Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2021 | Aug. 06, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2021 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2021 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 1-11416 | |
Entity Registrant Name | CONSUMER PORTFOLIO SERVICES, INC. | |
Entity Central Index Key | 0000889609 | |
Entity Tax Identification Number | 33-0459135 | |
Entity Incorporation, State or Country Code | CA | |
Entity Address, Address Line One | 3800 Howard Hughes Parkway | |
Entity Address, Address Line Two | Suite 1400 | |
Entity Address, City or Town | Las Vegas | |
Entity Address, State or Province | NV | |
Entity Address, Postal Zip Code | 89169 | |
City Area Code | (949) | |
Local Phone Number | 753-6800 | |
Title of 12(b) Security | Common Stock, no par value | |
Trading Symbol | CPSS | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 22,943,689 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
ASSETS | ||
Cash and cash equivalents | $ 43,131 | $ 13,466 |
Restricted cash and equivalents | 155,776 | 130,686 |
Finance receivables measured at fair value | 1,582,175 | 1,523,726 |
Finance receivables | 340,470 | 492,133 |
Less: Allowance for finance credit losses | (72,242) | (80,790) |
Finance receivables, net | 268,228 | 411,343 |
Furniture and equipment, net | 1,007 | 828 |
Deferred tax assets, net | 27,131 | 28,512 |
Accrued interest receivable | 3,601 | 5,017 |
Other assets | 22,691 | 32,317 |
Total asset | 2,103,740 | 2,145,895 |
Liabilities | ||
Accounts payable and accrued expenses | 52,142 | 43,112 |
Warehouse lines of credit | 77,044 | 118,999 |
Residual interest financing | 67,153 | 25,426 |
Securitization trust debt | 1,732,879 | 1,803,673 |
Subordinated renewable notes | 26,005 | 21,323 |
Total liabilities | 1,955,223 | 2,012,533 |
COMMITMENTS AND CONTINGENCIES | ||
Shareholders' Equity | ||
Preferred Stock, Value, Issued | 0 | 0 |
Common stock, no par value; authorized 75,000,000 shares; 23,055,239 and 22,737,342 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively | 73,204 | 72,926 |
Retained earnings | 83,884 | 69,007 |
Accumulated other comprehensive loss | (8,571) | (8,571) |
Total stockholders’ equity | 148,517 | 133,362 |
Total liability and stockholder’ equity | 2,103,740 | 2,145,895 |
Series A Preferred Stock [Member] | ||
Shareholders' Equity | ||
Preferred Stock, Value, Issued | 0 | 0 |
Series B Preferred Stock [Member] | ||
Shareholders' Equity | ||
Preferred Stock, Value, Issued | $ 0 | $ 0 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Jun. 30, 2021 | Dec. 31, 2020 |
Preferred stock, par value (in dollars per share) | $ 1 | $ 1 |
Preferred stock, authorized | 4,998,130 | 4,998,130 |
Preferred stock, issued | 0 | 0 |
Common stock, no par value (in dollars per share) | $ 0 | $ 0 |
Common Stock, Shares Authorized | 75,000,000 | 75,000,000 |
Common Stock, Shares, Issued | 23,055,239 | 22,737,342 |
Common Stock, Shares, Outstanding | 23,055,239 | 22,737,342 |
Series A Preferred Stock [Member] | ||
Preferred stock, par value (in dollars per share) | $ 1 | $ 1 |
Preferred stock, authorized | 5,000,000 | 5,000,000 |
Preferred stock, issued | 0 | 0 |
Series B Preferred Stock [Member] | ||
Preferred stock, par value (in dollars per share) | $ 1 | $ 1 |
Preferred stock, authorized | 1,870 | 1,870 |
Preferred stock, issued | 0 | 0 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Revenues: | ||||
Interest income | $ 65,440 | $ 75,552 | $ 131,533 | $ 154,689 |
Mark to finance receivables measured at fair value | 0 | (9,549) | (4,417) | (19,899) |
Other income | 1,329 | 1,289 | 2,765 | 3,269 |
Total revenues | 66,769 | 67,292 | 129,881 | 138,059 |
Expenses: | ||||
Employee costs | 19,448 | 19,828 | 39,607 | 41,671 |
General and administrative | 7,831 | 7,837 | 15,579 | 16,506 |
Interest | 18,980 | 26,485 | 39,925 | 53,476 |
Provision for credit losses | 0 | 3,100 | 0 | 6,713 |
Sales | 4,201 | 3,079 | 8,187 | 7,508 |
Occupancy | 2,016 | 1,833 | 3,918 | 3,524 |
Depreciation and amortization | 417 | 487 | 845 | 906 |
Total operating expenses | 52,893 | 62,649 | 108,061 | 130,304 |
Income before income tax expense (benefit) | 13,876 | 4,643 | 21,820 | 7,755 |
Income tax expense (benefit) | 4,163 | 1,671 | 6,943 | (6,009) |
Net income | $ 9,713 | $ 2,972 | $ 14,877 | $ 13,764 |
Earnings per share: | ||||
Basic | $ 0.43 | $ 0.13 | $ 0.65 | $ 0.61 |
Diluted | $ 0.39 | $ 0.13 | $ 0.59 | $ 0.58 |
Number of shares used in computing earnings per share: | ||||
Basic | 22,842 | 22,685 | 22,791 | 22,612 |
Diluted | 25,130 | 23,687 | 25,048 | 23,783 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Income Statement [Abstract] | ||||
Net income | $ 9,713 | $ 2,972 | $ 14,877 | $ 13,764 |
Other comprehensive income/(loss); change in funded status of pension plan | 0 | 0 | 0 | 0 |
Comprehensive income | $ 9,713 | $ 2,972 | $ 14,877 | $ 13,764 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Cash flows from operating activities: | ||
Net income | $ 14,877 | $ 13,764 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Accretion of deferred acquisition fees and origination costs | 651 | 641 |
Net interest income accretion on fair value receivables | 66,812 | 64,156 |
Depreciation and amortization | 845 | 906 |
Amortization of deferred financing costs | 3,598 | 4,127 |
Mark to finance receivables measured at fair value | 4,417 | 19,899 |
Provision for credit losses | 0 | 6,713 |
Stock-based compensation expense | 735 | 898 |
Changes in assets and liabilities: | ||
Accrued interest receivable | 1,416 | 4,416 |
Deferred tax assets, net | 1,381 | 16,569 |
Other assets | 8,644 | (3,074) |
Accounts payable and accrued expenses | 9,030 | 338 |
Net cash provided by operating activities | 112,406 | 129,353 |
Cash flows from investing activities: | ||
Payments received on finance receivables held for investment | 142,464 | 180,366 |
Purchases of finance receivables measured at fair value | (485,117) | (399,729) |
Payments received on finance receivables at fair value | 355,439 | 222,063 |
Change in repossessions held in inventory | 982 | 2,888 |
Purchase of furniture and equipment | (1,024) | (660) |
Net cash provided by investing activities | 12,744 | 4,928 |
Cash flows from financing activities: | ||
Proceeds from issuance of securitization trust debt | 470,545 | 462,343 |
Proceeds from issuance of subordinated renewable notes | 5,684 | 3,450 |
Payments on subordinated renewable notes | (1,002) | (1,404) |
Repayments of warehouse lines of credit | (42,560) | (78,843) |
Net Proceeds from (repayment of) residual interest financing debt | 42,332 | (2,120) |
Repayment of securitization trust debt | (541,065) | (508,942) |
Payment of financing costs | (3,872) | (3,178) |
Purchase of common stock | (1,582) | (205) |
Exercise of options and warrants | 1,125 | 452 |
Net cash used in financing activities | (70,395) | (128,447) |
Increase in cash and cash equivalents | 54,755 | 5,834 |
Cash and restricted cash at beginning of period | 144,152 | 140,832 |
Cash and restricted cash at end of period | 198,907 | 146,666 |
Cash paid (received) during the period for: | ||
Interest | 36,665 | 49,372 |
Income taxes | $ 2,962 | $ (17,580) |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Common Stock [Member] | Retained Earnings [Member] | AOCI Attributable to Parent [Member] | Total |
Balance, beginning of period, Shares at Dec. 31, 2019 | 22,531 | |||
Common stock issued upon exercise of options and warrants, Shares | 256 | |||
Repurchase of common stock, Shares | (72) | |||
Balance, end of period, Shares at Jun. 30, 2020 | 22,715 | |||
Balance, beginning of period at Dec. 31, 2019 | $ 71,257 | $ 139,805 | $ (8,421) | |
Common stock issued upon exercise of options and warrants | 452 | |||
Repurchase of common stock | (205) | |||
Cumulative change in accounting principle | (92,469) | |||
Balance, beginning of period (as adjusted for change in accounting principle) | 47,336 | |||
Pension benefit obligation | $ 0 | |||
Stock-based compensation | 898 | |||
Net income | 13,764 | 13,764 | ||
Balance at end at Jun. 30, 2020 | $ 72,402 | 61,100 | (8,421) | 125,081 |
Balance, beginning of period, Shares at Mar. 31, 2020 | 22,559 | |||
Common stock issued upon exercise of options and warrants, Shares | 228 | |||
Repurchase of common stock, Shares | (72) | |||
Balance, end of period, Shares at Jun. 30, 2020 | 22,715 | |||
Balance, beginning of period at Mar. 31, 2020 | $ 71,792 | 58,128 | (8,421) | |
Common stock issued upon exercise of options and warrants | 404 | |||
Repurchase of common stock | (205) | |||
Cumulative change in accounting principle | 0 | |||
Balance, beginning of period (as adjusted for change in accounting principle) | 58,128 | |||
Pension benefit obligation | 0 | |||
Stock-based compensation | 411 | |||
Net income | 2,972 | 2,972 | ||
Balance at end at Jun. 30, 2020 | $ 72,402 | 61,100 | (8,421) | 125,081 |
Balance, beginning of period, Shares at Dec. 31, 2020 | 22,737 | |||
Common stock issued upon exercise of options and warrants, Shares | 676 | |||
Repurchase of common stock, Shares | (358) | |||
Balance, end of period, Shares at Jun. 30, 2021 | 23,055 | |||
Balance, beginning of period at Dec. 31, 2020 | $ 72,926 | 69,007 | (8,571) | 133,362 |
Common stock issued upon exercise of options and warrants | 1,125 | |||
Repurchase of common stock | (1,582) | |||
Cumulative change in accounting principle | ||||
Balance, beginning of period (as adjusted for change in accounting principle) | 69,007 | |||
Pension benefit obligation | 0 | |||
Stock-based compensation | 735 | |||
Net income | 14,877 | 14,877 | ||
Balance at end at Jun. 30, 2021 | $ 73,204 | 83,884 | (8,571) | 148,517 |
Balance, beginning of period, Shares at Mar. 31, 2021 | 22,656 | |||
Common stock issued upon exercise of options and warrants, Shares | 578 | |||
Repurchase of common stock, Shares | (179) | |||
Balance, end of period, Shares at Jun. 30, 2021 | 23,055 | |||
Balance, beginning of period at Mar. 31, 2021 | $ 72,877 | 74,171 | (8,571) | |
Common stock issued upon exercise of options and warrants | 827 | |||
Repurchase of common stock | (827) | |||
Cumulative change in accounting principle | ||||
Balance, beginning of period (as adjusted for change in accounting principle) | 74,171 | |||
Pension benefit obligation | 0 | |||
Stock-based compensation | 327 | |||
Net income | 9,713 | 9,713 | ||
Balance at end at Jun. 30, 2021 | $ 73,204 | $ 83,884 | $ (8,571) | $ 148,517 |
(1) Summary of Significant Acco
(1) Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
