• Pretax income of $8.0 million
  • Net income of $4.6 million, or $0.17 per diluted share
  • New contract purchases of $234 million
  • Total managed portfolio increases to $2.34 billion from $2.31 billion at December 31, 2016

LAS VEGAS, NV, July 24, 2017 (GLOBE NEWSWIRE) -- Consumer Portfolio Services, Inc. (Nasdaq:CPSS) ("CPS" or the "Company") today announced earnings of $4.6 million, or $0.17 per diluted share, for its second quarter ended June 30, 2017.  This compares to net income of $7.3 million, or $0.25 per diluted share, in the second quarter of 2016.

Revenues for the second quarter of 2017 were $110.1 million, an increase of $5.1 million, or 4.9%, compared to $104.9 million for the second quarter of 2016.  Total operating expenses for the second quarter of 2017 were $102.1 million, an increase of $9.5 million, or 10.3%, compared to $92.6 million for the 2016 period.  Pretax income for the second quarter of 2017 was $8.0 million compared to pretax income of $12.3 million in the second quarter of 2016, a decrease of 35.5%.

For the six months ended June 30, 2017 total revenues were $217.7 million compared to $205.6 million for the six months ended June 30, 2016, an increase of approximately $12.1 million, or 5.9%.  Total expenses for the six months ended June 30, 2017 were $201.9 million, an increase of $20.9 million, or 11.5%, compared to $181.0 million for the six months ended June 30, 2016.  Pretax income for the six months ended June 30, 2017 was $15.7 million, compared to $24.6 million for the six months ended June 30, 2016.  Net income for the six months ended June 30, 2017 was $9.1 million compared to $14.5 million for the six months ended June 30, 2016. 

During the second quarter of 2017, CPS purchased $233.9 million of new contracts compared to $229.6 million during the first quarter of 2017 and $319.1 million during the second quarter of 2016.  The Company's managed receivables totaled $2.343 billion as of June 30, 2017, an increase from $2.323 billion as of March 31, 2017 and $2.254 billion as of June 30, 2016.

Annualized net charge-offs for the second quarter of 2017 were 7.62% of the average owned portfolio as compared to 6.94% for the second quarter of 2016.  Delinquencies greater than 30 days (including repossession inventory) were 9.64% of the total owned portfolio as of June 30, 2017, as compared to 8.58% as of June 30, 2016.

In the second quarter of 2017 our board of directors approved an increase to the aggregate authorization to repurchase our outstanding securities by $10 million. During the second quarter of 2017, CPS purchased 540,793 shares of stock in the open market at an average price of $4.54. For the six months ended June 30, 2017, CPS purchased 1,102,410 shares at an average price of $4.74.

"We are pleased with our second quarter results," said Charles E. Bradley, Jr., Chairman and Chief Executive Officer.  "We notched our 24 th consecutive quarter of positive earnings and the capital markets continue to be very receptive to our quarterly issuances of bonds backed by our automobile receivables, as shown by our second quarter securitization where the weighted average spread over benchmarks was the best since the third quarter of 2014."

Conference Call

CPS announced that it will hold a conference call on Tuesday, July 25, 2017, 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. The conference identification number is 54724137.

A replay of the conference call will be available between July 25, 2017 and August 1, 2017, beginning two hours after conclusion of the call, by dialing 855 859-2056 or 404 537-3406 for international participants, with conference identification number 54724137.  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.

 
             
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,   
        2017         2016         2017         2016    
Revenues:                          
Interest income     $   107,485       $   101,709       $   212,060       $   198,372    
Other income         2,587           3,224           5,610           7,210    
          110,072           104,933           217,670           205,582    
Expenses:                          
Employee costs         17,572           15,678           35,352           30,822    
General and administrative         6,819           6,569           13,741           11,900    
Interest         23,236           19,727           45,324           37,548    
Provision for credit losses         48,550           44,423           95,717           88,619    
Other expenses         5,943           6,211           11,792           12,139    
          102,120           92,608           201,926           181,028    
Income before income taxes         7,952           12,325           15,744           24,554    
Income tax expense         3,380           5,053           6,692           10,068    
  Net income      $   4,572       $   7,272       $   9,052       $   14,486    
                           
