CONSUMER PORTFOLIO SERVICES, INC. 10-Q

Item 1. Financial Statements CONSUMER PORTFOLIO SERVICES, INC. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share data) September 30, December 31, 2025 2024 ASSETS Cash and cash equivalents $ 9,388 $ 11,713 Restricted cash and equivalents 142,506 125,684 Finance receivables measured at fair value 3,624,941 3,313,767 Finance receivables, net 977 4,987 Furniture and equipment, net 882 943 Other assets 31,082 36,774 Total assets $ 3,809,776 $ 3,493,868 LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities Accounts payable and accrued expenses $ 67,037 $ 70,151 Warehouse lines of credit 340,645 410,898 Residual interest financing 149,501 99,176 Securitization trust debt 2,916,439 2,594,384 Subordinated renewable notes 28,589 26,489 Total liabilities 3,502,211 3,201,098 COMMITMENTS AND CONTINGENCIES – – Shareholders' Equity Preferred stock, $ 1 par value; authorized 4,998,130 shares; none issued – – Series A preferred stock, $ 1 par value; authorized 5,000,000 shares; none issued – – Series B preferred stock, $ 1 par value; authorized 1,870 shares; none issued – – Common stock, no par value; authorized 75,000,000 shares; 22,143,708 and 21,432,698 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively 26,171 25,720 Retained earnings 281,404 267,060 Accumulated other comprehensive loss ( 10 ) ( 10 ) Total shareholders' equity 307,565 292,770 Total liabilities and shareholders' equity $ 3,809,776 $ 3,493,868 See accompanying Notes to Unaudited Condensed Consolidated Financial Statements. 3 CONSUMER PORTFOLIO SERVICES, INC. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 Revenues: Interest income $ 107,166 $ 93,158 $ 314,462 $ 265,812 Mark to finance receivables measured at fair value – 5,500 6,500 16,000 Other income 1,255 1,922 4,098 6,391 Total revenues 108,421 100,580 325,060 288,203 Expenses: Employee costs 22,465 24,162 71,860 72,303 General and administrative 13,421 13,276 40,147 40,288 Interest 59,098 50,056 172,720 138,735 Provision for credit losses ( 712 ) ( 994 ) ( 2,472 ) ( 4,579 ) Sales 5,682 5,723 17,314 16,476 Occupancy 1,228 1,292 4,000 4,250 Depreciation and amortization 207 214 705 650 Total expenses 101,389 93,729 304,274 268,123 Income before income tax expense 7,032 6,851 20,786 20,080 Income tax expense 2,179 2,055 6,442 6,022 Net income $ 4,853 $ 4,796 $ 14,344 $ 14,058 Earnings per share: Basic $ 0.22 $ 0.22 $ 0.66 $ 0.66 Diluted $ 0.20 $ 0.20 $ 0.59 $ 0.58 Number of shares used in computing earnings per share: Basic 22,209 21,343 21,852 21,250 Diluted 24,046 24,153 24,187 24,340 See accompanying Notes to Unaudited Condensed Consolidated Financial Statements. 4 CONSUMER PORTFOLIO SERVICES, INC. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In thousands) Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 Net income $ 4,853 $ 4,796 $ 14,344 $ 14,058 Other comprehensive income/(loss); change in funded status of pension plan – – – – Comprehensive income $ 4,853 $ 4,796 $ 14,344 $ 14,058 See accompanying Notes to Unaudited Condensed Consolidated Financial Statements. 5 CONSUMER PORTFOLIO SERVICES, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Nine Months Ended September 30, 2025 2024 Cash flows from operating activities: Net income $ 14,344 $ 14,058 Adjustments to reconcile net income to net cash provided by operating activities: Net interest income accretion on fair value receivables 193,415 164,394 Depreciation and amortization 705 650 Amortization of deferred financing costs 9,317 7,740 Mark to finance receivables measured at fair value ( 6,500 ) ( 16,000 ) Provision for credit losses ( 2,472 ) ( 4,579 ) Stock-based compensation expense 1,862 2,368 Changes in assets and liabilities: Deferred tax assets, net 1,010 2,171 Other assets 4,682 ( 15,126 ) Accounts payable and accrued expenses ( 3,114 ) 10,082 Net cash provided by operating activities 213,249 165,758 Cash flows from investing activities: Payments received on finance receivables held for investment 6,482 21,475 Purchases of finance receivables measured at fair value ( 1,275,701 ) ( 1,195,886 ) Payments received on finance receivables at fair value 777,612 637,844 Change in repossessions held in inventory – 88 Purchase of furniture and equipment ( 644 ) ( 356 ) Net cash used in investing activities ( 492,251 ) ( 536,835 ) Cash flows from financing activities: Proceeds from issuance of securitization trust debt 1,280,700 1,453,921 Proceeds from issuance of subordinated renewable notes 4,013 8,784 Payments on subordinated renewable notes ( 1,913 ) ( 1,684 ) Net proceeds from (repayments of) warehouse lines of credit ( 72,297 ) ( 125,566 ) Net Proceeds