What changed in this filing

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Item 1. Financial Statements

2026-05-08 compared with 2025-11-10 · 307 added, 435 removed, 515 unchanged (59% of the section changed)

4 unchanged sentences

(In thousands, except share and per share data)

September 30,

Cash and cash equivalents

1 unchanged sentence

Finance receivables measured at fair value

Finance receivables, net

Furniture and equipment, net

Deferred tax assets, net

LIABILITIES AND SHAREHOLDERS’ EQUITY

7 unchanged sentences

Shareholders’ Equity

Preferred stock, $ 1 par value;

authorized 4,998,130 shares;

Series A preferred stock, $ 1 par value;

authorized 5,000,000 shares;

Series B preferred stock, $ 1 par value;

authorized 1,870 shares;

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

Preferred stock, $ 1 par value;authorized 4,998,130 shares;

Series A preferred stock, $ 1

authorized 5,000,000

Series B preferred stock, $ 1

authorized 1,870

Common stock, no

authorized 75,000,000

and 21,842,457

shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively

Retained earnings

10 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

Interest income

3 unchanged sentences

General and administrative

Provision for credit losses

Depreciation and amortization

4 unchanged sentences

Number of shares used in computing earnings per share:

See accompanying Notes to Unaudited Condensed

Consolidated Financial Statements.

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

CONSUMER PORTFOLIO SERVICES, INC.

4 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

Other comprehensive income/(loss);

4 unchanged sentences

CONSUMER PORTFOLIO SERVICES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS

OF CASH FLOWS

(In thousands)

Nine Months Ended

September 30,

Three Months Ended

Cash flows from operating activities:

13 unchanged sentences

Purchases of finance receivables measured at fair value

( 1,275,701 )

( 1,195,886 )

Payments received on finance receivables at fair value

Change in repossessions held in inventory

Purchase of furniture and equipment

5 unchanged sentences

Net proceeds from (repayments of) warehouse lines of credit

Net Proceeds from (repayment of) residual interest financing debt

Proceeds from issuance of residual interest financing debt

Repayment of residual interest financing debt

Repayment of securitization trust debt

4 unchanged sentences

Increase in cash and cash equivalents

Cash and restricted cash at beginning of period

Cash and restricted cash

at beginning of period

Cash and restricted cash at end of period

1 unchanged sentence

Cash paid during the period for:

See accompanying Notes to Unaudited Condensed

Consolidated Financial Statements.

See accompanying Notes

to Unaudited Condensed Consolidated Financial Statements

CONSUMER PORTFOLIO SERVICES, INC.

2 unchanged sentences

(In thousands)

Three Months Ended

Nine Months Ended

September 30,

Common Stock (Shares Outstanding)

18 unchanged sentences

Total Shareholders’ Equity

See accompanying Notes to Unaudited Condensed

Consolidated Financial Statements.

See accompanying Notes to

Unaudited Condensed Consolidated Financial Statements.

CONSUMER PORTFOLIO SERVICES, INC.

22 unchanged sentences

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

Results for the nine-month period ended September 30, 2025 are not necessarily

Results for the three-month period ended March 31, 2026, are not necessarily

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

10 unchanged sentences

reported amounts of income and expenses during the reported periods.

CONSUMER PORTFOLIO SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

Finance Receivables Measured

15 unchanged sentences

would be required.

CONSUMER PORTFOLIO SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Anticipated credit losses are included in our

10 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 nine-month periods ending September 30, 2025, and 2024:

The following table presents the primary components

of Other Income for the three-month periods ending March 31, 2026, and 2025:

Schedule of other income

Three Months Ended

Nine Months Ended

September 30,

(In thousands)

Origination and servicing fees from third party receivables

Sales tax refunds

Dealer recoveries

Other income for the period

CONSUMER PORTFOLIO SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

The Company has operating leases for corporate

10 unchanged sentences

Schedule of supplemental balance sheet information related to leases

September 30,

(In thousands)

