Company: CPSS
Filing Date: 2025-05-12
Form Type: 10-Q
Source: 0001683168-25-003436
Chunk: 34

Company: CONSUMER PORTFOLIO SERVICES, INC.
Filing Date: 2025-05-12
Form: 10-Q
Item: Part I, Item 1
Chunk 34
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 performed primarily in that California branch with certain of these functions also performed in our Florida, Nevada, and
Virginia branches. We service our automobile contracts from our California, Nevada, Virginia, Florida and Illinois branches.

The programs we offer to dealers
and consumers are intended to serve a wide range of sub-prime customers, primarily through franchised new car dealers. We originate automobile
contracts with the intention of financing them on a long-term basis through securitizations. Securitizations are transactions in which
we sell a specified pool of contracts to a special purpose subsidiary of ours, which in turn issues asset-backed securities to fund the
purchase of the pool of contracts from us.

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Securitization and Warehouse Credit Facilities

Throughout the period for which
information is presented in this report, we have purchased automobile contracts with the intention of financing them on a long-term basis
through securitizations, and on an interim basis through warehouse credit facilities. All such financings have involved identification
of specific automobile contracts, sale of those automobile contracts (and associated rights) to one of our special-purpose subsidiaries,
and issuance of asset-backed securities to be purchased by institutional investors. Depending on the structure, these transactions may
be accounted for under generally accepted accounting principles as sales of the automobile contracts or as secured financings. All of
our active securitizations are structured as secured financings.

When structured to be treated as a secured financing
for accounting purposes, the subsidiary is consolidated with us. Accordingly, the sold automobile contracts and the related debt appear
as assets and liabilities, respectively, on our consolidated balance sheet. We then periodically (i) recognize interest and fee income
on the contracts, and (ii) recognize interest expense on the securities issued in the transaction. For automobile contracts acquired after
2017 we take account of estimated credit losses in our computation of a level yield used to determine recognition of interest on the contracts.
For contracts acquired before 2018, we adopted CECL on January 1, 2020, and we may, as circumstances warrant, record or reverse expense
provisions for credit losses.

Since 1994 we have conducted
104 term securitizations of automobile contracts that we originated. As of March 31, 2025, 18 of those securitizations are active and
all are structured as secured financings. We generally conduct our securitizations on a quarterly basis, near the beginning of each calendar
quarter, resulting in four se