What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-11-07 compared with 2024-08-08 · 397 added, 314 removed, 596 unchanged (54% of the section changed)

4 unchanged sentences

(In thousands, except share and per share data)

September 30,

Cash and cash equivalents

23 unchanged sentences

authorized 75,000,000 shares;

21,304,643 and 21,174,856 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively

21,405,198 and 21,174,856 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively

Retained earnings

10 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Interest income

18 unchanged sentences

Three Months Ended

Six Months Ended

Other comprehensive income/(loss);change in funded status of pension plan

Nine Months Ended

September 30,

Other comprehensive income/(loss);

change in funded status of pension plan

Comprehensive income

6 unchanged sentences

(In thousands)

Six Months Ended

Nine Months Ended

September 30,

Cash flows from operating activities:

13 unchanged sentences

Purchases of finance receivables measured at fair value

( 1,195,886 )

Payments received on finance receivables at fair value

29 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Common Stock (Shares Outstanding)

45 unchanged sentences

in the opinion of management, of a normal recurring nature.

Results for the six-month period ended June 30, 2024 are not necessarily indicative

of the operating results to be expected for the full year.

Results for the nine-month period ended September 30, 2024 are not necessarily

indicative of the operating results to be expected for the full year.

Certain information and footnote disclosures normally

41 unchanged sentences

Rather we recognize the costs of acquisition as expenses in the period incurred.

The following table presents

the primary components of Other Income for the three-month and six-month periods ending June 30, 2024 and 2023:

The following

table presents the primary components of Other Income for the three-month and nine-month periods ending September 30, 2024 and 2023:

Schedule of other income

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(In thousands)

18 unchanged sentences

Schedule of supplemental balance sheet information related to leases

September 30,

(In thousands)

16 unchanged sentences

Year Ending December 31,

2024 (excluding the six months ended June 30, 2024)

2024 (excluding the nine months ended September 30, 2024)

Total undiscounted lease payments

8 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(In thousands)

3 unchanged sentences

Total lease cost

The following table presents

the supplemental cash flow information related to leases:

Schedule of supplemental

The following table presents the supplemental

cash flow information related to leases:

Schedule of supplemental cash flow information related to leases

Three Months Ended

Six Months Ended

Cash paid for amounts included in the

measurement of lease liabilities:

Nine Months Ended

September 30,

Cash paid for amounts included in the measurement of lease liabilities:

(In thousands)

7 unchanged sentences

Compensation”.

For the three and six months ended June 30, 2024,

For the three and nine months ended September

30, 2024, we recorded stock-based compensation costs in the amount of $ 727,000 and $ 2.4 million, respectively.

These stock-based compensation costs

were $ 905,000 and $ 1.8 million for the three and six months ended June 30, 2023.

As of June 30, 2024, unrecognized stock-based compensation

costs to be recognized over future periods equaled $ 4.4 million.

This amount will be recognized as expense over a weighted-average period

of 1.5 years.

The following represents

stock option activity for the six months ended June 30, 2024:

These stock-based compensation

costs were $ 816,000 and $ 2.6 million for the three and nine months ended September 30, 2023.

As of September 30, 2024, unrecognized stock-based

compensation costs to be recognized over future periods equaled $ 3.7 million.

This amount will be recognized as expense over a weighted-average

period of 1.3 years.

CONSUMER PORTFOLIO SERVICES, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

The following represents stock option activity

for the nine months ended September 30, 2024:

Schedule of stock option activity

5 unchanged sentences

Options exercisable at the end of period

CONSUMER PORTFOLIO SERVICES, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

The following table presents

the price distribution of stock options outstanding and exercisable as of June 30, 2024 and December 31, 2023:

Schedule of price distribution

of stock options outstanding and exercisable

The following table presents the price distribution

of stock options outstanding and exercisable for the years ended September 30, 2024 and December 31, 2023:

Schedule of price distribution of stock options outstanding and exercisable

Number of shares as of

June 30, 2024

September 30, 2024

December 31, 2023

Range of exercise prices:

(In thousands)

Range of exercise prices:

$2.00 - $2.99

2 unchanged sentences

$10.00 - $10.99

At June 30, 2024 the aggregate intrinsic value

of options outstanding and exercisable was $ 29.7 million and $ 26.8 million, respectively.

