third quarter and nine months ended September 30, 2026
Filed Oct 23, 2026Diluted EPS up 50%; Net Income Increases 43%; Quarterly Loan Originations Grow by 109%; Total Portfolio Exceeds $4.7 Billion- Highest in Company History
Third-quarter revenue, pretax income, net income and diluted EPS all increased year over year, while contract purchases more than doubled, the portfolio reached a record level, and reported delinquency and annualized net charge-off rates declined.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total revenue, three months ended September 30GAAP | $131.9M | – | 21.7% |
| Total revenue, nine months ended September 30GAAP | $365.6M | – | 12.5% |
| Interest income, three months ended September 30GAAP | $129.1M | – | – |
| Interest income, nine months ended September 30GAAP | $355.9M | – | – |
| Mark to finance receivables measured at fair value, three months ended September 30GAAP | – | – | – |
| Mark to finance receivables measured at fair value, nine months ended September 30GAAP | – | – | – |
| Other income, three months ended September 30GAAP | $2.83M | – | – |
| Other income, nine months ended September 30GAAP | $9.72M | – | – |
| Employee costs, three months ended September 30GAAP | $24.86M | – | – |
| Employee costs, nine months ended September 30GAAP | $71.33M | – | – |
| General and administrative expense, three months ended September 30GAAP | $15.57M | – | – |
| General and administrative expense, nine months ended September 30GAAP | $43.15M | – | – |
| Interest expense, three months ended September 30GAAP | $70.52M | – | – |
| Interest expense, nine months ended September 30GAAP | $194.8M | – | – |
| Other expenses, three months ended September 30GAAP | $10.88M | – | – |
| Other expenses, nine months ended September 30GAAP | $29.18M | – | – |
| Total operating expenses, three months ended September 30GAAP | $121.8M | – | – |
| Total operating expenses, nine months ended September 30GAAP | $338.5M | – | – |
| Income before income taxes, three months ended September 30GAAP | $10.1M | – | 44.3% |
| Income before income taxes, nine months ended September 30GAAP | $27.1M | – | 30.3% |
| Income tax expense, three months ended September 30GAAP | $3.13M | – | – |
| Income tax expense, nine months ended September 30GAAP | $8.41M | – | – |
| Net income, three months ended September 30GAAP | $7M | – | 43.3% |
| Net income, nine months ended September 30GAAP | $18.7M | – | 30.8% |
| Basic earnings per share, three months ended September 30GAAP | $0.32 | – | – |
| Basic earnings per share, nine months ended September 30GAAP | $0.86 | – | – |
| Diluted earnings per share, three months ended September 30GAAP | $0.30 per share | – | 50.0% |
| Diluted earnings per share, nine months ended September 30GAAP | $0.80 per share | – | 35.6% |
| Basic shares used in computing earnings per share, three months ended September 30GAAP | 21.85M | – | – |
| Basic shares used in computing earnings per share, nine months ended September 30GAAP | 21.75M | – | – |
| Diluted shares used in computing earnings per share, three months ended September 30GAAP | 23.32M | – | – |
| Diluted shares used in computing earnings per share, nine months ended September 30GAAP | 23.45M | – | – |
| Contracts purchased, three months ended September 30other | $815.3M | – | 108.5% |
| Contracts purchased, nine months ended September 30other | $2.11B | – | 65.2% |
| Contracts securitized, three months ended September 30other | $734.5M | – | 69.4% |
| Contracts securitized, nine months ended September 30other | $1.61B | – | 20.8% |
| Total portfolio balance at the end of the third quarterother | $4.71B | – | 25.3% |
| Average portfolio balance, three months ended September 30other | $4.58B | – | 22.2% |
| Average portfolio balance, nine months ended September 30other | $4.21B | – | 14.7% |
| 31+ Day Delinquency at the end of the third quarterother | 10.20% | – | (92 bps) |
| Repossession Inventory at the end of the third quarterother | 2.09% | – | (75 bps) |
| Total Delinquencies and Repo. Inventory at the end of the third quarterother | 12.29% | – | (167 bps) |
| Annualized Net Charge-offs, three months ended September 30other | 7.26% | – | (75 bps) |
| Annualized Net Charge-offs, nine months ended September 30other | 7.66% | – | (1 bps) |
| Recovery rates, three months ended September 30other | 32.0% | – | 328 bps |
| Recovery rates, nine months ended September 30other | 32.1% | – | 315 bps |
| Net interest margin, three months ended September 30other | 5.1% | – | – |
| Net interest margin, nine months ended September 30other | 5.1% | – | – |
What drove it
- Interest income, for both the third quarter and first nine months of 2026, was the largest driver of the increase in total revenue.
- The increase in interest income over the prior year periods is due to the growth in the loan portfolio from accelerating loan origination volume across an expanding dealer network.
- Accelerating contract-purchase volume was driven by expanding the dealership base through strategic additions to the sales force, as well as enhancements that increased the speed and efficiency of contract underwriting and funding.
- The increase in expense for both periods was largely due to interest expense in conjunction with the increase in loan origination volumes.
- Growth in diluted earnings per share was driven by higher net income alongside a lower diluted share count during the period.
Concerns
- Interest expense comprised approximately 58% of total operating expenses for both the third quarter and first nine months of 2026 and 2025.
- The release identifies risks including increased delinquencies, repossessions, and losses; reduced availability or increased cost of warehouse and securitization funding; declines in used vehicle prices; and economic conditions in the Company's principal markets.
- Results of the most recent quarter and the trends described in the release are not necessarily indicative of future results.
What to watch
- Expected loan origination volume and growth.
- Expansion of the dealership network and market share.
- Funding capacity and the availability and cost of warehouse and securitization funding.
- Future credit performance, including delinquencies, repossessions, losses, charge-offs and recovery rates.
- The effect of used vehicle prices, consumer bankruptcy filings and economic conditions in the Company's principal markets.
Balance sheet and cash flow
- Cash and cash equivalents were $ 5,147 (In thousands) as of September 30, 2026, compared to $ 6,322 (In thousands) as of December 31, 2025.
- Restricted cash and equivalents were $ 174,964 (In thousands) as of September 30, 2026, compared to $ 165,885 (In thousands) as of December 31, 2025.
- Finance receivables measured at fair value were $ 4,624,585 (In thousands) as of September 30, 2026, compared to $ 3,655,855 (In thousands) as of December 31, 2025.
- Warehouse lines of credit were $ 735,840 (In thousands) as of September 30, 2026, compared to $ 324,871 (In thousands) as of December 31, 2025.
- Residual interest financing was $ 190,665 (In thousands) as of September 30, 2026, compared to $ 142,982 (In thousands) as of December 31, 2025.
- Securitization trust debt was $ 3,458,537 (In thousands) as of September 30, 2026, compared to $ 2,986,574 (In thousands) as of December 31, 2025.
- Subordinated renewable notes were $ 28,850 (In thousands) as of September 30, 2026, compared to $ 28,986 (In thousands) as of December 31, 2025.
- Shareholders' equity was $ 324,488 (In thousands) as of September 30, 2026, compared to $ 309,536 (In thousands) as of December 31, 2025.
- In the third quarter, the Company renewed one of its warehouse lines of credit and increased the capacity to $508 million from $335 million.
- The 3rd asset backed securitization of 2026 closed during the third quarter and was the Company’s 110th securitization and the largest deal in the Company’s 35-year history.
Analysis
Consumer Portfolio Services reported a stronger third quarter, with total revenue of $131.9 million, up 21.7% from $108.4 million. Net income rose 43.3% to $7.0 million and diluted earnings per share increased 50.0% to $0.30 per share. For the nine months ended September 30, revenue was $365.6 million, net income was $18.7 million and diluted earnings per share was $0.80 per share. The company attributed the revenue increase principally to interest income supported by a growing loan portfolio and accelerating originations.
Origination activity accelerated materially. Third-quarter contract purchases increased 108.5% to $815.3 million, while nine-month purchases increased 65.2% to $2.106 billion. The company cited dealership-base expansion, additions to its sales force, and underwriting and funding efficiency enhancements. Total portfolio balance reached $4.711 billion at the end of the third quarter, up 25.3% from $3.760 billion, representing 21 consecutive quarters of portfolio growth.
Expense growth accompanied the portfolio expansion. Total operating expenses were $121.8 million in the quarter, compared with $101.4 million in the prior-year quarter, and interest expense was $70,519 (In thousands). The company stated that interest expense comprised approximately 58% of total operating expenses for both reported 2026 periods and their comparable 2025 periods. Net interest margin was 5.1% in the third quarter, unchanged from 5.1% in the prior-year quarter, while pretax income increased 44.3% to $10.1 million.
Reported credit indicators improved year over year in the quarter. Total delinquencies and repossession inventory declined to 12.29% from 13.96%, annualized net charge-offs declined to 7.26% from 8.01%, and recovery rates increased to 32.0% from 28.7%. The company also expanded one warehouse line's capacity to $508 million from $335 million and completed its 3rd ABS transaction of 2026. No quantitative forward guidance was provided, leaving portfolio growth, funding availability and costs, and the durability of credit metrics as key reported areas to monitor.
Management, verbatim
Our accelerating origination volume is demonstrating strong operating leverage in our business, as increases to net income are outpacing revenue and driving solid financial results,
Charles E. Bradley, Chief Executive Officer
Both the broadening of our dealership network and the deepening of relationships with existing dealers allows us to accelerate origination volume and capture market share, while remaining selective on the contracts we purchase.
Charles E. Bradley, Chief Executive Officer
Not in the filing
stated, not guessed- Forward quantitative guidance
- Prior outlook or guidance comparison
- Segment revenue reporting
- Gross margin
- Operating cash flow
- Free cash flow
- Share repurchases
- Dividends
- Non-GAAP financial measures
- Quarter-over-quarter comparisons
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.