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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2026

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 1-11416

CONSUMER PORTFOLIO SERVICES, INC.

(Exact name of registrant as specified in its charter)

California	33-0459135
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

3800 Howard Hughes Parkway, Suite 1400, Las Vegas, Nevada	89169
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including Area Code: (949) 753-6800

Former name, former address and former fiscal year, if changed since last report: N/A

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Common Stock, no par value	CPSS	The NASDAQ Stock Market LLC (Global Market)

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ☐	Accelerated Filer ☒
Non-Accelerated Filer ☐	Smaller Reporting Company ☒
	Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of April 24, 2026, the registrant had 21,698,565 common shares outstanding.

CONSUMER PORTFOLIO SERVICES, INC. AND SUBSIDIARIES

INDEX TO FORM 10-Q

For the Quarterly Period Ended March 31, 2026

		Page
PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements
	Unaudited Condensed Consolidated Balance Sheets as of March 31, 2026, and December 31, 2025	3
	Unaudited Condensed Consolidated Statements of Operations for the three-month periods ended March 31, 2026, and 2025	4
	Unaudited Condensed Consolidated Statements of Comprehensive Income for the three- month periods ended March 31, 2026, and 2025	5
	Unaudited Condensed Consolidated Statements of Cash Flows for the three-month periods ended March 31, 2026, and 2025	6
	Unaudited Condensed Consolidated Statements of Shareholders’ Equity for the three-month periods ended March 31, 2026, and 2025	7
	Notes to Unaudited Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 4.	Controls and Procedures	36

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	37
Item 1A.	Risk Factors	37
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 5.	Other Information	38
Item 6.	Exhibits	38
	Signatures	39

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

CONSUMER PORTFOLIO SERVICES, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)


	March 31,			December 31,
	2026			2025
ASSETS
Cash and cash equivalents	$	6,944		$	6,322
Restricted cash and equivalents		178,469			165,885
Finance receivables measured at fair value		3,835,789			3,655,855
Furniture and equipment, net		1,342			771
Deferred tax assets, net		16			16
Other assets		30,239			29,344
Total assets	$	4,052,799		$	3,858,193

LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities
Accounts payable and accrued expenses	$	70,261		$	65,244
Warehouse lines of credit		467,138			324,871
Residual interest financing		181,383			142,982
Securitization trust debt		2,992,157			2,986,574
Subordinated renewable notes		27,508			28,986
Total liabilities		3,738,447			3,548,657
COMMITMENTS AND CONTINGENCIES		–			–
Shareholders’ Equity
Preferred stock, $1 par value;authorized 4,998,130 shares; none issued		–			–
Series A preferred stock, $1 par value; authorized 5,000,000 shares; none issued		–			–
Series B preferred stock, $1 par value; authorized 1,870 shares; none issued		–			–
Common stock, no par value; authorized 75,000,000 shares; 21,695,835 and 21,842,457 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively		23,703			24,426
Retained earnings		291,924			286,385
Accumulated other comprehensive loss		(1,275	)		(1,275	)
Total shareholders’ equity		314,352			309,536

	$	4,052,799		$	3,858,193

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

CONSUMER PORTFOLIO SERVICES, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)


	Three Months Ended
	March 31,
	2026		2025
Revenues:
Interest income	$	108,721	$	101,933
Mark to finance receivables measured at fair value		–		3,500
Other income		3,613		1,441
Total revenues		112,334		106,874

Expenses:
Employee costs		23,046		25,033
General and administrative		12,908		12,563
Interest		60,061		54,918
Sales		6,552		5,911
Occupancy		1,514		1,398
Depreciation and amortization		225		249
Total expenses		104,306		100,072
Income before income tax expense		8,028		6,802
Income tax expense		2,489		2,108
Net income	$	5,539	$	4,694

Earnings per share:
Basic	$	0.25	$	0.22
Diluted		0.24		0.19

Number of shares used in computing earnings per share:
Basic		21,777		21,444
Diluted		23,534		24,325

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

CONSUMER PORTFOLIO SERVICES, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)


	Three Months Ended
	March 31,
	2026		2025
Net income	$	5,539	$	4,694

Other comprehensive income/(loss); change in funded status of pension plan		–		–
Comprehensive income	$	5,539	$	4,694

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

CONSUMER PORTFOLIO SERVICES, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)


