Company: CPSS
Filing Date: 2025-05-12
Form Type: 10-Q
Source: 0001683168-25-003436
Chunk: 70

Company: CONSUMER PORTFOLIO SERVICES, INC.
Filing Date: 2025-05-12
Form: 10-Q
Item: Part I, Item 2
Chunk 70
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 assets.

 32 

    Three Months Ended
                                                March 31, 2025
                                                Compared to
                                                March 31, 2024 

    Total  
    Change Due  
    Change Due 

    Change  
    to Volume  
    to Rate 

    (In thousands) 
  
    Interest Earning Assets 

    Loan Portfolio 
    $17,645  
    $16,752  
    $893 

    Interest Bearing Liabilities 

    Warehouse lines of credit 
     2,192  
     2,950  
     (758)
  
    Residual interest financing 
     1,506  
     745  
     761 
  
    Securitization trust debt 
     9,112  
     6,966  
     2,146 
  
    Subordinated renewable notes 
     140  
     147  
     (7)

     12,950  
     10,808  
     2,142 

    Net interest income/spread 
    $4,695  
    $5,944  
    $(1,249)

Our evaluation of the allowance for credit losses indicated that the reserves against future
losses are adequate as of March 31, 2025. The allowance applies only to our finance receivables originated through December 2017, which
we refer to as our legacy portfolio. 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. 

For the three months ended March
31, 2025, we recorded a reduction to provision for credit losses on finance receivables in the amount of $979,000. The reserve decrease
was primarily due to better than expected recovery rates and a decrease in lifetime expected credit losses resulting from improved credit
performance as our previous estimates for future losses exceeded actual incurred losses. This compares to $1.6 million in reductions to
provision for credit losses for the three months ended March 31, 2024.

Sales expenses consist 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. Sales expense increased to $5