Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2023 | Aug. 03, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2023 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2023 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 1-11416 | |
Entity Registrant Name | CONSUMER PORTFOLIO SERVICES, INC. | |
Entity Central Index Key | 0000889609 | |
Entity Tax Identification Number | 33-0459135 | |
Entity Incorporation, State or Country Code | CA | |
Entity Address, Address Line One | 3800 Howard Hughes Parkway | |
Entity Address, Address Line Two | Suite 1400 | |
Entity Address, City or Town | Las Vegas | |
Entity Address, State or Province | NV | |
Entity Address, Postal Zip Code | 89169 | |
City Area Code | (949) | |
Local Phone Number | 753-6800 | |
Title of 12(b) Security | Common Stock, no par value | |
Trading Symbol | CPSS | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 21,164,580 |
UNAUDITED CONDENSED CONSOLIDATE
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
ASSETS | ||
Cash and cash equivalents | $ 7,081 | $ 13,490 |
Restricted cash and equivalents | 148,063 | 149,299 |
Finance receivables measured at fair value | 2,618,420 | 2,476,617 |
Finance receivables | 52,080 | 92,304 |
Less: Allowance for finance credit losses | (5,721) | (21,753) |
Finance receivables, net | 46,359 | 70,551 |
Furniture and equipment, net | 1,284 | 1,660 |
Deferred tax assets, net | 7,367 | 10,177 |
Other assets | 25,304 | 30,974 |
Total Assets | 2,853,878 | 2,752,768 |
Liabilities | ||
Accounts payable and accrued expenses | 57,384 | 55,421 |
Warehouse lines of credit | 245,272 | 285,328 |
Residual interest financing | 49,749 | 49,623 |
Securitization trust debt | 2,225,072 | 2,108,744 |
Subordinated renewable notes | 21,204 | 25,263 |
Total liabilities | 2,598,681 | 2,524,379 |
COMMITMENTS AND CONTINGENCIES | ||
Shareholders' Equity | ||
Common stock, no par value; authorized 75,000,000 shares; 21,151,966 and 20,131,323 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively | 27,937 | 28,906 |
Retained earnings | 230,291 | 202,514 |
Accumulated other comprehensive loss | (3,031) | (3,031) |
Total stockholders’ equity | 255,197 | 228,389 |
Total liability and stockholder’ equity | 2,853,878 | 2,752,768 |
Preferred Stock [Member] | ||
Shareholders' Equity | ||
Preferred Stock, Value, Issued | 0 | 0 |
Series A Preferred Stock [Member] | ||
Shareholders' Equity | ||
Preferred Stock, Value, Issued | 0 | 0 |
Series B Preferred Stock [Member] | ||
Shareholders' Equity | ||
Preferred Stock, Value, Issued | $ 0 | $ 0 |
UNAUDITED CONDENSED CONSOLIDA_2
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2023 | Dec. 31, 2022 |
Preferred stock, par value (in dollars per share) | $ 1 | $ 1 |
Preferred stock, authorized | 4,998,130 | 4,998,130 |
Preferred stock, issued | 0 | 0 |
Common stock, no par value (in dollars per share) | $ 0 | $ 0 |
Common Stock, Shares Authorized | 75,000,000 | 75,000,000 |
Common Stock, Shares, Issued | 21,151,966 | 20,131,323 |
Common Stock, Shares, Outstanding | 21,151,966 | 20,131,323 |
Series A Preferred Stock [Member] | ||
Preferred stock, par value (in dollars per share) | $ 1 | $ 1 |
Preferred stock, authorized | 5,000,000 | 5,000,000 |
Preferred stock, issued | 0 | 0 |
Series B Preferred Stock [Member] | ||
Preferred stock, par value (in dollars per share) | $ 1 | $ 1 |
Preferred stock, authorized | 1,870 | 1,870 |
Preferred stock, issued | 0 | 0 |
UNAUDITED CONDENSED CONSOLIDA_3
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Revenues: | ||||
Interest income | $ 82,637 | $ 75,670 | $ 162,699 | $ 145,730 |
Mark to finance receivables measured at fair value | 0 | 4,700 | 0 | 7,100 |
Other income | 2,221 | 1,648 | 5,259 | 3,554 |
Total revenues | 84,858 | 82,018 | 167,958 | 156,384 |
Expenses: | ||||
Employee costs | 21,147 | 20,591 | 43,180 | 42,743 |
General and administrative | 11,783 | 8,280 | 23,180 | 16,511 |
Interest | 35,706 | 18,771 | 68,465 | 35,171 |
Provision for credit losses | (9,700) | (8,000) | (18,700) | (17,400) |
Sales | 5,463 | 5,838 | 11,186 | 11,224 |
Occupancy | 1,644 | 1,937 | 3,170 | 3,789 |
Depreciation and amortization | 211 | 385 | 442 | 802 |
Total operating expenses | 66,254 | 47,802 | 130,923 | 92,840 |
Income before income tax expense | 18,604 | 34,216 | 37,035 | 63,544 |
Income tax expense | 4,650 | 8,896 | 9,258 | 17,109 |
Net income | $ 13,954 | $ 25,320 | $ 27,777 | $ 46,435 |
Earnings per share: | ||||
Basic | $ 0.67 | $ 1.18 | $ 1.35 | $ 2.18 |
Diluted | $ 0.55 | $ 0.91 | $ 1.09 | $ 1.66 |
Number of shares used in computing earnings per share: | ||||
Basic | 20,866 | 21,370 | 20,643 | 21,296 |
Diluted | 25,373 | 27,687 | 25,384 | 27,943 |
UNAUDITED CONDENSED CONSOLIDA_4
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Income Statement [Abstract] | ||||
Net income | $ 13,954 | $ 25,320 | $ 27,777 | $ 46,435 |
Other comprehensive income/(loss); change in funded status of pension plan | 0 | 0 | 0 | 0 |
Comprehensive income | $ 13,954 | $ 25,320 | $ 27,777 | $ 46,435 |
UNAUDITED CONDENSED CONSOLIDA_5
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Cash flows from operating activities: | ||
Net income | $ 27,777 | $ 46,435 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Net interest income accretion on fair value receivables | 94,305 | 60,766 |
Depreciation and amortization | 442 | 802 |
Amortization of deferred financing costs | 4,800 | 3,628 |
Mark to finance receivables measured at fair value | 0 | (7,100) |
Provision for credit losses | (18,700) | (17,400) |
Stock-based compensation expense | 1,817 | 1,518 |
Changes in assets and liabilities: | ||
Deferred tax assets, net | 2,810 | 2,052 |
Other assets | 5,447 | 10,202 |
Accounts payable and accrued expenses | 1,963 | 18,767 |
Net cash provided by operating activities | 120,661 | 119,670 |
Cash flows from investing activities: | ||
Payments received on finance receivables held for investment | 42,892 | 80,246 |
Purchases of finance receivables measured at fair value | (658,048) | (904,475) |
Payments received on finance receivables at fair value | 421,940 | 425,774 |
Change in repossessions held in inventory | 223 | 1,087 |
Purchase of furniture and equipment | (66) | (1,028) |
Net cash used in investing activities | (193,059) | (398,396) |
Cash flows from financing activities: | ||
Proceeds from issuance of securitization trust debt | 657,653 | 712,400 |
Proceeds from issuance of subordinated renewable notes | 0 | 2,682 |
Payments on subordinated renewable notes | (4,059) | (1,933) |
Net proceeds from (repayments of) warehouse lines of credit | (41,031) | 124,606 |
Net Proceeds from (repayment of) residual interest financing debt | 0 | (4,311) |
Repayment of securitization trust debt | (540,958) | (536,824) |
Payment of financing costs | (4,066) | (6,204) |
Purchase of common stock | (18,464) | (34,285) |
Exercise of options and warrants | 15,678 | 14,416 |
Net cash provided by financing activities | 64,753 | 270,547 |
Increase in cash and cash equivalents | (7,645) | (8,179) |
Cash and restricted cash at beginning of period | 162,789 | 176,548 |
Cash and restricted cash at end of period | 155,144 | 168,369 |
Cash paid during the period for: | ||
Interest | 62,612 | 30,809 |
Income taxes | $ 4,639 | $ 4,796 |
UNAUDITED CONDENSED CONSOLIDA_6
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Common Stock [Member] | Retained Earnings [Member] | AOCI Attributable to Parent [Member] | Total |
Balance, beginning of period, Shares at Dec. 31, 2021 | 21,144 | |||
Balance, beginning of period at Dec. 31, 2021 | $ 55,298 | $ 116,531 | $ (1,622) | |
Pension benefit obligation | ||||
Common stock issued upon exercise of options and warrants, Shares | 2,895 | |||
Repurchase of common stock, Shares | (2,832) | |||
Common stock issued upon exercise of options and warrants | $ 14,416 | |||
Repurchase of common stock | (34,285) | |||
Stock-based compensation | $ 1,518 | |||
Net income | 46,435 | 46,435 | ||
Balance, end of period, Shares at Jun. 30, 2022 | 21,207 | |||
Balance, end of period at Jun. 30, 2022 | $ 36,947 | 162,966 | (1,622) | 198,291 |
Balance, beginning of period, Shares at Mar. 31, 2022 | 21,292 | |||
Balance, beginning of period at Mar. 31, 2022 | $ 47,844 | 137,646 | (1,622) | |
Pension benefit obligation | ||||
Common stock issued upon exercise of options and warrants, Shares | 1,529 | |||
Repurchase of common stock, Shares | (1,614) | |||
Common stock issued upon exercise of options and warrants | $ 8,556 | |||
Repurchase of common stock | (20,181) | |||
Stock-based compensation | $ 728 | |||
Net income | 25,320 | 25,320 | ||
Balance, end of period, Shares at Jun. 30, 2022 | 21,207 | |||
Balance, end of period at Jun. 30, 2022 | $ 36,947 | 162,966 | (1,622) | 198,291 |
Balance, beginning of period, Shares at Dec. 31, 2022 | 20,131 | |||
Balance, beginning of period at Dec. 31, 2022 | $ 28,906 | 202,514 | (3,031) | 228,389 |
Pension benefit obligation | ||||
Common stock issued upon exercise of options and warrants, Shares | 2,805 | |||
Repurchase of common stock, Shares | (1,784) | |||
Common stock issued upon exercise of options and warrants | $ 15,678 | |||
Repurchase of common stock | (18,464) | |||
Stock-based compensation | $ 1,817 | |||
Net income | 27,777 | 27,777 | ||
Balance, end of period, Shares at Jun. 30, 2023 | 21,152 | |||
Balance, end of period at Jun. 30, 2023 | $ 27,937 | 230,291 | (3,031) | 255,197 |
Balance, beginning of period, Shares at Mar. 31, 2023 | 20,496 | |||
Balance, beginning of period at Mar. 31, 2023 | $ 29,485 | 216,337 | (3,031) | |
Pension benefit obligation | ||||
Common stock issued upon exercise of options and warrants, Shares | 1,718 | |||
Repurchase of common stock, Shares | (1,062) | |||
Common stock issued upon exercise of options and warrants | $ 8,718 | |||
Repurchase of common stock | (11,171) | |||
Stock-based compensation | $ 905 | |||
Net income | 13,954 | 13,954 | ||
Balance, end of period, Shares at Jun. 30, 2023 | 21,152 | |||
Balance, end of period at Jun. 30, 2023 | $ 27,937 | $ 230,291 | $ (3,031) | $ 255,197 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | (1) Summary of Significant Accounting Policies Description of Business We were formed in California on March 8, 1991. We specialize in purchasing and servicing retail automobile installment sale contracts (“automobile contracts” or “finance receivables”) originated by licensed motor vehicle dealers located throughout the United States (“dealers”) in the sale of new and used automobiles, light trucks and passenger vans. Through our purchases, we provide indirect financing to dealer customers for borrowers with limited credit histories or past credit problems (“sub-prime customers”). We serve as an alternative source of financing for dealers, allowing sales to customers who otherwise might not be able to obtain financing. In addition to purchasing installment purchase contracts directly from dealers, we have also (i) lent money directly to consumers for loans secured by vehicles, (ii) purchased immaterial amounts of vehicle purchase money loans from non-affiliated lenders, and (iii) acquired installment purchase contracts in four merger and acquisition transactions. In this report, we refer to all of such contracts and loans as “automobile contracts.” Basis of Presentation Our Unaudited Condensed Consolidated Financial Statements have been prepared in conformity with accounting principles generally accepted in the United States of America, with the instructions to Form 10-Q and with Article 10 of Regulation S-X of the Securities and Exchange Commission, and include all adjustments that are, in management’s opinion, necessary for a fair presentation of the results for the interim periods presented. All such adjustments are, in the opinion of management, of a normal recurring nature. Results for the six-month period ended June 30, 2023 are not necessarily indicative of the operating results to be expected for the full year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted from these Unaudited Condensed Consolidated Financial Statements. These Unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2022. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements, as well as the reported amounts of income and expenses during the reported periods. Finance Receivables Measured at Fair Value Effective January 1, 2018, we adopted the fair value method of accounting for finance receivables acquired on or after that date. For each finance receivable acquired after 2017, we consider the price paid on the purchase date as the fair value for such receivable. We estimate the cash to be received in the future with respect to such receivables, based on our experience with similar receivables acquired in the past. We then compute the internal rate of return that results in the present value of those estimated cash receipts being equal to the purchase date fair value. Thereafter, we recognize interest income on such receivables on a level yield basis using that internal rate of return as the applicable interest rate. Cash received with respect to such receivables is applied first against such interest income, and then to reduce the recorded value of the receivables. We re-evaluate the fair value of such receivables at the close of each measurement period. If the reevaluation were to yield a value materially different from the recorded value, an adjustment would be required. Results for the first quarter include no mark down reversal to the carrying value of the portion of the receivables portfolio accounted for at fair value. Mark downs are reflected as a reduction in revenue. Anticipated credit losses are included in our estimation of cash to be received with respect to receivables. Because such credit losses are included in our computation of the appropriate level yield, we do not thereafter make periodic provision for credit losses, as our best estimate of the lifetime aggregate of credit losses is included in that initial computation. Also, because we include anticipated credit losses in our computation of the level yield, the computed level yield is materially lower than the average contractual rate applicable to the receivables. Because our initial recorded value is fixed as the price we pay for the receivable, rather than as the contractual principal balance, we do not record acquisition fees as an amortizing asset related to the receivables, nor do we capitalize costs of acquiring the receivables. Rather we recognize the costs of acquisition as expenses in the period incurred. Other Income The following table presents the primary components of Other Income for the three-month and six-month periods ending June 30, 2023 and 2022: Schedule of other income Three Months Ended Six Months Ended June 30, June 30, 2023 2022 2023 2022 (In thousands) (In thousands) Origination and servicing fees from third party receivables $ 1,924 $ 1,408 $ 4,661 $ 2,252 Direct mail revenues – – – 774 Sales tax refunds 264 159 524 303 Other 33 81 74 225 Other income for the period $ 2,221 $ 1,648 $ 5,259 $ 3,554 Leases The Company has operating leases for corporate offices, equipment, software and hardware. The Company has entered into operating leases for the majority of its real estate locations, primarily office space. These leases are generally for periods of three to seven years with various renewal options. The depreciable life of leased assets is limited by the expected lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheet and the related lease expense is recognized on a straight-line basis over the lease term. The following table presents the supplemental balance sheet information related to leases: Supplemental balance sheet information related to leases June 30, December 31, 2023 2022 (In thousands) Operating Leases Operating lease right-of-use assets $ 29,575 $ 28,397 Less: Accumulated amortization right-of-use assets (24,649 ) (22,613 ) Operating lease right-of-use assets, net $ 4,926 $ 5,784 Operating lease liabilities $ (5,271 ) $ (6,234 ) Finance Leases Property and equipment, at cost $ 3,454 $ 3,407 Less: Accumulated depreciation (3,357 ) (3,301 ) Property and equipment, net $ 97 $ 106 Finance lease liabilities $ (102 ) $ (177 ) Weighted Average Discount Rate Operating lease 5.0 5.0 Finance lease 6.5 6.5 Maturities of lease liabilities were as follows: Schedule of maturities of lease liabilities (In thousands) Operating Finance Year Ending June 30, Lease Lease 2023 $ 2,775 $ 30 2024 1,787 37 2025 737 20 2026 455 11 2027 452 11 Thereafter 565 1 Total undiscounted lease payments 6,771 110 Less amounts representing interest (1,500 ) (8 ) Lease Liability $ 5,271 $ 102 The following table presents the lease expense included in General and administrative and Occupancy expense on our Unaudited Condensed Consolidated Statement of Operations: Lease information Three Months Ended Six Months Ended June 30, June 30, 2023 2022 2023 2022 (In thousands) (In thousands) Operating lease cost $ 1,411 $ 1,760 $ 2,771 $ 3,630 Finance lease cost 24 257 125 555 Total lease cost $ 1,435 $ 2,017 $ 2,896 $ 4,185 The following table presents the supplemental cash flow information related to leases: Supplemental cash flow information related to leases Three Months Ended Six Months Ended June 30, June 30, 2023 2022 2023 2022 (In thousands) (In thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 1,441 $ 1,907 $ 2,771 $ 3,965 Operating cash flows from finance leases 23 245 122 527 Financing cash flows from finance leases 2 12 4 28 Stock-based Compensation We recognize compensation costs in the financial statements for all share-based payments based on the grant date fair value estimated in accordance with the provisions of ASC 718 “Stock Compensation”. For the three and six months ended June 30, 2023, we recorded stock-based compensation costs in the amount of $ 905,000 1.8 728,000 1.5 7.6 2.0 The following represents stock option activity for the six months ended June 30, 2023: Schedule of option activity Weighted Number of Weighted Average Shares Average Remaining (in thousands) Exercise Price Contractual Term Options outstanding at the beginning of period 11,167 $ 5.21 N/A Granted – – N/A Exercised (2,805 ) 5.59 N/A Forfeited – – N/A Options outstanding at the end of period 8,362 $ 5.09 3.61 Options exercisable at the end of period 5,675 $ 4.31 2.94 The following table presents the price distribution of stock options outstanding and exercisable for the years ended June 30, 2023 and December 31, 2022: Schedule of stock options outstanding and exercisable Number of shares as of Number of shares as of June 30, 2023 December 31, 2022 Outstanding Exercisable Outstanding Exercisable Range of exercise prices: (In thousands) (In thousands) $2.00 - $2.99 1,440 1,105 1,445 775 $3.00 - $3.99 2,543 2,253 3,785 3,495 $4.00 - $4.99 2,669 1,732 2,739 1,802 $5.00 - $5.99 – – – – $6.00 - $6.99 – – 740 740 $7.00 - $7.99 – – 748 748 $10.00 - $10.99 1,710 585 1,710 210 Total shares 8,362 5,675 11,167 7,770 At June 30, 2023 the aggregate intrinsic value of options outstanding and exercisable was $ 55.1 41.8 2.8 2.9 13.3 12.2 2,661,000 Purchases of Company Stock The table below describes the purchase of our common stock for the six months ended June 30, 2023 and 2022: Schedule of purchases of company stock Six Months Ended June 30, 2023 June 30, 2022 Shares Avg. Price Shares Avg. Price Open market purchases 564,202 $ 10.36 1,938,637 $ 11.42 Shares redeemed upon net exercise of stock options 1,220,044 10.34 893,153 13.56 Total stock purchases 1,784,246 $ 10.35 2,831,790 $ 12.09 Reclassifications Some items in the prior year financial statements were reclassified to conform to the current presentation. Reclassifications had no effect on net income or shareholders’ equity. Financial Covenants Certain of our securitization transactions, our warehouse credit facilities and our residual interest financing contain various financial covenants requiring minimum financial ratios and results. Such covenants include maintaining minimum levels of liquidity and net worth and not exceeding maximum leverage levels. As of June 30, 2023, we were in compliance with all such covenants. In addition, certain of our debt agreements other than our term securitizations contain cross-default provisions. Such cross-default provisions would allow the respective creditors to declare a default if an event of default occurred with respect to other indebtedness of ours, but only if such other event of default were to be accompanied by acceleration of such other indebtedness. Provision for Contingent Liabilities We are routinely involved in various legal proceedings resulting from our consumer finance activities and practices, both continuing and discontinued. Our legal counsel has advised us on such matters where, based on information available at the time of this report, there is an indication that it is both probable that a liability has been incurred and the amount of the loss can be reasonably determined. Adoption of New Accounting Standards In March 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") 2022-02, known as the Financial Instruments – Credit Losses (Topic 326), Troubled Debt Restructurings and Vintage Disclosures. ASU 2022-02 eliminates the accounting guidance for TDRs in ASC 310-40 on troubled debt restructurings for entities that have adopted the CECL model introduced by ASU 2016-13, Current Expected Credit Loss. ASU 2022-02 also requires that public business entities disclose current-period gross charge offs by year of origination for financing receivables and net investments in leases within the scope of Subtopic 326-20, Financial Instruments – Credit Losses – Measured at Amortized Cost. This guidance is effective for fiscal years beginning after December 15, 2022, and the adoption of this guidance did not have a material impact on the condensed consolidated financial statements. |
Finance Receivables
Finance Receivables | 6 Months Ended |
Jun. 30, 2023 | |
Finance Receivables | |
Finance Receivables | (2) Finance Receivables Our portfolio of finance receivables consists of small-balance homogeneous contracts comprising a single segment and class that is collectively evaluated for impairment on a portfolio basis according to delinquency status. Our contract purchase guidelines are designed to produce a homogenous portfolio. For key terms such as interest rate, length of contract, monthly payment and amount financed, there is relatively little variation from the average for the portfolio. We report delinquency on a contractual basis. Once a contract becomes greater than 90 days delinquent, we do not recognize additional interest income until the obligor under the contract makes sufficient payments to be less than 90 days delinquent. Any payments received on a contract that is greater than 90 days delinquent are first applied to accrued interest and then to principal reduction. In January 2018 the Company adopted the fair value method of accounting for finance receivables acquired after 2017. Finance receivables measured at fair value are recorded separately on the Company’s Balance Sheet and are excluded from all tables in this footnote. We consider an automobile contract delinquent when an obligor fails to make at least 90% of a contractually due payment by the following due date, which date may have been extended within limits specified in the servicing agreements. The period of delinquency is based on the number of days payments are contractually past due, as extended where applicable. Automobile contracts less than 31 days delinquent are not included. In certain circumstances we will grant obligors one-month payment extensions to assist them with temporary cash flow problems. The only modification of terms is to advance the obligor’s next due date by one month and extend the maturity date of the receivable by one month. In certain limited cases, a two-month extension may be granted. There are no other concessions such as a reduction in interest rate, forgiveness of principal or of accrued interest. Automobile finance receivables, net of unearned interest was $ 52.1 92.3 Schedule of delinquency status of finance receivables June 30, December 31, 2023 2022 (In thousands) Deliquency Status Current $ 37,553 $ 65,764 31 - 60 days 9,100 16,796 61 - 90 days 4,339 7,756 91 + days 1,088 1,988 $ 52,080 $ 92,304 Finance receivables totaling $ 1.1 2.0 Allowance for Credit Losses – Finance Receivables The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of finance receivables to present the net amount expected to be collected. Charge offs are deducted from the allowance when management believes that collectability is unlikely. Management estimates the allowance using relevant available information, from internal and external sources, relating to past events, current conditions and, reasonable and supportable forecasts. We believe our historical credit loss experience provides the best basis for the estimation of expected credit losses. Consequently, we use historical loss experience for older receivables, aggregated into vintage pools based on their calendar quarter of origination, to forecast expected losses for less seasoned quarterly vintage pools. We measure the weighted average monthly incremental change in cumulative net losses for the vintage pools in the relevant historical period. For the pools in the relevant historical period, we consider each pool’s performance from its inception through the end of the current period. We then apply the results of the historical analysis to less seasoned vintage pools beginning with each vintage pool’s most recent actual cumulative net loss experience and extrapolating from that point based on the historical data. We believe the pattern and magnitude of losses on older vintages allows us to