	Three Months Ended
	March 31,
	2026			2025
Cash flows from operating activities:
Net income	$	5,539		$	4,694
Adjustments to reconcile net income to net cash provided by operating activities:
Net interest income accretion on fair value receivables		69,947			64,907
Depreciation and amortization		225			249
Amortization of deferred financing costs		3,436			2,865
Mark to finance receivables measured at fair value		–			(3,500	)
Provision for credit losses		–			(979	)
Stock-based compensation expense		512			717
Changes in assets and liabilities:
Deferred tax assets, net		–			184
Other assets		(895	)		(407	)
Accounts payable and accrued expenses		5,017			5,138
Net cash provided by operating activities		83,781			73,868

Cash flows from investing activities:
Payments received on finance receivables held for investment		–			3,106
Purchases of finance receivables measured at fair value		(524,900	)		(449,602	)
Payments received on finance receivables at fair value		275,019			252,856
Purchase of furniture and equipment		(796	)		(471	)
Net cash used in investing activities		(250,677	)		(194,111	)

Cash flows from financing activities:
Proceeds from issuance of securitization trust debt		345,610			442,420
Proceeds from issuance of subordinated renewable notes		270			1,603
Payments on subordinated renewable notes		(1,748	)		(545	)
Net proceeds from (repayments of) warehouse lines of credit		141,499			(45,811	)
Proceeds from issuance of residual interest financing debt		50,000			65,000
Repayment of residual interest financing debt		(11,015	)		–
Repayment of securitization trust debt		(340,193	)		(292,997	)
Payment of financing costs		(3,086	)		(3,592	)
Purchase of common stock		(1,235	)		–
Exercise of options and warrants		–			246
Net cash provided by financing activities		180,102			166,324
Increase in cash and cash equivalents		13,206			46,081
Cash and restricted cash at beginning of period		172,207			137,397
Cash and restricted cash at end of period	$	185,413		$	183,478

Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest	$	56,777		$	51,507
Income taxes	$	80		$	(75	)

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements

CONSUMER PORTFOLIO SERVICES, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(In thousands)


	March 31,
	2026			2025
Common Stock (Shares Outstanding)
Balance, beginning of period		21,842			21,433
Common stock issued upon exercise of options and warrants		–			70
Repurchase of common stock		(146	)		–
Balance, end of period		21,696			21,503

Common Stock
Balance, beginning of period	$	24,426		$	25,720
Common stock issued upon exercise of options and warrants		–			246
Repurchase of common stock		(1,235	)		–
Stock-based compensation		512			717
Balance, end of period	$	23,703		$	26,683

Retained Earnings
Balance, beginning of period	$	286,385		$	267,060
Net income		5,539			4,694
Balance, end of period	$	291,924		$	271,754

Accumulated Other Comprehensive Loss
Balance, beginning of period	$	(1,275	)	$	(10	)
Pension benefit obligation		–			–
Balance, end of period	$	(1,275	)	$	(10	)

Balance, beginning of period		309,536			–
Pension benefit obligation		–			–
Total Shareholders’ Equity	$	314,352		$	298,427

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

CONSUMER PORTFOLIO SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(1) Summary of Significant Accounting Policies

Description of Business

We were formed in California on March 8, 1991. We specialize in purchasing and servicing retail automobile installment sale contracts (“automobile contracts” or “finance receivables”) originated by licensed motor vehicle dealers located throughout the United States (“dealers”) in the sale of new and used automobiles, light trucks and passenger vans. Through our purchases, we provide indirect financing to dealer customers for borrowers with limited credit histories or past credit problems (“sub-prime customers”). We serve as an alternative source of financing for dealers, allowing sales to customers who otherwise might not be able to obtain financing. In addition to purchasing installment purchase contracts directly from dealers, we have also (i) lent money directly to consumers for loans secured by vehicles, (ii) purchased immaterial amounts of vehicle purchase money loans from non-affiliated lenders, and (iii) acquired installment purchase contracts in four merger and acquisition transactions. In this report, we refer to all of such contracts and loans as “automobile contracts.”

