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CPS Announces Fourth Quarter And Full Year 2022 Earnings

  • Pretax income of $18.3 million for the fourth quarter and $116.2 million for 2022
  • Net income of $14.1 million, or $0.59 per diluted share for the fourth quarter
  • Net income of $86.0 million, or $3.23 per diluted share for 2022
  • New contract purchases of $1.854 billion for the full year 2022  

LAS VEGAS, NV, March 09, 2023 (GLOBE NEWSWIRE) -- Consumer Portfolio Services, Inc. (Nasdaq: CPSS) (“CPS” or the “Company”) today announced earnings of $14.1 million, or $0.59 per diluted share, for its fourth quarter ended December 31, 2022. This compares to a net income of $19.0 million, or $0.71 per diluted share, in the fourth quarter of 2021.

Revenues for the fourth quarter of 2022 were $83.0 million, an increase of $13.7 million, or 19.7%, compared to $69.4 million for the fourth quarter of 2021. Total operating expenses for the fourth quarter of 2022 were $64.7 million compared to $45.0 million for the 2021 period.   Pretax income for the fourth quarter of 2022 was $18.3 million compared to pretax income of $24.4 million in the fourth quarter of 2021.

For the twelve months ended December 31, 2022 total revenues were $329.7 million compared to $267.8 million for the twelve months ended December 31, 2021, an increase of approximately $61.9 million, or 23.1%. Total expenses for the twelve months ended December 31, 2022 were $213.5 million, an increase of $11.5 million, or 5.7%, compared to $202.1 million for the twelve months ended December 31, 2021. Pretax income for the twelve months ended December 31, 2022 was $116.2 million, compared to $65.7 million for the twelve months ended December 31, 2021. Net income for the twelve months ended December 31, 2022 was $86.0 million, or $3.23 per diluted share. This compares to net income of $47.5 million, or $1.84 per diluted share for the twelve months ended December 31, 2021.

During the fourth quarter of 2022, CPS purchased $428.1 million of new contracts compared to $468.2 million during the third quarter of 2022 and $328.0 million during the fourth quarter of 2021. The Company's receivables totaled $2.795 billion as of December 31, 2022, an increase from $2.687 billion as of September 30, 2022 and an increase from $2.209 billion as of December 31, 2021.

Annualized net charge-offs for the fourth quarter of 2022 were 5.83% of the average portfolio as compared to 2.57% for the fourth quarter of 2021. Delinquencies greater than 30 days (including repossession inventory) were 12.62% of the total portfolio as of December 31, 2022, as compared to 10.53% as of December 31, 2021.

The fourth quarter brings to close a banner year for the Company,” said Charles E. Bradley, Chief Executive Officer. “We originated $1.85 billion in new finance receivables for the year, a 62% increase over 2021. Our total managed portfolio eclipsed $3 billion for the first time and our earnings for the year are the highest ever in our history.”

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 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 figures representing allowances for remaining expected lifetime credit losses, its estimates of fair value (most significantly for its receivables accounted for at fair value), its provision for credit losses, its entries offsetting the preceding, and figures derived from any of the preceding. In each case, such figures are forward-looking statements because they are dependent on the Company’s estimates of losses to be incurred in the future. The accuracy of such estimates may be adversely affected by various factors, which include 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. Any or 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 losses to be incurred in the future may affect future performance.

Investor Relations Contact

Danny Bharwani, Chief Financial Officer

949-753-6811

Consumer Portfolio Services, Inc. and Subsidiaries     
Condensed Consolidated Statements of Operations     
(In thousands, except per share data)     
(Unaudited)     
             
   Three months ended  Twelve months ended
   December 31,  December 31,
    2022    2021    2022    2021 
Revenues:            
Interest income  $79,690   $67,715   $305,237   $266,266 
Mark to finance receivables measured at fair value   -    -    15,283    (4,417)
Other income   3,330    1,650    9,189    5,962 
    83,020    69,365    329,709    267,811 
Expenses:            
Employee costs   20,868    22,756    84,282    80,534 
General and administrative   11,699    11,582    37,618    34,616 
Interest   28,870    16,980    87,524    75,239 
Provision for credit losses   (4,700)   (13,000)   (28,100)   (14,590)
Other expenses   7,978    6,667    32,192    26,266 
    64,715    44,985    213,516    202,065 
Income before income taxes   18,305    24,380    116,193    65,746 
Income tax expense   4,170    5,415    30,210    18,222 
Net income  $14,135   $18,965   $85,983   $47,524 
             