There were 1.4 million options exercised for

the six months ended June 30, 2024 compared to 2.8 million for the comparable period in 2023.

The total intrinsic value of options exercised

was $ 6.2 million and $ 13.3 million for the six-month periods ended June 30, 2024 and 2023.

There were 2,894,000 shares available for future

stock option grants under existing plans as of June 30, 2024.

At September 30, 2024 the aggregate intrinsic

value of options outstanding and exercisable was $ 25.9 million and $ 24.6 million, respectively.

There were 1.7 million options exercised

for the nine months ended September 30, 2024 compared to 2.8 million for the comparable period in 2023.

The total intrinsic value of options

exercised was $ 8 .0 million and $ 13.5 million for the nine-month periods ended September 30, 2024 and 2023.

There were 2,954,000 shares

available for future stock option grants under existing plans as of September 30, 2024.

CONSUMER PORTFOLIO SERVICES, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

Purchases of Company Stock

The table below describes

the purchase of our common stock for the six months ended June 30, 2024 and 2023:

Schedule of purchase of our

Six Months Ended

June 30, 2024

June 30, 2023

The table below describes the purchase of our

common stock for the nine-month ended September 30, 2024 and 2023:

Schedule of purchase of our common stock

Nine Months Ended

September 30, 2024

September 30, 2023

Open market purchases

10 unchanged sentences

Such covenants include maintaining minimum levels of liquidity and net worth and not exceeding maximum leverage

As of June 30, 2024, 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.

CONSUMER PORTFOLIO SERVICES, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

As of September 30, 2024, 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

12 unchanged sentences

financial statements.

CONSUMER PORTFOLIO SERVICES, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

In December 2023, the FASB issued ASU No.

6 unchanged sentences

(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

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.

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.

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

Any payments received on a contract that is greater than 90 days delinquent are first applied to accrued interest and then

to principal reduction.

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.

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

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 reported as delinquent.

In certain circumstances we will grant obligors one-month payment extensions.

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.

circumstances we will grant obligors one-month payment extensions.

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

There are no other concessions, such as a reduction in interest rate, forgiveness of principal or of accrued interest.

Accordingly, we consider such extensions to be insignificant delays in payments.

The following table summarizes the delinquency status

of finance receivables as of June 30, 2024 and December 31, 2023:

Schedule of delinquency status

of finance receivables

Delinquency Status

we consider such extensions to be insignificant delays in payments.

The following table summarizes the delinquency status of finance

receivables as of September 30, 2024 and December 31, 2023:

Schedule of delinquency status of finance receivables

September 30,

(In thousands)

Delinquency Status

Finance receivables totaling $ 371,000 and $ 1.1

million at September 30, 2024 and December 31, 2023, respectively, have been placed on non-accrual status as a result of their delinquency

CONSUMER PORTFOLIO SERVICES, INC.

1 unchanged sentence

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

Finance receivables totaling

$ 442,000 and $ 1.1 million at June 30, 2024 and December 31, 2023, respectively, have been placed on non-accrual status as a result of

their delinquency status.

Allowance for Credit Losses

9 unchanged sentences

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.

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

19 unchanged sentences

factors into our estimates.

The following table presents

the amortized cost basis of our finance receivables by annual vintage as of June 30, 2024 and December 31, 2023.

The following table presents the amortized cost

basis of our finance receivables by annual vintage as of September 30, 2024 and December 31, 2023.

Schedule of finance receivables by annual vintage

Annual Vintage Pool

September 30,

(In thousands)

Annual Vintage Pool

2014 and prior

2 unchanged sentences

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

The following table presents

a summary of the activity for the allowance for finance credit losses for the three-month and six-month periods ended June 30, 2024 and

The following table presents a summary of the

activity for the allowance for finance credit losses for the three-month and nine-month periods ended September 30, 2024 and 2023:

Schedule of allowance for finance credit losses

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(In thousands)

3 unchanged sentences

Balance at end of period

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, 2024 and 2023:

The following table presents the gross charge-offs

by year of origination of our finance receivables for the three-month and nine-month ended September 30, 2024 and 2023:

Schedule of gross charge-off

Three Months Ended

Six Months Ended

Annual Vintage Pool

Nine Months Ended

September 30,

(In thousands)

Annual Vintage Pool

2014 and prior

Applied against repos in inventory (net)

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 in repossessed inventory

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 in repossessed inventory

September 30,

(In thousands)

6 unchanged sentences

(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:

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 securitization trust debt

1 unchanged sentence

Interest Rate at

September 30,

(Dollars in thousands)

16 unchanged sentences

Balance Sheet.