Basis of Presentation

Our Unaudited Condensed Consolidated Financial Statements have been prepared in conformity with accounting principles generally accepted in the United States of America, with the instructions to Form 10-Q and with Article 10 of Regulation S-X of the Securities and Exchange Commission, and include all adjustments that are, in management’s opinion, necessary for a fair presentation of the results for the interim periods presented. All such adjustments are, in the opinion of management, of a normal recurring nature. Results for the three-month period ended March 31, 2026, are not necessarily indicative of the operating results to be expected for the full year.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted from these Unaudited Condensed Consolidated Financial Statements. These Unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2025.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements, as well as the reported amounts of income and expenses during the reported periods.

Finance Receivables Measured at Fair Value

Effective January 1, 2018, we adopted the fair value method of accounting for finance receivables acquired on or after that date. For each finance receivable acquired after 2017, we consider the price paid on the purchase date as the fair value for such receivable. We estimate the cash to be received in the future with respect to such receivables, based on our experience with similar receivables acquired in the past. We then compute the internal rate of return that results in the present value of those estimated cash receipts being equal to the purchase date fair value. Thereafter, we recognize interest income on such receivables on a level yield basis using that internal rate of return as the applicable interest rate. Cash received with respect to such receivables is applied first against such interest income, and then to reduce the recorded value of the receivables.

We re-evaluate the fair value of such receivables at the close of each measurement period. If the reevaluation were to yield a value materially different from the recorded value, an adjustment would be required.

CONSUMER PORTFOLIO SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Anticipated credit losses are included in our estimation of cash to be received with respect to receivables. In accordance with the fair value accounting standards, credit losses are included in our computation of the appropriate level yield, therefore we do not thereafter make periodic provision for credit losses, as our best estimate of the lifetime aggregate of credit losses is included in that initial computation. Also, because we include anticipated credit losses in our computation of the level yield, the computed level yield is materially lower than the average contractual rate applicable to the receivables. Because our initial recorded value is fixed as the price we pay for the receivable, rather than the contractual principal balance, we do not record acquisition fees as an amortizing asset related to the receivables, nor do we capitalize costs of acquiring the receivables. Rather we recognize the costs of acquisition as expenses in the period incurred.

Other Income

The following table presents the primary components of Other Income for the three-month periods ending March 31, 2026, and 2025:

Schedule of other income
	Three Months Ended
	March 31,
	2026		2025
	(In thousands)
Origination and servicing fees from third party receivables	$	1,287	$	1,431
Dealer recoveries		2,319		–
Other		7		10
Other income for the period	$	3,613	$	1,441

Leases

The Company has operating leases for corporate offices, equipment, software and hardware. The Company has entered into operating leases for the majority of its real estate locations, primarily office space. These leases are generally for periods of three to seven years with various renewal options. The depreciable life of leased assets is limited by the expected lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheet and the related lease expense is recognized on a straight-line basis over the lease term.

The following table presents the supplemental balance sheet information related to leases:


	2026			2025
	(In thousands)
Operating Leases
Operating lease right-of-use assets	$	53,225		$	53,225
Less: Accumulated amortization right-of-use assets		(37,461	)		(36,281	)
Operating lease right-of-use assets, net	$	15,764		$	16,944

Operating lease liabilities	$	(18,012	)	$	(19,236	)

Finance Leases
Property and equipment, at cost	$	4,589		$	4,097
Less: Accumulated depreciation		(3,777	)		(3,684	)
Property and equipment, net	$	812		$	413

Finance lease liabilities	$	(832	)	$	(428	)

Weighted Average Discount Rate
Operating lease		5.0%			5.0%
Finance lease		6.6%			6.4%

CONSUMER PORTFOLIO SERVICES, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Maturities of lease liabilities were as follows:


(In thousands)	Operating			Finance
Year Ending December 31,	Lease			Lease
2026 (excluding the three months ended March 31, 2026)	$	4,219		$	310
2027		5,756			355
2028		5,937			234
2029		4,331			10
2030		1,171			–
2031.		719			–
Thereafter		50			–
Total undiscounted lease payments		22,183			909
Less amounts representing interest		(4,171	)		(77	)
Lease Liability	$	18,012		$	832

The following table presents the lease expense included in General and administrative and Occupancy expense on our Unaudited Condensed Consolidated Statement of Operations:

Schedule of lease cost
	Three Months Ended
	March 31,
	2026		2025
	(In thousands)
Operating lease cost	$	1,320	$	1,311
Finance lease cost		104		55
Total lease cost	$	1,424	$	1,366

The following table presents the supplemental cash flow information related to leases:


	Three Months Ended
	March 31,
	2026		2025
Cash paid for amounts included in the measurement of lease liabilities:	(In thousands)
Operating cash flows from operating leases	$	1,320	$	1,311
Operating cash flows from finance leases		88		47
Financing cash flows from finance leases		16		8

CONSUMER PORTFOLIO SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Stock-based Compensation

We recognize compensation costs in the financial statements for all share-based payments based on the grant date fair value estimated in accordance with the provisions of ASC 718 “Stock Compensation”.

