Consumer Portfolio Services, Inc.

Good day everyone and welcome to the Consumer Portfolio Services 2026 Second 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 of estimates of future events are also our forward-looking statements. All such forward-looking statements are subject to risk and could cause actual results to differ materially from those projected. I refer you to the company's annual report filed March 16th, 2026 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 Bharwani, 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 second quarter earnings call. I think a good way to sort of start things off is last year we thought we were going to grow a lot. We really did a lot of things we thought would enable us to do that. And we didn't really see as much growth as we anticipated. And as we rolled into this year, we continued to work on a bunch of different things, investing in technology, looking at new technologies and new ways to do things. along with expanding our marketing so that we can grow. In March of this year, last month of the first quarter, it actually worked and things took off. The second quarter, you know, we might have thought March is always a very good month for originations, so we kind of were hesitant to call out a big change. But by now, we can certainly say it's been an enormous change in terms of our originations volume. Quarter to quarter, it's up over 40%. It remains very strong. So it's probably the biggest and most important thing that's happened in the second quarter. And if we can keep that rolling along, it means very good things for the future. We also, the credit for all of that paper continues, at least on the early signs, to show to be at least as good as before, if not better. So we have not given up anything in terms of credit to achieve that growth objective. Also, we now, you know, we're about going through renewals and increases and things. We now stand with warehousing of over $900 million, which is kind of what we need to make things happen. Again, all these things are going the right way. I think we could use a little help there. We know some interest rates would come down or not go up and other things. We'll talk about that later. For now, I'll turn it over to Danny to go over the financials.

Thank you, Brad. Going over the financial results, revenues for the second quarter, 121.4 million is up 11% from the 109.8 in the second quarter of last year. For the six months ended June 30, 233.7 million is an 8% increase over 216.6 in the six months of last year. This increase in revenue is driven by our strong increase in new loan originations, $758 million for the quarter, $1.3 billion for the six months in 2026, compared to $433 million in the second quarter last year and $884 million for the six months of last year. Our fair value portfolio now sits at $4.2 billion, and that is yielding 11.3%. This yield is the net of credit losses. Moving down to expenses, $112.4 million for the second quarter is 9% higher than $102.8 last year. For the six months, expenses were $216.7, which is 7% higher than $202.9 million last year. This increase in interest expenses largely as a result of higher interest expense which can be expected because the new loan originations effectively increases our securitization debt as that is our primary means to finance the portfolio. Interest expense for the second quarter was $64 million, which is 9% higher than the $58 million last year. Pre-tax earnings, $9 million for the quarter is 29% higher than $7 million for the second quarter last year. For these six months, Pre-tax earnings were $17.1 million compared to $13.8 million in 2025, which is a 24% increase. Likewise, similar trends for net income, $6.2 million of net income for the quarter versus $4.8. That's a 30% increase. For the six months, net income is up 24% to $11.8 million. Diluted earnings per share, $0.27 compared to $0.20 in the second quarter of last year. For the six months, diluted earnings are 50 cents compared to 39 cents in the six months of 2025. Our cash of 180.2 million of restricted and unrestricted cash is 12% higher than 160.2 million in June of last year. Like I said, our fair value portfolio now sits at 4.2 billion. which is 18% higher than the $3.56 billion last year. Moving on to shareholders' equity, 319.2 is the record high for the company. That's up 5% from $303.1 million last year. Looking at other metrics, net interest margin is $53.9 million, which is 15% higher than for the six months ended June 30. Net interest margin was 102.5 compared to 93.7 million in the six months of last year. Core operating expenses, 48.1 million is 9% higher than the 44.1 million last year. For the six months, 92.3 million of core operating expenses is 3% higher than the $89.3 million in the six months of last year. So what we're seeing is an increase in revenues that are going faster than our core operating expenses, which is only growing at 3% rate, which is a good sign. Core operating expense as a percentage of the managed portfolio is 4.6% compared to 4.8% in the second quarter of last year. For the six months, it's 4.6 versus 4.9, comparing 26 versus 25. And lastly, the return on managed assets, 0.9% for the second quarter, compares to 0.8% in the second quarter of last year. For the six-month period, 0.8 million annualized is the same as 0.8 million in the six months of 2025. I will turn the call over to Mike.