Q3 2023 Consumer Portfolio Services Inc Earnings Call

Speaker 1: You

Okay.

Speaker 2: Good day, everyone, and welcome to the Consumer Portfolio Services 2023 third quarter operating results conference call. Today's call is being recorded. Before we begin, management has asked me to inform you that this conference call may contain forward-looking statements.

Good day, everyone and welcome to the consumer portfolio services 2023 third quarter operating results conference call today's.

Today's call is being recorded.

Before we begin management has asked me true for me at this conference call may contain forward looking statements.

Speaker 2: Any statements made during this call that are not statements of historical facts may be deemed forward-looking statements.

Any statements made during this call that are not statements of historical facts, maybe deemed forward looking statements statements regarding current or historical valuation of receivables because dependent on estimates of future events. Also are forward looking statements all sorts of all such forward looking statements are subject to risks that could cause.

Speaker 2: Statements regarding current or historical valuation of receivables, because dependent on estimates of future events, also are forward-looking statements.

Speaker 2: Also, all such forward-looking statements are subject to risk that could cause actual results to differ materially from those projected. I refer you to the company's annual report filed March 15th for further clarification.

<unk> actual results to differ materially from those projected I refer you to the company's annual report filed on March 15th for ore shoot further clarification.

Speaker 2: The company assumes no obligation to update publicly any forward looking statements, whether as a result of new information for the events or otherwise.

Clarification. The company assumes no obligation to update publicly any forward looking statements whether as a result of new information further events or otherwise.

Speaker 2: With us here is Mr. Charles Bradley, Chief Executive Officer, Mr. Danny Barwani, Chief Financial Officer, and Mr. Mike Lavin, President and Chief Operating Officer of Consumer Portfolio Services. I want to turn the call over to Mr. Bradley.

With us here is Mr. Charles Bradley Chief Executive Officer, Mr. Danny Bar, Wanni, Chief Financial Officer, and Mr. Michael <unk>, President and Chief operating officer of consumer portfolio services I will now turn the call over to Mr. Bradley.

Speaker 3: Thank you and welcome everyone to the CPS third quarter conference call.

Thank you and welcome everyone to the Cps third quarter conference call.

Speaker 3: In terms of opening comments, I think what we used to say a few quarters ago was generally speaking that our industry was returning to the pre-pandemic levels.

In terms of opening comments I think well we used to say a few quarters ago is generally speaking that our industry was returning to the pre pandemic levels.

Speaker 3: in terms of lost expectations and performance. And since then, obviously in the last few quarters, we've had a lot of things happen to make that return more bumpy.

In terms of loss expectations in performance.

And since then we've added some last few quarters, we've had a lot of things happen to make that return more bumpy things like has become a huge focus on the portfolio performance from the 'twenty. One 'twenty two vintages also interest rates, obviously much higher there for cost of funds is much higher.

Speaker 3: Things like it's become a huge focus on the portfolio performance from the 21, 22 vintages. Also interest rates obviously are much higher, therefore cost of funds is much higher. And then just the consumer position in terms of inflation, lots of little things that all together make it a difficult time.

And then just consumer position in terms of inflation.

Lots of little things that all together and make it a difficult time.

Speaker 3: The good news is, even having said that, we turned in another strong quarter, and we're to size now. We've been through all these problems before in numerous different iterations.

The good news is even having said that we turned in another strong quarter.

And we're at a size now and we've been through all these problems before in numerous different iterations and Cps isn't a very good position to weather any potential storm and it really looks like given our situation in the industry with other competitors that would probably have a much better position today than lots of other people and that we would have been in other.

Speaker 3: And CPS is in a very good position to weather any potential storm, and it really looks like given our situation in the industry with other competitors, that we're probably in a much better position today than lots of other people and that we would have been in other previous scenarios. The size of our portfolio, the size of the company, the experience we have, and the credit controls we have in place.

Previous scenarios the size of our portfolio the size of the company experience, we have and the credit controls we have in place.

Speaker 3: have put us in a good position today, and I would think, going forward, we can prove that even better. But I'll touch on that a little more after we go through the financials and the operations update. And so with that, I'll turn it over to Danny.

It put us in a good position today.

And I would think going forward, we can prove that even better and I'll touch on that a little more after we go through the financials and the operations update and so with that I'll turn it over to Danny.