(1) 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 six-month period ended June 30, 2021 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, 2020. 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 recorded 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 recorded value, an adjustment would be required. There are no adjustments to the carrying value of the portion of the receivables portfolio accounted for at fair value in the second quarter of 2021. Results for the second quarter of 2020 include a $9.5 million mark down. Mark downs of $4.4 million and $19.9 million were included in the results for the six months ending June 30, 2021 and 2020, respectively. The mark down is an estimate based on our evaluation of the appropriate fair value and future earnings rate of existing receivables compared to recently acquired receivables and our assessment of potential additional future net losses. Mark downs are reflected as a reduction in revenue. 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 recorded value is fixed as the price we pay for the receivable, rather than as the contractual principal balance, we do not record acquisition fees as an amortizing asset related to the receivables, nor do we capitalize costs of acquiring the receivables. Rather we recognize the costs of acquisition as expenses in the period incurred. Other Income The following table presents the primary components of Other Income for the three-month and six-month periods ending June 30, 2021 and 2020: Schedule of other income Three Months Ended Six Months Ended June 30, June 30, 2021 2020 2021 2020 (In thousands) (In thousands) Direct mail revenues $ 890 $ 501 $ 1,869 $ 1,684 Convenience fee revenue 180 530 420 1,060 Recoveries on previously charged-off contracts 45 50 60 75 Sales tax refunds 118 208 289 409 Other 96 – 127 41 Other income for the period $ 1,329 $ 1,289 $ 2,765 $ 3,269 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: Supplemental balance sheet information related to leases June 30, December 31, 2021 2020 (In thousands) Operating Leases Operating lease right-of-use assets $ 23,850 $ 23,735 Less: Accumulated amortization right-of-use assets (15,668 ) (12,792 ) Operating lease right-of-use assets, net $ 8,182 $ 10,943 Operating lease liabilities $ (9,143 ) $ (12,096 ) Finance Leases Property and equipment, at cost $ 3,407 $ 3,407 Less: Accumulated depreciation (1,788 ) (1,226 ) Property and equipment, net $ 1,619 $ 2,181 Finance lease liabilities $ (1,691 ) $ (2,243 ) Weighted Average Discount Rate Operating lease 5.0% 5.0% Finance lease 6.5% 6.5% Maturities of leases Maturities of lease liabilities were as follows: (In thousands) Operating Finance Year Ending December 31, Lease Lease 2021 (excluding the six months ended June 30, 2021) $ 3,659 $ 613 2022 6,092 1,050 2023 1,423 84 2024 445 26 2025 308 9 Thereafter 3 – Total undiscounted lease payments 11,930 1,782 Less amounts representing interest (2,787 ) (91 ) Lease Liability $ 9,143 $ 1,691 The following table presents the lease expense included in General and administrative and Occupancy expense on our Unaudited Condensed Consolidated Statement of Operations: Lease information Three Months Ended Six Months Ended June 30, June 30, 2021 2020 2021 2020 (In thousands) (In thousands) Operating lease cost $ 1,793 $ 1,885 $ 3,630 $ 3,769 Finance lease cost 308 293 616 572 Total lease cost $ 2,101 $ 2,178 $ 4,246 $ 4,341 The following table presents the supplemental cash flow information related to leases: Supplemental cash flow information related to leases Three Months Ended Six Months Ended June 30, June 30, 2021 2020 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: (In thousands) (In thousands) Operating cash flows from operating leases $ 1,892 $ 1,932 $ 3,822 $ 3,858 Operating cash flows from finance leases 278 248 552 481 Financing cash flows from finance leases 30 45 65 91 Stock-based Compensation We recognize compensation costs in the financial statements for all share-based payments based on the grant date fair value estimated in accordance with the provisions of ASC 718 “Stock Compensation”. For the three and six months ended June 30, 2021, we recorded stock-based compensation costs in the amount of $ 327,000 735,000 412,000 898,000 2.4 2.1 The following represents stock option activity for the six months ended June 30, 2021: Share-based Payment Arrangement, Option, Activity Weighted Average Number of Weighted Remaining Shares Average Contractual (in thousands) Exercise Price Term Options outstanding at the beginning of period 15,977 $ 4.46 N/A Granted – – N/A Exercised (676 ) 1.66 N/A Forfeited (272 ) 5.07 N/A Options outstanding at the end of period 15,029 $ 4.57 2.38 Options exercisable at the end of period 12,741 $ 4.85 1.86 The following table presents the price distribution of stock options outstanding and exercisable for the years ended June 30, 2021 and December 31, 2020: Schedule of stock options outstanding and exercisable Number of shares as of Number of shares as of June 30, 2021 December 31, 2020 Outstanding Exercisable Outstanding Exercisable Range of exercise prices: (In thousands) (In thousands) $0.95 - $1.99 1,390 1,390 1,904 1,904 $2.00 - $2.99 1,570 528 1,570 180 $3.00 - $3.99 4,774 3,469 4,973 3,306 $4.00 - $4.99 1,510 1,510 1,540 1,217 $5.00 - $5.99 – – – - $6.00 - $6.99 4,685 4,685 4,770 4,770 $7.00 - $7.99 1,190 1,190 1,220 1,220 Total shares 15,119 12,772 15,977 12,597 At June 30, 2021 the aggregate intrinsic value of options outstanding and exercisable was $ 12.3 8.9 676,000 256,600 1.9 285,000 453,000 Purchases of Company Stock The table below describes the purchase of our common stock for the six-month ended June 30, 2021 and 2020: Schedule of purchases of company stock Six Months Ended June 30, 2021 June 30, 2020 Shares Avg. Price Shares Avg. Price Open market purchases 301,088 $ 4.18 25,113 $ 2.85 Shares redeemed upon net exercise of stock options 56,983 4.47 46,909 2.86 Total stock purchases 358,071 $ 4.42 72,022 $ 2.85 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 June 30, 2021, 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. 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.” 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 have a significant effect on our fair value measurement. |
(2) Finance Receivables
(2) Finance Receivables | 6 Months Ended |
Jun. 30, 2021 | |
Finance Receivables | |
(2) 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: Schedule of finance receivables June 30, December 31, 2021 2020 Finance receivables (In thousands) Automobile finance receivables, net of unearned interest $ 340,470 $ 491,307 Unearned acquisition fees and originations costs – 826 Finance receivables $ 340,470 $ 492,133 We consider an automobile contract delinquent when an obligor fails to make at least 90% of a contractually due payment by the following due date, which date may have been extended within limits specified in the servicing agreements. The period of delinquency is based on the number of days payments are contractually past due, as extended where applicable. Automobile contracts less than 31 days delinquent are not included. In certain circumstances we will grant obligors one-month payment extensions to assist them with temporary cash flow problems. The only modification of terms is to advance the obligor’s next due date by one month and extend the maturity date of the receivable by one month. In certain limited cases, a two-month extension may be granted. There are no other concessions such as a reduction in interest rate, forgiveness of principal or of accrued interest. Accordingly, we consider such extensions to be insignificant delays in payments rather than troubled debt restructurings. The following table summarizes the delinquency status of finance receivables as of June 30, 2021 and December 31, 2020: Schedule of delinquency status of finance receivables June 30, December 31, 2021 2020 (In thousands) Delinquency Status Current $ 294,043 $ 406,693 31 - 60 days 34,437 56,572 61 - 90 days 10,093 22,660 91 + days 1,897 5,382 $ 340,470 $ 491,307 Finance receivables totaling $ 1.9 5.4 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. For the pools in the relevant historical period, we consider each pool’s performance from its inception through the end of the current period. 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 effect of such factors into our estimates. Effective January 1, 2020, the Company adopted Accounting Standards Codification ("ASC") 326, which changes the criteria under which credit losses on financial instruments (such as the Company’s finance receivables) are measured. ASC 326 introduced 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. 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 The following table presents the amortized cost basis of our finance receivables by annual vintage as of June 30, 2021 and December 31, 2020. Schedule of amortized cost basis of finance receivables June 30, December 31, 2021 2020 (In thousands) Annual Vintage Pool 2012 and prior $ 306 $ 608 2013 2,257 4,483 2014 12,750 23,115 2015 48,953 78,457 2016 113,339 163,677 2017 162,865 220,967 $ 340,470 $ 491,307 The following table presents a summary of the activity for the allowance for finance credit losses for the three-month and six-month periods ended June 30, 2021 and 2020: Schedule of allowance for finance credit losses Three Months Ended Six Months Ended June 30, June 30, 2021 2020 2021 2020 (In thousands) (In thousands) Balance at beginning of period $ 73,497 $ 114,073 $ 80,790 $ 11,640 Early adoption of CECL – – – 127,000 Provision for credit losses on finance receivables – 3,100 – 6,713 Charge-offs (6,699 ) (23,308 ) (18,820 ) (57,522 ) Recoveries 5,444 4,737 10,272 10,771 Balance at end of period $ 72,242 $ 98,602 $ 72,242 $ 98,602 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: Schedule of allowance for losses on repossessed inventory June 30, December 31, 2021 2020 (In thousands) Gross balance of repossessions in inventory $ 6,154 $ 15,589 Allowance for losses on repossessed inventory (3,337 ) (11,790 ) Net repossessed inventory included in other assets $ 2,817 $ 3,799 |
(3) Securitization Trust Debt
(3) Securitization Trust Debt | 6 Months Ended |
Jun. 30, 2021 | |
Securitization Trust Debt | |