Debt issuance

costs of $ 17.2 million and $ 14.6 million as of June 30, 2024 and December 31, 2023, respectively, have been excluded from the table above.

These debt issuance costs are presented as a direct deduction to the carrying amount of the Securitization trust debt on our Consolidated

Balance Sheets.

CONSUMER PORTFOLIO SERVICES, INC.

1 unchanged sentence

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

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.

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, 2024, 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

As of June 30, 2024, restricted cash under the various agreements totaled approximately $ 256.9 million.

Interest expense

on the securitization trust debt consists of the stated rate of interest plus amortization of additional costs of borrowing.

costs of borrowing include facility fees, amortization of deferred financing costs and discounts on notes sold.

Deferred financing costs

and discounts on notes sold related to the securitization trust debt are amortized using a level yield method.

Accordingly, the effective

cost of the securitization trust debt is greater than the contractual rate of interest disclosed above.

Debt issuance costs of $ 17.7

million and $ 14.6 million as of September 30, 2024 and December 31, 2023, respectively, have been excluded from the table above.

debt issuance costs are presented as a direct deduction to the carrying amount of the Securitization trust debt on our Consolidated Balance

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 September 30, 2024, 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 September 30, 2024, restricted cash under the

various agreements totaled approximately $271.0 million.

Interest expense on the securitization trust debt consists of the stated rate

of interest plus amortization of additional costs of borrowing.

Additional costs of borrowing include facility fees, amortization of deferred

financing costs and discounts on notes sold.

Deferred financing costs and discounts on notes sold related to the securitization trust

debt are amortized using a level yield method.

Accordingly, the effective cost of the securitization trust debt is greater than the contractual

rate of interest disclosed above.

Our wholly-owned bankruptcy remote subsidiaries

9 unchanged sentences

None of the assets of these subsidiaries are available to pay other creditors.

The terms and amounts of

our other debt outstanding at June 30, 2024 and December 31, 2023 are summarized below:

CONSUMER PORTFOLIO SERVICES, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

The terms and amounts of our other debt outstanding

at September 30, 2024 and December 31, 2023 are summarized below:

Schedule of debt outstanding

Amount Outstanding at

September 30,

(In thousands)

1 unchanged sentence

Warehouse lines of credit

3.00% over CP yield rate (Minimum 3.75%) 8.44% and 8.58% at June 30, 2024 and December 31 2023, respectively

4.50% over a commercial paper rate (Minimum 7.50%) 9.83% and 9.63% at June 30 2024, and December 31 2023, respectively

3.00% over CP yield rate (Minimum 3.75%) 8.27% and 8.58% at September 30, 2024 and December 31 2023, respectively

4.50% over a commercial paper rate (Minimum 7.50%) 9.60% and 9.63% at September 30 2024, and December 31 2023, respectively

Residual interest financing

1 unchanged sentence

Subordinated renewable notes

Weighted average rate of 9.20 % and 8.45 % at June 30, 2024 and December 31, 2023, respectively

Weighted average maturity of July 2026 and February 2026 at June 30, 2024 and December 31, 2023, respectively

CONSUMER PORTFOLIO SERVICES, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

Weighted average rate of 9.22 % and 8.45 % at September 30, 2024 and December 31, 2023, respectively

Weighted average maturity of October 2026 and February 2026 at September 30, 2024 and December 31,

2023, respectively

On July 11, 2024, we renewed our two-year $ 200

million revolving credit agreement with Citibank, N.A.

The revolving period for this facility was extended to July 2026 followed by an

amortization period through July 2027 for any receivables pledged at the end of the revolving period.

There was $ 109.1 million outstanding

under this facility at September 30, 2024.

On March 29, 2024, we renewed our two-year $ 200

2 unchanged sentences

by an amortization period through March 2028 for any receivables pledged at the end of the revolving period.