For the three 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 three months ended March 31, 2026:

Schedule of stock option activity
					Weighted
	Number of		Weighted		Average
	Shares		Average		Remaining
	(in thousands)		Exercise Price		Contractual Term
Options outstanding at the beginning of period		6,123	$	6.41	N/A
Granted		–		–	N/A
Exercised		–		–	N/A
Forfeited		–		–	N/A
Options outstanding at the end of period		6,123	$	6.41	2.97 years

Options exercisable at the end of period		4,535	$	5.71	1.86 years

The following table presents the price distribution of stock options outstanding and exercisable as of March 31, 2026 and December 31, 2025:


	Number of shares as of				Number of shares as of
	March 31, 2026				December 31, 2025
	Outstanding		Exercisable		Outstanding		Exercisable
Range of exercise prices:	(In thousands)				(In thousands)
$2.00 - $2.99		1,098		1,098		1,098		1,098
$3.00 - $3.99		897		897		897		897
$4.00 - $4.99		1,145		1,145		1,145		1,145
$8.00 - $8.99		1,430		–		1,430		–
$10.00 - $10.99		1,553		1,395		1,613		1,253
Total shares		6,123		4,535		6,123		4,393

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 three-months ended March 31, 2026, and 2025:

Three Months Ended

March 31, 2026

March 31, 2025

Avg. Price

Open market purchases

126,622

8.57

–

Shares redeemed upon net exercise of stock options

–

Other

20,000

7.53

–

Total stock purchases

146,622

8.43

–

Reclassifications

Some items in the prior year financial statements were reclassified to conform to the current presentation. Reclassifications had no effect on net income or shareholders’ equity.

Financial Covenants

Certain of our securitization transactions, our warehouse credit facilities and our residual interest financing contain various financial covenants requiring minimum financial ratios and results. Such covenants include maintaining minimum levels of liquidity and net worth and not exceeding maximum leverage levels. As of 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 Liabilities

We are routinely involved in various legal proceedings resulting from our consumer finance activities and practices, both continuing and discontinued. Our legal counsel has advised us on such matters where, based on information available at the time of this report, there is an indication that it is both probable that a liability has been incurred and the amount of the loss can be reasonably determined. This is described further in footnote 8.

Recent Accounting Pronouncements

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, if adopted.

(2) Finance receivables measured at fair value

Our portfolio of finance receivables 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 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:


	Three Months Ended
	March 31,
	2026			2025
	(In thousands)
Balance at beginning of period	$	3,655,855		$	3,313,767
Finance receivables at fair value acquired during period		524,900			449,602
Payments received on finance receivables at fair value		(275,019	)		(252,856	)
Net interest income accretion on fair value receivables		(69,947	)		(64,907	)
Mark to fair value		–			3,500
Balance at end of period	$	3,835,789		$	3,449,106

The table below compares the fair values of these finance receivables to their contractual balances for the periods shown:


	March 31, 2026				December 31, 2025
	Contractual		Fair		Contractual		Fair
	Balance		Value		Balance		Value
	(In thousands)
Finance receivables measured at fair value	$	3,941,948	$	3,835,789	$	3,778,127	$	3,655,855

The following table provides certain qualitative information about our level 3 fair value measurements:


Financial Instrument	Fair Values as of					Weight Avg. Inputs as of
	March 31,		December 31,			March 31,		December 31,
	2026		2025		Unobservable	2026		2025
	(In thousands)
Assets:
Finance receivables measured at fair value	$	3,835,789	$	3,655,855	Discount rate		11.07%		11.07%
					Cumulative net losses		16.21%		16.02%

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 31, 2025:


