CPSS - Earnings call transcript Q2 2019 | Consumer Portfolio Services, Inc.

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Operator

Good day, everyone, and welcome to the Consumer Portfolio Services 2019 Second Quarter Operating Results Conference Call. Today, the call is being recorded.

Before we begin, management has asked me to inform you that this conference call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements made during this call, that are not statements of historical facts maybe deemed forward-looking statements. Such forward-looking statements are subject to certain risks that could cause actual results to differ materially from those projected. the filings to further you refer company’s for SEC clarification. I or update assumes of forward-looking events no company publicly new obligation further result This a to any as statements, information, otherwise. whether Mr. us we With now, have Chief Bradley, Executive Mr. Charles and Officer; Portfolio Fritz, Jeff Services. of Financial Officer Chief Consumer

now turn the to Bradley. call like to would over I Mr.

Charles Bradley

second and our call quarter you, Thank to everyone. conference welcome

lots and have think much it to of wanted But on doldrums for summer overall, of sort the everyone’s least at we’re I are That went we we go. hopefully, our people happy think the company having It’s vacation summer. pretty And with quarter way the or some the results. good we industry. both the a highlights. do

raised to rate get our now over, of some where do of and we’ve of back positive probably X.XX% as sort to is of fees fee and initiatives trend. our the XXXX work One negative, We been continue real and to back. our coupon we’ll to sort of our on able this now some opposed our year coupon to the gotten quarter almost that. And as it’s we’ve second was in

thing, coupled of were but very as important just and a that’s able to So with important we is that sort still grow.

trick Somewhat raise our sort some growth. yet new about of prices a and of is manage across the still board

think our steady out still massively to nonetheless, to but the our environment again very piece out and current slow, But or is in are worked out we radically maintain whatever. to There for do. well. tough growth some and go fees, there little maybe Our bit carve that’s that’s probably us folks a growing

quarter – it fair portfolio. as legacy accounting, mention making in it hasn’t be to transitioning little – we that did well to proved to value last transition the the wanted rockier. bit terms of that’s to we’re In conference last the as I a still the want In call, accounting the a little portfolio That’s and the performed tougher.

value fair the legacy paper more XXXX is XXXX However, follow importantly, the better XXXX than paper and and and assume probably and portfolio XXXX, along. XX-XX, is transition XXXX we would will now substantially

this stronger going overall XXXX done, in be you’re And look the performance and we is so results will accounting and much will ups sort better and see portfolio, to in transition the think once even out better. the downs of

quarter And done, lastly, we’ve saying securitization comments, overall for the we’ve best it’s done. and ever keep another we best remains the been and very ever We the market the then to robust. go it’s

business. down do so securitization margins a we about demand basically good again, tightening, And all down backbone of strong market classes of our been yet and coming with bonds rates rates that’s and coming up very how the some, we’ve it’s talked down

important. So having that is well continue very to do

some I’ll Jeff of the after run department analysis runs through through financials.

Jeff Fritz

Thanks, Brad. Welcome everybody.

the Let’s begin with revenues.

quarter second X% second $XX.X the last year. this XX% over $XX.X that’s million, decrease a over our quarter were and a quarter of For first of million decrease year’s

months six million six to first months, and $XXX.X decrease that’s XX% last $XXX of For compared the a year’s million. first

old we’re that with Brad this so fair now, hit kind transitioning And transition. accounting, and the milestones quarter couple already of value alluded of a it’s news to

value – June portfolio now now the the portfolio. on XX, total For of fair XX% as managed is of

of it can and a portion line. the being, going helpful and is see, be more comparisons the quarter, top as this each so to with going – but the for year-over-year become and revenue effect passing are on the had reporting significant you to the particularly And more – dominant time meaningful

million first let’s million and from down to of for of six last second quarter the our expenses. move of of the $XXX quarter, by and second course, year. from $XXX down the million $XX.X of for X% quarter year. And the XX% first year by, quarter The quarter’s that’s the revenues were up for this months on originations were to aided originations

For last year. the XX% first six months, million to reduction $XXX.X $XXX.X million, expenses are a compared

our Interest most flat. because We’ve in of a of nearly have some core decreased provisions increased, expenses the had operating has couple of fair on expense actually provision no decreases expenses course, value are So is there and significantly categories. portfolio. expense

second provisions of million $XX.X They that’s XX% the first reduction at compared were our in look year Let’s to a a compared million to reduction and quarter the year. of for the quarter, losses. quarter for last $XX.X XX% credit this

