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CPS Announces Second Quarter 2022 Earnings

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Consumer Portfolio Services, Inc.
Consumer Portfolio Services, Inc.
  • Pretax income of $34.2 million, a 147% increase over the prior year period

  • Net income of $25.3 million, or $0.91 per diluted share

  • New contract purchases of $548.1 million, a 33.7% increase over the first quarter of 2022

LAS VEGAS, NV, July 25, 2022 (GLOBE NEWSWIRE) -- Consumer Portfolio Services, Inc. (Nasdaq: CPSS) (“CPS” or the “Company”) today announced earnings of $25.3 million, or $0.91 per diluted share, for its second quarter ended June 30, 2022. This compares to net income of $9.7 million, or $0.39 per diluted share, in the second quarter of 2021.

Revenues for the second quarter of 2022 were $82.0 million, compared to $66.8 million for the second quarter of 2021. Total operating expenses for the second quarter of 2022 were $47.8 million compared to $52.9 million for the 2021 period for a decrease of $5.1 million, or 9.6%. Pretax income for the second quarter of 2022 was $34.2 million compared to pretax income of $13.9 million in the second quarter of 2021, an increase of $20.3 million.

For the six months ended June 30, 2022 total revenues were $156.4 million compared to $129.9 million for the six months ended June 30, 2021, an increase of approximately $26.5 million, or 20.4%. Total expenses for the six months ended June 30, 2022 were $92.8 million, a decrease of $15.2 million, or 14.1%, compared to $108.1 million for the six months ended June 30, 2021. Pretax income for the six months ended June 30, 2022 was $63.5 million, compared to $21.8 million for the six months ended June 30, 2021, an increase of $41.7 million. Net income for the six months ended June 30, 2022 was $46.4 million compared to $14.9 million for the six months ended June 30, 2021.

During the second quarter of 2022, CPS purchased $548.1 million of new contracts compared to $410.0 million during the first quarter of 2022 and $286.0 million during the second quarter of 2021. The Company's receivables totaled $2.555 billion as of June 30, 2022, an increase from $2.324 billion as of March 31, 2022 and $2.116 billion as of June 30, 2021.

Annualized net charge-offs for the second quarter of 2022 were 3.57% of the average portfolio as compared to 2.79% for the second quarter of 2021. Delinquencies greater than 30 days (including repossession inventory) were 9.71% of the total portfolio as of June 30, 2022, as compared to 8.28% as of June 30, 2021.

“I’m proud to announce that in this past quarter we broke records for quarterly originations and pre-tax earnings,” reported Charles E. Bradley, Jr., Chief Executive Officer. “All areas of the Company are performing at high levels.”

Conference Call

CPS announced that it will hold a conference call on Tuesday, July 26, 2022 at 1:00 p.m. ET to discuss its second quarter 2022 operating results.

Those wishing to participate can pre-register for the conference call at the following link https://register.vevent.com/register/BIca2d8dafe11e4a0eab6c314d9b398f1b. Registered participants will receive an email containing conference call details for dial-in options. To avoid delays, we encourage participants to dial into the conference call fifteen minutes ahead of the schedule start time. A replay will be available beginning two hours after conclusion of the call for 12 months via the Company’s website at https://ir.consumerportfolio.com/investor-relations.

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 figures representing allowances for remaining expected lifetime credit losses, its pandemic-related markdown of carrying value for the portion of its portfolio accounted for at fair value, its pandemic-related charge to the provision for credit losses for the its legacy portfolio, 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 (in addition to risks relating to the COVID-19 pandemic and 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. The accuracy of such estimates may also be affected by the effects of the COVID-19 pandemic and of governmental responses to said pandemic, which have included prohibitions on certain means of enforcement of receivables, and may include additional restrictions, as yet unknown, in the future. 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

Jeffrey P. Fritz, Chief Financial Officer
844 878-2777


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,

 

 

 

 

 

2022

 

 

 

 

2021

 

 

 

 

2022

 

 

 

 

2021

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

$

75,670

 

 

 

$

65,440

 

 

 

$

145,730

 

 

 

$

131,533

 

 

Mark to finance receivables measured at fair value

 

4,700

 

