• Pretax income of $12.3 million
  • Net income of $7.3 million, or $0.25 per diluted share
  • New contract purchases of $319 million
  • Total managed portfolio increases to $2.25 billion from $2.14 billion at March 31, 2016

LAS VEGAS, NV, July 27, 2016 (GLOBE NEWSWIRE) -- Consumer Portfolio Services, Inc. (Nasdaq:CPSS) ("CPS" or the "Company") today announced earnings of $7.3 million, or $0.25 per diluted share, for its second quarter ended June 30, 2016.  This compares to net income of $8.5 million, or $0.27 per diluted share, in the second quarter of 2015.

Revenues for the second quarter of 2016 were $104.9 million, an increase of $16.6 million, or 18.8%, compared to $88.4 million for the second quarter of 2015.  Total operating expenses for the second quarter of 2016 were $92.6 million, an increase of $19.5 million, or 26.6%, compared to $73.2 million for the 2015 period.  Pretax income for the second quarter of 2016 was $12.3 million compared to pretax income of $15.2 million in the second quarter of 2015, a decrease of 18.9%.

For the six months ended June 30, 2016 total revenues were $205.6 million compared to $174.4 million for the six months ended June 30, 2015, an increase of approximately $31.2 million, or 17.9%.  Total expenses for the six months ended June 30, 2016 were $181.0 million, an increase of $36.6 million, or 25.4%, compared to $144.4 million for the six months ended June 30, 2015.  Pretax income for the six months ended June 30, 2016 was $24.6 million, compared to $29.9 million for the six months ended June 30, 2015.  Net income for the six months ended June 30, 2016 was $14.5 million compared to $16.9 million for the six months ended June 30, 2015. 

During the second quarter of 2016, CPS purchased $319.1 million of new contracts compared to $312.3 million during the first quarter of 2016 and $269.9 million during the second quarter of 2015.  The Company's managed receivables totaled $2.254 billion as of June 30, 2016, an increase from $2.142 billion as of March 31, 2016 and $1.822 billion as of June 30, 2015.

Annualized net charge-offs for the second quarter of 2016 were 6.94% of the average owned portfolio as compared to 6.59% for the second quarter of 2015.  Delinquencies greater than 30 days (including repossession inventory) were 8.58% of the total owned portfolio as of June 30, 2016, as compared to 7.49% as of June 30, 2015.

"We are pleased with our operating results for the second quarter of 2016," said Charles E. Bradley, Jr., Chairman and Chief Executive Officer.  "Our originations volumes increased both sequentially and year over year, our managed portfolio continues to grow, and we continue to achieve good execution in the market for our asset-backed securitizations."

Conference Call

CPS announced that it will hold a conference call on Thursday, July 28, 2016, at 1:00 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 of the conference call will be available between July 28, 2016 and August 4, 2016, beginning two hours after conclusion of the call, by dialing 855 859-2056 or 404 537-3406 for international participants, with conference identification number 51614443.  A broadcast of the conference call will also be available live and for 90 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 incurred 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, 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 the provision for credit losses may affect future performance.

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Consumer Portfolio Services, Inc. and Subsidiaries              
Condensed Consolidated Statements of Operations              
(In thousands, except per share data)              
(Unaudited)              
                             
      Three months ended     Six months ended    
      June 30,     June 30,    
        2016         2015         2016         2015      
Revenues:                            
Interest income     $ 101,709       $ 84,900       $ 198,372       $ 167,259      
Servicing fees       24         62         47         210      
Other income       3,200         3,399         7,163         6,881      
        104,933         88,361         205,582         174,350      
Expenses:                            
Employee costs       15,678         13,144         30,822         27,630      
General and administrative       6,569         5,108         11,900         9,944      
Interest       19,727         13,688         37,548         26,861      
Provision for credit losses       44,423         35,683         88,619         69,122      
Other expenses       6,211         5,538         12,139         10,844      
        92,608         73,161         181,028         144,401      
Income before income taxes       12,325         15,200         24,554         29,949      
Income tax expense       5,053         6,663         10,068         13,079      
Net income     $ 7,272       $ 8,537       $ 14,486       $ 16,870      
                             
Earnings per share:                            
Basic     $ 0.30       $ 0.33       $ 0.58       $ 0.65      
Diluted     $ 0.25       $ 0.27       $ 0.49       $ 0.53      
                             
