Consumer Portfolio Services (CPSS) 10-Q 5 May 20 2020 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2020	Apr. 27, 2020
Cover [Abstract]
Entity Registrant Name	CONSUMER PORTFOLIO SERVICES INC
Entity Central Index Key	0000889609
Document Type	10-Q
Document Period End Date	Mar. 31, 2020
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity File Number	1-14116
Entity's Reporting Status Current	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	true
Entity Shell Company	false
Entity Incorporation, State or Country Code	CA
Entity Common Stock, Shares Outstanding		22,728,109
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2020

UNAUDITED CONDENSED CONSOLIDATE

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
ASSETS
Cash and cash equivalents	$ 4,546	$ 5,295
Restricted cash and equivalents	137,523	135,537
Finance receivables	774,476	897,530
Less: Allowance for finance credit losses	(114,073)	(11,640)
Finance receivables, net	660,403	885,890
Finance receivables measured at fair value	1,559,697	1,444,038
Furniture and equipment, net	1,388	1,512
Deferred tax assets, net	58,375	15,480
Accrued interest receivable	8,795	11,645
Other assets	37,569	39,852
Total	2,468,296	2,539,249
Liabilities
Accounts payable and accrued expenses	56,932	47,077
Warehouse lines of credit	141,988	134,791
Residual interest financing	37,913	39,478
Securitization trust debt	2,091,642	2,097,728
Subordinated renewable notes	18,322	17,534
Total	2,346,797	2,336,608
COMMITMENTS AND CONTINGENCIES
Shareholders' Equity
Common stock, no par value; authorized 75,000,000 shares; 22,558,918 and 22,530,918 shares issued and outstanding at March 31, 2020 and December 31, 2019	71,792	71,257
Retained earnings	58,128	139,805
Accumulated other comprehensive loss	(8,421)	(8,421)
Total stockholders' equity	121,499	202,641
Total liabilities and stockholders' equity	2,468,296	2,539,249
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	Mar. 31, 2020	Dec. 31, 2019
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
Preferred stock, outstanding	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	22,558,918	22,530,918
Common stock, outstanding	22,558,918	22,530,918
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
Preferred stock, outstanding	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
Preferred stock, outstanding	0	0

UNAUDITED CONDENSED CONSOLIDA_3

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Revenues:
Interest income	$ 79,136	$ 85,845
Mark to finance receivables measured at fair value	(10,350)	0
Other income	1,981	2,385
Total revenues	70,767	88,230
Expenses:
Employee costs	21,842	19,073
General and administrative	8,669	8,174
Interest	26,991	27,290
Provision for credit losses	3,613	23,956
Sales	4,430	4,836
Occupancy	1,691	1,974
Depreciation and amortization	419	251
Total operating expenses	67,655	85,554
Income before income tax expense (benefit)	3,112	2,676
Income tax expense (benefit)	(7,680)	937
Net income	$ 10,792	$ 1,739
Earnings per share: Basic	$ 0.48	$ 0.08
Earnings per share: Diluted	$ 0.45	$ 0.07
Number of shares used in computing earnings per share: Basic	22,539	22,242
Number of shares used in computing earnings per share: Diluted	23,879	24,259

UNAUDITED CONDENSED CONSOLIDA_4

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Statement of Comprehensive Income [Abstract]
Net income	$ 10,792	$ 1,739
Other comprehensive income (loss); change in funded status of pension plan	0	0
Comprehensive income	$ 10,792	$ 1,739

UNAUDITED CONDENSED CONSOLIDA_5

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Cash flows from operating activities:
Net income	$ 10,792	$ 1,739
Adjustments to reconcile net income to net cash provided by operating activities:
Accretion of deferred acquisition fees and origination costs	339	492
Net interest income accretion on fair value receivables	29,715	18,767
Depreciation and amortization	419	251
Amortization of deferred financing costs	2,097	2,045
Mark to fair value of finance receivables measured at fair value	10,350	0
Provision for credit losses	3,613	23,956
Stock-based compensation expense	487	638
Changes in assets and liabilities:
Accrued interest receivable	2,850	10,924
Deferred tax assets, net	(8,364)	907
Other assets	1,901	(2,458)
Accounts payable and accrued expenses	9,855	1,243
Net cash provided by operating activities	64,054	58,504
Cash flows from investing activities:
Payments received on finance receivables held for investment	94,535	134,097
Purchases of finance receivables measured at fair value	(265,282)	(244,753)
Payments received on finance receivables at fair value	109,558	49,500
Change in repossessions held in inventory	382	(893)
Purchase of furniture and equipment	(295)	(174)
Net cash used in investing activities	(61,102)	(62,223)
Cash flows from financing activities:
Proceeds from issuance of securitization trust debt	260,000	254,400
Proceeds from issuance of subordinated renewable notes	1,114	397
Payments on subordinated renewable notes	(326)	(4,701)
Net advances of warehouse lines of credit	6,837	(19,092)
Repayment of residual interest financing debt	(1,658)	0
Repayment of securitization trust debt	(266,056)	(208,798)
Payment of financing costs	(1,674)	(2,808)
Purchase of common stock	0	(1,440)
Exercise of options and warrants	48	73
Net cash provided by (used in) financing activities	(1,715)	18,031
Increase in cash and cash equivalents	1,237	14,312
Cash and cash equivalents at beginning of period	140,832	130,110
Cash and cash equivalents at end of period	142,069	144,422
Cash paid (received) during the period for:
Interest	24,739	24,921
Income taxes	(410)	0
Non-cash financing activities:
Right-of-use asset, net	0	(21,869)
Lease liability	0	23,327
Deferred office rent	$ 0	$ (1,458)

UNAUDITED CONDENSED CONSOLIDA_6

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands	Common Stock [Member]	Retained Earnings	Other Comprehensive Income / Loss	Total
Balance at beginning at Dec. 31, 2018	$ 70,273	$ 134,399	$ (7,554)
Balance at beginning (in shares) at Dec. 31, 2018	22,422
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock issued upon exercise of options and warrants	$ 73
Common stock issued upon exercise of options and warrants (in shares)	78
Repurchase of common stock	$ (1,440)
Repurchase of common stock (in shares)	(366)
Pension benefit obligation				$ 0
Stock-based compensation	$ 638
Net income		1,739		1,739
Balance at end at Mar. 31, 2019	$ 69,544	136,138	(7,554)	198,128
Balance at end (in shares) at Mar. 31, 2019	22,134
Balance at beginning at Dec. 31, 2019		139,805	(8,421)	202,641
Balance at beginning (in shares) at Dec. 31, 2019	22,531
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cumulative change in accounting principle		(92,469)
Common stock issued upon exercise of options and warrants	$ 48
Common stock issued upon exercise of options and warrants (in shares)	28
Repurchase of common stock (in shares)	0
Pension benefit obligation				0
Stock-based compensation	$ 487
Net income		10,792		10,792
Balance at end at Mar. 31, 2020	$ 71,792	$ 58,128	$ (8,421)	$ 121,499
Balance at end (in shares) at Mar. 31, 2020	22,559

