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CPS Announces Third Quarter 2010 Operating Results

Conference Call

CPS announced that it will hold a conference call on Tuesday, November 16, 2010, at 1:30 p.m. ET to discuss its quarterly operating results.  Those wishing to participate by telephone may dial-in at 877 312-5502 or 253 237-1131 approximately 10 minutes prior to the scheduled time.

A replay will be available between November 16, 2010 and November 22, 2010, beginning one hour after conclusion of the call, by dialing 800 642-1687 or 706 645-9291 for international participants, with conference identification number 25285298.  A broadcast of the conference call will also be available live and for 30 days after the call via the Company's web site at www.consumerportfolio.com .

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, low incomes 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 revenue, expense and provision for credit losses, because these items are dependent on the Company's estimates of future losses. The accuracy of such estimates may be adversely affected by various factors, which include (in addition to risks relating to the economy generally) 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 or the effects of recent changes in bankruptcy law, 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. 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 provision for credit losses may affect future performance.

 
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,
  2010 2009 2010 2009
Revenues:        
Interest income  $ 32,925  $ 49,320  $ 107,072  $ 165,459
Servicing fees  1,768  839  6,119  2,811
Other income  2,105  2,662  6,724  8,922
   36,798  52,821  119,915  177,192
Expenses:        
Employee costs 7,599 8,224  25,075  26,466
General and administrative  3,593  5,569  15,048  18,021
Interest  20,056  26,175  63,380  87,278
Provision for credit losses  7,036  15,258  25,742  49,836
Other expenses  2,011  1,902  5,354  6,360
   40,295  57,128  134,599  187,961
Income before income taxes  (3,497)  (4,307)  (14,684)  (10,769)
Income taxes  1,000  --  4,600  --
Net income   $ (4,497)  $ (4,307)  $ (19,284)  $ (10,769)
         
Earnings per share:        
Basic  $ (0.26)  $ (0.23)  $ (1.10)  $ (0.57)
Diluted  (0.26)  (0.23)  (1.10)  (0.57)
         
Number of shares used in computing earnings per share:        
Basic  17,309  18,583  17,530  18,776
Diluted  17,309  18,583  17,530  18,776
         
         
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
         
  September 30, December 31,    
  2010 2009    
         
Cash  $ 11,293  $ 12,433    
Restricted cash 120,105 128,511    
Total Cash 131,398 140,944    
Finance receivables 629,508 878,366    
Allowance for finance credit losses (21,198) (38,274)    
Finance receivables, net 608,310 840,092    
Residual interest in securitizations 3,696 4,316    
Deferred tax assets, net 28,850 33,450    
Other assets 29,724 49,459    
   $ 801,978  $ 1,068,261    
         
Accounts payable and other liabilities  $ 20,932  $ 17,906    
Warehouse line of credit 39,692 4,932    
Residual interest financing 44,252 56,930    
Securitization trust debt 632,783 904,833    
Senior secured debt, related party 26,950 26,118    
Subordinated debt 21,300 21,965    
  785,909 1,032,684    
         
Shareholders' equity 16,069 35,577    
   $ 801,978  $ 1,068,261    
         
Operating and Performance Data ($ in thousands) At and for the  At and for the 
  Three months ended Nine months ended
  September 30, September 30,
  2010 2009 2010 2009
         
Contract purchases 35,253 506 79,390 2,539
         
Total managed portfolio 843,012 1,197,341 843,012 1,197,341
         
Average managed portfolio 873,439 1,240,287 978,087 1,391,013
         
Net interest margin (1) 12,869 23,145 43,692 78,181
         
Risk adjusted margin (2) 5,833 7,887 17,950 28,345
         
Core operating expenses (3) 13,203 15,695 45,477 50,847
Annualized % of average managed portfolio 6.05% 5.06% 6.20% 4.87%
         
Allowance for finance credit losses as % of fin. receivables 3.37% 3.28%    
         
Aggregate allowance as % of fin. receivables (4) 5.40% 5.57%    
         
Delinquencies        
31+ Days 5.90% 5.80%    
         
Repossession Inventory 2.74% 3.02%    
         
Total Delinquencies and Repossession Inventory 8.64% 8.83%    
         
Annualized net charge-offs as % of average owned portfolio 6.98% 8.82% 9.69% 10.44%
         
(1) Interest income less interest expense.
(2) Net interest margin less provision for credit losses.
(3) Total expenses less interest and provision for credit losses.
(4) Includes allowance for finance credit losses and allowance for repossession inventory.
CONTACT:  Consumer Portfolio Services, Inc.
          Investor Relations Contact:
          Robert E. Riedl, Chief Investment Officer
          949 753-6800

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