establish a reasonable and supportable forecast of less seasoned vintages. Our contract purchase guidelines are designed to produce a homogenous portfolio. For key credit characteristics of individual contracts such as obligor credit history, job stability, residence stability and ability to pay, there is relatively little variation from the average for the portfolio. Similarly, for key structural characteristics such as loan-to-value, length of contract, monthly payment and amount financed, there is relatively little variation from the average for the portfolio. Consequently, we do not believe there are significant differences in risk characteristics between various segments of our portfolio. Our methodology incorporates historical pools that are sufficiently seasoned to capture the magnitude and trends of losses within those vintage pools. Furthermore, the historical period encompasses a substantial volume of receivables over periods that include fluctuations in the competitive landscape, the Company’s rates of growth, size of our managed portfolio and fluctuations in economic growth and unemployment. In consideration of the depth and breadth of the historical period, and the homogeneity of our portfolio, we generally do not adjust historical loss information for differences in risk characteristics such as credit or structural composition of segments of the portfolio or for changes in environmental conditions such as changes in unemployment rates, collateral values or other factors. However, we have considered how certain qualitative factors may affect future credit losses and have incorporated our judgement of the effect of such factors into our estimates. The following table presents the amortized cost basis of our finance receivables by annual vintage as of June 30, 2023 and December 31, 2022. Schedule of amortized cost basis of finance receivables June 30, December 31, 2023 2022 (In thousands) Annual Vintage Pool 2014 and prior $ 876 $ 1,865 2015 4,019 8,627 2016 15,609 28,632 2017 31,576 53,180 $ 52,080 $ 92,304 The following table presents a summary of the activity for the allowance for finance credit losses for the three-month periods ended June 30, 2023 and 2022: Schedule of allowance for finance credit losses Three Months Ended Six Months Ended June 30, June 30, 2023 2022 2023 2022 (In thousands) (In thousands) Balance at beginning of period $ 14,728 $ 45,001 $ 21,753 $ 56,206 Provision for credit losses on finance receivables (9,700 ) (8,000 ) (18,700 ) (17,400 ) Charge-offs (1,897 ) (4,446 ) (4,914 ) (9,805 ) Recoveries 2,590 3,117 7,582 6,671 Balance at end of period $ 5,721 $ 35,672 $ 5,721 $ 35,672 The following table presents the gross charge-offs by year of origination of our finance receivables for the three-month and six-month ended June 30, 2023 and 2022: Schedule of charge-offs for financed receivables Three Months Ended Six Months Ended June 30, June 30, 2023 2022 2023 2022 Annual Vintage Pool (In thousands) (In thousands) 2014 and prior $ 67 $ 243 $ 208 $ 535 2015 297 653 741 1,742 2016 713 1,514 2,034 3,539 2017 1,230 2,131 2,732 4,303 Applied against repos in inventory (net) (410 ) (95 ) (801 ) (314 ) $ 1,897 $ 4,446 $ 4,914 $ 9,805 Excluded from finance receivables are contracts that were previously classified as finance receivables but were reclassified as other assets because we have repossessed the vehicle securing the Contract. The following table presents a summary of such repossessed inventory together with the allowance for losses in repossessed inventory that is not included in the allowance for finance credit losses: Schedule of allowance for losses on repossessed inventory June 30, December 31, 2023 2022 (In thousands) Gross balance of repossessions in inventory $ 1,003 $ 1,894 Allowance for losses on repossessed inventory (655 ) (1,323 ) Net repossessed inventory included in other assets $ 348 $ 571 |
Securitization Trust Debt
Securitization Trust Debt | 6 Months Ended |
Jun. 30, 2023 | |
Securitization Trust Debt | |
Securitization Trust Debt | (3) Securitization Trust Debt We have completed many securitization transactions that are structured as secured borrowings for financial accounting purposes. The debt issued in these transactions is shown on our Unaudited Condensed Consolidated Balance Sheets as “Securitization trust debt,” and the components of such debt are summarized in the following table: Schedule of Long-term Debt Instruments Series Final Scheduled Payment Date (1) Receivables Pledged at Initial Principal Outstanding Principal at Outstanding Principal at Weighted Average Contractual Debt Interest Rate at (Dollars in thousands) CPS 2018-A March 2025 $ – $ 190,000 $ – $ 12,939 – CPS 2018-B December 2024 – 201,823 – 17,077 – CPS 2018-C September 2025 – 230,275 – 20,222 6.07 CPS 2018-D June 2025 20,498 233,730 16,011 25,563 5.82 CPS 2019-A March 2026 26,513 254,400 21,680 32,898 5.73 CPS 2019-B June 2026 28,679 228,275 24,730 33,897 5.56 CPS 2019-C September 2026 34,151 243,513 30,129 41,515 4.55 CPS 2019-D December 2026 45,068 274,313 39,936 53,625 3.86 CPS 2020-A March 2027 42,267 260,000 38,057 52,705 4.18 CPS 2020-B June 2027 48,747 202,343 31,860 41,736 6.36 CPS 2020-C November 2027 66,427 252,200 56,227 72,894 3.45 CPS 2021-A March 2028 70,683 230,545 51,064 72,076 1.49 CPS 2021-B June 2028 89,355 240,000 76,336 101,206 2.01 CPS 2021-C September 2028 131,240 291,000 113,606 147,593 1.70 CPS 2021-D December 2028 178,689 349,202 162,778 209,277 2.00 CPS 2022-A April 2029 196,998 316,800 176,857 222,613 2.29 CPS 2022-B October 2029 295,399 395,600 266,669 325,907 4.28 CPS 2022-C April 2030 332,262 391,600 285,595 346,714 5.34 CPS 2022-D June 2030 278,221 307,018 250,805 292,461 7.45 CPS 2023-A August 2030 196,998 324,768 281,081 – 6.13 CPS 2023-B November 2030 295,399 332,885 316,192 – 6.46 $ 2,377,595 $ 5,750,290 $ 2,239,614 $ 2,122,919 _________________ (1) The Final Scheduled Payment Date represents final legal maturity of the securitization trust debt. Securitization trust debt is expected to become due and to be paid prior to those dates, based on amortization of the finance receivables pledged to the trusts. Expected payments, which will depend on the performance of such receivables, as to which there can be no assurance, are $ 409.3 747.0 463.2 288.1 193.9 102.9 20.7 (2) Includes repossessed assets that are included in Other assets on our Unaudited Condensed Consolidated Balance Sheet. Debt issuance costs of $ 14.5 14.2 All of the securitization trust debt was sold in private placement transactions to qualified institutional buyers. The debt was issued through our wholly-owned bankruptcy remote subsidiaries and is secured by the assets of such subsidiaries, but not by our other assets. The terms of the securitization agreements related to the issuance of the securitization trust debt and the warehouse credit facilities require that we meet certain delinquency and credit loss criteria with respect to the pool of receivables, and certain of the agreements require that we maintain minimum levels of liquidity and not exceed maximum leverage levels. As of June 30, 2023, we were in compliance with all such covenants. We are responsible for the administration and collection of the automobile contracts. The securitization agreements also require certain funds be held in restricted cash accounts to provide additional collateral for the borrowings, to be applied to make payments on the securitization trust debt or as pre-funding proceeds from a term securitization prior to the purchase of additional collateral. As of June 30, 2023, restricted cash under the various agreements totaled approximately $ 148.1 Our wholly-owned bankruptcy remote subsidiaries were formed to facilitate the above asset-backed financing transactions. Similar bankruptcy remote subsidiaries issue the debt outstanding under our credit facilities. Bankruptcy remote refers to a legal structure in which it is expected that the applicable entity would not be included in any bankruptcy filing by its parent or affiliates. All of the assets of these subsidiaries have been pledged as collateral for the related debt. All such transactions, treated as secured financings for accounting and tax purposes, are treated as sales for all other purposes, including legal and bankruptcy purposes. None of the assets of these subsidiaries are available to pay other creditors. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
Debt | (4) Debt The terms and amounts of our other debt outstanding at June 30, 2023 and December 31, 2022 are summarized below: Schedule of debt outstanding Amount Outstanding at June 30, December 31, 2023 2022 (In thousands) Description Interest Rate Maturity Warehouse lines of credit 3.00% over one month Libor (Minimum 3.75%) 8.38% and 7.48% at June 30, 2023 and December 31, 2022, respectively July 2024 $ 144,949 $ 150,293 4.15% over a commercial paper rate (Minimum 5.15%) 9.41% and 8.60% at June 30, 2023, and December 31, 2022, respectively January 2024 101,898 137,585 Residual interest financing 7.86 June 2026 50,000 50,000 Subordinated renewable notes Weighted average rate of 7.98% and 7.82% at June 30, 2023 and December 31, 2022, respectively Weighted average maturity of April 2025 October 2024 21,204 25,263 $ 318,051 $ 363,141 On February 2, 2022, we renewed our two-year revolving credit agreement with Ares Agent Services, L.P. There was $ 144.9 100 200 On July 15, 2022, we renewed our two-year revolving credit agreement with Citibank, N.A., and doubled the capacity from $ 100 200 101.9 Unamortized debt issuance costs of $ 251,000 377,000 1.6 2.6 |
Interest Income and Interest Ex
Interest Income and Interest Expense | 6 Months Ended |
Jun. 30, 2023 | |
Interest Income and Interest Expense | (5) Interest Income and Interest Expense The following table presents the components of interest income: Schedule of interest income Three Months Ended Six Months Ended June 30, June 30, 2023 2022 2023 2022 (In thousands) (In thousands) Interest on finance receivables $ 4,378 $ 9,832 $ 9,040 $ 21,146 Interest on finance receivables at fair value 76,735 65,730 150,793 124,470 Other interest income 1,524 108 2,866 114 Interest income $ 82,637 $ 75,670 $ 162,699 $ 145,730 The following table presents the components of interest expense: Schedule of interest expense Three Months Ended Six Months Ended June 30, June 30, 2023 2022 2023 2022 (In thousands) (In thousands) Securitization trust debt $ 29,171 $ 15,745 $ 55,524 $ 29,273 Warehouse lines of credit 5,008 1,386 9,856 2,544 Residual interest financing 1,050 1,050 2,100 2,144 Subordinated renewable notes 477 590 985 1,210 Interest expense $ 35,706 $ 18,771 $ 68,465 $ 35,171 |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2023 | |
Earnings per share: | |
Earnings Per Share | (6) Earnings Per Share Earnings per share for the three-month and six-month periods ended June 30, 2023 and 2022 were calculated using the weighted average number of shares outstanding for the related period. The following table reconciles the number of shares used in the computations of basic and diluted earnings per share for the three-month and six-month periods ended June 30, 2023 and 2022: Computation of earnings per share Three Months Ended Six Months Ended 2023 2022 2023 2022 (In thousands) (In thousands) Weighted average number of common shares outstanding during the period used to compute basic earnings per share 20,866 21,370 20,643 21,296 Incremental common shares attributable to exercise of outstanding options and warrants 4,507 6,317 4,741 6,647 Weighted average number of common shares used to compute diluted earnings per share 25,373 27,687 25,384 27,943 If the anti-dilutive effects of common stock equivalents were considered, shares included in the diluted earnings per share calculation for the three-month and six-month periods ended June 30, 2023 would have included an additional 1.5 1.5 824,000 692,000 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | (7) Income Taxes We file numerous consolidated and separate income tax returns with the United States and with many states. With few exceptions, we are no longer subject to U.S. federal, state, or local examinations by tax authorities for years before 2015. As of June 30, 2023, and December 31, 2022, we had no unrecognized tax benefits for uncertain tax positions. We do not anticipate that total unrecognized tax benefits will significantly change due to any settlements of audits or expirations of statutes of limitations over the next 12 months. The Company and its subsidiaries file a consolidated federal income tax return and combined or stand-alone state franchise tax returns for certain states. We utilize the asset and liability method of accounting for income taxes, under which deferred income taxes are recognized for the future tax consequences attributable to the differences between the financial statement values of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets are recognized subject to management’s judgment that realization is more likely than not. A valuation allowance is recognized for a deferred tax asset if, based on the weight of the available evidence, it is more likely than not that some portion of the deferred tax asset will not be realized. In making such judgments, significant weight is given to evidence that can be objectively verified. Although realization is not assured, we believe that the realization of the recognized net deferred tax asset of $ 7.4 4.8 2.6 Income tax expense was $ 4.7 9.3 25 8.9 17.1 26 27 |
