedness of approximately $3.3 billion as of March 31, 2025, poses a key risk, increasing vulnerability to economic downturns and limiting financial flexibility - The company has substantial indebtedness, totaling approximately $3.3 billion at March 31, 2025, consisting primarily of securitization trust debt and warehouse lines of credit158 - This high level of debt could adversely affect financial condition by increasing vulnerability to economic downturns, requiring dedication of substantial cash flow to debt payments, and limiting flexibility159160 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company did not repurchase any shares of its common stock during the first quarter of 2025 - The company did not repurchase any shares of its common stock during the first quarter of 2025161 Item 5. Other Information No director or officer adopted or terminated any Rule 10b5-1 trading arrangement during the quarter ended March 31, 2025 - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the quarter162 Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications and Inline XBRL financial data files - The exhibits filed with the report include CEO and CFO certifications (Exhibits 31.1, 31.2, 32) and Inline XBRL documents (Exhibit 101)163165