CPSS - Earnings call transcript Q1 2024 | Consumer Portfolio Services, Inc.

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Operator

Good day, everyone, and welcome to the Consumer Portfolio Services 2024 first quarter operating results conference call. Today's call is being recorded.

Before we begin, management has asked me to inform you that this conference call may contain forward-looking statements. Any statements made during this call that are not statements of historical facts may be deemed forward-looking statements. Statements regarding current or historical valuation of receivables because dependent on estimates of future events also are forward-looking statements. All such forward-looking statements are subject to risks that could cause actual results to differ materially from those projected. the report to for March you clarification. further refer company's on annual XX I no update further obligation statements, assumes company The to a us is of otherwise. With whether publicly result the or information, events here Mr. as forward-looking any Officer; Chief Mr. Bradley, Charles Executive Financial Mr. Chief and Officer; Bharwani, Danny will President Operating I Lavin, the call Consumer Portfolio Officer Mike turn of over and Services; Chief now to Mr. Bradley.

Charles Bradley

be anyone area earlier, we've company has somewhat performing new said take We off grow for is again. as in really weren't able beginning we're to this everyone, industry, the just done couple to of and on again. A of a it's we what quite call. originations last almost highlights. capital 'XX growth much that. handled I of turning very well, the in earnings still sort time, more We're earnings a corner the far something our that paper residual money importantly, But Generally importantly, more production where quarter said welcome, through now better particularly first which than 'XX We're proud better. industry. and at get the what's quarter the first but you, and to of else point, very did The to beginning now our for to and million performance but of corner. Thank true turned the big point which great, $XX most in our use we've raise to new speaking, to in is sort weaker is been the struggle in pools. But everyone those

renewed note our the One other one million lines. everything right warehouse is is going So of really, $XXX way. we

very going touch point So aggressively. We'll the buy Danny a going of to go some in over to point, minutes, very bit we getting the hopefully, more really back is few again, be on turn this rather a where jump-off through to we paper, well, little first I'm and areas to good it all get in grow of at year to now, for it kind those financials. for the performs to sort but quarter

Denesh Bharwani

Thank Brad. you,

some million to Revenues and That's our primarily QX million the in versus the for increase. March by XX.X%. first which year. XX% $X.X over quarter. financial billion, value were Going That's results fair yielding is now in of the portfolio, quarter last $XX.X a driven that's $XX.X

net calls credit at year you've quarter you're The of on yield aware losses. that, of If on projected these losses the or XX.X%. XX.X% of been before that portfolio was last is yield first the

Moving expenses. down to

in $XX.X million contribution on things million to to $X.X for million. of first higher For which last rates, first expenses a million, $XX part versus of was debt for the under quarter, legacy interest quarter. the growth expense quarter the first last The also largely to compared million but increased portfolio first quarter, the $XX.X million to A note year in in $XX.X expenses. under year, couple last of that number provision That is loss this in and balance. Also CECL. accounted is the in year, year our of included reversal the provision it's loss portfolio, -- and the reversal the higher $X due

portfolio we time not or that run quarters, legacy X remaining that X the by get have So to end the the year. over next of going then portfolio to much is the will and of off we

legacy per reversal share first following million on last was in again, $XX.X year. last the first $X.X last provision And quarter per quarter diluted first $X.XX in in Our of $X.XX million the year. from decrease million is compared the year, down is higher of earnings share interest of $X.X the loss and pretax to for mainly for the $XX.X to earnings Net the to due million income the expense quarter quarter, portfolio. the same the the quarter, compared in trends,

Moving sheet. the balance to

billion from quarter the of quarter value, the in is first the Our up first X% in finance receivables $X.XXX last fair at $X.XXX year.

