Consumer Portfolio Services (CPSS) 10-Q 6 Nov 18 2018 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2018	Oct. 31, 2018
Document And Entity Information
Entity Registrant Name	CONSUMER PORTFOLIO SERVICES INC
Entity Central Index Key	889,609
Document Type	10-Q
Trading Symbol	CPSS
Document Period End Date	Sep. 30, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity's Reporting Status Current	Yes
Entity Filer Category	Accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	false
Entity Common Stock, Shares Outstanding		22,589,549
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2,018

UNAUDITED CONDENSED CONSOLIDATE

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
ASSETS
Cash and cash equivalents	$ 10,537	$ 12,731
Restricted cash and equivalents	110,473	111,965
Finance receivables	1,697,841	2,304,984
Less: Allowance for finance credit losses	(82,472)	(109,187)
Finance receivables, net	1,615,369	2,195,797
Finance receivables measured at fair value	614,807	0
Furniture and equipment, net	1,801	1,752
Deferred tax assets, net	28,686	32,446
Accrued interest receivable	36,232	46,753
Other assets	25,665	23,397
Total	2,443,570	2,424,841
Liabilities
Accounts payable and accrued expenses	33,324	28,715
Warehouse lines of credit	127,695	112,408
Residual interest financing	39,013	0
Securitization trust debt	2,034,281	2,083,215
Subordinated renewable notes	16,948	16,566
Total	2,251,261	2,240,904
COMMITMENTS AND CONTINGENCIES	0	0
Shareholders' Equity
Preferred stock	0	0
Common stock, no par value; authorized 75,000,000 shares; 22,656,075 and 21,488,589 shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively	70,444	71,582
Retained earnings	129,047	119,537
Accumulated other comprehensive loss	(7,182)	(7,182)
Total stockholders' equity	192,309	183,937
Total liabilities and stockholders' equity	2,443,570	2,424,841
Series A Preferred Stock [Member]
Shareholders' Equity
Preferred stock	0	0
Series B Preferred Stock [Member]
Shareholders' Equity
Preferred stock	$ 0	$ 0

UNAUDITED CONDENSED CONSOLIDA_2

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2018	Dec. 31, 2017
Shareholders' Equity
Preferred stock, par value (in dollars per share)	$ 1	$ 1
Preferred stock, authorized	4,998,130	4,998,130
Preferred stock, issued	0	0
Common stock, no par value (in dollars per share)	$ 0	$ 0
Common stock, authorized	75,000,000	75,000,000
Common stock, issued	22,656,075	21,488,589
Common stock, outstanding	22,656,075	21,488,589
Series A Preferred Stock [Member]
Shareholders' Equity
Preferred stock, par value (in dollars per share)	$ 1	$ 1
Preferred stock, authorized	5,000,000	5,000,000
Preferred stock, issued	0	0
Series B Preferred Stock [Member]
Shareholders' Equity
Preferred stock, par value (in dollars per share)	$ 1	$ 1
Preferred stock, authorized	1,870	1,870
Preferred stock, issued	0	0

UNAUDITED CONDENSED CONSOLIDA_3

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Revenues:
Interest income	$ 93,617	$ 107,014	$ 291,535	$ 319,074
Other income	2,014	2,474	7,022	8,084
Total revenues	95,631	109,488	298,557	327,158
Expenses:
Employee costs	18,806	18,455	59,288	53,807
General and administrative	7,784	6,355	22,730	20,096
Interest	25,808	23,317	75,057	68,641
Provision for credit losses	31,959	47,336	107,997	143,053
Marketing	4,377	3,807	13,176	11,757
Occupancy	1,935	1,865	5,644	5,258
Depreciation and amortization	256	244	746	692
Total operating expenses	90,925	101,379	284,638	303,304
Income before income tax expense	4,706	8,109	13,919	23,854
Income tax expense	1,508	3,446	4,409	10,138
Net income	$ 3,198	$ 4,663	$ 9,510	$ 13,716
Earnings per share:
Basic (in dollars per share)	$ 0.14	$ 0.21	$ 0.44	$ 0.6
Diluted (in dollars per share)	$ 0.13	$ 0.17	$ 0.38	$ 0.5
Number of shares used in computing earnings per share:
Basic (in shares)	22,636	22,473	21,800	23,019
Diluted (in shares)	24,735	26,779	25,178	27,606

UNAUDITED CONDENSED CONSOLIDA_4

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Statement of Comprehensive Income [Abstract]
Net income	$ 3,198	$ 4,663	$ 9,510	$ 13,716
Other comprehensive income/(loss); change in funded status of pension plan	0	0	0	0
Comprehensive income	$ 3,198	$ 4,663	$ 9,510	$ 13,716

UNAUDITED CONDENSED CONSOLIDA_5

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Cash flows from operating activities:
Net income	$ 9,510	$ 13,716
Adjustments to reconcile net income to net cash provided by operating activities:
Accretion of deferred acquisition fees and origination costs	2,119	619
Net interest income accretion on fair value receivables	13,010	0
Depreciation and amortization	746	692
Amortization of deferred financing costs	6,430	6,559
Provision for credit losses	107,997	143,053
Stock-based compensation expense	2,816	4,266
Changes in assets and liabilities:
Accrued interest receivable	10,521	(5,915)
Deferred tax assets, net	3,760	(4,807)
Other assets	(2,892)	5,784
Accounts payable and accrued expenses	4,609	4,285
Net cash provided by operating activities	158,626	168,252
Cash flows from investing activities:
Purchases of finance receivables held for investment	0	(668,284)
Payments received on finance receivables held for investment	470,312	487,869
Purchases of finance receivables measured at fair value	(659,641)	0
Payments received on finance receivables at fair value	31,824	4
Change in repossessions held in inventory	624	1,961
Purchase of furniture and equipment	(795)	(585)
Net cash used in investing activities	(157,676)	(179,035)
Cash flows from financing activities:
Proceeds from issuance of securitization trust debt	622,098	656,315
Proceeds from issuance of subordinated renewable notes	2,226	2,793
Payments on subordinated renewable notes	(1,844)	(1,513)
Net advances of warehouse lines of credit	15,005	2,951
Net advances of residual interest financing debt	40,000	0
Repayment of securitization trust debt	(671,700)	(634,171)
Payment of financing costs	(6,467)	(5,713)
Purchase of common stock	(4,437)	(10,536)
Exercise of options and warrants	483	1,031
Net cash provided by (used in) financing activities	(4,636)	11,157
Increase (decrease) in cash and cash equivalents	(3,686)	374
Cash and restricted cash at beginning of period	124,696	126,690
Cash and restricted cash at end of period	121,010	127,064
Cash paid during the period for:
Interest	68,042	61,756
Income taxes	$ 7,256	$ 6,157