1. Summary of Significant Accou

1. Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2020
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 three-month period ended March 31, 2020 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, 2019. 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. Results for the first quarter include the estimated potential impact on credit performance resulting from the COVID-19 pandemic. We recorded a $10.4 million mark down to the carrying value of the portion of the receivables portfolio accounted for at fair value. The mark down is reflected as a reduction in revenue for the quarter. 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 periods ending March 31, 2020 and 2019: Three Months Ended March 31, 2020 2019 (In thousands) Direct mail revenues $ 1,183 $ 1,336 Convenience fee revenue 530 700 Recoveries on previously charged-off contracts 25 57 Sales tax refunds 202 227 Other 41 65 Other income for the period $ 1,981 $ 2,385 Leases The Company has operating leases for corporate offices, equipment, software and hardware. The Company has entered into operating leases for the majority of its real estate locations, primarily office space. These leases are generally for periods of three to seven years with various renewal options. The depreciable life of leased assets is limited by the expected lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheet and the related lease expense is recognized on a straight-line basis over the lease term. The following table presents the supplemental balance sheet information related to leases: Year Ended, March 31, 2020 (In thousands) Operating Leases Operating lease right-of-use assets $ 23,735 Less: Accumulated amortization right-of-use assets (8,194 ) Operating lease right-of-use assets, net $ 15,541 $ Operating lease liabilities (16,892 ) $ Finance Leases $ Property and equipment, at cost $ 3,062 Less: Accumulated depreciation (404 ) Property and equipment, net $ 2,658 $ Finance lease liabilities $ (2,673 ) $ Weighted Average Discount Rate $ Operating lease 5.0% Finance lease 6.5% Maturities of lease liabilities were as follows: $ (In thousands) Operating Finance Year Ending December 31, Lease Lease 2020 (excluding the three months ended March 31, 2020) $ 5,831 $ 835 2021 7,449 1,110 2022 6,058 931 2023 1,389 27 2024 411 14 Thereafter 278 – Total undiscounted lease payments 21,416 2,917 Less amounts representing interest (4,524 ) (244 ) Lease Liability $ 16,892 $ 2,673 The following table presents the leases expense included in Occupancy, General and administrative on our Unaudited Condensed Consolidated Statement of Operations: Three Months Ended March 31, 2020 2019 (In thousands) Operating lease cost $ 1,885 $ 1,889 Finance lease cost 278 – Total lease cost $ 2,163 $ 1,889 The following table presents the supplemental cash flow information related to leases: Three Months Ended March 31, 2020 2019 (In thousands) Cash paid for amounts included in the measurement of lease liabilities: $ Operating cash flows from operating leases $ 1,926 $ 1,886 Operating cash flows from finance leases 231 – Financing cash flows from finance leases 46 – 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 months ended March 31, 2020 and 2019, we recorded stock-based compensation costs in the amount of $487,000 and $638,000, respectively. As of March 31, 2020, unrecognized stock-based compensation costs to be recognized over future periods equaled $2.6 million. This amount will be recognized as expense over a weighted-average period of 1.9 years. The following represents stock option activity for the three months ended March 31, 2020: Number of Shares Weighted Average Exercise Weighted Average Remaining Contractual (in thousands) Price Term Options outstanding at the beginning of period 15,348 $ 4.59 N/A Granted – – N/A Exercised (28 ) 1.73 N/A Forfeited – – N/A Options outstanding at the end of period 15,320 $ 4.59 3.10 years Options exercisable at the end of period 11,844 $ 4.86 2.50 years At March 31, 2020, the aggregate intrinsic value of options outstanding and exercisable was $325,000. There were 28,000 options exercised for the three months ended March 31, 2020 compared to 78,000 for the comparable period in 2019. The total intrinsic value of options exercised was $51,000 and $227,000 for the three-month periods ended March 31, 2020 and 2019. There were 1,458,000 shares available for future stock option grants under existing plans as of March 31, 2020. Purchases of Company Stock The table below describes the purchase of our common stock for the three-month ended March 31, 2020 and 2019: Three Months Ended March 31, 2020 March 31, 2019 Shares Avg. Price Shares Avg. Price Open market purchases – $ – 335,546 $ 3.95 Shares redeemed upon net exercise of stock options – – 5,500 4.20 Other purchases – – 24,500 4.20 Total stock purchases – $ – 365,546 $ 3.97 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 March 31, 2020, 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. Adoption of New Accounting Standards In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") 2016-13, which changes the criteria under which credit losses on financial instruments (such as the Company’s finance receivables) are measured. ASU 2016-3 introduces a new credit reserving model known as the Current Expected Credit Loss (“CECL”) model, which replaces the incurred loss impairment methodology previously used under U.S. GAAP with a methodology that records currently the expected lifetime credit losses on financial instruments. To establish such lifetime credit loss estimates, consideration of a broadened range of reasonable and supportable information to establish credit loss estimates is required. ASU 2016-13 was initially scheduled to become effective for interim and annual reporting periods beginning after December 15, 2019, however on October 16, 2019, the FASB changed the effective date for smaller reporting companies to interim and annual reporting periods Effective January 1, 2020, the Company adopted the CECL model. The adoption of CECL required that we establish an allowance for the remaining expected lifetime credit losses on the portion of the Company’s receivable portfolio for which the Company was not already using fair value accounting. We refer to that portion, which is those receivables that were originated prior to January 2018, as our “legacy portfolio”. To comply with CECL, the Company recorded an addition to its allowance for finance credit losses of $127.0 million. In accordance with the rules for adopting CECL, the offset to the addition to the allowance for finance credit losses was a tax affected reduction to retained earnings using the modified retrospective method, and not a current period expense. Coronavirus Pandemic In December 2019, a new strain of coronavirus (the “COVID-19 virus”) originated in Wuhan, China. Since its discovery, the COVID-19 virus has spread throughout the world, and the outbreak has been declared to be a pandemic by the World Health Organization. We refer from time to time in this report to the outbreak and spread of the COVID-19 virus as “the pandemic.” Results for the first quarter include the estimated potential impact on credit performance resulting from the pandemic. We recorded a $3.6 million charge to the provision for credit losses for the legacy portfolio accounted for under CECL and a $10.4 million mark down to the carrying value of the finance receivables measured at fair value. The pandemic itself, if sufficient numbers of people were to be afflicted, could cause obligors under our automobile contracts to be unable to pay their contractual obligations. As the future course of the COVID-19 pandemic is as yet unknown, its direct effect on future obligor payments is likewise uncertain, but we believe it may be material. The mandatory shutdown of large portions of the United States economy pursuant to emergency restrictions has impaired and will impair the ability of obligors under our automobile contracts to pay their contractual obligations. The extent to which that ability will be impaired, and the extent to which public ameliorative measures such as stimulus payments and enhanced unemployment benefits may restore such ability, cannot be estimated, but we believe it may be material. We measure our portfolio of finance receivables carried at fair value with consideration for unobservable inputs that 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. The pandemic and the adverse effect it may have on the U.S. economy and our obligors may cause us to consider significant changes in any of those inputs, which in turn may a significant impact on our fair value measurement.

2. Finance Receivables

2. Finance Receivables	3 Months Ended
	Mar. 31, 2020
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: March 31, December 31, 2020 2019 Finance receivables (In thousands) Automobile finance receivables, net of unearned interest $ 772,851 $ 895,566 Unearned acquisition fees and originations costs 1,625 1,964 Finance receivables $ 774,476 $ 897,530 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 March 31, 2020 and December 31, 2019: March 31, December 31, 2020 2019 (In thousands) Delinquency Status Current $ 635,961 $ 698,870 31 - 60 days 76,455 107,951 61 - 90 days 40,089 57,395 91 + days 20,346 31,350 $ 772,851 $ 895,566 Finance receivables totaling $20.3 million and $31.4 million at March 31, 2020 and December 31, 2019, respectively, including all receivables greater than 90 days delinquent, have been placed on non-accrual status as a result of their delinquency status. Allowance for Credit Losses – Finance Receivables The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of finance receivables to present the net amount expected to be collected. Charge offs are deducted from the allowance when management believes that collectability is unlikely. Management estimates the allowance using relevant available information, from internal and external sources, relating to past events, current conditions and, reasonable and supportable forecasts. We believe our historical credit loss experience provides the best basis for the estimation of expected credit losses. Consequently, we use historical loss experience for older receivables, aggregated into vintage pools based on their calendar quarter of origination, to forecast expected losses for less seasoned quarterly vintage pools. We measure the weighted average monthly incremental change in cumulative net losses for the vintage pools in the relevant historical period. The data reflects the impact on vintage pools of past events as well as more recent events reflecting current conditions. We then apply the results of the historical analysis to less seasoned vintage pools beginning with each vintage pool’s most recent actual cumulative net loss experience and extrapolating from that point based on the historical data. We believe the pattern and magnitude of losses on older vintages allows us to establish a reasonable and supportable forecast of less seasoned vintages. Our contract purchase guidelines are designed to produce a homogenous portfolio. For key credit characteristics of individual contracts such as obligor credit history, job stability, residence stability and ability to pay, there is relatively little variation from the average for the portfolio. Similarly, for key structural characteristics such as loan-to-value, length of contract, monthly payment and amount financed, there is relatively little variation from the average for the portfolio. Consequently, we do not believe there are significant differences in risk characteristics between various segments of our portfolio. Our methodology incorporates historical pools that are sufficiently seasoned to capture the magnitude and trends of losses within those vintage pools. Furthermore, the historical period encompasses a substantial volume of receivables over periods that include fluctuations in the competitive landscape, the Company’s rates of growth, size of our managed portfolio and fluctuations in economic growth and unemployment. In consideration of the depth and breadth of the historical period, and the homogeneity of our portfolio, we generally do not adjust historical loss information for differences in risk characteristics such as credit or structural composition of segments of the portfolio or for changes in environmental conditions such as changes in unemployment rates, collateral values or other factors. However, we have considered how certain qualitative factors may affect future credit losses and have incorporated our judgement of the impact of such factors into our estimates. The following table presents the amortized cost basis of our finance receivables by annual vintage as of March 31, 2020 and December 31, 2019. March 31, December 31, 2020 2019 (In thousands) Annual Vintage Pool 2012 $ 1,816 $ 2,432 2013 11,643 15,489 2014 48,794 61,290 2015 136,679 162,242 2016 253,339 292,360 2017 320,580 361,753 $ 772,851 $ 895,566 At the adoption of CECL, the Company recorded an addition to its allowance for finance credit losses of $127.0 million. In accordance with the rules for adopting CECL, the offset to the addition to the allowance for finance credit losses was a tax affected reduction to retained earnings using the modified retrospective method. For the three-month period ended March 31, 2020, the Company made an additional provision for credit losses on finance receivables of $3.6 million in consideration of the uncertainty associated with the pandemic. The following table presents a summary of the activity for the allowance for finance credit losses for the three-month periods ended March 31, 2020 and 2019: Three Months Ended March 31, 2020 2019 (In thousands) Balance at beginning of period $ 11,640 $ 67,376 Early adoption of CECL 127,000 n/a Provision for credit losses on finance receivables 3,613 23,956 Charge-offs (34,214 ) (54,344 ) Recoveries 6,034 11,208 Balance at end of period $ 114,073 $ 48,196 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: March 31, December 31, 2020 2019 (In thousands) Gross balance of repossessions in inventory $ 35,127 $ 28,933 Allowance for losses on repossessed inventory (27,965 ) (21,389 ) Net repossessed inventory included in other assets $ 7,162 $ 7,544

