Consumer Portfolio Services, Inc.

Good day, everyone, and welcome to the Consumer Portfolio Services 2024 Fourth Quarter Operating Results Conference Call. Today's call is being recorded. Before we begin, management has asked me to inform you that this conference call may contain forward-looking statements. Any statements made during this call that are not statements of historical facts may be deemed forward-looking statements. Statements regarding current or historical evaluation of receivables because dependent on estimates of future events also are forward-looking statements. All such forward-looking statements are subject to risk that could cause actual results to differ materially from those projected. I refer you to the company's annual report filed March 15th for further clarification. The company assumes no obligation to update publicly any forward-looking statements, whether as a result of new information, further events, or otherwise. With us here is Mr. Charles Bradley, Chief Executive Officer, Mr. Danny Marwani, Chief Financial Officer, and Mr. Mike Lavin, President and Chief Operating Officer of Consumer Portfolio Services. I would now like to turn the call over to Mr. Bradley.

Thank you and welcome everyone to our fourth quarter and year-end conference call. I think looking back in the fourth quarter and the whole year, 2024 was a year of what we'll loosely call cautious growth while we waited to prove out the changes in credit. As most people know, and certainly everyone in the industry, 2022 is a very difficult year and even parts of 23 in terms of credit performance. And so for the most part, we wanted to grow, but we didn't want to run away when with bad credit. And so now, it appears, we thought sort of the first, certainly 22 wasn't particularly great, the beginning of 23 wasn't particularly great, but the end of 23 has now proven to be much better, and all of 24 is proving out to be much better. So we finally made a distinctive change in terms of the credit approach, which sets us up. And part of what we did while we were waiting for the credit to improve was to set ourselves up to be able to grow more aggressively in the coming year. So we actually did all that. We now have a better credit performance. Our originations growth was not quite as strong as the year before, but still very good. And again, we've sort of set the stage for what could be a very good year in 2025. But that was really the focus of 24. I'll touch on some more highlights on that a little bit later. But for now, I'll turn the conference call over to Danny Maloney.

Danny Maloney Thank you, Brad. So revenues for the quarter were $105.3 million, which is a 5% increase over the $100.6 million of revenues in our third quarter. And it's a 14% increase from the $92 million. for the fourth quarter of 2023. For the year, 393.5 million of revenues is a 12% increase over the 352 million revenues in 2023. These increase in revenues being driven by strong growth and loan originations, for the quarter we originated 458 million in new auto loans, which is a 52% increase over the $302 million in the fourth quarter of 2023. Loan originations for the year, $1.68 billion is a 24% increase from the $1.36 billion in 2023. This is then in turn driving an increase in our fair value portfolio, which now sits at $3.5 billion and is yielding 11.3%. remembering that this 11.3% yield is net of losses. The expenses for the quarter were $98 million compared to $82.1 million in the fourth quarter of 2023. For the year, expenses were $366.1 million, which is 26% higher than the $290.9 million in 2023. The expenses for the year period, 24 versus 23, include adjustments to our CECL portfolio for excess loan provisions. That amounted to $5.3 million in the 24 period compared to $22.3 million in the 23 period. So there's a big decrease in these loan provision adjustments on our legacy CECL portfolio from 23 to 24. The other big driver of expenses is the interest expense, which still continues to be higher than the prior year, both on a quarter and year basis. This can largely be attributed to higher rates, but also in part to our portfolio growth, which is driving an increase in our securitization debt. Pre-tax earnings for the quarter, $7.4 million. is down 24% from $9.8 million in the fourth quarter of last year. For the year, $27.4 million of pre-tax earnings compared to $61.1 million in 2023. Net income for the quarter, $5.1 million in the fourth quarter. Last year, fourth quarter, $7.2 million. For the year, net income was $19.2 million compared to $45.3 million in 2023. Same trends in earnings per share, diluted earnings per share for the quarter, 21 cents, 29 cents in the fourth quarter of last year. For the year, 79 cents diluted earnings per share compared to 180 in the prior year. Moving on to the balance sheet, our cash unrestricted and restricted cash is 137.4 million at the end of the year. compared to $125.5 million in 2023. The biggest other item on our balance sheet is obviously our fair value portfolio. That is $3.314 billion in 2024 at the end of 2024. It's 22% higher than the $2.723 billion at the end of 2023. Moving on to the liability section of the balance sheet, our total debt. $3.131 billion is also 22% higher than the $2.566 billion at the end of 2023. Shareholders' equity continues to increase. This is one area of strength in our balance sheet. We are at the highest level we've ever seen in the history of the company. $293 million in shareholders' equity is 7% higher than the $275 million at the end of 2023. Looking at other metrics, net interest margin is 52.8 million for the fourth quarter of 24, is 2% higher than 51.7 in the fourth quarter of 23. For the year, net interest margin is 202 million compared to 205.4 million. Core operating expenses on a percentage basis for the quarter was 5.4, That's down from the 5.9% in the fourth quarter of 23. On an annualized basis for the year, 5.6% compared to 5.7% in the prior year for core operating expense as a percentage of the managed portfolio. And lastly, the return on managed assets, 0.9% for the fourth quarter is down slightly from 1.3% in the fourth quarter of last year. For the year 2024 is also 0.9 is down from 2.1% in 2023. I will turn over the call to Mike.