$XX is to million a XX% last reduction For of million the months, year. compared six $XX.X

see with our proportion to, have that taking is medicine more And from bit are and that can so the not XXXX little provisions which decreasing the to And of legacy as portfolio. we’re mirror still of a our in the vintages, obviously. most you alluded some rearview performed or XXXX expectations, but less really Brad in

XX% last it’s million compared in the our reduction recognized the to $X.X of second quarter X% earnings compared year. $X.X a it’s this quarter year Pretax to we increase quarter first for and a million,

pretax million really – if primarily $X.X sort to really of you that is year. compared in a decompose all last can attribute the all change to months, of million change the accounting. and decrease the you components the And For earnings six results, these XX% of reduction to of $X.X

second million. $X.X XX% compared It’s last quarter for reduction quarter, the to the income year. Net a

million, a months is a For the earnings $X.XX months, XX% share year. for Diluted compared also the per six reduction of compared that’s quarter to six and XXXX. reduction to net second $X.XX XX% the income $X.X last

compared for is $X.XX For of six XXXX. $X.XX the the to six reduction first the months months, XX% a

the sheet. onto balance Moving

our single for liquidity down good which hopefully now leverage our just in we a consecutive press position to we did the to position. stable. that’s on and and release, that two securitization securitizations, class. and securitizations done April second We’ve it’s maximize rated where this the really B single us – liquidity saw quarter closed week structured And Our remains securitizations allowed securitization, we’ve class you B very the the

The value over gone finance of you portfolio. and $X declining the legacy The billion total portfolio, for now, has the the portfolio is portfolio can managed first about time. see receivables XX% fair

going So the financial on to material balance change the be our levels debt no at our at much results originations No going new use of and sheet, the the Not really all. forward. to and three continue change the dominant of side driver dictated by facilities that’s warehouse we volumes. borrowings revenue

$XX.X to – six The the performance year. million, the for was million, million down some onto for and quarter $XXX.X last metrics. down months, for Moving last NIM that’s the of it was year’s six XX% months margin from XX% the interest net compared six months $XX.X

fair fair top So, are the of the end receivables kind the of the driving and value revenue is of is losses expected – built revenues of course, that from down course, of into computation. net value the because,

all for the And NIM cost ABS then X.X% last year. on of quarter for of the of our in borrowings calculation, blended compared quarter this was to X.X% the debt side the second

of So have funds. of a parts down there’s are older a example, securitizations The back of obviously. securitizations XXXX, low lot – that’s there for moving and to going really some those cost – paying older and

of good putting paying So got ones even year’s we’re execution than the lot worth them and we’ve deals – deal, – paying debt a higher that on some are of down. last blended of really rapidly are down the last cheap cost though

because between with a what be the this quarter the to convergence there’s what’s for normal million to $XX.X provision was compared the the NIM legacy and six away NIM away. second the we actually goes margin compared to going last for was – year quarter, portfolio that’s risk-adjusted flat nearly metric about NIM months, to $XX.X about interest $XX.X interesting million, And the is incline of it again, The the risk-adjusted if go million and flat. the expenses call net

So margin. metric what will we’ve separate is single a net become reporting of just been interest the metrics eventually two

million, just X% operating $XX.X for the for year compared a the that’s bit, $XX.X Core quarter of six is million to the last little second million X% months, in a and six up year. increase first were months $XX the last quarter from expenses

expenses grown expenses core the grown of needed really to the of significantly the has haven’t increase a significantly. most the portfolio second quarter compared we’re managed to year. last quarter, operating bit just operating nominally, those the we again of originations for portfolio So little the that’s month X.X% just up our expenses of core The haven’t to amount doing second ratio every X.X% operating and so in

it’s six For X.X% is months, X.X%, lower the last bit a little year. than which just

the in ratio which this of So – opportunity we conditions an will is if do the point. business, here this to at for give to grow able some be we us market ratio think poised improvement sort

it’s X.X% from the of for although pretax last just That’s X.X% it’s to as X.X% X.X% The compared return in the a for quarter down year. compared year. six percent little six And on assets, first QX – X.X% this for income months, XXXX. the for also up quarter months managed managed year, for this portfolio, six of second bit a the months to the