3. Securitization Trust Debt

3. Securitization Trust Debt	3 Months Ended
	Mar. 31, 2020
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 March 31, Initial March 31, December 31, March 31, Series Date (1) 2020 (2) Principal 2020 2019 2020 (Dollars in thousands) CPS 2014-C December 2021 – 273,000 – 19,758 – CPS 2014-D March 2022 20,403 267,500 19,476 23,755 5.72 % CPS 2015-A June 2022 23,427 245,000 21,623 26,713 5.62 % CPS 2015-B September 2022 30,831 250,000 31,032 36,338 5.25 % CPS 2015-C December 2022 45,935 300,000 46,354 53,579 5.95 % CPS 2016-A March 2023 60,013 329,460 62,489 71,599 6.33 % CPS 2016-B June 2023 73,496 332,690 72,256 82,667 6.71 % CPS 2016-C September 2023 75,038 318,500 73,378 83,696 6.86 % CPS 2016-D April 2024 59,088 206,325 56,965 65,021 5.00 % CPS 2017-A April 2024 64,901 206,320 62,536 71,450 5.03 % CPS 2017-B December 2023 79,576 225,170 66,160 76,201 4.32 % CPS 2017-C September 2024 82,008 224,825 70,376 80,315 4.25 % CPS 2017-D June 2024 83,976 196,300 74,019 83,801 3.87 % CPS 2018-A March 2025 90,570 190,000 80,840 91,258 3.71 % CPS 2018-B December 2024 105,665 201,823 98,424 111,188 4.13 % CPS 2018-C September 2025 124,843 230,275 114,360 130,064 4.25 % CPS 2018-D June 2025 146,617 233,730 131,630 149,470 4.21 % CPS 2019-A March 2026 181,893 254,400 166,520 186,900 4.04 % CPS 2019-B June 2026 175,677 228,275 166,846 184,308 3.66 % CPS 2019-C September 2026 204,061 243,513 196,387 216,650 3.06 % CPS 2019-D December 2026 252,186 274,313 243,816 265,035 2.64 % CPS 2020-A March 2027 248,762 260,000 248,223 – 2.62 % $ 2,228,966 $ 5,491,419 $ 2,103,710 $ 2,109,766 _________________ (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 $609.0 million in 2020, $627.2 million in 2021, $428.3 million in 2022, $308.8 million in 2023, $69.9 million in 2024, $48.6 million in 2025. (2) Includes repossessed assets that are included in Other assets on our Unaudited Condensed Consolidated Balance Sheet. Debt issuance costs of $12.1 million and $12.0 million as of March 31, 2020 and December 31, 2019, 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 March 31, 2020, 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 March 31, 2020, restricted cash under the various agreements totaled approximately $137.5 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.

4. Debt

4. Debt	3 Months Ended
	Mar. 31, 2020
Debt Disclosure [Abstract]
Debt	(4) Debt The terms and amounts of our other debt outstanding at March 31, 2020 and December 31, 2019 are summarized below: Amount Outstanding at March 31, December 31, 2020 2019 (In thousands) Description Interest Rate Maturity Warehouse lines of credit 5.50% over one month Libor (Minimum 6.50%) February 2021 $ 50,776 $ 40,558 3.00% over one month Libor (Minimum 3.75%) September 2020 53,411 96,225 4.00% over a commercial paper rate (Minimum 5.00%) December 2021 39,434 – Residual interest financing 8.60% January 2026 38,342 40,000 Subordinated renewable notes Weighted average rate of 9.92% and 9.75% at March 31, 2020 and December 31, 2019, respectively Weighted average maturity of July 2022 and April 2022 at March 31, 2020 and December 31, 2019, respectively 18,322 17,534 $ 200,285 $ 194,317 Unamortized debt issuance costs of $429,000 and $522,000 as of March 31, 2020 and December 31, 2019, respectively, have been excluded from the amount reported above for residual interest financing. Similarly, unamortized debt issuance costs of $1.6 million and $2.0 million as of March 31, 2020 and December 31, 2019, 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	3 Months Ended
	Mar. 31, 2020
Warehouse lines of credit [Member]
Interest Income and Interest Expense	(5) Interest Income and Interest Expense The following table presents the components of interest income: Three Months Ended March 31, 2020 2019 (In thousands) Interest on finance receivables $ 37,807 $ 62,290 Interest on finance receivables at fair value 40,806 22,815 Mark to finance receivables measured at fair value (10,350 ) – Other interest income 523 740 Interest income $ 68,786 $ 85,845 The following table presents the components of interest expense: Three Months Ended March 31, 2020 2019 (In thousands) Securitization trust debt $ 23,798 $ 23,988 Warehouse lines of credit 1,763 2,020 Residual interest financing 938 956 Subordinated renewable notes 492 326 Interest expense $ 26,991 $ 27,290

6. Earnings Per Share

6. Earnings Per Share	3 Months Ended
	Mar. 31, 2020
Earnings Per Share [Abstract]
Earnings Per Share	(6) Earnings Per Share Earnings per share for the three-month periods ended March 31, 2020 and 2019 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 periods ended March 31, 2020 and 2019: Three Months Ended March 31, 2020 2019 (In thousands) Weighted average number of common shares outstanding during the period used to compute basic earnings per share 22,539 22,242 $ Incremental common shares attributable to exercise of outstanding options and warrants 1,340 2,017 $ Weighted average number of common shares used to compute diluted earnings per share 23,879 24,259 If the anti-dilutive effects of common stock equivalents were considered, shares included in the diluted earnings per share calculation for the three-months ended March 31, 2020 and 2019 would have included an additional 12.9 million and 10.5 million shares, respectively, attributable to the exercise of outstanding options and warrants.

7. Income Taxes

7. Income Taxes	3 Months Ended
	Mar. 31, 2020
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. On March 27, 2020, the Coronavirus Aid, Relief and Economic Security (“CARES”) Act was adopted, providing wide ranging economic relief for individuals and businesses. One component of the CARES Act provides the Company with an opportunity to carry back net operating losses (“NOLs”) arising from 2018, 2019 and 2020 to the prior five tax years. The Company has such NOLs reflected on its balance sheet as a portion of deferred tax assets. The Company has previously valued its NOLs at the federal corporate income tax rate of 21%. However, the provisions of the CARES Act provide for NOL carryback claims to be calculated based on a rate of 35%, which was the federal corporate tax rate in effect for the carryback years. Consequently, effective March 31, 2020, the Company has revalued the benefit from its NOLs to reflect a 35% tax rate. The result of the revaluation of NOLs and other tax adjustments is a net tax benefit of $8.8 million, which is reflected in income taxes for the quarter ended March 31, 2020. As of March 31, 2020, and December 31, 2019, 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 $58.4 million as of March 31, 2020 is more likely than not based on forecasted future net earnings. Our net deferred tax asset of $58.4 million consists of approximately $46.8 million of net U.S. federal deferred tax assets and $11.6 million of net state deferred tax assets. Income tax benefit was $7.7 million for the three months ended March 31, 2020, which includes net tax benefits of $8.8 million. Excluding the tax benefit, income tax expense would have been $1.1 million, representing an effective income tax rate of 36%. For the prior year period, income tax expense was $937,000, which represents an effective income tax rate of 35%.

8. Legal Proceedings

8. Legal Proceedings	3 Months Ended
	Mar. 31, 2020
Commitments and Contingencies Disclosure [Abstract]
Legal Proceedings	(8) 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. Wage and Hour Claim. We believe that our compensation practices with respect to our sales representatives are compliant with applicable law. Accordingly, we have defended and intend to continue to defend this lawsuit. We have not recorded a liability with respect to this claim on the accompanying consolidated financial statements . 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 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. Fair Value Measurements