Legal Proceedings
Legal Proceedings | 6 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Proceedings | (8) Legal Proceedings Consumer Litigation. Following our filing of a complaint for a deficiency judgment in the Superior Court at Waterbury, Connecticut, the defendant filed a cross-claim alleging that our deficiency notices were not compliant with Connecticut law, and seeking relief on behalf of a class of Connecticut obligors whose vehicles we had repossessed. The defendant’s contract provided for resolution of disputes exclusively by arbitration, and exclusively on an individual basis, not a class basis. Nevertheless, in August 2021, the court denied our motion to compel arbitration, without opinion. In April 2022, a motion for certification of a class was filed but has not been ruled upon. It is reasonable to expect that resolution of these claims will be on a class basis. Wage and Hour Claim. Massachusetts Civil Investigative Demand In General. 3.8 7.3 Accordingly, we believe that the ultimate resolution of such legal proceedings and contingencies should not have a material adverse effect on our consolidated financial condition. We note, however, that in light of the uncertainties inherent in contested proceedings there can be no assurance that the ultimate resolution of these matters will not be material to our operating results for a particular period, depending on, among other factors, the size of the loss or liability imposed and the level of our income for that period. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | (9) Fair Value Measurements ASC 820, "Fair Value Measurements" clarifies the principle that fair value should be based on the assumptions market participants would use when pricing an asset or liability and establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. Under the standard, fair value measurements would be separately disclosed by level within the fair value hierarchy. ASC 820 defines fair value, establishes a framework for measuring fair value, establishes a three-level valuation hierarchy for disclosure of fair value measurement and enhances disclosure requirements for fair value measurements. The three levels are defined as follows: level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets; level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument; and level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement. Effective January 2018 we have elected to use the fair value method to value our portfolio of finance receivables acquired in January 2018 and thereafter. Our valuation policies and procedures have been developed by our Accounting department in conjunction with our Risk department and with consultation with outside valuation experts. Our policies and procedures have been approved by our Chief Executive and our Board of Directors and include methodologies for valuation, internal reporting, calibration and back testing. Our periodic review of valuations includes an analysis of changes in fair value measurements and documentation of the reasons for such changes. There is little available third-party information such as broker quotes or pricing services available to assist us in our valuation process. Our level 3, unobservable inputs reflect our own assumptions about the factors that market participants use in pricing similar receivables and are based on the best information available in the circumstances. They include such inputs as estimates for the magnitude and timing of net charge-offs and the rate of amortization of the portfolio of finance receivable. Significant changes in any of those inputs in isolation would have a significant effect on our fair value measurement. For the quarter ended June 30, 2023, the Company evaluated the appropriate fair value and future earnings rate of existing receivables compared to recently acquired receivables and our assessment of potential additional future net losses on the portfolio of finance receivables carried at fair value and did not record a mark down to that portfolio. The table below presents a reconciliation of the finance receivables measured at fair value on a recurring basis using significant unobservable inputs: Schedule of reconciliation of the finance receivables measured at fair value on a recurring basis Three Months Ended Six Months Ended June 30, June 30, 2023 2022 2023 2022 (In thousands) (In thousands) Balance at beginning of period $ 2,575,117 $ 1,903,857 $ 2,476,617 $ 1,749,098 Finance receivables at fair value acquired during period 305,450 511,068 658,048 904,475 Payments received on finance receivables at fair value (215,314 ) (215,930 ) (421,940 ) (425,774 ) Net interest income accretion on fair value receivables (46,833 ) (29,562 ) (94,305 ) (60,766 ) Mark to fair value – 4,700 – 7,100 Balance at end of period $ 2,618,420 $ 2,174,133 $ 2,618,420 $ 2,174,133 The table below compares the fair values of these finance receivables to their contractual balances for the periods shown: Finance receivables fair and contractual balances June 30, 2023 December 31, 2022 Contractual Fair Contractual Fair Balance Value Balance Value (In thousands) Finance receivables measured at fair value $ 2,857,205 $ 2,618,420 $ 2,701,184 $ 2,476,617 The following table provides certain qualitative information about our level 3 fair value measurements: Schedule of level 3 fair value measurements Financial Instrument Fair Values as of Inputs as of June 30, December 31, June 30, December 31, 2023 2022 Unobservable 2023 2022 (In thousands) Assets: Finance receivables measured at fair value $ 2,618,420 $ 2,476,617 Discount rate 11.0% - 11.5% 11.0% - 11.3% Cumulative net losses 10.0% - 21.5% 13.4% - 19.4% The following table summarizes the delinquency status of these finance receivables measured at fair value as of June 30, 2023 and December 31, 2022: Schedule of delinquency status of finance receivables measured at fair value June 30, December 31, 2023 2022 (In thousands) Delinquency Status Current $ 2,531,445 $ 2,375,271 31 - 60 days 180,284 184,968 61 - 90 days 74,963 72,390 91 + days 28,619 29,048 Repo 41,894 39,507 $ 2,857,205 $ 2,701,184 Repossessed vehicle inventory, which is included in Other Assets on our unaudited condensed consolidated balance sheet, is measured at fair value using level 2 assumptions based on our actual loss experience on sale of repossessed vehicles. At June 30, 2023 the finance receivables related to the repossessed vehicles in inventory totaled $1.0 million. We have applied a valuation adjustment, or loss allowance, of $655,000, which is based on a recovery rate of approximately 35%, resulting in an estimated fair value and carrying amount of $348,000. The fair value and carrying amount of the repossessed inventory at December 31, 2022 was $1.9 million after applying a valuation adjustment of $1.3 million. There were no transfers in or out of level 1, level 2 or level 3 assets and liabilities for the three months ended June 30, 2023 and 2022. The estimated fair values of financial assets and liabilities at June 30, 2023 and December 31, 2022, were as follows: Schedule of estimated fair values of financial assets and liabilities As of June 30, 2023 Financial Instrument (In thousands) Carrying Fair Value Measurements Using: Value Level 1 Level 2 Level 3 Total Assets: Cash and cash equivalents $ 7,081 $ 7,081 $ – $ – $ 7,081 Restricted cash and equivalents 148,063 148,063 – – 148,063 Finance receivables, net 46,359 – – 42,495 42,495 Accrued interest receivable 93 – – 93 93 Liabilities: Warehouse lines of credit $ 245,272 $ – $ – $ 245,272 $ 245,272 Residual interest financing 49,749 49,749 49,749 Accrued interest payable 7,243 – – 7,243 7,243 Securitization trust debt 2,225,072 – – 2,137,162 2,137,162 Subordinated renewable notes 21,204 – – 21,204 21,204 As of December 31, 2022 Financial Instrument (In thousands) Carrying Fair Value Measurements Using: Value Level 1 Level 2 Level 3 Total Assets: Cash and cash equivalents $ 13,490 $ 13,490 $ – $ – $ 13,490 Restricted cash and equivalents 149,299 149,299 – – 149,299 Finance receivables, net 70,551 – – 60,063 60,063 Accrued interest receivable 649 – – 649 649 Liabilities: Warehouse lines of credit $ 285,328 $ – $ – $ 285,328 $ 285,328 Accrued interest payable 6,190 – – 6,190 6,190 Securitization trust debt 2,108,744 – – 1,957,995 1,957,995 Subordinated renewable notes 25,263 – – 25,263 25,263 |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | (10) Subsequent Events On July 25, 2023 we executed our third securitization of 2023. In the transaction, qualified institutional buyers purchased $291.7 million of asset-backed notes secured by $312.7 million in automobile receivables originated by CPS. The sold notes, issued by CPS Auto Receivables Trust 2023-C, consist of five classes. Ratings of the notes were provided by Standard & Poor’s and DBRS Morningstar, and were based on the structure of the transaction, the historical performance of similar receivables and CPS’s experience as a servicer. The weighted average yield on the notes is approximately 7.13%. The 2023-C transaction has initial credit enhancement consisting of a cash deposit equal to 1.00% of the original receivable pool balance and overcollateralization of 6.70%. The transaction agreements require accelerated payment of principal on the notes to reach overcollateralization of the lesser of 9.70% of the original receivable pool balance, or 21.50% of the then outstanding pool balance. The transaction was a private offering of securities, not registered under the Securities Act of 1933, or any state securities law. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Description of Business | Description of Business We were formed in California on March 8, 1991. We specialize in purchasing and servicing retail automobile installment sale contracts (“automobile contracts” or “finance receivables”) originated by licensed motor vehicle dealers located throughout the United States (“dealers”) in the sale of new and used automobiles, light trucks and passenger vans. Through our purchases, we provide indirect financing to dealer customers for borrowers with limited credit histories or past credit problems (“sub-prime customers”). We serve as an alternative source of financing for dealers, allowing sales to customers who otherwise might not be able to obtain financing. In addition to purchasing installment purchase contracts directly from dealers, we have also (i) lent money directly to consumers for loans secured by vehicles, (ii) purchased immaterial amounts of vehicle purchase money loans from non-affiliated lenders, and (iii) acquired installment purchase contracts in four merger and acquisition transactions. In this report, we refer to all of such contracts and loans as “automobile contracts.” |
Basis of Presentation | Basis of Presentation Our Unaudited Condensed Consolidated Financial Statements have been prepared in conformity with accounting principles generally accepted in the United States of America, with the instructions to Form 10-Q and with Article 10 of Regulation S-X of the Securities and Exchange Commission, and include all adjustments that are, in management’s opinion, necessary for a fair presentation of the results for the interim periods presented. All such adjustments are, in the opinion of management, of a normal recurring nature. Results for the six-month period ended June 30, 2023 are not necessarily indicative of the operating results to be expected for the full year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted from these Unaudited Condensed Consolidated Financial Statements. These Unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2022. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements, as well as the reported amounts of income and expenses during the reported periods. |