from (repayment of) residual interest financing debt 51,110 50,000 Repayment of securitization trust debt ( 957,621 ) ( 840,480 ) Payment of financing costs ( 9,082 ) ( 14,274 ) Purchase of common stock ( 6,119 ) ( 12,828 ) Exercise of options and warrants 4,708 6,825 Net cash provided by financing activities 293,499 524,698 Increase in cash and cash equivalents 14,497 153,621 Cash and restricted cash at beginning of period 137,397 125,431 Cash and restricted cash at end of period $ 151,894 $ 279,052 Supplemental disclosure of cash flow information: Cash paid during the period for: Interest $ 162,493 $ 129,335 Income taxes $ 6,729 $ 9,552 See accompanying Notes to Unaudited Condensed Consolidated Financial Statements. 6 CONSUMER PORTFOLIO SERVICES, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (In thousands) Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 Common Stock (Shares Outstanding) Balance, beginning of period 22,224 21,305 21,433 21,175 Common stock issued upon exercise of options and warrants 34 272 1,352 1,700 Repurchase of common stock ( 114 ) ( 172 ) ( 641 ) ( 1,470 ) Balance, end of period 22,144 21,405 22,144 21,405 Common Stock Balance, beginning of period $ 26,560 $ 25,062 $ 25,720 $ 28,678 Common stock issued upon exercise of options and warrants 91 910 4,708 6,825 Repurchase of common stock ( 981 ) ( 1,656 ) ( 6,119 ) ( 12,828 ) Stock-based compensation 501 727 1,862 2,368 Balance, end of period $ 26,171 $ 25,043 $ 26,171 $ 25,043 Retained Earnings Balance, beginning of period $ 276,551 $ 257,119 $ 267,060 $ 247,857 Net income 4,853 4,796 14,344 14,058 Balance, end of period $ 281,404 $ 261,915 $ 281,404 $ 261,915 Accumulated Other Comprehensive Loss Balance, beginning of period $ ( 10 ) $ ( 1,867 ) $ ( 10 ) $ ( 1,867 ) Pension benefit obligation – – – – Balance, end of period $ ( 10 ) $ ( 1,867 ) $ ( 10 ) $ ( 1,867 ) Balance, beginning of period – – 292,770 – Pension benefit obligation – – – – Total Shareholders' Equity $ 307,565 $ 285,091 $ 307,565 $ 285,091 See accompanying Notes to Unaudited Condensed Consolidated Financial Statements. 7 CONSUMER PORTFOLIO SERVICES, INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (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 nine-month period ended September 30, 2025 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, 2024. 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. 8 CONSUMER PORTFOLIO SERVICES, INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 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. Anticipated credit losses are included in our estimation of cash to be received with respect to receivables. In accordance with the fair value accounting standards, credit losses are included in our computation of the appropriate level yield, therefore 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 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 nine-month periods ending September 30, 2025, and 2024: Schedule of other income Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 (In thousands) (In thousands) Origination and servicing fees from third party receivables $ 1,248 $ 1,647 $ 4,063 $ 5,485 Sales tax refunds – 254 – 803 Other 7 21 35 103 Other income for the period $ 1,255 $ 1,922 $ 4,098 $ 6,391 9 CONSUMER PORTFOLIO SERVICES, INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 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: Schedule of supplemental balance sheet information related to leases September 30, December 31, 2025 2024 (In thousands) Operating Leases Operating lease right-of-use assets $ 51,770 $ 51,093 Less: Accumulated amortization right-of-use assets ( 35,055 ) ( 31,644 ) Operating lease right-of-use assets, net $ 16,715 $ 19,449 Operating lease liabilities $ ( 18,748 ) $ ( 21,471 ) Finance Leases Property and equipment, at cost $ 4,039 $ 3,794 Less: Accumulated depreciation ( 3,635 ) ( 3,488 ) Property and equipment, net $ 404 $ 306 Finance lease liabilities $ ( 418 ) $ ( 315 ) Weighted Average Discount Rate Operating lease 5.0 % 5.0 % Finance lease 6.4 % 6.5 % 10 CONSUMER PORTFOLIO SERVICES, INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Maturities of lease liabilities were as follows: Schedule of maturities of lease liabilities (In thousands) Operating Finance Year Ending December 31, Lease Lease 2025 (excluding the nine months ended September 30, 2025) $ 938 $ 52 2026 5,084 207 2027 5,242 149 2028 5,408 30 2029 3,761 10 Thereafter 985 – Total undiscounted lease payments 21,418 448 Less amounts representing interest ( 2,670 ) ( 30 ) Lease Liability $ 18,748 $ 418 The following table presents the lease expense included in General and administrative