first performance credit in up this ago XX.XX% of metrics. XX.X% end of was a up Delinquency the the from from to at here on bit quarter a year. XX% that’s and Moving June year and little

months weighted this portfolio can things. age. is months XX versus couple little us That’s is a for it’s a point a ago. in we month now a so we delinquency to age it. portfolio The it to good contributing XX and And But – somewhat. combination were The a disappointed year not of to continues

this aspect of last year. what far we we this extensions do year is fewer were Another to significant compared

extensions year, first important is of the expectations training some little of seen the but culture an reinforce which decrease higher And bit the last and in time significant the made decision around there – and delinquency. extensions, quarter we’ve somewhat really decrease a a use the we are a trade-off and and tool, to year-over-year the

and X.XX% X.XX%. down On the ago for year bit a just the are from losses plus net the first at of at X.XX% quarter up quarter side, from actually the little annualized

real So and proportionately the seen losses the also become the the of net side in and as – in business, delinquencies this have – the Even not a delinquencies challenge increased losses cumulative – have servicing we’ve though have the increased. net before.

XX.X% The losses trend is bit the did the the six first auction X.X% and getting to months year pretty almost than quarter, we The last XX.X% second steady. the a of little valuation loan for quarter balances, year’s to little bit compared better quarter second that’s down X.XX%. as a first the months, of just same net our of at six this XX.X%. in annualized year of better the be Actually, continue last to

look quick ABS market. the at A

deal Of course, our was second in completed executed April. and quarter

had April So spreads significantly deal. the first deal, January that the tighter closed from in XXXX and benchmarks deal quarter we and

years two resulted class we also I a in in which So for that of liquidity really bond, our a B first And X.XX%. is the as and these coupon said good blended on F single for sold leverage time transactions. rated

really our a And yesterday. the the up a one from demand you just event, bonds, in just and although across of benchmarks cap sort bonds closed the of storm is throughout tighter which lot really all structure. yield week, the inverted XXXX-C for this deal this then, really for spreads, of curve, quarter and down this of benefited And structure, have curve third demand the this good almost really then created kind entire lower some perfect

has blended our quarter blended XXXX. is lowest since deal X.XX%, the cost of a that which of second So cost

I ABS execution to four deals. cost the best the turn we’ve a it will on So had back that, over Brad. for that’s funds of And with years, standpoint

Charles Bradley

us the I And little important time ever, that or taking Jeff. really now at dealers. the and sales more predominantly in and the the of even route closely, easiest known we marketing mean, each a is accessing departments more get think always. the of are dealers I Thanks, few terms looking department, for

always do to to use them it’s send and easy to want make not by – work documents. checking do with and to want. that to dealers Unfortunately, if the need you as we deal the we all business, just need the still it those and our for lowering price it So pick can’t possible for and we do results that CPS a it you we as what need to do, CPS we

CPS. in be seems our terms to get recently access go a the you two What and dealer So in imperfect, not It’s gives quarters the fill as dealer there mentioned our and easier The and out portal. have website. basically to in and much in portal the your stakeholder verifications we’re is price service better of a was a our you talk approval of we anyone improving. scorecard is everything put dealer to last is want CPS to bit can and

the the the stronger be is the had much, capture capture much of into months, than about portal but We’ve the for portal only future three normal process rate. the could in so And off results rate terrific.

a very strong So that’s point.

Another and the a sales and of doing you call department we the thing blend triangle, originates we’re the sales both some dealers. it but department,

So to what and can when it them knows much fund really they’re reward we and departments have doing, the again, a within gives a better dealer certain work we all get that with other those deals. faster service, two group deals as those they

in easiest to And going take to again, the we’re terms trying be innovative so of how access kind are dealers little we of because, the the a bit dealers way.

all that doing works. giving this and give trying you by to good and you paper higher to them way, price, higher a maintain give while the and continuing fees. service good we’re good Remember, coupons therefore So them they’re really

a far working so a well. but it’s trick, good, it’s So so bit of new

are It’s this XX% the also a profitable up little it’s business. Again, with that’s XX% our very much to the business or in the direct of more customer bit or of the get Direct on is going a in control where and next the at you’re point We of lending, performance so. better. lending, year year probably focused X% of the to year-over-year. luck to part

dealers, do again, – service it’s get to we to just more ways more water, business, in oars the working. So more we’re get trying different ways our to to everything can and

a the new mentioned we scorecard. of In have scorecard, terms we

and to find analytics we database that’s paper best mind very also to can very buy yield pricing to advanced large at very alternative best using We’re data the good our starting results. the and

we’ve to higher again, paper been and – better get able getting find We’re prices.