                             
Number of shares used in computing earnings per share:                            
Basic       24,538         26,234         24,917         25,936      
Diluted       29,111         31,917         29,632         31,955      
                             
                             
Condensed Consolidated Balance Sheets              
(In thousands)              
(Unaudited)              
                             
                             
      June 30,     December 31,                
        2016         2015                  
Assets:                            
Cash and cash equivalents     $ 15,752       $ 19,322                  
Restricted cash and equivalents       115,268         106,054                  
Total cash and cash equivalents       131,020         125,376                  
                             
Finance receivables       2,218,389         1,985,093                  
Allowance for finance credit losses       (90,168 )       (75,603 )                
Finance receivables, net       2,128,221         1,909,490                  
                             
Finance receivables measured at fair value       13         61                  
Deferred tax assets, net       40,350         37,597                  
Other assets       55,305         56,401                  
      $ 2,354,909       $ 2,128,925                  
                             
Liabilities and Shareholders' Equity:                            
Accounts payable and accrued expenses     $ 38,509       $ 29,509                  
Warehouse lines of credit       165,103         194,056                  
Residual interest financing       7,455         9,042                  
Securitization trust debt       1,956,620         1,720,021                  
Subordinated renewable notes       15,257         15,138                  
        2,182,944         1,967,766                  
                             
Shareholders' equity       171,965         161,159                  
      $ 2,354,909       $ 2,128,925                  
                             
                             
Operating and Performance Data ($ in millions)                            
                             
                             
                             
      At and for the     At and for the    
      Three months ended     Six months ended    
      June 30,     June 30,    
        2016         2015         2016         2015      
                             
Contracts purchased     $ 319.11       $ 269.90       $ 631.41       $ 503.79      
Contracts securitized       340.00         227.13         680.00         485.46      
                             
Total managed portfolio     $ 2,253.70       $ 1,822.18       $ 2,253.70       $ 1,822.18      
Average managed portfolio       2,216.87         1,783.87         2,157.58         1,744.23      
                             
Allowance for finance credit losses as % of fin. receivables       4.06 %       4.18 %                
                             
Aggregate allowance as % of fin. receivables (1)       5.02 %       5.00 %                
                             
Delinquencies                            
31+ Days       7.10 %       6.12 %                
Repossession Inventory       1.48 %       1.37 %                
Total Delinquencies and Repo. Inventory       8.58 %       7.49 %                
                             
Annualized net charge-offs as % of average owned portfolio       6.94 %       6.59 %       7.24 %       6.62 %    
                             
Recovery rates (2)       38.9 %       44.8 %       39.4 %       44.4 %    
                             
      For the   For the  
      Three months ended   Six months ended  
      June 30,   June 30,  
        2016       2015       2016       2015    
      $ (3 ) % (4)   $ (3 ) % (4)   $ (3 ) % (4)   $ (3 ) % (4)  
Interest income     $ 101.71     18.4 %   $ 84.90     19.0 %   $ 198.37     18.4 %   $ 167.26     19.2 %  
Servicing fees and other income       3.22     0.6 %     3.46     0.8 %     7.21     0.7 %     7.09     0.8 %  
Interest expense         (19.73 )   -3.6 %       (13.69 )   -3.1 %       (37.55 )   -3.5 %       (26.86 )   -3.1 %  
Net interest margin       85.21     15.4 %     74.67     16.7 %     168.03     15.6 %     147.49     16.9 %  
Provision for credit losses         (44.42 )   -8.0 %       (35.68 )   -8.0 %       (88.62 )   -8.2 %       (69.12 )   -7.9 %  
Risk adjusted margin       40.78     7.4 %     38.99     8.7 %     79.42     7.4 %     78.37     9.0 %  
Core operating expenses       (28.46 )   -5.1 %     (23.79 )   -5.3 %     (54.86 )   -5.1 %     (48.42 )   -5.6 %  
Pre-tax income     $ 12.33     2.2 %   $ 15.20     3.4 %   $ 24.55     2.3 %   $ 29.95     3.4 %  
                             
                             
                             
(1)  Includes allowance for finance credit losses and allowance for repossession inventory.                
(2)  Wholesale auction liquidation amounts (net of expenses) as a percentage of the account balance at the time of sale.          
(3)  Numbers may not add due to rounding.                            
(4)  Annualized percentage of the average managed portfolio.  Percentages may not add due to rounding.            
                             

Investor Relations ContactJeffrey P. Fritz, Chief Financial Officer844 878-2777