and Occupancy expense on our Unaudited Condensed Consolidated Statement of Operations: Schedule of lease cost Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 (In thousands) (In thousands) Operating lease cost $ 1,126 $ 1,311 $ 3,748 $ 3,996 Finance lease cost 55 34 164 82 Total lease cost $ 1,181 $ 1,345 $ 3,912 $ 4,078 11 CONSUMER PORTFOLIO SERVICES, INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS The following table presents the supplemental cash flow information related to leases: Schedule of supplemental cash flow information related to leases Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 Cash paid for amounts included in the measurement of lease liabilities: (In thousands) (In thousands) Operating cash flows from operating leases $ 1,126 $ 1,311 $ 3,748 $ 3,996 Operating cash flows from finance leases 48 29 142 70 Financing cash flows from finance leases 7 6 22 13 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 nine months ended September 30, 2025, we recorded stock-based compensation costs in the amount of $ 500,000 and $ 1.9 million, respectively. These stock-based compensation costs were $ 727,000 and $ 2.4 million for the three and nine months ended September 30, 2024. As of September 30, 2025, unrecognized stock-based compensation costs to be recognized over future periods equaled $ 6 .0 million. This amount will be recognized as expense over a weighted-average period of 3.47 years. The following represents stock option activity for the nine months ended September 30, 2025: Schedule of stock option activity Weighted Number of Weighted Average Shares Average Remaining (in thousands) Exercise Price Contractual Term Options outstanding at the beginning of period 6,157 $ 5.37 N/A Granted 1,430 8.19 N/A Exercised ( 1,352 ) 3.48 N/A Forfeited ( 7 ) 4.95 N/A Options outstanding at the end of period 6,228 $ 6.43 3.47 years Options exercisable at the end of period 4,438 $ 5.55 2.35 years 12 CONSUMER PORTFOLIO SERVICES, INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS The following table presents the price distribution of stock options outstanding and exercisable as of September 30, 2025 and December 31, 2024: Schedule of price distribution of stock options outstanding and exercisable Number of shares as of Number of shares as of September 30, 2025 December 31, 2024 Outstanding Exercisable Outstanding Exercisable Range of exercise prices: (In thousands) (In thousands) $2.00 - $2.99 1,098 1,098 1,197 1,197 $3.00 - $3.99 897 897 2,026 2,026 $4.00 - $4.99 1,190 1,190 1,262 972 $8.00 - $8.99 1,430 – – – $10.00 - $10.99 1,613 1,253 1,612 892 Total shares 6,228 4,438 6,097 5,087 At September 30, 2025, the aggregate intrinsic value of options outstanding and exercisable was $ 12.3 million. There were 1.4 million options exercised for the nine months ended September 30, 2025, compared to 1.7 million for the comparable period in 2024. The total intrinsic value of options exercised was $ 8.4 million and $ 8 .0 million for the nine-month periods ended September 30, 2025, and 2024. There were 1,501,000 shares available for future stock option grants under existing plans as of September 30, 2025. Purchases of Company Stock The table below describes the purchase of our common stock for the nine-months ended September 30, 2025, and 2024: Schedule of purchase of our common stock Nine Months Ended September 30, 2025 September 30, 2024 Shares Avg. Price Shares Avg. Price Open market purchases 89,362 $ 9.48 473,202 $ 8.67 Shares redeemed upon net exercise of stock options 451,937 9.76 876,456 8.66 Other 100,000 8.62 120,000 9.49 Total stock purchases 641,299 $ 9.54 1,469,658 $ 8.73 13 CONSUMER PORTFOLIO SERVICES, INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 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 September 30, 2025, 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. Recent Accounting Pronouncements In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740),” which is intended to provide greater transparency in various income tax components that affect the rate reconciliation based on the applicable taxing jurisdictions, as well as the qualitative and quantitative aspects of those components. This new standard will be effective for annual reporting periods beginning on or after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of ASU 2023-09; however, at the current time, the Company does not believe this ASU will have a material impact on its consolidated financial statements. (2) Finance Receivables, net Our portfolio of finance receivables, net 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. 