CPS Announces Fourth Quarter And Full Year 2022 Earnings
March 09 2023 - 4:30PM
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 |
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Condensed Consolidated Statements of
Operations |
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(In thousands, except per share data) |
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(Unaudited) |
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Three months ended |
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Twelve months ended |
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December 31, |
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December 31, |
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2022 |
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2021 |
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2022 |
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2021 |
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Revenues: |
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Interest income |
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$ |
79,690 |
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$ |
67,715 |
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$ |
305,237 |
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$ |
266,266 |
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Mark to finance receivables
measured at fair value |
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- |
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- |
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15,283 |
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(4,417 |
) |
Other income |
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3,330 |
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1,650 |
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9,189 |
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5,962 |
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83,020 |
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69,365 |
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329,709 |
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267,811 |
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Expenses: |
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Employee costs |
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20,868 |
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22,756 |
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84,282 |
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80,534 |
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General and
administrative |
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11,699 |
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11,582 |
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37,618 |
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34,616 |
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Interest |
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28,870 |
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16,980 |
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87,524 |
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75,239 |
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Provision for credit
losses |
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(4,700 |
) |
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(13,000 |
) |
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(28,100 |
) |
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(14,590 |
) |
Other expenses |
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7,978 |
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6,667 |
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32,192 |
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26,266 |
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64,715 |
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44,985 |
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213,516 |
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202,065 |
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Income before income
taxes |
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18,305 |
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24,380 |
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116,193 |
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65,746 |
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Income tax expense |
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4,170 |
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5,415 |
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30,210 |
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18,222 |
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Net income |
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$ |
14,135 |
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$ |
18,965 |
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$ |
85,983 |
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$ |
47,524 |
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Earnings per share: |
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Basic |
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$ |
0.69 |
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$ |
0.88 |
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$ |
4.10 |
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$ |
2.11 |
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Diluted |
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$ |
0.59 |
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$ |
0.71 |
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$ |
3.23 |
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$ |
1.84 |
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Number of shares used in
computing earnings |
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per share: |
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Basic |
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20,341 |
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21,661 |
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20,958 |
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22,562 |
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Diluted |
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23,828 |
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26,813 |
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26,589 |
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25,780 |
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Condensed Consolidated Balance Sheets |
(In thousands) |
(Unaudited) |
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December 31, |
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December 31, |
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2022 |
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2021 |
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Assets: |
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Cash and cash equivalents |
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$ |
13,490 |
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$ |
29,928 |
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Restricted cash and
equivalents |
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149,299 |
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146,620 |
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Finance receivables measured
at fair value |
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2,476,617 |
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1,749,098 |
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Finance receivables |
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92,304 |
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232,390 |
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Allowance for finance credit
losses |
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(21,753 |
) |
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(56,206 |
) |
Finance receivables, net |
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70,551 |
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176,184 |
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Deferred tax assets, net |
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10,177 |
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19,575 |
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Other assets |
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32,634 |
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38,173 |
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$ |
2,752,768 |
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$ |
2,159,578 |
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Liabilities and
Shareholders' Equity: |
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Accounts payable and accrued
expenses |
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$ |
55,421 |
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$ |
43,648 |
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Warehouse lines of credit |
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285,328 |
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105,610 |
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Residual interest
financing |
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49,623 |
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53,682 |
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Securitization trust debt |
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2,108,744 |
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1,759,972 |
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Subordinated renewable
notes |
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25,263 |
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26,459 |
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2,524,379 |
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1,989,371 |
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Shareholders' equity |
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228,389 |
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170,207 |
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$ |
2,752,768 |
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$ |
2,159,578 |
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Operating and Performance Data
($ in millions) |
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At and for the |
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At and for the |
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Three months ended |
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Twelve months ended |
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December 31, |
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December 31, |
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2022 |
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|
2021 |
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2022 |
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2021 |
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Contracts purchased |
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$ |
428.08 |
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$ |
327.98 |
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$ |
1,854.39 |
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$ |
1,146.32 |
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Contracts securitized |
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337.38 |
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360.00 |
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1,537.38 |
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1,145.00 |
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Total portfolio balance
(5) |
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$ |
2,795.38 |
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$ |
2,209.43 |
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$ |
2,795.38 |
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$ |
2,209.43 |
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Average portfolio balance
(5) |
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2,764.80 |
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2,190.16 |
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2,539.11 |
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2,147.61 |
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Delinquencies (5) |
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31+ Days |
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11.12 |
% |
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9.50 |
% |
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Repossession Inventory |
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1.50 |
% |
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1.03 |
% |
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Total Delinquencies and Repo. Inventory |
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12.62 |
% |
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10.53 |
% |
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Annualized Net Charge-offs as
% of Average Portfolio (5) |
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Legacy portfolio |
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6.84 |
% |
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0.11 |
% |
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4.63 |
% |
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|
5.78 |
% |
Fair Value portfolio |
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|
5.79 |
% |
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|
2.89 |
% |
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|
4.52 |
% |
|
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|
3.09 |
% |
Total portfolio |
|
|
|
5.83 |
% |
|
|
|
2.57 |
% |
|
|
|
4.53 |
% |
|
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|
3.52 |
% |
|
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|
|
|
|
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|
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Recovery rates (2) |
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43.6 |
% |
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|
63.3 |
% |
|
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|
52.3 |
% |
|
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|
54.5 |
% |
|
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|
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|
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For the |
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For the |
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|
Three months ended |
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Twelve months ended |
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December 31, |
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December 31, |
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|
2022 |
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|
2021 |
|
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|
2022 |
|
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|
2021 |
|
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|
$ |
(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 |
% |
|
|
|
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(1) Includes
allowance for finance credit losses and allowance for repossession
inventory. |
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(2) Wholesale
auction liquidation amounts (net of expenses) as a percentage of
the account balance at the time of sale. |
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(3) Numbers may not add due to
rounding. |
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(4) Annualized
percentage of the average portfolio balance. Percentages may not
add due to rounding. |
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|
(5) Excludes third party
portfolios. |
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