debt balance of the Our year. is billion, which securitization X% $X.XXX the in up first is billion $X.XXX quarter from last

our we're is $XXX.X So in equity mark in of debt, lower balance only our That's asset in in up years making to $XXX.X And on equity pretax is last sheet. That's increase -- helping that's from strength an consecutive XXth end driven boost X% million seeing -- the the value quarter. that and first X% the shows XX% increase increase and of million the at leverage a year. so corresponding and quarter benefit some by March fair over XX the in quarter shareholders' the that's the number profitability, of a to of profit. balance the the would first this sheet. Shareholders' pretax

to X% X% the first X.X% The million, down the million I first Core for turn -- financial the this metrics. a important of portfolio the the year. Mike. the of the in of is quarter will quarter quarter average is is last $XX.X it margin interest numbers. XXXX. That's at managed to the Moving call in year for net compared expenses as which percentage over from of $XX.X first to operating other

Michael Lavin

you, Thank Danny.

of quarter million $XXX quarter and terrific first as purchased good in during million contracts. new fourth quarter news. of to the we a in million XXXX of XXXX. More $XXX was the compares first That quarter The $XXX originations

our and of Our March XX, $X.XX as XXXX. XX, and of $X.XX portfolio an increase billion billion December increase amount an billion as history, XXXX. of $X.XX March from grew XXXX, I the from that's as to that's note in portfolio XX, highest XX-year

do that is that quarter can none so. We in the we credit initiatives showed positive in which trick that that a affect our to February, but nudge predicts that growth million of is $XXX credit fees. in As Didn't affect and it We several metric and trend. to to initiatives then the used which hold note The million we're million credit said, first those losses. $XXX to $XXX to loan our in Brad did our growth our our LTV, and to March. didn't the worked, upped touched is January, volume, critical first quarter, price optimistic key upped value,

all our So news helped organic there. Those rate, initiatives through good loyalty. increase contracts funding capture our and our increasing of dealers growth our dealer

service growth hired XX our of up adding adding will focusing year initiative [ in because dealer, XX group which One exponential to the of grown We will have going a dealer reps that quarter, heads we of between XX%. That XX XX just dealers and is with their the and XXX been X in last XX ] When sales has our help forward. groups, currently class for we're in We things out. instead dealer XX% the we've one and quarter is dealership. reps. large first onboard the dealers is This inside. field, new and more defined as to XXXX, and dealer the first end the by business, than a years of has more more at growth the likely umbrella. do of per that launched that large the early groups under on made

solid ironclad in and partnerships origination on first added profits. with resulting our quarter, with Pagaya gained the volume in [indiscernible] continued Pagaya We and

underwriting customer lowered our first continue days, thing service platform Another to our we we to we significantly rate errors. quarter, In deal [ return low. package and our in build note, reduced an less originations. We the funding X time our all-time to lowered of ] than

All of these are dealers metrics the with to CPS. that applications their send business encourage do and

of we competition, losses so to and enough business don't when credit silver and of the pull that friendly strong, us out market. Again, remains meet of X and continue a our waves unemployment space of of terms and the for competitors of they the recession bullets the are out or In lower their like rates, for sort dominate expectations. the the come rate. there's things X in of and unions the us see space sort with Demand then

up our a been even it near-term performance. Taking risk So far, affected check And unemployment QX our demand bit, hasn't our ticked portfolio just quick a recession. has on or profile. there though no

at a from fluctuates is between XXX we've APR XXX LTV down continue it and XX%. XXX. and our -- to our thing to risk best driven the profile hold in Probably We strong

our Our at quarter-over-quarter payment-to-income ratio model, remains which the in which and flat, flat scoring amount is our and great, use portfolio we debt-to-income performance. remains ratio, finance $XX,XXX. Switching of to

indeed portfolio DQ, as lowered inventory, we the performance, the up as charge-offs compared compared including lowered of the For compared previous first Annualized previous of were in have and is same quarter in total to XXXX charge-offs in in same to for of portfolio fourth news total XXXX. DQ as the XX.XX% quarter X.XX% the our terms to of compared quarter X.XX% first the as positive our quarter, at quarter that XXXX. The net and the XX.XX% to X.XX% quarter. the quarter, corner in we've ended we've also our our as of turned repossession