	March 31,		December 31,
	2026		2025
	(In thousands)
Delinquency Status
Current	$	3,485,649	$	3,220,198
31 - 60 days		217,632		272,421
61 - 90 days		86,227		118,201
91 + days		48,911		56,203
Repo		103,529		111,104
	$	3,941,948	$	3,778,127

(3) Securitization Trust Debt

We have completed many securitization transactions that are structured as secured borrowings for financial accounting purposes. The debt issued in these transactions is shown on our Unaudited Condensed Consolidated Balance Sheets as “Securitization trust debt,” and the components of such debt are summarized in the following table:

Schedule of securitization trust debt
										Weighted Average
	Final Scheduled Payment	Receivables Pledged at March 31,		Initial		Outstanding Principal at March 31,		Outstanding Principal at December 31,		Contractual Debt Interest Rate at March 31,
Series	Date (1)	2026 (2)		Principal		2026		2025		2026
	(Dollars in thousands)
CPS 2021-B	June 2028	$	–	$	240,000	$	–	$	15,832		–
CPS 2021-C	September 2028		26,532		291,000		20,877		25,889		3.21%
CPS 2021-D	December 2028		38,630		349,202		32,336		39,625		4.06%
CPS 2022-A	April 2029		44,831		316,800		35,580		42,241		4.35%
CPS 2022-B	October 2029		73,489		395,600		60,999		72,820		6.91%
CPS 2022-C	April 2030		90,856		391,600		65,899		77,073		7.84%
CPS 2022-D	June 2030		88,079		307,018		77,684		86,973		10.05%
CPS 2023-A	August 2030		110,909		324,768		72,286		83,896		8.09%
CPS 2023-B	November 2030		123,672		332,885		96,290		107,035		7.92%
CPS 2023-C	February 2031		120,818		291,732		98,403		110,281		7.53%
CPS 2023-D	May 2031		126,518		286,149		107,460		121,208		8.28%
CPS 2024-A	August 2031		133,029		280,924		112,509		128,466		6.64%
CPS 2024-B	November 2031		173,674		319,871		152,694		171,992		6.74%
CPS 2024-C	March 2032		254,942		436,310		226,459		254,043		6.45%
CPS 2024-D	June 2032		268,918		416,816		240,262		269,169		5.35%
CPS 2025-A	August 2032		319,783		442,420		291,983		324,242		5.64%
CPS 2025-B	March 2033		341,428		419,950		313,883		341,383		5.54%
CPS 2025-C	May 2033		360,778		418,330		337,260		364,711		5.15%
CPS 2025-D	May 2033		352,083		384,600		335,664		366,313		5.18%
CPS 2026-A	August 2033		339,580		345,610		330,081		–		4.74%
		$	3,388,549	$	6,991,585	$	3,008,609	$	3,003,192

________________

(1)

The Final Scheduled Payment Date represents final legal maturity of the securitization trust debt. Securitization trust debt is expected to become due and to be paid prior to those dates, based on amortization of the finance receivables pledged to the trusts. Expected payments, which will depend on the performance of such receivables, as to which there can be no assurance, are $915.9 million in 2026, $914.6 million in 2027, $563.5 million in 2028, $337.9 million in 2029, $182.1 million in 2030, $65.9 million in 2031, and $12.3 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 $16.5 million and $16.6 million as of March 31, 2026, and December 31, 2025, respectively, have been excluded from the table above. These debt issuance costs are presented as a direct deduction to the carrying amount of the Securitization trust debt on our Consolidated Balance Sheets.

All the securitization trust debt was sold in private placement transactions to qualified institutional buyers. The debt was issued through our wholly owned bankruptcy remote subsidiaries and is secured by the assets of such subsidiaries, but not by our other assets.

The terms of the various securitization agreements related to the issuance of the securitization trust debt require that certain delinquency and credit loss criteria be met with respect to the collateral pool and require that we maintain minimum levels of liquidity and net worth and not exceed maximum leverage levels. We are in compliance with all such covenants as of March 31, 2026.

We are responsible for the administration and collection of the contracts. The securitization agreements also require certain funds be held in restricted cash accounts to provide additional credit enhancement for the Notes or to be applied to make payments on the securitization trust debt. As of 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 issuance. Deferred financing costs related to the securitization trust debt are amortized using the interest method. Accordingly, the effective cost of borrowing of the securitization trust debt is greater than the stated rate of interest.