14 CONSUMER PORTFOLIO SERVICES, INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS In January 2018 the Company adopted the fair value method of accounting for finance receivables, net acquired after 2017. Finance receivables, net measured at fair value are recorded separately on the Company’s Balance Sheet and are excluded from all tables in this footnote. The following table presents the components of Finance Receivables, net of allowance for finance credit losses: Schedule of components of finance receivables September 30, December 31, 2025 2024 (In thousands) Finance receivables $ 977 $ 5,420 Less: Allowance for finance credit losses – ( 433 ) Finance receivables, net $ 977 $ 4,987 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. 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 September 30, 2025, and December 31, 2024: Schedule of delinquency status of finance receivables September 30, December 31, 2025 2024 Delinquency Status (In thousands) Current $ 556 $ 2,994 31-60 days 154 1,184 61-90 days 227 971 91 + days 40 271 $ 977 $ 5,420 15 CONSUMER PORTFOLIO SERVICES, INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Finance receivables totaling $ 40,000 and $ 271,000 at September 30, 2025, and December 31, 2024, respectively, have been placed on non-accrual status as a result of their delinquency status. 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. 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, 2025, and 2024: Schedule of allowance for finance credit losses Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 (In thousands) (In thousands) Balance at beginning of period $ 145 $ 684 $ 433 $ 2,869 Provision for credit losses on finance receivables ( 712 ) ( 994 ) ( 2,472 ) ( 4,579 ) Charge-offs ( 120 ) ( 544 ) ( 584 ) ( 1,976 ) Recoveries 687 1,340 2,623 4,172 Balance at end of period $ – $ 486 $ – $ 486 16 CONSUMER PORTFOLIO SERVICES, INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (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 securitization trust debt Weighted Average Final Receivables Outstanding Outstanding Contractual Debt Scheduled Pledged at Principal at Principal at Interest Rate at Payment September 30, Initial September 30, December 31, September 30, Series Date (1) 2025 (2) Principal 2025 2024 2025 (Dollars in thousands) CPS 2020-C November 2027 $ – $ 252,200 $ – $ 22,453 – CPS 2021-A March 2028 – 230,545 – 22,396 – CPS 2021-B June 2028 24,710 240,000 19,436 31,903 3.41 % CPS 2021-C September 2028 38,935 291,000 30,814 49,739 2.89 % CPS 2021-D December 2028 55,549 349,202 46,683 72,090 3.76 % CPS 2022-A April 2029 63,523 316,800 49,477 77,872 3.93 % CPS 2022-B October 2029 101,335 395,600 85,400 132,002 6.36 % CPS 2022-C April 2030 123,463 391,600 89,070 141,176 7.32 % CPS 2022-D June 2030 112,715 307,018 96,940 135,857 9.58 % CPS 2023-A August 2030 137,807 324,768 96,162 146,020 7.45 % CPS 2023-B November 2030 152,355 332,885 117,944 172,154 7.53 % CPS 2023-C February 2031 147,251 291,732 123,154 175,219 7.26 % CPS 2023-D May 2031 156,958 286,149 136,229 191,621 7.99 % CPS 2024-A August 2031 167,533 280,924 145,377 206,348 6.41 % CPS 2024-B November 2031 214,128 319,871 192,643 262,768 6.57 % CPS 2024-C March 2032 312,286 436,310 283,539 379,254 6.33 % CPS 2024-D June 2032 327,936 416,816 298,515 390,983 5.26 % CPS 2025-A August 2032 384,422 442,420 354,756 – 5.49 % CPS 2025-B March 2033 398,857 419,950 369,875 – 5.42 % CPS 2025-C May 2033 415,633 418,330 396,919 – 5.08 % – $ 3,335,398 $ 6,744,120 $ 2,932,933 $ 2,609,855 _________________ (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 $ 279.4 million in 2025, $ 1,055.9 million in 2026, $ 736 .0 million in 2027, $ 451.5 million in 2028, $ 257.3 million in 2029, $ 116.5 million in 2030, and $ 19.8 million in 2031. (2) Includes repossessed assets that are included in other assets on our Unaudited Condensed Consolidated Balance Sheet. 17 CONSUMER PORTFOLIO SERVICES, INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Debt issuance costs of $ 16.5 million and $ 15.5 million as of September 30, 2025, and December 31, 2024, 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. All 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 various securitization agreements related to the issuance of the securitization trust debt require that certain delinquency and credit loss criteria be met with respect to the collateral pool and require that we maintain minimum levels of liquidity and net worth and not exceed maximum leverage levels. We followed all such covenants as of September 30, 2025. We are responsible for the administration and collection of the contracts. The securitization agreements also require certain funds be held in