13 unchanged sentences

CONSUMER PORTFOLIO SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Maturities of lease liabilities were as follows:

2 unchanged sentences

Year Ending December 31,

2025 (excluding the nine months ended September 30, 2025)

2026 (excluding the three months ended March 31, 2026)

Total undiscounted lease payments

5 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

(In thousands)

Operating lease cost

1 unchanged sentence

Total lease cost

CONSUMER PORTFOLIO SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

The following table presents the supplemental

2 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

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

(In thousands)

Operating cash flows from operating leases

1 unchanged sentence

Financing cash flows from finance leases

CONSUMER PORTFOLIO SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Stock-based Compensation

2 unchanged sentences

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.

For the three months ended March 31, 2026, and

2025 we recorded stock-based compensation costs in the amount of $ 512,000 and $ 717,000 , respectively.

As of March 31, 2026, unrecognized

stock-based compensation costs to be recognized over future periods equaled $ 4.8 million.

This amount will be recognized as expense over

a weighted-average period of 3.12 years.

The following represents stock option activity

for the nine months ended September 30, 2025:

for the three months ended March 31, 2026:

Schedule of stock option activity

5 unchanged sentences

Options exercisable at the end of period

CONSUMER PORTFOLIO SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

The following table presents the price distribution

of stock options outstanding and exercisable as of September 30, 2025 and December 31, 2024:

of stock options outstanding and exercisable as of March 31, 2026 and December 31, 2025:

Schedule of price distribution of stock options outstanding and exercisable

1 unchanged sentence

Number of shares as of

September 30, 2025

March 31, 2026

December 31, 2025

7 unchanged sentences

$10.00 - $10.99

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.

At March 31, 2026, the aggregate intrinsic value

of options outstanding and exercisable was $ 12.7 million.

There were no options exercised for the three months ended March 31, 2026, compared

to 70,000 for the comparable period in 2025.

The total intrinsic value of options exercised was $ 390,000 for the three-month periods ended

March 31, 2025.

There were 4,501,000 shares available for future stock option grants under existing plans as of March 31, 2026.

CONSUMER PORTFOLIO SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Purchases of Company Stock

The table below describes the purchase of our

common stock for the nine-months ended September 30, 2025, and 2024:

common stock for the three-months ended March 31, 2026, and 2025:

Schedule of purchase of our

Nine Months Ended

September 30, 2025

September 30, 2024

Three Months Ended

March 31, 2026

March 31, 2025

Open market purchases

1 unchanged sentence

Total stock purchases

CONSUMER PORTFOLIO SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

Reclassifications

7 unchanged sentences

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

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.

As of March 31, 2026, 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

3 unchanged sentences

is both probable that a liability has been incurred and the amount of the loss can be reasonably determined.

This is described further

in footnote 8.

Recent Accounting Pronouncements

In December 2023, the FASB issued ASU No.

“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,

We do not believe that any accounting pronouncements

issued, but not yet effective, are applicable or would have a material impact on our consolidated financial statements or disclosures,

(2) Finance receivables measured at fair

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

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

to principal reduction.

CONSUMER PORTFOLIO SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

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,

(In thousands)

Finance receivables

Allowance for finance credit losses

Finance receivables, net

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.

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.

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,

Delinquency Status

(In thousands)

consists of small-balance homogeneous contracts comprising a single segment.

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 have elected to use the

fair value method to value our portfolio of finance receivables acquired.

The accounting treatment follows the fair value hierarchy outlined

in ASC 820, “Fair Value Measurements”, and the inputs and assumptions are level 3.

This is described further in footnote 9.

CONSUMER PORTFOLIO SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

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

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

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

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Our valuation policies and

procedures have been developed by our Accounting department in conjunction with our Risk department and with consultation with outside

valuation experts.

Our policies and procedures have been approved by our Chief Executive and our Board of Directors and include methodologies

for valuation, internal reporting, calibration and back testing.

Our periodic review of valuations includes an analysis of changes in

fair value measurements and documentation of the reasons for such changes.