Thanks, Brad going over the financials I will start with revenues our revenue for the quarter $92 1 million.

Speaker 4: Million is 8% higher than the 84.9 in our second quarter of this year and 2% higher than the 90.3 million.

Is 8% higher than the $84 nine and our second quarter of this year and 2% higher than the 93 million in the third quarter of last year for the nine months period, ending September 30 revenues were $260 million, which is 5% higher than the 240.

Speaker 4: in the third quarter of last year for the nine-month period ending September 30.

Speaker 4: Revenues were 260 million, which is 5% higher than the 246.7 million in the 3 quarters of 2022.

$6 7 million.

Third the three quarters of 2022.

Speaker 4: of note here uh... our fair value portfolio is now two point seven billion continuing to grow if you've been listening to these calls in the past you'll know that the yield on the fair value portfolio is risk-adjusted and it's after losses and that portfolio is yielding eleven point three percent in the current period uh... also included in revenues for this for this quarter is a fair value mark uh... it's a markup in Q3 of six million dollars that compares to a markup

Of note here, our fair value portfolio is now $2 7 billion continuing to grow if you've been listening to these calls in the past you all know that the yield on a fair value portfolio is risk adjusted and it's after losses in that portfolio is yielding 11, 3% in the current period.

Also included in revenues for this for this quarter is a fair value Mark It's a mark up in Q3 of $6 million that compares to a markup.

Speaker 4: of $8.1 million in Q3 of 2022. For the year-to-date period, that markup is $15.2 million in 2022.

$8 1 million in Q3 of 2022 for the year to date period that markup is $15 2 million.

In 2022 and <unk>.

Speaker 4: and six million in for the three quarters of 2023. The markup is a result of better than expected performance in our.

And $6 million for the three for three quarters of 2023, the markup as a result of better than expected performance in.

Speaker 4: our fair value portfolio, mainly the older vintages that have outperformed our initial expectation and we recognize the benefits we receive from our collections and losses from those portfolios and that's resulting in the markup that you're seeing that's included in revenues for all the four periods we're comparing.

Our our fair value portfolio, mainly the older vintages that have outperformed our initial expectation and we recognize the benefits we received from our collections and losses from those portfolios and that's resulting in the markup that you're seeing that's included in revenues for a while.

All the four periods we're comparing.

Speaker 4: Moving on to expenses, it's $77.9 million in the current quarter, compared to $66.3 million in the second quarter of 2023, that's a 17% increase in expenses. That is compared to $56 million in the third quarter of last year, which is a 39% increase.

Moving on to expenses at $77 9 million.

In the current quarter compared to $66 3 million in.

In the second quarter of 'twenty, three that's a 17% increase in expenses.

That is compared to $56 million in the third quarter of last year, which a third its a 39% increase for the year to date period expenses are $208 8 million for them for the nine months, ending 2023 compared to $148 8 million last year, which is a 40% increase.

Speaker 4: For the year-to-date period, expenses are $208.8 million for the nine months ending 2023, compared to $148.8 million last year, which is a 40% increase.

Speaker 4: Two things of note in terms of expenses, again, all four periods that we're comparing here include an adjustment to our legacy portfolio, and that's the portfolio that's not accounted for under fair value. These are accounted for using CECL, and we posted a lifetime loss reserve on these loans. And over time, we've risen.

Two things of note in terms of expenses all again, all four periods that we're comparing here include a an adjustment to our legacy portfolio and that's the portfolio.

Not accounted for under fair value.

These are accounted for using CSL and we posted a lifetime loss reserve on these loans.

And over time, we realize that the perf.

Speaker 4: performance has come in better than expected, and we're able to reverse the loss provisions we took for this portfolio.

Performance has come in better than expected and we were able to reverse the loss provisions we took for this portfolio.

Speaker 4: The reversing of loss provisions helped to reduce expenses by 2 million in the third quarter compared to 6 million in the third quarter of last year. For the nine months, that reversal of loss provision is 20.7 million compared to 23.4 million in the three quarters of 2022.

The reversing of loss provisions helped to reduce expenses by $2 million in the third quarter compared to $6 million in the third quarter of last year for the nine months that reversal of loss provision is $20 7 million compared to $23 4 million in the.

Three quarters of 2022.

Speaker 4: The other driver of the additional expenses is interest expense. That interest expense is $37.9 million in the current quarter, $106 million for the year-to-date period, and that compares to $23.5 million in the third quarter of last year in 57.