 

 

 

-

 

 

 

 

7,100

 

 

 

 

(4,417

)

 

Other income

 

 

 

1,648

 

 

 

 

1,329

 

 

 

 

3,554

 

 

 

 

2,765

 

 

 

 

 

 

82,018

 

 

 

 

66,769

 

 

 

 

156,384

 

 

 

 

129,881

 

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Employee costs

 

 

 

20,591

 

 

 

 

19,448

 

 

 

 

42,743

 

 

 

 

39,607

 

 

General and administrative

 

 

 

8,280

 

 

 

 

7,831

 

 

 

 

16,511

 

 

 

 

15,579

 

 

Interest

 

 

 

18,771

 

 

 

 

18,980

 

 

 

 

35,171

 

 

 

 

39,925

 

 

Provision for credit losses

 

 

 

(8,000

)

 

 

 

-

 

 

 

 

(17,400

)

 

 

 

-

 

 

Other expenses

 

 

 

8,160

 

 

 

 

6,634

 

 

 

 

15,815

 

 

 

 

12,950

 

 

 

 

 

 

47,802

 

 

 

 

52,893

 

 

 

 

92,840

 

 

 

 

108,061

 

 

Income before income taxes

 

 

 

34,216

 

 

 

 

13,876

 

 

 

 

63,544

 

 

 

 

21,820

 

 

Income tax expense

 

 

 

8,896

 

 

 

 

4,163

 

 

 

 

17,109

 

 

 

 

6,943

 

 

Net income

 

 

$

25,320

 

 

 

$

9,713

 

 

 

$

46,435

 

 

 

$

14,877

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

$

1.18

 

 

 

$

0.43

 

 

 

$

2.18

 

 

 

$

0.65

 

 

Diluted

 

 

$

0.91

 

 

 

$

0.39

 

 

 

$

1.66

 

 

 

$

0.59

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of shares used in computing earnings  per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 

21,370

 

 

 

 

22,842

 

 

 

 

21,296

 

 

 

 

22,791

 

 

Diluted

 

 

 

27,687

 

 

 

 

25,130

 

 

 

 

27,943

 

 

 

 

25,048

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Condensed Consolidated Balance Sheets

 

(In thousands)

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

 

December 31,

 

 

 

 

 

 

 

 

 

 

2022

 

 

 

 

2021

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

$

11,348

 

 

 

$

29,928

 

 

 

 

 

 

 

 

Restricted cash and equivalents

 

 

 

157,021

 

 

 

 

146,620

 

 

 

 

 

 

 

 

Finance receivables measured at fair value

 

 

 

2,174,133

 

 

 

 

1,749,098

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Finance receivables

 

 

 

149,010

 

 

 

 

232,390

 

 

 

 

 

 

 

 

Allowance for finance credit losses

 

 

 

(35,672

)

 

 

 

(56,206

)

 

 

 

 

 

 

 

Finance receivables, net

 

 

 

113,338

 

 

 

 

176,184

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deferred tax assets, net

 

 

 

17,523

 

 

 

 

19,575

 

 

 

 

 

 

 

 

Other assets

 

 

 

27,110

 

 

 

 

38,173

 

 

 

 

 

 

 

 

 

 

 

$

2,500,473

 

 

 

$

2,159,578

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders' Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

 

$

62,415

 

 

 

$

43,648

 

 

 

 

 

 

 

 

Warehouse lines of credit

 

 

 

228,906

 

 

 

 

105,610

 

 

 

 

 

 

 

 

Residual interest financing

 

 

 

49,497

 

 

 

 

53,682

 

 

 

 

 

 

 

 

Securitization trust debt

 

 

 

1,934,156

 

 

 

 

1,759,972

 

 

 

 

 

 

 

 

Subordinated renewable notes

 

 

 

27,208

 

 

 

 

26,459

 

 

 

 

 

 

 

 

 

 

 

 

2,302,182

 

 

 

 

1,989,371

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders' equity

 

 

 

198,291

 

 

 

 

170,207

 

 

 

 

 

 

 

 

 

 

 

$

2,500,473

 

 

 

$

2,159,578

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating and Performance Data ($ in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At and for the