Earnings per share:                          
  Basic     $   0.20       $   0.30       $   0.39       $   0.58    
  Diluted     $   0.17       $   0.25       $   0.32       $   0.49    
                           
                           
Number of shares used in computing earnings                          
  per share:                          
  Basic       23,076         24,538         23,296         24,917    
  Diluted       27,602         29,111         28,024         29,632    
                           
                           
Condensed Consolidated Balance Sheets 
(In thousands)
(Unaudited) 
                           
                           
      June 30,     December 31,              
        2017         2016                
Assets:                          
Cash and cash equivalents     $   15,810       $   13,936                
Restricted cash and equivalents       118,298         112,754                
Total cash and cash equivalents       134,108         126,690                
                           
Finance receivables       2,314,522         2,267,943                
Allowance for finance credit losses       (107,315 )       (95,578 )              
Finance receivables, net       2,207,207         2,172,365                
                           
Deferred tax assets, net       45,198         42,845                
Other assets       61,283         68,502                
      $   2,447,796       $   2,410,402                
                           
Liabilities and Shareholders' Equity:                          
Accounts payable and accrued expenses     $   25,204       $   24,977                
Warehouse lines of credit       131,272         103,358                
Securitization trust debt       2,081,989         2,080,900                
Subordinated renewable notes       16,080         14,949                
        2,254,545         2,224,184                
                           
Shareholders' equity       193,251         186,218                
      $   2,447,796       $   2,410,402                
                         
                         
Operating and Performance Data ($ in millions)                        
                           
       At and for the       At and for the   
       Three months ended       Six months ended   
       June 30,       June 30,   
        2017         2016         2017         2016    
                           
Contracts purchased     $   233.90       $   319.11       $   463.55       $   631.41    
Contracts securitized         230.00           340.00           440.00           680.00    
                           
Total managed portfolio     $   2,343.30       $   2,253.70       $   2,343.30       $   2,253.70    
Average managed portfolio         2,340.23           2,216.87           2,326.02           2,157.58    
                           
Allowance for finance credit losses as % of fin. receivables       4.64 %       4.06 %              
                           
Aggregate allowance as % of fin. receivables (1)       5.56 %       5.02 %              
                           
Delinquencies                          
31+ Days       8.30 %       7.10 %              
Repossession Inventory       1.34 %       1.48 %              
Total Delinquencies and Repo. Inventory       9.64 %       8.58 %              
                           
Annualized net charge-offs as % of average owned portfolio       7.62 %       6.94 %       7.76 %       7.24 %  
                           
Recovery rates (2)       35.6 %       38.9 %       35.4 %       39.4 %  
                           
       For the     For the 
       Three months ended     Six months ended 
       June 30,     June 30, 
        2017       2016       2017       2016  
      $ (3)   % (4)   $ (3)   % (4)   $ (3)   % (4)   $ (3)   % (4)
Interest income     $   107.49     18.4 %   $   101.71     18.4 %   $   212.06     18.2 %   $   198.37     18.4 %
Servicing fees and other income         2.59     0.4 %       3.22     0.6 %       5.61     0.5 %       7.21     0.7 %
Interest expense         (23.24 )   -4.0 %       (19.73 )   -3.6 %       (45.32 )   -3.9 %       (37.55 )   -3.5 %
Net interest margin          86.84     14.8 %       85.21     15.4 %       172.35     14.8 %       168.03     15.6 %
Provision for credit losses         (48.55 )   -8.3 %       (44.42 )   -8.0 %       (95.72 )   -8.2 %       (88.62 )   -8.2 %
Risk adjusted margin         38.29     6.5 %       40.78     7.4 %       76.63     6.6 %       79.42     7.4 %
Core operating expenses         (30.33 )   -5.2 %       (28.46 )   -5.1 %       (60.89 )   -5.2 %       (54.86 )   -5.1 %
Pre-tax income     $   7.95     1.4 %   $   12.33     2.2 %   $   15.74     1.4 %   $   24.55     2.3 %
                           
(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