1. Summary of Significant Accou

1. Summary of Significant Accounting Policies	9 Months Ended
	Sep. 30, 2018
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	(1) 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) lent money directly to consumers for loans secured by vehicles, (ii) purchased immaterial amounts of vehicle purchase money loans from non-affiliated lenders, and (iii) acquired installment purchase contracts in four merger and acquisition transactions. 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 nine month period ended September 30, 2018 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, 2017. 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. Finance Receivables Measured at Fair Value Effective January 1, 2018, we adopted the fair value method of accounting for finance receivables acquired on or after that date. For each finance receivable acquired after 2017, we consider the price paid on the purchase date as the fair value for such receivable. We estimate the cash to be received in the future with respect to such receivables, based on our experience with similar receivables acquired in the past. We then compute the internal rate of return that results in the present value of those estimated cash receipts being equal to the purchase date fair value. Thereafter, we recognize interest income on such receivables on a level yield basis using that internal rate of return as the applicable interest rate. Cash received with respect to such receivables is applied first against such interest income, and then to reduce the carrying value of the receivables. We re-evaluate the fair value of such receivables at the close of each measurement period. If the reevaluation were to yield a value materially different from the carrying value, an adjustment would be required. Anticipated credit losses are included in our estimation of cash to be received with respect to receivables. Because such credit losses are included in our computation of the appropriate level yield, we do not thereafter make periodic provision for credit losses, as our best estimate of the lifetime aggregate of credit losses is included in that initial computation. Also because we include anticipated credit losses in our computation of the level yield, the computed level yield is materially lower than the average contractual rate applicable to the receivables. Because our initial carrying value is fixed as the price we pay for the receivable, rather than as the contractual principal balance, we do not record acquisition fees as an amortizing asset related to the receivables, nor do we capitalize costs of acquiring the receivables. Rather we recognize the costs of acquisition as expenses in the period incurred. Other Income The following table presents the primary components of Other Income for the three-month and nine-month periods ending September 30, 2018 and 2017: Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 (In thousands) (In thousands) Direct mail revenues $ 1,328 $ 1,628 $ 4,833 $ 5,261 Convenience fee revenue 360 430 1,200 1,510 Recoveries on previously charged-off contracts. 44 140 198 464 Sales tax refunds 220 224 658 636 Other 62 52 133 213 Other income for the period $ 2,014 $ 2,474 $ 7,022 $ 8,084 On January 1, 2018, the Company adopted Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers”. The majority of the Company’s revenues come from interest income which is outside the scope of ASC 606. The Company’s services that fall within the scope of ASC 606 are presented within Other Income and are recognized as revenue as the Company satisfies its obligation to the customer. Services within the scope of ASC 606 include revenue associated with direct mail and other related products and services that we offer to our dealers. 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, and allocated $4,071,429 of the aggregate consideration received in that transaction to the issuance of the warrants. The warrants represented the right to purchase CPS common shares at a nominal exercise price. In March 2010 we repurchased the warrants for 500,000 of these shares for $1.0 million. Warrants to purchase 2,000,000 shares were outstanding as of December 31, 2017. All of such warrants were exercised on July 10, 2018 and 1,999,995 net shares were issued to the holder, following surrender of five shares in payment of the exercise price. 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 nine months ended September 30, 2018, we recorded stock-based compensation costs in the amount of $663,000 and $2.8 million, respectively. These stock-based compensation costs were $1.7 million and $4.3 million for the three and nine months ended September 30, 2017. As of September 30, 2018, unrecognized stock-based compensation costs to be recognized over future periods equaled $4.3 million. This amount will be recognized as expense over a weighted-average period of 2.2 years. The following represents stock option activity for the nine months ended September 30, 2018: Number of Shares (in thousands) Weighted Average Exercise Price Weighted Average Remaining Contractual Term Options outstanding at the beginning of period 13,135 $ 4.66 N/A Granted 1,700 3.49 N/A Exercised (315 ) 1.53 N/A Forfeited (119 ) 7.20 N/A Options outstanding at the end of period 14,401 $ 4.57 4.05 years Options exercisable at the end of period 10,417 $ 4.79 3.60 years At September 30, 2018, the aggregate intrinsic value of options outstanding and exercisable was $7.7 million and $7.2 million, respectively. There were 315,500 options exercised for the nine months ended September 30, 2018 compared to 618,773 for the comparable period in 2017. The total intrinsic value of options exercised was $869,000 and $1.8 million for the nine-month periods ended September 30, 2018 and 2017. There were 2,893,000 shares available for future stock option grants under existing plans as of September 30, 2018. Purchases of Company Stock The table below describes the purchase of our common stock for the nine-month periods ended September 30, 2018 and 2017: Nine Months Ended September 30, 2018 September 30, 2017 Shares Avg. Price Shares Avg. Price Open market purchases 1,024,410 $ 3.79 2,292,070 $ 4.51 Shares redeemed upon net exercise of stock options 33,604 4.37 44,942 4.65 Other 90,000 4.13 – – Total stock purchases 1,148,014 $ 3.84 2,337,012 $ 4.51 Reclassifications Some items in the prior year financial statements were reclassified to conform to the current presentation. Reclassifications had no effect on net income or 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 September 30, 2018, we were in compliance with all such covenants. In addition, certain of our debt agreements other than our term 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 record at each measurement date, most recently as of September 30, 2018, our best estimate of probable incurred losses for legal contingencies. The amount of losses that may ultimately be incurred cannot be estimated with certainty. Adoption of New Accounting Standards In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which modifies lease accounting for lessees to increase transparency and comparability by recording lease assets and liabilities for operating leases and disclosing key information about leasing arrangements. We will adopt ASU 2016-02 effective January 1, 2019 utilizing the modified retrospective transition method. The Company is currently evaluating the impact of adopting ASU 2016-20.

2. Finance Receivables

2. Finance Receivables	9 Months Ended
	Sep. 30, 2018
Finance Receivables
Finance Receivables	(2) 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. In January 2018 the Company adopted the fair value method of accounting for finance receivables acquired after 2017. Finance receivables measured at fair value are recorded separately on the Company’s Balance Sheet and are excluded from all tables in this footnote. The following table presents the components of Finance Receivables, net of unearned interest: September 30, December 31, 2018 2017 (In thousands) Finance receivables Automobile finance receivables, net of unearned interest $ 1,693,584 $ 2,298,608 Unearned acquisition fees and originations costs. 4,257 6,376 Finance receivables $ 1,697,841 $ 2,304,984 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 September 30, 2018 and December 31, 2017: September 30, December 31, 2018 2017 (In thousands) Delinquency Status Current $ 1,475,029 $ 2,069,617 31 - 60 days 132,030 138,395 61 - 90 days. 58,667 63,081 91 + days 27,858 27,515 $ 1,693,584 $ 2,298,608 Finance receivables totaling $27.9 million and $27.5 million at September 30, 2018 and December 31, 2017, 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 "static pooling," which stratifies our finance receivable portfolio into separately identified pools based on the period of origination. Using analytical and formula driven techniques, we estimate an allowance for finance credit losses, which we believe is adequate for probable incurred credit losses that can be reasonably estimated in our portfolio of automobile contracts. The estimate for probable incurred credit losses is reduced by our estimate for future recoveries on previously incurred losses. Provision for credit losses is charged to our consolidated statement of operations. Net losses incurred on finance receivables are charged to the allowance. We establish the allowance for new receivables over the 12-month period following their acquisition. The following table presents a summary of the activity for the allowance for finance credit losses for the three-month and nine-month periods ended September 30, 2018 and 2017: Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 (In thousands) (In thousands) Balance at beginning of period $ 94,376 $ 107,315 $ 109,187 $ 95,578 Provision for credit losses on finance receivables 31,959 47,336 107,997 143,053 Charge-offs (54,033 ) (53,628 ) (163,628 ) (152,401 ) Recoveries 10,170 7,596 28,916 22,389 Balance at end of period $ 82,472 $ 108,619 $ 82,472 $ 108,619 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: September 30, December 31, 2018 2017 (In thousands) Gross balance of repossessions in inventory $ 32,323 $ 33,679 Allowance for losses on repossessed inventory (23,292 ) (24,024 ) Net repossessed inventory included in other assets $ 9,031 $ 9,655

3. Securitization Trust Debt

3. Securitization Trust Debt	9 Months Ended
	Sep. 30, 2018
Securitization Trust Debt
Securitization Trust Debt	(3) 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 Final Receivables Outstanding Outstanding Contractual Scheduled Pledged at Principal at Principal at Interest Rate at Payment September 30, Initial September 30, December 31, September 30, Series Date (1) 2018 (2) Principal 2018 2017 2018 (Dollars in thousands) CPS 2013-B September 2020 – 205,000 – 18,407 – CPS 2013-C December 2020 – 205,000 – 25,559 – CPS 2013-D March 2021 – 183,000 – 24,917 – CPS 2014-A June 2021 20,652 180,000 18,447 30,521 5.01% CPS 2014-B September 2021 30,370 202,500 28,542 44,516 4.23% CPS 2014-C December 2021 49,690 273,000 47,685 71,174 4.41% CPS 2014-D March 2022 55,838 267,500 53,711 79,099 4.74% CPS 2015-A June 2022 62,557 245,000 60,077 87,194 4.27% CPS 2015-B September 2022 74,678 250,000 73,012 102,873 4.26% CPS 2015-C December 2022 103,397 300,000 102,156 141,362 4.73% CPS 2016-A March 2023 135,737 329,460 133,612 180,761 4.99% CPS 2016-B June 2023 153,931 332,690 149,522 201,199 5.19% CPS 2016-C September 2023 154,934 318,500 151,409 203,504 4.85% CPS 2016-D April 2024 117,334 206,325 114,540 149,671 3.64% CPS 2017-A April 2024 127,389 206,320 124,560 161,892 3.79% CPS 2017-B December 2023 153,829 225,170 140,756 186,594 3.27% CPS 2017-C September 2024 156,928 224,825 146,720 197,155 3.19% CPS 2017-D June 2024 155,682 196,300 146,842 189,277 3.00% CPS 2018-A March 2025 164,281 190,000 154,758 – 3.05% CPS 2018-B December 2024 188,338 201,823 180,508 – 3.52% CPS 2018-C September 2025 229,241 230,275 219,216 – 3.60% $ 2,134,806 $ 4,972,688 $ 2,046,073 $ 2,095,675 _________ (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 $233.8 million in 2018, $853.1 million in 2019, $527.2 million in 2020, $272.2 million in 2021, $112.5 million in 2022, $35.5 million in 2023. (2) Includes repossessed assets that are included in Other assets on our Unaudited Condensed Consolidated Balance Sheet. Debt issuance costs of $11.8 million and $12.5 million as of September 30, 2018 and December 31, 2017, 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. As of September 30, 2018, we were in compliance with all such covenants. 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 September 30, 2018, restricted cash under the various agreements totaled approximately $110.5 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. On October 17, 2018 we completed our fourth securitization transaction of 2018. In the transaction, qualified institutional buyers purchased $233.7 million of asset-backed notes secured by $245 million in automobile receivables purchased by us. The sold notes, issued by CPS Auto Receivables Trust 2018-D, consist of five classes. Ratings of the notes were provided by Standard & Poor’s and Kroll Bond Rating Agency, and were based on the structure of the transaction, the historical performance of similar receivables and CPS’s experience as a servicer. The weighted average yield on the notes is approximately 4.25%.

