Company: CPSS
Filing Date: 2025-08-11
Form Type: 10-Q
Source: 0001683168-25-005901
Chunk: 40

Company: CONSUMER PORTFOLIO SERVICES, INC.
Filing Date: 2025-08-11
Form: 10-Q
Item: Part I, Item 8
Chunk 40
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    to Rate 

    (In thousands) 
  
    Interest Earning Assets 

    Loan Portfolio 
    $16,995  
    $16,074  
    $921 

    Interest Bearing Liabilities 

    Warehouse lines of credit 
     2,514  
     3,662  
     (1,148)
  
    Residual interest financing 
     1,709  
     1,668  
     41 
  
    Securitization trust debt 
     7,629  
     3,411  
     4,218 
  
    Subordinated renewable notes 
     142  
     149  
     (7)

     11,994  
     8,890  
     3,104 

    Net interest income/spread 
    $5,001  
    $7,184  
    $(2,183)

 37 

Our evaluation of the allowance
for credit losses indicated that the reserves against future losses are adequate as of June 30, 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
June 30, 2025, we recorded a reduction to provision for credit losses on finance receivables in the amount of $781,000. 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 $2.0 million in reductions
to provision for credit losses for the three months ended June 30, 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 decreased to $5.7 million during the three months ended June 30, 2025 from $5.9 million
for the same quarter in 2024. We purchased $433.0 million of new contracts during the three months ended