 

 

At and for the

 

 

 

 

Three months ended

 

 

Six months ended

 

 

 

 

June 30,

 

 

June 30,

 

 

 

 

 

2022

 

 

 

 

2021

 

 

 

 

2022

 

 

 

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contracts purchased

 

 

$

548.13

 

 

 

$

286.01

 

 

 

$

958.09

 

 

 

$

491.49

 

 

Contracts securitized

 

 

 

430.00

 

 

 

 

240.00

 

 

 

 

760.00

 

 

 

 

485.00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total portfolio balance (5)

 

 

$

2,554.85

 

 

 

$

2,115.61

 

 

 

$

2,554.85

 

 

 

$

2,115.61

 

 

Average portfolio balance (5)

 

 

 

2,469.95

 

 

 

 

2,118.67

 

 

 

 

2,371.72

 

 

 

 

2,128.67

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for finance credit losses as % of fin. receivables

 

 

 

23.94

%

 

 

 

21.22

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aggregate allowance as % of fin. receivables (1)

 

 

 

24.54

%

 

 

 

21.80

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Delinquencies (5)

 

 

 

 

 

 

 

 

 

 

 

 

 

31+ Days

 

 

 

8.65

%

 

 

 

7.34

%

 

 

 

 

 

 

 

Repossession Inventory

 

 

 

1.06

%

 

 

 

0.94

%

 

 

 

 

 

 

 

Total Delinquencies and Repo. Inventory

 

 

 

9.71

%

 

 

 

8.28

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annualized Net Charge-offs as % of Average Portfolio (5)

 

 

 

 

 

 

 

 

 

 

 

 

 

Legacy portfolio

 

 

 

4.16

%

 

 

 

5.10

%

 

 

 

2.70

%

 

 

 

8.27

%

 

Fair Value portfolio

 

 

 

3.52

%

 

 

 

2.29

%

 

 

 

3.53

%

 

 

 

3.43

%

 

Total portfolio

 

 

 

3.57

%

 

 

 

2.79

%

 

 

 

2.38

%

 

 

 

4.37

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Recovery rates (2)

 

 

 

56.7

%

 

 

 

57.8

%

 

 

 

58.8

%

 

 

 

50.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

 

For the

 

For the

 

 

 

Three months ended

 

Six months ended

 

 

 

June 30,

 

June 30,

 

 

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

 

 

 

(3)

% (4)

 

(3)

% (4)

(3)

% (4)

 

(3)

% (4)

Interest income

 

 

$

75.67

 

12.3

%

 

$

65.44

 

12.4

%

 

$

145.73

 

12.3

%

 

$

131.53

 

12.4

%

Mark to finance receivables measured at fair value

 

4.70

 

0.8

%

 

 

-

 

0.0

%

 

 

7.10

 

0.6

%

 

 

(4.42

)

-0.4

%

Other income

 

 

 

1.65

 

0.3

%

 

 

1.33

 

0.3

%

 

 

3.55

 

0.3

%

 

 

2.77

 

0.3

%

Interest expense

 

 

 

(18.77

)

-3.0

%

 

 

(18.98

)

-3.6

%

 

 

(35.17

)

-3.0

%

 

 

(39.93

)

-3.8

%

Net interest margin

 

 

 

63.25

 

10.2

%

 

 

47.79

 

9.0

%

 

 

121.21

 

10.2

%

 

 

89.96

 

8.5

%

Provision for credit losses

 

 

 

8.00

 

1.3

%

 

 

-

 

0.0

%

 

 

17.40

 

1.5

%

 

 

-

 

0.0

%

Risk adjusted margin

 

 

 

71.25

 

11.5

%

 

 

47.79

 

9.0

%

 

 

138.61

 

11.7

%

 

 

89.96

 

8.5

%

Core operating expenses

 

 

 

(37.03

)

-6.0

%

 

 

(33.91

)

-6.4

%

 

 

(75.07

)

-6.3

%

 

 

(68.14

)

-6.4

%

Pre-tax income

 

 

$

34.22

 

5.5

%

 

$

13.88

 

2.6

%

 

$

63.54

 

5.4

%

 

$

21.82

 

2.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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.