last And show things in so for year. really – are working all a to They’re very to six that super good we’ve the months that’s these been that. positive beginning on results all

We’re still paper growing. The performance better. is

very in We’re a tough and getting competitive market. higher prices

side, collection able extension fundamental to away been said our as a DQ On our is the a use Having and down decision make the Jeff industry to data forever, extension we seems that, the running We We’ve prove did with usage have the works. little to to slow bit. up. the defend mentioned, use. extension be

up, extensions. is down. thought rather we use that would pointed the DQ than as the quagmire, stuck Jeff So be the If in out, of we back loss goes off

So we’re still – the model still works.

run, you long which suffer line less the extensions. as better in get on higher as many DQ. in real working slightly extensions that to now much we’re extensions probably think is or I is, without back a The using is of as DQ the trick, of course, what use

we watch And see future know can we so do to in to the is if something it.

lower is confidence can have pretty out. DQ can, and We long can see both. as works have We extensions DQ of that we so have losses a we’ll as lot do the flat, again, And we and we’re on what performance. the we to doing. think are how better But good

we’ll see. So

big what’s trying like exceedingly industry where crazy to have is PE and important. still like well on. trying industry, going lot growing are to companies crazy is make competitive. to so decisions these People the is is exceedingly this on the and some guys the a The grow to of Moving always moment question do need which because

our and people things. performance us competitive are So meager very to that excessive doing and our amongst on out again growth pressure that eke puts these

that So it’s a way. very tough market

right a there’s different However lot of sales that rough growing, this factors like – of are and not it’s car make so now. environment sort a

back shiny out in doing. future in XX% we good value. in look growing would XX% the coupons, backdrop year but growth, the side straightened pretty at to a we’re of the a at things that as accounting good like, or our not getting a the it’s terms would fair and going to job and with to the is success fees, going our of and higher XXXX doing year terms has this So change higher be all we still that hopefully, of we’re to be all that what really fact a get year

other very terms there’s the good of helping we’ve that’s the funds, the lower a cost about as economy. I think – talked a industry is in in thing of basically

away for Any players to little a see work lower decent including how in cost with that get the economy buying looking of a shake paper can with You it that backed interesting waiting turn and everybody, funds and having us rougher results. and of for shakes out, very be a but economy. of in PE the these particularly, end, some are the out are would

this just year going the this point we’re we few there We’ve said we going probably a over, expecting that to nicks companies looking a but for that well changes away, you in little now and haven’t at big happen So to But we’ll going keep see. some for. seen and here see over are it’s happen.

our still of to the is economic mentioned, terms seem fine of I customer’s tip performance economy the the in be terms As and in borrower. spear always say our doing probably that fine. We of doing they

become I Our make on and do you about something I cell G, are the google do you. borrower has whole work phone. know customer or it it. a this Everyone google, how lot need a a you will you has not Well, and probably I payment a call if decided, payment, it, to tell Everyone smarter. has do how what

use today it in to need just and keep quite want is opposed friendly you so I if smarter to as can’t isn’t terms think and you call you car." "hey, And anymore. as your say, method just how him works understanding up of customer anymore that far our And this pay to

one With open of work DQ it’s But significantly we And It’s the with. can long runs reasons that, we’ll a again, over up higher the probably term. that so questions. one that’s for main challenge. part and

Operator

[Operator question our Instructions] David from is from And Securities. Scharf coming first JMP

now Your line is open.

David Scharf

I on talked What’s it’s taking volumes my rate? this sort trying forward? And how about X.XX% how for much the of sense of trying to of are $XXX in quarter? a to think the Thanks capture wanted the and million just your start you to of of most question. Brad, beginning know a get claw was sort of did the some the mean, pricing, for we of back year going – benchmark occur impacted value coupon. more sense a Just to the at of your of lot I