The other driver of the.

In addition on expenses is interest expense net interest expense was $37 9 million in the current quarter $106 million for the year to date period and that compares to $23 5 million in the third quarter of last year and 57.

Speaker 4: point 58.7 million last year.

<unk> $58 7 million last year.

Speaker 4: For the most part, that increase in interest expense is attributable to higher interest costs.

For the most part that any increase in interest expenses attributable to higher interest costs.

Speaker 4: The portfolio size is also greater, so that's partly contributing to increased costs, but the real driver of that is obviously the increase in rates that we've seen. In fact, to further quantify it.

Portfolio sizes also greater so that's partly contributing to increased costs, but the real driver of that is obviously the increase in rates that we've seen.

In fact, it further quantify it.

Speaker 4: the increase in interest expense. It's up 61% quarter over quarter and 81% year over year.

The increase in interest expense, it's up 61% quarter over quarter and 81% year over year.

Speaker 4: Looking at pre-tax earnings, it's $14.2 million in the current quarter, $34.3 million in the quarter last year. For the nine-month period, $51.3 million this year versus $97.9 million last year. That's a 48 percent decrease.

Looking at our pre tax earnings it's $14 $2 million in the current quarter $34 3 million in the quarter last year for the nine months period, 51, 3 million this year versus $97 9 million last year, that's a 48% decrease we're seeing.

Speaker 4: We're seeing the same trends in net income and earnings per share. Net income is $10.4 million in the current quarter, $25.4 million last year. That's a 59% decrease.

The same trends in net income and earnings per share.

Net income was $10 4 million in the current quarter $25 four last year, that's a 59% decrease for the nine month period, $38 2 million versus $71 8 million last year. So net income is down 47% similar to the rate of decline in pre tax earnings and.

Speaker 4: For the nine-month period, $38.2 million versus $71.8 million last year. So net income is down 47%, similar to the rate of decline in pre-tax earnings. And again, obviously, diluted earnings per share will reflect and manifest those same.

Again, obviously diluted earnings per share will reflect and manifestos same.

Speaker 4: Same trend, $0.41 per diluted share this quarter compared to $0.95 last year, $1.51 for the three quarters ending September 30 this year versus $2.61 last year.

Same trends 41 cents per diluted share this quarter compared to <unk> 95 last year, a $1 51.

For the three quarters ending September 30, this year versus $2 61 last year.

Moving on to the balance sheet, our fair value portfolio grew by 2% over the June quarter, and 14% year over year, driven by healthy origination levels throughout the year.

Speaker 4: Our securitization debt is up only 1% sequentially and 9% year over year. So this shows an area of strength on our balance sheet where we're able to maintain our liquidity despite lower leverage on our loan portfolio.

Our securitization debt is up only 1% sequentially and 9% year over year. So this shows an area of strength on our balance sheet, we're able to maintain our liquidity despite lower leverage on our loan portfolio.

Speaker 4: Another area of strength is our shareholders' equity. The $265.9 million we posted at 9.30 this year is an all-time high for the company, driven by 48 consecutive quarters of pre-tax profitability. So we've shown our durability that over the last 12 years, we've been able to post quarterly profits throughout the entire period.

Yes.

Another area of strength is our shareholders' equity the $265 9 million we posted.

At 930.

This year is an all time high for the company.

Driven by 48 consecutive quarters of pretax profitability. So we've shown our durability that over the last 12 years, we've been able to post a quarterly profits throughout the entire period.

Speaker 4: Looking at some other metrics, our net interest margin is $54.2 million in the current quarter versus $66.8 in the third quarter last year. That's a decrease of 19%.

Looking at some other metrics our net interest margin is $54 2 million in the current quarter versus $66 eight in the third quarter last year Thats a decrease of 19%.

Speaker 4: For the year-to-date period, 153.7. This year versus 188 last year, that's a decrease of 18%. Core operating expenses are 42 million in the current quarter, 38.5 last year. 123.1 for the nine-month period this year, versus 113.6 last year, that's an increase of 8%.

For the year to date period 153, seven this year versus $1 88 last year Thats, a decrease of 18% core operating expenses of $42 million in the current quarter $38 five last year, a $123 one for the nine months period this year.

Versus $113 six last year, that's an increase of 8%.