9. Fair Value Measurements	3 Months Ended
	Mar. 31, 2020
Fair Value Disclosures [Abstract]
Fair Value Measurements	(9) 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. For the period ended March 31, 2020, the Company considered the impact of the pandemic on the portfolio of finance receivables carried at fair value and recorded a mark down to that portfolio of $10.4 million. 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 March 31, 2020 2019 (In thousands) Balance at beginning of period $ 1,444,038 $ 821,066 Finance receivables at fair value acquired during period 265,282 244,753 Payments received on finance receivables at fair value (109,558 ) (49,500 ) Net interest income accretion on fair value receivables (29,715 ) (18,767 ) Mark to fair value (10,350 ) – Balance at end of period $ 1,559,697 $ 997,552 The table below compares the fair values of these finance receivables to their contractual balances for the periods shown: March 31, 2020 December 31, 2019 Contractual Fair Contractual Fair Balance Value Balance Value (In thousands) Finance receivables measured at fair value $ 1,628,557 $ 1,559,697 $ 1,492,803 $ 1,444,038 The following table provides certain qualitative information about our level 3 fair value measurements: Financial Instrument Fair Values as of Inputs as of March 31, December 31, March 31, December 31, 2020 2019 Unobservable 2020 2019 (In thousands) Assets: Finance receivables measured at fair value $ 1,559,697 $ 1,444,038 Discount rate 8.9% - 11.1% 8.9% - 11.1% Cumulative net losses 15.0% - 18.4% 15.0% - 16.1% The following table summarizes the delinquency status of these finance receivables measured at fair value as of March 31, 2020 and December 31, 2019: March 31, December 31, 2020 2019 (In thousands) Delinquency Status Current $ 1,498,296 $ 1,344,883 31 - 60 days 67,294 81,262 61 - 90 days 29,275 34,280 91 + days 14,470 15,167 Repo 19,222 17,211 $ 1,628,557 $ 1,492,803 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 March 31, 2020 the finance receivables related to the repossessed vehicles in inventory totaled $35.1 million. We have applied a valuation adjustment, or loss allowance, of $28.0 million, which is based on a recovery rate of approximately 26%, resulting in an estimated fair value and carrying amount of $7.1 million. The fair value and carrying amount of the repossessed inventory at December 31, 2019 was $7.5 million after applying a valuation adjustment of $21.4 million. There were no transfers in or out of level 1, level 2 or level 3 assets and liabilities for the three months ended March 30, 2020 and 2019. The estimated fair values of financial assets and liabilities at March 31, 2020 and December 31, 2019, were as follows: As of March 31, 2020 Financial Instrument (In thousands) Carrying Fair Value Measurements Using: Value Level 1 Level 2 Level 3 Total Assets: Cash and cash equivalents $ 4,546 $ 4,546 $ – $ – $ 4,546 Restricted cash and equivalents 137,523 137,523 – – 137,523 Finance receivables, net 660,403 – – 606,077 606,077 Accrued interest receivable 8,795 – – 8,795 8,795 Liabilities: Warehouse lines of credit $ 141,988 $ – $ – $ 141,988 $ 141,988 Accrued interest payable 5,409 – – 5,409 5,409 Residual interest financing 37,913 – – 37,913 37,913 Securitization trust debt 2,091,642 – – 1,900,451 1,900,451 Subordinated renewable notes 18,322 – – 18,322 18,322 As of December 31, 2019 Financial Instrument (In thousands) Carrying Fair Value Measurements Using: Value Level 1 Level 2 Level 3 Total Assets: Cash and cash equivalents $ 5,295 $ 5,295 $ – $ – $ 5,295 Restricted cash and equivalents 135,537 135,537 – – 135,537 Finance receivables, net 885,890 – – 841,160 841,160 Accrued interest receivable 11,645 – – 11,645 11,645 Liabilities: Warehouse lines of credit $ 134,791 $ – $ – $ 134,791 $ 134,791 Accrued interest payable 5,254 – – 5,254 5,254 Residual interest financing 39,478 – – 39,478 39,478 Securitization trust debt 2,097,728 – – 2,116,520 2,116,520 Subordinated renewable notes 17,534 – – 17,534 17,534

1. Summary of Significant Acc_2

1. Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2020
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 three-month period ended March 31, 2020 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, 2019.
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. Results for the first quarter include the estimated potential impact on credit performance resulting from the COVID-19 pandemic. We recorded a $10.4 million mark down to the carrying value of the portion of the receivables portfolio accounted for at fair value. The mark down is reflected as a reduction in revenue for the quarter. 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 periods ending March 31, 2020 and 2019: Three Months Ended March 31, 2020 2019 (In thousands) Direct mail revenues $ 1,183 $ 1,336 Convenience fee revenue 530 700 Recoveries on previously charged-off contracts 25 57 Sales tax refunds 202 227 Other 41 65 Other income for the period $ 1,981 $ 2,385
Leases	Leases The Company has operating leases for corporate offices, equipment, software and hardware. The Company has entered into operating leases for the majority of its real estate locations, primarily office space. These leases are generally for periods of three to seven years with various renewal options. The depreciable life of leased assets is limited by the expected lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheet and the related lease expense is recognized on a straight-line basis over the lease term. The following table presents the supplemental balance sheet information related to leases: Year Ended, March 31, 2020 (In thousands) Operating Leases Operating lease right-of-use assets $ 23,735 Less: Accumulated amortization right-of-use assets (8,194 ) Operating lease right-of-use assets, net $ 15,541 $ Operating lease liabilities (16,892 ) $ Finance Leases $ Property and equipment, at cost $ 3,062 Less: Accumulated depreciation (404 ) Property and equipment, net $ 2,658 $ Finance lease liabilities $ (2,673 ) $ Weighted Average Discount Rate $ Operating lease 5.0 % Finance lease 6.5 % Maturities of lease liabilities were as follows: $ (In thousands) Operating Finance Year Ending December 31, Lease Lease 2020 (excluding the three months ended March 31, 2020) $ 5,831 $ 835 2021 7,449 1,110 2022 6,058 931 2023 1,389 27 2024 411 14 Thereafter 278 – Total undiscounted lease payments 21,416 2,917 Less amounts representing interest (4,524 ) (244 ) Lease Liability $ 16,892 $ 2,673 The following table presents the leases expense included in Occupancy, General and administrative on our Unaudited Condensed Consolidated Statement of Operations: Three Months Ended March 31, 2020 2019 (In thousands) Operating lease cost $ 1,885 $ 1,889 Finance lease cost 278 – Total lease cost 2,163 $ 1,889 The following table presents the supplemental cash flow information related to leases: Three Months Ended March 31, 2020 2019 (In thousands) Cash paid for amounts included in the measurement of lease liabilities: $ Operating cash flows from operating leases $ 1,926 $ 1,886 Operating cash flows from finance leases 231 – Financing cash flows from finance leases 46 –
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 months ended March 31, 2020 and 2019, we recorded stock-based compensation costs in the amount of $487,000 and $638,000, respectively. As of March 31, 2020, unrecognized stock-based compensation costs to be recognized over future periods equaled $2.6 million. This amount will be recognized as expense over a weighted-average period of 1.9 years. The following represents stock option activity for the three months ended March 31, 2020: Number of Shares Weighted Average Exercise Weighted Average Remaining Contractual (in thousands) Price Term Options outstanding at the beginning of period 15,348 $ 4.59 N/A Granted – – N/A Exercised (28 ) 1.73 N/A Forfeited – – N/A Options outstanding at the end of period 15,320 $ 4.59 3.10 years Options exercisable at the end of period 11,844 $ 4.86 2.50 years At March 31, 2020, the aggregate intrinsic value of options outstanding and exercisable was $325,000. There were 28,000 options exercised for the three months ended March 31, 2020 compared to 78,000 for the comparable period in 2019. The total intrinsic value of options exercised was $51,000 and $227,000 for the three-month periods ended March 31, 2020 and 2019. There were 1,458,000 shares available for future stock option grants under existing plans as of March 31, 2020.
Purchases of Company Stock	Purchases of Company Stock The table below describes the purchase of our common stock for the three-month ended March 31, 2020 and 2019: Three Months Ended March 31, 2020 March 31, 2019 Shares Avg. Price Shares Avg. Price Open market purchases – $ – 335,546 $ 3.95 Shares redeemed upon net exercise of stock options – – 5,500 4.20 Other purchases – – 24,500 4.20 Total stock purchases – $ – 365,546 $ 3.97
Reclassification	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 March 31, 2020, 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.
Adoption of New Accounting Standards	Adoption of New Accounting Standards In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") 2016-13, which changes the criteria under which credit losses on financial instruments (such as the Company’s finance receivables) are measured. ASU 2016-3 introduces a new credit reserving model known as the Current Expected Credit Loss (“CECL”) model, which replaces the incurred loss impairment methodology previously used under U.S. GAAP with a methodology that records currently the expected lifetime credit losses on financial instruments. To establish such lifetime credit loss estimates, consideration of a broadened range of reasonable and supportable information to establish credit loss estimates is required. ASU 2016-13 was initially scheduled to become effective for interim and annual reporting periods beginning after December 15, 2019, however on October 16, 2019, the FASB changed the effective date for smaller reporting companies to interim and annual reporting periods Effective January 1, 2020, the Company adopted the CECL model. The adoption of CECL required that we establish an allowance for the remaining expected lifetime credit losses on the portion of the Company’s receivable portfolio for which the Company was not already using fair value accounting. We refer to that portion, which is those receivables that were originated prior to January 2018, as our “legacy portfolio”. To comply with CECL, the Company recorded an addition to its allowance for finance credit losses of $127.0 million. In accordance with the rules for adopting CECL, the offset to the addition to the allowance for finance credit losses was a tax affected reduction to retained earnings using the modified retrospective method, and not a current period expense.
Coronavirus Pandemic	Coronavirus Pandemic In December 2019, a new strain of coronavirus (the “COVID-19 virus”) originated in Wuhan, China. Since its discovery, the COVID-19 virus has spread throughout the world, and the outbreak has been declared to be a pandemic by the World Health Organization. We refer from time to time in this report to the outbreak and spread of the COVID-19 virus as “the pandemic.” Results for the first quarter include the estimated potential impact on credit performance resulting from the pandemic. We recorded a $3.6 million charge to the provision for credit losses for the legacy portfolio accounted for under CECL and a $10.4 million mark down to the carrying value of the finance receivables measured at fair value. The pandemic itself, if sufficient numbers of people were to be afflicted, could cause obligors under our automobile contracts to be unable to pay their contractual obligations. As the future course of the COVID-19 pandemic is as yet unknown, its direct effect on future obligor payments is likewise uncertain, but we believe it may be material. The mandatory shutdown of large portions of the United States economy pursuant to emergency restrictions has impaired and will impair the ability of obligors under our automobile contracts to pay their contractual obligations. The extent to which that ability will be impaired, and the extent to which public ameliorative measures such as stimulus payments and enhanced unemployment benefits may restore such ability, cannot be estimated, but we believe it may be material. We measure our portfolio of finance receivables carried at fair value with consideration for unobservable inputs that 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. The pandemic and the adverse effect it may have on the U.S. economy and our obligors may cause us to consider significant changes in any of those inputs, which in turn may a significant impact on our fair value measurement.