There was $ 13.3 million outstanding

under this facility at June 30, 2024.

There was no amount outstanding

under this facility at September 30, 2024.

CONSUMER PORTFOLIO SERVICES, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

On March 22, 2024, we completed a $ 50 million

5 unchanged sentences

consist of a single class with a coupon of 11.50%.

At June 30, 2024 there was $ 50 .0 million outstanding under this facility.

On July 11, 2024, we renewed our two-year $ 200

million revolving credit agreement with Citibank, N.A.

The revolving period for this facility was extended to July 2026 followed by an

amortization period through July 2027 for any receivables pledged at the end of the revolving period.

There was $ 70.7 million outstanding

under this facility at June 30, 2024.

At September 30, 2024 there was $ 50 .0 million outstanding under this facility.

Unamortized debt issuance costs of $ 873,000 and

$ 125,000 as of June 30, 2024 and December 31, 2023, respectively, have been excluded from the amount reported above for residual interest

Similarly, unamortized debt issuance costs of $ 1.8 million and $ 599,000 as of June 30, 2024 and December 31, 2023, respectively,

have been excluded from the Warehouse lines of credit amounts in the table above.

These debt issuance costs are presented as a direct

deduction to the carrying amount of the debt on our Unaudited Condensed Consolidated Balance Sheets.

$ 125,000 as of September 30, 2024 and December 31, 2023, respectively, have been excluded from the amount reported above for residual

interest financing.

Similarly, unamortized debt issuance costs of $ 3.3 million and $ 599,000 as of September 30, 2024 and December 31,

2023, respectively, have been excluded from the Warehouse lines of credit amounts in the table above.

These debt issuance costs are presented

as a direct deduction to the carrying amount of the debt on our Unaudited Condensed Consolidated Balance Sheets.

(5) Interest Income and Interest Expense

The following table presents

the components of interest income:

The following table presents the components of interest

Schedule of interest

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(In thousands)

4 unchanged sentences

Interest income

The following table presents

the components of interest expense:

The following table presents the components of

interest expense:

Schedule of interest expense

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(In thousands)

9 unchanged sentences

(6) Earnings Per Share

Earnings per share for the

three-month and six-month periods ended June 30, 2024 and 2023 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, 2024 and 2023:

Earnings per share for the three-month and nine-month

periods ended September 30, 2024 and 2023 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 nine-month periods ended September 30, 2024 and 2023:

Schedule of earnings per share

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(In thousands)

3 unchanged sentences

Weighted average number of common shares used to compute diluted earnings per share

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, 2024 would have included an additional 1.7 million shares attributable to the exercise

of outstanding options and warrants.

F or the three-month and six-month periods ended June 30, 2023

would have included an additional 1.5 million shares included in the diluted earnings per share calculation.

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 nine-month

periods ended September 30, 2024 would have included an additional 1.6 million and 1.7 million shares, respectively, attributable to the

exercise of outstanding options and warrants.

For the three-month and nine-month periods ended September 30, 2023, 1.5 million shares,

would be included in the diluted earnings per share calculation.

(7) Income Taxes

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.

June 30, 2024 and December 31, 2023, 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.

and its subsidiaries file a consolidated federal income tax return and combined or stand-alone state franchise tax returns for certain

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.

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.

realization is not assured, we believe that the realization of the recognized net deferred tax asset of $ 2.4 million as of June 30, 2024

is more likely than not based on forecasted future net earnings.

Our net deferred tax asset of $ 2.4 million consists of approximately

$ 1.3 million of net U.S.

federal deferred tax assets and $ 1.1 million of net state deferred tax assets.

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.

state, or local examinations by tax authorities for years before 2015.

As of September 30, 2024 and

December 31, 2023, 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.

CONSUMER PORTFOLIO SERVICES, INC.

1 unchanged sentence

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

Income tax expense was $ 2 .0 million

and $ 4 .0 million for the three months and six months ended June 30, 2024, representing effective income tax rates of 30 %, compared to

income tax expense of $ 4.7 million and $ 9.3 million for the three months and six months ended June 30, 2023, and represents an effective

income tax rates of 25 %.

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

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 $ 1.6 million as of September 30, 2024 is more

likely than not based on forecasted future net earnings.