4. Debt

4. Debt	9 Months Ended
	Sep. 30, 2018
Debt Disclosure [Abstract]
Debt	(4) Debt The terms and amounts of our other debt outstanding at September 30, 2018 and December 31, 2017 are summarized below: Amount Outstanding at September 30, December 31, 2018 2017 (In thousands) Description Interest Rate Maturity Warehouse lines of credit 5.50% over one month Libor (Minimum 6.50%) April 2019 $ 79,438 $ 25,629 3.00% over one month Libor (Minimum 4.5%) September 2020 38,241 77,546 6.75% over a commercial paper rate (Minimum 7.75%) November 2019 11,599 11,100 Residual interest financing 8.60% January 2026 40,000 – Subordinated renewable notes Weighted average rate of 8.31% and 7.99% at September 30, 2018 and December 31, 2017, respectively Weighted average maturity of August 2020 and March 2020 at September 30, 2018 and December 31, 2017, respectively 16,948 16,566 $ 186,226 $ 130,841 On September 21, 2018, we renewed our $100 million warehouse credit line that was first established in May 2012. There was $38.2 million outstanding under this facility at September 30, 2018. The revolving period for this facility was extended to September 2020 followed by an amortization period through September 2021 for any receivables pledged at the end of the revolving period. On May 16, 2018, we completed a $40 million securitization of residual interests from previously issued securitizations. In this residual interest financing transaction, qualified institutional buyers purchased $40.0 million of asset-backed notes secured by residual interests in thirteen CPS securitizations consecutively conducted from September 2013 through December 2016, and an 80% interest in a CPS affiliate that owns the residual interests in the four CPS securitizations conducted in 2017. The sold notes (“2018-1 Notes”), issued by CPS Auto Securitization Trust 2018-1, consist of a single class with a coupon of 8.595%. The agreed valuation of the collateral for the 2018-1 Notes is the sum of the amounts on deposit in the underlying spread accounts for each related securitization and the over-collateralization of each related securitization, which is the difference between the outstanding principal balances of the related receivables less the principal balance of the outstanding notes issued in the related securitization. With respect to the securitizations conducted by CPS in 2017, only 80% of such amounts are included in the collateral. On each monthly payment date, the 2018-1 Notes are entitled to interest at the coupon rate and, if necessary, a principal payment necessary to maintain a specified minimum collateral ratio. Unamortized debt issuance costs of $987,000 have been excluded from the amount reported above for residual interest financing. Similarly, unamortized debt issuance costs of $1.6 million and $1.9 million as of September 30, 2018 and December 31, 2017, respectively, have been excluded from the Warehouse lines of credit amounts in the table above. These debt issuance costs are presented as a direct deduction to the carrying amount of the debt on our Unaudited Condensed Consolidated Balance Sheets.

5. Interest Income and Interest

5. Interest Income and Interest Expense	9 Months Ended
	Sep. 30, 2018
Interest Income And Interest Expense
Interest Income and Interest Expense	(5) Interest Income and Interest Expense The following table presents the components of interest income: Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 (In thousands) (In thousands) Interest on finance receivables $ 79,573 $ 106,830 $ 264,545 $ 318,670 Interest on finance receivables at fair value 13,482 – 25,822 – Other interest income 562 184 1,168 404 Interest income $ 93,617 $ 107,014 $ 291,535 $ 319,074 The following table presents the components of interest expense: Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 (In thousands) (In thousands) Securitization trust debt $ 22,678 $ 20,973 $ 66,762 $ 61,589 Warehouse lines of credit 1,827 1,994 5,850 6,081 Residual interest financing 936 – 1,387 – Subordinated renewable notes 367 350 1,058 971 Interest expense $ 25,808 $ 23,317 $ 75,057 $ 68,641

6. Earnings Per Share

6. Earnings Per Share	9 Months Ended
	Sep. 30, 2018
Earnings per share:
Earnings Per Share	(6) Earnings Per Share Earnings per share for the three-month and nine-month periods ended September 30, 2018 and 2017 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 nine-month periods ended September 30, 2018 and 2017: Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 (In thousands) (In thousands) Weighted average number of common shares outstanding during the period used to compute basic earnings per share 22,636 22,473 21,800 23,019 Incremental common shares attributable to exercise of outstanding options and warrants 2,099 4,306 3,378 4,587 Weighted average number of common shares used to compute diluted earnings per share 24,735 26,779 25,178 27,606 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 nine-month periods ended September 30, 2018 would have included an additional 11.0 million and 10.1 million shares, respectively, attributable to the exercise of outstanding options and warrants. For the three-month and nine-month periods ended September 30, 2017, an additional 9.7 million and 7.3 million shares, respectively, would be included in the diluted earnings per share calculation.

7. Income Taxes

7. Income Taxes	9 Months Ended
	Sep. 30, 2018
Income Tax Disclosure [Abstract]
Income Taxes	(7) 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 2013. As of September 30, 2018 and December 31, 2017, 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 $28.7 million as of September 30, 2018 is more likely than not based on forecasted future net earnings. Our net deferred tax asset of $28.7 million consists of approximately $19.9 million of net U.S. federal deferred tax assets and $8.8 million of net state deferred tax assets. Income tax expense was $1.5 million and $4.4 million for the three months and nine months ended September 30, 2018 and represents an effective income tax rate of 32%, compared to income tax expense of $3.4 million and $10.1 million for the three and nine months ended September 30, 2017, and represents an effective income tax rate of and 43%.

8. Legal Proceedings

8. Legal Proceedings	9 Months Ended
	Sep. 30, 2018
Legal Proceedings
Legal Proceedings	(8) Legal Proceedings Consumer Litigation. 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. Department of Justice Industry Inquiry. Although the inquiry commenced January 2015 is thus completed as to us, no assurance can be given as to whether some other government agency may commence inquiries into or actions against us, nor as to whether the DOJ may recommence its investigation, any of which hypothetical proceedings might materially and adversely affect us. In General Accordingly, we believe that the ultimate resolution of such legal proceedings and contingencies 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 DOJ 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 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	9 Months Ended
	Sep. 30, 2018
Employee Benefits
Employee Benefits	(9) 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 nine-month periods ended September 30, 2018 and 2017. Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 (In thousands) (In thousands) Components of net periodic cost (benefit) Service cost $ – $ – $ – $ – Interest cost 194 214 582 642 Expected return on assets (291 ) (287 ) (873 ) (861 ) Amortization of transition (asset)/obligation – – – – Amortization of net (gain) / loss 111 101 333 303 Net periodic cost (benefit) $ 14 $ 28 $ 42 $ 84 We did not make any contributions to the Plan during the three-month period ended September 30, 2017. We made a contribution in the amount of $1.0 million during the three-month period ended September 30, 2018. We do not anticipate making any contributions for the remainder of 2018.