1. Summary of Significant Acc_3

1. Summary of Significant Accounting Policies (Tables)	3 Months Ended
	Mar. 31, 2020
Accounting Policies [Abstract]
Schedule of other income	Three Months Ended March 31, 2020 2019 (In thousands) Direct mail revenues $ 1,183 $ 1,336 Convenience fee revenue 530 700 Recoveries on previously charged-off contracts 25 57 Sales tax refunds 202 227 Other 41 65 Other income for the period $ 1,981 $ 2,385
Supplemental balance sheet information related to leases	Year Ended, March 31, 2020 (In thousands) Operating Leases Operating lease right-of-use assets $ 23,735 Less: Accumulated amortization right-of-use assets (8,194 ) Operating lease right-of-use assets, net $ 15,541 $ Operating lease liabilities (16,892 ) $ Finance Leases $ Property and equipment, at cost $ 3,062 Less: Accumulated depreciation (404 ) Property and equipment, net $ 2,658 $ Finance lease liabilities $ (2,673 ) $ Weighted Average Discount Rate $ Operating lease 5.0% Finance lease 6.5%
Maturities of operating leases	Maturities of lease liabilities were as follows: $ (In thousands) Operating Year Ending December 31, Lease 2020 (excluding the three months ended March 31, 2020) $ 5,831 2021 7,449 2022 6,058 2023 1,389 2024 411 Thereafter 278 Total undiscounted lease payments 21,416 Less amounts representing interest (4,524 ) Lease Liability $ 16,892
Maturities of finance leases	Maturities of lease liabilities were as follows: (In thousands) Finance Year Ending December 31, Lease 2020 (excluding the three months ended March 31, 2020) $ 835 2021 1,110 2022 931 2023 27 2024 14 Thereafter – Total undiscounted lease payments 2,917 Less amounts representing interest (244 ) Lease Liability $ 2,673
Lease information	Three Months Ended March 31, 2020 2019 (In thousands) Operating lease cost $ 1,885 $ 1,889 Finance lease cost 278 – Total lease cost $ 2,163 $ 1,889
Supplemental cash flow information related to leases	Three Months Ended March 31, 2020 2019 (In thousands) Cash paid for amounts included in the measurement of lease liabilities: $ Operating cash flows from operating leases $ 1,926 $ 1,886 Operating cash flows from finance leases 231 – Financing cash flows from finance leases 46 –
Schedule of stock option activity	Number of Shares Weighted Average Exercise Weighted Average Remaining Contractual (in thousands) Price Term Options outstanding at the beginning of period 15,348 $ 4.59 N/A Granted – – N/A Exercised (28 ) 1.73 N/A Forfeited – – N/A Options outstanding at the end of period 15,320 $ 4.59 3.10 years Options exercisable at the end of period 11,844 $ 4.86 2.50 years
Schedule of purchases of company stock	Three Months Ended March 31, 2020 March 31, 2019 Shares Avg. Price Shares Avg. Price Open market purchases – $ – 335,546 $ 3.95 Shares redeemed upon net exercise of stock options – – 5,500 4.20 Other purchases – – 24,500 4.20 Total stock purchases – $ – 365,546 $ 3.97
Schedule of computation of earnings per share	Three Months Ended March 31, 2020 2019 (In thousands) Weighted average number of common shares outstanding during the period used to compute basic earnings per share 22,539 22,242 $ Incremental common shares attributable to exercise of outstanding options and warrants 1,340 2,017 $ Weighted average number of common shares used to compute diluted earnings per share 23,879 24,259

2. Finance Receivables (Tables)

2. Finance Receivables (Tables)	3 Months Ended
	Mar. 31, 2020
Finance Receivables
Schedule of finance receivables	March 31, December 31, 2020 2019 Finance receivables (In thousands) Automobile finance receivables, net of unearned interest $ 772,851 $ 895,566 Unearned acquisition fees and originations costs 1,625 1,964 Finance receivables $ 774,476 $ 897,530
Schedule of delinquency status of finance receivables	March 31, December 31, 2020 2019 (In thousands) Delinquency Status Current $ 635,961 $ 698,870 31 - 60 days 76,455 107,951 61 - 90 days 40,089 57,395 91 + days 20,346 31,350 $ 772,851 $ 895,566
Schedule of amortized cost basis of finance receivables	March 31, December 31, 2020 2019 (In thousands) Annual Vintage Pool 2012 $ 1,816 $ 2,432 2013 11,643 15,489 2014 48,794 61,290 2015 136,679 162,242 2016 253,339 292,360 2017 320,580 361,753 $ 772,851 $ 895,566
Schedule of allowance for finance credit losses	Three Months Ended March 31, 2020 2019 (In thousands) Balance at beginning of period $ 11,640 $ 67,376 Early adoption of CECL 127,000 n/a Provision for credit losses on finance receivables 3,613 23,956 Charge-offs (34,214 ) (54,344 ) Recoveries 6,034 11,208 Balance at end of period $ 114,073 $ 48,196
Schedule of allowance for losses on repossessed inventory	March 31, December 31, 2020 2019 (In thousands) Gross balance of repossessions in inventory $ 35,127 $ 28,933 Allowance for losses on repossessed inventory (27,965 ) (21,389 ) Net repossessed inventory included in other assets $ 7,162 $ 7,544

3. Securitization Trust Debt (T

3. Securitization Trust Debt (Tables)	3 Months Ended
	Mar. 31, 2020
Securitization Trust Debt
Schedule of securitization trust debt	Weighted Average Final Receivables Outstanding Outstanding Contractual Scheduled Pledged at Principal at Principal at Interest Rate at Payment March 31, Initial March 31, December 31, March 31, Series Date (1) 2020 (2) Principal 2020 2019 2020 (Dollars in thousands) CPS 2014-C December 2021 – 273,000 – 19,758 – CPS 2014-D March 2022 20,403 267,500 19,476 23,755 5.72 % CPS 2015-A June 2022 23,427 245,000 21,623 26,713 5.62 % CPS 2015-B September 2022 30,831 250,000 31,032 36,338 5.25 % CPS 2015-C December 2022 45,935 300,000 46,354 53,579 5.95 % CPS 2016-A March 2023 60,013 329,460 62,489 71,599 6.33 % CPS 2016-B June 2023 73,496 332,690 72,256 82,667 6.71 % CPS 2016-C September 2023 75,038 318,500 73,378 83,696 6.86 % CPS 2016-D April 2024 59,088 206,325 56,965 65,021 5.00 % CPS 2017-A April 2024 64,901 206,320 62,536 71,450 5.03 % CPS 2017-B December 2023 79,576 225,170 66,160 76,201 4.32 % CPS 2017-C September 2024 82,008 224,825 70,376 80,315 4.25 % CPS 2017-D June 2024 83,976 196,300 74,019 83,801 3.87 % CPS 2018-A March 2025 90,570 190,000 80,840 91,258 3.71 % CPS 2018-B December 2024 105,665 201,823 98,424 111,188 4.13 % CPS 2018-C September 2025 124,843 230,275 114,360 130,064 4.25 % CPS 2018-D June 2025 146,617 233,730 131,630 149,470 4.21 % CPS 2019-A March 2026 181,893 254,400 166,520 186,900 4.04 % CPS 2019-B June 2026 175,677 228,275 166,846 184,308 3.66 % CPS 2019-C September 2026 204,061 243,513 196,387 216,650 3.06 % CPS 2019-D December 2026 252,186 274,313 243,816 265,035 2.64 % CPS 2020-A March 2027 248,762 260,000 248,223 – 2.62 % $ 2,228,966 $ 5,491,419 $ 2,103,710 $ 2,109,766 _________________ (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 $609.0 million in 2020, $627.2 million in 2021, $428.3 million in 2022, $308.8 million in 2023, $69.9 million in 2024, $48.6 million in 2025. (2) Includes repossessed assets that are included in Other assets on our Unaudited Condensed Consolidated Balance Sheet.