Finance Receivables Measured at Fair Value | Finance Receivables Measured at Fair Value Effective January 1, 2018, we adopted the fair value method of accounting for finance receivables acquired on or after that date. For each finance receivable acquired after 2017, we consider the price paid on the purchase date as the fair value for such receivable. We estimate the cash to be received in the future with respect to such receivables, based on our experience with similar receivables acquired in the past. We then compute the internal rate of return that results in the present value of those estimated cash receipts being equal to the purchase date fair value. Thereafter, we recognize interest income on such receivables on a level yield basis using that internal rate of return as the applicable interest rate. Cash received with respect to such receivables is applied first against such interest income, and then to reduce the recorded value of the receivables. We re-evaluate the fair value of such receivables at the close of each measurement period. If the reevaluation were to yield a value materially different from the recorded value, an adjustment would be required. Results for the first quarter include no mark down reversal to the carrying value of the portion of the receivables portfolio accounted for at fair value. Mark downs are reflected as a reduction in revenue. Anticipated credit losses are included in our estimation of cash to be received with respect to receivables. Because such credit losses are included in our computation of the appropriate level yield, we do not thereafter make periodic provision for credit losses, as our best estimate of the lifetime aggregate of credit losses is included in that initial computation. Also, because we include anticipated credit losses in our computation of the level yield, the computed level yield is materially lower than the average contractual rate applicable to the receivables. Because our initial recorded value is fixed as the price we pay for the receivable, rather than as the contractual principal balance, we do not record acquisition fees as an amortizing asset related to the receivables, nor do we capitalize costs of acquiring the receivables. Rather we recognize the costs of acquisition as expenses in the period incurred. |
Other Income | Other Income The following table presents the primary components of Other Income for the three-month and six-month periods ending June 30, 2023 and 2022: Schedule of other income Three Months Ended Six Months Ended June 30, June 30, 2023 2022 2023 2022 (In thousands) (In thousands) Origination and servicing fees from third party receivables $ 1,924 $ 1,408 $ 4,661 $ 2,252 Direct mail revenues – – – 774 Sales tax refunds 264 159 524 303 Other 33 81 74 225 Other income for the period $ 2,221 $ 1,648 $ 5,259 $ 3,554 |
Leases | Leases The Company has operating leases for corporate offices, equipment, software and hardware. The Company has entered into operating leases for the majority of its real estate locations, primarily office space. These leases are generally for periods of three to seven years with various renewal options. The depreciable life of leased assets is limited by the expected lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheet and the related lease expense is recognized on a straight-line basis over the lease term. The following table presents the supplemental balance sheet information related to leases: Supplemental balance sheet information related to leases June 30, December 31, 2023 2022 (In thousands) Operating Leases Operating lease right-of-use assets $ 29,575 $ 28,397 Less: Accumulated amortization right-of-use assets (24,649 ) (22,613 ) Operating lease right-of-use assets, net $ 4,926 $ 5,784 Operating lease liabilities $ (5,271 ) $ (6,234 ) Finance Leases Property and equipment, at cost $ 3,454 $ 3,407 Less: Accumulated depreciation (3,357 ) (3,301 ) Property and equipment, net $ 97 $ 106 Finance lease liabilities $ (102 ) $ (177 ) Weighted Average Discount Rate Operating lease 5.0 5.0 Finance lease 6.5 6.5 Maturities of lease liabilities were as follows: Schedule of maturities of lease liabilities (In thousands) Operating Finance Year Ending June 30, Lease Lease 2023 $ 2,775 $ 30 2024 1,787 37 2025 737 20 2026 455 11 2027 452 11 Thereafter 565 1 Total undiscounted lease payments 6,771 110 Less amounts representing interest (1,500 ) (8 ) Lease Liability $ 5,271 $ 102 The following table presents the lease expense included in General and administrative and Occupancy expense on our Unaudited Condensed Consolidated Statement of Operations: Lease information Three Months Ended Six Months Ended June 30, June 30, 2023 2022 2023 2022 (In thousands) (In thousands) Operating lease cost $ 1,411 $ 1,760 $ 2,771 $ 3,630 Finance lease cost 24 257 125 555 Total lease cost $ 1,435 $ 2,017 $ 2,896 $ 4,185 The following table presents the supplemental cash flow information related to leases: Supplemental cash flow information related to leases Three Months Ended Six Months Ended June 30, June 30, 2023 2022 2023 2022 (In thousands) (In thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 1,441 $ 1,907 $ 2,771 $ 3,965 Operating cash flows from finance leases 23 245 122 527 Financing cash flows from finance leases 2 12 4 28 |
Stock-based Compensation | Stock-based Compensation We recognize compensation costs in the financial statements for all share-based payments based on the grant date fair value estimated in accordance with the provisions of ASC 718 “Stock Compensation”. For the three and six months ended June 30, 2023, we recorded stock-based compensation costs in the amount of $ 905,000 1.8 728,000 1.5 7.6 2.0 The following represents stock option activity for the six months ended June 30, 2023: Schedule of option activity Weighted Number of Weighted Average Shares Average Remaining (in thousands) Exercise Price Contractual Term Options outstanding at the beginning of period 11,167 $ 5.21 N/A Granted – – N/A Exercised (2,805 ) 5.59 N/A Forfeited – – N/A Options outstanding at the end of period 8,362 $ 5.09 3.61 Options exercisable at the end of period 5,675 $ 4.31 2.94 The following table presents the price distribution of stock options outstanding and exercisable for the years ended June 30, 2023 and December 31, 2022: Schedule of stock options outstanding and exercisable Number of shares as of Number of shares as of June 30, 2023 December 31, 2022 Outstanding Exercisable Outstanding Exercisable Range of exercise prices: (In thousands) (In thousands) $2.00 - $2.99 1,440 1,105 1,445 775 $3.00 - $3.99 2,543 2,253 3,785 3,495 $4.00 - $4.99 2,669 1,732 2,739 1,802 $5.00 - $5.99 – – – – $6.00 - $6.99 – – 740 740 $7.00 - $7.99 – – 748 748 $10.00 - $10.99 1,710 585 1,710 210 Total shares 8,362 5,675 11,167 7,770 At June 30, 2023 the aggregate intrinsic value of options outstanding and exercisable was $ 55.1 41.8 2.8 2.9 13.3 12.2 2,661,000 |
Purchases of Company Stock | Purchases of Company Stock The table below describes the purchase of our common stock for the six months ended June 30, 2023 and 2022: Schedule of purchases of company stock Six Months Ended June 30, 2023 June 30, 2022 Shares Avg. Price Shares Avg. Price Open market purchases 564,202 $ 10.36 1,938,637 $ 11.42 Shares redeemed upon net exercise of stock options 1,220,044 10.34 893,153 13.56 Total stock purchases 1,784,246 $ 10.35 2,831,790 $ 12.09 |
Reclassifications | Reclassifications Some items in the prior year financial statements were reclassified to conform to the current presentation. Reclassifications had no effect on net income or shareholders’ equity. |
Financial Covenants | Financial Covenants Certain of our securitization transactions, our warehouse credit facilities and our residual interest financing contain various financial covenants requiring minimum financial ratios and results. Such covenants include maintaining minimum levels of liquidity and net worth and not exceeding maximum leverage levels. As of June 30, 2023, we were in compliance with all such covenants. In addition, certain of our debt agreements other than our term securitizations contain cross-default provisions. Such cross-default provisions would allow the respective creditors to declare a default if an event of default occurred with respect to other indebtedness of ours, but only if such other event of default were to be accompanied by acceleration of such other indebtedness. |
Provision for Contingent Liabilities | Provision for Contingent Liabilities We are routinely involved in various legal proceedings resulting from our consumer finance activities and practices, both continuing and discontinued. Our legal counsel has advised us on such matters where, based on information available at the time of this report, there is an indication that it is both probable that a liability has been incurred and the amount of the loss can be reasonably determined. |
Adoption of New Accounting Standards | Adoption of New Accounting Standards In March 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") 2022-02, known as the Financial Instruments – Credit Losses (Topic 326), Troubled Debt Restructurings and Vintage Disclosures. ASU 2022-02 eliminates the accounting guidance for TDRs in ASC 310-40 on troubled debt restructurings for entities that have adopted the CECL model introduced by ASU 2016-13, Current Expected Credit Loss. ASU 2022-02 also requires that public business entities disclose current-period gross charge offs by year of origination for financing receivables and net investments in leases within the scope of Subtopic 326-20, Financial Instruments – Credit Losses – Measured at Amortized Cost. This guidance is effective for fiscal years beginning after December 15, 2022, and the adoption of this guidance did not have a material impact on the condensed consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Schedule of other income | Schedule of other income Three Months Ended Six Months Ended June 30, June 30, 2023 2022 2023 2022 (In thousands) (In thousands) Origination and servicing fees from third party receivables $ 1,924 $ 1,408 $ 4,661 $ 2,252 Direct mail revenues – – – 774 Sales tax refunds 264 159 524 303 Other 33 81 74 225 Other income for the period $ 2,221 $ 1,648 $ 5,259 $ 3,554 |
Supplemental balance sheet information related to leases | Supplemental balance sheet information related to leases June 30, December 31, 2023 2022 (In thousands) Operating Leases Operating lease right-of-use assets $ 29,575 $ 28,397 Less: Accumulated amortization right-of-use assets (24,649 ) (22,613 ) Operating lease right-of-use assets, net $ 4,926 $ 5,784 Operating lease liabilities $ (5,271 ) $ (6,234 ) Finance Leases Property and equipment, at cost $ 3,454 $ 3,407 Less: Accumulated depreciation (3,357 ) (3,301 ) Property and equipment, net $ 97 $ 106 Finance lease liabilities $ (102 ) $ (177 ) |
Schedule of maturities of lease liabilities | Schedule of maturities of lease liabilities (In thousands) Operating Finance Year Ending June 30, Lease Lease 2023 $ 2,775 $ 30 2024 1,787 37 2025 737 20 2026 455 11 2027 452 11 Thereafter 565 1 Total undiscounted lease payments 6,771 110 Less amounts representing interest (1,500 ) (8 ) Lease Liability $ 5,271 $ 102 |
Lease information | Lease information Three Months Ended Six Months Ended June 30, June 30, 2023 2022 2023 2022 (In thousands) (In thousands) Operating lease cost $ 1,411 $ 1,760 $ 2,771 $ 3,630 Finance lease cost 24 257 125 555 Total lease cost $ 1,435 $ 2,017 $ 2,896 $ 4,185 |
Supplemental cash flow information related to leases | Supplemental cash flow information related to leases Three Months Ended Six Months Ended June 30, June 30, 2023 2022 2023 2022 (In thousands) (In thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 1,441 $ 1,907 $ 2,771 $ 3,965 Operating cash flows from finance leases 23 245 122 527 Financing cash flows from finance leases 2 12 4 28 |
Schedule of option activity | Schedule of option activity Weighted Number of Weighted Average Shares Average Remaining (in thousands) Exercise Price Contractual Term Options outstanding at the beginning of period 11,167 $ 5.21 N/A Granted – – N/A Exercised (2,805 ) 5.59 N/A Forfeited – – N/A Options outstanding at the end of period 8,362 $ 5.09 3.61 Options exercisable at the end of period 5,675 $ 4.31 2.94 |
Schedule of stock options outstanding and exercisable | Schedule of stock options outstanding and exercisable Number of shares as of Number of shares as of June 30, 2023 December 31, 2022 Outstanding Exercisable Outstanding Exercisable Range of exercise prices: (In thousands) (In thousands) $2.00 - $2.99 1,440 1,105 1,445 775 $3.00 - $3.99 2,543 2,253 3,785 3,495 $4.00 - $4.99 2,669 1,732 2,739 1,802 $5.00 - $5.99 – – – – $6.00 - $6.99 – – 740 740 $7.00 - $7.99 – – 748 748 $10.00 - $10.99 1,710 585 1,710 210 Total shares 8,362 5,675 11,167 7,770 |
Schedule of purchases of company stock | Schedule of purchases of company stock Six Months Ended June 30, 2023 June 30, 2022 Shares Avg. Price Shares Avg. Price Open market purchases 564,202 $ 10.36 1,938,637 $ 11.42 Shares redeemed upon net exercise of stock options 1,220,044 10.34 893,153 13.56 Total stock purchases 1,784,246 $ 10.35 2,831,790 $ 12.09 |
Finance Receivables (Tables)