restricted cash accounts to provide additional credit enhancement for the Notes or to be applied to make payments on the securitization trust debt. As of September 30, 2025, restricted cash under the various agreements totaled approximately $ 142.5 million. Interest expense on the securitization trust debt is composed of the stated rate of interest plus amortization of additional costs of borrowing. Additional costs of borrowing include facility fees, insurance premiums, amortization of deferred financing costs, and amortization of discounts required on the notes at the time of issuance. Deferred financing costs related to the securitization trust debt are amortized using the interest method. Accordingly, the effective cost of borrowing of the securitization trust debt is greater than the stated rate of interest. 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 warehouse line of credit. 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 financing 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 any of our other creditors. 18 CONSUMER PORTFOLIO SERVICES, INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (4) Debt The terms and amounts of our other debt outstanding at September 30, 2025, and December 31, 2024, are summarized below: Schedule of debt outstanding Amount Outstanding at September 30, December 31, 2025 2024 (In thousands) Description Interest Rate Subordinate Lender Interest Rate Maturity Warehouse lines of credit 2.85% over CP yield rate (Minimum 3.75%) 7.18% and 7.52% at September 30, 2025 and December 31 2024, respectively 6.40% over SOFR yield rate (Minimum 7.15%) 10.78% and 11.09% at September 30, 2025 and December 31, 2024, respectively July 2026 $ 291,217 $ 269,602 Warehouse lines of credit 4.50% over a commercial paper rate (Minimum 7.50%) 8.65% and 8.90% at September 30 2025, and December 31 2024, respectively March 2026 51,685 145,597 Residual interest financing 7.86 % June 2026 36,490 50,000 Residual interest financing 11.50 % March 2029 49,988 50,000 Residual interest financing 11.00 % June 2032 64,632 – Subordinated renewable notes Weighted average rate of 8.99 % and 9.24 % at September 30, 2025 and December 31, 2024, respectively Weighted average maturity of October 2027 and December 2026 at September 30, 2025 and December 31, 2024, respectively 28,589 26,489 $ 522,601 $ 541,688 19 CONSUMER PORTFOLIO SERVICES, INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS On March 20, 2025, we completed a $ 65 million securitization of residual interests from previously issued securitizations. In the transaction, a qualified institutional buyer purchased $ 65 .0 million of asset-backed notes secured by an 80% interest in a CPS affiliate that owns the residual interests in five CPS securitizations issued from October 2023 through September 2024. The sold notes (“2025-1 Notes”), issued by CPS Auto Securitization Trust 2025-1, consist of a single class with a coupon of 11.00%. At September 30, 2025, there was $ 64 .6 million outstanding under this facility. On December 19, 2024, we increased the capacity of our revolving credit agreement with Citibank, N.A., to $ 335 million. This follows the November 2024 closing of a revolving credit agreement with Oaktree Capital Management, which is subordinate to our credit agreement with Citibank, N.A. The facility provides effective advances up to 10.00% of eligible finance receivables, effectively increasing the advance rate up to 95% across the facility for eligible receivables. The revolving credit agreement with Citibank, N.A. was last renewed in July 2024, extending the maturity date to July 2026 followed by an amortization period through July 2027 for any receivables pledged at the end of the revolving period. There was $ 291.2 million outstanding under this facility at September 30, 2025. On March 29, 2024, we renewed our two-year $ 200 million revolving credit agreement with Ares Agent Services, L.P. The revolving period for this facility was extended to March 2026 followed by an amortization period through March 2028 for any receivables pledged at the end of the revolving period. There was $ 51.7 million outstanding under this facility at September 30, 2025. On March 22, 2024, we completed a $ 50 million securitization of residual interests from previously issued securitizations. In the transaction, a qualified institutional buyer purchased $ 50 .0 million of asset-backed notes secured by an 80% interest in a CPS affiliate that owns the residual interests in five CPS securitizations issued from January 2022 through January 2023. The sold notes (“2024-1 Notes”), issued by CPS Auto Securitization Trust 2024-1, consist