4. Debt (Tables)

4. Debt (Tables)	3 Months Ended
	Mar. 31, 2020
Debt Disclosure [Abstract]
Schedule of debt outstanding	Amount Outstanding at March 31, December 31, 2020 2019 (In thousands) Description Interest Rate Maturity Warehouse lines of credit 5.50% over one month Libor (Minimum 6.50%) February 2021 $ 50,776 $ 40,558 3.00% over one month Libor (Minimum 3.75%) September 2020 53,411 96,225 4.00% over a commercial paper rate (Minimum 5.00%) December 2021 39,434 – Residual interest financing 8.60% January 2026 38,342 40,000 Subordinated renewable notes Weighted average rate of 9.92% and 9.75% at March 31, 2020 and December 31, 2019, respectively Weighted average maturity of July 2022 and April 2022 at March 31, 2020 and December 31, 2019, respectively 18,322 17,534 $ 200,285 $ 194,317

5. Interest Income and Intere_2

5. Interest Income and Interest Expense (Tables)	3 Months Ended
	Mar. 31, 2020
Warehouse lines of credit [Member]
Schedule of interest income	Three Months Ended March 31, 2020 2019 (In thousands) Interest on finance receivables $ 37,807 $ 62,290 Interest on finance receivables at fair value 40,806 22,815 Mark to finance receivables measured at fair value (10,350 ) – Other interest income 523 740 Interest income $ 68,786 $ 85,845
Schedule of interest expense	Three Months Ended March 31, 2020 2019 (In thousands) Securitization trust debt $ 23,798 $ 23,988 Warehouse lines of credit 1,763 2,020 Residual interest financing 938 956 Subordinated renewable notes 492 326 Interest expense $ 26,991 $ 27,290

6. Earnings Per Share (Tables)

6. Earnings Per Share (Tables)	3 Months Ended
	Mar. 31, 2020
Earnings Per Share [Abstract]
Computation of earnings per share	Three Months Ended March 31, 2020 2019 (In thousands) Weighted average number of common shares outstanding during the period used to compute basic earnings per share 22,539 22,242 $ Incremental common shares attributable to exercise of outstanding options and warrants 1,340 2,017 $ Weighted average number of common shares used to compute diluted earnings per share 23,879 24,259

9. Fair Value Measurements (Tab

9. Fair Value Measurements (Tables)	3 Months Ended
	Mar. 31, 2020
Fair Value Disclosures [Abstract]
Schedule of reconciliation of the finance receivables measured at fair value on a recurring basis	Three Months Ended March 31, 2020 2019 (In thousands) Balance at beginning of period $ 1,444,038 $ 821,066 Finance receivables at fair value acquired during period 265,282 244,753 Payments received on finance receivables at fair value (109,558 ) (49,500 ) Net interest income accretion on fair value receivables (29,715 ) (18,767 ) Mark to fair value (10,350 ) – Balance at end of period $ 1,559,697 $ 997,552
Schedule of finance receivables to their contractual balances	March 31, 2020 December 31, 2019 Contractual Fair Contractual Fair Balance Value Balance Value (In thousands) Finance receivables measured at fair value $ 1,628,557 $ 1,559,697 $ 1,492,803 $ 1,444,038
Schedule of level 3 fair value measurements	Financial Instrument Fair Values as of Inputs as of March 31, December 31, March 31, December 31, 2020 2019 Unobservable 2020 2019 (In thousands) Assets: Finance receivables measured at fair value $ 1,559,697 $ 1,444,038 Discount rate 8.9% - 11.1% 8.9% - 11.1% Cumulative net losses 15.0% - 18.4% 15.0% - 16.1%
Schedule of delinquency status of finance receivables measured at fair value	March 31, December 31, 2020 2019 (In thousands) Delinquency Status Current $ 1,498,296 $ 1,344,883 31 - 60 days 67,294 81,262 61 - 90 days 29,275 34,280 91 + days 14,470 15,167 Repo 19,222 17,211 $ 1,628,557 $ 1,492,803
Schedule of estimated fair values of financial assets and liabilities	The estimated fair values of financial assets and liabilities at March 31, 2020 and December 31, 2019, were as follows: As of March 31, 2020 Financial Instrument (In thousands) Carrying Fair Value Measurements Using: Value Level 1 Level 2 Level 3 Total Assets: Cash and cash equivalents $ 4,546 $ 4,546 $ – $ – $ 4,546 Restricted cash and equivalents 137,523 137,523 – – 137,523 Finance receivables, net 660,403 – – 606,077 606,077 Accrued interest receivable 8,795 – – 8,795 8,795 Liabilities: Warehouse lines of credit $ 141,988 $ – $ – $ 141,988 $ 141,988 Accrued interest payable 5,409 – – 5,409 5,409 Residual interest financing 37,913 – – 37,913 37,913 Securitization trust debt 2,091,642 – – 1,900,451 1,900,451 Subordinated renewable notes 18,322 – – 18,322 18,322 As of December 31, 2019 Financial Instrument (In thousands) Carrying Fair Value Measurements Using: Value Level 1 Level 2 Level 3 Total Assets: Cash and cash equivalents $ 5,295 $ 5,295 $ – $ – $ 5,295 Restricted cash and equivalents 135,537 135,537 – – 135,537 Finance receivables, net 885,890 – – 841,160 841,160 Accrued interest receivable 11,645 – – 11,645 11,645 Liabilities: Warehouse lines of credit $ 134,791 $ – $ – $ 134,791 $ 134,791 Accrued interest payable 5,254 – – 5,254 5,254 Residual interest financing 39,478 – – 39,478 39,478 Securitization trust debt 2,097,728 – – 2,116,520 2,116,520 Subordinated renewable notes 17,534 – – 17,534 17,534

1. Other Income (Details - Othe

1. Other Income (Details - Other income) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Primary components of Other Income
Other income for the period	$ 1,981	$ 2,385
Direct Mail Revenues [Member]
Primary components of Other Income
Other income for the period	1,183	1,336
Convenience Fee Revenue [Member]
Primary components of Other Income
Other income for the period	530	700
Recoveries on Previously Charged-Off Contracts [Member]
Primary components of Other Income
Other income for the period	25	57
Sales Tax Refunds [Member]
Primary components of Other Income
Other income for the period	202	227
Other Income [Member]
Primary components of Other Income
Other income for the period	$ 41	$ 65

1. Leases (Details - Operating

1. Leases (Details - Operating leases) $ in Thousands	Mar. 31, 2020USD ($)
Operating Leases
Operating lease right-of-use assets	$ 23,735
Less: Accumulated amortization right-of-use assets	(8,194)
Operating lease right-of-use assets, net	15,541
Operating lease liabilities	$ (16,892)

1. Leases (Details - Finance Le

1. Leases (Details - Finance Leases) $ in Thousands	Mar. 31, 2020USD ($)
Finance Leases
Property and equipment, at cost	$ 3,062
Less: Accumulated depreciation	(404)
Property and equipment, net	2,658
Finance lease liabilities	$ (2,673)

1. Leases (Details - Other Leas

1. Leases (Details - Other Lease Info)	Mar. 31, 2020
Leases [Abstract]
Weighted Average Discount Rate Operating lease	5.00%
Weighted Average Discount Rate Finance lease	6.50%

1. Leases (Details - Maturities

1. Leases (Details - Maturities of lease liabilities) $ in Thousands	Mar. 31, 2020USD ($)
Maturities of Operating lease liabilities
2020	$ 5,831
2021	7,449
2022	6,058
2023	1,389
2024	411
Thereafter	278
Total undiscounted lease payments	21,416
Less amounts representing interest	(4,524)
Lease Liability	16,892
Maturities of Finance lease liabilities
2020	835
2021	1,110
2022	931
2023	27
2024	14
Thereafter	0
Total undiscounted lease payments	2,917
Less amounts representing interest	(244)
Lease Liability	$ 2,673

1. Leases (Details - Lease cost

1. Leases (Details - Lease cost) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Leases [Abstract]
Operating lease cost	$ 1,885	$ 1,889
Finance lease cost	278	0
Total lease cost	$ 2,163	$ 1,889

1. Leases (Details - Cash flow)

1. Leases (Details - Cash flow) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$ 1,926	$ 1,886
Operating cash flows from finance leases	231	0
Financing cash flows from finance leases	$ 46	$ 0

1. Stock-based Compensation (De

1. Stock-based Compensation (Details - Option activity) - Options [Member] shares in Thousands	3 Months Ended
	Mar. 31, 2020$ / sharesshares
Number of Shares
Options outstanding at the beginning of period	15,348
Granted	0
Exercised	(28)
Forfeited/Expired	0
Options outstanding at the end of period	15,320
Options exercisable at the end of period	11,844
Weighted Average Exercise Price
Options outstanding at the beginning of period | $ / shares	$ 4.59
Exercised | $ / shares	1.73
Options outstanding at the end of period | $ / shares	4.59
Options exercisable at the end of period | $ / shares	$ 4.86
Weighted Average Remaining Contractual Term
Weighted average remaining contractual term, end of period	3 years 1 month 6 days
Weighted average remaining contractual term, exercisable at the end of period	2 years 6 months

1. Purchases of Company Stock (

1. Purchases of Company Stock (Details - Stock purchases) - Common Stock [Member] - $ / shares	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Total stock purchases, shares	0	365,546
Total stock purchases, average price per share		$ 3.97
Open Market Purchases [Member]
Total stock purchases, shares	0	335,546
Total stock purchases, average price per share		$ 3.95
Shares redeemed upon net exercise of stock options [Member]
Total stock purchases, shares	0	5,500
Total stock purchases, average price per share		$ 4.20
Other Repurchases [Member]
Total stock purchases, shares	0	24,500
Total stock purchases, average price per share		$ 4.20

1. Summary of Significant Acc_4

1. Summary of Significant Accounting Policies (Details Narrative) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Accounting Policies [Abstract]
Stock-based compensation	$ 487	$ 638
Unrecognized stock-based compensation costs	$ 2,600
Weighted-average period for unrecognized costs	1 year 10 months 25 days
Intrinsic value options outstanding	$ 325
Intrinsic value of options exercisable	325
Intrinsic value of options exercised	$ 51	$ 227
Shares available for grant	1,458,000

2. Finance Receivables (Details

2. Finance Receivables (Details - Components of Finance Receivables) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Finance receivables
Automobile finance receivables, net of unearned interest	$ 772,851	$ 895,566
Unearned acquisition fees and originations costs	1,625	1,964
Finance Receivables	$ 774,476	$ 897,530

