Consumer Portfolio Services (CPSS) 10-Q 8 Aug 16 2016 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2016	Aug. 02, 2016
Document And Entity Information
Entity Registrant Name	CONSUMER PORTFOLIO SERVICES INC
Entity Central Index Key	889,609
Document Type	10-Q
Document Period End Date	Jun. 30, 2016
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		23,865,015
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2,016

UNAUDITED CONDENSED CONSOLIDATE

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
ASSETS
Cash and cash equivalents	$ 15,752	$ 19,322
Restricted cash and equivalents	115,268	106,054
Finance receivables	2,218,389	1,985,093
Less: Allowance for finance credit losses	(90,168)	(75,603)
Finance receivables, net	2,128,221	1,909,490
Finance receivables measured at fair value	13	61
Furniture and equipment, net	1,792	1,715
Deferred tax assets, net	40,350	37,597
Accrued interest receivable	33,598	31,547
Other assets	19,915	23,139
Total	2,354,909	2,128,925
Liabilities
Accounts payable and accrued expenses	38,509	29,509
Warehouse lines of credit	165,103	194,056
Residual interest financing	7,455	9,042
Securitization trust debt	1,956,620	1,720,021
Subordinated renewable notes	15,257	15,138
Total	2,182,944	1,967,766
COMMITMENTS AND CONTINGENCIES
Shareholders' Equity
Common stock, no par value; authorized 75,000,000 shares; 24,088,674 and 25,616,460 shares issued and outstanding at June 30, 2016 and December 31, 2015, respectively	77,657	81,337
Retained earnings	100,958	86,472
Accumulated other comprehensive loss	(6,650)	(6,650)
Total stockholders' equity	171,965	161,159
Total liabilities and stockholders' equity	2,354,909	2,128,925
Series A Preferred Stock [Member]
Shareholders' Equity
Preferred stock, $1 par value; authorized	0	0
Series B Preferred Stock [Member]
Shareholders' Equity
Preferred stock, $1 par value; authorized	$ 0	$ 0

UNAUDITED CONDENSED CONSOLIDAT3

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jun. 30, 2016	Dec. 31, 2015
Shareholders' Equity
Preferred Stock, Par Value	$ 1	$ 1
Preferred Stock, Authorized	4,998,130	4,998,130
Preferred Stock, Issued	0	0
Preferred Stock, Outstanding	0	0
Common Stock, No Par Value	$ 0	$ 0
Common Stock, Authorized	75,000,000	75,000,000
Common Stock, Issued	24,088,674	25,616,460
Common Stock, Outstanding	24,088,674	25,616,460
Series A Preferred Stock [Member]
Shareholders' Equity
Preferred Stock, Par Value	$ 1	$ 1
Preferred Stock, Authorized	5,000,000	5,000,000
Preferred Stock, Issued	0	0
Preferred Stock, Outstanding	0	0
Series B Preferred Stock [Member]
Shareholders' Equity
Preferred Stock, Par Value	$ 1	$ 1
Preferred Stock, Authorized	1,870	1,870
Preferred Stock, Issued	0	0
Preferred Stock, Outstanding	0	0

UNAUDITED CONDENSED CONSOLIDAT4

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Revenues:
Interest income	$ 101,709	$ 84,900	$ 198,372	$ 167,259
Servicing fees	24	62	47	210
Other income	3,200	3,399	7,163	6,881
Total revenues	104,933	88,361	205,582	174,350
Expenses:
Employee costs	15,678	13,144	30,822	27,630
General and administrative	6,569	5,108	11,900	9,944
Interest	19,727	13,688	37,548	26,861
Provision for credit losses	44,423	35,683	88,619	69,122
Marketing	4,731	4,436	9,401	8,639
Occupancy	1,288	949	2,371	1,904
Depreciation and amortization	192	153	367	301
Total operating expenses	92,608	73,161	181,028	144,401
Income before income tax expense	12,325	15,200	24,554	29,949
Income tax expense	5,053	6,663	10,068	13,079
Net income	$ 7,272	$ 8,537	$ 14,486	$ 16,870
Earnings per share:
Basic	$ .30	$ .33	$ .58	$ .65
Diluted	$ .25	$ .27	$ .49	$ .53
Number of shares used in computing earnings per share:
Basic	24,538	26,234	24,917	25,936
Diluted	29,111	31,917	29,632	31,955

UNAUDITED CONDENSED CONSOLIDAT5

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Statement of Comprehensive Income [Abstract]
Net income	$ 7,272	$ 8,537	$ 14,486	$ 16,870
Other comprehensive income/(loss); change in funded status of pension plan	0	0	0	0
Comprehensive income	$ 7,272	$ 8,537	$ 14,486	$ 16,870

UNAUDITED CONDENSED CONSOLIDAT6

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Cash flows from operating activities:
Net income	$ 14,486	$ 16,870
Adjustments to reconcile net income to net cash provided by operating activities:
Accretion of deferred acquisition fees	(2,114)	(5,318)
Amortization of discount on securitization trust debt	20	41
Depreciation and amortization	367	301
Amortization of deferred financing costs	4,129	3,437
Provision for credit losses	88,619	69,122
Stock-based compensation expense	2,595	2,176
Interest income on residual assets	0	(65)
Changes in assets and liabilities:
Accrued interest receivable	(2,051)	(4,707)
Deferred tax assets, net	(2,753)	630
Other assets	1,032	5,697
Accounts payable and accrued expenses	9,000	707
Net cash provided by operating activities	113,330	88,891
Cash flows from investing activities:
Purchases of finance receivables held for investment	(631,412)	(503,791)
Payments received on finance receivables held for investment	326,176	264,226
Payments received on receivables portfolio at fair value	48	1,348
Change in repossessions held in inventory	2,192	1,391
Increases in restricted cash and cash equivalents, net	(9,214)	(24,740)
Purchase of furniture and equipment	(444)	(832)
Net cash used in investing activities	(312,654)	(262,398)
Cash flows from financing activities:
Proceeds from issuance of securitization trust debt	662,150	495,000
Proceeds from issuance of subordinated renewable notes	904	431
Payments on subordinated renewable notes	(785)	(682)
Net repayments of warehouse lines of credit	(29,853)	4,932
Repayments of residual interest financing debt	(1,587)	(1,053)
Repayment of securitization trust debt	(424,155)	(317,963)
Repayment of debt secured by receivables measured at fair value	0	(1,250)
Payment of financing costs	(4,645)	(4,968)
Purchase of common stock	(6,323)	(1,773)
Exercise of options and warrants	48	1,410
Net cash provided by financing activities	195,754	174,084
Increase (decrease) in cash and cash equivalents	(3,570)	577
Cash and cash equivalents at beginning of period	19,322	17,859
Cash and cash equivalents at end of period	15,752	18,436
Cash paid during the period for:
Interest	32,746	22,941
Income taxes	$ 3,784	$ 8,455