Speaker 4: And measured against the managed portfolio, core operating expenses are $5.7.

Measured against the managed portfolio core operating expenses are five seven.

Speaker 4: this year, this quarter, versus 5.8 in the third quarter of last year, 5.7 also for the year-to-date period this year, versus 6.1 percent.

This year this quarter versus $5 eight in the third quarter of last year $5. Seven also for the year to date period this year versus six 1%.

Speaker 4: for the nine months in 2022. And lastly, our return on managed assets, 1.9% this quarter, 5.2% last year. On an annualized basis, 2.4% in 2023, and 5.3% for the nine months in 2022.

For the nine months in 2022, and lastly, our return on managed assets one 9% this quarter five 2% last year on an annualized basis to 4% in 2023 and five 3% for the nine months in 2022.

Speaker 4: I will turn over to call the mic to go over some of the operational aspects. All right. Thanks, Danny.

I will now turn over the call to Mike to go over some of the operational aspects alright. Thanks Danny.

Speaker 4: In originations, the third quarter remained solid as we purchased 322 million of new contracts. That compares to 318 million in new contracts in Q2. And that compares to 468 million of new contracts during the third quarter of 2022. The slight uptick quarter over quarter in originations reflects the strong demand in our space.

And originations.

Third quarter remains solid as we purchased 320 $322 million of new contracts that compares to $318 million in new contracts in Q2.

And that compares to $468 million of new contracts during the third quarter of 2022, the slight uptick quarter over quarter and originations reflects the strong demand in our space the reduction in volume year over year, but certainly purposeful as we scaled back due to certain macroeconomic headwinds that Brad discussed.

Speaker 4: The reduction in volume year over year was certainly purposeful as we scaled back due to certain macroeconomic headwinds that Brad discussed. And we continue to operate with a tighter credit box and kept a keen eye on affordability of our product for our customers.

And we continue to operate with a tighter credit box and kept a keen eye on affordability of our products for.

Speaker 4: In terms of the ever-important affordability factor in our space,

For our customers.

In terms of the ever important affordability factor in our space.

Speaker 4: We continue to hold firm on our payment to income and debt to income ratios.

We continue to hold firm on our payment.

Income and debt to income ratios.

Speaker 4: Equally important, our monthly payment remains relatively low for our space at $531. That compares to the upper $500s for a used car price that's irrespective of a subprime customer or a near prime customer.

Equally important our monthly payment remained relatively low for our space at $531 that compares to the upper five hundreds for used car price, that's irrespective of the subprime customer or a near prime customer.

Speaker 4: And that compares to a car payment in the upper 700s for a new car. So our payment target remains quite low for our

And that compares to a car payment in the upper seven hundreds for a new car. So we are our payment our payment target remains quite low for our space.

Speaker 4: As I mentioned, demand remains strong in the third quarter. We are getting roughly 8,000 applications a day, which is roughly the same as we received in 2022 when we originated a 31-year company record of 1.85.

I mentioned demand remains strong in the third quarter.

We're getting roughly 8000 applications a day, which is roughly the same as we received in 2022, when we originated 30.

<unk> 31 year company record of $1 eight 5 billion.

Speaker 4: Our approval rate kicked down to 51%, which is significantly down from 2022 Q3 of 70%. Again, that's not a cause for concern, as that drop was purposeful, as we significantly tightened our credit box at the end of 2022 and really dug in at the beginning of 2023 on that credit.

Yes.

Our approval rate ticked down to 51%, which is significantly down from 2022 Q3, a 70% again, that's not our that's not a cause for concern as that drop was purposeful as we significantly tightened our credit box at the end of 2022 and really dug in at the beginning of 2023.

Speaker 4: Specifically, we tightened our LTV, we capped payments in certain program segments.

On that credit tightening.

Specifically, we tightened our LTV, we cap payments and certain program segments, we've tightened job stability and residents residency requirements.

Speaker 4: We've tightened job stability and residency requirements and we definitely made less exceptions.

We definitely made less exceptions.

Speaker 4: Again, this has lowered our approval percentage, but most significantly, and especially more importantly, it's lowered our LTVs, which is a leading indicator of loss.

Again, this has lowered our approval percentage, but most significantly and especially more importantly, it's lowered our ltvs, which is a leading indicator of losses.

