CPS Announces Second Quarter 2022 Earnings
July 25 2022 - 4:30PM
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 Officer844 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. |
|
|
|
|
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