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CPS Reports Strong Second Quarter

August 13, 2013

IRVINE, Calif. — For the second quarter 2013, Consumer Portfolio Services Inc. reported earnings of $4.8 million, or $0.15 per diluted share.

In the same period last year, the company reported a net income of $1.3 million, or $0.05 per diluted share. Earnings for the first six months of 2013 were $8.6 million, or $0.27 per diluted share, vs. earnings of $1.9 million, or $0.08 per diluted share, for the same period in 2012.

Revenues for the second quarter were $70.5 million, an increase of $26.3 million, or 60 percent, from the year-ago period. Total operating expenses for the second quarter were $61.9 million, an increase of $19.1 million, or 45 percent, compared to $42.8 million for the 2012 period. Pretax income for the second quarter of 2013 was $8.5 million compared to pretax income of $1.3 million in the second quarter of 2012.

"The second quarter of 2013 was another good quarter for CPS," said Charles E. Bradley, Jr., chairman and CEO. "Our managed portfolio continues to grow as we purchase new contracts with attractive yields and credit demographics. Asset performance metrics, while higher year over year, are well within our expectations as credit trends ‘normalize’ after the very tight lending period following the financial crisis.”

For the six months ended June 30, total revenues were $125.1 million compared to $88.7 million for the six months ended June 30, 2012. Total expenses for the six months ended June 30 were $110.0 million, an increase of $23.2 million, or 27 percent, compared to $86.8 million for same period last year. Pretax income for the six months ended June 30 was $15.1 million, compared to $1.9 million for the year-ago period.

During the second quarter of 2013, CPS purchased $203.8 million of new contracts compared to $180.1 million during the first quarter of 2013 and $137.9 million during the second quarter of 2012.

Annualized net charge-offs for the quarter were 4.03 percent of the average owned portfolio. Delinquencies greater than 30 days (including repossession inventory) were 5.16 percent of the total owned portfolio as of June 30, 2013.

In June, CPS closed its second term securitization transaction of 2013 and the ninth transaction since April 2011. In the senior subordinate structure, a special purpose subsidiary sold five tranches of asset-backed notes totaling $205.0 million. The notes are secured by automobile receivables purchased by CPS and have a weighted average effective coupon of approximately 2.34 percent. The transaction has initial credit enhancement consisting of a cash deposit equal to 1 percent of the original receivable pool balance. The final enhancement level requires accelerated payment of principal on the notes to reach overcollateralization of 11.50 percent of the then-outstanding receivable pool balance.

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