(3) 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: Schedule of Long-term Debt Instruments Weighted Average Final Receivables Outstanding Outstanding Contractual Scheduled Pledged at Principal at Principal at Interest Rate Payment June 30, Initial June 30, December 31, at June 30, Series Date (1) 2021 (2) Principal 2021 2020 2021 (Dollars in thousands) CPS 2015-B September 2022 – 250,000 – 17,984 – CPS 2015-C December 2022 – 300,000 – 28,529 – CPS 2016-A March 2023 – 329,460 24,551 37,158 7.65% CPS 2016-B June 2023 30,449 332,690 30,632 46,079 7.84% CPS 2016-C September 2023 32,501 318,500 32,010 47,325 8.30% CPS 2016-D April 2024 27,003 206,325 24,564 36,455 6.43% CPS 2017-A April 2024 30,562 206,320 27,466 40,619 6.41% CPS 2017-B December 2023 38,953 225,170 23,983 39,016 5.65% CPS 2017-C September 2024 41,567 224,825 35,619 47,553 5.16% CPS 2017-D June 2024 42,475 196,300 36,645 49,297 4.62% CPS 2018-A March 2025 46,399 190,000 40,124 53,549 4.41% CPS 2018-B December 2024 56,439 201,823 48,683 66,955 4.86% CPS 2018-C September 2025 64,829 230,275 58,318 77,345 4.93% CPS 2018-D June 2025 78,903 233,730 67,767 88,228 4.81% CPS 2019-A March 2026 98,774 254,400 84,920 114,373 4.63% CPS 2019-B June 2026 97,182 228,275 87,833 118,982 4.24% CPS 2019-C September 2026 114,238 243,513 106,354 142,080 3.47% CPS 2019-D December 2026 145,606 274,313 137,180 181,485 2.98% CPS 2020-A March 2027 141,542 260,000 139,485 184,944 3.03% CPS 2020-B June 2027 145,858 202,343 124,382 164,403 3.71% CPS 2020-C November 2027 196,785 252,200 187,529 231,961 1.91% CPS 2021-A March 2028 211,575 230,545 197,170 – 0.81% CPS 2021-B June 2028 228,935 240,000 228,585 – 1.05% $ 1,870,574 $ 5,631,007 $ 1,743,799 $ 1,814,320 _________________ (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 $ 442.0 543.0 451.5 112.3 119.4 53.2 11.4 (2) Includes repossessed assets that are included in Other assets on our Unaudited Condensed Consolidated Balance Sheet. Debt issuance costs of $ 10.9 10.6 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 June 30, 2021, 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 June 30, 2021, restricted cash under the various agreements totaled approximately $ 155.8 Our wholly-owned bankruptcy remote subsidiaries were formed to facilitate the above asset-backed financing transactions. Similar bankruptcy remote subsidiaries issue the debt outstanding under our credit facilities. Bankruptcy remote refers to a legal structure in which it is expected that the applicable entity would not be included in any bankruptcy filing by its parent or affiliates. All of the assets of these subsidiaries have been pledged as collateral for the related debt. All such transactions, treated as secured financings for accounting and tax purposes, are treated as sales for all other purposes, including legal and bankruptcy purposes. None of the assets of these subsidiaries are available to pay other creditors. On July 28, 2021 we completed our third securitization transaction of 2021. In the transaction, qualified institutional buyers purchased $ 291.0 300.0 1.55 |
(4) Debt
(4) Debt | 6 Months Ended |
Jun. 30, 2021 | |
Debt Disclosure [Abstract] | |
(4) Debt | (4) Debt The terms and amounts of our other debt outstanding at June 30, 2021 and December 31, 2020 are summarized below: Schedule of debt outstanding Amount Outstanding at June December 31, 2021 2020 (In thousands) Description Interest Rate Maturity Warehouse lines of credit 5.50% over one month Libor (Minimum 6.50%) N/A $ – $ 42,558 3.00% over one month Libor (Minimum 3.75%) December 2022 45,642 45,689 4.00% over a commercial paper rate (Minimum 5.00%) December 2021 32,310 32,265 Residual interest financing 8.60% January 2026 17,908 25,576 7.86% June 2026 50,000 – Subordinated renewable notes Weighted average rate of 9.67% and 10.09% at June 30, 2021 and December 31, 2020, respectively Weighted average maturity of April 2023 and January 2023 at June 30, 2021 and December 31, 2020, respectively 26,005 21,323 $ 171,865 $ 167,411 As of December 31, 2020, we had short-term funding capacity of $ 300 200 On June 30, 2021, we completed a $ 50 50.0 Unamortized debt issuance costs of $ 755,000 150,000 907,000 1.5 |
(5) Interest Income and Interes
(5) Interest Income and Interest Expense | 6 Months Ended |
Jun. 30, 2021 | |
Transfers and Servicing [Abstract] | |
(5) Interest Income and Interest Expense | (5) Interest Income and Interest Expense The following table presents the components of interest income: Schedule of interest income Three Months Ended Six Months Ended June 30, June 30, 2021 2020 2021 2020 (In thousands) (In thousands) Interest on finance receivables $ 18,491 $ 33,773 $ 40,590 $ 71,580 Interest on finance receivables at fair value 46,943 41,659 90,931 82,465 Mark to finance receivables measured at fair value – (9,549 ) (4,417 ) (19,899 ) Other interest income 6 120 12 644 Interest income $ 65,440 $ 66,003 $ 127,116 $ 134,790 The following table presents the components of interest expense: Schedule of interest expense Three Months Ended Six Months Ended June 30, June 30, 2021 2020 2021 2020 (In thousands) (In thousands) Securitization trust debt $ 16,823 $ 22,367 $ 35,276 $ 46,165 Warehouse lines of credit 1,021 2,675 2,335 4,437 Residual interest financing 467 920 1,033 1,857 Subordinated renewable notes 669 523 1,281 1,017 Interest expense $ 18,980 $ 26,485 $ 39,925 $ 53,476 |
(6) Earnings Per Share
(6) Earnings Per Share | 6 Months Ended |
Jun. 30, 2021 | |
Earnings per share: | |
(6) Earnings Per Share | (6) Earnings Per Share Earnings per share for the three-month and six-month periods ended June 30, 2021 and 2020 were calculated using the weighted average number of shares outstanding for the related period. The following table reconciles the number of shares used in the computations of basic and diluted earnings per share for the three-month and six-month periods ended June 30, 2021 and 2020: Computation of earnings per share Three Months Ended Six Months Ended June 30, June 30, 2021 2020 2021 2020 (In thousands) (In thousands) Weighted average number of common shares outstanding during the period used to compute basic earnings per share 22,842 22,685 22,791 22,612 Incremental common shares attributable to exercise of outstanding options and warrants 2,288 1,002 2,257 1,171 Weighted average number of common shares used to compute diluted earnings per share 25,130 23,687 25,048 23,783 If the anti-dilutive effects of common stock equivalents were considered, shares included in the diluted earnings per share calculation for the three-month and six-month periods ended June 30, 2021 would have included an additional 6.0 6.9 13.3 13.1 |
(7) Income Taxes
(7) Income Taxes | 6 Months Ended |
Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
(7) 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, 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 As of June 30, 2021, and December 31, 2020, we had no 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 $ 27.1 27.1 15.9 11.2 Income tax expense was $ 4.2 6.9 30 32 1.7 6.0 36 |
(8) Legal Proceedings
(8) Legal Proceedings | 6 Months Ended |
Jun. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
(8) 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 | 6 Months Ended |
Jun. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
(9) 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 effect on our fair value measurement. For the quarter ended June 30, 2021, the Company evaluated the appropriate fair value and future earnings rate of existing receivables compared to recently acquired receivables and our assessment of potential additional future net losses on the portfolio of finance receivables carried at fair value and did not record a mark down to that portfolio. The table below presents a reconciliation of the finance receivables measured at fair value on a recurring basis using significant unobservable inputs: Schedule of reconciliation of the finance receivables measured at fair value on a recurring basis Three Months Ended Six Months Ended June 30, June 30, 2021 2020 2021 2020 (In thousands) (In thousands) Balance at beginning of period $ 1,533,723 $ 1,559,697 $ 1,523,726 $ 1,444,038 Finance receivables at fair value acquired during period 279,658 134,447 485,117 399,729 Payments received on finance receivables at fair value (199,419 ) (112,505 ) (355,439 ) (222,063 ) Net interest income accretion on fair value receivables (31,787 ) (34,441 ) (66,812 ) (64,156 ) Mark to fair value – (9,549 ) (4,417 ) (19,899 ) Balance at end of period $ 1,582,175 $ 1,537,649 $ 1,582,175 $ 1,537,649 The table below compares the fair values of these finance receivables to their contractual balances for the periods shown: Schedule of finance receivables to their contractual balances June 30, 2021 December 31, 2020 Contractual Fair Contractual Fair Balance Value Balance Value (In thousands) Finance receivables measured at fair value $ 1,768,988 $ 1,582,175 $ 1,668,076 $ 1,523,726 The following table provides certain qualitative information about our level 3 fair value measurements: Schedule of level 3 fair value measurements Financial Instrument Fair Values as of Inputs as of June 30, December 31, June 30, December 31, 2021 2020 Unobservable Inputs 2021 2020 (In thousands) Assets: Finance receivables measured at fair value $ 1,582,175 $ 1,523,726 Discount rate 11.0 11.3 10.4 11.1 Cumulative net losses 15.4 18.4 15.3 18.4 The following table summarizes the delinquency status of these finance receivables measured at fair value as of June 30, 2021 and December 31, 2020: Schedule of delinquency status of finance receivables measured at fair value June 30, December 31, 2021 2020 (In thousands) Delinquency Status Current $ 1,646,257 $ 1,505,486 31 - 60 days 80,719 96,296 61 - 90 days 23,034 36,436 91 + days 5,205 9,607 Repo 13,773 20,251 $ 1,768,988 $ 1,668,076 Repossessed vehicle inventory, which is included in Other assets on our unaudited condensed consolidated balance sheet, is measured at fair value using level 2 assumptions based on our actual loss experience on sale of repossessed vehicles. At June 30, 2021 the finance receivables related to the repossessed vehicles in inventory totaled $ 6.1 3.3 2.8 3.8 11.8 There were no transfers in or out of level 1, level 2 or level 3 assets and liabilities for the six months ended June 30, 2021 and 2020. The estimated fair values of financial assets and liabilities at June 30, 2021 and December 31, 2020, were as follows: Schedule of estimated fair values of financial assets and liabilities As of June 30, 2021 Financial Instrument (In thousands) Carrying Fair Value Measurements Using: Value Level 1 Level 2 Level 3 Total Assets: Cash and cash equivalents $ 43,131 $ 43,131 $ – $ – $ 43,131 Restricted cash and equivalents 155,776 155,776 – – 155,776 Finance receivables, net 268,228 – – 270,271 270,271 Accrued interest receivable 3,601 – – 3,601 3,601 Liabilities: Warehouse lines of credit $ 77,044 $ – $ – $ 77,044 $ 77,044 Accrued interest payable 4,582 – – 4,582 4,582 Securitization trust debt 1,732,879 – – 1,769,682 1,769,682 Subordinated renewable notes 26,005 – – 26,005 26,005 As of December 31, 2020 Financial Instrument (In thousands) Carrying Fair Value Measurements Using: Value Level 1 Level 2 Level 3 Total Assets: Cash and cash equivalents $ 13,466 $ 13,466 $ – $ – $ 13,466 Restricted cash and equivalents 130,686 130,686 – – 130,686 Finance receivables, net 411,343 – – 429,972 429,972 Accrued interest receivable 5,017 – – 5,017 5,017 Liabilities: Warehouse lines of credit $ 118,999 $ – $ – $ 118,999 $ 118,999 Accrued interest payable 4,919 – – 4,919 4,919 Securitization trust debt 1,803,673 – – 1,862,630 1,862,630 Subordinated renewable notes 21,323 – – 21,323 21,323 |
