CPS Announces First Quarter 2025 Earnings

Rhea-AI Summary

Consumer Portfolio Services (CPSS) reported strong Q1 2025 financial results with net income of $4.7 million ($0.19 per diluted share), slightly up from $4.6 million in Q1 2024. Revenues increased 16.6% to $106.9 million compared to $91.7 million in the prior year. The company achieved its highest-ever total portfolio balance of $3.615 billion and recorded significant Q1 loan originations of $451.2 million. Credit metrics showed improvement with annualized net charge-offs decreasing to 7.54% (vs 7.84% in Q1 2024) and delinquencies over 30 days slightly improving to 12.35% (vs 12.39% in Q1 2024). Operating expenses increased to $100.1 million from $85.2 million in the previous year.

Positive

• Record-high total portfolio balance of $3.615 billion
• Revenue growth of 16.6% year-over-year to $106.9 million
• Highest Q1 loan originations in company history at $451.2 million
• Improved credit metrics with lower net charge-offs (7.54% vs 7.84%)
• Slight improvement in delinquency rates (12.35% vs 12.39%)

Negative

• Operating expenses increased 17.5% to $100.1 million
• Interest expenses rose significantly to $54.9 million from $42.0 million
• Pre-tax margin declined to 0.8% from 0.9% year-over-year
• Recovery rates decreased to 27.7% from 33.3% year-over-year

Insights

Financial Analyst

CPS reports 16.6% revenue growth and record portfolio balance despite stable earnings per share and rising delinquencies.

Consumer Portfolio Services has delivered a mixed first quarter with some notable achievements alongside concerning trends. Revenue increased impressively by $15.2 million (16.6%) to $106.9 million, driven primarily by higher interest income as the company's portfolio grew to a record $3.615 billion. This portfolio expansion represents a 19.7% year-over-year increase, demonstrating strong origination capabilities with $451.2 million in new contracts purchased.

However, this growth hasn't translated to improved bottom-line performance. Net income of $4.7 million was only marginally higher than the $4.6 million reported in Q1 2024, with earnings per share flat at $0.19. This profit stagnation stems from significantly higher operating expenses, which jumped by $14.9 million, primarily due to a 30.9% increase in interest expenses to $54.9 million.

The company's net interest margin percentage declined from 6.7% to 5.8%, indicating compression in profitability metrics despite portfolio growth. While annualized net charge-offs improved slightly from 7.84% to 7.54%, they remain elevated. Delinquencies over 30 days (including repossessions) at 12.35% showed minimal improvement from 12.39% a year ago.

Another concerning trend is the deterioration in recovery rates, which fell from 33.3% to 27.7%. This means CPS is recovering less value from defaulted loans, which could pressure future profitability if the trend continues. The company has also increased its reliance on debt financing, with securitization trust debt up to $2.74 billion from $2.59 billion at year-end.

While management highlighted record first-quarter originations as positioning them well for the remainder of the year, the challenge will be converting this portfolio growth into improved profitability while managing credit quality in an environment where recovery rates are declining.

• Revenues of $106.9 million compared to $91.7 million in the prior year period
• Net income of $4.7 million, or $0.19 per diluted share
• Total portfolio balance of $3.615 billion, highest in company history
• New contract purchases of $451.2 million

LAS VEGAS, NV, May 12, 2025 (GLOBE NEWSWIRE) -- Consumer Portfolio Services, Inc. (Nasdaq: CPSS) (“CPS” or the “Company”) today announced earnings of $4.7 million, or $0.19 per diluted share, for its first quarter ended March 31, 2025. This compares to a net income of $4.6 million, or $0.19 per diluted share, in the first quarter of 2024.

Revenues for the first quarter of 2025 were $106.9 million, an increase of $15.2 million, or 16.6%, compared to $91.7 million for the first quarter of 2024.  Total operating expenses for the first quarter of 2025 were $100.1 million compared to $85.2 million for the 2024 period.  Pretax income for the first quarter of 2025 was $6.8 million compared to pretax income of $6.6 million in the first quarter of 2024.

During the first quarter of 2025, CPS purchased $451.2 million of new contracts compared to $457.8 million during the fourth quarter of 2024, and $346.3 million during the first quarter of 2024. The Company's receivables totaled $3.615 billion as of March 31, 2025, an increase from $3.491 billion as of December 31, 2024, and an increase from $3.021 billion as of March 31, 2024.

Annualized net charge-offs for the first quarter of 2025 were 7.54% of the average portfolio as compared to 7.84% for the first quarter of 2024. Delinquencies greater than 30 days (including repossession inventory) were 12.35% of the total portfolio as of March 31, 2025, compared to 12.39% as of March 31, 2024.