There is little available third-party information such as broker

quotes or pricing services available to assist us in our valuation process.

Our level 3, unobservable

inputs reflect our own assumptions about the factors that market participants use in pricing similar receivables and are based on the

best information available in the circumstances.

They include such inputs as estimates for the magnitude and timing of net charge-offs

and the rate of amortization of the portfolio of finance receivable.

Significant changes in any of those inputs in isolation would have

a significant effect on our fair value measurement.

For the quarter ended March

31, 2026, the Company evaluated the appropriate fair value and future earnings rate of existing receivables compared to recently acquired

receivables and did not record a mark up or down to the 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,

(In thousands)

Balance at beginning of period

Provision for credit losses on finance receivables

Finance receivables at fair value acquired during period

Payments received on finance receivables at fair value

Net interest income accretion on fair value receivables

Mark to fair value

Balance at end of period

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

March 31, 2026

December 31, 2025

(In thousands)

Finance receivables measured at fair value

The following table provides certain qualitative

information about our level 3 fair value measurements:

Schedule of level 3 fair value measurements

Financial Instrument

(In thousands)

receivables measured at fair value

Discount rate

Cumulative net losses

CONSUMER PORTFOLIO SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

We report delinquency on a contractual basis.

The following table summarizes the delinquency status of these finance receivables measured at fair value as of March 31, 2026, and December

Schedule of delinquency

status of finance receivables measured at fair value

(In thousands)

Delinquency Status

(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)

November 2027

September 2028

13 unchanged sentences

CONSUMER PORTFOLIO SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

AND SUBSIDIARIES

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.

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

million and $ 16.6 million as of March 31, 2026, and December 31, 2025, respectively, have been excluded from the table above.

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

All the securitization trust

5 unchanged sentences

respect to the collateral pool and require that we maintain minimum levels of liquidity and net worth and not exceed maximum leverage

We followed all such covenants as of September 30, 2025.

We are in compliance with all such covenants as of March 31, 2026.

We are responsible for the administration

2 unchanged sentences

additional credit enhancement for the Notes or to be applied to make payments on the securitization trust debt.

As of September 30, 2025,

As of March 31, 2026,

restricted cash under the various agreements totaled approximately $ 178.5 million.

18 unchanged sentences

CONSUMER PORTFOLIO SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

The terms and amounts of our

other debt outstanding at September 30, 2025, and December 31, 2024, are summarized below:

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The terms and amounts of our other debt outstanding

at March 31, 2026, and December 31, 2025, are summarized below:

Schedule of debt outstanding

Amount Outstanding at

September 30,

(In thousands)

Interest Rate

Subordinate Lender Interest Rate

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

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

Subordinate Lender

Interest Rate

Warehouse line of credit

2.85% over CP yield rate (Minimum 3.60%)

6.68% and 6.80% at March 31, 2026 and December 31 2025, respectively

6.40% over SOFR yield rate (Minimum 7.15%)

10.33% and 10.40% at March 31, 2026 and December 31, 2025, respectively

Warehouse line of credit

4.50% over a commercial paper rate (Minimum 7.50%) 8.18%

and 8.25% at March 31, 2026, and December 31 2025, respectively

Warehouse line of credit

2.75% over SOFR yield rate (Minimum 3.00%) 6.42% and

6.50% at March 31, 2026 and December 31, 2025, respectively

6.40% over SOFR yield rate (Minimum 6.65%) 10.07% and

10.27% at March 31, 2026 and December 31, 2025, respectively

Residual interest financing

December 2028

Residual interest financing

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

Residual interest financing

renewable notes

average rate of 8.81 % and 8.98 % at March 31, 2026 and December 31, 2025, respectively

average maturity of January 2028 and November 2027 at March 31, 2026 and December 31, 2025, respectively

CONSUMER PORTFOLIO SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

On March 4, 2026, 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 four CPS securitizations issued

from January 2025 through October 2025.

The sold notes (“2025-1 Notes”), issued by CPS Auto Securitization Trust 2026-1, consist

of a single class with a coupon of 8.75%.