Charles Bradley

see could fine. is, think XX.XX. we’ve would moving to back goal. trying real got get If try a think little XX-plus The at keep the that be goal to don’t is to too we hard the benefit I we’re mean, mind wouldn’t pieces doing mean, stay where that in people market our do. I would to we’re into I there. I I coupon bit. I don’t there, we that paper we’re know way we’re higher, other about it that the much we and up it achieved – going find of that it

buy paper cheaper And it’s allows rate. better us to good paper, buy and so either with of we can little paper higher which a sort little that some a nice

there’s or combination’s to there APR strictly lack us the folks out without credit business. And of the always chance, on losing the that strictly up lots price buying allowed verification. There’s on so the of move

continue to and on sit foresee But find coupon the kind to confident navigate. ways don’t down. but fees. edge going try And where have so a up, with pretty you to waters them them feel I the of I we shark-infested We’ll that’s and

David Scharf

to don’t sort you of And Can part the that the expectations to to regarding Jeff. will follow-up, year-end? maybe original guess, give for the initially value? sort – where transition will value in portfolio, just too into the adopted the to But the sense what And maybe of an the reserving on were a potentially obviously, I portfolio for maybe be, book what of us requirements. legacy compare balance fair much it. lifetime for updated response when CECL Got you weeds by be fair that in want value was impact Listen, get I that accounting.

Jeff Fritz

legacy is portfolio off. mean, I can look you almost the Well, the running quarter-to-quarter. yes, at

at end should – So about a here $X.X that were be as in little still runoff were end goes progress. as the in we like million, under billion But we And QX $X.X and accelerate that something going QX. year, to that. get of $X to the thing it’s legacy quarter on of billion, we portfolio – when bit the probably billion just the each $XXX the at

asset. a traditional along the really a adoption significant the So material CECL that. potentially looking shifting looking And feet additional allowance a months, you’re you’re only XX CECL right? a ground allowance. the line. probably the it’s far time because at significant to is – enough additional pro at to a forecasting in – allowance the still is significant forma But And implementation not on supplement we’re estimate below But our it’s number, environment,

Because, never companies. folks this they’re couple CECL formally as smaller do. decided to a just reporting election made yet, allow CECL ago, indication And a that going accounting who up fair for that they deferral be for not then, a folks for it’s would two-year to although they value to week, of strong otherwise subject a years something allow and very would the to standards was election you know, that for months

the two definition And implementation for two just a reporting smaller instance, for we to for public And CECL years. based is float. – the would qualify up defer companies, on to –

something never they that’s said And they also course so and – of do. would

company, and – So best yet. not focus some totally in would will today, – the but air management that’s Board do. make decisions what Directors and and what the Actually, up of in got to be for talk very the and much it’s the approach the we decide we’ve amongst

David Scharf

the about sort that some because auto And we shifting for hear of fair question adjustments there we it. different from fair interest on particularly just ultimately that value should with marking liabilities, remarking then The be environment, each views into something we rate differing quarter? imagine parties. be the one last your maybe Got accounting never value I Is factors might and get focusing the loan? securitization. just a Or the catalyst mark-to-market, would

Jeff Fritz

assets because portfolio the debt, do not debt is the asset-backed to Yes, which auto should not we the is just the that and still side receivables, make of for sheet. the traditional our the the independent is the election consider of fair value side you accounting, okay? – sheet accounting other finance debt of our is is used to – the even you one balance election debt of balance So make the portfolio, the

a So to yes, you’d the worry in the – though like at Because unlike auto right being you’d changing you rate about written need – you’re like a every marking effects your that would don’t receivables, are sort interest could mark-to-market you what – our look real environment almost similarly constantly have quarter debt whipsaw things that debt rated the and market-based to at market. is on it’s environment, debt. of and securities be

using to be the little but we not not hoop of type value, where face. through market of have prime and there a since what it’s issues for active do trying exit determine jump sheet that of the trading of to would one a for asset price on We balance not themselves. there’s That’s auto receivables the an side are an those product really receivables in assets it’s commodity and fair some tricky

of is value sort have fair sort math, tearing I carrying. initial recognition the that we’re what point, So other right the of the that guess, whipsaw make because the we’ve – effect had haven’t they’re while is deemed accreting we to at we

David Scharf

Thank it. Got you.

Operator

Jefferies. next the And you. Thank comes from Kyle Joseph question from

line is now Your open.

Kyle Joseph

guys morning, Good for taking my thanks questions.