of a single class with a coupon of 11.50%. At September 30, 2025, there was $ 50 .0 million outstanding under this facility. On June 30, 2021, we completed a $ 50 million securitization of residual interests from previously issued securitizations. In this residual interest financing transaction, qualified institutional buyers purchased $ 50 .0 million of asset-backed notes secured by residual interests in eleven CPS securitizations consecutively issued from January 2018 and September 2020. The sold notes (“2021-1 Notes”), issued by CPS Auto Securitization Trust 2021-1, consist of a single class with a coupon of 7.86%. At September 30, 2025, there was $ 36.5 million outstanding under this facility. Unamortized debt issuance costs of $ 1.6 million and $ 824,000 as of September 30, 2025, and December 31, 2024, respectively, have been excluded from the amount reported above for residual interest financing. Similarly, unamortized debt issuance costs of $ 2.3 million and $ 4.3 million as of September 30, 2025, and December 31, 2024, 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. 20 CONSUMER PORTFOLIO SERVICES, INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (5) Interest Income and Interest Expense The following table presents the components of interest income: Schedule of interest income Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 (In thousands) (In thousands) Interest on finance receivables at fair value $ 104,890 $ 89,942 $ 307,484 $ 255,546 Interest on finance receivables 844 1,516 2,949 5,634 Other interest income 1,432 1,700 4,029 4,632 Interest income $ 107,166 $ 93,158 $ 314,462 $ 265,812 The following table presents the components of interest expense: Schedule of interest expense Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 (In thousands) (In thousands) Securitization trust debt $ 47,581 $ 42,998 $ 138,182 $ 116,859 Warehouse lines of credit 6,710 4,000 21,439 14,022 Residual interest financing 4,085 2,477 11,048 6,225 Subordinated renewable notes 722 581 2,051 1,629 Interest expense $ 59,098 $ 50,056 $ 172,720 $ 138,735 21 CONSUMER PORTFOLIO SERVICES, INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (6) Earnings Per Share Earnings per share for the three-month and nine-month periods ended September 30, 2025, and 2024 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, 2025, and 2024: Schedule of earnings per share Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 (In thousands) (In thousands) Weighted average number of common shares outstanding during the period used to compute basic earnings per share 22,209 21,343 21,852 21,250 Incremental common shares attributable to exercise of outstanding options and warrants 1,837 2,810 2,335 3,090 Weighted average number of common shares used to compute diluted earnings per share 24,046 24,153 24,187 24,340 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 period ended September 30, 2025, would have included an additional 1.6 million shares attributable to the exercise of outstanding options and warrants. For the three-month and nine-month periods ended September 30, 2024, 1.6 million and 1.7 million shares, respectively, would be included in the diluted earnings per share calculation. (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 September 30, 2025, and December 31, 2024, 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. 22 CONSUMER PORTFOLIO SERVICES, INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 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 and liabilities are recognized for the future tax consequences of events that have been recognized in the financial statements. A valuation allowance is recognized to reduce a deferred tax asset if, based on the weight of all available evidence, it is more likely than not that some or all of the deferred tax asset will not be realized. When making this judgment, both positive and negative evidence is considered, with the most weight given to evidence that can be objectively verified. The recognition of deferred tax liabilities, however, does not require a similar more likely than not test for realization. They are recognized with the expectation that they will be settled in future periods when the related taxable temporary differences reverse. As of September 2025, we have a net deferred tax liabilities of $ 674,000 . Our net deferred tax liabilities of $ 674,000 consists of approximately $ 847,000 of net U.S. federal deferred tax liabilities and $ 173,000 of net state deferred tax assets. Income tax expense was $ 2.2 million for the three months and $ 6.4 million nine months ended September 30, 2025, representing effective income tax