(1) Summary of Significant Ac_2
(1) Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2021 | |
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 six-month period ended June 30, 2021 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, 2020. |
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 recorded 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 recorded value, an adjustment would be required. There are no adjustments to the carrying value of the portion of the receivables portfolio accounted for at fair value in the second quarter of 2021. Results for the second quarter of 2020 include a $9.5 million mark down. Mark downs of $4.4 million and $19.9 million were included in the results for the six months ending June 30, 2021 and 2020, respectively. The mark down is an estimate based on our evaluation of the appropriate fair value and future earnings rate of existing receivables compared to recently acquired receivables and our assessment of potential additional future net losses. Mark downs are reflected as a reduction in revenue. 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 recorded value is fixed as the price we pay for the receivable, rather than as the contractual principal balance, we do not record acquisition fees as an amortizing asset related to the receivables, nor do we capitalize costs of acquiring the receivables. Rather we recognize the costs of acquisition as expenses in the period incurred. |
Other Income | Other Income The following table presents the primary components of Other Income for the three-month and six-month periods ending June 30, 2021 and 2020: Schedule of other income Three Months Ended Six Months Ended June 30, June 30, 2021 2020 2021 2020 (In thousands) (In thousands) Direct mail revenues $ 890 $ 501 $ 1,869 $ 1,684 Convenience fee revenue 180 530 420 1,060 Recoveries on previously charged-off contracts 45 50 60 75 Sales tax refunds 118 208 289 409 Other 96 – 127 41 Other income for the period $ 1,329 $ 1,289 $ 2,765 $ 3,269 |
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: Supplemental balance sheet information related to leases June 30, December 31, 2021 2020 (In thousands) Operating Leases Operating lease right-of-use assets $ 23,850 $ 23,735 Less: Accumulated amortization right-of-use assets (15,668 ) (12,792 ) Operating lease right-of-use assets, net $ 8,182 $ 10,943 Operating lease liabilities $ (9,143 ) $ (12,096 ) Finance Leases Property and equipment, at cost $ 3,407 $ 3,407 Less: Accumulated depreciation (1,788 ) (1,226 ) Property and equipment, net $ 1,619 $ 2,181 Finance lease liabilities $ (1,691 ) $ (2,243 ) Weighted Average Discount Rate Operating lease 5.0% 5.0% Finance lease 6.5% 6.5% Maturities of leases Maturities of lease liabilities were as follows: (In thousands) Operating Finance Year Ending December 31, Lease Lease 2021 (excluding the six months ended June 30, 2021) $ 3,659 $ 613 2022 6,092 1,050 2023 1,423 84 2024 445 26 2025 308 9 Thereafter 3 – Total undiscounted lease payments 11,930 1,782 Less amounts representing interest (2,787 ) (91 ) Lease Liability $ 9,143 $ 1,691 The following table presents the lease expense included in General and administrative and Occupancy expense on our Unaudited Condensed Consolidated Statement of Operations: Lease information Three Months Ended Six Months Ended June 30, June 30, 2021 2020 2021 2020 (In thousands) (In thousands) Operating lease cost $ 1,793 $ 1,885 $ 3,630 $ 3,769 Finance lease cost 308 293 616 572 Total lease cost $ 2,101 $ 2,178 $ 4,246 $ 4,341 The following table presents the supplemental cash flow information related to leases: Supplemental cash flow information related to leases Three Months Ended Six Months Ended June 30, June 30, 2021 2020 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: (In thousands) (In thousands) Operating cash flows from operating leases $ 1,892 $ 1,932 $ 3,822 $ 3,858 Operating cash flows from finance leases 278 248 552 481 Financing cash flows from finance leases 30 45 65 91 |
Stock-based Compensation | Stock-based Compensation We recognize compensation costs in the financial statements for all share-based payments based on the grant date fair value estimated in accordance with the provisions of ASC 718 “Stock Compensation”. For the three and six months ended June 30, 2021, we recorded stock-based compensation costs in the amount of $ 327,000 735,000 412,000 898,000 2.4 2.1 The following represents stock option activity for the six months ended June 30, 2021: Share-based Payment Arrangement, Option, Activity Weighted Average Number of Weighted Remaining Shares Average Contractual (in thousands) Exercise Price Term Options outstanding at the beginning of period 15,977 $ 4.46 N/A Granted – – N/A Exercised (676 ) 1.66 N/A Forfeited (272 ) 5.07 N/A Options outstanding at the end of period 15,029 $ 4.57 2.38 Options exercisable at the end of period 12,741 $ 4.85 1.86 The following table presents the price distribution of stock options outstanding and exercisable for the years ended June 30, 2021 and December 31, 2020: Schedule of stock options outstanding and exercisable Number of shares as of Number of shares as of June 30, 2021 December 31, 2020 Outstanding Exercisable Outstanding Exercisable Range of exercise prices: (In thousands) (In thousands) $0.95 - $1.99 1,390 1,390 1,904 1,904 $2.00 - $2.99 1,570 528 1,570 180 $3.00 - $3.99 4,774 3,469 4,973 3,306 $4.00 - $4.99 1,510 1,510 1,540 1,217 $5.00 - $5.99 – – – - $6.00 - $6.99 4,685 4,685 4,770 4,770 $7.00 - $7.99 1,190 1,190 1,220 1,220 Total shares 15,119 12,772 15,977 12,597 At June 30, 2021 the aggregate intrinsic value of options outstanding and exercisable was $ 12.3 8.9 676,000 256,600 1.9 285,000 453,000 |
Purchases of Company Stock | Purchases of Company Stock The table below describes the purchase of our common stock for the six-month ended June 30, 2021 and 2020: Schedule of purchases of company stock Six Months Ended June 30, 2021 June 30, 2020 Shares Avg. Price Shares Avg. Price Open market purchases 301,088 $ 4.18 25,113 $ 2.85 Shares redeemed upon net exercise of stock options 56,983 4.47 46,909 2.86 Total stock purchases 358,071 $ 4.42 72,022 $ 2.85 |
Reclassifications | Reclassifications Some items in the prior year financial statements were reclassified to conform to the current presentation. Reclassifications had no effect on net income or shareholders’ equity. |
Financial Covenants | Financial Covenants Certain of our securitization transactions, our warehouse credit facilities and our residual interest financing contain various financial covenants requiring minimum financial ratios and results. Such covenants include maintaining minimum levels of liquidity and net worth and not exceeding maximum leverage levels. As of June 30, 2021, 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. |
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.” 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 have a significant effect on our fair value measurement. |
(1) Summary of Significant Ac_3
(1) Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Schedule of other income | Schedule of other income Three Months Ended Six Months Ended June 30, June 30, 2021 2020 2021 2020 (In thousands) (In thousands) Direct mail revenues $ 890 $ 501 $ 1,869 $ 1,684 Convenience fee revenue 180 530 420 1,060 Recoveries on previously charged-off contracts 45 50 60 75 Sales tax refunds 118 208 289 409 Other 96 – 127 41 Other income for the period $ 1,329 $ 1,289 $ 2,765 $ 3,269 |
Supplemental balance sheet information related to leases | Supplemental balance sheet information related to leases June 30, December 31, 2021 2020 (In thousands) Operating Leases Operating lease right-of-use assets $ 23,850 $ 23,735 Less: Accumulated amortization right-of-use assets (15,668 ) (12,792 ) Operating lease right-of-use assets, net $ 8,182 $ 10,943 Operating lease liabilities $ (9,143 ) $ (12,096 ) Finance Leases Property and equipment, at cost $ 3,407 $ 3,407 Less: Accumulated depreciation (1,788 ) (1,226 ) Property and equipment, net $ 1,619 $ 2,181 Finance lease liabilities $ (1,691 ) $ (2,243 ) Weighted Average Discount Rate Operating lease 5.0% 5.0% Finance lease 6.5% 6.5% |
Maturities of leases | Maturities of leases Maturities of lease liabilities were as follows: (In thousands) Operating Finance Year Ending December 31, Lease Lease 2021 (excluding the six months ended June 30, 2021) $ 3,659 $ 613 2022 6,092 1,050 2023 1,423 84 2024 445 26 2025 308 9 Thereafter 3 – Total undiscounted lease payments 11,930 1,782 Less amounts representing interest (2,787 ) (91 ) Lease Liability $ 9,143 $ 1,691 |
Lease information | Lease information Three Months Ended Six Months Ended June 30, June 30, 2021 2020 2021 2020 (In thousands) (In thousands) Operating lease cost $ 1,793 $ 1,885 $ 3,630 $ 3,769 Finance lease cost 308 293 616 572 Total lease cost $ 2,101 $ 2,178 $ 4,246 $ 4,341 |
Supplemental cash flow information related to leases | Supplemental cash flow information related to leases Three Months Ended Six Months Ended June 30, June 30, 2021 2020 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: (In thousands) (In thousands) Operating cash flows from operating leases $ 1,892 $ 1,932 $ 3,822 $ 3,858 Operating cash flows from finance leases 278 248 552 481 Financing cash flows from finance leases 30 45 65 91 |