Our net deferred tax asset of $ 1.6 million consists of approximately $ 667,000

federal deferred tax assets and $ 898,000 of net state deferred tax assets.

Income tax expense was $ 2.1

million and $ 6 .0 million for the three months and nine months ended September 30, 2024, representing effective income tax rates of 30 %,

compared to income tax expense of $ 3.8 million and $ 13.1 million for the three months and nine months ended September 30, 2023, and representing

effective income tax rates of 27 % and 26 % respectively.

(8) Legal Proceedings

1 unchanged sentence

activities and practices, both continuing and discontinued.

Consumers can and do initiate lawsuits against us alleging violations of law

applicable to collection of receivables, and such lawsuits sometimes allege that resolution as a class action is appropriate.

most part, we have legal and factual defenses to consumer claims, which we routinely contest or settle (for immaterial amounts) depending

Consumers can and do initiate lawsuits against us alleging violations of

law applicable to collection of receivables, and such lawsuits sometimes allege that resolution as a class action is appropriate.

the most part, we have legal and factual defenses to consumer claims, which we routinely contest or settle (for immaterial amounts) depending

on the particular circumstances of each case.

23 unchanged sentences

class for $1.1 million.

The settlement was preliminarily approved by the court on March 1, 2024 and remains subject to final court approval.

The settlement was approved by the court on October 9, 2024.

Under the settlement, the Company paid, after September

30, 2024, $ 1.1 million to the settlement administrator.

CONSUMER PORTFOLIO SERVICES, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

There can be no assurance as to the outcomes of the matters described or referenced above.

at each measurement date, most recently as of June 30, 2024, our best estimate of probable incurred losses for legal contingencies, including

the matters identified above.

at each measurement date, most recently as of September 30, 2024, our best estimate of probable incurred losses for legal contingencies,

including the matters identified above.

The amount of losses that may ultimately be incurred cannot be estimated with certainty.

However, based

on such information as is available to us, we believe that the total of probable incurred losses for legal contingencies as of June 30,

based on such information as is available to us, we believe that the total of probable incurred losses for legal contingencies as of September

30, 2024 is $ 2.3 million, and that the range of reasonably possible losses for the legal proceedings and contingencies we face, including

those described or identified above, as of June 30, 2024 does not exceed $ 4.3 million.

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.

those described or identified above, as of September 30, 2024 does not exceed $ 4.3 million.

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.

(9) Fair Value Measurements

"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

Under the standard, fair value measurements would be separately disclosed by level within the fair value hierarchy.

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.

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.

CONSUMER PORTFOLIO SERVICES, INC.

1 unchanged sentence

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

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:

1 - inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets;

– 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.

January 2018 we have elected to use the fair value method to value our portfolio of finance receivables acquired in January 2018 and

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.

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.

quarter ended June 30, 2024, 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:

For the quarter ended September

30, 2024, 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

Nine Months Ended

September 30,

(In thousands)

6 unchanged sentences

Balance at end of period

CONSUMER PORTFOLIO SERVICES, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

The table below compares

the fair values of these finance receivables to their contractual balances for the periods shown:

The table below compares the fair values of these

finance receivables to their contractual balances for the periods shown:

Schedule of finance receivables to their contractual balances

June 30, 2024

September 30, 2024

December 31, 2023

1 unchanged sentence

Finance receivables measured at fair value

The following table provides

certain qualitative information about our level 3 fair value measurements:

The following

table provides certain qualitative information about our level 3 fair value measurements:

Schedule of level 3 fair value measurements

2 unchanged sentences

Weighted Avg.

September 30,

Unobservable Inputs

3 unchanged sentences

Cumulative net losses

The following table summarizes

the delinquency status of these finance receivables measured at fair value as of June 30, 2024 and December 31, 2023:

CONSUMER PORTFOLIO SERVICES, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

The following table summarizes the delinquency

status of these finance receivables measured at fair value as of September 30, 2024 and December 31, 2023:

Schedule of delinquency status of finance receivables measured at fair value

September 30,

(In thousands)

1 unchanged sentence

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, 2024 and 2023.

CONSUMER PORTFOLIO SERVICES, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

The estimated fair values

of financial assets and liabilities at June 30, 2024 and December 31, 2023, were as follows:

or out of level 1, level 2 or level 3 assets and liabilities for the three months ended September 30, 2024 and 2023.