“We started off the year by posting the highest amount in new loan originations for any first quarter in company history,” said Charles E. Bradley, Chief Executive Officer. “This positions us well for the remainder of the year, as we remain focused on driving the company forward.”  

Conference Call

CPS announced that it will hold a conference call on May 13, 2025 at 1:00 p.m. ET to discuss its first quarter 2025 operating results. 

Those wishing to participate can pre-register for the conference call at the following link https://register-conf.media-server.com/register/BIa727447d5fdf49d4b7da9c96f3d668b7. 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 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
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
	Three months ended
	March 31,
		2025				2024
Revenues:
Interest income	$	101,933			$	84,288
Mark to finance receivables measured at fair value		3,500				5,000
Other income		1,441				2,456
		106,874				91,744
Expenses:
Employee costs		25,033				24,416
General and administrative		13,542				13,753
Interest		54,918				41,968
Provision for credit losses		(979	)			(1,635	)
Other expenses		7,558				6,685
		100,072				85,187
Income before income taxes		6,802				6,557
Income tax expense		2,108				1,967
Net income	$	4,694			$	4,590
Earnings per share:
Basic	$	0.22			$	0.22
Diluted	$	0.19			$	0.19
Number of shares used in computing earnings per share:
Basic		21,444				21,143
Diluted		24,325				24,602

Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
	March 31,				December 31,
		2025				2024
Assets:
Cash and cash equivalents	$	29,841			$	11,713
Restricted cash and equivalents		153,637				125,684
Finance receivables measured at fair value		3,449,106				3,313,767
Finance receivables		3,109				5,420
Allowance for finance credit losses		(249	)			(433	)
Finance receivables, net		2,860				4,987
Deferred tax assets, net		826				1,010
Other assets		37,336				36,707
	$	3,673,606			$	3,493,868
Liabilities and Shareholders' Equity:
Accounts payable and accrued expenses	$	75,289			$	70,151
Warehouse lines of credit		365,683				410,898
Residual interest financing		163,391				99,176
Securitization trust debt		2,743,269				2,594,384
Subordinated renewable notes		27,547				26,489
		3,375,179				3,201,098
Shareholders' equity		298,427				292,770
	$	3,673,606			$	3,493,868

Operating and Performance Data ($ in millions)
		At and for the
		Three months ended
		March 31,
			2025				2024
Contracts purchased		$	451.22			$	346.30
Contracts securitized		$	462.54			$	300.61
Total portfolio balance (1)		$	3,614.55			$	3,021.19
Average portfolio balance (1)		$	3,572.64			$	2,993.82
Delinquencies (1)
31+ Days			9.75	%			9.98	%
Repossession Inventory			2.60	%			2.41	%
Total Delinquencies and Repo. Inventory			12.35	%			12.39	%
Annualized Net Charge-offs as % of Average Portfolio (1)			7.54	%			7.84	%
Recovery rates (1), (2)			27.7	%			33.3	%

	For the
	Three months ended
	March 31,
	2025							2024
	$ (3)				% (4)			$ (3)				% (4)
Interest income	$	101.93			11.4	%		$	84.29			11.3	%
Mark to finance receivables measured at fair value		3.50			0.4	%			5.00			0.7	%
Other income		1.44			0.2	%			2.46			0.3	%
Interest expense		(54.92	)		-6.1	%			(41.97	)		-5.6	%
Net interest margin		51.96			5.8	%			49.78			6.7	%
Provision for credit losses		0.98			0.1	%			1.64			0.2	%
Risk adjusted margin		52.94			5.9	%			51.41			6.9	%
Other operating expenses (5)		(46.13	)		-5.2	%			(44.85	)		-6.0	%
Pre-tax income	$	6.80			0.8	%		$	6.56			0.9	%
(1)  Excludes third party portfolios. (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)  Total pre-tax expenses less provision for credit losses and interest expense.

FAQ

What were CPSS's Q1 2025 earnings per share?

CPSS reported earnings of $0.19 per diluted share in Q1 2025, unchanged from Q1 2024.

How much did Consumer Portfolio Services' revenue grow in Q1 2025?

CPSS's revenue grew 16.6% year-over-year to $106.9 million, compared to $91.7 million in Q1 2024.

What was CPSS's total portfolio balance in Q1 2025?

CPSS achieved a record-high total portfolio balance of $3.615 billion as of March 31, 2025.

How did CPSS's delinquency rates change in Q1 2025?

Delinquencies over 30 days slightly improved to 12.35% compared to 12.39% in Q1 2024.

What was the value of new contracts purchased by CPSS in Q1 2025?

CPSS purchased $451.2 million of new contracts in Q1 2025, their highest first-quarter originations in company history.