Speaker 4: Our average amount financed for the quarter was $20,100, which is down about $900 quarter over quarter, and down a whopping $3,000 in Q3 of 2022. This drop is likely the result of a major pullback in back-end products that we offer, specifically Warranty and Gap.

Our average amount financed for the quarter was 20100, which is down about $900 quarter over quarter and down a whopping $3 in Q3 of 2022 <unk>.

This drop is likely the result of a major pullback in back end products that we offer specifically warranty and gap.

Speaker 4: So we've allowed less of those back-end products to be financed, which has lowered the LTV caps, which has lowered the amount financed.

So we've allowed less of those backend products be finance, which has lowered the LTV caps, which has lowered the amount financed.

Speaker 5: And this has also contributed to our monthly payment remaining relatively low compared to our.

And this has also contributed to our monthly payment.

Remaining relatively low compared to our peers.

Speaker 5: We continue to hold a strong APR in Q3, registering an average APR at 21%.

We continue to hold a strong APR in Q3, registering an average APR of 21%.

Speaker 5: which is about a half point lower quarter over quarter and significantly higher than the average APR in Q3 of 2022 of 18%. Again, it's important to recognize that this APR was achieved despite materially tightening our credit box in late 22 and early 2023.

Which is about a half point lower quarter over quarter.

And significantly higher than the average APR in Q3 of 2022 of 18% again, it's important to recognize that this APR was achieved despite materially materially tightening our credit box and late 'twenty two in early 2023.

Speaker 5: In terms of competition, we continue to see waves of credit unions come in and come out of the space with lower rates. And then they basically pull out of the space when they realize the losses don't meet their expectations.

In terms of competition.

We continue to see waves of credit unions come in and come out of this space with lower rates and then they basically pull out of the space when they realized the losses don't meet their expectations, but like I said demand remains strong so there's more than enough business for the five or six market makers in the space, including us.

Speaker 5: But like I said, demand remains strong. So there's more than enough business for the five or six market makers in the space.

Speaker 5: In terms of growth, there remains a tremendous opportunity as there are no new entrants into the market, regional players are continuing to pull out, and credit unions continually learn month over month that this is probably not their best target market.

In terms of growth there remains a tremendous opportunity as there are no new entrants into the market regional players are continuing to pull out.

And credit unions continually learn month over month that this is probably not their best target market.

Speaker 5: We are holding firm at $100 million a month until we see the fruits of our credit tightening and our portfolio performance, but nonetheless, we are planning to grow when the time requires

We are holding firm at $100 million a month until we see the fruits of our credit tightening and our portfolio performance.

But nonetheless, we are planning to grow in that.

Time requires it.

Speaker 5: Moving on to portfolio performance.

Moving on to portfolio performance.

Speaker 5: You know, certainly there's macroeconomic headwinds that are weighing on some of our more recent vintages.

Certainly theres macroeconomic headwinds that are weighing on some of our more recent vintages.

Speaker 4: particularly the 2022s and early 2023 vintages.

Particularly the 2020 twos in early 2023 vintages.

Speaker 5: and raising interest rates are the headwinds that make affordability an issue for our customers.

<unk> and raising interest rates are the headwinds that make affordability issue for our customers.

Speaker 5: That's but we must consider that that's balanced out with the fact that there's been no recession yet most Talking heads believe that there's not going to be a recession and if there is one it's going to be very soft and short And equally if not more important the unemployment rate Still hovers in the mid threes, which is well below the target fives

But we must consider that that's balanced out with the fact that there's been a recession yet.

Talking heads believe that theres not going to be recession, and if there is one it's going to be very soft and short.

And equally if not more important the unemployment rate still.

Still hovers in the mid threes, which is well below the target fives, which is.

Speaker 5: which is one of the key economic.

One of the key economic.

Speaker 5: metrics that we monitor for the success of our business, so we're looking good there.

Metrics that we that we that we monitor for the success of our business. So we're looking to get there.

Speaker 5: Deque delinquencies including repossession inventory ended at 13.31% of the total portfolio as compared to 10.85% in the same quarter in 2022.

For the quarter.

Q delinquencies, including repossession inventory ended at $13 three 1% of the total portfolio as compared to 10, 85% in the same quarter in 2022.

Speaker 5: Annualized net charge-offs for the quarter were 6.86% of the portfolio as compared to 4.93% in the same quarter of 2022.