Can In LTVs, you terms pricing. cetera? new deals, other sense a give about terms for et of talked guys deals, new us the you durations, on

Jeff Fritz

uptick up trend slight to don’t helped our last we’ve a we side we’re necessarily around degree Last July of we around over were year, scorecard pricing a of in August LTVs time, we this that this probably risk-based the during XXX the and at last probably and of implemented at of in that gen production really this in engineered. I our effects year dial one and XXX. that to six I it’s had months, the LTVs. time – the back it probably time, mean, think anything slight that nine had to is when we period or We’ve the XXX that year and in attribute

That anyone is haven’t significantly. The we’ve of the of we’ve we’re the as quarter a second new trouble significant doesn’t of it’s we’ve of and business, that. new doing changed observed pools it’s probably vehicle. a original still weighted these receivables term a XX XX recent still And around something seen probably months, us, average of but and portion Terms or model contracts. of stated of I our volume used here or which – XX-month normal was past, for is in in XX% think, the kind the late

Kyle Joseph

us where on that’s recoveries a pricing like it. year-over-year. Can thoughts used your sense and are give just adding? for then looks you stable it And Got fairly car

Jeff Fritz

what really we’ve seen around really a two levels with fluctuation markets think where and Well, right, despite I almost see so from we big of a did those years bit normalized, – highs, forth. they ago, the have – maybe historical now little two have hovered been years back just for because of decrease

that the So of normalized. those predicted complete think didn’t and really sort collapse of they’ve people two pan out, markets ago I years

really that maybe know to going that lot that’s – to what have What I If don’t future. but pass, markets, night. pile really dealer on news to area an keep building cars about do. keeps an that That up cars the us on the that’s manufacturers these too pile comes expected eye may is, an up to in starting impact not dealer these at many on we sometime or lots up on sort of and

Charles Bradley

would We think down. improve to the to trend’s as opposed go probably going

of be terms pricing in we’d car forward. So optimistic used going

Kyle Joseph

answering my much for Got questions. it, very thanks

Operator

from Our from Slam. next Instructions] Mitch Grand [Operator question Sacks comes

Your now line open. is

Mitch Sacks

Thanks. Question increases G&A, been The by fair value driven on have that in rules? G&A expenses. going on accounting it the partially is

Jeff Fritz

effect and the back statements, value that take of origination of that fair In two to impacted is operating the losses. the only – expenses. impacting the really by bit. accounting revenues, is a accounting. has traditional value of The the there component Max expenses little credit our a of the fair significant defer No, the less did provisions for It’s lines – right? it And I’ll we less revenues one to loan days, used was compared operating accounting aspect so old

So life and about deferred – loan, costs the or attributable $XX it recognized of were employee about it I think $XX over to primarily was the was that per contracts.

the the And old with so that was accounting. case

comparing the change year-over-year year because its sort is in of you’re second baked entirety fair of of really this if into both we and value last affect that accounting. quarter results, However, place quarter once year took second that Mitch, adopted

Mitch Sacks

been Okay. expenses ramping through because XXXX What’s in that now. kind G&A middle, G&A? part driving of increase of throughout Yes, latter have

Jeff Fritz

nominal suppose that’s in I of think increases sales staffing, technology I had in business. the maybe the in significant that made investments may of to attributed we sales really you part side business it. so the and We’ve think side of the

associated from certainly the level incremental other last a CRM static prior in couple the technology really have some did building we during we sales or to of months, more XXXX, few expenses we early anything field to space XXXX and there no there and we with been I most – like – an new did But add force material technology XX really in with and that’s tools of sales that, platform and last say helped new but is physical for that up is that – the that our dealers a branches, the year. that’s the new is have although has a this to pretty space in of – mean, service So things. people a and

Mitch Sacks

side, you Okay. to third seem I lead kind the multiple just that’s call. And were missed that’s on earlier in work and sales the Can then have on going? starting you of volumes? may how driving how this And remember to with update guys I parties,

Jeff Fritz

in It’s going quite process. well. We’ve got couple a

and that now is are going and starting We it’s add to going little the We’re certainly people workout very bit of are well sort everyone’s a that in It little get a two flow two more. new involved. using time us. to of probably and bit which to want a anything, of out. the But kinks the some of just level, takes provider lot between couple have it

the the good one And and on platform, we’ve been be asked actually of lenders a So are. on to if it’s we you’re thing, more.