Our wholly owned, bankruptcy remote subsidiaries were formed to facilitate the above asset-backed financing transactions. Similar bankruptcy remote subsidiaries issue the debt outstanding under our warehouse line of credit. Bankruptcy remote refers to a legal structure in which it is expected that the applicable entity would not be included in any bankruptcy filing by its parent or affiliates. All of the assets of these subsidiaries have been pledged as collateral for the related debt. All such transactions, treated as secured financing for accounting and tax purposes, are treated as sales for all other purposes, including legal and bankruptcy purposes. None of the assets of these subsidiaries are available to pay any of our other creditors.

CONSUMER PORTFOLIO SERVICES, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(4) Debt

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
				March 31,		December 31,
				2026		2025
				(In thousands)
Description	Interest Rate	Subordinate Lender Interest Rate	Maturity

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	July 2026	$	301,207	$	197,107

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		April 2026		–		11,778
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	October 2027		167,500		118,323

Residual interest financing	7.86%		December 2028		21,030		31,163

Residual interest financing	11.50%		March 2029		49,652		49,820

Residual interest financing	11.00%		June 2032		62,810		63,524

Residual interest financing	8.75%		May 2033		50,000		–

Subordinated renewable notes	Weighted average rate of 8.81% and 8.98% at March 31, 2026 and December 31, 2025, respectively		Weighted average maturity of January 2028 and November 2027 at March 31, 2026 and December 31, 2025, respectively		27,508		28,986
				$	679,707	$	500,701

CONSUMER PORTFOLIO SERVICES, INC. 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 securitization of residual interests from previously issued securitizations. In the transaction, a qualified institutional buyer purchased $65.0 million of asset-backed notes secured by an 80% interest in a CPS affiliate that owns the residual interests in five CPS securitizations issued from October 2023 through September 2024. The sold notes (“2025-1 Notes”), issued by CPS Auto Securitization Trust 2025-1, consist of a single class with a coupon of 11.00%. At March 31, 2026, there was $62.8 million outstanding under this facility.

On December 19, 2024, we increased the capacity of our revolving credit agreement with Citibank, N.A., to $335 million. This follows the November 2024 closing of a revolving credit agreement with Oaktree Capital Management, which is subordinate to our credit agreement with Citibank, N.A. The facility provides effective advances up to 10.00% of eligible finance receivables, effectively increasing the advance rate up to 95% across the facility for eligible receivables. The revolving credit agreement with Citibank, N.A. was last renewed in July 2024, extending the maturity date to July 2026 followed by an amortization period through July 2027 for any receivables pledged at the end of the revolving period. There was $301.2 million outstanding under this facility at March 31, 2026.

On March 29, 2024, we renewed our two-year $200 million revolving credit agreement with Ares Agent Services, L.P. The revolving period for this facility was extended to March 2026 followed by an amortization period through March 2028 for any receivables pledged at the end of the revolving period. 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 securitization of residual interests from previously issued securitizations. In the transaction, a qualified institutional buyer purchased $50.0 million of asset-backed notes secured by an 80% interest in a CPS affiliate that owns the residual interests in five CPS securitizations issued from January 2022 through January 2023. The sold notes (“2024-1 Notes”), issued by CPS Auto Securitization Trust 2024-1, consist of a single class with a coupon of 11.50%. At March 31, 2026, there was $49.7 million outstanding under this facility.

On June 30, 2021, we completed a $50 million securitization of residual interests from previously issued securitizations. In this residual interest financing transaction, qualified institutional buyers purchased $50.0 million of asset-backed notes secured by residual interests in eleven CPS securitizations consecutively issued from January 2018 and September 2020. The sold notes (“2021-1 Notes”), issued by CPS Auto Securitization Trust 2021-1, consist of a single class with a coupon of 7.86%. At March 31, 2026, there was $21.0 million outstanding under this facility.

