CPS Announces First Quarter 2022 Earnings
April 18 2022 - 4:35PM
Consumer Portfolio Services, Inc. (Nasdaq: CPSS) (“CPS” or the
“Company”) today announced earnings of $21.1 million, or $0.75 per
diluted share, for its first quarter ended March 31, 2022. This
compares to net income of $5.2 million, or $0.21 diluted share, in
the first quarter of 2021.
Revenues for the first quarter of 2022 were
$74.4 million, an increase of $11.3 million, or 17.8%, compared to
$63.1 million for the first quarter of 2021. Total operating
expenses for the first quarter of 2022 were $45.0 million compared
to $55.2 million for the 2021 period for a decrease of $10.1
million, or 18.4%. Pretax income for the first quarter
of 2022 was $29.3 million compared to pretax income of $7.9 million
in the first quarter of 2021, an increase of 269.2%.
During the first quarter of 2022, CPS purchased
$410.0 million of new contracts compared to $328.0 million during
the fourth quarter of 2021 and $205.5 million during the first
quarter of 2021. The Company's receivables totaled $2.324 billion
as of March 31, 2022, an increase from $2.209 billion as of
December 31, 2021 and $2.119 billion as of March 31, 2021.
Annualized net charge-offs for the first quarter
of 2022 were 3.3% of the average portfolio as compared to 6.3% for
the first quarter of 2021. Delinquencies greater than 30 days
(including repossession inventory) were 8.52% of the total
portfolio as of March 31, 2022, as compared to 7.77% as of March
31, 2021.
“I’m proud to report on the best quarterly
results in the 31-year history of the Company”, said Charles E.
Bradley, Jr., President and Chief Executive Officer. “Our first
quarter originations volume was 25% greater than the fourth quarter
of 2021 and approximately double the volume from the first quarter
of 2021. We continue to see strong metrics in credit performance
and are looking forward to the remainder of 2022.”
Conference Call
CPS announced that it will hold a conference
call on Tuesday, April 19, 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 3771614.
A replay of the conference call will be
available between April 19 and April 26, beginning two hours after
conclusion of the call, by dialing 855 859-2056 or 404 537-3406 for
international participants, with conference identification number
3771614. 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 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 Officer844 878-2777
|
Consumer Portfolio Services, Inc. and
Subsidiaries |
Condensed Consolidated Statements of
Operations |
(In thousands, except per share data) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
|
|
March 31, |
|
|
|
|
|
2022 |
|
|
|
|
2021 |
|
|
Revenues: |
|
|
|
|
|
|
|
Interest income |
|
|
$ |
70,060 |
|
|
|
$ |
66,093 |
|
|
Mark to finance receivables measured at fair value |
|
2,400 |
|
|
|
|
(4,417 |
) |
|
Other income |
|
|
|
1,906 |
|
|
|
|
1,436 |
|
|
|
|
|
|
74,366 |
|
|
|
|
63,112 |
|
|
Expenses: |
|
|
|
|
|
|
|
Employee costs |
|
|
|
22,152 |
|
|
|
|
20,159 |
|
|
General and administrative |
|
|
|
8,231 |
|
|
|
|
7,748 |
|
|
Interest |
|
|
|
16,400 |
|
|
|
|
20,946 |
|
|
Provision for credit losses |
|
|
|
(9,400 |
) |
|
|
|
- |
|
|
Other expenses |
|
|
|
7,655 |
|
|
|
|
6,315 |
|
|
|
|
|
|
45,038 |
|
|
|
|
55,168 |
|
|
Income before income taxes |
|
|
|
29,328 |
|
|
|
|
7,944 |
|
|
Income tax expense |
|
|
|
8,213 |
|
|
|
|
2,780 |
|
|
Net income |
|
|
$ |
21,115 |
|
|
|
$ |
5,164 |
|
|
|
|
|
|
|
|
|
|
Earnings per share: |
|
|
|
|
|
|
|
Basic |
|
|
$ |
0.99 |
|
|
|
$ |
0.23 |
|
|
Diluted |
|
|
$ |
0.75 |
|
|
|
$ |
0.21 |
|
|
|
|
|
|
|
|
|
|
Number of shares used in computing earnings |
|
|
|
|
|
|
|
per share: |
|
|
|
|
|
|
|
Basic |
|
|
|
21,221 |
|
|
|
|
22,741 |
|
|
Diluted |
|
|
|
28,197 |
|
|
|
|
24,967 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Balance Sheets |
