CPS Announces Fourth Quarter 2015 Earnings

Fourth quarter pretax income of $15.8 million
Fourth quarter net income of $9.0 million, or $0.29 per diluted share
Full year pretax income increased 18% to $61.4 million
Full year net income increased 18% to $34.7 million, or $1.10 per diluted share
New contract purchases of $269 million for the fourth quarter
Total managed portfolio increases to $2.03 billion from $1.94 billion at September 30, 2015

LAS VEGAS, NV, Feb. 23, 2016 (GLOBE NEWSWIRE) -- Consumer Portfolio Services, Inc. (Nasdaq:CPSS) (“CPS” or the “Company”) today announced earnings of $9.0 million, or $0.29 per diluted share, for its fourth quarter ended December 31, 2015. This compares to net income of $8.0 million, or $0.25 per diluted share, in the fourth quarter of 2014, representing a 16.0% increase in diluted earnings per share.

Revenues for the fourth quarter of 2015 were $95.3 million, an increase of $11.8 million, or 14.2%, compared to $83.5 million for the fourth quarter of 2014. Total operating expenses for the fourth quarter of 2015 were $79.5 million, an increase of $10.4 million, or 15.1%, compared to $69.1 million for the 2014 period. Pretax income for the fourth quarter of 2015 was $15.8 million compared to pretax income of $14.3 million in the fourth quarter of 2014, an increase of 10.0%.

For the year ended December 31, 2015 total revenues were $363.7 million compared to $300.3 million for the year ended December 31, 2014, an increase of approximately $63.4 million, or 21.1%. Total expenses for the year ended December 31, 2015 were $302.3 million, an increase of $54.3 million, or 21.9%, compared to $248.0 million for the year ended December 31, 2014. Pretax income for the year ended December 31, 2015 was $61.4 million, compared to $52.2 million for the year ended December 31, 2014. Net income for the year ended December 31, 2015 was $34.7 million, an increase of 17.5%, compared to $29.5 million for the year ended December 31, 2014.

During the fourth quarter of 2015, CPS purchased $269.2 million of new contracts compared to $287.5 million during the third quarter of 2015 and $264.4 million during the fourth quarter of 2014. The Company's managed receivables totaled $2.031 billion as of December 31, 2015, an increase from $1.941 billion as of September 30, 2015 and $1.644 billion as of December 31, 2014.

Annualized net charge-offs for the fourth quarter of 2015 were 6.23% of the average owned portfolio as compared to 6.44% for the fourth quarter of 2014. Delinquencies greater than 30 days (including repossession inventory) were 9.53% of the total owned portfolio as of December 31, 2015, as compared to 7.18% as of December 31, 2014.

"We are pleased with our operating results for the fourth quarter and for the year 2015," said Charles E. Bradley, Jr., Chairman and Chief Executive Officer. “Our managed portfolio is now in excess of $2 billion and we achieved our 17^th consecutive quarter of increasing quarterly earnings. In addition, during the fourth quarter we added a third $100 million revolving credit facility with Credit Suisse and Ares, bringing our total short term funding capacity to $300 million.”

Conference Call

CPS announced that it will hold a conference call on Wednesday, February 24, 2016, 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.

A replay of the conference call will be available between February 24, 2016 and March 2, 2016, beginning two hours after conclusion of the call, by dialing 855 859-2056 or 404 537-3406 for international participants, with conference identification number 49943840. 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 revenue, expense and provision for credit losses, because these items are dependent on the Company’s estimates of incurred 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, 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 the 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										Twelve months ended
	December 31,										December 31,
		2015					2014					2015					2014
Revenues:
Interest income	$	92,069				$	79,652				$	349,912				$	286,734
Servicing fees		36					218					319					1,376
Other income		3,203					3,597					13,419					12,146
		95,308					83,467					363,650					300,256
Expenses:
Employee costs		16,671					14,732					59,556					50,129
General and administrative		5,212					4,772					20,160					19,254
Interest		16,036					12,833					57,745					50,395
Provision for credit losses		36,085					31,433					142,618					108,228
Other expenses		5,521					5,351					22,189					20,008
		79,525					69,121					302,268					248,014
Income before income taxes		15,783					14,346					61,382					52,242
Income tax expense		6,816					6,336					26,701					22,726
Net income	$	8,967				$	8,010				$	34,681				$	29,516

