Consumer Portfolio Services, Inc. Q4 FY2024 earnings call

• Charles Bradley noted 2024 was a year of cautious growth as credit improved, setting up for potential aggressive growth in 2025. • Danny Bharwani detailed revenue growth driven by loan originations, with Q4 2024 revenues up 14% YoY, yearly revenues up 12% YoY. Loan originations Q4 2024 up 52% YoY, yearly up 24% YoY. Expenses included adjustments to CECL portfolio and higher interest expense. Balance sheet showed cash, fair value portfolio, debt, and shareholders' equity changes. • Mike Lavin highlighted operational notes: Q4 originations up 41% YoY, yearly up 24%; portfolio balance $3.41 billion (record). Hired 42 new sales reps, expanded large dealer group base, increased funding dealers per rep, improved capture rate. Used data analytics for top states, strengthened partnerships, improved funding times. Credit performance: net charge offs, DQ, pots collection, extensions, auction recoveries discussed. Technology advancements: AI fraud scores saved $4.6M in 2024, piloted AI voice bot.

Revenues for the quarter were $105.3 million, a 5% increase over the third quarter and a 14% increase from the fourth quarter of 2023. For the year, revenues were $393.5 million, a 12% increase over 2023. Loan originations in the quarter were $458 million, a 52% increase from the fourth quarter of 2023; yearly loan originations were $1.68 billion, a 24% increase from 2023. The fair value portfolio was $3.5 billion, yielding 11.3%. Expenses for the quarter were $98 million, up from $82.1 million in the fourth quarter of 2023; yearly expenses were $366.1 million, 26% higher than 2023. Pretax earnings for the quarter were $7.4 million, down 24% from the fourth quarter of 2023; yearly pretax earnings were $27.4 million, down from $61.1 million in 2023. Net income for the quarter was $5.1 million, down from $7.2 million in the fourth quarter of 2023; yearly net income was $19.2 million, down from $45.3 million in 2023. Cash was $137.4 million at year-end 2024. The fair value portfolio was $3.314 billion at year-end 2024, 22% higher than 2023. Total debt was $3.131 billion, 22% higher than 2023. Shareholders' equity was $293 million, 7% higher than 2023. Net interest margin for the quarter was $52.8 million, 2% higher than the fourth quarter of 2023; yearly net interest margin was $202 million, down from $205.4 million. Core operating expenses as a percentage of the managed portfolio were 5.4% in the quarter (down from 5.9% in the fourth quarter of 2023) and 5.6% yearly (down from 5.7% in 2023). Return on managed assets was 0.9% in the quarter and yearly, down from 1.3% and 2.1% respectively in 2023.

• Charles indicated 2025 could be a very good year, with NIM expected to improve, expenses to be lower as portfolio grows, and the unemployment rate favorable. • Stated that 2022 vintages should be behind us by the end of 2025, paving the way for a strong growth year in 2025.

• Auction recoveries tough at ~30% (vs historical 40-45%) due to macro issues, including inflation, vehicle damage, and post-COVID retail agent scarcity.