Finance Receivables (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Finance Receivables | |
Schedule of delinquency status of finance receivables | Schedule of delinquency status of finance receivables June 30, December 31, 2023 2022 (In thousands) Deliquency Status Current $ 37,553 $ 65,764 31 - 60 days 9,100 16,796 61 - 90 days 4,339 7,756 91 + days 1,088 1,988 $ 52,080 $ 92,304 |
Schedule of amortized cost basis of finance receivables | Schedule of amortized cost basis of finance receivables June 30, December 31, 2023 2022 (In thousands) Annual Vintage Pool 2014 and prior $ 876 $ 1,865 2015 4,019 8,627 2016 15,609 28,632 2017 31,576 53,180 $ 52,080 $ 92,304 |
Schedule of allowance for finance credit losses | Schedule of allowance for finance credit losses Three Months Ended Six Months Ended June 30, June 30, 2023 2022 2023 2022 (In thousands) (In thousands) Balance at beginning of period $ 14,728 $ 45,001 $ 21,753 $ 56,206 Provision for credit losses on finance receivables (9,700 ) (8,000 ) (18,700 ) (17,400 ) Charge-offs (1,897 ) (4,446 ) (4,914 ) (9,805 ) Recoveries 2,590 3,117 7,582 6,671 Balance at end of period $ 5,721 $ 35,672 $ 5,721 $ 35,672 |
Schedule of charge-offs for financed receivables | Schedule of charge-offs for financed receivables Three Months Ended Six Months Ended June 30, June 30, 2023 2022 2023 2022 Annual Vintage Pool (In thousands) (In thousands) 2014 and prior $ 67 $ 243 $ 208 $ 535 2015 297 653 741 1,742 2016 713 1,514 2,034 3,539 2017 1,230 2,131 2,732 4,303 Applied against repos in inventory (net) (410 ) (95 ) (801 ) (314 ) $ 1,897 $ 4,446 $ 4,914 $ 9,805 |
Schedule of allowance for losses on repossessed inventory | Schedule of allowance for losses on repossessed inventory June 30, December 31, 2023 2022 (In thousands) Gross balance of repossessions in inventory $ 1,003 $ 1,894 Allowance for losses on repossessed inventory (655 ) (1,323 ) Net repossessed inventory included in other assets $ 348 $ 571 |
Securitization Trust Debt (Tabl
Securitization Trust Debt (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Securitization Trust Debt | |
Schedule of Long-term Debt Instruments | Schedule of Long-term Debt Instruments Series Final Scheduled Payment Date (1) Receivables Pledged at Initial Principal Outstanding Principal at Outstanding Principal at Weighted Average Contractual Debt Interest Rate at (Dollars in thousands) CPS 2018-A March 2025 $ – $ 190,000 $ – $ 12,939 – CPS 2018-B December 2024 – 201,823 – 17,077 – CPS 2018-C September 2025 – 230,275 – 20,222 6.07 CPS 2018-D June 2025 20,498 233,730 16,011 25,563 5.82 CPS 2019-A March 2026 26,513 254,400 21,680 32,898 5.73 CPS 2019-B June 2026 28,679 228,275 24,730 33,897 5.56 CPS 2019-C September 2026 34,151 243,513 30,129 41,515 4.55 CPS 2019-D December 2026 45,068 274,313 39,936 53,625 3.86 CPS 2020-A March 2027 42,267 260,000 38,057 52,705 4.18 CPS 2020-B June 2027 48,747 202,343 31,860 41,736 6.36 CPS 2020-C November 2027 66,427 252,200 56,227 72,894 3.45 CPS 2021-A March 2028 70,683 230,545 51,064 72,076 1.49 CPS 2021-B June 2028 89,355 240,000 76,336 101,206 2.01 CPS 2021-C September 2028 131,240 291,000 113,606 147,593 1.70 CPS 2021-D December 2028 178,689 349,202 162,778 209,277 2.00 CPS 2022-A April 2029 196,998 316,800 176,857 222,613 2.29 CPS 2022-B October 2029 295,399 395,600 266,669 325,907 4.28 CPS 2022-C April 2030 332,262 391,600 285,595 346,714 5.34 CPS 2022-D June 2030 278,221 307,018 250,805 292,461 7.45 CPS 2023-A August 2030 196,998 324,768 281,081 – 6.13 CPS 2023-B November 2030 295,399 332,885 316,192 – 6.46 $ 2,377,595 $ 5,750,290 $ 2,239,614 $ 2,122,919 _________________ (1) The Final Scheduled Payment Date represents final legal maturity of the securitization trust debt. Securitization trust debt is expected to become due and to be paid prior to those dates, based on amortization of the finance receivables pledged to the trusts. Expected payments, which will depend on the performance of such receivables, as to which there can be no assurance, are $ 409.3 747.0 463.2 288.1 193.9 102.9 20.7 (2) Includes repossessed assets that are included in Other assets on our Unaudited Condensed Consolidated Balance Sheet. |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of debt outstanding | Schedule of debt outstanding Amount Outstanding at June 30, December 31, 2023 2022 (In thousands) Description Interest Rate Maturity Warehouse lines of credit 3.00% over one month Libor (Minimum 3.75%) 8.38% and 7.48% at June 30, 2023 and December 31, 2022, respectively July 2024 $ 144,949 $ 150,293 4.15% over a commercial paper rate (Minimum 5.15%) 9.41% and 8.60% at June 30, 2023, and December 31, 2022, respectively January 2024 101,898 137,585 Residual interest financing 7.86 June 2026 50,000 50,000 Subordinated renewable notes Weighted average rate of 7.98% and 7.82% at June 30, 2023 and December 31, 2022, respectively Weighted average maturity of April 2025 October 2024 21,204 25,263 $ 318,051 $ 363,141 |
Interest Income and Interest _2
Interest Income and Interest Expense (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Schedule of interest income | Schedule of interest income Three Months Ended Six Months Ended June 30, June 30, 2023 2022 2023 2022 (In thousands) (In thousands) Interest on finance receivables $ 4,378 $ 9,832 $ 9,040 $ 21,146 Interest on finance receivables at fair value 76,735 65,730 150,793 124,470 Other interest income 1,524 108 2,866 114 Interest income $ 82,637 $ 75,670 $ 162,699 $ 145,730 |
Schedule of interest expense | Schedule of interest expense Three Months Ended Six Months Ended June 30, June 30, 2023 2022 2023 2022 (In thousands) (In thousands) Securitization trust debt $ 29,171 $ 15,745 $ 55,524 $ 29,273 Warehouse lines of credit 5,008 1,386 9,856 2,544 Residual interest financing 1,050 1,050 2,100 2,144 Subordinated renewable notes 477 590 985 1,210 Interest expense $ 35,706 $ 18,771 $ 68,465 $ 35,171 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Earnings per share: | |
Computation of earnings per share | Computation of earnings per share Three Months Ended Six Months Ended 2023 2022 2023 2022 (In thousands) (In thousands) Weighted average number of common shares outstanding during the period used to compute basic earnings per share 20,866 21,370 20,643 21,296 Incremental common shares attributable to exercise of outstanding options and warrants 4,507 6,317 4,741 6,647 Weighted average number of common shares used to compute diluted earnings per share 25,373 27,687 25,384 27,943 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of reconciliation of the finance receivables measured at fair value on a recurring basis | Schedule of reconciliation of the finance receivables measured at fair value on a recurring basis Three Months Ended Six Months Ended June 30, June 30, 2023 2022 2023 2022 (In thousands) (In thousands) Balance at beginning of period $ 2,575,117 $ 1,903,857 $ 2,476,617 $ 1,749,098 Finance receivables at fair value acquired during period 305,450 511,068 658,048 904,475 Payments received on finance receivables at fair value (215,314 ) (215,930 ) (421,940 ) (425,774 ) Net interest income accretion on fair value receivables (46,833 ) (29,562 ) (94,305 ) (60,766 ) Mark to fair value – 4,700 – 7,100 Balance at end of period $ 2,618,420 $ 2,174,133 $ 2,618,420 $ 2,174,133 |
Finance receivables fair and contractual balances | Finance receivables fair and contractual balances June 30, 2023 December 31, 2022 Contractual Fair Contractual Fair Balance Value Balance Value (In thousands) Finance receivables measured at fair value $ 2,857,205 $ 2,618,420 $ 2,701,184 $ 2,476,617 |
Schedule of level 3 fair value measurements | Schedule of level 3 fair value measurements Financial Instrument Fair Values as of Inputs as of June 30, December 31, June 30, December 31, 2023 2022 Unobservable 2023 2022 (In thousands) Assets: Finance receivables measured at fair value $ 2,618,420 $ 2,476,617 Discount rate 11.0% - 11.5% 11.0% - 11.3% Cumulative net losses 10.0% - 21.5% 13.4% - 19.4% |
Schedule of delinquency status of finance receivables measured at fair value | Schedule of delinquency status of finance receivables measured at fair value June 30, December 31, 2023 2022 (In thousands) Delinquency Status Current $ 2,531,445 $ 2,375,271 31 - 60 days 180,284 184,968 61 - 90 days 74,963 72,390 91 + days 28,619 29,048 Repo 41,894 39,507 $ 2,857,205 $ 2,701,184 |
Schedule of estimated fair values of financial assets and liabilities | Schedule of estimated fair values of financial assets and liabilities As of June 30, 2023 Financial Instrument (In thousands) Carrying Fair Value Measurements Using: Value Level 1 Level 2 Level 3 Total Assets: Cash and cash equivalents $ 7,081 $ 7,081 $ – $ – $ 7,081 Restricted cash and equivalents 148,063 148,063 – – 148,063 Finance receivables, net 46,359 – – 42,495 42,495 Accrued interest receivable 93 – – 93 93 Liabilities: Warehouse lines of credit $ 245,272 $ – $ – $ 245,272 $ 245,272 Residual interest financing 49,749 49,749 49,749 Accrued interest payable 7,243 – – 7,243 7,243 Securitization trust debt 2,225,072 – – 2,137,162 2,137,162 Subordinated renewable notes 21,204 – – 21,204 21,204 As of December 31, 2022 Financial Instrument (In thousands) Carrying Fair Value Measurements Using: Value Level 1 Level 2 Level 3 Total Assets: Cash and cash equivalents $ 13,490 $ 13,490 $ – $ – $ 13,490 Restricted cash and equivalents 149,299 149,299 – – 149,299 Finance receivables, net 70,551 – – 60,063 60,063 Accrued interest receivable 649 – – 649 649 Liabilities: Warehouse lines of credit $ 285,328 $ – $ – $ 285,328 $ 285,328 Accrued interest payable 6,190 – – 6,190 6,190 Securitization trust debt 2,108,744 – – 1,957,995 1,957,995 Subordinated renewable notes 25,263 – – 25,263 25,263 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details - Other income) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Other Operating Income | $ 2,221 | $ 1,648 | $ 5,259 | $ 3,554 |
Origination And Servicing Fees [Member] | ||||
Other Operating Income | 1,924 | 1,408 | 4,661 | 2,252 |
Direct Mail Revenues [Member] | ||||
Other Operating Income | 0 | 0 | 0 | 774 |
Sales Tax Refunds [Member] | ||||
Other Operating Income | 264 | 159 | 524 | 303 |
Other Income [Member] | ||||
Other Operating Income | $ 33 | $ 81 | $ 74 | $ 225 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details - Supplemental balance sheet information related to leases) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Operating Leases | ||
Operating lease right-of-use assets | $ 29,575 | $ 28,397 |
Less: Accumulated amortization right-of-use assets | (24,649) | (22,613) |
Operating lease right-of-use assets, net | 4,926 | 5,784 |
Operating lease liabilities | (5,271) | (6,234) |
Finance Leases | ||
Property and equipment, at cost | 3,454 | 3,407 |
Less: Accumulated depreciation | (3,357) | (3,301) |
Property and equipment, net | 97 | 106 |
Finance lease liabilities | $ (102) | $ (177) |
Operating Lease, Weighted Average Discount Rate, Percent | 5% | 5% |
Finance Lease, Weighted Average Discount Rate, Percent | 6.50% | 6.50% |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details - Maturities of lease liabilities) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Lease Liability | $ 5,271 | $ 6,234 |
Lease Liability | 102 | $ 177 |
Operating Lease [Member] | ||
2023 | 2,775 | |
2024 | 1,787 | |
2025 | 737 | |
2026 | 455 | |
2027 | 452 | |
Thereafter | 565 | |
Total undiscounted lease payments | 6,771 | |
Less amounts representing interest | (1,500) | |
Lease Liability | 5,271 | |
Finance Lease [Member] | ||
2023 | 30 | |
2024 | 37 | |
2025 | 20 | |
2026 | 11 | |
2027 | 11 | |
Thereafter | 1 | |
Total undiscounted lease payments | 110 | |
Less amounts representing interest | (8) | |
Lease Liability | $ 102 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies (Details - Lease cost) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Accounting Policies [Abstract] | ||||
Operating lease cost | $ 1,411 | $ 1,760 | $ 2,771 | $ 3,630 |
Finance lease cost | 24 | 257 | 125 | 555 |
Total lease cost | $ 1,435 | $ 2,017 | $ 2,896 | $ 4,185 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies (Details - Cash flow) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||||
Operating cash flows from operating leases | $ 1,441 | $ 1,907 | $ 2,771 | $ 3,965 |
Operating cash flows from finance leases | 23 | 245 | 122 | 527 |
Financing cash flows from finance leases | $ 2 | $ 12 | $ 4 | $ 28 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies (Details - Option activity) - $ / shares shares in Thousands | 3 Months Ended | 6 Months Ended | |
Mar. 31, 2023 | Jun. 30, 2023 | Dec. 31, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Options outstanding | 11,167 | 11,167 | |
Options outstanding | 8,362 | ||
Options exercisable at the end of period | 5,675 | 7,770 | |
Equity Option [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Options outstanding | 11,167 | 11,167 | |
