CPSS Consumer Portfolio Services Inc

Consumer Portfolio Services, Inc. (Nasdaq:CPSS) ("CPS" or the "Company") today announced operating results for its second quarter ended June 30, 2010.

Operating results for the second quarter of 2010 included revenues of $38.5 million, a decrease of approximately $19.8 million, or 33.9%, compared to $58.3 million for the second quarter of 2009. Total operating expenses for the second quarter of 2010 were $43.9 million, a decrease of $20.4 million, or 31.7%, as compared to $64.3 million for the 2009 period. Pretax loss for the second quarter of 2010 was $(5.4) million compared to pretax loss of $(5.9) million in the second quarter of 2009. Net loss for the second quarter of 2010 was $(9.0) million, or $(0.51) per diluted share, compared to net loss of $(5.9) million, or $(0.32) per diluted share, for the year-ago quarter. Net loss for the second quarter of 2010 includes a charge to income tax expense of $(3.6) million, or $(0.21) per diluted share, related to an addition to the valuation allowance against the deferred tax asset.

For the six months ended June 30, 2010 total revenues were $83.1 million compared to $124.4 million for the six months ended June 30, 2009, a decrease of approximately $41.3 million, or 33.2%. Total expenses for the six months ended June 30, 2010 were $94.3 million, a decrease of $36.5 million, or 27.9%, as compared to $130.8 million for the six months ended June 30, 2000. Pretax loss for the six months ended June 30, 2010 was ($11.2) million, compared to pretax loss of $(6.5) million for the six months ended June 30, 2009. Net loss for the six months ended June 30, 2010 was ($14.8) million, or ($0.84) per diluted share, compared to net loss of $(6.5) million, or $(0.34) per diluted share, for the six months ended June 30, 2009. Net loss for the first half of 2010 includes a charge to income tax expense of $(3.6) million, or $(0.20) per diluted share, related to an addition to the valuation allowance against the deferred tax asset.

During the second quarter of 2010, CPS purchased $26.7 million of contracts from dealers as compared to $17.4 million during the first quarter of 2010 and $937,000 million during the second quarter of 2009. The Company's managed receivables totaled $931.6 million as of June 30, 2010, a decrease of $402.3 million, or 30.2%, from $1,333.9 million as of June 30, 2009, as follows ($ in millions):

	June 30, 2010	June 30, 2009
Owned by Consolidated Subsidiaries*	$719.8	$1,173.1
Owned by Non-Consolidated Subsidiaries	107.9	160.8
As Third Party Servicer	103.9	0.0
Total	$931.6	$1,333.9
* Before $52.2 million and $86.0  million of allowance for credit losses, deferred acquisition fees and repossessed vehicles for 2010 and 2009, respectively.

Annualized net charge-offs for the second quarter of 2010 were 9.33% of the average owned portfolio as compared to 10.59% in 2009.  Delinquencies greater than 30 days (including repossession inventory) were 6.83% of the total owned portfolio as of June 30, 2010, as compared to 6.99% as of June 30, 2009. The second quarter of 2010 represents the first time that year-over-year portfolio net charge-off levels have improved since the Company's managed portfolio began to decrease in 2008.

"We are pleased with the continued growth in new contract purchases and the improving asset performance metrics from the second quarter," said Charles E. Bradley, Jr., Chairman and Chief Executive Officer. "New contract purchases increased over 50% vs. the first quarter this year and our positive momentum on that front has continued into the third quarter. While our financial results are still being negatively impacted by the recession, the credit market freeze of 2008 and 2009 and the resulting significant decline in our total managed portfolio, we hope to demonstrate continued improvement in pretax income going forward."

Conference Call

CPS announced that it will hold a conference call on Tuesday, August 17, 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 for international participants approximately 10 minutes prior to the scheduled time.

A replay will be available between August 17, 2010 and August 23, 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 95075250.  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		Six months ended
	June 30,		June 30,
	2010	2009	2010	2009
Revenues:
Interest income	$ 35,178	$ 54,960	$ 74,147	$ 116,139
Servicing fees	1,963	942	4,351	1,971
Other income	1,387	2,420	4,619	6,261
	38,528	58,322	83,117	124,371
Expenses:
Employee costs	8,697	8,980	17,475	18,242
General and administrative	5,579	5,842	11,454	12,452
Interest	20,975	28,971	43,324	61,103
Provision for credit losses	6,990	18,489	18,706	34,578
Other expenses	1,656	1,993	3,344	4,458
	43,897	64,275	94,303	130,833
Income before income taxes	(5,369)	(5,953)	(11,186)	(6,462)
Income taxes	3,600	--	3,600	--
Net income	$ (8,969)	$ (5,953)	$ (14,786)	$ (6,462)
Earnings per share:
Basic	$ (0.51)	$ (0.32)	$ (0.84)	$ (0.34)
Diluted	(0.51)	(0.32)	(0.84)	(0.34)
Number of shares used in computing earnings
per share:
Basic	17,450	18,744	17,642	18,874
Diluted	17,450	18,744	17,642	18,874

Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
	June 30,	December 31,
	2010	2009
Cash	$ 13,442	$ 12,433
Restricted cash	120,707	128,511
Total Cash	134,149	140,944
Finance receivables	694,963	878,366
Allowance for finance credit losses	(27,375)	(38,274)
Finance receivables, net	667,588	840,092
Residual interest in securitizations	4,839	4,316
Deferred tax assets, net	29,850	33,450
Other assets	32,772	49,459
	$ 869,198	$ 1,068,261
Accounts payable and other liabilities	$ 20,081	$ 17,906
Warehouse line of credit	29,448	4,932
Residual interest financing	48,765	56,930
Securitization trust debt	701,820	904,833
Senior secured debt, related party	26,672	26,118
Subordinated debt	22,120	21,965
	848,906	1,032,684
Shareholders' equity	20,292	35,577
	$ 869,198	$ 1,068,261

Operating and Performance Data ($ in thousands)	At and for the		At and for the
	Three months ended		Six months ended
	June 30,		June 30,
	2010	2009	2010	2009
Contract purchases	26,727	937	44,137	2,033
Total managed portfolio	931,615	1,333,919	931,615	1,333,919
Average managed portfolio	966,510	1,384,290	1,030,410	1,466,377
Net interest margin (1)	14,203	25,989	30,823	55,036
Risk adjusted margin (2)	7,213	7,500	12,117	20,458
Core operating expenses (3)	15,932	16,815	32,273	35,152
Annualized % of average managed portfolio	6.59%	4.86%	6.26%	4.79%
Allowance for finance credit losses as % of fin. receivables	3.94%	3.86%
Aggregate allowance as % of fin. receivables (4)	5.57%	5.82%
Delinquencies
31+ Days	4.55%	4.29%
Repossession Inventory	2.28%	2.71%
Total Delinquencies and Repossession Inventory	6.83%	6.99%
Annualized net charge-offs as % of average owned portfolio	9.33%	10.59%	10.85%	11.12%
(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