Share-based Payment Arrangement, Option, Activity | Share-based Payment Arrangement, Option, Activity Weighted Average Number of Weighted Remaining Shares Average Contractual (in thousands) Exercise Price Term Options outstanding at the beginning of period 15,977 $ 4.46 N/A Granted – – N/A Exercised (676 ) 1.66 N/A Forfeited (272 ) 5.07 N/A Options outstanding at the end of period 15,029 $ 4.57 2.38 Options exercisable at the end of period 12,741 $ 4.85 1.86 |
Schedule of stock options outstanding and exercisable | Schedule of stock options outstanding and exercisable Number of shares as of Number of shares as of June 30, 2021 December 31, 2020 Outstanding Exercisable Outstanding Exercisable Range of exercise prices: (In thousands) (In thousands) $0.95 - $1.99 1,390 1,390 1,904 1,904 $2.00 - $2.99 1,570 528 1,570 180 $3.00 - $3.99 4,774 3,469 4,973 3,306 $4.00 - $4.99 1,510 1,510 1,540 1,217 $5.00 - $5.99 – – – - $6.00 - $6.99 4,685 4,685 4,770 4,770 $7.00 - $7.99 1,190 1,190 1,220 1,220 Total shares 15,119 12,772 15,977 12,597 |
Schedule of purchases of company stock | Schedule of purchases of company stock Six Months Ended June 30, 2021 June 30, 2020 Shares Avg. Price Shares Avg. Price Open market purchases 301,088 $ 4.18 25,113 $ 2.85 Shares redeemed upon net exercise of stock options 56,983 4.47 46,909 2.86 Total stock purchases 358,071 $ 4.42 72,022 $ 2.85 |
(2) Finance Receivables (Tables
(2) Finance Receivables (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Finance Receivables | |
Schedule of finance receivables | Schedule of finance receivables June 30, December 31, 2021 2020 Finance receivables (In thousands) Automobile finance receivables, net of unearned interest $ 340,470 $ 491,307 Unearned acquisition fees and originations costs – 826 Finance receivables $ 340,470 $ 492,133 |
Schedule of delinquency status of finance receivables | Schedule of delinquency status of finance receivables June 30, December 31, 2021 2020 (In thousands) Delinquency Status Current $ 294,043 $ 406,693 31 - 60 days 34,437 56,572 61 - 90 days 10,093 22,660 91 + days 1,897 5,382 $ 340,470 $ 491,307 |
Schedule of amortized cost basis of finance receivables | Schedule of amortized cost basis of finance receivables June 30, December 31, 2021 2020 (In thousands) Annual Vintage Pool 2012 and prior $ 306 $ 608 2013 2,257 4,483 2014 12,750 23,115 2015 48,953 78,457 2016 113,339 163,677 2017 162,865 220,967 $ 340,470 $ 491,307 |
Schedule of allowance for finance credit losses | Schedule of allowance for finance credit losses Three Months Ended Six Months Ended June 30, June 30, 2021 2020 2021 2020 (In thousands) (In thousands) Balance at beginning of period $ 73,497 $ 114,073 $ 80,790 $ 11,640 Early adoption of CECL – – – 127,000 Provision for credit losses on finance receivables – 3,100 – 6,713 Charge-offs (6,699 ) (23,308 ) (18,820 ) (57,522 ) Recoveries 5,444 4,737 10,272 10,771 Balance at end of period $ 72,242 $ 98,602 $ 72,242 $ 98,602 |
Schedule of allowance for losses on repossessed inventory | Schedule of allowance for losses on repossessed inventory June 30, December 31, 2021 2020 (In thousands) Gross balance of repossessions in inventory $ 6,154 $ 15,589 Allowance for losses on repossessed inventory (3,337 ) (11,790 ) Net repossessed inventory included in other assets $ 2,817 $ 3,799 |
(3) Securitization Trust Debt (
(3) Securitization Trust Debt (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Securitization Trust Debt | |
Schedule of Long-term Debt Instruments | Schedule of Long-term Debt Instruments Weighted Average Final Receivables Outstanding Outstanding Contractual Scheduled Pledged at Principal at Principal at Interest Rate Payment June 30, Initial June 30, December 31, at June 30, Series Date (1) 2021 (2) Principal 2021 2020 2021 (Dollars in thousands) CPS 2015-B September 2022 – 250,000 – 17,984 – CPS 2015-C December 2022 – 300,000 – 28,529 – CPS 2016-A March 2023 – 329,460 24,551 37,158 7.65% CPS 2016-B June 2023 30,449 332,690 30,632 46,079 7.84% CPS 2016-C September 2023 32,501 318,500 32,010 47,325 8.30% CPS 2016-D April 2024 27,003 206,325 24,564 36,455 6.43% CPS 2017-A April 2024 30,562 206,320 27,466 40,619 6.41% CPS 2017-B December 2023 38,953 225,170 23,983 39,016 5.65% CPS 2017-C September 2024 41,567 224,825 35,619 47,553 5.16% CPS 2017-D June 2024 42,475 196,300 36,645 49,297 4.62% CPS 2018-A March 2025 46,399 190,000 40,124 53,549 4.41% CPS 2018-B December 2024 56,439 201,823 48,683 66,955 4.86% CPS 2018-C September 2025 64,829 230,275 58,318 77,345 4.93% CPS 2018-D June 2025 78,903 233,730 67,767 88,228 4.81% CPS 2019-A March 2026 98,774 254,400 84,920 114,373 4.63% CPS 2019-B June 2026 97,182 228,275 87,833 118,982 4.24% CPS 2019-C September 2026 114,238 243,513 106,354 142,080 3.47% CPS 2019-D December 2026 145,606 274,313 137,180 181,485 2.98% CPS 2020-A March 2027 141,542 260,000 139,485 184,944 3.03% CPS 2020-B June 2027 145,858 202,343 124,382 164,403 3.71% CPS 2020-C November 2027 196,785 252,200 187,529 231,961 1.91% CPS 2021-A March 2028 211,575 230,545 197,170 – 0.81% CPS 2021-B June 2028 228,935 240,000 228,585 – 1.05% $ 1,870,574 $ 5,631,007 $ 1,743,799 $ 1,814,320 _________________ (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 $ 442.0 543.0 451.5 112.3 119.4 53.2 11.4 (2) Includes repossessed assets that are included in Other assets on our Unaudited Condensed Consolidated Balance Sheet. |
(4) Debt (Tables)
(4) Debt (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of debt outstanding | Schedule of debt outstanding Amount Outstanding at June December 31, 2021 2020 (In thousands) Description Interest Rate Maturity Warehouse lines of credit 5.50% over one month Libor (Minimum 6.50%) N/A $ – $ 42,558 3.00% over one month Libor (Minimum 3.75%) December 2022 45,642 45,689 4.00% over a commercial paper rate (Minimum 5.00%) December 2021 32,310 32,265 Residual interest financing 8.60% January 2026 17,908 25,576 7.86% June 2026 50,000 – Subordinated renewable notes Weighted average rate of 9.67% and 10.09% at June 30, 2021 and December 31, 2020, respectively Weighted average maturity of April 2023 and January 2023 at June 30, 2021 and December 31, 2020, respectively 26,005 21,323 $ 171,865 $ 167,411 |
(5) Interest Income and Inter_2
(5) Interest Income and Interest Expense (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Transfers and Servicing [Abstract] | |
Schedule of interest income | Schedule of interest income Three Months Ended Six Months Ended June 30, June 30, 2021 2020 2021 2020 (In thousands) (In thousands) Interest on finance receivables $ 18,491 $ 33,773 $ 40,590 $ 71,580 Interest on finance receivables at fair value 46,943 41,659 90,931 82,465 Mark to finance receivables measured at fair value – (9,549 ) (4,417 ) (19,899 ) Other interest income 6 120 12 644 Interest income $ 65,440 $ 66,003 $ 127,116 $ 134,790 |
Schedule of interest expense | Schedule of interest expense Three Months Ended Six Months Ended June 30, June 30, 2021 2020 2021 2020 (In thousands) (In thousands) Securitization trust debt $ 16,823 $ 22,367 $ 35,276 $ 46,165 Warehouse lines of credit 1,021 2,675 2,335 4,437 Residual interest financing 467 920 1,033 1,857 Subordinated renewable notes 669 523 1,281 1,017 Interest expense $ 18,980 $ 26,485 $ 39,925 $ 53,476 |
(6) Earnings Per Share (Tables)
(6) Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Earnings per share: | |
Computation of earnings per share | Computation of earnings per share Three Months Ended Six Months Ended June 30, June 30, 2021 2020 2021 2020 (In thousands) (In thousands) Weighted average number of common shares outstanding during the period used to compute basic earnings per share 22,842 22,685 22,791 22,612 Incremental common shares attributable to exercise of outstanding options and warrants 2,288 1,002 2,257 1,171 Weighted average number of common shares used to compute diluted earnings per share 25,130 23,687 25,048 23,783 |
(9) Fair Value Measurements (Ta
(9) Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of reconciliation of the finance receivables measured at fair value on a recurring basis | Schedule of reconciliation of the finance receivables measured at fair value on a recurring basis Three Months Ended Six Months Ended June 30, June 30, 2021 2020 2021 2020 (In thousands) (In thousands) Balance at beginning of period $ 1,533,723 $ 1,559,697 $ 1,523,726 $ 1,444,038 Finance receivables at fair value acquired during period 279,658 134,447 485,117 399,729 Payments received on finance receivables at fair value (199,419 ) (112,505 ) (355,439 ) (222,063 ) Net interest income accretion on fair value receivables (31,787 ) (34,441 ) (66,812 ) (64,156 ) Mark to fair value – (9,549 ) (4,417 ) (19,899 ) Balance at end of period $ 1,582,175 $ 1,537,649 $ 1,582,175 $ 1,537,649 |
Schedule of finance receivables to their contractual balances | Schedule of finance receivables to their contractual balances June 30, 2021 December 31, 2020 Contractual Fair Contractual Fair Balance Value Balance Value (In thousands) Finance receivables measured at fair value $ 1,768,988 $ 1,582,175 $ 1,668,076 $ 1,523,726 |
Schedule of level 3 fair value measurements | Schedule of level 3 fair value measurements Financial Instrument Fair Values as of Inputs as of June 30, December 31, June 30, December 31, 2021 2020 Unobservable Inputs 2021 2020 (In thousands) Assets: Finance receivables measured at fair value $ 1,582,175 $ 1,523,726 Discount rate 11.0 11.3 10.4 11.1 Cumulative net losses 15.4 18.4 15.3 18.4 |
Schedule of delinquency status of finance receivables measured at fair value | Schedule of delinquency status of finance receivables measured at fair value June 30, December 31, 2021 2020 (In thousands) Delinquency Status Current $ 1,646,257 $ 1,505,486 31 - 60 days 80,719 96,296 61 - 90 days 23,034 36,436 91 + days 5,205 9,607 Repo 13,773 20,251 $ 1,768,988 $ 1,668,076 |
Schedule of estimated fair values of financial assets and liabilities | Schedule of estimated fair values of financial assets and liabilities As of June 30, 2021 Financial Instrument (In thousands) Carrying Fair Value Measurements Using: Value Level 1 Level 2 Level 3 Total Assets: Cash and cash equivalents $ 43,131 $ 43,131 $ – $ – $ 43,131 Restricted cash and equivalents 155,776 155,776 – – 155,776 Finance receivables, net 268,228 – – 270,271 270,271 Accrued interest receivable 3,601 – – 3,601 3,601 Liabilities: Warehouse lines of credit $ 77,044 $ – $ – $ 77,044 $ 77,044 Accrued interest payable 4,582 – – 4,582 4,582 Securitization trust debt 1,732,879 – – 1,769,682 1,769,682 Subordinated renewable notes 26,005 – – 26,005 26,005 As of December 31, 2020 Financial Instrument (In thousands) Carrying Fair Value Measurements Using: Value Level 1 Level 2 Level 3 Total Assets: Cash and cash equivalents $ 13,466 $ 13,466 $ – $ – $ 13,466 Restricted cash and equivalents 130,686 130,686 – – 130,686 Finance receivables, net 411,343 – – 429,972 429,972 Accrued interest receivable 5,017 – – 5,017 5,017 Liabilities: Warehouse lines of credit $ 118,999 $ – $ – $ 118,999 $ 118,999 Accrued interest payable 4,919 – – 4,919 4,919 Securitization trust debt 1,803,673 – – 1,862,630 1,862,630 Subordinated renewable notes 21,323 – – 21,323 21,323 |