Earnings per share:
Basic	$	0.35				$	0.31				$	1.34				$	1.18
Diluted	$	0.29				$	0.25				$	1.10				$	0.92


Number of shares used in computing earnings per share:
Basic		25,774					25,470					25,935					25,040
Diluted		30,948					32,060					31,584					32,032


Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)


	December 31,					December 31,
		2015					2014
Assets:
Cash and cash equivalents	$	19,322				$	17,859
Restricted cash and equivalents		106,054					175,382
Total cash and cash equivalents		125,376					193,241

Finance receivables		1,985,093					1,595,956
Allowance for finance credit losses		(75,603	)				(61,460	)
Finance receivables, net		1,909,490					1,534,496

Finance receivables measured at fair value		61					1,664
Deferred tax assets, net		37,597					42,847
Other assets		70,383					60,810
	$	2,142,907				$	1,833,058

Liabilities and Shareholders' Equity:
Accounts payable and accrued expenses	$	29,509				$	21,660
Warehouse lines of credit		196,461					56,839
Residual interest financing		9,042					12,327
Debt secured by receivables measured at fair value		--					1,250
Securitization trust debt		1,731,598					1,598,496
Subordinated renewable notes		15,138					15,233
		1,981,748					1,705,805

Shareholders' equity		161,159					127,253
	$	2,142,907				$	1,833,058


Operating and Performance Data ($ in millions)



	At and for the										At and for the
	Three months ended										Twelve months ended
	December 31,										December 31,
		2015					2014					2015					2014

Contracts purchased	$	269.20				$	264.37				$	1,060.54				$	944.94
Contracts securitized		102.10					269.93					880.33					901.07

Total managed portfolio	$	2,031.14				$	1,643.92				$	2,031.14				$	1,643.92
Average managed portfolio		2,000.10					1,605.04					1,847.94					1,422.87

Allowance for finance credit losses as % of fin. receivables		3.81	%				3.85	%

Aggregate allowance as % of fin. receivables (1)		5.06	%				4.88	%

Delinquencies
31+ Days		7.61	%				5.46	%
Repossession Inventory		1.92	%				1.72	%
Total Delinquencies and Repo. Inventory		9.53	%				7.18	%

Annualized net charge-offs as % of average owned portfolio		6.23	%				6.44	%				6.42	%				5.83	%

Recovery rates (2)		38.3	%				42.7	%				41.3	%				46.0	%

	For the										For the
	Three months ended										Twelve months ended
	December 31,										December 31,
		2015					2014					2015					2014
	$	(3	)	% (4	)	$	(3	)	% (4	)	$	(3	)	% (4	)	$	(3	)	% (4	)
Interest income	$	92.07		18.4	%	$	79.65		19.9	%	$	349.91		18.9	%	$	286.73		20.2	%
Servicing fees and other income		3.24		0.6	%		3.82		1.0	%		13.74		0.7	%		13.52		1.0	%
Interest expense		(16.04	)	-3.2	%		(12.83	)	-3.2	%		(57.75	)	-3.1	%		(50.40	)	-3.5	%
Net interest margin		79.27		15.9	%		70.63		17.6	%		305.91		16.6	%		249.86		17.6	%
Provision for credit losses		(36.09	)	-7.2	%		(31.43	)	-7.8	%		(142.62	)	-7.7	%		(108.23	)	-7.6	%
Risk adjusted margin		43.19		8.6	%		39.20		9.8	%		163.29		8.8	%		141.63		10.0	%
Core operating expenses		(27.40	)	-5.5	%		(24.86	)	-6.2	%		(101.91	)	-5.5	%		(89.39	)	-6.3	%
Pre-tax income	$	15.78		3.2	%	$	14.35		3.6	%	$	61.38		3.3	%	$	52.24		3.7	%



(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 managed portfolio. Percentages may not add due to rounding.

Investor Relations Contact

Jeffrey P. Fritz, Chief Financial Officer
844 878-2777

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