At March 31, 2026, there was $ 50 .0 million outstanding under this facility.

On October 17, 2025, we entered into a $ 167.5

million two-year warehouse credit line with Capital One, N.A as the Class A Lender and Oaktree Asset-Backed Income Private Placement Fund

Inc., as the Class B Lenders.

The facility is structured to allow us to fund a portion of the purchase price of automobile contracts by

borrowing from a credit facility to our consolidated subsidiary Page Eleven Funding, LLC.

The facility provides for effective advances

up to 95.50% of eligible finance receivables.

The Class A loans under the facility generally accrue interest during the revolving period

at a per annum rate equal to the Term SOFR plus 2.75% per annum, with a minimum rate of 3.00% per annum and during the amortization period

at a per annum rate equal to the Term SOFR plus 3.75% per annum, with a minimum rate of 4.00% per annum.

The Class B loans under the facility

generally accrue interest during the revolving period at a per annum rate equal to the Term SOFR plus 6.40% per annum, with a minimum

rate of 6.65% per annum and during the amortization period at a per annum rate equal to the Term SOFR plus 7.40% per annum, with a minimum

rate of 7.65% per annum.

At March 31, 2026, there was $ 167.5 million outstanding under this facility.

On March 20, 2025, we completed a $ 65 million

5 unchanged sentences

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.

At March 31, 2026, there was $ 62.8 million outstanding under this facility.

On December 19, 2024, we increased the capacity

8 unchanged sentences

There was $ 301.2 million outstanding

under this facility at September 30, 2025.

under this facility at March 31, 2026.

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 $ 51.7 million outstanding

under this facility at September 30, 2025.

In March 2026, the revolving

period was extended to April 2026.

There was nothing outstanding under this facility at March 31, 2026.

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

5 unchanged sentences

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

At September 30, 2025, there was $ 50 .0 million outstanding under this facility.

At March 31, 2026, there was $ 49.7 million outstanding under this facility.

On June 30, 2021, we completed a $ 50 million securitization

5 unchanged sentences

of a single class with a coupon of 7.86%.

At September 30, 2025, there was $ 36.5 million outstanding under this facility.

At March 31, 2026, there was $ 21 .0 million outstanding under this facility.

Unamortized debt issuance costs of $ 2.1 million

and $ 824,000 as of September 30, 2025, and December 31, 2024, respectively, have been excluded from the amount reported above for residual

and $ 1.5 million as of March 31, 2026, and December 31, 2025, 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.

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

Condensed Consolidated Balance Sheets.

CONSUMER PORTFOLIO SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(5) Interest Income and Interest Expense

The following table presents the components of interest

Schedule of interest

Schedule of interest income

Three Months Ended

Nine Months Ended

September 30,

(In thousands)

Interest on finance receivables at fair value

Interest on finance receivables

Other interest income

4 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

(In thousands)

Securitization trust debt

3 unchanged sentences

Interest expense

CONSUMER PORTFOLIO SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

(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:

Earnings per share for the three-month periods

ended March 31, 2026, and 2025 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 periods ended

March 31, 2026, and 2025:

Schedule of earnings per share

Three Months Ended

Nine Months Ended

September 30,

(In thousands)

Weighted average number of common shares outstanding during the period used to compute basic earnings per share

Incremental common shares attributable to exercise of outstanding options and warrants

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

Weighted average number of common shares outstanding during the period used to compute basic earnings

Incremental common shares attributable to exercise

of outstanding options and warrants

Weighted average number of common shares used to

compute diluted earnings per share

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.

of common stock equivalents were considered, shares included in the diluted earnings per share calculation for the three-month period

ended March 31, 2026, would have included an additional 3 .0 million shares attributable to the exercise of outstanding options and warrants.

For the three month ended March 31, 2025, 1.4 million shares, would be included in the diluted earnings per share calculation.

CONSUMER PORTFOLIO SERVICES, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(7) Income Taxes

3 unchanged sentences

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.