2. Finance Receivables (Detai_2

2. Finance Receivables (Details - Delinquency status) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Delinquency Status
Total finance receivables with delinquency status	$ 772,851	$ 895,566
Current [Member]
Delinquency Status
Finance receivables, current	635,961	698,870
31 to 60 Days [Member]
Delinquency Status
Finance receivables, past due	76,455	107,951
61 to 90 Days [Member]
Delinquency Status
Finance receivables, past due	40,089	57,395
91 + Days [Member]
Delinquency Status
Finance receivables, past due	$ 20,346	$ 31,350

2. Finance Receivables (Detai_3

2. Finance Receivables (Details - Amortized Cost Basis) - USD ($)	Mar. 31, 2020	Dec. 31, 2019
Amortized cost basis	$ 772,851,000	$ 895,566,000
2012 Annual Vintage Pool [Member]
Amortized cost basis	1,816,000	2,432,000
2013 Annual Vintage Pool [Member]
Amortized cost basis	11,643,000	15,489,000
2014 Annual Vintage Pool [Member]
Amortized cost basis	48,794,000	61,290,000
2015 Annual Vintage Pool [Member]
Amortized cost basis	136,679,000	162,242,000
2016 Annual Vintage Pool [Member]
Amortized cost basis	253,339,000	292,360,000
2017 Annual Vintage Pool [Member]
Amortized cost basis	$ 320,580,000	$ 361,753,000

2. Finance Receivables (Detai_4

2. Finance Receivables (Details - Summary of activity) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Finance Receivables
Balance at beginning of year	$ 11,640	$ 67,376
Early adoption of CECL	127,000	0
Provision for credit losses	3,613	23,956
Charge-offs	(34,214)	(54,344)
Recoveries	6,034	11,208
Balance at end of year	$ 114,073	$ 48,196

2. Finance Receivables (Detai_5

2. Finance Receivables (Details - Repossessed inventory) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2020	Dec. 31, 2019
Finance Receivables
Gross balance of repossessions in inventory	$ 35,127	$ 28,933
Allowance for losses on repossessed inventory	(27,965)	(21,389)
Net repossessed inventory included in other assets	$ 7,162	$ 7,544

2. Finance Receivables (Detai_6

2. Finance Receivables (Details Narrative) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Finance Receivables
Finance receivables, non accrual status	$ 20,300	$ 31,400

3. Securitization Trust Debt (D

3. Securitization Trust Debt (Details) - USD ($) $ in Thousands		3 Months Ended
		Mar. 31, 2020	Dec. 31, 2019
"Securitization trust debt," and components of debt
Receivables Pledged at end of period	[1]	$ 2,228,966
Initial Principal		5,491,419
Outstanding Principal		$ 2,103,710	$ 2,109,766
CPS 2014-C [Member]
"Securitization trust debt," and components of debt
Final Scheduled Payment Date	[2]	December 2021
Receivables Pledged at end of period	[1]	$ 0
Initial Principal		273,000
Outstanding Principal		$ 0	19,758
Weighted Average Contractual Interest Rate
CPS 2014-D [Member]
"Securitization trust debt," and components of debt
Final Scheduled Payment Date	[2]	March 2022
Receivables Pledged at end of period	[1]	$ 20,403
Initial Principal		267,500
Outstanding Principal		$ 19,476	23,755
Weighted Average Contractual Interest Rate		5.72%
CPS 2015-A [Member]
"Securitization trust debt," and components of debt
Final Scheduled Payment Date	[2]	June 2022
Receivables Pledged at end of period	[1]	$ 23,427
Initial Principal		245,000
Outstanding Principal		$ 21,623	26,713
Weighted Average Contractual Interest Rate		5.62%
CPS 2015-B [Member]
"Securitization trust debt," and components of debt
Final Scheduled Payment Date	[2]	September 2022
Receivables Pledged at end of period	[1]	$ 30,831
Initial Principal		250,000
Outstanding Principal		$ 31,032	36,338
Weighted Average Contractual Interest Rate		5.25%
CPS 2015-C [Member]
"Securitization trust debt," and components of debt
Final Scheduled Payment Date	[2]	December 2022
Receivables Pledged at end of period	[1]	$ 45,935
Initial Principal		300,000
Outstanding Principal		$ 46,354	53,579
Weighted Average Contractual Interest Rate		5.95%
CPS 2016-A [Member]
"Securitization trust debt," and components of debt
Final Scheduled Payment Date	[2]	March 2023
Receivables Pledged at end of period	[1]	$ 60,013
Initial Principal		329,460
Outstanding Principal		$ 62,489	71,599
Weighted Average Contractual Interest Rate		6.33%
CPS 2016-B [Member]
"Securitization trust debt," and components of debt
Final Scheduled Payment Date	[2]	June 2023
Receivables Pledged at end of period	[1]	$ 73,496
Initial Principal		332,690
Outstanding Principal		$ 72,256	82,667
Weighted Average Contractual Interest Rate		6.71%
CPS 2016-C [Member]
"Securitization trust debt," and components of debt
Final Scheduled Payment Date	[2]	September 2023
Receivables Pledged at end of period	[1]	$ 75,038
Initial Principal		318,500
Outstanding Principal		$ 73,378	83,696
Weighted Average Contractual Interest Rate		6.86%
CPS 2016-D [Member]
"Securitization trust debt," and components of debt
Final Scheduled Payment Date	[2]	April 2024
Receivables Pledged at end of period	[1]	$ 59,088
Initial Principal		206,325
Outstanding Principal		$ 56,965	65,021
Weighted Average Contractual Interest Rate		5.00%
CPS 2017-A [Member]
"Securitization trust debt," and components of debt
Final Scheduled Payment Date	[2]	April 2024
Receivables Pledged at end of period	[1]	$ 64,901
Initial Principal		206,320
Outstanding Principal		$ 62,536	71,450
Weighted Average Contractual Interest Rate		5.03%
CPS 2017-B [Member]
"Securitization trust debt," and components of debt
Final Scheduled Payment Date	[2]	December 2023
Receivables Pledged at end of period	[1]	$ 79,576
Initial Principal		225,170
Outstanding Principal		$ 66,160	76,201
Weighted Average Contractual Interest Rate		4.32%
CPS 2017-C [Member]
"Securitization trust debt," and components of debt
Final Scheduled Payment Date	[2]	September 2024
Receivables Pledged at end of period	[1]	$ 82,008
Initial Principal		224,825
Outstanding Principal		$ 70,376	80,315
Weighted Average Contractual Interest Rate		4.25%
CPS 2017-D [Member]
"Securitization trust debt," and components of debt
Final Scheduled Payment Date	[2]	June 2024
Receivables Pledged at end of period	[1]	$ 83,976
Initial Principal		196,300
Outstanding Principal		$ 74,019	83,801
Weighted Average Contractual Interest Rate		3.87%
CPS 2018-A [Member]
"Securitization trust debt," and components of debt
Final Scheduled Payment Date	[2]	March 2025
Receivables Pledged at end of period	[1]	$ 90,570
Initial Principal		190,000
Outstanding Principal		$ 80,840	91,258
Weighted Average Contractual Interest Rate		3.71%
CPS 2018-B [Member]
"Securitization trust debt," and components of debt
Final Scheduled Payment Date	[2]	December 2024
Receivables Pledged at end of period	[1]	$ 105,665
Initial Principal		201,823
Outstanding Principal		$ 98,424	111,188
Weighted Average Contractual Interest Rate		4.13%
CPS 2018-C [Member]
"Securitization trust debt," and components of debt
Final Scheduled Payment Date	[2]	September 2025
Receivables Pledged at end of period	[1]	$ 124,843
Initial Principal		230,275
Outstanding Principal		$ 114,360	130,064
Weighted Average Contractual Interest Rate		4.25%
CPS 2018-D [Member]
"Securitization trust debt," and components of debt
Final Scheduled Payment Date	[2]	June 2025
Receivables Pledged at end of period	[1]	$ 146,617
Initial Principal		233,730
Outstanding Principal		$ 131,630	149,470
Weighted Average Contractual Interest Rate		4.21%
CPS 2019-A [Member]
"Securitization trust debt," and components of debt
Final Scheduled Payment Date	[2]	March 2026
Receivables Pledged at end of period	[1]	$ 181,893
Initial Principal		254,400
Outstanding Principal		$ 166,520	186,900
Weighted Average Contractual Interest Rate		4.04%
CPS 2019-B [Member]
"Securitization trust debt," and components of debt
Final Scheduled Payment Date	[2]	June 2026
Receivables Pledged at end of period	[1]	$ 175,677
Initial Principal		228,275
Outstanding Principal		$ 166,846	184,308
Weighted Average Contractual Interest Rate		3.66%
CPS 2019-C [Member]
"Securitization trust debt," and components of debt
Final Scheduled Payment Date	[2]	September 2026
Receivables Pledged at end of period	[1]	$ 204,061
Initial Principal		243,513
Outstanding Principal		$ 196,387	216,650
Weighted Average Contractual Interest Rate		3.06%
CPS 2019-D [Member]
"Securitization trust debt," and components of debt
Final Scheduled Payment Date	[2]	December 2026
Receivables Pledged at end of period	[1]	$ 252,186
Initial Principal		274,313
Outstanding Principal		$ 243,816	265,035
Weighted Average Contractual Interest Rate		2.64%
CPS 2020-A [Member]
"Securitization trust debt," and components of debt
Final Scheduled Payment Date	[2]	March 2027
Receivables Pledged at end of period	[1]	$ 248,762
Initial Principal		260,000
Outstanding Principal		$ 248,223	$ 0
Weighted Average Contractual Interest Rate		2.62%
[1]	Includes repossessed assets that are included in Other assets on our Unaudited Condensed Consolidated Balance Sheet.
[2]	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 $609.0 million in 2020, $627.2 million in 2021, $428.3 million in 2022, $308.8 million in 2023, $69.9 million in 2024, $48.6 million in 2025.