Earnings per share:            
Basic  $0.69   $0.88   $4.10   $2.11 
Diluted  $0.59   $0.71   $3.23   $1.84 
             
             
Number of shares used in computing earnings            
per share:            
Basic   20,341    21,661    20,958    22,562 
Diluted   23,828    26,813    26,589    25,780 
             


Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
       
       
   December 31,  December 31,
    2022    2021 
Assets:      
Cash and cash equivalents  $13,490   $29,928 
Restricted cash and equivalents   149,299    146,620 
Finance receivables measured at fair value   2,476,617    1,749,098 
       
Finance receivables   92,304    232,390 
Allowance for finance credit losses   (21,753)   (56,206)
Finance receivables, net   70,551    176,184 
       
       
Deferred tax assets, net   10,177    19,575 
Other assets   32,634    38,173 
   $2,752,768   $2,159,578 
       
Liabilities and Shareholders' Equity:      
Accounts payable and accrued expenses  $55,421   $43,648 
Warehouse lines of credit   285,328    105,610 
Residual interest financing   49,623    53,682 
Securitization trust debt   2,108,744    1,759,972 
Subordinated renewable notes   25,263    26,459 
    2,524,379    1,989,371 
       
Shareholders' equity   228,389    170,207 
   $2,752,768   $2,159,578 
       


Operating and Performance Data ($ in millions)            
          
   At and for the  At and for the
   Three months ended  Twelve months ended
   December 31,  December 31,
    2022    2021    2022    2021 
             
Contracts purchased  $428.08   $327.98   $1,854.39   $1,146.32 
Contracts securitized   337.38    360.00    1,537.38    1,145.00 
             
Total portfolio balance (5)  $2,795.38   $2,209.43   $2,795.38   $2,209.43 
Average portfolio balance (5)   2,764.80    2,190.16    2,539.11    2,147.61 
             
             
Delinquencies (5)            
31+ Days   11.12%   9.50%      
Repossession Inventory   1.50%   1.03%      
Total Delinquencies and Repo. Inventory   12.62%   10.53%      
             
Annualized Net Charge-offs as % of Average Portfolio (5)            
Legacy portfolio   6.84%   0.11%   4.63%   5.78%
Fair Value portfolio   5.79%   2.89%   4.52%   3.09%
Total portfolio   5.83%   2.57%   4.53%   3.52%
             
Recovery rates (2)   43.6%   63.3%   52.3%   54.5%
             


   For the For the
   Three months ended Twelve months ended
   December 31, December 31,
    2022   2021   2022   2021 
   $(3)% (4) $(3)% (4) $(3)% (4) $(3)% (4)
Interest income  $79.69 11.5% $67.72 12.4% $305.24 12.0% $266.27 12.4%
Mark to finance receivables measured at fair value   - 0.0%  - 0.0%  15.28 0.6%  (4.42)-0.2%
Other income   3.33 0.5%  1.65 0.3%  9.19 0.4%  5.96 0.3%
Interest expense   (28.87)-4.2%  (16.98)-3.1%  (87.52)-3.4%  (75.24)-3.5%
Net interest margin   54.15 7.8%  52.39 9.6%  242.19 9.5%  192.57 9.0%
Provision for credit losses   4.70 0.7%  13.00 2.4%  28.10 1.1%  14.59 0.7%
Risk adjusted margin   58.85 8.5%  65.39 11.9%  270.29 10.6%  207.16 9.6%
Core operating expenses   (40.55)-5.9%  (41.01)-7.5%  (154.09)-6.1%  (141.42)-6.6%
Pre-tax income  $18.31 2.6% $24.38 4.5% $116.19 4.6% $65.75 3.1%
              
              
              
(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 portfolio balance. Percentages may not add due to rounding.      
(5) Excludes third party portfolios.             

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