up, interesting. this which driven we've is less down. but ticked it's while year-over-year, utilizing quarter-over-quarter, metrics So done those We've extensions,

metrics of X, around we've strategies for we've collect In the vintages, believe vintages. the collection utilizing and of and out terms more arms that curves. We the been to unique quarter sort industry. of employed our control collectors vintages, got flatten secret as key XXXX those XXXX vintages have it's no We've of the to challenging end those our those been

in X slightly But look of much, critical at CNLs. into it's I that slightly first just challenging, -- vintages better. to albeit is be thing better, should to also XXXX-C and looking a our much our less doing the normalize The vintage little vintages XXXX most little The challenging, more while might judge, vintages XXXX those is say. to our XXXX also early is our historical much XXXX-D, a were

industry, and in reportedly, thing training that interestingly bolstered balances. Looking we're enough, recovery we're DQ. our the outperforming to note X work And in and investment of XXXX that of least CNL bonds employing all up on performance the far who the competitors of few we the in our months collecting the at and it all-important initiatives at to outperforming new go collections of the is so our which and our and XX% all according losses. investors XXXX charge-off we charge vintages metric. One in up with also comes the and we to we've are note those is competitors how to XXXX, offset securitization collected we in quarter, the we follow ARD staff, when industry, our our first a all after right what bankers And our of stack department, collected

already has In using artificial synthetic many $X quarter, That significantly that on fraud more fraud in the the looking saved terms save for quarter, fraud our million millions over tool. intelligence and of scoring us and tool technology, going our first in AI to has we we reduced forward application that, in first deployed -- which base. expect

As the in our X call, launched I fourth mentioned our in we XXXX. quarter of model last originations gen

we to where X. now with analyze have October had originated We originations those the originations XXXX a chance gen

We also gen has lowered originated X, basis XXX organically by points. X and gen with that DQ paper our

bodes translate well just should -- going our to Brad. with it kick that for So DQ forward, AI CNLs to translates also through that, model. And I'll our lower back which

Charles Bradley

Thank you, Mike.

Turning to the industry.

we'll industry easing the growth pointed Mike than on probably problems 'XX we grow the vintages. is this to out pointed slow back to are storm to think we able guess some us very at yet, point, margins. we've as I or get that I weathered That out, and for our And our in friendly hang our most players we margins creates going industry. going and the well, to had fellow As hang given on better of much big to through large opportunity with be how an either --

might create 'XX. the able a And 'XX, or folks some may to of few may get fellow that not also for the production so problems out that's of opportunities good. And weaker be it there through

is economy, the In We our looks competitors. we certainly and always looking yet some much of optimistic. love most, industry on seem for in and think thing and and and at out very we're our to about maybe the be we speaking, the industry we'll helping the quite we're generally customers of but unemployment our tip watch So doing is would fine. Unemployment get the fine. What looking spear doing. the down care around but wait recessions fellow to opportunities what see, growing, if we're then the rates just We're to to when of do, to of a there up they really course, things cut come and road, will sitting keep where get not is much rate the pick that could we cut, when enhance than doing grow. be just extra then waiting volumes for doing up margin so volumes and better thinking large really them currently, be, those just get

kind things look fronts. we're on We're all well good Those second those again, almost quarter. optimistic well. into So of different our as

shortly So quarter rather we'll little back bit. second to the report be a in

So and speak to you we'll with soon. for thank joining that, us, all you

Operator

today's at Ladies replay be this have this you. concludes now Please day. the teleconference. a website for via beginning X and gentlemen, disconnect XX A Thank available hours at months will and time, wonderful lines your from company's www.consumerportfolio.com.

Consumer Portfolio Services (CPSS) 14 May 242024 Q1 Earnings call transcript