10. Fair Value Measurements

10. Fair Value Measurements	9 Months Ended
	Sep. 30, 2018
Fair Value Disclosures [Abstract]
Fair Value Measurements	(10) 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. Effective January 2018 we have elected to use the fair value method to value our portfolio of finance receivables acquired in January 2018 and thereafter. Our valuation policies and procedures have been developed by our Accounting department in conjunction with our Risk department and with consultation with outside valuation experts. Our policies and procedures have been approved by our Chief Executive and our Board of Directors and include methodologies for valuation, internal reporting, calibration and back testing. Our periodic review of valuations includes an analysis of changes in fair value measurements and documentation of the reasons for such changes. There is little available third-party information such as broker quotes or pricing services available to assist us in our valuation process. Our level 3, unobservable inputs reflect our own assumptions about the factors that market participants use in pricing similar receivables and are based on the best information available in the circumstances. They include such inputs as estimates for the magnitude and timing of net charge-offs and the rate of amortization of the portfolio of finance receivable. Significant changes in any of those inputs in isolation would have a significant impact on our fair value measurement. The table below presents a reconciliation of the finance receivables measured at fair value on a recurring basis using significant unobservable inputs: Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 (In thousands) (In thousands) Balance at beginning of period $ 412,895 $ – $ – $ – Finance receivables at fair value acquired during period 229,030 – 659,641 – Payments received on finance receivables at fair value (18,851 ) – (31,824 ) – Net interest income accretion on fair value receivables (8,267 ) – (13,010 ) – Mark to fair value – – – – Balance at end of period $ 614,807 $ – $ 614,807 $ – The table below compares the fair values of these finance receivables to their contractual balances for the periods shown: September 30, 2018 December 31, 2017 Contractual Fair Contractual Fair Balance Value Balance Value (In thousands) Finance receivables measured at fair value $ 614,578 $ 614,807 $ – $ – The following table provides certain qualitative information about our level 3 fair value measurements: Financial Instrument Fair Values as of Inputs as of September 30, December 31, S eptember 30, December 31, 2018 2017 Unobservable Inputs 2018 2017 Assets: Finance receivables measured at fair value $ 614,807 $ – Discount rate 8.9% - 10.7% n/a Cumulative net losses 15% - 16% n/a The following table summarizes the delinquency status of these finance receivables measured at fair value as of September 30, 2018 and December 31, 2017: September 30, December 31, 2018 2017 (In thousands) Delinquency Status Current $ 595,920 $ – 31 - 60 days 12,812 – 61 - 90 days 3,975 – 91 + days 1,871 – $ 614,578 $ – 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 September 30, 2018 the finance receivables related to the repossessed vehicles in inventory totaled $32.3 million. We have applied a valuation adjustment, or loss allowance, of $23.3 million, which is based on a recovery rate of approximately 28%, resulting in an estimated fair value and carrying amount of $9.0 million. The fair value and carrying amount of the repossessed inventory at December 31, 2017 was $9.7 million after applying a valuation adjustment of $24.0 million. There were no transfers in or out of level 1 or level 2 assets and liabilities for the three months ended September 30, 2018 and 2017. 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 September 30, 2018 and December 31, 2017, were as follows: As of September 30, 2018 Financial Instrument (In thousands) Carrying Fair Value Measurements Using: Value Level 1 Level 2 Level 3 Total Assets: Cash and cash equivalents $ 10,537 $ 10,537 $ – $ – $ 10,537 Restricted cash and equivalents 110,473 110,473 – – 110,473 Finance receivables, net 1,615,369 – – 1,620,076 1,620,076 Finance receivables measured at fair value 614,807 – – 614,807 614,807 Accrued interest receivable 36,232 – – 36,232 36,232 Liabilities: Warehouse lines of credit $ 127,695 $ – $ – $ 127,695 $ 127,695 Accrued interest payable 4,797 – – 4,797 4,797 Securitization trust debt 2,034,281 – – 2,033,598 2,033,598 Subordinated renewable notes 16,948 – – 16,948 16,948 As of December 31, 2017 Financial Instrument (In thousands) Carrying Fair Value Measurements Using: Value Level 1 Level 2 Level 3 Total Assets: Cash and cash equivalents $ 12,731 $ 12,731 $ – $ – $ 12,731 Restricted cash and equivalents 111,965 111,965 – – 111,965 Finance receivables, net 2,195,797 – – 2,171,846 2,171,846 Accrued interest receivable 46,753 – – 46,753 46,753 Liabilities: Warehouse lines of credit $ 112,408 $ – $ – $ 112,408 $ 112,408 Accrued interest payable 4,212 – – 4,212 4,212 Securitization trust debt 2,083,215 – – 2,089,678 2,089,678 Subordinated renewable notes 16,566 – – 16,566 16,566 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 September 30, 2018 and December 31, 2017, 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 discount rates at which similar receivables could be sold. 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 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 Acc_2

1. Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2018
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) lent money directly to consumers for loans secured by vehicles, (ii) purchased immaterial amounts of vehicle purchase money loans from non-affiliated lenders, and (iii) acquired installment purchase contracts in four merger and acquisition transactions. 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 nine month period ended September 30, 2018 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, 2017.
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.
Finance Receivables Measured at Fair Value	Finance Receivables Measured at Fair Value Effective January 1, 2018, we adopted the fair value method of accounting for finance receivables acquired on or after that date. For each finance receivable acquired after 2017, we consider the price paid on the purchase date as the fair value for such receivable. We estimate the cash to be received in the future with respect to such receivables, based on our experience with similar receivables acquired in the past. We then compute the internal rate of return that results in the present value of those estimated cash receipts being equal to the purchase date fair value. Thereafter, we recognize interest income on such receivables on a level yield basis using that internal rate of return as the applicable interest rate. Cash received with respect to such receivables is applied first against such interest income, and then to reduce the carrying value of the receivables. We re-evaluate the fair value of such receivables at the close of each measurement period. If the reevaluation were to yield a value materially different from the carrying value, an adjustment would be required. Anticipated credit losses are included in our estimation of cash to be received with respect to receivables. Because such credit losses are included in our computation of the appropriate level yield, we do not thereafter make periodic provision for credit losses, as our best estimate of the lifetime aggregate of credit losses is included in that initial computation. Also because we include anticipated credit losses in our computation of the level yield, the computed level yield is materially lower than the average contractual rate applicable to the receivables. Because our initial carrying value is fixed as the price we pay for the receivable, rather than as the contractual principal balance, we do not record acquisition fees as an amortizing asset related to the receivables, nor do we capitalize costs of acquiring the receivables. Rather we recognize the costs of acquisition as expenses in the period incurred.
Other Income	Other Income The following table presents the primary components of Other Income for the three-month and nine-month periods ending September 30, 2018 and 2017: Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 (In thousands) (In thousands) Direct mail revenues $ 1,328 $ 1,628 $ 4,833 $ 5,261 Convenience fee revenue 360 430 1,200 1,510 Recoveries on previously charged-off contracts. 44 140 198 464 Sales tax refunds 220 224 658 636 Other 62 52 133 213 Other income for the period $ 2,014 $ 2,474 $ 7,022 $ 8,084 On January 1, 2018, the Company adopted Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers”. The majority of the Company’s revenues come from interest income which is outside the scope of ASC 606. The Company’s services that fall within the scope of ASC 606 are presented within Other Income and are recognized as revenue as the Company satisfies its obligation to the customer. Services within the scope of ASC 606 include revenue associated with direct mail and other related products and services that we offer to our dealers.
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, and allocated $4,071,429 of the aggregate consideration received in that transaction to the issuance of the warrants. The warrants represented the right to purchase CPS common shares at a nominal exercise price. In March 2010 we repurchased the warrants for 500,000 of these shares for $1.0 million. Warrants to purchase 2,000,000 shares were outstanding as of December 31, 2017. All of such warrants were exercised on July 10, 2018 and 1,999,995 net shares were issued to the holder, following surrender of five shares in payment of the exercise price.
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 nine months ended September 30, 2018, we recorded stock-based compensation costs in the amount of $663,000 and $2.8 million, respectively. These stock-based compensation costs were $1.7 million and $4.3 million for the three and nine months ended September 30, 2017. As of September 30, 2018, unrecognized stock-based compensation costs to be recognized over future periods equaled $4.3 million. This amount will be recognized as expense over a weighted-average period of 2.2 years. The following represents stock option activity for the nine months ended September 30, 2018: Number of Shares (in thousands) Weighted Average Exercise Price Weighted Average Remaining Contractual Term Options outstanding at the beginning of period 13,135 $ 4.66 N/A Granted 1,700 3.49 N/A Exercised (315 ) 1.53 N/A Forfeited (119 ) 7.20 N/A Options outstanding at the end of period 14,401 $ 4.57 4.05 years Options exercisable at the end of period 10,417 $ 4.79 3.60 years At September 30, 2018, the aggregate intrinsic value of options outstanding and exercisable was $7.7 million and $7.2 million, respectively. There were 315,500 options exercised for the nine months ended September 30, 2018 compared to 618,773 for the comparable period in 2017. The total intrinsic value of options exercised was $869,000 and $1.8 million for the nine-month periods ended September 30, 2018 and 2017. There were 2,893,000 shares available for future stock option grants under existing plans as of September 30, 2018.
Purchases of Company Stock	Purchases of Company Stock The table below describes the purchase of our common stock for the nine-month periods ended September 30, 2018 and 2017: Nine Months Ended September 30, 2018 September 30, 2017 Shares Avg. Price Shares Avg. Price Open market purchases 1,024,410 $ 3.79 2,292,070 $ 4.51 Shares redeemed upon net exercise of stock options 33,604 4.37 44,942 4.65 Other 90,000 4.13 – – Total stock purchases 1,148,014 $ 3.84 2,337,012 $ 4.51
Reclassifications	Reclassifications Some items in the prior year financial statements were reclassified to conform to the current presentation. Reclassifications had no effect on net income or 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 September 30, 2018, we were in compliance with all such covenants. In addition, certain of our debt agreements other than our term 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 record at each measurement date, most recently as of September 30, 2018, our best estimate of probable incurred losses for legal contingencies. The amount of losses that may ultimately be incurred cannot be estimated with certainty.
Adoption of New Accounting Standards	Adoption of New Accounting Standards In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which modifies lease accounting for lessees to increase transparency and comparability by recording lease assets and liabilities for operating leases and disclosing key information about leasing arrangements. We will adopt ASU 2016-02 effective January 1, 2019 utilizing the modified retrospective transition method. The Company is currently evaluating the impact of adopting ASU 2016-20.

