Company: CPSS
Filing Date: 2025-03-12
Form Type: 10-K
Source: 0001683168-25-001548
Chunk: 73

Company: CONSUMER PORTFOLIO SERVICES, INC.
Filing Date: 2025-03-12
Form: 10-K
Item: Item 1
Chunk 73
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) 
  
    Loan portfolio 
    $34,743  
    $33,494  
    $1,249 

    Interest Bearing Liabilities 

    Warehouse lines of credit 
     100  
     (340) 
     440 
  
    Residual interest financing 
     4,503  
     3,511  
     992 
  
    Securitization trust debt 
     39,606  
     13,688  
     25,918 
  
    Subordinated renewable notes 
     417  
     170  
     247 

     44,626  
     17,029  
     27,597 

    Net interest income/spread 
    $(9,883) 
    $16,465  
    $(26,348)

For our receivables originated
prior to January 2018, we maintain an allowance for credit losses on automobile contracts held on our balance sheet, which reflects our
estimates of probable credit losses that can be reasonably estimated. For the year ended December 31, 2024, we recorded a reduction to
provision for credit losses on finance receivables in the amount of $5.3 million. In the prior year period, we recorded similar reductions
to provision for credit losses in the amount of $22.3 million. The adjustments recorded to reduce provisions for credit losses in both
periods were primarily due to better than expected credit performance for these receivables. The allowance applies only to our finance
receivables originated through December 2017, which we refer to as our legacy portfolio. The legacy portfolio balance decreased
from $27.6 million on December 31, 2023 to $5.4 million on December 31, 2024. Finance receivables that we have originated since January
2018 are accounted for at fair value. Under the fair value method of accounting, we recognize interest income net of expected credit
losses. Thus, no provision for credit loss expense is recorded for finance receivables measured at fair value.

Sales expense consists primarily
of commission-based compensation paid to our employee sales representatives. Our sales representatives earn a salary plus commissions
based on volume of contract purchases and sales of ancillary products and services that we offer our dealers. Sales expense increased
by $1.5 million to $22.8 million during the year ended December 31,