(In thousands) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
March 31, |
|
|
December 31, |
|
|
|
|
|
|
2022 |
|
|
|
|
2021 |
|
|
Assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
$ |
21,726 |
|
|
|
$ |
29,928 |
|
|
Restricted cash and equivalents |
|
|
|
164,550 |
|
|
|
|
146,620 |
|
|
Finance receivables measured at fair value |
|
|
|
1,903,857 |
|
|
|
|
1,749,098 |
|
|
|
|
|
|
|
|
|
|
Finance receivables |
|
|
|
186,745 |
|
|
|
|
232,390 |
|
|
Allowance for finance credit losses |
|
|
|
(45,001 |
) |
|
|
|
(56,206 |
) |
|
Finance receivables, net |
|
|
|
141,744 |
|
|
|
|
176,184 |
|
|
|
|
|
|
|
|
|
|
Deferred tax assets, net |
|
|
|
18,913 |
|
|
|
|
19,575 |
|
|
Other assets |
|
|
|
26,760 |
|
|
|
|
38,173 |
|
|
|
|
|
$ |
2,277,550 |
|
|
|
$ |
2,159,578 |
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders' Equity: |
|
|
|
|
|
|
|
Accounts payable and accrued expenses |
|
|
$ |
56,988 |
|
|
|
$ |
43,648 |
|
|
Warehouse lines of credit |
|
|
|
147,026 |
|
|
|
|
105,610 |
|
|
Residual interest financing |
|
|
|
49,434 |
|
|
|
|
53,682 |
|
|
Securitization trust debt |
|
|
|
1,813,478 |
|
|
|
|
1,759,972 |
|
|
Subordinated renewable notes |
|
|
|
26,756 |
|
|
|
|
26,459 |
|
|
|
|
|
|
2,093,682 |
|
|
|
|
1,989,371 |
|
|
|
|
|
|
|
|
|
|
Shareholders' equity |
|
|
|
183,868 |
|
|
|
|
170,207 |
|
|
|
|
|
$ |
2,277,550 |
|
|
|
$ |
2,159,578 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating and Performance Data ($ in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At and for the |
|
|
|
|
Three months ended |
|
|
|
|
March 31, |
|
|
|
|
|
2022 |
|
|
|
|
2021 |
|
|
|
|
|
|
|
|
|
|
Contracts purchased |
|
|
$ |
409.96 |
|
|
|
$ |
205.48 |
|
|
Contracts securitized |
|
|
|
330.00 |
|
|
|
|
245.00 |
|
|
|
|
|
|
|
|
|
|
Total portfolio balance |
|
|
$ |
2,324.35 |
|
|
|
$ |
2,119.07 |
|
|
Average portfolio balance |
|
|
|
2,273.48 |
|
|
|
|
2,138.66 |
|
|
|
|
|
|
|
|
|
|
Allowance for finance credit losses as % of fin. receivables |
|
|
|
24.10 |
% |
|
|
|
17.88 |
% |
|
|
|
|
|
|
|
|
|
Aggregate allowance as % of fin. receivables (1) |
|
|
|
24.50 |
% |
|
|
|
19.06 |
% |
|
|
|
|
|
|
|
|
|
Delinquencies |
|
|
|
|
|
|
|
31+ Days |
|
|
|
7.39 |
% |
|
|
|
6.34 |
% |
|
Repossession Inventory |
|
|
|
1.13 |
% |
|
|
|
1.43 |
% |
|
Total Delinquencies and Repo. Inventory |
|
|
|
8.52 |
% |
|
|
|
7.77 |
% |
|
|
|
|
|
|
|
|
|
Annualized Net Charge-offs as % of Average Portfolio |
|
|
|
|
|
|
|
|
|
Legacy portfolio |
|
|
|
0.84 |
% |
|
|
|
12.63 |
% |
|
Fair Value portfolio |
|
|
|
3.53 |
% |
|
|
|
4.61 |
% |
|
Total portfolio |
|
|
|
3.29 |
% |
|
|
|
6.30 |
% |
|
|
|
|
|
|
|
|
|
Recovery rates (2) |
|
|
|
61.4 |
% |
|
|
|
43.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
For the |
|
|
|
Three months ended |
|
|
|
March 31, |
|
|
|
2022 |
|
2021 |
|
|
|
$ (3) |
|
% (4) |
|
$ (3) |
|
% (4) |
Interest income |
|
|
$ |
70.06 |
|
12.3 |
% |
|
$ |
66.09 |
|
12.4 |
% |
Mark to finance receivables measured at fair value |
|
2.40 |
|
0.4 |
% |
|
|
(4.42 |
) |
-0.8 |
% |
Other income |
|
|
|
1.91 |
|
0.3 |
% |
|
|
1.44 |
|
0.3 |
% |
Interest expense |
|
|
|
(16.40 |
) |
-2.9 |
% |
|
|
(20.95 |
) |
-3.9 |
% |
Net interest margin |
|
|
|
57.97 |
|
10.2 |
% |
|
|
42.17 |
|
7.9 |
% |
Provision for credit losses |
|
|
|
9.40 |
|
1.7 |
% |
|
|
- |
|
0.0 |
% |
Risk adjusted margin |
|
|
|
67.37 |
|
11.9 |
% |
|
|
42.17 |
|
7.9 |
% |
Core operating expenses |
|
|
|
(38.04 |
) |
-6.7 |
% |
|
|
(34.22 |
) |
-6.4 |
% |
Pre-tax income |
|
|
$ |
29.33 |
|
5.2 |
% |
|
$ |
7.94 |
|
1.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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. |
Consumer Portfolio Servi... (NASDAQ:CPSS)
Historical Stock Chart
From Jun 2024 to Jul 2024
Consumer Portfolio Servi... (NASDAQ:CPSS)
Historical Stock Chart
From Jul 2023 to Jul 2024