1. Summary of Significant Acc_3

1. Summary of Significant Accounting Policies (Tables)	9 Months Ended
	Sep. 30, 2018
Accounting Policies [Abstract]
Schedule of other Income	The following table presents the primary components of Other Income for the three-month and nine-month periods ending September 30, 2018 and 2017: Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 (In thousands) (In thousands) Direct mail revenues $ 1,328 $ 1,628 $ 4,833 $ 5,261 Convenience fee revenue 360 430 1,200 1,510 Recoveries on previously charged-off contracts. 44 140 198 464 Sales tax refunds 220 224 658 636 Other 62 52 133 213 Other income for the period $ 2,014 $ 2,474 $ 7,022 $ 8,084
Schedule of stock option activity	The following represents stock option activity for the nine months ended September 30, 2018: Number of Shares (in thousands) Weighted Average Exercise Price Weighted Average Remaining Contractual Term Options outstanding at the beginning of period 13,135 $ 4.66 N/A Granted 1,700 3.49 N/A Exercised (315 ) 1.53 N/A Forfeited (119 ) 7.20 N/A Options outstanding at the end of period 14,401 $ 4.57 4.05 years Options exercisable at the end of period 10,417 $ 4.79 3.60 years
Schedule of purchases of company stock	The table below describes the purchase of our common stock for the nine-month periods ended September 30, 2018 and 2017: Nine Months Ended September 30, 2018 September 30, 2017 Shares Avg. Price Shares Avg. Price Open market purchases 1,024,410 $ 3.79 2,292,070 $ 4.51 Shares redeemed upon net exercise of stock options 33,604 4.37 44,942 4.65 Other 90,000 4.13 – – Total stock purchases 1,148,014 $ 3.84 2,337,012 $ 4.51

2. Finance Receivables (Tables)

2. Finance Receivables (Tables)	9 Months Ended
	Sep. 30, 2018
Finance Receivables
Schedule of financial receivables	The following table presents the components of Finance Receivables, net of unearned interest: September 30, December 31, 2018 2017 (In thousands) Finance receivables Automobile finance receivables, net of unearned interest $ 1,693,584 $ 2,298,608 Unearned acquisition fees and originations costs. 4,257 6,376 Finance receivables $ 1,697,841 $ 2,304,984
Schedule of delinquency status of finance receivables	The following table summarizes the delinquency status of finance receivables as of September 30, 2018 and December 31, 2017: September 30, December 31, 2018 2017 (In thousands) Delinquency Status Current $ 1,475,029 $ 2,069,617 31 - 60 days 132,030 138,395 61 - 90 days. 58,667 63,081 91 + days 27,858 27,515 $ 1,693,584 $ 2,298,608
Schedule of allowance for credit losses	The following table presents a summary of the activity for the allowance for finance credit losses for the three-month and nine-month periods ended September 30, 2018 and 2017: Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 (In thousands) (In thousands) Balance at beginning of period $ 94,376 $ 107,315 $ 109,187 $ 95,578 Provision for credit losses on finance receivables 31,959 47,336 107,997 143,053 Charge-offs (54,033 ) (53,628 ) (163,628 ) (152,401 ) Recoveries 10,170 7,596 28,916 22,389 Balance at end of period $ 82,472 $ 108,619 $ 82,472 $ 108,619
Schedule of allowance for losses on repossessed inventory	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: September 30, December 31, 2018 2017 (In thousands) Gross balance of repossessions in inventory $ 32,323 $ 33,679 Allowance for losses on repossessed inventory (23,292 ) (24,024 ) Net repossessed inventory included in other assets $ 9,031 $ 9,655

3. Securitization Trust Debt (T

3. Securitization Trust Debt (Tables)	9 Months Ended
	Sep. 30, 2018
Securitization Trust Debt
Schedule of securitization trust debt	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 Final Receivables Outstanding Outstanding Contractual Scheduled Pledged at Principal at Principal at Interest Rate at Payment September 30, Initial September 30, December 31, September 30, Series Date (1) 2018 (2) Principal 2018 2017 2018 (Dollars in thousands) CPS 2013-B September 2020 – 205,000 – 18,407 – CPS 2013-C December 2020 – 205,000 – 25,559 – CPS 2013-D March 2021 – 183,000 – 24,917 – CPS 2014-A June 2021 20,652 180,000 18,447 30,521 5.01% CPS 2014-B September 2021 30,370 202,500 28,542 44,516 4.23% CPS 2014-C December 2021 49,690 273,000 47,685 71,174 4.41% CPS 2014-D March 2022 55,838 267,500 53,711 79,099 4.74% CPS 2015-A June 2022 62,557 245,000 60,077 87,194 4.27% CPS 2015-B September 2022 74,678 250,000 73,012 102,873 4.26% CPS 2015-C December 2022 103,397 300,000 102,156 141,362 4.73% CPS 2016-A March 2023 135,737 329,460 133,612 180,761 4.99% CPS 2016-B June 2023 153,931 332,690 149,522 201,199 5.19% CPS 2016-C September 2023 154,934 318,500 151,409 203,504 4.85% CPS 2016-D April 2024 117,334 206,325 114,540 149,671 3.64% CPS 2017-A April 2024 127,389 206,320 124,560 161,892 3.79% CPS 2017-B December 2023 153,829 225,170 140,756 186,594 3.27% CPS 2017-C September 2024 156,928 224,825 146,720 197,155 3.19% CPS 2017-D June 2024 155,682 196,300 146,842 189,277 3.00% CPS 2018-A March 2025 164,281 190,000 154,758 – 3.05% CPS 2018-B December 2024 188,338 201,823 180,508 – 3.52% CPS 2018-C September 2025 229,241 230,275 219,216 – 3.60% $ 2,134,806 $ 4,972,688 $ 2,046,073 $ 2,095,675

4. Debt (Tables)

4. Debt (Tables)	9 Months Ended
	Sep. 30, 2018
Debt Disclosure [Abstract]
Schedule of debt Outstanding	The terms and amounts of our other debt outstanding at September 30, 2018 and December 31, 2017 are summarized below: Amount Outstanding at September 30, December 31, 2018 2017 (In thousands) Description Interest Rate Maturity Warehouse lines of credit 5.50% over one month Libor (Minimum 6.50%) April 2019 $ 79,438 $ 25,629 3.00% over one month Libor (Minimum 4.5%) September 2020 38,241 77,546 6.75% over a commercial paper rate (Minimum 7.75%) November 2019 11,599 11,100 Residual interest financing 8.60% January 2026 40,000 – Subordinated renewable notes Weighted average rate of 8.31% and 7.99% at September 30, 2018 and December 31, 2017, respectively Weighted average maturity of August 2020 and March 2020 at September 30, 2018 and December 31, 2017, respectively 16,948 16,566 $ 186,226 $ 130,841

5. Interest Income and Intere_2

5. Interest Income and Interest Expense (Tables)	9 Months Ended
	Sep. 30, 2018
Interest Income And Interest Expense Tables
Schedule of interest income	The following table presents the components of interest income: Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 (In thousands) (In thousands) Interest on finance receivables $ 79,573 $ 106,830 $ 264,545 $ 318,670 Interest on finance receivables at fair value 13,482 – 25,822 – Other interest income 562 184 1,168 404 Interest income $ 93,617 $ 107,014 $ 291,535 $ 319,074
Schedule of interest expense	The following table presents the components of interest expense: Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 (In thousands) (In thousands) Securitization trust debt $ 22,678 $ 20,973 $ 66,762 $ 61,589 Warehouse lines of credit 1,827 1,994 5,850 6,081 Residual interest financing 936 – 1,387 – Subordinated renewable notes 367 350 1,058 971 Interest expense $ 25,808 $ 23,317 $ 75,057 $ 68,641

6. Earnings Per Share (Tables)

6. Earnings Per Share (Tables)	9 Months Ended
	Sep. 30, 2018
Earnings per share:
Schedule of computation of basic and diluted earnings per share	Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 (In thousands) (In thousands) Weighted average number of common shares outstanding during the period used to compute basic earnings per share 22,636 22,473 21,800 23,019 Incremental common shares attributable to exercise of outstanding options and warrants 2,099 4,306 3,378 4,587 Weighted average number of common shares used to compute diluted earnings per share 24,735 26,779 25,178 27,606