1. Summary of Significant Accou

1. Summary of Significant Accounting Policies	6 Months Ended
	Jun. 30, 2016
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	Description of Business We were formed in California on March 8, 1991. We specialize in purchasing and servicing retail automobile installment sale contracts (“automobile contracts” or “finance receivables”) originated by licensed motor vehicle dealers located throughout the United States (“dealers”) in the sale of new and used automobiles, light trucks and passenger vans. Through our purchases, we provide indirect financing to dealer customers for borrowers with limited credit histories or past credit problems (“sub-prime customers”). We serve as an alternative source of financing for dealers, allowing sales to customers who otherwise might not be able to obtain financing. In addition to purchasing installment purchase contracts directly from dealers, we have also (i) acquired installment purchase contracts in four merger and acquisition transactions, (ii) purchased immaterial amounts of vehicle purchase money loans from non-affiliated lenders, and (iii) lent money directly to consumers for an immaterial amount of loans secured by vehicles. In this report, we refer to all of such contracts and loans as "automobile contracts." Basis of Presentation Our Unaudited Condensed Consolidated Financial Statements have been prepared in conformity with accounting principles generally accepted in the United States of America, with the instructions to Form 10-Q and with Article 10 of Regulation S-X of the Securities and Exchange Commission, and include all adjustments that are, in management’s opinion, necessary for a fair presentation of the results for the interim periods presented. All such adjustments are, in the opinion of management, of a normal recurring nature. Results for the six month period ended June 30, 2016 are not necessarily indicative of the operating results to be expected for the full year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted from these Unaudited Condensed Consolidated Financial Statements. These Unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2015. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements, as well as the reported amounts of income and expenses during the reported periods. Other Income The following table presents the primary components of Other Income for the three-month and six-month periods ending June 30, 2016 and 2015: Three Months Ended Six Months Ended June 30, June 30, 2016 2015 2016 2015 (In thousands) (In thousands) Direct mail revenues $ 2,378 $ 2,382 $ 5,222 $ 4,519 Convenience fee revenue 460 530 1,105 1,480 Recoveries on previously charged-off contracts 122 308 365 500 Sales tax refunds 202 144 401 294 Other 38 35 70 88 Other income for the period $ 3,200 $ 3,399 $ 7,163 $ 6,881 Warrants In connection with the amendment to and partial repayment of our residual interest financing in July 2008, we issued warrants exercisable for 2,500,000 common shares for $4,071,429. The warrants represent the right to purchase 2,500,000 CPS common shares at a nominal exercise price, at any time prior to July 10, 2018. In March 2010 we repurchased warrants for 500,000 of these shares for $1.0 million. Warrants to purchase 2,000,000 shares remain outstanding as of June 30, 2016. Stock-based Compensation We recognize compensation costs in the financial statements for all share-based payments based on the grant date fair value estimated in accordance with the provisions of ASC 718 “Stock Compensation”. For the three and six months ended June 30, 2016, we recorded stock-based compensation costs in the amount of $1.2 million and $2.6 million, respectively. These stock-based compensation costs were $1.1 million and $2.2 million for the three and six months ended June 30, 2015. As of June 30, 2016, unrecognized stock-based compensation costs to be recognized over future periods equaled $13.2 million. This amount will be recognized as expense over a weighted-average period of 2.5 years. The following represents stock option activity for the six months ended June 30, 2016: Weighted Number of Weighted Average Shares Average Remaining (in thousands) Exercise Price Contractual Term Options outstanding at the beginning of period 11,228 $ 4.66 5.55 years Granted 2,015 3.48 N/A Exercised (29 ) 1.18 N/A Forfeited – – N/A Options outstanding at the end of period 13,214 $ 4.49 5.33 years Options exercisable at the end of period 7,288 $ 3.82 4.66 years At June 30, 2016, the aggregate intrinsic value of options outstanding and exercisable was $10.8 million and $9.6 million, respectively. There were 29,200 options exercised for the six months ended June 30, 2016 compared to 978,000 for the comparable period in 2015. The total intrinsic value of options exercised was $91,000 and $5.4 million for the six-month periods ended June 30, 2016 and 2015. There were 3.5 million shares available for future stock option grants under existing plans as of June 30, 2016. Purchases of Company Stock During the six-month period ended June 30, 2016, we purchased 1.6 million shares of our stock in the open market at an average price of $4.06. During the six-month period ended June 30, 2015, we purchased 361,046 shares of our common stock, at an average price of $6.39. We purchased 285,473 shares of our stock in the open market at an average price of $6.21. The remaining purchases of 75,573 shares were related to net exercises of outstanding options and warrants. In transactions during the six-month period ended June 30, 2015, the holders of options and warrants to purchase 392,200 shares of our common stock paid the aggregate $535,000 exercise price by surrender to us of 75,573 of such 392,200 shares. New Accounting Pronouncements In June 2016, the FASB issued Accounting Standards Update ("ASU") 2016-13 - Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The revised accounting guidance will remove all recognition thresholds and will require a company to recognize an allowance for credit losses for the difference between the amortized cost basis of a financial instrument and the amount of amortized cost that the company expects to collect over the instrument's contractual life. It also amends the credit loss measurement guidance for beneficial interests in securitized financial assets. This new accounting guidance will be effective for interim and annual reporting periods beginning after December 15, 2019. The Company is currently evaluating the provisions of ASU No. 2016-13 to determine the potential impact the new standard will have on the Company's Consolidated Financial Statements. Reclassifications Some items in the prior year financial statements were reclassified to conform to the current presentation. Reclassifications had no effect on prior year net income or total shareholders’ equity. Financial Covenants Certain of our securitization transactions, our warehouse credit facilities and our residual interest financing contain various financial covenants requiring minimum financial ratios and results. Such covenants include maintaining minimum levels of liquidity and net worth and not exceeding maximum leverage levels. As of June 30, 2016, we were in compliance with all such covenants. In addition, certain of our debt agreements other than our team securitizations contain cross-default provisions. Such cross-default provisions would allow the respective creditors to declare a default if an event of default occurred with respect to other indebtedness of ours, but only if such other event of default were to be accompanied by acceleration of such other indebtedness. Provision for Contingent Liabilities We are routinely involved in various legal proceedings resulting from our consumer finance activities and practices, both continuing and discontinued. Our legal counsel has advised us on such matters where, based on information available at the time of this report, there is an indication that it is both probable that a liability has been incurred and the amount of the loss can be reasonably determined. We have recorded a liability as of June 30, 2016, which represents our best estimate of probable incurred losses for legal contingencies. The amount of losses that may ultimately be incurred cannot be estimated with certainty.

2. Finance Receivables

2. Finance Receivables	6 Months Ended
	Jun. 30, 2016
Finance Receivables
Finance Receivables	Our portfolio of finance receivables consists of small-balance homogeneous contracts comprising a single segment and class that is collectively evaluated for impairment on a portfolio basis according to delinquency status. Our contract purchase guidelines are designed to produce a homogenous portfolio. For key terms such as interest rate, length of contract, monthly payment and amount financed, there is relatively little variation from the average for the portfolio. We report delinquency on a contractual basis. Once a contract becomes greater than 90 days delinquent, we do not recognize additional interest income until the obligor under the contract makes sufficient payments to be less than 90 days delinquent. Any payments received on a contract that is greater than 90 days delinquent are first applied to accrued interest and then to principal reduction. The following table presents the components of Finance Receivables, net of unearned interest: June 30, December 31, 2016 2015 (In thousands) Finance Receivables Automobile finance receivables, net of unearned interest $ 2,219,285 $ 1,990,913 Less: Unearned acquisition fees and originations costs (896 ) (5,820 ) Finance Receivables $ 2,218,389 $ 1,985,093 We consider an automobile contract delinquent when an obligor fails to make at least 90% of a contractually due payment by the following due date, which date may have been extended within limits specified in the servicing agreements. The period of delinquency is based on the number of days payments are contractually past due, as extended where applicable. Automobile contracts less than 31 days delinquent are not included. In certain circumstances we will grant obligors one-month payment extensions to assist them with temporary cash flow problems. The only modification of terms is to advance the obligor’s next due date by one month and extend the maturity date of the receivable by one month. In certain limited cases, a two-month extension may be granted. There are no other concessions such as a reduction in interest rate, forgiveness of principal or of accrued interest. Accordingly, we consider such extensions to be insignificant delays in payments rather than troubled debt restructurings. The following table summarizes the delinquency status of finance receivables as of June 30, 2016 and December 31, 2015: June 30, December 31, 2016 2015 (In thousands) Deliquency Status Current $ 2,059,318 $ 1,836,267 31 - 60 days 87,824 70,036 61 - 90 days 38,403 41,136 91 + days 33,740 43,474 $ 2,219,285 $ 1,990,913 Finance receivables totaling $33.7 million and $43.5 million at June 30, 2016 and December 31, 2015, respectively, including all receivables greater than 90 days delinquent, have been placed on non-accrual status as a result of their delinquency status. We use a loss allowance methodology commonly referred to as " " The following table presents a summary of the activity for the allowance for finance credit losses for the three-month and six-month periods ended June 30, 2016 and 2015: Three Months Ended Six Months Ended June 30, June 30, 2016 2015 2016 2015 (In thousands) (In thousands) Balance at beginning of period $ 79,867 $ 68,142 $ 75,603 $ 61,460 Provision for credit losses on finance receivables 44,423 35,683 88,619 69,122 Charge-offs (41,901 ) (34,836 ) (87,834 ) (66,665 ) Recoveries 7,779 5,552 13,780 10,624 Balance at end of period $ 90,168 $ 74,541 $ 90,168 $ 74,541 Excluded from finance receivables are contracts that were previously classified as finance receivables but were reclassified as other assets because we have repossessed the vehicle securing the Contract. The following table presents a summary of such repossessed inventory together with the allowance for losses in repossessed inventory that is not included in the allowance for finance credit losses: June 30, December 31, 2016 2015 (In thousands) Gross balance of repossessions in inventory $ 33,347 $ 39,728 Allowance for losses on repossessed inventory (22,765 ) (26,954 ) Net repossessed inventory included in other assets $ 10,582 $ 12,774

3. Securitization Trust Debt

3. Securitization Trust Debt	6 Months Ended
	Jun. 30, 2016
Securitization Trust Debt
Securitization Trust Debt	We have completed many securitization transactions that are structured as secured borrowings for financial accounting purposes. The debt issued in these transactions is shown on our Unaudited Condensed Consolidated Balance Sheets as “Securitization trust debt,” and the components of such debt are summarized in the following table: Weighted Average Contractual Final Receivables Outstanding Outstanding Interest Scheduled Pledged at Principal at Principal at Rate at Payment June 30, Initial June 30, December 31, June 30, Series Date (1) 2016 (2) Principal 2016 2015 2016 (Dollars in thousands) CPS 2011-B September 2018 $ – $ 109,936 $ – $ 10,023 – CPS 2011-C March 2019 – 119,400 – 14,785 – CPS 2012-A June 2019 – 155,000 – 16,795 – CPS 2012-B September 2019 18,621 141,500 18,275 26,758 3.10% CPS 2012-C December 2019 21,589 147,000 21,269 30,653 2.39% CPS 2012-D March 2020 27,579 160,000 26,304 37,464 1.87% CPS 2013-A June 2020 42,677 185,000 40,925 56,583 1.77% CPS 2013-B September 2020 54,229 205,000 51,854 70,332 2.28% CPS 2013-C December 2020 63,533 205,000 62,695 82,851 4.00% CPS 2013-D March 2021 63,683 183,000 62,318 82,337 3.45% CPS 2014-A June 2021 72,629 180,000 71,345 92,571 2.89% CPS 2014-B September 2021 95,595 202,500 95,528 121,515 2.51% CPS 2014-C December 2021 146,749 273,000 146,651 183,802 2.69% CPS 2014-D March 2022 158,601 267,500 157,836 198,533 2.92% CPS 2015-A June 2022 165,646 245,000 164,824 201,527 2.69% CPS 2015-B September 2022 188,417 250,000 187,391 221,587 2.74% CPS 2015-C December 2022 250,048 300,000 246,956 283,482 3.14% CPS 2016-A March 2023 311,343 329,460 294,583 – 3.40% CPS 2016-B June 2023 330,267 332,690 320,860 – 3.59% $ 2,011,206 $ 3,990,986 $ 1,969,614 $ 1,731,598 _________________ (1) The Final Scheduled Payment Date represents final legal maturity of the securitization trust debt. Securitization trust debt is expected to become due and to be paid prior to those dates, based on amortization of the finance receivables pledged to the trusts. Expected payments, which will depend on the performance of such receivables, as to which there can be no assurance, are $400.4 million in 2016, $673.4 million in 2017, $458.5 million in 2018, $268.7 million in 2019, $134.5 million in 2020, $34.1 million in 2021. (2) Includes repossessed assets that are included in Other assets on our Unaudited Condensed Consolidated Balance Sheet. Debt issuance costs of $13.0 million and $11.6 million as of June 30, 2016 and December 31, 2015, respectively, have been excluded from the table above. These debt issuance costs are presented as a direct deduction to the carrying amount of the Securitization trust debt on our Unaudited Condensed Consolidated Balance Sheets. All of the securitization trust debt was sold in private placement transactions to qualified institutional buyers. The debt was issued through our wholly-owned bankruptcy remote subsidiaries and is secured by the assets of such subsidiaries, but not by our other assets. The terms of the securitization agreements related to the issuance of the securitization trust debt and the warehouse credit facilities require that we meet certain delinquency and credit loss criteria with respect to the pool of receivables, and certain of the agreements require that we maintain minimum levels of liquidity and not exceed maximum leverage levels. We are responsible for the administration and collection of the automobile contracts. The securitization agreements also require certain funds be held in restricted cash accounts to provide additional collateral for the borrowings, to be applied to make payments on the securitization trust debt or as pre-funding proceeds from a term securitization prior to the purchase of additional collateral. As of June 30, 2016, restricted cash under the various agreements totaled approximately $115.3 million. Interest expense on the securitization trust debt consists of the stated rate of interest plus amortization of additional costs of borrowing. Additional costs of borrowing include facility fees, amortization of deferred financing costs and discounts on notes sold. Deferred financing costs and discounts on notes sold related to the securitization trust debt are amortized using a level yield method. Accordingly, the effective cost of the securitization trust debt is greater than the contractual rate of interest disclosed above. Our wholly-owned bankruptcy remote subsidiaries were formed to facilitate the above asset-backed financing transactions. Similar bankruptcy remote subsidiaries issue the debt outstanding under our credit facilities. Bankruptcy remote refers to a legal structure in which it is expected that the applicable entity would not be included in any bankruptcy filing by its parent or affiliates. All of the assets of these subsidiaries have been pledged as collateral for the related debt. All such transactions, treated as secured financings for accounting and tax purposes, are treated as sales for all other purposes, including legal and bankruptcy purposes. None of the assets of these subsidiaries are available to pay other creditors.

4. Debt

4. Debt	6 Months Ended
	Jun. 30, 2016
Debt Disclosure [Abstract]
Debt	The terms and amounts of our other debt outstanding at June 30, 2016 and December 31, 2015 are summarized below: Amount Outstanding at June 30, December 31, 2016 2015 (In thousands) Description Interest Rate Maturity Warehouse lines of credit 5.50% over one month Libor (Minimum 6.50%) April 2019 $ 78,404 $ 91,504 5.50% over one month Libor (Minimum 6.25%) August 2017 40,079 73,940 6.75% over a commercial paper rate (Minimum 7.75%) November 2019 48,123 31,017 Residual interest financing 11.75% over one month Libor April 2018 7,455 9,042 Subordinated renewable notes Weighted average rate of 8.70% and 9.04% at June 30, 2016 and December 31, 2015 , respectively Weighted average maturity of February 2018 and October 2017 at June 30, 2016 and December 31, 2015, respectively 15,257 15,138 $ 189,318 $ 220,641 Debt issuance costs of $1.5 million and $2.4 million as of June 30, 2016 and December 31, 2015, respectively, have been excluded from the table above. These debt issuance costs are presented as a direct deduction to the carrying amount of the Warehouse lines of credit on our Unaudited Condensed Consolidated Balance Sheets.

5. Interest Income and Interest

5. Interest Income and Interest Expense	6 Months Ended
	Jun. 30, 2016
Interest Income And Interest Expense
Interest Income and Interest Expense	The following table presents the components of interest income: Three Months Ended Six Months Ended June 30, June 30, 2016 2015 2016 2015 (In thousands) (In thousands) Interest on finance receivables $ 101,624 $ 84,872 $ 198,252 $ 167,193 Residual interest income – 28 – 65 Other interest income 85 – 120 1 Interest income $ 101,709 $ 84,900 $ 198,372 $ 167,259 The following table presents the components of interest expense: Three Months Ended Six Months Ended June 30, June 30, 2016 2015 2016 2015 (In thousands) (In thousands) Securitization trust debt $ 16,875 $ 11,670 $ 31,639 $ 22,546 Warehouse lines of credit 2,244 1,259 4,666 2,732 Residual interest financing 245 351 516 773 Subordinated renewable notes 363 408 727 810 Interest expense $ 19,727 $ 13,688 $ 37,548 $ 26,861

6. Earnings Per Share

6. Earnings Per Share	6 Months Ended
	Jun. 30, 2016
Earnings per share:
Earnings Per Share	Earnings per share for the three-month and six-month periods ended June 30, 2016 and 2015 were calculated using the weighted average number of shares outstanding for the related period. The following table reconciles the number of shares used in the computations of basic and diluted earnings per share for the three-month and six-month periods ended June 30, 2016 and 2015: Three Months Ended Six Months Ended June 30, June 30, 2016 2015 2016 2015 (In thousands) (In thousands) Weighted average number of common shares outstanding during the period used to compute basic earnings per share 24,538 26,234 24,917 25,936 $ Incremental common shares attributable to exercise of outstanding options and warrants 4,573 5,683 4,715 6,019 $ Weighted average number of common shares used to compute diluted earnings per share 29,111 31,917 29,632 31,955 If the anti-dilutive effects of common stock equivalents were considered, shares included in the diluted earnings per share calculation for the three-month and six-month periods ended June 30, 2016 would have included an additional 7.9 million and 7.4 million shares, respectively attributable to the exercise of outstanding options and warrants. For the three-month and six-month periods ended June 30, 2015, an additional 5.7 million and 5.3 million shares, respectively, would be included in the diluted earnings per share calculation.

7. Income Taxes

7. Income Taxes	6 Months Ended
	Jun. 30, 2016
Income Tax Disclosure [Abstract]
Income Taxes	We file numerous consolidated and separate income tax returns with the United States and with many states. With few exceptions, we are no longer subject to U.S. federal, state, or local examinations by tax authorities for years before 2012. As of June 30, 2016 and December 31, 2015, we had no unrecognized tax benefits for uncertain tax positions. We do not anticipate that total unrecognized tax benefits will significantly change due to any settlements of audits or expirations of statutes of limitations over the next 12 months. The Company and its subsidiaries file a consolidated federal income tax return and combined or stand-alone state franchise tax returns for certain states. We utilize the asset and liability method of accounting for income taxes, under which deferred income taxes are recognized for the future tax consequences attributable to the differences between the financial statement values of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets are recognized subject to management’s judgment that realization is more likely than not. A valuation allowance is recognized for a deferred tax asset if, based on the weight of the available evidence, it is more likely than not that some portion of the deferred tax asset will not be realized. In making such judgments, significant weight is given to evidence that can be objectively verified. Although realization is not assured, we believe that the realization of the recognized net deferred tax asset of $40.4 million as of June 30, 2016 is more likely than not based on forecasted future net earnings. Our net deferred tax asset of $40.4 million consists of approximately $32.4 million of net U.S. federal deferred tax assets and $8.0 million of net state deferred tax assets. Income tax expense was $5.1 million and $10.1 million for the three months and six months ended June 30, 2016 and represents an effective income tax rate of 41%, compared to income tax expense of $6.7 million and $13.1 million for the three and six months ended June 30, 2015, and represents an effective income tax rate of and 44%.

8. Legal Proceedings

8. Legal Proceedings	6 Months Ended
	Jun. 30, 2016
Legal Proceedings
Legal Proceedings	Consumer Litigation. We are currently subject to one such class action, which has been settled by agreement with the plaintiffs. The settlement remains subject to final court approval. (The court has approved the settlement, but an objecting member of the settlement class has appealed that approval.) For the most part, we have legal and factual defenses to consumer claims, which we routinely contest or settle (for immaterial amounts) depending on the particular circumstances of each case. We have recorded a liability as of June 30, 2016 with respect to such matters, in the aggregate. Department of Justice Subpoena. In General Accordingly, we believe that the ultimate resolution of such legal proceedings and contingencies, after taking into account our current litigation reserves, should not have a material adverse effect on our consolidated financial condition. We note, however, that in light of the uncertainties inherent in contested proceedings, the wide discretion vested in the U.S. Department of Justice and other government agencies, and the deference that courts may give to assertions made by government litigants, there can be no assurance that the ultimate resolution of these matters will not significantly exceed the reserves we have accrued; as a result, the outcome of a particular matter may be material to our operating results for a particular period, depending on, among other factors, the size of the loss or liability imposed and the level of our income for that period.

9. Employee Benefits

9. Employee Benefits	6 Months Ended
	Jun. 30, 2016
Employee Benefits
Employee Benefits	On March 8, 2002 we acquired MFN Financial Corporation and its subsidiaries in a merger. We sponsor the MFN Financial Corporation Benefit Plan (the “Plan”). Plan benefits were frozen June 30, 2001. The table below sets forth the Plan’s net periodic benefit cost for the three-month and six-month periods ended June 30, 2016 and 2015. Three Months Ended Six Months Ended June 30, June 30, 2016 2015 2016 2015 (In thousands) (In thousands) Components of net periodic cost (benefit) Service cost $ – $ – $ – $ – Interest cost 221 211 442 422 Expected return on assets (300 ) (377 ) (600 ) (754 ) Amortization of transition (asset)/obligation – – – – Amortization of net (gain) / loss 138 87 276 174 Net periodic cost (benefit) $ 59 $ (79 ) $ 118 $ (158 ) We did not make any contributions to the Plan during the six-month periods ended June 30, 2016 and 2015. We do not anticipate making any contributions for the remainder of 2016.

10. Fair Value Measurements

10. Fair Value Measurements	6 Months Ended
	Jun. 30, 2016
Fair Value Disclosures [Abstract]
Fair Value Measurements	ASC 820, "Fair Value Measurements" clarifies the principle that fair value should be based on the assumptions market participants would use when pricing an asset or liability and establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. Under the standard, fair value measurements would be separately disclosed by level within the fair value hierarchy. ASC 820 defines fair value, establishes a framework for measuring fair value, establishes a three-level valuation hierarchy for disclosure of fair value measurement and enhances disclosure requirements for fair value measurements. The three levels are defined as follows: level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets; level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument; and level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement. Repossessed vehicle inventory, which is included in Other assets on our unaudited condensed consolidated balance sheet, is measured at fair value using level 2 assumptions based on our actual loss experience on sale of repossessed vehicles. At June 30, 2016 the finance receivables related to the repossessed vehicles in inventory totaled $33.3 million. We have applied a valuation adjustment, or loss allowance, of $22.8 million, which is based on a recovery rate of approximately 32%, resulting in an estimated fair value and carrying amount of $10.6 million. The fair value and carrying amount of the repossessed inventory at December 31, 2015 was $12.8 million after applying a valuation adjustment of $27.0 million. There were no transfers in or out of level 1 or level 2 assets and liabilities for the six months ended June 30, 2016 and 2015. We have no material level 3 assets that are measured at fair value on a non-recurring basis. The estimated fair values of financial assets and liabilities at June 30, 2016 and December 31, 2015, were as follows: As of June 30, 2016 Financial Instrument (In thousands) Carrying Fair Value Measurements Using: Value Level 1 Level 2 Level 3 Total Assets: Cash and cash equivalents $ 15,752 $ 15,752 $ – $ – $ 15,752 Restricted cash and equivalents 115,268 115,268 – – 115,268 Finance receivables, net 2,128,221 – – 2,066,721 2,066,721 Finance receivables measured at fair value 13 – – 13 13 Accrued interest receivable 33,598 – – 33,598 33,598 Liabilities: Warehouse lines of credit $ 165,103 $ – $ – $ 165,103 $ 165,103 Accrued interest payable 3,913 – – 3,913 3,913 Residual interest financing 7,455 – – 7,455 7,455 Securitization trust debt 1,956,620 – – 1,960,990 1,960,990 Subordinated renewable notes 15,257 – – 15,257 15,257 As of December 31, 2015 Financial Instrument (In thousands) Carrying Fair Value Measurements Using: Value Level 1 Level 2 Level 3 Total Assets: Cash and cash equivalents $ 19,322 $ 19,322 $ – $ – $ 19,322 Restricted cash and equivalents 106,054 106,054 – – 106,054 Finance receivables, net 1,909,490 – – 1,879,510 1,879,510 Finance receivables measured at fair value 61 – – 61 61 Accrued interest receivable 31,547 – – 31,547 31,547 Liabilities: Warehouse lines of credit $ 196,461 $ – $ – $ 196,461 $ 196,461 Accrued interest payable 3,260 – – 3,260 3,260 Residual interest financing 9,042 – – 9,042 9,042 Securitization trust debt 1,731,598 – – 1,718,418 1,718,418 Subordinated renewable notes 15,138 – – 15,138 15,138 The following summary presents a description of the methodologies and assumptions used to estimate the fair value of our financial instruments. Much of the information used to determine fair value is highly subjective. When applicable, readily available market information has been utilized. However, for a significant portion of our financial instruments, active markets do not exist. Therefore, significant elements of judgment were required in estimating fair value for certain items. The subjective factors include, among other things, the estimated timing and amount of cash flows, risk characteristics, credit quality and interest rates, all of which are subject to change. Since the fair value is estimated as of June 30, 2016 and December 31, 2015, the amounts that will actually be realized or paid at settlement or maturity of the instruments could be significantly different. Cash, Cash Equivalents and Restricted Cash and Equivalents The carrying value equals fair value. Finance Receivables, net The fair value of finance receivables is estimated by discounting future cash flows expected to be collected using current rates at which similar receivables could be originated. Finance Receivables Measured at Fair Value The carrying value equals fair value. Accrued Interest Receivable and Payable The carrying value approximates fair value. Warehouse Lines of Credit, Residual Interest Financing, and Subordinated Renewable Notes The carrying value approximates fair value because the related interest rates are estimated to reflect current market conditions for similar types of secured instruments. Securitization Trust Debt The fair value is estimated by discounting future cash flows using interest rates that we believe reflect the current market rates.

1. Summary of Significant Acc17

1. Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2016
Accounting Policies [Abstract]
Description of Business	Description of Business We were formed in California on March 8, 1991. We specialize in purchasing and servicing retail automobile installment sale contracts (“automobile contracts” or “finance receivables”) originated by licensed motor vehicle dealers located throughout the United States (“dealers”) in the sale of new and used automobiles, light trucks and passenger vans. Through our purchases, we provide indirect financing to dealer customers for borrowers with limited credit histories or past credit problems (“sub-prime customers”). We serve as an alternative source of financing for dealers, allowing sales to customers who otherwise might not be able to obtain financing. In addition to purchasing installment purchase contracts directly from dealers, we have also (i) acquired installment purchase contracts in four merger and acquisition transactions, (ii) purchased immaterial amounts of vehicle purchase money loans from non-affiliated lenders, and (iii) lent money directly to consumers for an immaterial amount of loans secured by vehicles. In this report, we refer to all of such contracts and loans as "automobile contracts."
Basis of Presentation	Basis of Presentation Our Unaudited Condensed Consolidated Financial Statements have been prepared in conformity with accounting principles generally accepted in the United States of America, with the instructions to Form 10-Q and with Article 10 of Regulation S-X of the Securities and Exchange Commission, and include all adjustments that are, in management’s opinion, necessary for a fair presentation of the results for the interim periods presented. All such adjustments are, in the opinion of management, of a normal recurring nature. Results for the six month period ended June 30, 2016 are not necessarily indicative of the operating results to be expected for the full year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted from these Unaudited Condensed Consolidated Financial Statements. These Unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2015.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements, as well as the reported amounts of income and expenses during the reported periods.
Other Income	Other Income The following table presents the primary components of Other Income for the three-month and six-month periods ending June 30, 2016 and 2015: Three Months Ended Six Months Ended June 30, June 30, 2016 2015 2016 2015 (In thousands) (In thousands) Direct mail revenues $ 2,378 $ 2,382 $ 5,222 $ 4,519 Convenience fee revenue 460 530 1,105 1,480 Recoveries on previously charged-off contracts 122 308 365 500 Sales tax refunds 202 144 401 294 Other 38 35 70 88 Other income for the period $ 3,200 $ 3,399 $ 7,163 $ 6,881
Warrants	Warrants In connection with the amendment to and partial repayment of our residual interest financing in July 2008, we issued warrants exercisable for 2,500,000 common shares for $4,071,429. The warrants represent the right to purchase 2,500,000 CPS common shares at a nominal exercise price, at any time prior to July 10, 2018. In March 2010 we repurchased warrants for 500,000 of these shares for $1.0 million. Warrants to purchase 2,000,000 shares remain outstanding as of June 30, 2016.
Stock-based Compensation	Stock-based Compensation We recognize compensation costs in the financial statements for all share-based payments based on the grant date fair value estimated in accordance with the provisions of ASC 718 “Stock Compensation”. For the three and six months ended June 30, 2016, we recorded stock-based compensation costs in the amount of $1.2 million and $2.6 million, respectively. These stock-based compensation costs were $1.1 million and $2.2 million for the three and six months ended June 30, 2015. As of June 30, 2016, unrecognized stock-based compensation costs to be recognized over future periods equaled $13.2 million. This amount will be recognized as expense over a weighted-average period of 2.5 years. The following represents stock option activity for the six months ended June 30, 2016: Weighted Number of Weighted Average Shares Average Remaining (in thousands) Exercise Price Contractual Term Options outstanding at the beginning of period 11,228 $ 4.66 5.55 years Granted 2,015 3.48 N/A Exercised (29 ) 1.18 N/A Forfeited – – N/A Options outstanding at the end of period 13,214 $ 4.49 5.33 years Options exercisable at the end of period 7,288 $ 3.82 4.66 years At June 30, 2016, the aggregate intrinsic value of options outstanding and exercisable was $10.8 million and $9.6 million, respectively. There were 29,200 options exercised for the six months ended June 30, 2016 compared to 978,000 for the comparable period in 2015. The total intrinsic value of options exercised was $91,000 and $5.4 million for the six-month periods ended June 30, 2016 and 2015. There were 3.5 million shares available for future stock option grants under existing plans as of June 30, 2016.
Purchases of Company Stock	Purchases of Company Stock During the six-month period ended June 30, 2016, we purchased 1.6 million shares of our stock in the open market at an average price of $4.06. During the six-month period ended June 30, 2015, we purchased 361,046 shares of our common stock, at an average price of $6.39. We purchased 285,473 shares of our stock in the open market at an average price of $6.21. The remaining purchases of 75,573 shares were related to net exercises of outstanding options and warrants. In transactions during the six-month period ended June 30, 2015, the holders of options and warrants to purchase 392,200 shares of our common stock paid the aggregate $535,000 exercise price by surrender to us of 75,573 of such 392,200 shares.
New Accounting Pronouncements	New Accounting Pronouncements In June 2016, the FASB issued Accounting Standards Update ("ASU") 2016-13 - Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The revised accounting guidance will remove all recognition thresholds and will require a company to recognize an allowance for credit losses for the difference between the amortized cost basis of a financial instrument and the amount of amortized cost that the company expects to collect over the instrument's contractual life. It also amends the credit loss measurement guidance for beneficial interests in securitized financial assets. This new accounting guidance will be effective for interim and annual reporting periods beginning after December 15, 2019. The Company is currently evaluating the provisions of ASU No. 2016-13 to determine the potential impact the new standard will have on the Company's Consolidated Financial Statements.
Reclassifications	Reclassifications Some items in the prior year financial statements were reclassified to conform to the current presentation. Reclassifications had no effect on prior year net income or total shareholders’ equity.
Financial Covenants	Financial Covenants Certain of our securitization transactions, our warehouse credit facilities and our residual interest financing contain various financial covenants requiring minimum financial ratios and results. Such covenants include maintaining minimum levels of liquidity and net worth and not exceeding maximum leverage levels. As of June 30, 2016, we were in compliance with all such covenants. In addition, certain of our debt agreements other than our team securitizations contain cross-default provisions. Such cross-default provisions would allow the respective creditors to declare a default if an event of default occurred with respect to other indebtedness of ours, but only if such other event of default were to be accompanied by acceleration of such other indebtedness.
Provision for Contingent Liabilities	Provision for Contingent Liabilities We are routinely involved in various legal proceedings resulting from our consumer finance activities and practices, both continuing and discontinued. Our legal counsel has advised us on such matters where, based on information available at the time of this report, there is an indication that it is both probable that a liability has been incurred and the amount of the loss can be reasonably determined. We have recorded a liability as of June 30, 2016, which represents our best estimate of probable incurred losses for legal contingencies. The amount of losses that may ultimately be incurred cannot be estimated with certainty.

1. Summary of Significant Acc18

1. Summary of Significant Accounting Policies (Tables)	6 Months Ended
	Jun. 30, 2016
Accounting Policies [Abstract]
Other Income	Three Months Ended Six Months Ended June 30, June 30, 2016 2015 2016 2015 (In thousands) (In thousands) Direct mail revenues $ 2,378 $ 2,382 $ 5,222 $ 4,519 Convenience fee revenue 460 530 1,105 1,480 Recoveries on previously charged-off contracts 122 308 365 500 Sales tax refunds 202 144 401 294 Other 38 35 70 88 Other income for the period $ 3,200 $ 3,399 $ 7,163 $ 6,881
Stock option activity	Weighted Number of Weighted Average Shares Average Remaining (in thousands) Exercise Price Contractual Term Options outstanding at the beginning of period 11,228 $ 4.66 5.55 years Granted 2,015 3.48 N/A Exercised (29 ) 1.18 N/A Forfeited – – N/A Options outstanding at the end of period 13,214 $ 4.49 5.33 years Options exercisable at the end of period 7,288 $ 3.82 4.66 years

2. Finance Receivables (Tables)

2. Finance Receivables (Tables)	6 Months Ended
	Jun. 30, 2016
Finance Receivables
Financial Receivables	June 30, December 31, 2016 2015 (In thousands) Finance Receivables Automobile finance receivables, net of unearned interest $ 2,219,285 $ 1,990,913 Less: Unearned acquisition fees and originations costs (896 ) (5,820 ) Finance Receivables $ 2,218,389 $ 1,985,093
Delinquency status of finance receivables	June 30, December 31, 2016 2015 (In thousands) Deliquency Status Current $ 2,059,318 $ 1,836,267 31 - 60 days 87,824 70,036 61 - 90 days 38,403 41,136 91 + days 33,740 43,474 $ 2,219,285 $ 1,990,913
Allowance for credit losses	Three Months Ended Six Months Ended June 30, June 30, 2016 2015 2016 2015 (In thousands) (In thousands) Balance at beginning of period $ 79,867 $ 68,142 $ 75,603 $ 61,460 Provision for credit losses on finance receivables 44,423 35,683 88,619 69,122 Charge-offs (41,901 ) (34,836 ) (87,834 ) (66,665 ) Recoveries 7,779 5,552 13,780 10,624 Balance at end of period $ 90,168 $ 74,541 $ 90,168 $ 74,541
Allowance for losses on repossessed inventory	June 30, December 31, 2016 2015 (In thousands) Gross balance of repossessions in inventory $ 33,347 $ 39,728 Allowance for losses on repossessed inventory (22,765 ) (26,954 ) Net repossessed inventory included in other assets $ 10,582 $ 12,774

3. Securitization Trust Debt (T

3. Securitization Trust Debt (Tables)	6 Months Ended
	Jun. 30, 2016
Securitization Trust Debt
Securitization trust debt	Weighted Average Contractual Final Receivables Outstanding Outstanding Interest Scheduled Pledged at Principal at Principal at Rate at Payment June 30, Initial June 30, December 31, June 30, Series Date (1) 2016 (2) Principal 2016 2015 2016 (Dollars in thousands) CPS 2011-B September 2018 $ – $ 109,936 $ – $ 10,023 – CPS 2011-C March 2019 – 119,400 – 14,785 – CPS 2012-A June 2019 – 155,000 – 16,795 – CPS 2012-B September 2019 18,621 141,500 18,275 26,758 3.10% CPS 2012-C December 2019 21,589 147,000 21,269 30,653 2.39% CPS 2012-D March 2020 27,579 160,000 26,304 37,464 1.87% CPS 2013-A June 2020 42,677 185,000 40,925 56,583 1.77% CPS 2013-B September 2020 54,229 205,000 51,854 70,332 2.28% CPS 2013-C December 2020 63,533 205,000 62,695 82,851 4.00% CPS 2013-D March 2021 63,683 183,000 62,318 82,337 3.45% CPS 2014-A June 2021 72,629 180,000 71,345 92,571 2.89% CPS 2014-B September 2021 95,595 202,500 95,528 121,515 2.51% CPS 2014-C December 2021 146,749 273,000 146,651 183,802 2.69% CPS 2014-D March 2022 158,601 267,500 157,836 198,533 2.92% CPS 2015-A June 2022 165,646 245,000 164,824 201,527 2.69% CPS 2015-B September 2022 188,417 250,000 187,391 221,587 2.74% CPS 2015-C December 2022 250,048 300,000 246,956 283,482 3.14% CPS 2016-A March 2023 311,343 329,460 294,583 – 3.40% CPS 2016-B June 2023 330,267 332,690 320,860 – 3.59% $ 2,011,206 $ 3,990,986 $ 1,969,614 $ 1,731,598

4. Debt (Tables)

4. Debt (Tables)	6 Months Ended
	Jun. 30, 2016
Debt Disclosure [Abstract]
Debt Outstanding	Amount Outstanding at June 30, December 31, 2016 2015 (In thousands) Description Interest Rate Maturity Warehouse lines of credit 5.50% over one month Libor (Minimum 6.50%) April 2019 $ 78,404 $ 91,504 5.50% over one month Libor (Minimum 6.25%) August 2017 40,079 73,940 6.75% over a commercial paper rate (Minimum 7.75%) November 2019 48,123 31,017 Residual interest financing 11.75% over one month Libor April 2018 7,455 9,042 Subordinated renewable notes Weighted average rate of 8.70% and 9.04% at June 30, 2016 and December 31, 2015 , respectively Weighted average maturity of February 2018 and October 2017 at June 30, 2016 and December 31, 2015, respectively 15,257 15,138 $ 189,318 $ 220,641

5. Interest Income and Intere22

5. Interest Income and Interest Expense (Tables)	6 Months Ended
	Jun. 30, 2016
Interest Income And Interest Expense Tables
Interest income	Three Months Ended Six Months Ended June 30, June 30, 2016 2015 2016 2015 (In thousands) (In thousands) Interest on finance receivables $ 101,624 $ 84,872 $ 198,252 $ 167,193 Residual interest income – 28 – 65 Other interest income 85 – 120 1 Interest income $ 101,709 $ 84,900 $ 198,372 $ 167,259
Interest expense	Three Months Ended Six Months Ended June 30, June 30, 2016 2015 2016 2015 (In thousands) (In thousands) Securitization trust debt $ 16,875 $ 11,670 $ 31,639 $ 22,546 Warehouse lines of credit 2,244 1,259 4,666 2,732 Residual interest financing 245 351 516 773 Subordinated renewable notes 363 408 727 810 Interest expense $ 19,727 $ 13,688 $ 37,548 $ 26,861

6. Earnings Per Share (Tables)

6. Earnings Per Share (Tables)	6 Months Ended
	Jun. 30, 2016
Earnings per share:
Computation of basic and diluted earnings per share	Three Months Ended Six Months Ended June 30, June 30, 2016 2015 2016 2015 (In thousands) (In thousands) Weighted average number of common shares outstanding during the period used to compute basic earnings per share 24,538 26,234 24,917 25,936 $ Incremental common shares attributable to exercise of outstanding options and warrants 4,573 5,683 4,715 6,019 $ Weighted average number of common shares used to compute diluted earnings per share 29,111 31,917 29,632 31,955

9. Employee Benefits (Tables)

9. Employee Benefits (Tables)	6 Months Ended
	Jun. 30, 2016
Employee Benefits
Net periodic cost (benefit)	Three Months Ended Six Months Ended June 30, June 30, 2016 2015 2016 2015 (In thousands) (In thousands) Components of net periodic cost (benefit) Service cost $ – $ – $ – $ – Interest cost 221 211 442 422 Expected return on assets (300 ) (377 ) (600 ) (754 ) Amortization of transition (asset)/obligation – – – – Amortization of net (gain) / loss 138 87 276 174 Net periodic cost (benefit) $ 59 $ (79 ) $ 118 $ (158 )

10. Fair Value Measurements (Ta

10. Fair Value Measurements (Tables)	6 Months Ended
	Jun. 30, 2016
Fair Value Disclosures [Abstract]
Estimated fair values of financial assets and liabilities	As of June 30, 2016 Financial Instrument (In thousands) Carrying Fair Value Measurements Using: Value Level 1 Level 2 Level 3 Total Assets: Cash and cash equivalents $ 15,752 $ 15,752 $ – $ – $ 15,752 Restricted cash and equivalents 115,268 115,268 – – 115,268 Finance receivables, net 2,128,221 – – 2,066,721 2,066,721 Finance receivables measured at fair value 13 – – 13 13 Accrued interest receivable 33,598 – – 33,598 33,598 Liabilities: Warehouse lines of credit $ 165,103 $ – $ – $ 165,103 $ 165,103 Accrued interest payable 3,913 – – 3,913 3,913 Residual interest financing 7,455 – – 7,455 7,455 Securitization trust debt 1,956,620 – – 1,960,990 1,960,990 Subordinated renewable notes 15,257 – – 15,257 15,257 As of December 31, 2015 Financial Instrument (In thousands) Carrying Fair Value Measurements Using: Value Level 1 Level 2 Level 3 Total Assets: Cash and cash equivalents $ 19,322 $ 19,322 $ – $ – $ 19,322 Restricted cash and equivalents 106,054 106,054 – – 106,054 Finance receivables, net 1,909,490 – – 1,879,510 1,879,510 Finance receivables measured at fair value 61 – – 61 61 Accrued interest receivable 31,547 – – 31,547 31,547 Liabilities: Warehouse lines of credit $ 196,461 $ – $ – $ 196,461 $ 196,461 Accrued interest payable 3,260 – – 3,260 3,260 Residual interest financing 9,042 – – 9,042 9,042 Securitization trust debt 1,731,598 – – 1,718,418 1,718,418 Subordinated renewable notes 15,138 – – 15,138 15,138

1. Summary of Significant Acc26

1. Summary of Significant Accounting Policies - Schedule of Other Income (Details-Other Income) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Primary components of Other Income
Other income for the period	$ 3,200	$ 3,399	$ 7,163	$ 6,881
Direct Mail Revenues [Member]
Primary components of Other Income
Other income for the period	2,378	2,382	5,222	4,519
Convenience Fee Revenue [Member]
Primary components of Other Income
Other income for the period	460	530	1,105	1,480
Recoveries on previously charged-off contracts [Member]
Primary components of Other Income
Other income for the period	122	308	365	500
Sales Tax Refunds [Member]
Primary components of Other Income
Other income for the period	202	144	401	294
Other Income [Member]
Primary components of Other Income
Other income for the period	$ 38	$ 35	$ 70	$ 88