rates of 31 %, compared to income tax expense of $ 2.1 million and 6 .0 million for the three months and nine months ended September 30, 2024, and representing effective income tax rates of 30 % respectively. (8) Legal Proceedings Consumer Litigation. We are routinely involved in various legal proceedings resulting from our consumer finance 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. For 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. Following our filing of a complaint for a deficiency judgment in the Superior Court at Waterbury, Connecticut, the defendant filed a cross-claim on October 16, 2019, 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 complaint seeks primarily damages, injunctive relief, waiver of contract deficiencies, and attorney fees and interest. 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 2024, a motion for certification of a class was filed. Prior to the motion being ruled upon, summary judgment was granted in our favor, disposing of the claims against CPS. An appeal of the summary judgment ruling was filed on October 25, 2024, and we filed a cross appeal of the denial of the motion to compel arbitration on October 31, 2024. 23 CONSUMER PORTFOLIO SERVICES, INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS In General. There can be no assurance as to the outcomes of the matters described or referenced above. We record at each measurement date, most recently as of September 30, 2025, 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 range of reasonably possible losses for the legal proceedings and contingencies we face, including those described or identified above, as of September 30, 2025, does not exceed $ 3.2 million. 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. (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. 24 CONSUMER PORTFOLIO SERVICES, INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS For the quarter ended September 30, 2025, 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 Nine Months Ended September 30, September 30, 2025 2024 2025 2024 (In thousands) (In thousands) Balance at beginning of period $ 3,559,029 $ 2,960,375 $ 3,313,767 $ 2,722,662 Finance receivables at fair value acquired during period 392,822 442,126 1,275,701 1,195,886 Payments received on finance receivables at fair value ( 260,043 ) ( 217,945 ) ( 777,612 ) ( 637,844 ) Net interest income accretion on fair value receivables ( 66,867 ) ( 57,746 ) ( 193,415 ) ( 164,394 ) Mark to fair value – 5,500 6,500 16,000 Balance at end of period $ 3,624,941 $ 3,132,310 $ 3,624,941 $ 3,132,310 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 September 30, 2025 December 31, 2024 Contractual Fair Contractual Fair Balance Value Balance Value (In thousands) Finance receivables measured at fair value $ 3,759,339 $ 3,624,941 $ 3,485,540 $ 3,313,767 25 CONSUMER PORTFOLIO SERVICES, INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 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 Weight Avg. Inputs as of September 30, December 31, September 30, December 31, 2025 2024 Unobservable 2025 2024 (In thousands) Assets: Finance receivables measured at fair value $ 3,624,941 $ 3,313,767 Discount rate 11.29% 11.37% Cumulative net losses 15.85% 15.47% The following table summarizes the delinquency status of these finance receivables measured at fair value as of September 30, 2025, and December 31, 2024: Schedule of delinquency status of finance receivables measured at fair value September 30, December 31, 2025 2024 (In thousands) Delinquency Status Current $ 3,234,924 $ 2,969,864 31 - 60 days 247,787 241,883 61 - 90 days 111,169 113,662 91 + days 58,631 64,810 Repo 106,828 95,321 $ 3,759,339 $ 3,485,540 There were no transfers in or out of level 1, level 2 or level 3 assets and liabilities for the nine months ended September 30, 2025, and 2024. 26 CONSUMER PORTFOLIO SERVICES, INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS The estimated fair values of financial assets and liabilities, excluding assets carried at fair value, on September 30, 2025, and December 31, 2024, were as follows: Schedule of fair values of financial assets and liabilities As of September 30, 2025 Financial Instrument (In thousands) Carrying Fair Value Measurements Using: Value Level 1 Level 2 Level 3 Total Assets: Cash and cash equivalents $ 9,388 $ 9,388 $ – $ – $ 9,388 Restricted cash and equivalents 142,506 142,506 – – 142,506 Finance receivables, net 977 – – 806 806 Accrued interest receivable 14 – – 14 14 Liabilities: Warehouse lines of credit $ 340,645 $ – $ – $ 340,645 $ 340,645 Residual interest financing 149,501 149,501 149,501 Accrued interest payable 11,573 – – 11,573 11,573 Securitization trust debt 2,916,439 – – 2,912,901 2,912,901 Subordinated renewable notes 28,589 – – 28,589 28,589 As of December 31, 2024 Financial Instrument (In thousands) Carrying Fair Value Measurements Using: Value Level 1 Level 2 Level 3 Total Assets: Cash and cash equivalents $ 11,713 $ 11,713 $ – $ – $ 11,713 Restricted cash and equivalents 125,684 125,684 – – 125,684 Finance receivables, net 4,987 – – 3,996 3,996 Accrued interest receivable 65 – – 65 65 Liabilities: Warehouse lines of credit $ 410,898 $ – $ – $ 410,898 $ 410,898 Accrued interest payable 10,663 – – 10,663 10,663 Securitization trust debt 2,594,384 – – 2,614,352 2,614,352 Subordinated renewable notes 26,489 – – 26,489 26,489 27 CONSUMER PORTFOLIO SERVICES, INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (10) Business Segment Information The company has one reportable segment. This determination is made by our Chief Executive Officer, who acts as the chief operating decision-maker (“CODM”), in assessing performance and making decisions regarding resource allocation. The CODM assesses performance by reviewing the consolidated financial statements, which reflect the financial results of our one reportable operating segment. Within the Company’s one reportable segment, it provides indirect vehicle financing to motor vehicle dealer’s less credit- worthy borrowers. The Company’s revenue primarily consists of interest income and is derived from the interest recorded on contracts the Company has purchased. The revenue generated from any individual borrower is deemed to be immaterial. (11) Subsequent Events On October 17, 2025, we closed a new two-year $167.5 million revolving credit agreement with Capital One, N.A. The credit facility includes a subordinate lender, in which it will provide effective advances up to 10% of eligible finance receivables, effectively increasing the advance rate up to 95.5% across the facility. The revolving period for this facility will extend to October 2027 followed by an amortization period through April 2028 for any receivables pledged at the end of the revolving period. On October 23, 2025, we executed our fourth securitization of 2025. In the transaction, qualified institutional buyers purchased $384.6 million of asset-backed notes secured by $392.5 million in automobile receivables originated by CPS. The sold notes, issued by CPS Auto Receivables Trust 2025-D, 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 5.72%. 28 Cautionary Note Regarding Forward-Looking Statements Discussions of certain matters contained in this report may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Exchange Act, and as such, may involve risks and uncertainties. You can generally identify forward-looking statements as statements containing the words “will,” “would,” “believe,” “may,” “could,” “expect,” “anticipate,” “intend,” “estimate,” “judgment,” “assume,” “plans,” “goals, “strategy,” “future,” “likely,” “should” or other similar expressions. Examples of forward-looking statements include, among others, statements we make regarding: • 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; • 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; or • 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 and achievements may differ materially from the results, performance and achievements expressed or implied in such forward-looking statements. 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; • competition; • the level of losses incurred on contracts in our managed portfolio; • adverse decisions by courts or regulators; • regulatory changes with respect to consumer finance; 29 • 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; and • such other factors as discussed through the “Risk Factors” section of this report. Forward-looking statements are neither historical facts nor guarantees of performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, plans and strategies, projections, anticipated events and trends, the economy and other uncertain conditions. Because forward-looking statements relate to the future, they involve risks, uncertainties and assumptions. Actual results may differ from expectations due to many factors beyond our ability to control or predict, including those described herein, and in any documents incorporated by reference in this report. Therefore, you should not rely on any of these forward-looking statements. For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. We undertake no obligation to publicly update any forward-looking information. You are advised to consult any additional disclosure we make in our periodic reports filed with the SEC. 30