What changed in this filing

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Item 1. Financial Statements

2026-08-07 compared with 2026-05-08 · 228 added, 209 removed, 613 unchanged (42% of the section changed)

8 unchanged sentences

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

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

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;

21,598,965 and 21,842,457 shares issued and outstanding at June 30, 2026 and December 31, 2025, respectively

Retained earnings

10 unchanged sentences

Three Months Ended

Six Months Ended

Interest income

9 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

Six Months Ended

Other comprehensive income/(loss);

1 unchanged sentence

Comprehensive income

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

Six Months Ended

Cash flows from operating activities:

7 unchanged sentences

Changes in assets and liabilities:

Deferred tax assets, net

Accounts payable and accrued expenses

3 unchanged sentences

Purchases of finance receivables measured at fair value

( 1,266,636 )

Payments received on finance receivables at fair value

14 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

Six Months Ended

Common Stock (Shares Outstanding)

21 unchanged sentences

CONSUMER PORTFOLIO SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(1) Summary of Significant Accounting Policies

9 unchanged sentences

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.”

purchase contracts directly from dealers, we also, to a lesser extent, originate loans directly to consumers for the refinancing of an

existing loan from other lenders secured by an automobile and have also (i) lent money directly to consumers for vehicle purchase money

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

5 unchanged sentences

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

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

Results for the six-month period ended June 30, 2026, are not necessarily

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

23 unchanged sentences

of the receivables.

CONSUMER PORTFOLIO SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

We re-evaluate the fair value of such receivables

2 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 periods ending March 31, 2026, and 2025:

The following table presents

the primary components of Other Income for the three-month and six-month periods ending June 30, 2026, and 2025:

Schedule of other income

Three Months Ended

Six Months Ended

(In thousands)

Origination and servicing fees from third party receivables

Dealer recoveries

Other income for the period

8 unchanged sentences

sheet and the related lease expense is recognized on a straight-line basis over the lease term.

CONSUMER PORTFOLIO SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following table presents

15 unchanged sentences

Finance lease

CONSUMER PORTFOLIO SERVICES, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Maturities of lease liabilities were as follows:

2 unchanged sentences

Year Ending December 31,

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

2026 (excluding the six months ended June 30, 2026)

Total undiscounted lease payments

1 unchanged sentence

Lease Liability

CONSUMER PORTFOLIO SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following table presents

2 unchanged sentences

Three Months Ended

Six Months Ended

(In thousands)

Operating lease cost

5 unchanged sentences

Three Months Ended

Six Months Ended

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 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

For the three and six months ended June 30, 2026,

we recorded stock-based compensation costs in the amount of $ 578,000 and $ 1.1 million respectively.

As of June 30, 2026, unrecognized

stock-based compensation costs to be recognized over future periods equaled $ 4.2 million.

1 unchanged sentence

a weighted-average period of 3.19 years.

CONSUMER PORTFOLIO SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following represents stock option activity

for the three months ended March 31, 2026:

for the six months ended June 30, 2026:

Schedule of stock option activity

6 unchanged sentences

The following table presents the price distribution

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

of stock options outstanding and exercisable as of June 30, 2026 and December 31, 2025:

Schedule of price distribution of stock options outstanding and exercisable

1 unchanged sentence

Number of shares as of

March 31, 2026

June 30, 2026

December 31, 2025

7 unchanged sentences

$10.00 - $10.99

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.

At June 30, 2026, the aggregate intrinsic value

of options outstanding and exercisable was $ 19.6 million and $ 17.6 million, respectively.

There were 157,000 options exercised for the

six months ended June 30, 2026, compared to 1.3 million for the comparable period in 2025.

The total intrinsic value of options exercised

was $ 880,000 and $ 8.2 million for the six-month periods ended June 30, 2026 and 2025.

There were 4,606,000 shares available for future

stock option grants under existing plans as of June 30, 2026.

CONSUMER PORTFOLIO SERVICES, INC.

2 unchanged sentences

The table below describes the purchase of our

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

common stock for the six months ended June 30, 2026, and 2025:

Schedule of purchase of our

Three Months Ended

March 31, 2026

March 31, 2025

Six Months Ended

June 30, 2026

June 30, 2025

Open market purchases

10 unchanged sentences

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

As of March 31, 2026, we were in compliance with all such covenants.

As of June 30, 2026, we were in compliance with all such covenants.

In addition, certain of our debt agreements other than our

13 unchanged sentences

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

CONSUMER PORTFOLIO SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(2) Finance receivables measured at fair

10 unchanged sentences

This is described further in footnote 9.

CONSUMER PORTFOLIO SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Our valuation policies and

14 unchanged sentences

a significant effect on our fair value measurement.

For the quarter ended March

For the quarter ended June

30, 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:

The table below presents a

reconciliation of the finance receivables measured at fair value on a recurring basis using significant unobservable inputs:

Schedule of reconciliation of the finance receivables measured at fair value on a recurring basis

Three Months Ended

Six Months Ended

(In thousands)

Balance at beginning of period

4 unchanged sentences

Balance at end of period

The table below compares the fair values of these

finance receivables to their contractual balances for the periods shown:

CONSUMER PORTFOLIO SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

June 30, 2026

December 31, 2025

1 unchanged sentence

Finance receivables measured at fair value

The following table provides certain qualitative

information about our level 3 fair value measurements:

The following table provides

certain qualitative information about our level 3 fair value measurements:

Schedule of level 3 fair value measurements

Financial Instrument

Fair Values as of

(In thousands)

receivables measured at fair value

Finance receivables measured at fair value

Discount rate

Cumulative net losses

CONSUMER PORTFOLIO SERVICES, INC.

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

We report delinquency on a

contractual basis.

The following table summarizes the delinquency status of these finance receivables measured at fair value as of June

30, 2026, and December 31, 2025:

Schedule of delinquency

2 unchanged sentences

Delinquency Status

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:

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

7 unchanged sentences

November 2031

November 2033

_________________

5 unchanged sentences

in 2031, and $30.5 million in 2032.

(2) Includes repossessed assets that are included in other assets on our Unaudited Condensed Consolidated

Balance Sheet.

CONSUMER PORTFOLIO SERVICES, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Debt issuance costs of $ 16.7

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

million and $ 16.6 million as of June 30, 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

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

We are in compliance with all such covenants as of June 30, 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 March 31, 2026,

restricted cash under the various agreements totaled approximately $ 178.5 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

As of June 30, 2026, restricted

cash under the various agreements totaled approximately $ 172.7 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.

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

10 unchanged sentences

CONSUMER PORTFOLIO SERVICES, INC.

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:

The terms and amounts of our

other debt outstanding on June 30, 2026, and December 31, 2025, are summarized below:

Schedule of debt outstanding

2 unchanged sentences

Interest Rate

Subordinate Lender

Interest Rate

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

2.85% over CP yield rate (Minimum 3.60%) 6.74% and 6.80% at June 30, 2026 and December 31 2025, respectively

6.40% over SOFR yield rate (Minimum 7.15%) 10.31% and 10.40% at June 30, 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

4.50% over a commercial paper rate (Minimum 7.50%) 8.25% at December 31 2025

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

2.60% over SOFR yield rate (Minimum 2.85%) 6.23% and 6.50% at June 30, 2026 and December 31, 2025, respectively

6.40% over SOFR yield rate (Minimum 6.65%) 10.02% and 10.27% at June 30, 2026 and December 31, 2025, respectively

Residual interest financing

3 unchanged sentences

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

Subordinated renewable notes

Weighted average rate of 8.78 % and 8.98 % at June 30, 2026 and December 31, 2025, respectively

Weighted average maturity of March 2028 and November 2027 at June 30, 2026 and December 31, 2025,

CONSUMER PORTFOLIO SERVICES, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

6 unchanged sentences

of a single class with a coupon of 8.75%.

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

At June 30, 2026, there was $ 50 .0 million outstanding under this facility.

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

1 unchanged sentence

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 April 3, 2026, we amended the credit agreement with Capital One, N.A.

to increase the capacity of the

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.

This facility has a two-year revolving period to October 2027, with an optional amortization period through

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 2.60% per annum, with a minimum rate of 2.85% per annum and during the amortization period at a per annum

rate equal to the Term SOFR plus 3.60% per annum, with a minimum rate of 3.85% 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%

At June 30, 2026, there was $ 353.7 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 March 31, 2026, there was $ 62.8 million outstanding under this facility.

At June 30, 2026, there was $ 62.8 million outstanding under this facility.

On December 19, 2024, we increased the capacity

8 unchanged sentences

There was $ 327.9 million outstanding

under this facility at March 31, 2026.

under this facility at June 30, 2026.

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

4 unchanged sentences

period was extended to April 2026.

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

The facility was not renewed following the expiration of the revolving period.

There was nothing outstanding

under this facility at June 30, 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 March 31, 2026, there was $ 49.7 million outstanding under this facility.

At June 30, 2026, there was $ 46.9 million outstanding under this facility.

CONSUMER PORTFOLIO SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

5 unchanged sentences

of a single class with a coupon of 7.86%.

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

At June 30, 2026, there was $ 11.1 million outstanding under this facility.

Since 2005, we have offered renewable subordinated

notes to the public on a continuous basis, and such notes have maturities that range from six months to 10 years.

At June 30, 2026, there

was $ 28.5 million outstanding under this facility.

Unamortized debt issuance costs of $ 2 .0 million

and $ 1.5 million as of March 31, 2026, and December 31, 2025, respectively, have been excluded from the amount reported above for residual

and $ 1.5 million as of June 30, 2026, and December 31, 2025, respectively, have been excluded from the amount reported above for residual

interest financing.

1 unchanged sentence

Condensed Consolidated Balance Sheets.

CONSUMER PORTFOLIO SERVICES, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(5) Interest Income and Interest Expense

2 unchanged sentences

Three Months Ended

Six Months Ended

(In thousands)

Interest on finance receivables at fair value

Interest on finance receivables

Other interest income

4 unchanged sentences

Three Months Ended

Six Months Ended

(In thousands)

Securitization trust debt

3 unchanged sentences

Interest expense

CONSUMER PORTFOLIO SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(6) Earnings Per Share

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:

Earnings per share for the three-month

and six-month periods ended June 30, 2026, and 2025 were calculated using the weighted average number of shares outstanding for the related

The following table reconciles the number of shares used in the computations of basic and diluted earnings per share for the three-month

and six-month periods ended June 30, 2026, and 2025:

Schedule of earnings per share

Three Months Ended

Six Months Ended

(In thousands)

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

(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

If the anti-dilutive effects

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

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

periods ended June 30, 2026, would have included an additional 3 .0 million shares attributable to the exercise of outstanding options

and warrants.

For the three months and six-months ended June 30, 2025, 1.6 million shares, would be included in the diluted earnings per

share calculation.

(7) Income Taxes

3 unchanged sentences

state, or local examinations by tax authorities for years before 2021.

As of March 31, 2026 and December

As of June 30, 2026 and December

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

10 unchanged sentences

income in the period that includes the enactment date.

CONSUMER PORTFOLIO SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Deferred tax assets and liabilities

9 unchanged sentences

when the related taxable temporary differences reverse.

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

As of June 30, 2026 we have a net deferred tax asset of $ 16,000 .

Our net deferred

2 unchanged sentences

Income tax expense was $ 2.8

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.

million for the three-month and $ 5.3 million and six-month ended on June 30, 2026, compared to income tax expense of $ 2.2 million and

$ 4.3 million for the three-months and six-months ended June 30, 2025, representing an effective income tax rate of 31 % in both periods.

(8) Legal Proceedings

15 unchanged sentences

the loss or liability imposed and the level of our income for that period.

CONSUMER PORTFOLIO SERVICES, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Fair Value Measurements

14 unchanged sentences

valuation methodology are unobservable and significant to the fair value measurement.

CONSUMER PORTFOLIO SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

There were no transfers in

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:

or out of level 1, level 2 or level 3 assets and liabilities for the three and six months ended June 30, 2026, and 2025.

The estimated fair values

of financial assets and liabilities, excluding assets carried at fair value, on June 30, 2026 and December 31, 2025, were as follows:

Schedule of fair values of financial assets and

As of March 31, 2026

As of June 30, 2026

Financial Instrument

20 unchanged sentences

CONSUMER PORTFOLIO SERVICES, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(10) Business Segment

Business Segment Information

The company has one reportable

9 unchanged sentences

Subsequent Events

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%.

On July 9, 2026, we renewed

our two-year revolving credit agreement with Citibank, N.A., while simultaneously increasing the capacity of the facility.

and increase apply to both Citibank, N.A.

and the subordinate lender, and increases the capacity of the facility from $335 million to

$508 million.

The revolving period for this facility will extend to July 2028 after which CPS will have the option to repay the outstanding

loans in full or to allow them to amortize for a one-year period.

On July 22, 2026, we completed

our third securitization of 2026.

In the transaction, qualified institutional buyers purchased $716.88 million of asset-backed notes secured

by $734.51 million in automobile receivables originated by CPS.

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

five classes.

Ratings of the notes were provided by Standard & Poor’s and DBRS Morningstar, and were based on the structure

of the transaction, the historical performance of similar receivables and CPS’s experience as a servicer.

The weighted average interest

rate on the notes is approximately 5.90%.

Cautionary Note Regarding

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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;

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;

expected industry and general

economic trends;

accrued losses for legal

contingencies;

anticipated deferred tax

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 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

Our actual results, performance

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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;

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;

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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;

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;

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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;

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.

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

Forward-looking statements

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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