1. Summary of Significant Acc27

1. Summary of Significant Accounting Policies (Details-Options outstanding) - $ / shares	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Number of Shares
Outstanding options, beginning balance	11,228,000
Granted	2,015,000
Exercised	(29,200)	(978,000)
Forfeited	0
Outstanding options, ending balance	13,214,000
Options exercisable	7,288,000
Weighted Average Exercise Price
Outstanding options, beginning balance	$ 4.66
Granted	3.48
Exercised	1.18
Forfeited
Outstanding options, ending balance	4.49
Options exercisable	$ 3.82
Weighted Average Remaining Contractual Term
Weighted Average Remaining Contractual Term, beginning	5 years 6 months 18 days
Weighted Average Remaining Contractual Term, ending	5 years 3 months 29 days
Options exercisable	4 years 7 months 28 days

1. Summary of Significant Acc28

1. Summary of Significant Accounting Policies (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Accounting Policies [Abstract]
Warrants outstanding	2,000,000		2,000,000
Stock based compensation costs	$ 1,200	$ 1,100	$ 2,595	$ 2,176
Unrecognized stock-based compensation costs	13,200		$ 13,200
Unrecognized stock-based compensation costs amortization period			2 years 6 months
Aggregate intrinsic value outstanding	10,800		$ 10,800
Aggregate intrinsic value exercisable	$ 9,600		$ 9,600
Options Exercised			29,200	978,000
Total intrinsic value of options exercised			$ 91	$ 5,400
Shares available for future grants	3,500,000		3,500,000
Repurchase of common stock, shares repurchased			1,600,000	361,046
Repurchase of common stock average share price			$ 4.06	$ 6.39

2. Finance Receivables (Details

2. Finance Receivables (Details-Finance receivables) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Finance Receivables
Automobile finance receivables, net of unearned interest	$ 2,219,285	$ 1,990,913
Less: Unearned acquisition fees and originations costs	(896)	(5,820)
Finance Receivables	$ 2,218,389	$ 1,985,093

2. Finance Receivables (Detai30

2. Finance Receivables (Details-Delinquency status) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Delinquency Status
Current	$ 2,059,318	$ 1,836,267
Finance receivables	2,102,093	1,990,913
Financing Receivables, 30 to 59 Days Past Due [Member]
Delinquency Status
Finance receivables	87,824	70,036
Financing Receivables, 60 to 89 Days Past Due [Member]
Delinquency Status
Finance receivables	38,403	41,136
Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Delinquency Status
Finance receivables	$ 33,740	$ 43,474

2. Finance Receivables (Detai31

2. Finance Receivables (Details-Allowance for finance credit losses) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Finance Receivables
Balance at beginning of period	$ 79,867	$ 68,142	$ 75,603	$ 61,460
Provision for credit losses on finance receivables	44,423	35,683	88,619	69,122
Charge-offs	(41,901)	(34,836)	(87,834)	(66,665)
Recoveries	7,779	5,552	13,780	10,624
Balance at end of period	$ 90,168	$ 74,541	$ 90,168	$ 74,541

2. Finance Receivables (Detai32

2. Finance Receivables (Details-Repossessions) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Finance Receivables
Gross balance of repossessions in inventory	$ 33,347	$ 39,728
Allowance for losses on repossessed inventory	(22,765)	(26,954)
Net repossessed inventory included in other assets	$ 10,582	$ 12,774

2. Finance Receivables (Detai33

2. Finance Receivables (Details Narrative) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Finance Receivables
Finance receivables	$ 33,700	$ 43,500

3. Securitization Trust Debt (D

3. Securitization Trust Debt (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
"Securitization trust debt," and components of debt
Receivables Pledged at end of period	$ 2,011,206
Initial Principal	3,990,986
Outstanding Principal	$ 1,969,614	$ 1,731,598
CPS 2011-B [Member]
"Securitization trust debt," and components of debt
Final Scheduled Payment Date	September 2,018
Receivables Pledged at end of period	$ 0
Initial Principal	109,936
Outstanding Principal	$ 0	10,023
Weighted Average Contractual Interest Rate
CPS 2011-C [Member]
"Securitization trust debt," and components of debt
Final Scheduled Payment Date	March 2,019
Receivables Pledged at end of period	$ 0
Initial Principal	119,400
Outstanding Principal	$ 0	14,785
Weighted Average Contractual Interest Rate
CPS 2012-A [Member]
"Securitization trust debt," and components of debt
Final Scheduled Payment Date	June 2,019
Receivables Pledged at end of period	$ 0
Initial Principal	155,000
Outstanding Principal	$ 0	16,795
Weighted Average Contractual Interest Rate
CPS 2012-B [Member]
"Securitization trust debt," and components of debt
Final Scheduled Payment Date	September 2,019
Receivables Pledged at end of period	$ 18,621
Initial Principal	141,500
Outstanding Principal	$ 18,275	26,758
Weighted Average Contractual Interest Rate	3.10%
CPS 2012-C [Member]
"Securitization trust debt," and components of debt
Final Scheduled Payment Date	December 2,019
Receivables Pledged at end of period	$ 21,589
Initial Principal	147,000
Outstanding Principal	$ 21,269	30,653
Weighted Average Contractual Interest Rate	2.39%
CPS 2012-D [Member]
"Securitization trust debt," and components of debt
Final Scheduled Payment Date	March 2,020
Receivables Pledged at end of period	$ 27,579
Initial Principal	160,000
Outstanding Principal	$ 26,304	37,464
Weighted Average Contractual Interest Rate	1.87%
CPS 2013-A [Member]
"Securitization trust debt," and components of debt
Final Scheduled Payment Date	June 2,020
Receivables Pledged at end of period	$ 42,677
Initial Principal	185,000
Outstanding Principal	$ 40,925	56,583
Weighted Average Contractual Interest Rate	1.77%
CPS 2013-B [Member]
"Securitization trust debt," and components of debt
Final Scheduled Payment Date	September 2,020
Receivables Pledged at end of period	$ 54,229
Initial Principal	205,000
Outstanding Principal	$ 51,854	70,332
Weighted Average Contractual Interest Rate	2.28%
CPS 2013-C [Member]
"Securitization trust debt," and components of debt
Final Scheduled Payment Date	December 2,020
Receivables Pledged at end of period	$ 63,533
Initial Principal	205,000
Outstanding Principal	$ 62,695	82,851
Weighted Average Contractual Interest Rate	4.00%
CPS 2013-D [Member]
"Securitization trust debt," and components of debt
Final Scheduled Payment Date	March 2,021
Receivables Pledged at end of period	$ 63,683
Initial Principal	183,000
Outstanding Principal	$ 62,318	82,337
Weighted Average Contractual Interest Rate	3.45%
CPS 2014-A [Member]
"Securitization trust debt," and components of debt
Final Scheduled Payment Date	June 2,021
Receivables Pledged at end of period	$ 72,629
Initial Principal	180,000
Outstanding Principal	$ 71,345	92,571
Weighted Average Contractual Interest Rate	2.89%
CPS 2014-B [Member]
"Securitization trust debt," and components of debt
Final Scheduled Payment Date	September 2,021
Receivables Pledged at end of period	$ 95,595
Initial Principal	202,500
Outstanding Principal	$ 95,528	121,515
Weighted Average Contractual Interest Rate	2.51%
CPS 2014-C [Member]
"Securitization trust debt," and components of debt
Final Scheduled Payment Date	December 2,021
Receivables Pledged at end of period	$ 146,749
Initial Principal	273,000
Outstanding Principal	$ 146,651	183,802
Weighted Average Contractual Interest Rate	2.69%
CPS 2014-D [Member]
"Securitization trust debt," and components of debt
Final Scheduled Payment Date	March 2,022
Receivables Pledged at end of period	$ 158,601
Initial Principal	267,500
Outstanding Principal	$ 157,836	198,533
Weighted Average Contractual Interest Rate	2.92%
CPS 2015-A [Member]
"Securitization trust debt," and components of debt
Final Scheduled Payment Date	June 2,022
Receivables Pledged at end of period	$ 165,646
Initial Principal	245,000
Outstanding Principal	$ 164,824	201,527
Weighted Average Contractual Interest Rate	2.69%
CPS 2015-B [Member]
"Securitization trust debt," and components of debt
Final Scheduled Payment Date	September 2,022
Receivables Pledged at end of period	$ 188,417
Initial Principal	250,000
Outstanding Principal	$ 187,391	221,587
Weighted Average Contractual Interest Rate	2.74%
CPS 2015-C [Member]
"Securitization trust debt," and components of debt
Final Scheduled Payment Date	December 2,022
Receivables Pledged at end of period	$ 250,048
Initial Principal	300,000
Outstanding Principal	$ 246,956	283,482
Weighted Average Contractual Interest Rate	3.14%
CPS 2016-A [Member]
"Securitization trust debt," and components of debt
Final Scheduled Payment Date	March 2,023
Receivables Pledged at end of period	$ 311,343
Initial Principal	329,460
Outstanding Principal	$ 294,583
Weighted Average Contractual Interest Rate	3.40%
CPS 2016-B [Member]
"Securitization trust debt," and components of debt
Final Scheduled Payment Date	June 2,023
Receivables Pledged at end of period	$ 330,267
Initial Principal	332,690
Outstanding Principal	$ 320,860
Weighted Average Contractual Interest Rate	3.59%

