Consumer Portfolio Services, Inc.

Good day everyone and welcome to the Consumer Portfolio Services 2026 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 the current or historical valuation of receivables because dependent on estimates of future events are also 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 16, 2026 for further clarifications. 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 Barwani, Chief Financial Officer, and Mr. Mike Lavin, President and Chief Operating Officer of Consumer Portfolio Services. I will now turn the call over to Mr. Bradley.

Thank you and welcome everyone to our first quarter earnings call. And looking back at the quarter, I think sort of going through the basic things, our securitization program continues to run really well. We did another securitization, $345 million, well-received, no problems at all. So it's very good that that program remains consistent. We'd like to see the interest rates come down a little more, but overall, being able to buy a lot of paper and sell it all to Wall Street is one of the most important things we can do. Secondly, we did another residual financing, and that program also is running really well. Very well received. Actually, each time we do a new residual financing, it's probably more well received each time along. We're getting a little better pricing as well. So that's all very good. Probably the big news is finally, after spending all last year thinking we could grow and trying to grow and not really getting where we wanted to go, The program was to expand our geographic footprint as much as we could, add as many dealers into our network as we could, and also add a lot more marketing people to get more boots on the ground and really focus on that sales. And finally, that has started to pay off. As much as January and February were a bit slow or normal, I should say, March took off. And so being how we're here in May, it's safe to say, you know, all of that hard work we've done over the last year or 18 months is really beginning to pay off in terms of the growth in our originations platform and our ability to buy paper and penetrate the markets deeper. So, you know, we really caught a lot of that in March. Next quarter, the second quarter should be, you know, very interesting in that regard. But all in all, very good in terms of what we're doing. So across the board, things look very good. I'll get back to that after Danny and Mike go through their pieces. So I'll turn it over to Danny to do the financials.

Thank you, Brad. Going over the financials revenues for the quarter, we're 112.3 million, which is up 5% from 106.9 in the 2025 first quarter. driven by interest income of 108.7 million, which is up 6.7% over the prior year period. That increase is driven by, as Brad alluded to, strong new loan originations in the quarter. We did 533 million, which is 18% better than the first quarter of 2025. Our failed value portfolio now sits at 3.8 billion, yielding 11.3%, which is net of losses. And in terms of revenues, the only other item of note is the prior year period included a fair value mark of 3.5 million, where we did not have a mark in the first quarter of 2026. Expenses of 104.3 million is up 4% from 100.1 million in 2025. Interest income is the largest contributor to that increase. 60 million is up from Q4 of 2025 compared to 55 million a year ago, which is a 9% increase. And obviously that increase is largely due to the higher debt balance from the higher loan originations in the quarter. Pre-tax earnings of 8 million is 18% higher than 6.8 million in the first quarter of 2025. And net income is also 18% higher. 5.5 million compared to 4.7 million in the March quarter of 2025. Diluted earnings per share is 24 cents compared to 19 cents in the first quarter of last year. That is a 22% increase and those trends follow along with the higher pre-tax and net income. Moving on to the balance sheet, our cash and restricted cash of 185.4 million. is 1% higher than 183.5 in March of 2025. Our fair value portfolio, like I said, 3.8 billion now, is 11% higher than 3.45 billion in March 31 of 2025. Moving on to shareholders' equity, 314.4 million, 5% higher than the 2025 quarter. Net interest margin of $48.7 compared to $47 million last year is a 3% increase. And core operating expenses of $44.2 million is actually down 2% from the $45.2 million in 2025. So this is a good, something we were able to accomplish in the first quarter. We were able to grow the loan portfolio without showing an increase in cost. And because of that, the core operating expense as a percentage of the managed portfolio is 4.6% down from 5.1% in the first quarter of last year. And finally, our return on managed assets, 0.8% is flat from 0.8% last year. That's it for the financials. I will turn the call over to Mike.