3. Securitization Trust Debt _2

3. Securitization Trust Debt (Details Narrative) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Expected finance receivable payments 2020	$ 609,000
Expected finance receivable payments 2021	627,200
Expected finance receivable payments 2022	428,300
Expected finance receivable payments 2023	308,800
Expected finance receivable payments 2024	69,900
Expected finance receivable payments 2025	48,600
Restricted cash under various agreements	137,500
Securitization Trust Debt [Member]
Debt issuance costs	$ 12,100	$ 12,000

4. Debt (Details - Debt outstan

4. Debt (Details - Debt outstanding) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Dec. 31, 2019
Warehouse lines of credit	$ 141,988	$ 134,791
Residual interest financing	37,913	39,478
Subordinated renewable notes	18,322	17,534
Total debt outstanding	200,285	194,317
Warehouse Lines Of Credit [Member]
Warehouse lines of credit	$ 50,776	40,558
Interest rate	5.50% over one month Libor (Minimum 6.50%)
Credit line maturity date	Feb. 28, 2021
Warehouse Lines Of Credit (2) [Member]
Warehouse lines of credit	$ 53,411	96,225
Interest rate	3.00% over one month Libor (Minimum 3.75%)
Credit line maturity date	Sep. 30, 2020
Warehouse Lines Of Credit (3) [Member]
Warehouse lines of credit	$ 39,434	0
Interest rate	4.00% over a commercial paper rate (Minimum 5.00%)
Credit line maturity date	Dec. 31, 2021
Residual interest financing [Member]
Residual interest financing	$ 38,342	40,000
Interest rate	8.60%
Maturity date	Jan. 31, 2026
Subordinated Renewable Notes [Member]
Subordinated renewable notes	$ 18,322	$ 17,534
Interest rate	Weighted average rate of 9.92% and 9.75% at March 31, 2020 and December 31, 2019, respectively
Maturity date description	Weighted average maturity of July 2022 and April 2022 at March 31, 2020 and December 31, 2019, respectively

4. Debt (Details Narrative)

4. Debt (Details Narrative) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Three Warehouse Lines Of Credit [Member]
Unamortized debt issuance costs	$ 1,600	$ 2,000
Residual Interest Financings [Member]
Unamortized debt issuance costs	$ 429	$ 522

5. Interest Income and Intere_3

5. Interest Income and Interest Expense (Details - Interest income) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Components of interest income
Interest on finance receivables	$ 37,807	$ 62,290
Interest on finance receivables at fair value	40,806	22,815
Mark to finance receivables measured at fair value	(10,350)	0
Other interest income	523	740
Interest income	$ 68,786	$ 85,845

5. Interest Income and Intere_4

5. Interest Income and Interest Expense (Details - Interest expense) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Total interest expense	$ 26,991	$ 27,290
Securitization Trust Debt [Member]
Total interest expense	23,798	23,988
Warehouse Lines Of Credit [Member]
Total interest expense	1,763	2,020
Residual interest financing [Member]
Total interest expense	938	956
Subordinated Renewable Notes [Member]
Total interest expense	$ 492	$ 326

6. Earnings Per Share (Details

6. Earnings Per Share (Details - Earnings Per Share) - shares shares in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Earnings Per Share [Abstract]
Denominator for basic earnings per share - weighted average number of common shares outstanding during the year	22,539	22,242
Incremental common shares attibutable to exercise of outstanding options and warrants	1,340	2,017
Denominator for diluted earnings per share	23,879	24,259
Antidilutive shares	12,900	10,500

7. Income Taxes (Details Narrat

7. Income Taxes (Details Narrative) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Net deferred tax asset	$ 58,400
Unrecognized tax benefits	0		$ 0
Income tax expense (benefit)	$ (7,680)	$ 937
Effective tax rate	36.00%	35.00%
Federal [Member]
Net deferred tax asset	$ 46,800
State [Member]
Net deferred tax asset	$ 11,600

9. Fair Value Measurements (Det

9. Fair Value Measurements (Details - Reconciliation of Finance Receivables) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Fair Value Disclosures [Abstract]
Balance at beginning of period	$ 1,444,038	$ 821,066
Finance receivables at fair value acquired during period	265,282	244,753
Payments received on finance receivables at fair value	(109,558)	(49,500)
Net interest income accretion on fair value receivables	(29,715)	(18,767)
Mark to fair value	(10,350)	0
Balance at end of period	$ 1,559,697	$ 997,552

9. Fair Value Measurements (D_2

9. Fair Value Measurements (Details - Finance Receivables to Their Contractual Balances) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019	Mar. 31, 2019	Dec. 31, 2018
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Finance receivables measured at fair value	$ 1,559,697	$ 1,444,038	$ 997,552	$ 821,066
Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Finance receivables measured at fair value	1,559,697	1,444,038
Contractual Balance [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Finance receivables measured at fair value	$ 1,628,557	$ 1,492,803

9. Fair Value Measurements (D_3

9. Fair Value Measurements (Details - Level 3 Fair Value Measurements) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019	Mar. 31, 2019	Dec. 31, 2018
Finance receivables measured at fair value	$ 1,559,697	$ 1,444,038	$ 997,552	$ 821,066
Fair Value [Member]
Finance receivables measured at fair value	1,559,697	1,444,038
Fair Value [Member] | Level 3 [Member]
Finance receivables measured at fair value	$ 1,559,697	$ 1,444,038
Fair Value [Member] | Level 3 [Member] | Discount Rate [Member] | Minimum [Member]
Unobservable Inputs	8.90%	8.90%
Fair Value [Member] | Level 3 [Member] | Discount Rate [Member] | Maximum [Member]
Unobservable Inputs	11.10%	11.10%
Fair Value [Member] | Level 3 [Member] | Cumulative Net Losses [Member] | Minimum [Member]
Unobservable Inputs	15.00%	15.00%
Fair Value [Member] | Level 3 [Member] | Cumulative Net Losses [Member] | Maximum [Member]
Unobservable Inputs	18.40%	16.10%

9. Fair Value Measurements (D_4

9. Fair Value Measurements (Details - Delinquency status) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Finance receivables measured at fair value current	$ 1,498,296	$ 1,344,883
Finance receivables measured at fair value	1,628,557	1,492,803
31 to 60 Days [Member]
Finance receivables measured at fair value	67,294	81,262
61 to 90 Days [Member]
Finance receivables measured at fair value	29,275	34,280
91 + Days [Member]
Finance receivables measured at fair value	14,470	15,167
Repossessed Vehicles [Member]
Finance receivables measured at fair value	$ 19,222	$ 17,211

9. Fair Value Measurements (D_5

9. Fair Value Measurements (Details - Fair values) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Assets:
Cash and cash equivalents	$ 4,546	$ 5,295
Restricted cash and equivalents	137,523	135,537
Finance receivables, net	606,077	841,160
Accrued interest receivable	8,795	11,645
Liabilities:
Warehouse lines of credit	141,988	134,791
Accrued interest payable	5,409	5,254
Residual interest financing	37,913	39,478
Securitization trust debt	1,900,451	2,116,520
Subordinated renewable notes	18,322	17,534
Level 1 [Member]
Assets:
Cash and cash equivalents	4,546	5,295
Restricted cash and equivalents	137,523	135,537
Finance receivables, net	0	0
Accrued interest receivable	0	0
Liabilities:
Warehouse lines of credit	0	0
Accrued interest payable	0	0
Residual interest financing	0	0
Securitization trust debt	0	0
Subordinated renewable notes	0	0
Level 2 [Member]
Assets:
Cash and cash equivalents	0	0
Restricted cash and equivalents	0	0
Finance receivables, net	0	0
Accrued interest receivable	0	0
Liabilities:
Warehouse lines of credit	0	0
Accrued interest payable	0	0
Residual interest financing	0	0
Securitization trust debt	0	0
Subordinated renewable notes	0	0
Level 3 [Member]
Assets:
Cash and cash equivalents	0	0
Restricted cash and equivalents	0	0
Finance receivables, net	606,077	841,160
Accrued interest receivable	8,795	11,645
Liabilities:
Warehouse lines of credit	141,988	134,791
Accrued interest payable	5,409	5,254
Residual interest financing	37,913	39,478
Securitization trust debt	1,900,451	2,116,520
Subordinated renewable notes	18,322	17,534
Carrying Value [Member]
Assets:
Cash and cash equivalents	4,546	5,295
Restricted cash and equivalents	137,523	135,537
Finance receivables, net	660,403	885,890
Accrued interest receivable	8,795	11,645
Liabilities:
Warehouse lines of credit	141,988	134,791
Accrued interest payable	5,409	5,254
Residual interest financing	37,913	39,478
Securitization trust debt	2,091,642	2,097,728
Subordinated renewable notes	$ 18,322	$ 17,534