9. Employee Benefits (Tables)

9. Employee Benefits (Tables)	9 Months Ended
	Sep. 30, 2018
Employee Benefits
Schedule of net periodic cost (benefit)	The table below sets forth the Plan’s net periodic benefit cost for the three-month and nine-month periods ended September 30, 2018 and 2017. Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 (In thousands) (In thousands) Components of net periodic cost (benefit) Service cost $ – $ – $ – $ – Interest cost 194 214 582 642 Expected return on assets (291 ) (287 ) (873 ) (861 ) Amortization of transition (asset)/obligation – – – – Amortization of net (gain) / loss 111 101 333 303 Net periodic cost (benefit) $ 14 $ 28 $ 42 $ 84

10. Fair Value Measurements (Ta

10. Fair Value Measurements (Tables)	9 Months Ended
	Sep. 30, 2018
Fair Value Disclosures [Abstract]
Schedule of reconciliation of the finance receivables measured at fair value on a recurring basis	Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 (In thousands) (In thousands) Balance at beginning of period $ 412,895 $ – $ – $ – Finance receivables at fair value acquired during period 229,030 – 659,641 – Payments received on finance receivables at fair value (18,851 ) – (31,824 ) – Net interest income accretion on fair value receivables (8,267 ) – (13,010 ) – Mark to fair value – – – – Balance at end of period $ 614,807 $ – $ 614,807 $ –
Schedule of finance receivables to their contractual balances	The table below compares the fair values of these finance receivables to their contractual balances for the periods shown: September 30, 2018 December 31, 2017 Contractual Fair Contractual Fair Balance Value Balance Value (In thousands) Finance receivables measured at fair value $ 614,578 $ 614,807 $ – $ –
Schedule of level 3 fair value measurements	Financial Instrument Fair Values as of Inputs as of September 30, December 31, S eptember 30, December 31, 2018 2017 Unobservable Inputs 2018 2017 Assets: Finance receivables measured at fair value $ 614,807 $ – Discount rate 8.9% - 10.7% n/a Cumulative net losses 15% - 16% n/a
Schedule of delinquency status of finance receivables measured at fair value	The following table summarizes the delinquency status of these finance receivables measured at fair value as of September 30, 2018 and December 31, 2017: September 30, December 31, 2018 2017 (In thousands) Delinquency Status Current $ 595,920 $ – 31 - 60 days 12,812 – 61 - 90 days 3,975 – 91 + days 1,871 – $ 614,578 $ –
Schedule of estimated fair values of financial assets and liabilities	The estimated fair values of financial assets and liabilities at September 30, 2018 and December 31, 2017, were as follows: As of September 30, 2018 Financial Instrument (In thousands) Carrying Fair Value Measurements Using: Value Level 1 Level 2 Level 3 Total Assets: Cash and cash equivalents $ 10,537 $ 10,537 $ – $ – $ 10,537 Restricted cash and equivalents 110,473 110,473 – – 110,473 Finance receivables, net 1,615,369 – – 1,620,076 1,620,076 Finance receivables measured at fair value 614,807 – – 614,807 614,807 Accrued interest receivable 36,232 – – 36,232 36,232 Liabilities: Warehouse lines of credit $ 127,695 $ – $ – $ 127,695 $ 127,695 Accrued interest payable 4,797 – – 4,797 4,797 Securitization trust debt 2,034,281 – – 2,033,598 2,033,598 Subordinated renewable notes 16,948 – – 16,948 16,948 As of December 31, 2017 Financial Instrument (In thousands) Carrying Fair Value Measurements Using: Value Level 1 Level 2 Level 3 Total Assets: Cash and cash equivalents $ 12,731 $ 12,731 $ – $ – $ 12,731 Restricted cash and equivalents 111,965 111,965 – – 111,965 Finance receivables, net 2,195,797 – – 2,171,846 2,171,846 Accrued interest receivable 46,753 – – 46,753 46,753 Liabilities: Warehouse lines of credit $ 112,408 $ – $ – $ 112,408 $ 112,408 Accrued interest payable 4,212 – – 4,212 4,212 Securitization trust debt 2,083,215 – – 2,089,678 2,089,678 Subordinated renewable notes 16,566 – – 16,566 16,566

1. Summary of Significant Acc_4

1. Summary of Significant Accounting Policies (Details - Other Income) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Other income for the period	$ 2,014	$ 2,474	$ 7,022	$ 8,084
Direct Mail Revenues [Member]
Other income for the period	1,328	1,628	4,833	5,261
Convenience Fee Revenue [Member]
Other income for the period	360	430	1,200	1,510
Recoveries on previously charged-off contracts [Member]
Other income for the period	44	140	198	464
Sales Tax Refunds [Member]
Other income for the period	220	224	658	636
Other Income [Member]
Other income for the period	$ 62	$ 52	$ 133	$ 213

1. Summary of Significant Acc_5

1. Summary of Significant Accounting Policies (Details - Options outstanding) - $ / shares	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Number of Shares
Outstanding options, beginning balance	13,135,000
Granted	1,700,000
Exercised	(315,000)	(618,773)
Forfeited	(119,000)
Outstanding options, ending balance	14,401,000
Options exercisable at the end of period	10,417,000
Weighted Average Exercise Price
Outstanding options, beginning balance	$ 4.66
Granted	3.49
Exercised	1.53
Forfeited	7.20
Outstanding options, ending balance	4.57
Options exercisable at the end of period	$ 4.79
Weighted Average Remaining Contractual Term
Weighted Average Remaining Contractual Term, ending	4 years 18 days
Options exercisable at the end of period	3 years 7 months 6 days

1. Summary of Significant Acc_6

1. Summary of Significant Accounting Policies (Details - Stock purchases) - $ / shares	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Accounting Policies [Abstract]
Open market purchases	1,024,410	2,292,070
Average price for open market purchases	$ 3.79	$ 4.51
Shares redeemed upon net exercise of stock options	33,604	44,942
Average price for shares redeemed upon net exercise of stock options	$ 4.37	$ 4.65
Other purchases	90,000	0
Average price for other stock purchases	$ 4.13
Total stock purchases	1,148,014	2,337,012
Average price for total stock purchases	$ 3.84	$ 4.51

1. Summary of Significant Acc_7

1. Summary of Significant Accounting Policies (Details Narrative) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Stock based compensation costs	$ 663	$ 1,700	$ 2,816	$ 4,266
Unrecognized stock-based compensation costs	4,300		$ 4,300
Unrecognized stock-based compensation costs amortization period			2 years 2 months 12 days
Aggregate intrinsic value outstanding	7,700		$ 7,700
Aggregate intrinsic value exercisable	$ 7,200		$ 7,200
Options Exercised			315,000	618,773
Total intrinsic value of options exercised			$ 869	$ 1,800
Shares available for future grants	2,893,000		2,893,000
Warrants [Member]
Warrants outstanding	0		0		2,000,000
Warrants exercised			1,999,995
Stock issued from warrant exercises			5
Common Stock [Member]
Stock issued from warrant exercises			1,999,995

2. Finance Receivables (Details

2. Finance Receivables (Details - Finance receivables) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Finance Receivables
Automobile finance receivables, net of unearned interest	$ 1,693,584	$ 2,298,608
Unearned acquisition fees and originations costs	4,257	6,376
Finance Receivables	$ 1,697,841	$ 2,304,984

2. Finance Receivables (Detai_2

2. Finance Receivables (Details - Delinquency status) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Current	$ 1,475,029	$ 2,069,617
Finance receivables	1,693,584	2,298,608
Financing Receivables, 31 - 60 Days Past Due [Member]
Finance receivables	132,030	138,395
Financing Receivables, 61 - 90 Days Past Due [Member]
Finance receivables	58,667	63,081
Financing Receivables, 91+ Days Past Due [Member]
Finance receivables	$ 27,858	$ 27,515

2. Finance Receivables (Detai_3

2. Finance Receivables (Details - Finance credit losses) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Finance Receivables
Balance at beginning of period	$ 94,376	$ 107,315	$ 109,187	$ 95,578
Provision for credit losses	31,959	47,336	107,997	143,053
Charge-offs	(54,033)	(53,628)	(163,628)	(152,401)
Recoveries	10,170	7,596	28,916	22,389
Balance at end of period	$ 82,472	$ 108,619	$ 82,472	$ 108,619

2. Finance Receivables (Detai_4

2. Finance Receivables (Details - Repossessions) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Finance Receivables
Gross balance of repossessions in inventory	$ 32,323	$ 33,679
Allowance for losses on repossessed inventory	(23,292)	(24,024)
Net repossessed inventory included in other assets	$ 9,031	$ 9,655