So new would a the for be growing now, better. whether paper us. is substantially. to good forever thing this right it’s it’s tell, It’s hard but or thing not, The very

it more. We’re continue and very look with happy we’ll to for

Mitch Sacks

potentially then growing potentially you lid keeping growth help and sales that also terms and balances could receivables So marketing? on maybe in of a of your

Jeff Fritz

benefit mean, taking we’re to have in to in sort really what like to real gets long good the going probably it’s deal. mean, it on the some enough marketing term very our the cost actually ways effect volume, where enough seems credit I yes, expensive to things far, I make so – it get do, be and could said, two I it But we as if would is loans, better but it of should. slightly alone normally big in an it more a than average well. helps those it depend, be, we it the are

is on some the give grow right it’s the focus is it’s going to importantly, actually reasons us is But the I market. one paper. more the increased now in of on, sources think paper able volumes. getting And focus tough a the road, we’ve from we’re been think I But down better ways to – in those probably

get to sort road down of the kick well. going you’re as So a

Mitch Sacks

to walk as experience that fair coming impacts you’re the even you recording fair rate on you on Okay. quarters? just know value. guess your and get Can that kind And final interest over on with portfolio, the more older I think that rate. going us question the few value do to about of I how has there what’s

Jeff Fritz

charge we balances, know terms dealers the it things we what approaching these We So call we sure. cohort we it the loans, month’s there’s pay the it about is monthly know or the way – the we We of what when – yes, for for dealers of receivables pool there’s it. are, worth now know a acquire things. we’re all of coupons know loans, really for we or

what but pretty be. the good are to losses estimate to data we that to the have help and us metrics estimate have We going losses,

what it the which with should pretty spits And the internal so and out receivables in yield you the sophisticated the into that sort net return, of yield, call of of model of put or we all rate IRR, produce. baked a losses is the that what pool

consider, and no par monthly then the the is good the the the just mix, with – and But things know second an that things around pool yield like metrics APRs for So pools have time the it’s on cohort, with – those dealers, contracts goes where make each quarter at XX% you a in are there estimate you monthly don’t right? also basically and blend losses as net is bought we from those So to you right? receivables. And baked in, had each here the we again, for then on, all – in all credit know. of two with pretty instance, alike,

instance, is the to lower pool, So trend you a hypothetically compared like, estimate slight a tier in little for being if are a losses towards there pool the previous particular higher. might a

change the you higher even you cases if you a be think are of up So IRR. in might a losses coupon, with got the the to some higher because in end going mix, if similar

with process, results one involved. mean, that’s more fairly It’s complex better portfolio. portfolio that financial ours measured it’s is great and a the become of and oversimplification of I really So despite of whole think the of once I for like but kind a that’s results, this on really really a road the to company we’re – I bumpy and the basis, comfortable a more transition on report becoming year-over-year that what’s way think the comparison

Mitch Sacks

up, Okay. And was stay value did recorded that if second then saw the versus it, fair stable I’m not for second the or quarter? rate receivables so it down, where quarter, I you go the the sure

Jeff Fritz

just be quarter might would compared that up blended have been the rate very to Well, the quarter, first overall close. a second little bit but in the

Mitch Sacks

Thanks. Okay.

Operator

any no back for to further I’m additional call closing the Instructions] Charles Mr. and remarks. [Operator questions like Bradley turn I’d to over showing

Charles Bradley

Thank you.

make It’s stock as sort a into really we’re in market. looking transition do we the putting the price working accomplished hasn’t now the this smallest way with exceedingly we’re point and towards portfolio, would lot. it with of in much we’re the well hard to to say growing this think new of finger a yet, the blocks accounting. we’ve a importantly, But more certainly future, I for and together need the breaks we dealers but building done the

we to all opportunity. do best to small wait do and are for we can our we So move windows and and be stick improve best we pricing our stuff. when really the is portfolio, our the know of fact can to do building able little and in grow some we of to the what should sort road things credit, down what opportunity But increase great more, the a

in we next able perfect accomplish So and as thanks we should be of much will the With in we of what quarter, and the call. terms highlights lots what you as, like, it’s not all to there doing world attending the would for are we’re see that, future.

Operator

This website days now wonderful via your and hours Eastern the (XXX) time, with www.consumerportfolio.com. available lines Time you. replay the p.m. a also A this by A until does day. and at conference broadcast have call dialing from of X, after conference today’s the or XX be conclude call will beginning two be will live XXXXXXX. August number Please at XXX-XXXX, identification teleconference. company’s X:XX (XXX) XXXX, XXX-XXXX disconnect for available Thank

Consumer Portfolio Services (CPSS) 26 Jul 192019 Q2 Earnings call transcript