Annualized net charge offs for the quarter were $6 eight 6% of the portfolio as compared to $4, 93% in the same quarter of 2022 extensions were up slightly.

Speaker 5: Extensions were up slightly, but still at average over the course of the last five years. And repossessions were actually down quarter over quarter.

But still average over the course of the last five years, and repossessions were actually down quarter over quarter.

On the recovery front.

Speaker 5: We, which helps offset our losses, we're happy to report that recoveries are stabilizing in the low 40s, which is up from the low 30s, which we experienced earlier this year. That's something that we don't control, that we're seeing is coming our way to help our performance going forward.

Which helps offset our losses.

We're happy to report that recoveries are stabilizing in the low <unk>, which is up from the low <unk>, which we experienced earlier this year.

It's something that we don't control that we're seeing.

Is coming our way to help our performance going forward.

Speaker 5: Well, our portfolio performance has ticked up overall.

So.

Portfolio performance has ticked up overall in Q3.

Speaker 5: 3, we are taking solace in the fact that, at least from what we've heard in the market.

We are taking solace in the fact that it.

From what we've heard in the market from investors from bankers that we are outperforming our competitors in the space.

Speaker 5: investors, from bankers, that we are outperforming our competitors.

Speaker 5: In the quarter, we also continue to employ several unique strategic changes to improve performance, especially on collection tactics.

In the quarter. We also continued to employ several unique strategic changes to improve performance, especially on collection tactics.

Speaker 5: We were successful in hiring 96 new collectors over the last 10 months to lower our accounts per collector by over 100. This allows more in-depth collection tactics, such as skip tracing and talk-offs, and we believe that this is improving our performance the last couple of months.

We were successful in hiring 96, new collectors over the last 10 months to lower accounts per collector by over 100.

This allows more in depth collection tactics, such as skip tracing and talk us and we believe that.

This is improving our pro forma performance the last couple of months and going forward.

Speaker 5: We also built out or built up our nearshore collection program to focus on potential DQ accounts.

We also built out our build up our near shore collection program to focus on potential <unk> accounts.

Speaker 5: Reduce the roll rate and increase the use of our power dialer. So It's all hands on deck on Servicing to collect the 2022 and early 2023

Reduce the roll rate and increase the use of our power Tyler so.

So all hands on deck on servicing to collect the 2020 to you in early 2023 vintages.

Speaker 5: One last thing, in the quarter we launched our Gen 8 Originations model. This model is a complete refresh of our Gen 7 model that launched in 2021. We try to refresh these models every 18 to 24 months. So we hit our target.

One last thing in the quarter, we launched our Gen. Eight originations model. This model is a complete refresh of our Gen. Seven model that launched in 2021, we tried to refresh. These models every 18 to 24 months. So we hit our target.

Speaker 5: on implementing the Gen-A model. This model utilizes machine learning AI on our most recent originations to better score app.

On implementing the <unk> model.

This model utilizes machine learning AI on our most recent originations to better score applicants.

Speaker 5: It's infused with updated alternative data and, importantly, some new fraud scores to reduce fraud. We believe that this is our best buy box yet, and we also believe that it should improve performance going forward. So, with that, thank you. Thank you.

It's infused with updated alternative data.

And importantly, some new fraud scores.

To reduce fraud.

We believe that this is our best buy box yet and we also believe that showed improved performance going forward, so with that I'll kick it back to Brad.

Thanks, Mike.

Speaker 3: So that's a lot of information in terms of what the company has been doing. In terms of where we sit in the industry, as both guys pointed out, it's been somewhat turbulent times. Everyone got quite aggressive during the pandemic with all the money flowing to the customers. And, you know, people grew a lot and were aggressive.

So that's a lot of information in terms of what the company has been doing in terms of where we sit in the industry.

Both guys pointed out.

It's been somewhat turbulent times, everyone got quite aggressive after the prepaid during the pandemic with all the money flowing into the customers.

People grow a lot and we're aggressive.

Speaker 3: We're now all, as an industry, beginning to pay the price for that because the 22 performance has not been as good as everybody expected.

We're now all as an industry beginning to pay the price for that because the 22 performance has not been as good as anybody expected.

