Consumer Portfolio Services, Inc.

Good day, everyone, and welcome to the Consumer Portfolio Services 2025 First 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 valuation of receivables because dependent on estimates of future events also are forward-looking statements. All such forward-looking statements are subject to risks that could cause actual results to differ materially from those projected. I refer you to the company's annual report filed March 12th 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 today are Mr. Charles Bradley, Chief Executive Officer, Mr. Danny Barwani, Chief Financial Officer, and Mr. Mike Lavin, President and Chief Operating Officer of Consumer Portfolio Services. I would now turn the call over to Mr. Bradley.

Thank you and welcome to our first quarter conference call. I think the easy way to describe it is off to a good start. First quarter went well, a little bit late on the call, but been busy. We had very strong originations to start the year. We're up over 100 million. That bodes well for the rest of the year. I think our focus this year can be summed up as Given the uncertain economy and sort of all the noise, we want to grow, and we are growing, but we want to do it in a very credit-conscious way. We want to continue to follow our credit, buy very good paper, kind of let the Bad paper, 22 and 23 get through the snake and move on as the portfolio becomes more and more high credit worthy paper. And in fact, that's exactly what we're doing. You can see, you know, both delinquencies and charge drops are down nominally for the quarter and We hope that trend will continue. But overall, so far, so good. It's now late enough to say we just did our second quarter securitization, and we're very happy that's done, given that we had a lot of uncertainty in the market in the last few weeks. It's good to get that done, and it was done well to boot. So very good. I'll have a few more comments, but I'm going to turn it over to Danny to go through the financials.

Thank you, Brad. Going over the results for the first quarter, We had revenues of $106.9 million, which is a 17 percent increase over the $91.7 million in the first quarter of 2024. The revenues are driven by interest on our fair value portfolio, which is now $3.6 billion, and that is yielding 11.4 percent. If you've been on these calls before, you'll remember that the 11.4 percent yield is net of losses. Included in revenues for the first quarter are is a $3.5 million fair value markup in the first quarter of this year. In the first quarter of last year, that same markup was $5 million. And these markups are a result of better than expected performance in our fair value portfolio. Looking at expenses, $100.1 million in the first quarter of 25 is also a 17 percent increase over the $85.2 million last year. The main driver of the increase in expenses is interest expense, which is $55 million this year and $42 million last year. While some of that rise in interest expense can be attributed to higher rates, really most of it can be attributed to our higher debt balance on our servicing securitization debt, which is attributable to growth in our loan portfolio and our total managed portfolio size, which is now up to $3.45 billion on the balance sheet. Looking at pre-tax earnings, $6.8 million for the quarter compared to $6.6 million last year is a 3% increase. And net income is $4.7 million compared to $4.6 million last year, which is a 2% increase The 4.7 million of net income translates to diluted earnings per share of 19 cents, which is flat from the first quarter of 2024. Looking at the balance sheet, unrestricted and restricted cash of 183.5 is greater than the 151 million last year. And our finance receivables at fair value is now 3.45 billion, which is 24% higher than the $2.79 billion as of March 31, 2024. Looking at our securitization debt, the $2.74 billion of securitization debt is 20 percent higher than the $2.27 billion from March of 2024. Shareholders' equity, 298.4 at the end of this first quarter, a record high for the company, 7 percent higher than the $279.1 million last year. Looking at other metrics, net interest margin is $52 million, 4% higher than the $49.8 million last year. Core operating expenses, 46.1, which is 3% higher than the $44.9 million last year. As a percentage of the managed portfolio, those core operating expenses were 5.2%, which is an improvement over the 6% in the first quarter of last year. And lastly, the return on managed assets is 0.8% in the first quarter of this year compared to 0.9% in the first quarter of last year. I will turn the call over to Mike.