Options outstanding, per share | $ 5.21 | $ 5.21 | |
Granted | 0 | ||
Granted, per share | $ 0 | ||
Exercised | (2,805) | ||
Exercised, per share | $ 5.59 | ||
Forfeited | 0 | ||
Forfeited, per share | $ 0 | ||
Options outstanding | 8,362 | ||
Options outstanding, per share | $ 5.09 | ||
Options Outstanding, Weighted Average Remaining Contractual Term | 3 years 7 months 9 days | ||
Options exercisable at the end of period | 5,675 | ||
Options exercisable at the end of period | $ 4.31 | ||
Options Exercisable, Weighted Average Remaining Contractual Term | 2 years 11 months 8 days |
Summary of Significant Accou_10
Summary of Significant Accounting Policies (Details - Options outstanding and exercisable) - shares shares in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Number of shares, outstanding | 8,362 | 11,167 |
Number of shares, exercisable | 5,675 | 7,770 |
Range 1 [Member] | ||
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Number of shares, outstanding | 1,440 | 1,445 |
Number of shares, exercisable | 1,105 | 775 |
Range 2 [Member] | ||
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Number of shares, outstanding | 2,543 | 3,785 |
Number of shares, exercisable | 2,253 | 3,495 |
Range 3 [Member] | ||
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Number of shares, outstanding | 2,669 | 2,739 |
Number of shares, exercisable | 1,732 | 1,802 |
Range 4 [Member] | ||
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Number of shares, outstanding | 0 | 0 |
Number of shares, exercisable | 0 | 0 |
Range 5 [Member] | ||
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Number of shares, outstanding | 0 | 740 |
Number of shares, exercisable | 0 | 740 |
Range 6 [Member] | ||
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Number of shares, outstanding | 0 | 748 |
Number of shares, exercisable | 0 | 748 |
Range 7 [Member] | ||
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Number of shares, outstanding | 1,710 | 1,710 |
Number of shares, exercisable | 585 | 210 |
Summary of Significant Accou_11
Summary of Significant Accounting Policies (Details - Stock purchases) - Common Stock [Member] - $ / shares | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Equity, Class of Treasury Stock [Line Items] | ||
Total stock purchases, shares | 1,784,246 | 2,831,790 |
Total stock purchases, average price per share | $ 10.35 | $ 12.09 |
Open Market Purchases [Member] | ||
Equity, Class of Treasury Stock [Line Items] | ||
Total stock purchases, shares | 564,202 | 1,938,637 |
Total stock purchases, average price per share | $ 10.36 | $ 11.42 |
Shares Redeemed [Member] | ||
Equity, Class of Treasury Stock [Line Items] | ||
Total stock purchases, shares | 1,220,044 | 893,153 |
Total stock purchases, average price per share | $ 10.34 | $ 13.56 |
Summary of Significant Accou_12
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Stock-based compensation | $ 905,000 | $ 728,000 | $ 1,800,000 | $ 1,500,000 |
Unrecognized stock-based compensation costs | 7,600,000 | $ 7,600,000 | ||
Weighted-average period for unrecognized costs | 2 years | |||
Intrinsic value options outstanding | 55,100,000 | $ 55,100,000 | ||
Intrinsic value of options exercisable | $ 41,800,000 | 41,800,000 | ||
Intrinsic value of options exercised | $ 13,300,000 | $ 12,200,000 | ||
Shares available for grant | 2,661,000 | 2,661,000 | ||
Options Exercised [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Options exercised | 2,800,000 | 2,900,000 |
Finance Receivables (Details -
Finance Receivables (Details - Delinquency status) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Financing Receivable, Past Due [Line Items] | ||
Finance receivables | $ 52,080 | $ 92,304 |
Financial Asset, 1 to 29 Days Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Finance receivables | 37,553 | 65,764 |
Financial Asset, 30 to 59 Days Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Finance receivables | 9,100 | 16,796 |
Financial Asset, 60 to 89 Days Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Finance receivables | 4,339 | 7,756 |
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Finance receivables | $ 1,088 | $ 1,988 |
Finance Receivables (Details _2
Finance Receivables (Details - Amortized Cost Basis) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Financing Receivable, Past Due [Line Items] | ||
Amortized cost basis | $ 52,080 | $ 92,304 |
Vintage Pool 2014 [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Amortized cost basis | 876 | 1,865 |
Vintage Pool 2015 [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Amortized cost basis | 4,019 | 8,627 |
Vintage Pool 2016 [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Amortized cost basis | 15,609 | 28,632 |
Vintage Pool 2017 [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Amortized cost basis | $ 31,576 | $ 53,180 |
Finance Receivables (Details _3
Finance Receivables (Details - Summary of activity) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Finance Receivables | ||||
Financing Receivable, Allowance for Credit Loss, Beginning Balance | $ 14,728 | $ 45,001 | $ 21,753 | $ 56,206 |
Provision for credit losses on finance receivables | (9,700) | (8,000) | (18,700) | (17,400) |
Charge-offs | (1,897) | (4,446) | (4,914) | (9,805) |
Recoveries | 2,590 | 3,117 | 7,582 | 6,671 |
Financing Receivable, Allowance for Credit Loss, Beginning Balance | $ 5,721 | $ 35,672 | $ 5,721 | $ 35,672 |
Finance Receivables (Details _4
Finance Receivables (Details - Charge-Offs for Financed Receivables) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Financing Receivable, Past Due [Line Items] | ||||
Charge-offs | $ 1,897 | $ 4,446 | $ 4,914 | $ 9,805 |
Vintage Pool 2014 [Member] | ||||
Financing Receivable, Past Due [Line Items] | ||||
Charge-offs | 67 | 243 | 208 | 535 |
Vintage Pool 2015 [Member] | ||||
Financing Receivable, Past Due [Line Items] | ||||
Charge-offs | 297 | 653 | 741 | 1,742 |
Vintage Pool 2016 [Member] | ||||
Financing Receivable, Past Due [Line Items] | ||||
Charge-offs | 713 | 1,514 | 2,034 | 3,539 |
Vintage Pool 2017 [Member] | ||||
Financing Receivable, Past Due [Line Items] | ||||
Charge-offs | 1,230 | 2,131 | 2,732 | 4,303 |
Charged Against Repos In Inventory [Member] | ||||
Financing Receivable, Past Due [Line Items] | ||||
Charge-Offs for financed receivables applied | $ (410) | $ (95) | $ (801) | $ (314) |
Finance Receivables (Details _5
Finance Receivables (Details - Repossessed inventory) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Finance Receivables | ||
Gross balance of repossessions in inventory | $ 1,003 | $ 1,894 |
Allowance for losses on repossessed inventory | (655) | (1,323) |
Net repossessed inventory included in other assets | $ 348 | $ 571 |
Finance Receivables (Details Na
Finance Receivables (Details Narrative) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Finance Receivables | ||
Interest Receivable | $ 52,100 | $ 92,300 |
Finance receivables, non accrual status | $ 1,100 | $ 2,000 |
Securitization Trust Debt (Deta
Securitization Trust Debt (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2023 | Dec. 31, 2022 | ||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | |||
Receivables Pledged at end of period | [1] | $ 2,377,595 | |
Initial Principal | 5,750,290 | ||
Outstanding Principal | 2,239,614 | $ 2,122,919 | |
Securitization Trust Debt, payable in 2023 | 409,300 | ||
Securitization Trust Debt, payable in 2024 | 747,000 | ||
Securitization Trust Debt, payable in 2025 | 463,200 | ||
Securitization Trust Debt, payable in 2026 | 288,100 | ||
Securitization Trust Debt, payable in 2027 | 193,900 | ||
Securitization Trust Debt, payable in 2028 | 102,900 | ||
Securitization Trust Debt, payable in 2029 | $ 20,700 | ||
CPS 2018-A [Member] | |||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | |||
Final Scheduled Payment Date | [2] | March 2025 | |
Receivables Pledged at end of period | [1] | $ 0 | |
Initial Principal | 190,000 | ||
Outstanding Principal | $ 0 | 12,939 | |
Weighted Average Contractual Interest Rate | 0% | ||
CPS 2018-B [Member] | |||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | |||
Final Scheduled Payment Date | [2] | December 2024 | |
Receivables Pledged at end of period | [1] | $ 0 | |
Initial Principal | 201,823 | ||
Outstanding Principal | $ 0 | 17,077 | |
Weighted Average Contractual Interest Rate | 0% | ||
CPS 2018-C [Member] | |||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | |||
Final Scheduled Payment Date | [2] | September 2025 | |
Receivables Pledged at end of period | [1] | $ 0 | |
Initial Principal | 230,275 | ||
Outstanding Principal | $ 0 | 20,222 | |
Weighted Average Contractual Interest Rate | 6.07% | ||
CPS 2018-D [Member] | |||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | |||
Final Scheduled Payment Date | [2] | June 2025 | |
Receivables Pledged at end of period | [1] | $ 20,498 | |
Initial Principal | 233,730 | ||
Outstanding Principal | $ 16,011 | 25,563 | |
Weighted Average Contractual Interest Rate | 5.82% | ||
CPS 2019-A [Member] | |||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | |||
Final Scheduled Payment Date | [2] | March 2026 | |
Receivables Pledged at end of period | [1] | $ 26,513 | |
Initial Principal | 254,400 | ||
Outstanding Principal | $ 21,680 | 32,898 | |
Weighted Average Contractual Interest Rate | 5.73% | ||
CPS 2019-B [Member] | |||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | |||
Final Scheduled Payment Date | [2] | June 2026 | |
Receivables Pledged at end of period | [1] | $ 28,679 | |
Initial Principal | 228,275 | ||
Outstanding Principal | $ 24,730 | 33,897 | |
Weighted Average Contractual Interest Rate | 5.56% | ||
CPS 2019-C [Member] | |||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | |||
Final Scheduled Payment Date | [2] | September 2026 | |
Receivables Pledged at end of period | [1] | $ 34,151 | |
Initial Principal | 243,513 | ||
Outstanding Principal | $ 30,129 | 41,515 | |
Weighted Average Contractual Interest Rate | 4.55% | ||
CPS 2019-D [Member] | |||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | |||
Final Scheduled Payment Date | [2] | December 2026 | |
Receivables Pledged at end of period | [1] | $ 45,068 | |
Initial Principal | 274,313 | ||
Outstanding Principal | $ 39,936 | 53,625 | |
Weighted Average Contractual Interest Rate | 3.86% | ||
CPS 2020-A [Member] | |||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | |||
Final Scheduled Payment Date | [2] | March 2027 | |
Receivables Pledged at end of period | [1] | $ 42,267 | |
Initial Principal | 260,000 | ||
Outstanding Principal | $ 38,057 | 52,705 | |
Weighted Average Contractual Interest Rate | 4.18% | ||
CPS 2020-B [Member] | |||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | |||
Final Scheduled Payment Date | [2] | June 2027 | |
Receivables Pledged at end of period | [1] | $ 48,747 | |
Initial Principal | 202,343 | ||
Outstanding Principal | $ 31,860 | 41,736 | |
Weighted Average Contractual Interest Rate | 6.36% | ||
CPS 2020-C [Member] | |||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | |||
Final Scheduled Payment Date | [2] | November 2027 | |
Receivables Pledged at end of period | [1] | $ 66,427 | |
Initial Principal | 252,200 | ||
Outstanding Principal | $ 56,227 | 72,894 | |
Weighted Average Contractual Interest Rate | 3.45% | ||
CPS 2021-A [Member] | |||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | |||
Final Scheduled Payment Date | [2] | March 2028 | |
Receivables Pledged at end of period | [1] | $ 70,683 | |
Initial Principal | 230,545 | ||
Outstanding Principal | $ 51,064 | 72,076 | |
Weighted Average Contractual Interest Rate | 1.49% | ||
CPS 2021-B [Member] | |||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | |||
Final Scheduled Payment Date | [2] | June 2028 | |
Receivables Pledged at end of period | [1] | $ 89,355 | |
Initial Principal | 240,000 | ||
Outstanding Principal | $ 76,336 | 101,206 | |
Weighted Average Contractual Interest Rate | 2.01% | ||
CPS 2021 C [Member] | |||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | |||
Final Scheduled Payment Date | [2] | September 2028 | |
Receivables Pledged at end of period | [1] | $ 131,240 | |
Initial Principal | 291,000 | ||
Outstanding Principal | $ 113,606 | 147,593 | |
Weighted Average Contractual Interest Rate | 1.70% | ||
CPS 2021 D [Member] | |||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | |||
Final Scheduled Payment Date | [2] | December 2028 | |
Receivables Pledged at end of period | [1] | $ 178,689 | |
Initial Principal | 349,202 | ||
Outstanding Principal | $ 162,778 | 209,277 | |
Weighted Average Contractual Interest Rate | 2% | ||
CPS 2022 A [Member] | |||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | |||
Final Scheduled Payment Date | [2] | April 2029 | |
Receivables Pledged at end of period | [1] | $ 196,998 | |
Initial Principal | 316,800 | ||