(1) Summary of Significant Ac_4
(1) Summary of Significant Accounting Policies (Details - Other income) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Other income for the period | $ 1,329 | $ 1,289 | $ 2,765 | $ 3,269 |
Direct Mail Revenues [Member] | ||||
Other income for the period | 890 | 501 | 1,869 | 1,684 |
Convenience Fee Revenue [Member] | ||||
Other income for the period | 180 | 530 | 420 | 1,060 |
Recoveries on previously charged-off contracts [Member] | ||||
Other income for the period | 45 | 50 | 60 | 75 |
Sales Tax Refunds [Member] | ||||
Other income for the period | 118 | 208 | 289 | 409 |
Other Income [Member] | ||||
Other income for the period | $ 96 | $ 0 | $ 127 | $ 41 |
(1) Summary of Significant Ac_5
(1) Summary of Significant Accounting Policies (Details - Supplemental balance sheet information related to leases) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Operating Leases | ||
Operating lease right-of-use assets | $ 23,850 | $ 23,735 |
Less: Accumulated amortization right-of-use assets | 15,668 | 12,792 |
Operating lease right-of-use assets, net | 8,182 | 10,943 |
Operating lease liabilities | (9,143) | (12,096) |
Finance Leases | ||
Property and equipment, at cost | 3,407 | 3,407 |
Less: Accumulated depreciation | 1,788 | 1,226 |
Property and equipment, net | 1,619 | 2,181 |
Finance lease liabilities | $ (1,691) | $ (2,243) |
Operating lease | 5.00% | 5.00% |
Finance lease | 6.50% | 6.50% |
(1) Summary of Significant Ac_6
(1) Summary of Significant Accounting Policies (Details - Maturities of lease liabilities) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Lease Liability | $ 9,143 | $ 12,096 |
Lease Liability | 1,691 | $ 2,243 |
Operating Lease [Member] | ||
2021 (excluding the six months ended June 30, 2021) | 3,659 | |
2022 | 6,092 | |
2023 | 1,423 | |
2024 | 445 | |
2025 | 308 | |
Thereafter | 3 | |
Total undiscounted lease payments | 11,930 | |
Less amounts representing interest | (2,787) | |
Lease Liability | 9,143 | |
Finance Lease [Member] | ||
2021 (excluding the six months ended June 30, 2021) | 613 | |
2022 | 1,050 | |
2023 | 84 | |
2024 | 26 | |
2025 | 9 | |
Thereafter | 0 | |
Total undiscounted lease payments | 1,782 | |
Less amounts representing interest | (91) | |
Lease Liability | $ 1,691 |
(1) Summary of Significant Ac_7
(1) Summary of Significant Accounting Policies (Details - Lease cost) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Accounting Policies [Abstract] | ||||
Operating lease cost | $ 1,793 | $ 1,885 | $ 3,630 | $ 3,769 |
Finance lease cost | 308 | 293 | 616 | 572 |
Total lease cost | $ 2,101 | $ 2,178 | $ 4,246 | $ 4,341 |
(1) Summary of Significant Ac_8
(1) Summary of Significant Accounting Policies (Details - Cash flow) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||||
Operating cash flows from operating leases | $ 1,892 | $ 1,932 | $ 3,822 | $ 3,858 |
Operating cash flows from finance leases | 278 | 248 | 552 | 481 |
Financing cash flows from finance leases | $ 30 | $ 45 | $ 65 | $ 91 |
(1) Summary of Significant Ac_9
(1) Summary of Significant Accounting Policies (Details - Option activity) - $ / shares | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options outstanding at the beginning of period | 15,977,000 | ||
Exercised | (676,000) | (256,600) | |
Options outstanding at the end of period | 15,119,000 | ||
Options exercisable at the end of period | 12,772,000 | 12,597,000 | |
Equity Option [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options outstanding at the beginning of period | 15,977,000 | ||
Options outstanding at the beginning of period | $ 4.46 | ||
Granted | 0 | ||
Granted | |||
Exercised | (676,000) | ||
Exercised | $ 1.66 | ||
Forfeited | (272,000) | ||
Forfeited | $ 5.07 | ||
Options outstanding at the end of period | 15,029,000 | ||
Options outstanding at the end of period | $ 4.57 | ||
Options Outstanding, Weighted Average Remaining Contractual Term | 2 years 4 months 17 days | ||
Options exercisable at the end of period | 12,741,000 | ||
Options exercisable at the end of period | $ 4.85 | ||
Options Exercisable, Weighted Average Remaining Contractual Term | 1 year 10 months 9 days |
(1) Summary of Significant A_10
(1) Summary of Significant Accounting Policies (Details - Options outstanding and exercisable) - shares shares in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Number of shares, outstanding | 15,119 | 15,977 |
Number of shares, exercisable | 12,772 | 12,597 |
$0.95 - $1.99 [Member] | ||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Number of shares, outstanding | 1,390 | 1,904 |
Number of shares, exercisable | 1,390 | 1,904 |
$2.00 - $2.99 [Member] | ||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Number of shares, outstanding | 1,570 | 1,570 |
Number of shares, exercisable | 528 | 180 |
$3.00 - $3.99 [Member] | ||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Number of shares, outstanding | 4,774 | 4,973 |
Number of shares, exercisable | 3,469 | 3,306 |
$4.00 - $4.99 [Member] | ||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Number of shares, outstanding | 1,510 | 1,540 |
Number of shares, exercisable | 1,510 | 1,217 |
$5.00 - $5.99 [Member] | ||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Number of shares, outstanding | 0 | 0 |
Number of shares, exercisable | 0 | 0 |
$6.00 - $6.99 [Member] | ||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Number of shares, outstanding | 4,685 | 4,770 |
Number of shares, exercisable | 4,685 | 4,770 |
$7.00 - $7.99 [Member] | ||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Number of shares, outstanding | 1,190 | 1,220 |
Number of shares, exercisable | 1,190 | 1,220 |
(1) Summary of Significant A_11
(1) Summary of Significant Accounting Policies (Details - Stock purchases) - Common Stock [Member] - $ / shares | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
StockPurchasesLineItems [Line Items] | ||
Total stock purchases, shares | 358,071 | 72,022 |
Total stock purchases, average price per share | $ 4.42 | $ 2.85 |
Open Market Purchases[Member] | ||
StockPurchasesLineItems [Line Items] | ||
Total stock purchases, shares | 301,088 | 25,113 |
Total stock purchases, average price per share | $ 4.18 | $ 2.85 |
Shares Redeemed [Member] | ||
StockPurchasesLineItems [Line Items] | ||
Total stock purchases, shares | 56,983 | 46,909 |
Total stock purchases, average price per share | $ 4.47 | $ 2.86 |
(1) Summary of Significant A_12
(1) Summary of Significant Accounting Policies (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Accounting Policies [Abstract] | ||||
Stock-based compensation | $ 327 | $ 412 | $ 735 | $ 898 |
Unrecognized stock-based compensation costs | 2,400 | $ 2,400 | ||
Weighted-average period for unrecognized costs | 2 years 1 month 6 days | |||
Intrinsic value options outstanding | 12,300 | $ 12,300 | ||
Intrinsic value of options exercisable | $ 8,900 | $ 8,900 | ||
Options exercised | 676,000 | 256,600 | ||
Intrinsic value of options exercised | $ 1,900 | $ 285 | ||
Shares available for grant | 453,000 | 453,000 |
(2) Finance Receivables (Detail
(2) Finance Receivables (Details - Components of Finance Receivables) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Finance receivables | ||
Automobile finance receivables, net of unearned interest | $ 340,470 | $ 491,307 |
Unearned acquisition fees and originations costs | 0 | 826 |
Finance receivables | $ 340,470 | $ 492,133 |
(2) Finance Receivables (Deta_2
(2) Finance Receivables (Details - Delinquency status) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Financing Receivable, Past Due [Line Items] | ||
Total finance receivables with delinquency status | $ 340,470 | $ 491,307 |
Financial Asset, 1 to 29 Days Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Finance receivables | 294,043 | 406,693 |
Financial Asset, 30 to 59 Days Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Finance receivables | 34,437 | 56,572 |
Financial Asset, 60 to 89 Days Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Finance receivables | 10,093 | 22,660 |
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Finance receivables | $ 1,897 | $ 5,382 |
(2) Finance Receivables (Deta_3
(2) Finance Receivables (Details - Amortized Cost Basis) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Securities Financing Transaction [Line Items] | ||
Amortized cost basis | $ 340,470 | $ 491,307 |
Vintage Pool 2012 [Member] | ||
Securities Financing Transaction [Line Items] | ||
Amortized cost basis | 306 | 608 |
Vintage Pool 2013 [Member] | ||
Securities Financing Transaction [Line Items] | ||
Amortized cost basis | 2,257 | 4,483 |
Vintage Pool 2014 [Member] | ||
Securities Financing Transaction [Line Items] | ||
Amortized cost basis | 12,750 | 23,115 |
Vintage Pool 2015 [Member] | ||
Securities Financing Transaction [Line Items] | ||
Amortized cost basis | 48,953 | 78,457 |
Vintage Pool 2016 [Member] | ||
Securities Financing Transaction [Line Items] | ||
Amortized cost basis | 113,339 | 163,677 |
Vintage Pool 2017 [Member] | ||
Securities Financing Transaction [Line Items] | ||
Amortized cost basis | $ 162,865 | $ 220,967 |
(2) Finance Receivables (Deta_4
(2) Finance Receivables (Details - Summary of activity) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Finance Receivables | ||||
Balance at beginning of period | $ 73,497 | $ 114,073 | $ 80,790 | $ 11,640 |
Early adoption of CECL | 0 | 0 | 0 | 127,000 |
Provision for credit losses on finance receivables | 0 | 3,100 | 0 | 6,713 |
Charge-offs | (6,699) | (23,308) | (18,820) | (57,522) |
Recoveries | 5,444 | 4,737 | 10,272 | 10,771 |
Balance at end of period | $ 72,242 | $ 98,602 | $ 72,242 | $ 98,602 |
(2) Finance Receivables (Deta_5
(2) Finance Receivables (Details - Repossessed inventory) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Finance Receivables | ||
Gross balance of repossessions in inventory | $ 6,154 | $ 15,589 |
Allowance for losses on repossessed inventory | (3,337) | (11,790) |
Net repossessed inventory included in other assets | $ 2,817 | $ 3,799 |