3. Securitization Trust Debt 35

3. Securitization Trust Debt (Details Narrative) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Restricted Cash for securitization trust debt	$ 115,300
Expected finance receivable payments 2016	400,400
Expected finance receivable payments 2017	673,400
Expected finance receivable payments 2018	458,500
Expected finance receivable payments 2019	268,700
Expected finance receivable payments 2020	134,500
Expected finance receivable payments 2021	34,100
Securitization Trust Debt [Member]
Debt issuance costs	$ 13,000	$ 11,600

4. Debt (Details)

4. Debt (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items]
Warehouse lines of credit	$ 165,103	$ 194,056
Residual interest financing	7,455	9,042
Subordinated renewable notes	15,257	15,138
Debt issuance costs	1,500	2,400
Total other debt outstanding	$ 189,318	220,641
Residual interest financing [Member]
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items]
Interest rate	11.75% over one month Libor
Maturity date	April 2,018
Subordinated renewable notes [Member]
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items]
Interest rate	Weighted average rate of 8.67% and 9.04% at June 30, 2016 and December 31, 2015, respectively
Maturity date	Weighted average maturity of February 2018 and October 2017 at June 30, 2016 and December 31, 2015, respectively
Warehouse lines of credit [Member]
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items]
Warehouse lines of credit	$ 78,404	91,504
Interest rate	5.50% over one month Libor (Minimum 6.50%)
Maturity date	April 2,019
Warehouse lines of credit (2) [Member]
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items]
Warehouse lines of credit	$ 40,079	73,940
Interest rate	5.50% over one month Libor (Minimum 6.25%)
Maturity date	August 2,017
Warehouse lines of credit (3) [Member]
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items]
Warehouse lines of credit	$ 48,123	31,017
Interest rate	6.75% over a commercial paper rate (Minimum 7.75%)
Maturity date	November 2,019
Residual interest financing [Member]
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items]
Residual interest financing	$ 7,455	9,042
Subordinated renewable notes [Member]
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items]
Subordinated renewable notes	$ 15,257	$ 15,138

4. Debt (Details Narrative)

4. Debt (Details Narrative) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Debt issuance costs	$ 1,500	$ 2,400
Warehouse lines of credit [Member]
Debt issuance costs	$ 1,500	$ 2,400

5. Interest Income (Details)

5. Interest Income (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Components of interest income
Interest on Finance Receivables	$ 101,624	$ 84,872	$ 198,252	$ 167,193
Residual interest income	0	28	0	65
Other interest income	85	0	120	1
Interest income	$ 101,709	$ 84,900	$ 198,372	$ 167,259

5. Interest Expense (Details)

5. Interest Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Total interest expense	$ 19,727	$ 13,688	$ 37,548	$ 26,861
Securitization Trust Debt [Member]
Total interest expense	16,875	11,670	31,639	22,546
Warehouse lines of credit [Member]
Total interest expense	2,244	1,259	4,666	2,732
Residual interest financing [Member]
Total interest expense	245	351	516	773
Subordinated renewable notes [Member]
Total interest expense	$ 363	$ 408	$ 727	$ 810

6. Earnings Per Share (Details)

6. Earnings Per Share (Details) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Earnings per share:
Weighted average common shares - basic	24,538,000	26,234,000	24,917,000	25,936,000
Incremental common shares attibutable to exercise of outstanding options and warrants	4,573,000	5,683,000	4,715,000	6,019,000
Weighted average common shares - diluted	29,111,000	31,917,000	29,632,000	31,955,000

6. Earnings Per Share (Details

6. Earnings Per Share (Details Narrative) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Earnings per share:
Antidilutive common stock equivalents	7,900,000	5,700,000	7,400,000	5,300,000

7. Income Taxes (Details Narrat

7. Income Taxes (Details Narrative) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Income Tax Disclosure [Abstract]
Unrecognized tax benefits	$ 0		$ 0		$ 0
Deferred tax asset	40,350		40,350		$ 37,597
U.S. federal deferred tax assets	32,400		32,400
State deferred tax assets	8,000		8,000
Income tax expense	$ 5,053	$ 6,663	$ 10,068	$ 13,079
Effective income tax rate			41.00%	44.00%

8. Legal Proceedings (Details N

8. Legal Proceedings (Details Narrative) $ in Thousands	Jun. 30, 2016USD ($)
Legal Proceedings
Litigation accrual	$ 250

9. Employee Benefits (Details)

9. Employee Benefits (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Components of net periodic cost (benefit)
Service cost	$ 0	$ 0	$ 0	$ 0
Interest cost	221	211	442	422
Expected return on assets	(300)	(377)	(600)	(754)
Amortization of transition (asset)/obligation	0	0	0	0
Amortization of net (gain)/loss	138	87	276	174
Net periodic cost (benefit)	$ 59	$ (79)	$ 118	$ (158)

9. Employee Benefits (Details N

9. Employee Benefits (Details Narrative) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Employee Benefits
Plan contribution	$ 0	$ 0

10. Fair Value Measurements (De

10. Fair Value Measurements (Details - Fair Value Financial Assets) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Assets:
Cash and cash equivalents	$ 15,752	$ 19,322
Restricted cash and equivalents	115,268	106,054
Finance receivables, net	2,066,721	1,879,510
Finance receivables measured at fair value	13	61
Accrued interest receivable	33,598	31,547
Liabilities:
Warehouse lines of credit	165,103	196,461
Accrued interest payable	3,913	3,260
Residual interest financing	7,455	9,042
Securitization trust debt	1,960,990	1,718,418
Subordinated renewable notes	15,257	15,138
Level 1 [Member]
Assets:
Cash and cash equivalents	15,752	19,322
Restricted cash and equivalents	115,268	106,054
Finance receivables, net	0	0
Finance receivables measured at fair value	0	0
Accrued interest receivable	0	0
Liabilities:
Warehouse lines of credit	0	0
Accrued interest payable	0	0
Residual interest financing	0	0
Securitization trust debt	0	0
Subordinated renewable notes	0	0
Level 2 [Member]
Assets:
Cash and cash equivalents	0	0
Restricted cash and equivalents	0	0
Finance receivables, net	0	0
Finance receivables measured at fair value	0	0
Accrued interest receivable	0	0
Liabilities:
Warehouse lines of credit	0	0
Accrued interest payable	0	0
Residual interest financing	0	0
Securitization trust debt	0	0
Subordinated renewable notes	0	0
Level 3 [Member]
Assets:
Cash and cash equivalents	0	0
Restricted cash and equivalents	0	0
Finance receivables, net	2,066,721	1,879,510
Finance receivables measured at fair value	13	61
Accrued interest receivable	33,598	31,547
Liabilities:
Warehouse lines of credit	165,103	196,461
Accrued interest payable	3,913	3,260
Residual interest financing	7,445	9,042
Securitization trust debt	1,960,990	1,718,418
Subordinated renewable notes	15,257	15,138
Carrying Value [Member]
Assets:
Cash and cash equivalents	15,752	19,322
Restricted cash and equivalents	115,268	106,054
Finance receivables, net	2,128,221	1,909,490
Finance receivables measured at fair value	13	61
Accrued interest receivable	33,598	31,547
Liabilities:
Warehouse lines of credit	165,103	196,461
Accrued interest payable	3,913	3,260
Residual interest financing	7,455	9,042
Securitization trust debt	1,956,620	1,731,598
Subordinated renewable notes	$ 15,257	$ 15,138

10. Fair Value Measurements (47

10. Fair Value Measurements (Details Narrative) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Fair Value Measurements Details Narrative
Finance receivables related to reposessed vehicles in inventory	$ 33,347	$ 39,728
Valuation adjustment, loss allowance	$ 22,765	26,954
Recovery rate	32.00%
Estimated fair value and carrying amount of repossed inventory	$ 10,582	$ 12,774