Outstanding Principal | $ 176,857 | 222,613 | |
Weighted Average Contractual Interest Rate | 2.29% | ||
CPS 2022 B [Member] | |||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | |||
Final Scheduled Payment Date | [2] | October 2029 | |
Receivables Pledged at end of period | [1] | $ 295,399 | |
Initial Principal | 395,600 | ||
Outstanding Principal | $ 266,669 | 325,907 | |
Weighted Average Contractual Interest Rate | 4.28% | ||
CPS 2022 C [Member] | |||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | |||
Final Scheduled Payment Date | [2] | April 2030 | |
Receivables Pledged at end of period | [1] | $ 332,262 | |
Initial Principal | 391,600 | ||
Outstanding Principal | $ 285,595 | 346,714 | |
Weighted Average Contractual Interest Rate | 5.34% | ||
C P S 2022 D [Member] | |||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | |||
Final Scheduled Payment Date | [2] | June 2030 | |
Receivables Pledged at end of period | [1] | $ 278,221 | |
Initial Principal | 307,018 | ||
Outstanding Principal | $ 250,805 | 292,461 | |
Weighted Average Contractual Interest Rate | 7.45% | ||
C P S 2023 A [Member] | |||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | |||
Final Scheduled Payment Date | [2] | August 2030 | |
Receivables Pledged at end of period | [1] | $ 196,998 | |
Initial Principal | 324,768 | ||
Outstanding Principal | $ 281,081 | 0 | |
Weighted Average Contractual Interest Rate | 6.13% | ||
C P S 2023 B [Member] | |||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | |||
Final Scheduled Payment Date | [2] | November 2030 | |
Receivables Pledged at end of period | [1] | $ 295,399 | |
Initial Principal | 332,885 | ||
Outstanding Principal | $ 316,192 | $ 0 | |
Weighted Average Contractual Interest Rate | 6.46% | ||
[1]Includes repossessed assets that are included in Other assets on our Unaudited Condensed Consolidated Balance Sheet.[2] The Final Scheduled Payment Date represents final legal maturity of the securitization trust debt. Securitization trust debt is expected to become due and to be paid prior to those dates, based on amortization of the finance receivables pledged to the trusts. Expected payments, which will depend on the performance of such receivables, as to which there can be no assurance, are $ 409.3 747.0 463.2 288.1 193.9 102.9 20.7 |
Securitization Trust Debt (De_2
Securitization Trust Debt (Details Narrative) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Securitization Trust Debt | ||
Debt issuance costs | $ 14,500 | $ 14,200 |
Restricted cash under various agreements | $ 148,100 |
Debt (Details - Debt outstandin
Debt (Details - Debt outstanding) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Line of Credit Facility [Line Items] | ||
Warehouse lines of credit | $ 245,272 | $ 285,328 |
Residual interest financing | 49,749 | 49,623 |
Subordinated renewable notes | 21,204 | 25,263 |
Total debt outstanding | $ 318,051 | $ 363,141 |
Subordinated renewable notes [Member] | ||
Line of Credit Facility [Line Items] | ||
Maturity date description | April 2025 | October 2024 |
Warehouse Lines Of Credit 1 [Member] | ||
Line of Credit Facility [Line Items] | ||
Interest rate | 3.00% over one month Libor (Minimum 3.75%) 8.38% and 7.48% at June 30, 2023 and December 31, 2022, respectively | |
Maturity date description | July 2024 | |
Warehouse lines of credit | $ 144,949 | $ 150,293 |
Warehouse Lines Of Credit 2 [Member] | ||
Line of Credit Facility [Line Items] | ||
Interest rate | 4.15% over a commercial paper rate (Minimum 5.15%) 9.41% and 8.60% at June 30, 2023, and December 31, 2022, respectively | |
Maturity date description | January 2024 | |
Warehouse lines of credit | $ 101,898 | 137,585 |
Residual interest financing [Member] | ||
Line of Credit Facility [Line Items] | ||
Maturity date description | June 2026 | |
Interest rate | 7.86% | |
Residual interest financing | $ 50,000 | 50,000 |
Subordinated renewable notes [Member] | ||
Line of Credit Facility [Line Items] | ||
Interest rate | Weighted average rate of 7.98% and 7.82% at June 30, 2023 and December 31, 2022, respectively | |
Subordinated renewable notes | $ 21,204 | $ 25,263 |
Debt (Details Narrative)
Debt (Details Narrative) - USD ($) | 6 Months Ended | |||
Jun. 30, 2023 | Dec. 31, 2022 | Jul. 15, 2022 | Jun. 28, 2022 | |
Warehouse Lines Of Credit [Member] | ||||
Short-Term Debt [Line Items] | ||||
Unamortized debt issuance costs | $ 251,000 | $ 377,000 | ||
Warehouse Lines Of Credit 5 [Member] | ||||
Short-Term Debt [Line Items] | ||||
Unamortized debt issuance costs | 1,600,000 | $ 2,600,000 | ||
Agent Services L P [Member] | ||||
Short-Term Debt [Line Items] | ||||
Line of credit outstanding facility amount | 144,900,000 | |||
Agent Services L P [Member] | Minimum [Member] | ||||
Short-Term Debt [Line Items] | ||||
Line of credit maximum amount | $ 100,000,000 | |||
Agent Services L P [Member] | Maximum [Member] | ||||
Short-Term Debt [Line Items] | ||||
Line of credit maximum amount | $ 200,000,000 | |||
Citibank N A [Member] | ||||
Short-Term Debt [Line Items] | ||||
Line of credit outstanding facility amount | $ 101,900,000 | |||
Citibank N A [Member] | Minimum [Member] | ||||
Short-Term Debt [Line Items] | ||||
Line of credit maximum amount | $ 100,000,000 | |||
Citibank N A [Member] | Maximum [Member] | ||||
Short-Term Debt [Line Items] | ||||
Line of credit maximum amount | $ 200,000,000 |
Interest Income and Interest _3
Interest Income and Interest Expense (Details - Interest income) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Interest on finance receivables | $ 4,378 | $ 9,832 | $ 9,040 | $ 21,146 |
Interest on finance receivables at fair value | 76,735 | 65,730 | 150,793 | 124,470 |
Other interest income | 1,524 | 108 | 2,866 | 114 |
Interest income | $ 82,637 | $ 75,670 | $ 162,699 | $ 145,730 |
Interest Income and Interest _4
Interest Income and Interest Expense (Details - Interest expense) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Debt Instrument [Line Items] | ||||
Total interest expense | $ 35,706 | $ 18,771 | $ 68,465 | $ 35,171 |
Securitization Trust Debt [Member] | ||||
Debt Instrument [Line Items] | ||||
Total interest expense | 29,171 | 15,745 | 55,524 | 29,273 |
Warehouse Lines Of Credit [Member] | ||||
Debt Instrument [Line Items] | ||||
Total interest expense | 5,008 | 1,386 | 9,856 | 2,544 |
Residual interest financing [Member] | ||||
Debt Instrument [Line Items] | ||||
Total interest expense | 1,050 | 1,050 | 2,100 | 2,144 |
Subordinated renewable notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Total interest expense | $ 477 | $ 590 | $ 985 | $ 1,210 |
Earnings Per Share (Details - E
Earnings Per Share (Details - Earnings Per Share) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Earnings per share: | ||||
Weighted average number of common shares outstanding during the period used to compute basic earnings per share | 20,866 | 21,370 | 20,643 | 21,296 |
Incremental common shares attributable to exercise of outstanding options and warrants | 4,507 | 6,317 | 4,741 | 6,647 |
Weighted average number of common shares used to compute diluted earnings per share | 25,373 | 27,687 | 25,384 | 27,943 |
Earnings Per Share (Details Nar
Earnings Per Share (Details Narrative) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Earnings per share: | ||||
Antidilutive shares | 1,500,000 | 824,000 | 1,500,000 | 692,000 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Operating Loss Carryforwards [Line Items] | ||||
Net deferred tax asset | $ 7,400 | $ 7,400 | ||
Current income tax expense | $ 4,700 | $ 8,900 | $ 9,300 | $ 17,100 |
Effective Income Tax Rate Reconciliation, Percent | 25% | 26% | 25% | 27% |
Domestic Tax Authority [Member] | ||||
Operating Loss Carryforwards [Line Items] | ||||
Net deferred tax asset | $ 4,800 | $ 4,800 | ||
State and Local Jurisdiction [Member] | ||||
Operating Loss Carryforwards [Line Items] | ||||
Net deferred tax asset | $ 2,600 | $ 2,600 |
Legal Proceedings (Details Narr
Legal Proceedings (Details Narrative) $ in Thousands | Jun. 30, 2023 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Probably losses for legal contingencies | $ 3,800 |
Maximum possible losses for legal proceedings and contingencies | $ 7,300 |
Fair Value Measurements (Detail
Fair Value Measurements (Details - Reconciliation of Finance Receivables) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Fair Value Disclosures [Abstract] | ||||
Balance at beginning of period | $ 2,575,117 | $ 1,903,857 | $ 2,476,617 | $ 1,749,098 |
Finance receivables at fair value acquired during period | 305,450 | 511,068 | 658,048 | 904,475 |
Payments received on finance receivables at fair value | (215,314) | (215,930) | (421,940) | (425,774) |
Net interest income accretion on fair value receivables | (46,833) | (29,562) | (94,305) | (60,766) |
Mark to fair value | 0 | 4,700 | 0 | 7,100 |
Receivables, Fair Value Disclosure | $ 2,618,420 | $ 2,174,133 | $ 2,618,420 | $ 2,174,133 |
Fair Value Measurements (Deta_2
Fair Value Measurements (Details - Finance Receivables to Their Contractual Balances) - USD ($) $ in Thousands | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Fair Value Disclosures [Abstract] | ||||||
Finance receivables contractual balance | $ 2,857,205 | $ 2,701,184 | ||||
Receivables, Fair Value Disclosure | $ 2,618,420 | $ 2,575,117 | $ 2,476,617 | $ 2,174,133 | $ 1,903,857 | $ 1,749,098 |
Fair Value Measurements (Deta_3
Fair Value Measurements (Details - Level 3 Fair Value Measurements) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2023 | Dec. 31, 2022 | Mar. 31, 2023 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | ||||||
Receivables, Fair Value Disclosure | $ 2,618,420 | $ 2,476,617 | $ 2,575,117 | $ 2,174,133 | $ 1,903,857 | $ 1,749,098 |
Discount Rate on Finance Receivables | 11.0% - 11.5% | 11.0% - 11.3% | ||||
Cumulative Net Losses (Percent) on Finance Receivables | 10.0% - 21.5% | 13.4% - 19.4% |
Fair Value Measurements (Deta_4
Fair Value Measurements (Details - Delinquency status) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Financing Receivable, Past Due [Line Items] | ||
Initial Principal | $ 2,857,205 | $ 2,701,184 |
Financial Asset, Not Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Initial Principal | 2,531,445 | 2,375,271 |
Financial Asset, 30 to 59 Days Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Initial Principal | 180,284 | 184,968 |
Financial Asset, 60 to 89 Days Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Initial Principal | 74,963 | 72,390 |
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Initial Principal | 28,619 | 29,048 |
Repossessed Vehicles [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Initial Principal | $ 41,894 | $ 39,507 |
Fair Value Measurements (Deta_5
Fair Value Measurements (Details - Fair values) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Cash and cash equivalents | $ 7,081 | $ 13,490 |
Restricted cash and equivalents | 148,063 | 149,299 |
Finance receivables, net | 42,495 | 60,063 |
Accrued interest receivable | 93 | 649 |
Warehouse lines of credit | 245,272 | 285,328 |
Residual interest financing | 49,749 | |
Accrued interest payable | 7,243 | 6,190 |
Securitization trust debt | 2,137,162 | 1,957,995 |
Subordinated renewable notes | 21,204 | 25,263 |
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Cash and cash equivalents | 7,081 | 13,490 |
Restricted cash and equivalents | 148,063 | 149,299 |
Finance receivables, net | 0 | 0 |
Accrued interest receivable | 0 | 0 |
Warehouse lines of credit | 0 | 0 |
Accrued interest payable | 0 | 0 |
Securitization trust debt | 0 | 0 |
Subordinated renewable notes | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Cash and cash equivalents | 0 | 0 |
Restricted cash and equivalents | 0 | 0 |
Finance receivables, net | 0 | 0 |
Accrued interest receivable | 0 | 0 |
Warehouse lines of credit | 0 | 0 |
Accrued interest payable | 0 | 0 |
Securitization trust debt | 0 | 0 |
Subordinated renewable notes | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Cash and cash equivalents | 0 | 0 |
Restricted cash and equivalents | 0 | 0 |
Finance receivables, net | 42,495 | 60,063 |
Accrued interest receivable | 93 | 649 |
Warehouse lines of credit | 245,272 | 285,328 |
Residual interest financing | 49,749 | |
Accrued interest payable | 7,243 | 6,190 |
Securitization trust debt | 2,137,162 | 1,957,995 |
Subordinated renewable notes | 21,204 | 25,263 |
Carrying Value [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Cash and cash equivalents | 7,081 | 13,490 |
Restricted cash and equivalents | 148,063 | 149,299 |
Finance receivables, net | 46,359 | 70,551 |
Accrued interest receivable | 93 | 649 |
Warehouse lines of credit | 245,272 | 285,328 |
Residual interest financing | 49,749 | |
Accrued interest payable | 7,243 | 6,190 |
Securitization trust debt | 2,225,072 | 2,108,744 |
Subordinated renewable notes | $ 21,204 | $ 25,263 |