Speaker 3: Again, as the guys pointed out, our performance has actually been way better than some and way better than most. So, we're kind of happy with where we sit. It kind of means our control is really hung in there. However, what that does leave us sitting in, in a position where we're not really ready to go full bore again. We would like to start growing again, but we need to do two things. We need to let the 22 vintage get through the pipeline, which it's doing. We were initially a little worried about the 21 vintage, but that's all turned out fine. 22, we would expect to track the same way. It's going to be higher losses than we expected, but not nearly as bad as some. And again, certainly a lot better than a bunch of others. And so, in terms of that, we're good. The next thing we need is we need the 23 vintage, which is still quite young, to show that the improvements and changes we made in late 22 and early 23 are, in fact, the proper moves and will hold.

Again as you guys pointed out our performance has actually been way better than.

Better than <unk>.

Way better than most so when you kind of happy with where we sit and kind of means our controls.

There.

However, and what that does leave us sitting in and then position, where we're not really ready to go full bore again.

We'd like to start growing again, but we need to do two things we need to let the 'twenty two vintage give through the pipeline, which it's doing well.

Initially a little worried about the 'twenty one.

But that's all turned out fine 22, we would expect to track the same way, it's going to be higher losses than we expected, but not nearly as bad as and again, certainly a lot better than a bunch of others. So in terms of that were good. The next thing we need is we need to 'twenty three vintage which is still quite young to show that to improve.

And changes we made in late 'twenty two in early 'twenty three are in fact, the proper moves and will hold.

Speaker 3: Now, against all that, inflation is hurting our customers' performance, the higher interest rates is cutting our margins, so there's a bunch of things, recovery rates are returning to normal, there's a bunch of little items that, again, are making life somewhat difficult.

Against all that inflation is hurting our customers performance the higher interest rates is cutting our margins. So it's about <unk>.

Things recovery rates are returning to normal there's a bunch of little items that again are making it somewhat.

Speaker 3: Given what we've done, I think we're in a very strong position to get through it, no problem. We've been doing this forever. This isn't easily the worst thing in all we've ever seen or had to get through. So we're confident where we go.

Somewhat difficult given what we've done I think we're in a very strong position to get through it no problem. We've been doing this forever and Susan easily the worst thing at all we've ever seen and had to get through so we're confident where we go.

Speaker 3: And again, I think just really getting through the next few months, the first half of 2024 will be very strong. It's usually one of the strongest performance months, so that should hopefully take care of the problems in 2022 and put that behind us, and then we can look to grow again in 2023. It would also appear, hopefully, that interest rates will at least stay flat, potentially come down, also that inflation will continue to ease.

Again, I think just really getting through the next few months. The first half of 'twenty four it will be very strong and it's usually one of the strongest performance months. So that should hopefully take care of the problems in 'twenty, two and put that behind US and then we can look to grow again in 2003. It would also appear hopefully that interest rates will at least stay flat potentially.

Come down.

Also that inflation will continue to ease and so we're very optimistic about the future in terms of what we've done again us and everyone else has sort of slowed through the problems 'twenty two and get through 'twenty three 'twenty four it should be a very positive.

Speaker 3: So, you know, we're very optimistic about the future in terms of what we've done. Again, us and everyone else has to sort of slug through the problems of 22 and get through 23. But 24 should be a very positive position for both the industry and our company in particular. So we'll see how that goes.

And for both the industry and our company in particular, so we'll see how that goes.

Speaker 3: Again, we're big enough, we've done it before, we're not particularly worried, and we're actually quite pleased with how well we've done compared to lots of other folks, which is one of the first times we can clearly identify that our program has worked very, very well.

Again, we're big enough we've done it before we're not particularly worried.

And we're actually quite pleased with how well we've done in compared to lots of other folks which is one of the first times. We can clearly identify that our program has worked very very well.

Speaker 3: With that, we'll just thank you all for being here and we'll speak to you next quarter. Thanks for tuning in.

With that I'll, just thank you all for being here and we will speak to you next quarter.

Thanks for tuning in and see that.

Speaker 2: Thank you and this concludes today's teleconference. A replay will be available beginning two hours from now for 12 months via the company's website at www.consumerportfolio.com. Please disconnect your lines at this time and have a wonderful day.

Thank you and this concludes today's teleconference. A replay will be available beginning two hours from now for 12 months via the company's website at www Dot consumer portfolio Dot Com. Please disconnect. Your lines at this time and have a wonderful day.

Okay.

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Okay.

Yes.

Sure.

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