(2) Finance Receivables (Deta_6
(2) Finance Receivables (Details Narrative) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Finance Receivables | ||
Finance receivables, non accrual status | $ 1,900 | $ 5,400 |
Allowance for finance credit losses | $ 127,000 |
(3) Securitization Trust Debt_2
(3) Securitization Trust Debt (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2021 | Dec. 31, 2020 | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Receivables Pledged at end of period | [1] | $ 1,870,574 | |
Initial Principal | 5,631,007 | ||
Outstanding Principal | 1,743,799 | $ 1,814,320 | |
Expected finance receivable payments 2021 | 442,000 | ||
Expected finance receivable payments 2022 | 543,000 | ||
Expected finance receivable payments 2023 | 451,500 | ||
Expected finance receivable payments 2024 | 112,300 | ||
Expected finance receivable payments 2025 | 119,400 | ||
Expected finance receivable payments 2026 | 53,200 | ||
Expected finance receivable payments 2027 | $ 11,400 | ||
CPS 2015-B [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Final Scheduled Payment Date | [2] | September 2022 | |
Receivables Pledged at end of period | [1] | $ 0 | |
Initial Principal | 250,000 | ||
Outstanding Principal | $ 0 | 17,984 | |
Weighted Average Contractual Interest Rate | |||
CPS 2015-C [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Final Scheduled Payment Date | [2] | December 2022 | |
Receivables Pledged at end of period | [1] | $ 0 | |
Initial Principal | 300,000 | ||
Outstanding Principal | $ 0 | 28,529 | |
Weighted Average Contractual Interest Rate | |||
CPS 2016-A [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Final Scheduled Payment Date | [2] | March 2023 | |
Receivables Pledged at end of period | [1] | $ 0 | |
Initial Principal | 329,460 | ||
Outstanding Principal | $ 24,551 | 37,158 | |
Weighted Average Contractual Interest Rate | 7.65% | ||
CPS 2016-B [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Final Scheduled Payment Date | [2] | June 2023 | |
Receivables Pledged at end of period | [1] | $ 30,449 | |
Initial Principal | 332,690 | ||
Outstanding Principal | $ 30,632 | 46,079 | |
Weighted Average Contractual Interest Rate | 7.84% | ||
CPS 2016-C [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Final Scheduled Payment Date | [2] | September 2023 | |
Receivables Pledged at end of period | [1] | $ 32,501 | |
Initial Principal | 318,500 | ||
Outstanding Principal | $ 32,010 | 47,325 | |
Weighted Average Contractual Interest Rate | 8.30% | ||
CPS 2016-D [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Final Scheduled Payment Date | [2] | April 2024 | |
Receivables Pledged at end of period | [1] | $ 27,003 | |
Initial Principal | 206,325 | ||
Outstanding Principal | $ 24,564 | 36,455 | |
Weighted Average Contractual Interest Rate | 6.43% | ||
CPS 2017-A [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Final Scheduled Payment Date | [2] | April 2024 | |
Receivables Pledged at end of period | [1] | $ 30,562 | |
Initial Principal | 206,320 | ||
Outstanding Principal | $ 27,466 | 40,619 | |
Weighted Average Contractual Interest Rate | 6.41% | ||
CPS 2017-B [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Final Scheduled Payment Date | [2] | December 2023 | |
Receivables Pledged at end of period | [1] | $ 38,953 | |
Initial Principal | 225,170 | ||
Outstanding Principal | $ 23,983 | 39,016 | |
Weighted Average Contractual Interest Rate | 5.65% | ||
CPS 2017-C [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Final Scheduled Payment Date | [2] | September 2024 | |
Receivables Pledged at end of period | [1] | $ 41,567 | |
Initial Principal | 224,825 | ||
Outstanding Principal | $ 35,619 | 47,553 | |
Weighted Average Contractual Interest Rate | 5.16% | ||
CPS 2017-D [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Final Scheduled Payment Date | [2] | June 2024 | |
Receivables Pledged at end of period | [1] | $ 42,475 | |
Initial Principal | 196,300 | ||
Outstanding Principal | $ 36,645 | 49,297 | |
Weighted Average Contractual Interest Rate | 4.62% | ||
CPS 2018-A [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Final Scheduled Payment Date | [2] | March 2025 | |
Receivables Pledged at end of period | [1] | $ 46,399 | |
Initial Principal | 190,000 | ||
Outstanding Principal | $ 40,124 | 53,549 | |
Weighted Average Contractual Interest Rate | 4.41% | ||
CPS 2018-B [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Final Scheduled Payment Date | [2] | December 2024 | |
Receivables Pledged at end of period | [1] | $ 56,439 | |
Initial Principal | 201,823 | ||
Outstanding Principal | $ 48,683 | 66,955 | |
Weighted Average Contractual Interest Rate | 4.86% | ||
CPS 2018-C [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Final Scheduled Payment Date | [2] | September 2025 | |
Receivables Pledged at end of period | [1] | $ 64,829 | |
Initial Principal | 230,275 | ||
Outstanding Principal | $ 58,318 | 77,345 | |
Weighted Average Contractual Interest Rate | 4.93% | ||
CPS 2018-D [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Final Scheduled Payment Date | [2] | June 2025 | |
Receivables Pledged at end of period | [1] | $ 78,903 | |
Initial Principal | 233,730 | ||
Outstanding Principal | $ 67,767 | 88,228 | |
Weighted Average Contractual Interest Rate | 4.81% | ||
CPS 2019-A [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Final Scheduled Payment Date | [2] | March 2026 | |
Receivables Pledged at end of period | [1] | $ 98,774 | |
Initial Principal | 254,400 | ||
Outstanding Principal | $ 84,920 | 114,373 | |
Weighted Average Contractual Interest Rate | 4.63% | ||
CPS 2019-B [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Final Scheduled Payment Date | [2] | June 2026 | |
Receivables Pledged at end of period | [1] | $ 97,182 | |
Initial Principal | 228,275 | ||
Outstanding Principal | $ 87,833 | 118,982 | |
Weighted Average Contractual Interest Rate | 4.24% | ||
CPS 2019-C [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Final Scheduled Payment Date | [2] | September 2026 | |
Receivables Pledged at end of period | [1] | $ 114,238 | |
Initial Principal | 243,513 | ||
Outstanding Principal | $ 106,354 | 142,080 | |
Weighted Average Contractual Interest Rate | 3.47% | ||
CPS 2019-D [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Final Scheduled Payment Date | [2] | December 2026 | |
Receivables Pledged at end of period | [1] | $ 145,606 | |
Initial Principal | 274,313 | ||
Outstanding Principal | $ 137,180 | 181,485 | |
Weighted Average Contractual Interest Rate | 2.98% | ||
CPS 2020-A [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Final Scheduled Payment Date | [2] | March 2027 | |
Receivables Pledged at end of period | [1] | $ 141,542 | |
Initial Principal | 260,000 | ||
Outstanding Principal | $ 139,485 | 184,944 | |
Weighted Average Contractual Interest Rate | 3.03% | ||
CPS 2020-B [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Final Scheduled Payment Date | [2] | June 2027 | |
Receivables Pledged at end of period | [1] | $ 145,858 | |
Initial Principal | 202,343 | ||
Outstanding Principal | $ 124,382 | 164,403 | |
Weighted Average Contractual Interest Rate | 3.71% | ||
CPS 2020-C [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Final Scheduled Payment Date | [2] | November 2027 | |
Receivables Pledged at end of period | [1] | $ 196,785 | |
Initial Principal | 252,200 | ||
Outstanding Principal | $ 187,529 | 231,961 | |
Weighted Average Contractual Interest Rate | 1.91% | ||
CPS 2021-A [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Final Scheduled Payment Date | [2] | March 2028 | |
Receivables Pledged at end of period | [1] | $ 211,575 | |
Initial Principal | 230,545 | ||
Outstanding Principal | $ 197,170 | 0 | |
Weighted Average Contractual Interest Rate | 0.81% | ||
CPS 2021-B | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Final Scheduled Payment Date | [2] | June 2028 | |
Receivables Pledged at end of period | [1] | $ 228,935 | |
Initial Principal | 240,000 | ||
Outstanding Principal | $ 228,585 | $ 0 | |
Weighted Average Contractual Interest Rate | 1.05% | ||
[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 $ 442.0 543.0 451.5 112.3 119.4 53.2 11.4 |
(3) Securitization Trust Debt_3
(3) Securitization Trust Debt (Details Narrative) - USD ($) $ in Thousands | Jul. 28, 2021 | Jun. 30, 2021 | Dec. 31, 2020 | |
Subsequent Event [Line Items] | ||||
Debt issuance costs | $ 10,900 | $ 10,600 | ||
Restricted cash under various agreements | 155,800 | |||
Initial Principal | 5,631,007 | |||
Receivables Pledged at end of period | [1] | 1,870,574 | ||
CPS 2021-B | ||||
Subsequent Event [Line Items] | ||||
Initial Principal | 240,000 | |||
Receivables Pledged at end of period | [1] | $ 228,935 | ||
Weighted Average Contractual Interest Rate | 1.05% | |||
Subsequent Event [Member] | C P S 2021 C [Member] | ||||
Subsequent Event [Line Items] | ||||
Initial Principal | $ 291,000 | |||
Weighted Average Contractual Interest Rate | 1.55% | |||
Subsequent Event [Member] | CPS 2021-B | ||||
Subsequent Event [Line Items] | ||||
Receivables Pledged at end of period | $ 300,000 | |||
[1] | Includes repossessed assets that are included in Other assets on our Unaudited Condensed Consolidated Balance Sheet. |
(4) Debt (Details - Debt outsta
(4) Debt (Details - Debt outstanding) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2021 | Dec. 31, 2020 | |
Line of Credit Facility [Line Items] | ||
Warehouse lines of credit | $ 77,044 | $ 118,999 |
Residual interest financing | 67,153 | 25,426 |
Subordinated renewable notes | 26,005 | 21,323 |
Total debt outstanding | $ 171,865 | 167,411 |
Warehouse Lines Of Credit 1 [Member] | ||
Line of Credit Facility [Line Items] | ||
Interest rate | 5.50% over one month Libor (Minimum 6.50%) | |
Warehouse lines of credit | 42,558 | |
Warehouse Lines Of Credit 2 [Member] | ||
Line of Credit Facility [Line Items] | ||
Interest rate | 3.00% over one month Libor (Minimum 3.75%) | |
Warehouse lines of credit | $ 45,642 | 45,689 |
Maturity date description | December 2022 | |
Warehouse Lines Of Credit 3 [Member] | ||
Line of Credit Facility [Line Items] | ||
Interest rate | 4.00% over a commercial paper rate (Minimum 5.00%) | |
Warehouse lines of credit | $ 32,310 | 32,265 |
Maturity date description | December 2021 | |
Residual interest financing [Member] | ||
Line of Credit Facility [Line Items] | ||
Maturity date description | January 2026 | |
Interest rate | 8.60% | |
Residual interest financing | $ 17,908 | 25,576 |