2. Finance Receivables (Detai_5

2. Finance Receivables (Details Narrative) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Finance Receivables
Finance receivables	$ 27,900	$ 27,500

3. Securitization Trust Debt (D

3. Securitization Trust Debt (Details) - USD ($) $ in Thousands		9 Months Ended
		Sep. 30, 2018	Dec. 31, 2017
"Securitization trust debt," and components of debt
Receivables Pledged at end of period		$ 2,134,806
Initial Principal		4,972,688
Outstanding Principal		$ 2,046,073	$ 2,095,675
CPS 2013-B [Member]
"Securitization trust debt," and components of debt
Final Scheduled Payment Date	[1]	September 2,020
Receivables Pledged at end of period		$ 0
Initial Principal		205,000
Outstanding Principal		$ 0	18,407
Weighted Average Contractual Interest Rate		0.00%
CPS 2013-C [Member]
"Securitization trust debt," and components of debt
Final Scheduled Payment Date	[1]	December 2,020
Receivables Pledged at end of period		$ 0
Initial Principal		205,000
Outstanding Principal		$ 0	25,559
Weighted Average Contractual Interest Rate		0.00%
CPS 2013-D [Member]
"Securitization trust debt," and components of debt
Final Scheduled Payment Date	[1]	March 2,021
Receivables Pledged at end of period		$ 0
Initial Principal		183,000
Outstanding Principal		$ 0	24,917
Weighted Average Contractual Interest Rate		0.00%
CPS 2014-A [Member]
"Securitization trust debt," and components of debt
Final Scheduled Payment Date	[1]	June 2,021
Receivables Pledged at end of period		$ 20,652
Initial Principal		180,000
Outstanding Principal		$ 18,447	30,521
Weighted Average Contractual Interest Rate		5.01%
CPS 2014-B [Member]
"Securitization trust debt," and components of debt
Final Scheduled Payment Date	[1]	September 2,021
Receivables Pledged at end of period		$ 30,370
Initial Principal		202,500
Outstanding Principal		$ 28,542	44,516
Weighted Average Contractual Interest Rate		4.23%
CPS 2014-C [Member]
"Securitization trust debt," and components of debt
Final Scheduled Payment Date	[1]	December 2,021
Receivables Pledged at end of period		$ 49,690
Initial Principal		273,000
Outstanding Principal		$ 47,685	71,174
Weighted Average Contractual Interest Rate		4.41%
CPS 2014-D [Member]
"Securitization trust debt," and components of debt
Final Scheduled Payment Date	[1]	March 2,022
Receivables Pledged at end of period		$ 55,838
Initial Principal		267,500
Outstanding Principal		$ 53,711	79,099
Weighted Average Contractual Interest Rate		4.74%
CPS 2015-A [Member]
"Securitization trust debt," and components of debt
Final Scheduled Payment Date	[1]	June 2,022
Receivables Pledged at end of period		$ 62,557
Initial Principal		245,000
Outstanding Principal		$ 60,077	87,194
Weighted Average Contractual Interest Rate		4.27%
CPS 2015-B [Member]
"Securitization trust debt," and components of debt
Final Scheduled Payment Date	[1]	September 2,022
Receivables Pledged at end of period		$ 74,678
Initial Principal		250,000
Outstanding Principal		$ 73,012	102,873
Weighted Average Contractual Interest Rate		4.26%
CPS 2015-C [Member]
"Securitization trust debt," and components of debt
Final Scheduled Payment Date	[1]	December 2,022
Receivables Pledged at end of period		$ 103,397
Initial Principal		300,000
Outstanding Principal		$ 102,156	141,362
Weighted Average Contractual Interest Rate		4.73%
CPS 2016-A [Member]
"Securitization trust debt," and components of debt
Final Scheduled Payment Date	[1]	March 2,023
Receivables Pledged at end of period		$ 135,737
Initial Principal		329,460
Outstanding Principal		$ 133,612	180,761
Weighted Average Contractual Interest Rate		4.99%
CPS 2016-B [Member]
"Securitization trust debt," and components of debt
Final Scheduled Payment Date	[1]	June 2,023
Receivables Pledged at end of period		$ 153,931
Initial Principal		332,690
Outstanding Principal		$ 149,522	201,199
Weighted Average Contractual Interest Rate		5.19%
CPS 2016-C [Member]
"Securitization trust debt," and components of debt
Final Scheduled Payment Date	[1]	September 2,023
Receivables Pledged at end of period		$ 154,934
Initial Principal		318,500
Outstanding Principal		$ 151,409	203,504
Weighted Average Contractual Interest Rate		4.85%
CPS 2016-D [Member]
"Securitization trust debt," and components of debt
Final Scheduled Payment Date	[1]	April 2,024
Receivables Pledged at end of period		$ 117,334
Initial Principal		206,325
Outstanding Principal		$ 114,540	149,671
Weighted Average Contractual Interest Rate		3.64%
CPS 2017-A [Member]
"Securitization trust debt," and components of debt
Final Scheduled Payment Date	[1]	April 2,024
Receivables Pledged at end of period		$ 127,389
Initial Principal		206,320
Outstanding Principal		$ 124,560	161,892
Weighted Average Contractual Interest Rate		3.79%
CPS 2017-B [Member]
"Securitization trust debt," and components of debt
Final Scheduled Payment Date	[1]	December 2,023
Receivables Pledged at end of period		$ 153,829
Initial Principal		225,170
Outstanding Principal		$ 140,756	186,594
Weighted Average Contractual Interest Rate		3.27%
CPS 2017-C [Member]
"Securitization trust debt," and components of debt
Final Scheduled Payment Date	[1]	September 2,024
Receivables Pledged at end of period		$ 156,928
Initial Principal		224,825
Outstanding Principal		$ 146,720	197,155
Weighted Average Contractual Interest Rate		3.19%
CPS 2017-D [Member]
"Securitization trust debt," and components of debt
Final Scheduled Payment Date	[1]	June 2,024
Receivables Pledged at end of period		$ 155,682
Initial Principal		196,300
Outstanding Principal		$ 146,842	189,277
Weighted Average Contractual Interest Rate		3.00%
CPS 2018-A [Member]
"Securitization trust debt," and components of debt
Final Scheduled Payment Date	[1]	March 2,025
Receivables Pledged at end of period		$ 164,281
Initial Principal		190,000
Outstanding Principal		$ 154,758	0
Weighted Average Contractual Interest Rate		3.05%
CPS 2018-B [Member]
"Securitization trust debt," and components of debt
Final Scheduled Payment Date	[1]	December 2,024
Receivables Pledged at end of period		$ 188,338
Initial Principal		201,823
Outstanding Principal		$ 180,508	0
Weighted Average Contractual Interest Rate		3.52%
CPS 2018-C [Member]
"Securitization trust debt," and components of debt
Final Scheduled Payment Date	[1]	September 2,025
Receivables Pledged at end of period		$ 229,241
Initial Principal		230,275
Outstanding Principal		$ 219,216	$ 0
Weighted Average Contractual Interest Rate		3.60%
[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 $233.8 million in 2018, $853.1 million in 2019, $527.2 million in 2020, $272.2 million in 2021, $112.5 million in 2022, $35.5 million in 2023.

3. Securitization Trust Debt _2

3. Securitization Trust Debt (Details Narrative) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Expected finance receivable payments 2018	$ 233,800
Expected finance receivable payments 2019	853,100
Expected finance receivable payments 2020	527,200
Expected finance receivable payments 2021	272,200
Expected finance receivable payments 2022	112,500
Expected finance receivable payments 2023	35,500
Securitization Trust Debt [Member]
Debt issuance costs	$ 11,800	$ 12,500

4. Debt (Details)

4. Debt (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Warehouse lines of credit	$ 127,695	$ 112,408
Residual interest financing	39,013	0
Subordinated renewable notes	16,948	16,566
Total other debt outstanding	$ 186,226	130,841
Residual interest financing [Member]
Interest rate	8.60%
Revolving Maturity date	January 2,026
Subordinated renewable notes [Member]
Interest rate	Weighted average rate of 8.31% and 7.99% at September 30, 2018 and December 31, 2017, respectively
Revolving Maturity date	Weighted average maturity of August 2020 and March 2020 at September 30, 2018 and December 31, 2017, respectively
Warehouse lines of credit [Member]
Warehouse lines of credit	$ 79,438	25,629
Interest rate	5.50% over one month Libor (Minimum 6.50%)
Revolving Maturity date	April 2,019
Warehouse lines of credit (2) [Member]
Warehouse lines of credit	$ 38,241	77,546
Interest rate	3.00% over one month Libor (Minimum 4.5%)
Revolving Maturity date	September 2,020
Warehouse lines of credit (3) [Member]
Warehouse lines of credit	$ 11,599	11,100
Interest rate	6.75% over a commercial paper rate (Minimum 7.75%)
Revolving Maturity date	November 2,019
Residual interest financing [Member]
Warehouse lines of credit		0
Residual interest financing	$ 40,000
Subordinated renewable notes [Member]
Subordinated renewable notes	$ 16,948	$ 16,566