CONSUMER PORTFOLIO SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

As of March 31, 2026 and December

31, 2025, we had no unrecognized tax benefits for uncertain tax positions.

We do not anticipate that total unrecognized tax benefits will

significantly change due to any settlements of audits or expirations of statutes of limitations over the next 12 months.

The Company and its subsidiaries

18 unchanged sentences

when the related taxable temporary differences reverse.

As of September 2025, we have a net deferred tax liabilities of $ 674,000 .

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.

As of March 31, 2026 we have a net deferred tax asset of $ 16,000 .

Our net deferred

tax asset of $16,000 consists of approximately $ 270,000 of net U.S.

federal deferred tax liabilities and $ 286,000 of net state deferred

Income tax expense was $ 2.5

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.

million for the three months ended on March 31, 2026, compared to income tax expense of $ 2.1 million for the three months ended March

31, 2025, representing an effective income tax rate of 31 % in both periods.

(8) Legal Proceedings

5 unchanged sentences

on the particular circumstances of each case.

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.

general, there can be no assurance as to the outcomes of the matters described above.

We record at each measurement date our best estimate

of probable incurred losses for legal contingencies, if any.

The amount of losses that may ultimately be incurred cannot be estimated

with certainty.

However, based on such information as is available to us, the Company is not currently a party to any such material proceedings.

we believe that the ultimate resolution of legal proceedings 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.

CONSUMER PORTFOLIO SERVICES, INC.

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 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.

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.

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.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(9) Fair Value Measurements

14 unchanged sentences

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.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

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,

(In thousands)

Balance at beginning of period

Finance receivables at fair value acquired during period

Payments received on finance receivables at fair value

Net interest income accretion on fair value receivables

Mark to fair value

Balance at end of period

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

(In thousands)

Finance receivables measured at fair value

CONSUMER PORTFOLIO SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

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

September 30,

(In thousands)

Finance receivables measured at fair value

Discount rate

Cumulative net losses

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,

(In thousands)

Delinquency Status

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.

CONSUMER PORTFOLIO SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

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

or out of level 1, level 2 or level 3 assets and liabilities for the three months ended March 31, 2026, and 2025.

The estimated fair values of financial assets

and liabilities, excluding assets carried at fair value, on March 31, 2026 and December 31, 2025, were as follows:

Schedule of fair values of financial assets and

As of March 31, 2026

Financial Instrument

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Restricted cash and equivalents

Finance receivables, net

Accrued interest receivable

Warehouse lines of credit

Residual interest financing

Accrued interest payable

Residual interest financing

Securitization trust debt

6 unchanged sentences

Restricted cash and equivalents

Finance receivables, net

Accrued interest receivable

Warehouse lines of credit

Accrued interest payable

Residual interest financing

Securitization trust debt

1 unchanged sentence

CONSUMER PORTFOLIO SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(10) Business Segment

4 unchanged sentences

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.

Within the Company’s one

reportable segment, it provides indirect vehicle financing to motor vehicle dealer’s less credit- worthy borrowers.

The Company’s

2 unchanged sentences

(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%.

On April 6, 2026, we amended

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

to increase the capacity of the facility.

The amendment applies to both

Capital One, N.A.

and the subordinate lender, and increases the capacity of the facility from $167.5 million to $390 million.

The revolving

period for this facility will extend to October 2027 after which CPS will have the option to repay the outstanding loans in full or to

allow them to amortize for an eighteen-month period.

On April 22, 2026, we completed

our second securitization of 2026.

In the transaction, qualified institutional buyers purchased $514.07 million of asset-backed notes

secured by $526.17 million in automobile receivables originated by CPS.

The sold notes, issued by CPS Auto Receivables Trust 2026-B, consist

of five classes.

Ratings of the notes were provided by Moody’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 interest rate on the

notes is approximately 5.51%.

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

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.

· 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.

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

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 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;

· changes in the market for used vehicles;

· levels of cash releases from existing pools of

· the terms on which we are able to finance contract

· 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