The estimated fair values of financial assets

and liabilities at September 30, 2024 and December 31, 2023, were as follows:

Schedule of fair values of financial assets and liabilities

As of June 30, 2024

As of September 30, 2024

Financial Instrument

10 unchanged sentences

Subordinated renewable notes

CONSUMER PORTFOLIO SERVICES, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

As of December 31, 2023

11 unchanged sentences

(10) Subsequent Events

On July 11, 2024, we renewed

our two-year revolving credit agreement with Citibank, N.A.

The revolving period for this facility was extended to July 2026 followed

by an amortization period through July 2027 for any receivables pledged at the end of the revolving period.

There was $70.7 million outstanding

under this facility at June 30, 2024.

On November 1, 2024, we amended

our revolving credit agreement with Citibank, N.A., to add a subordinate third party lender that increases the rate at which we receive

advances secured by automobile contracts pledged to this credit facility.

The amendment allows us to advance up to 96% of the purchase

price of the automobile contracts.

This amendment also increases the capacity for this facility from $200 million to $225 million.

Cautionary Note Regarding

10 unchanged sentences

charge-offs and recovery rates;

the willingness or ability of obligors to pay pursuant to contractual terms;

our ability to enforce rights under contracts;

our ability to and rates at which we plan to acquire automobile contracts;

the anticipated levels of recoveries upon sale of repossessed vehicles;

the willingness

or ability of obligors to pay pursuant to contractual terms;

our ability to enforce

rights under contracts;

our ability to and

rates at which we plan to acquire automobile contracts;

the anticipated

levels of recoveries upon sale of repossessed vehicles;

revenues or expenses;

provisions for credit losses;

expected industry and general economic trends;

accrued losses for legal contingencies;

anticipated deferred tax assets;

estimates of taxable income;

our ability to service and repay our debt;

the structuring of securitization transactions as secured financings and the effects of such structures on financial items and future profitability;

the effect of the change in structure on our profitability and the duration of the period in which our profitability would be affected by the change in securitization structure.

provisions for credit

CONSUMER PORTFOLIO SERVICES, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

expected industry

and general economic trends;

accrued losses for

legal contingencies;

anticipated deferred

estimates of taxable

our ability to service

and repay our debt;

the structuring

of securitization transactions as secured financings and the effects of such structures on financial items and future profitability;

the effect of the

change in structure on our profitability and the duration of the period in which our profitability would be affected by the change in

securitization structure.

Our actual results, performance

1 unchanged sentence

Some of the factors that might cause such a difference include, but are not limited to, the following:

unexpected exogenous events, such as a widespread public health emergency;

mandates imposed in reaction to such events, such as prohibitions of otherwise permissible activity;

changes in general economic conditions;

changes in performance of our automobile contracts;

increases in interest rates;

our ability to generate sufficient operating and financing cash flows;

the level of losses incurred on contracts in our managed portfolio;

adverse decisions by courts or regulators;

regulatory changes with respect to consumer finance;

changes in the market for used vehicles;

levels of cash releases from existing pools of contracts;

the terms on which we are able to finance contract purchases;

the willingness or ability of dealers to assign contracts to us on acceptable terms;

the terms on which we are able to complete term securitizations once contracts are acquired;

any breach in the security of our systems;

such other factors as discussed through the “Risk Factors” section of this report.

unexpected exogenous

events, such as a widespread public health emergency;

mandates imposed

in reaction to such events, such as prohibitions of otherwise permissible activity;

changes in general

economic conditions;

changes in performance

of our automobile contracts;

increases in interest

our ability to generate

sufficient operating and financing cash flows;

the level of losses

incurred on contracts in our managed portfolio;

adverse decisions

by courts or regulators;

regulatory changes

with respect to consumer finance;

changes in the market

for used vehicles;

levels of cash releases

from existing pools of contracts;

the terms on which

we are able to finance contract purchases;

the willingness

or ability of dealers to assign contracts to us on acceptable terms;

the terms on which

we are able to complete term securitizations once contracts are acquired;

any breach in the

security of our systems;

such other factors

as discussed through the “Risk Factors” section of this report.

Forward-looking statements

13 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements