CPS Announces Third Quarter 2012 Earnings

CPS Announces Third Quarter 2012 Earnings

  *Net income of $2.7 million, or $0.11 per share
  *New contract purchases of $143 million
  *Total managed portfolio increases to $845 million from $806 million in
    June 2012

IRVINE, Calif., Oct. 15, 2012 (GLOBE NEWSWIRE) -- Consumer Portfolio Services,
Inc. (Nasdaq:CPSS) ("CPS" or the "Company") today announced earnings of $2.7
million, or $0.11 per diluted share, for its third quarter ended September 30,
2012. This compares to a net loss of $4.0 million, or $0.20 per diluted share,
in the third quarter of 2011. Earnings for the first nine months of 2012 were
$4.6 million, or $0.19 per diluted share, as compared to a net loss of $14.7
million, or $0.78 per diluted share, for the same period in 2011.

Revenues for the third quarter of 2012 were $47.9 million, an increase of
approximately $14.1 million, or 42%, compared to $33.8 million for the third
quarter of 2011. Total operating expenses for the third quarter of 2012 were
$45.2 million, an increase of $7.3 million, or 19%, compared to $37.9 million
for the 2011 period. Pretax income for the third quarter of 2012 was $2.7
million compared to pretax loss of $4.0 million in the third quarter of 2011.

For the nine months ended September 30, 2012 total revenues were $136.6
million compared to $97.4 million for the nine months ended September 30,
2011, an increase of approximately $39.2 million, or 40%. Total expenses for
the nine months ended September 30, 2012 were $132.0 million, an increase of
$20.0 million, or 18%, compared to $112.1 million for the nine months ended
September 30, 2011. Pretax income for the nine months ended September 30, 2012
was $4.6 million, compared to pretax loss of $14.7 million for the nine months
ended September 30, 2011.

During the third quarter of 2012, CPS purchased $143.1 million of new
contracts compared to $137.9 million during the second quarter of 2012 and
$81.2 million during the third quarter of 2011. The Company's managed
receivables totaled $844.9 million as of September 30, 2012, an increase from
$806.1 million as of June 30, 2012 and $827.8 million as of September 30,
2011, as follows ($ in millions):

Originating Entity      September 30, 2012 June 30, 2012 September 30, 2011
CPS                     $748.8             $681.5        $572.5
Fireside Bank           80.3               104.0         210.9
TFC                     0.4                0.6           3.1
As Third Party Servicer 15.4               20.0          41.3
Total                   $844.9             $806.1        $827.8

Annualized net charge-offs for the third quarter of 2012 were 3.35% of the
average owned portfolio as compared to 4.13% for the third quarter of 2011.
Delinquencies greater than 30 days (including repossession inventory) were
4.64% of the total owned portfolio as of September 30, 2012, as compared to
6.54% as of September 30, 2011.

As previously reported, during September CPS closed its third term
securitization transaction of 2012 and the sixth transaction in the last 18
months. In the senior subordinate structure, a special purpose subsidiary sold
five tranches of asset-backed notes totaling $147.0 million. The notes are
secured by automobile receivables purchased by CPS and have a weighted average
effective coupon of approximately 2.45%. The transaction has initial credit
enhancement consisting of a cash deposit equal to 1.00% of the original
receivable pool balance. The final enhancement level requires accelerated
payment of principal on the notes to reach overcollateralization of 11.00% of
the then-outstanding receivable pool balance.

"We are extremely pleased with our third quarter financial results," said
Charles E. Bradley, Jr., Chairman and Chief Executive Officer. "It was our
first quarter of organic sequential revenue growth since 2007 and the onset of
the financial crisis. This demonstrates that we are well positioned within the
auto finance industry to continue growing our managed portfolio. And as we
fund this growth with cost-efficient securitizations, our net interest margin
is expanding significantly. These two components have been big drivers of our
earnings growth over the last year."

Conference Call

CPS announced that it will hold a conference call on Tuesday, October 16,
2012, at 1:00 p.m. ET to discuss its quarterly operating results. Those
wishing to participate by telephone may dial-in at 877 312-5502 or 253
237-1131 approximately 10 minutes prior to the scheduled time.

A replay will be available between October 16, 2012 and October 23, 2012,
beginning two hours after conclusion of the call, by dialing 855 859-2056 or
404 537-3406 for international participants, with conference identification
number 43148332. A broadcast of the conference call will also be available
live and for 90 days after the call via the Company's web site at
www.consumerportfolio.com.

About Consumer Portfolio Services, Inc.

Consumer Portfolio Services, Inc. is an independent specialty finance company
that provides indirect automobile financing to individuals with past credit
problems, low incomes or limited credit histories. We purchase retail
installment sales contracts primarily from franchised automobile dealerships
secured by late model used vehicles and, to a lesser extent, new vehicles. We
fund these contract purchases on a long-term basis primarily through the
securitization markets and service the contracts over their lives.

Forward-looking statements in this news release include the Company's recorded
revenue, expense and provision for credit losses, because these items are
dependent on the Company's estimates of future losses. The accuracy of such
estimates may be adversely affected by various factors, which include (in
addition to risks relating to the economy generally) the following: possible
increased delinquencies; repossessions and losses on retail installment
contracts; incorrect prepayment speed and/or discount rate assumptions;
possible unavailability of qualified personnel, which could adversely affect
the Company's ability to service its portfolio; possible increases in the rate
of consumer bankruptcy filings, which could adversely affect the Company's
rights to collect payments from its portfolio; other changes in government
regulations affecting consumer credit; possible declines in the market price
for used vehicles, which could adversely affect the Company's realization upon
repossessed vehicles; and economic conditions in geographic areas in which the
Company's business is concentrated. All of such factors also may affect the
Company's future financial results, as to which there can be no assurance. Any
implication that the results of the most recently completed quarter are
indicative of future results is disclaimed, and the reader should draw no such
inference. Factors such as those identified above in relation to provision for
credit losses may affect future performance.

Consumer Portfolio Services, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
                                                               
                              Three months ended    Nine months ended
                               September 30,           September 30,
                              2012        2011         2012       2011
Revenues:                                                       
Interest income                $45,053   $30,236    $127,210 $86,632
Servicing fees                 502        986         1,897     3,530
Other income                   2,365      2,592       7,481     7,201
                              47,920     33,814      136,588   97,363
Expenses:                                                       
Employee costs                 8,730       8,257        25,878    23,343
General and administrative     3,690      3,286       11,765    10,697
Interest                       19,560     19,011      61,696    57,377
Provision for credit losses    9,465      3,982       22,012    12,034
Other expenses                 3,747      3,324       10,657    8,607
                              45,192     37,860      132,008   112,058
Income (loss) before income    2,728      (4,046)     4,580     (14,695)
taxes
Income taxes                   --         --          --        --
Net income (loss)             $2,728    $(4,046)   $4,580   $(14,695)
                                                               
Earnings (loss) per share:                                      
Basic                          $0.14     $(0.20)    $0.24    $(0.78)
Diluted                        $0.11     $(0.20)    $0.19    $(0.78)
                                                               
Number of shares used in computing earnings (loss) per            
share:
Basic                          19,495     19,821      19,406    18,794
Diluted                        25,695     19,821      24,026    18,794


Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
                                                               
                                                  September 30, December 31,
                                                   2012          2011
                                                               
Cash                                               $10,468     $10,094
Restricted cash                                    107,240       159,228
Total Cash                                         117,708       169,322
                                                               
Finance receivables                                687,096       516,630
Allowance for finance credit losses                (16,946)      (10,351)
Finance receivables, net                           670,150       506,279
                                                               
Finance receivables measured at fair value         77,484        160,253
Residual interest in securitizations               4,895         4,414
Deferred tax assets, net                           15,000        15,000
Other assets                                       37,628        34,782
                                                  $922,865    $890,050
                                                               
Accounts payable and other liabilities             $22,146     $27,993
Warehouse lines of credit                          20,398        25,393
Residual interest financing                        13,773        21,884
Debt secured by receivables measured at fair value 76,630        166,828
Securitization trust debt                          721,396       583,065
Senior secured debt, related party                 54,452        58,344
Subordinated debt                                  21,525        20,750
                                                  930,320       904,257
                                                               
Shareholders' equity                               (7,455)       (14,207)
                                                  $922,865    $890,050

                                                            
Operating and Performance Data ($ in millions)                             
                                                           
                                 At and for the   At and for the
                                Three months ended  Nine months ended
                                 September 30,      September 30,
                                2012      2011      2012      2011
                                                           
Contracts purchased              $143.11 $81.17  $400.91 $192.02
Contracts securitized            154.70   111.05   437.90   215.60
                                                           
Total managed portfolio          $844.86 $827.80 $844.86 $827.80
Average managed portfolio        831.30   691.24   803.27   669.03
                                                           
Allowance for finance credit     2.47%     1.97%              
losses as % of fin. receivables
                                                           
Aggregate allowance as % of fin. 3.13%     2.91%              
receivables (1)
                                                           
Delinquencies                                               
31+ Days                         3.33%     5.08%              
Repossession Inventory           1.31%     1.46%              
Total Delinquencies and Repo.    4.64%     6.54%              
Inventory
                                                           
Annualized net charge-offs as %  3.35%     4.13%     3.47%     6.56%
of average owned portfolio
                                                           
Recovery rates (2)               47.2%     43.2%     48.2%     44.0%

                                     
          For the                     For the
         Three months ended           Nine months ended
          September 30,               September 30,
         2012          2011           2012            2011
         $       % (3) $       % (3)  $        % (3)  $       % (3)
Interest  $45.1 21.7% $30.2 17.5%  $127.2 21.1%  $86.6 17.3%
income
Servicing
and other 2.9    1.4%  3.6    2.1%   9.4     1.6%   10.7   2.1%
income
Interest  (19.6) -9.4% (19.0) -11.0% (61.7)  -10.2% (57.4) -11.4%
expense
Net
interest  28.4   13.6% 14.8   8.6%   74.9    12.4%  40.0   8.0%
margin
Provision
for       (9.5)  -4.6% (4.0)  -2.3%  (22.0)  -3.7%  (12.0) -2.4%
credit
losses
Risk
adjusted  18.9   9.1%  10.8   6.3%   52.9    8.8%   28.0   5.6%
margin
Core
operating (16.2) -7.8% (14.9) -8.6%  (48.3)  -8.0%  (42.6) -8.5%
expenses
Pre-tax   2.7    1.3%  (4.0)  -2.3%  4.6     0.8%   (14.7) -2.9%
income
                                                       
(1)Includes allowance for finance credit losses and allowance for      
repossession inventory.
(2)Wholesale auction liquidation amounts (net of expenses) for CPS
portfolio as a percentage of the account balance at the time of sale.
(3)As a percentage of the average managed portfolio.                       

CONTACT: Investor Relations Contact
        
         Robert E. Riedl, Chief Investment Officer
         949 753-6800