4. Debt (Details Narrative)

4. Debt (Details Narrative) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Warehouse Lines of Credit [Member]
Credit line maximum borrowing amount	$ 100,000
Credit line expiration date	Sep. 30, 2020
Residual interest financing [Member]
Unamortized debt issuance costs	$ 987	$ 0
Warehouse Lines of Credit [Member]
Unamortized debt issuance costs	$ 1,600	$ 1,900

5. Interest Income and Intere_3

5. Interest Income and Interest Expense (Details - Interest income) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Components of interest income
Interest on finance receivables	$ 79,573	$ 106,830	$ 264,545	$ 318,670
Interest on finance receivables at fair value	13,482	0	25,822	0
Other interest income	562	184	1,168	404
Interest income	$ 93,617	$ 107,014	$ 291,535	$ 319,074

5. Interest Income and Intere_4

5. Interest Income and Interest Expense (Details - Interest expense) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Total interest expense	$ 25,808	$ 23,317	$ 75,057	$ 68,641
Securitization Trust Debt [Member]
Total interest expense	22,678	20,973	66,762	61,589
Warehouse Lines of Credit [Member]
Total interest expense	1,827	1,994	5,850	6,081
Residual interest financing [Member]
Total interest expense	936	0	1,387	0
Subordinated renewable notes [Member]
Total interest expense	$ 367	$ 350	$ 1,058	$ 971

6. Earnings Per Share (Details)

6. Earnings Per Share (Details) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Earnings per share:
Weighted average number of common shares outstanding during the period used to compute basic earnings per share	22,636	22,473	21,800	23,019
Incremental common shares attibutable to exercise of outstanding options and warrants	2,099	4,306	3,378	4,587
Weighted average number of common shares used to compute diluted earnings per share	24,735	26,779	25,178	27,606

6. Earnings Per Share (Details

6. Earnings Per Share (Details Narrative) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Earnings per share:
Antidilutive common stock equivalents	11,000	9,700	10,100	7,300

7. Income Taxes (Details Narrat

7. Income Taxes (Details Narrative) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Income Tax Disclosure [Abstract]
Unrecognized tax benefits	$ 0		$ 0		$ 0
Deferred tax asset	28,700		28,700
U.S. federal deferred tax assets	19,900		19,900
State deferred tax assets	8,800		8,800
Income tax expense	$ 1,508	$ 3,446	$ 4,409	$ 10,138
Effective income tax rate			32.00%	43.00%

9. Employee Benefits (Details)

9. Employee Benefits (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Components of net periodic cost (benefit)
Service cost	$ 0	$ 0	$ 0	$ 0
Interest cost	194	214	582	642
Expected return on assets	(291)	(287)	(873)	(861)
Amortization of transition (asset)/obligation	0	0	0	0
Amortization of net (gain)/loss	111	101	333	303
Net periodic cost (benefit)	$ 14	$ 28	$ 42	$ 84

9. Employee Benefits (Details N

9. Employee Benefits (Details Narrative) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Employee Benefits
Plan contribution	$ 1,000	$ 0

10. Fair Value Measurements (De

10. Fair Value Measurements (Details - Reconciliation of Finance Receivables) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Fair Value Disclosures [Abstract]
Balance at beginning of period	$ 412,895	$ 0	$ 0	$ 0
Finance receivables at fair value acquired during period	229,030	0	659,641	0
Payments received on finance receivables at fair value	(18,851)	0	(31,824)	0
Net interest income accretion on fair value receivables	(8,267)	0	(13,010)	0
Mark to fair value	0	0	0	0
Balance at end of period	$ 614,807	$ 0	$ 614,807	$ 0

10. Fair Value Measurements (_2

10. Fair Value Measurements (Details - Finance Receivables to Their Contractual Balances) - USD ($) $ in Thousands	Sep. 30, 2018	Jun. 30, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Dec. 31, 2016
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Finance receivables measured at fair value	$ 614,807	$ 412,895	$ 0	$ 0	$ 0	$ 0
Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Finance receivables measured at fair value	614,807		0
Contractual Balance [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Finance receivables measured at fair value	$ 614,578		$ 0

10. Fair Value Measurements (_3

10. Fair Value Measurements (Details - Level 3 Fair Value Measurements) - USD ($) $ in Thousands	Sep. 30, 2018	Jun. 30, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Dec. 31, 2016
Finance receivables measured at fair value	$ 614,807	$ 412,895	$ 0	$ 0	$ 0	$ 0
Level 3 [Member]
Finance receivables measured at fair value	614,807
Fair Value [Member]
Finance receivables measured at fair value	614,807		0
Fair Value [Member] | Level 3 [Member]
Finance receivables measured at fair value	$ 614,807		$ 0
Fair Value [Member] | Level 3 [Member] | Discount Rate [Member] | Minimum [Member]
Unobservable Inputs, Inputs as of	8.90%
Fair Value [Member] | Level 3 [Member] | Discount Rate [Member] | MaximumMember
Unobservable Inputs, Inputs as of	10.70%
Fair Value [Member] | Level 3 [Member] | Cumulative Net Losses [Member] | Minimum [Member]
Unobservable Inputs, Inputs as of	15.00%
Fair Value [Member] | Level 3 [Member] | Cumulative Net Losses [Member] | MaximumMember
Unobservable Inputs, Inputs as of	16.00%

10. Fair Value Measurements (_4

10. Fair Value Measurements (Details - Delinquency status) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Finance receivables measured at fair value current	$ 595,920	$ 0
Finance receivables measured at fair value	614,578	0
Financing Receivables, 31 - 60 Days Past Due [Member]
Finance receivables measured at fair value	12,812	0
Financing Receivables, 61 - 90 Days Past Due [Member]
Finance receivables measured at fair value	3,975	0
Financing Receivables, 91+ Days Past Due [Member]
Finance receivables measured at fair value	$ 1,871	$ 0

10. Fair Value Measurements (_5

10. Fair Value Measurements (Details - Fair Value Financial Assets) - USD ($) $ in Thousands	Sep. 30, 2018	Jun. 30, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Dec. 31, 2016
Assets:
Cash and cash equivalents	$ 10,537		$ 12,731
Restricted cash and equivalents	110,473		111,965
Finance receivables, net	1,620,076		2,171,846
Finance receivables measured at fair value	614,807	$ 412,895	0	$ 0	$ 0	$ 0
Accrued interest receivable	36,232		46,753
Liabilities:
Warehouse lines of credit	127,695		112,408
Accrued interest payable	4,797		4,212
Securitization trust debt	2,033,598		2,089,678
Subordinated renewable notes	16,948		16,566
Carrying Value [Member]
Assets:
Cash and cash equivalents	10,537		12,731
Restricted cash and equivalents	110,473		111,965
Finance receivables, net	1,615,369		2,195,797
Finance receivables measured at fair value	614,807
Accrued interest receivable	36,232		46,753
Liabilities:
Warehouse lines of credit	127,695		112,408
Accrued interest payable	4,797		4,212
Securitization trust debt	2,034,281		2,083,215
Subordinated renewable notes	16,948		16,566
Level 1 [Member]
Assets:
Cash and cash equivalents	10,537		12,731
Restricted cash and equivalents	110,473		111,965
Finance receivables, net	0		0
Finance receivables measured at fair value	0
Accrued interest receivable	0		0
Liabilities:
Warehouse lines of credit	0		0
Accrued interest payable	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
Accrued interest receivable	0		0
Liabilities:
Warehouse lines of credit	0		0
Accrued interest payable	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	1,620,076		2,171,846
Finance receivables measured at fair value	614,807
Accrued interest receivable	36,232		46,753
Liabilities:
Warehouse lines of credit	127,695		112,408
Accrued interest payable	4,797		4,212
Securitization trust debt	2,033,598		2,089,678
Subordinated renewable notes	$ 16,948		$ 16,566

10. Fair Value Measurements (_6

10. Fair Value Measurements (Details Narrative) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Fair Value Disclosures [Abstract]
Finance receivables related to reposessed vehicles in inventory	$ 32,323	$ 33,679
Valuation adjustment, loss allowance	$ 23,292	24,024
Recovery rate	28.00%
Estimated fair value and carrying amount of repossed inventory	$ 9,031	$ 9,655