Residual Interest Financing 1 [Member] | ||
Line of Credit Facility [Line Items] | ||
Maturity date description | June 2026 | |
Interest rate | 7.86% | |
Residual interest financing | $ 50,000 | 0 |
Subordinated renewable notes [Member] | ||
Line of Credit Facility [Line Items] | ||
Interest rate | Weighted average rate of 9.67% and 10.09% at June 30, 2021 and December 31, 2020, respectively | |
Maturity date description | Weighted average maturity of April 2023 and January 2023 at June 30, 2021 and December 31, 2020, respectively | |
Subordinated renewable notes | $ 26,005 | $ 21,323 |
(4) Debt (Details Narrative)
(4) Debt (Details Narrative) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Line of Credit Facility [Line Items] | ||
Short term credit facility | $ 200,000 | $ 300,000 |
Securitization of residual interests | 50,000 | |
Warehouse Lines Of Credit [Member] | ||
Line of Credit Facility [Line Items] | ||
Unamortized debt issuance costs | 907 | 1,500 |
Asset Backed [Member] | ||
Line of Credit Facility [Line Items] | ||
Securitization of residual interests | 50,000 | |
Residual Interest Financings [Member] | ||
Line of Credit Facility [Line Items] | ||
Unamortized debt issuance costs | $ 755 | $ 150 |
(5) Interest Income and Inter_3
(5) Interest Income and Interest Expense (Details - Interest income) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Transfers and Servicing [Abstract] | ||||
Interest on finance receivables | $ 18,491 | $ 33,773 | $ 40,590 | $ 71,580 |
Interest on finance receivables at fair value | 46,943 | 41,659 | 90,931 | 82,465 |
Mark to finance receivables measured at fair value | 0 | (9,549) | (4,417) | (19,899) |
Other interest income | 6 | 120 | 12 | 644 |
Interest income | $ 65,440 | $ 66,003 | $ 127,116 | $ 134,790 |
(5) Interest Income and Inter_4
(5) Interest Income and Interest Expense (Details - Interest expense) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Securities Financing Transaction [Line Items] | ||||
Total interest expense | $ 18,980 | $ 26,485 | $ 39,925 | $ 53,476 |
Securitization Trust Debt [Member] | ||||
Securities Financing Transaction [Line Items] | ||||
Total interest expense | 16,823 | 22,367 | 35,276 | 46,165 |
Warehouse Lines Of Credit [Member] | ||||
Securities Financing Transaction [Line Items] | ||||
Total interest expense | 1,021 | 2,675 | 2,335 | 4,437 |
Residual interest financing [Member] | ||||
Securities Financing Transaction [Line Items] | ||||
Total interest expense | 467 | 920 | 1,033 | 1,857 |
Subordinated renewable notes [Member] | ||||
Securities Financing Transaction [Line Items] | ||||
Total interest expense | $ 669 | $ 523 | $ 1,281 | $ 1,017 |
(6) Earnings Per Share (Details
(6) Earnings Per Share (Details - Earnings Per Share) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Earnings per share: | ||||
Weighted average number of common shares outstanding during the period used to compute basic earnings per share | 22,842 | 22,685 | 22,791 | 22,612 |
Incremental common shares attributable to exercise of outstanding options and warrants | 2,288 | 1,002 | 2,257 | 1,171 |
Weighted average number of common shares used to compute diluted earnings per share | 25,130 | 23,687 | 25,048 | 23,783 |
(6) Earnings Per Share (Detai_2
(6) Earnings Per Share (Details Narrative) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Earnings per share: | ||||
Antidilutive shares | 6,000 | 13,300 | 6,900 | 13,100 |
(7) Income Taxes (Details Narra
(7) Income Taxes (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Operating Loss Carryforwards [Line Items] | |||||
Current tax benefit | $ 8,800 | ||||
Unrecognized Tax Benefits | $ 0 | $ 0 | $ 0 | ||
Net deferred tax asset | 27,100 | 27,100 | |||
Deferred tax assets approximately | 27,100 | 27,100 | |||
Income Tax Expense (Benefit) | $ 4,200 | $ 1,700 | $ 6,900 | $ 6,000 | |
Effective tax rate | 30.00% | 32.00% | 36.00% | ||
Domestic Tax Authority [Member] | |||||
Operating Loss Carryforwards [Line Items] | |||||
Net deferred tax asset | $ 15,900 | $ 15,900 | |||
State and Local Jurisdiction [Member] | |||||
Operating Loss Carryforwards [Line Items] | |||||
Net deferred tax asset | $ 11,200 | $ 11,200 |
(9) Fair Value Measurements (D
(9) Fair Value Measurements (Details - Reconciliation of Finance Receivables) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | ||||
Balance at beginning of period | $ 1,533,723 | $ 1,559,697 | $ 1,523,726 | $ 1,444,038 |
Finance receivables at fair value acquired during period | 279,658 | 134,447 | 485,117 | 399,729 |
Payments received on finance receivables at fair value | (199,419) | (112,505) | (355,439) | (222,063) |
Net interest income accretion on fair value receivables | (31,787) | (34,441) | (66,812) | (64,156) |
Mark to fair value | 0 | (9,549) | (4,417) | (19,899) |
Balance at end of period | $ 1,582,175 | $ 1,537,649 | $ 1,582,175 | $ 1,537,649 |
(9) Fair Value Measurements (De
(9) Fair Value Measurements (Details - Finance Receivables to Their Contractual Balances) - USD ($) $ in Thousands | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||
Finance receivables measured at fair value | $ 1,582,175 | $ 1,533,723 | $ 1,523,726 | $ 1,537,649 | $ 1,559,697 | $ 1,444,038 |
Reported Value Measurement [Member] | ||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||
Finance receivables measured at fair value | 1,768,988 | 1,668,076 | ||||
Portion at Fair Value Measurement [Member] | ||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||
Finance receivables measured at fair value | $ 1,582,175 | $ 1,523,726 |
(9) Fair Value Measurements (_2
(9) Fair Value Measurements (Details - Level 3 Fair Value Measurements) - USD ($) $ in Thousands | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Finance receivables measured at fair value | $ 1,582,175 | $ 1,533,723 | $ 1,523,726 | $ 1,537,649 | $ 1,559,697 | $ 1,444,038 |
Portion at Fair Value Measurement [Member] | Fair Value, Inputs, Level 3 [Member] | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Finance receivables measured at fair value | $ 1,582,175 | $ 1,523,726 | ||||
Portion at Fair Value Measurement [Member] | Fair Value, Inputs, Level 3 [Member] | Measurement Input, Discount Rate [Member] | Minimum [Member] | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Unobservable Inputs | 11.00% | 10.40% | ||||
Portion at Fair Value Measurement [Member] | Fair Value, Inputs, Level 3 [Member] | Measurement Input, Discount Rate [Member] | Maximum [Member] | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Unobservable Inputs | 11.30% | 11.10% | ||||
Portion at Fair Value Measurement [Member] | Fair Value, Inputs, Level 3 [Member] | Measurement Input Cumulative Net Losses [Member] | Minimum [Member] | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Unobservable Inputs | 15.40% | 15.30% | ||||
Portion at Fair Value Measurement [Member] | Fair Value, Inputs, Level 3 [Member] | Measurement Input Cumulative Net Losses [Member] | Maximum [Member] | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Unobservable Inputs | 18.40% | 18.40% |
(9) Fair Value Measurements (_3
(9) Fair Value Measurements (Details - Delinquency status) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Financing Receivable, Past Due [Line Items] | ||
Initial Principal | $ 1,768,988 | $ 1,668,076 |
Financial Asset, Not Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Initial Principal | 1,646,257 | 1,505,486 |
Financial Asset, 30 to 59 Days Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Initial Principal | 80,719 | 96,296 |
Financial Asset, 60 to 89 Days Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Initial Principal | 23,034 | 36,436 |
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Initial Principal | 5,205 | 9,607 |
Repossessed Vehicles | ||
Financing Receivable, Past Due [Line Items] | ||
Initial Principal | $ 13,773 | $ 20,251 |
(9) Fair Value Measurements (_4
(9) Fair Value Measurements (Details - Fair values) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Cash and cash equivalents | $ 43,131 | $ 13,466 |
Restricted cash and equivalents | 155,776 | 130,686 |
Finance receivables, net | 270,271 | 429,972 |
Accrued interest receivable | 3,601 | 5,017 |
Warehouse lines of credit | 77,044 | 118,999 |
Accrued interest payable | 4,582 | 4,919 |
Securitization trust debt | 1,769,682 | 1,862,630 |
Subordinated renewable notes | 26,005 | 21,323 |
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Cash and cash equivalents | 43,131 | 13,466 |
Restricted cash and equivalents | 155,776 | 130,686 |
Finance receivables, net | 0 | 0 |
Accrued interest receivable | 0 | 0 |
Warehouse lines of credit | 0 | 0 |
Accrued interest payable | 0 | 0 |
Securitization trust debt | 0 | 0 |
Subordinated renewable notes | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Cash and cash equivalents | 0 | 0 |
Restricted cash and equivalents | 0 | 0 |
Finance receivables, net | 0 | 0 |
Accrued interest receivable | 0 | 0 |
Warehouse lines of credit | 0 | 0 |
Accrued interest payable | 0 | 0 |
Securitization trust debt | 0 | 0 |
Subordinated renewable notes | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Cash and cash equivalents | 0 | 0 |
Restricted cash and equivalents | 0 | 0 |
Finance receivables, net | 270,271 | 429,972 |
Accrued interest receivable | 3,601 | 5,017 |
Warehouse lines of credit | 77,044 | 118,999 |
Accrued interest payable | 4,582 | 4,919 |
Securitization trust debt | 1,769,682 | 1,862,630 |
Subordinated renewable notes | 26,005 | 21,323 |
Carrying Value [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Cash and cash equivalents | 43,131 | 13,466 |
Restricted cash and equivalents | 155,776 | 130,686 |
Finance receivables, net | 268,228 | 411,343 |
Accrued interest receivable | 3,601 | 5,017 |
Warehouse lines of credit | 77,044 | 118,999 |
Accrued interest payable | 4,582 | 4,919 |
Securitization trust debt | 1,732,879 | 1,803,673 |
Subordinated renewable notes | $ 26,005 | $ 21,323 |
(9) Fair Value Measurements (_5
(9) Fair Value Measurements (Details Narrative) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Inventory [Line Items] | ||
Gross balance of repossessions in inventory | $ 6,154 | $ 15,589 |
Allowance for losses on repossessed inventory | 3,337 | 11,790 |
Net repossessed inventory included in other assets | 2,800 | |
Repossessed Vehicles | ||
Inventory [Line Items] | ||
Gross balance of repossessions in inventory | 6,100 | |
Allowance for losses on repossessed inventory | $ 3,300 | 11,800 |
Net repossessed inventory included in other assets | $ 3,800 |