Unamortized debt issuance costs of $2.1 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 interest financing. 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. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(5) Interest Income and Interest Expense

The following table presents the components of interest income:

Schedule of interest income
	Three Months Ended
	March 31,
	2026		2025
	(In thousands)
Interest on finance receivables at fair value	$	106,331	$	99,567
Other interest income		2,390		2,366

Interest income	$	108,721	$	101,933

The following table presents the components of interest expense:

Schedule of interest expense
	Three Months Ended
	March 31,
	2026		2025
	(In thousands)
Securitization trust debt	$	48,756	$	45,044
Warehouse lines of credit		6,465		6,513
Residual interest financing		4,155		2,715
Subordinated renewable notes		685		646

Interest expense	$	60,061	$	54,918

(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:

Schedule of earnings per share
	Three Months Ended
	March 31,
	2026		2025
	(In thousands)
Weighted average number of common shares outstanding during the period used to compute basic earnings per share		21,777		21,444
Incremental common shares attributable to exercise of outstanding options and warrants		1,757		2,881
Weighted average number of common shares used to compute diluted earnings per share		23,534		24,325

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

(7) Income Taxes

We file numerous consolidated and separate income tax returns with the United States and with many states. With few exceptions, we are no longer subject to U.S. federal, state, or local examinations by tax authorities for years before 2015.

As of 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 file a consolidated federal income tax return and combined or stand-alone state franchise tax returns for certain states. We utilize the asset and liability method of accounting for income taxes, under which deferred income taxes are recognized for the future tax consequences attributable to the differences between the financial statement values of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date.

Deferred tax assets and liabilities are recognized for the future tax consequences of events that have been recognized in the financial statements. A valuation allowance is recognized to reduce a deferred tax asset if, based on the weight of all available evidence, it is more likely than not that some or all of the deferred tax asset will not be realized. When making this judgment, both positive and negative evidence is considered, with the most weight given to evidence that can be objectively verified. The recognition of deferred tax liabilities, however, does not require a similar more likely than not test for realization. They are recognized with the expectation that they will be settled in future periods when the related taxable temporary differences reverse. As of 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 tax assets.

Income tax expense was $2.5 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

Consumer Litigation. We are routinely involved in various legal proceedings resulting from our consumer finance activities and practices, both continuing and discontinued. Consumers can and do initiate lawsuits against us alleging violations of law applicable to collection of receivables, and such lawsuits sometimes allege that resolution as a class action is appropriate. For the most part, we have legal and factual defenses to consumer claims, which we routinely contest or settle (for immaterial amounts) depending on the particular circumstances of each case.

In 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.

Accordingly, 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. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(9) Fair Value Measurements

ASC 820, “Fair Value Measurements” clarifies the principle that fair value should be based on the assumptions market participants would use when pricing an asset or liability and establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. Under the standard, fair value measurements would be separately disclosed by level within the fair value hierarchy.

ASC 820 defines fair value, establishes a framework for measuring fair value, establishes a three-level valuation hierarchy for disclosure of fair value measurement and enhances disclosure requirements for fair value measurements. The three levels are defined as follows: level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets; level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument; and level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement.

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:


	As of March 31, 2026
Financial Instrument	(In thousands)
	Carrying		Fair Value Measurements Using:
	Value		Level 1		Level 2		Level 3		Total
Assets:
Cash and cash equivalents	$	6,944	$	6,944	$	–	$	–	$	6,944
Restricted cash and equivalents		178,469		178,469		–		–		178,469
Liabilities:
Warehouse lines of credit	$	467,138	$	–	$	–	$	467,138	$	467,138
Accrued interest payable		11,842		–		–		11,842		11,842
Residual interest financing		181,383		–		–		192,294		192,294
Securitization trust debt		2,992,157		–		–		3,013,756		3,013,756
Subordinated renewable notes		27,508		–		–		27,508		27,508


	As of December 31, 2025
Financial Instrument	(In thousands)
	Carrying		Fair Value Measurements Using:
	Value		Level 1		Level 2		Level 3		Total
Assets:
Cash and cash equivalents	$	6,322	$	6,322	$	–	$	–	$	6,322
Restricted cash and equivalents		165,885		165,885		–		–		165,885
Liabilities:
Warehouse lines of credit	$	324,871	$	–	$	–	$	324,871	$	324,871
Accrued interest payable		11,994		–		–		11,994		11,994
Residual interest financing		142,982		–		–		152,607		152,607
Securitization trust debt		2,986,574		–		–		2,985,961		2,985,961
Subordinated renewable notes		28,986		–		–		28,986		28,986

CONSUMER PORTFOLIO SERVICES, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(10) Business Segment Information

The company has one reportable segment. This determination is made by our Chief Executive Officer, who acts as the chief operating decision-maker (“CODM”), in assessing performance and making decisions regarding resource allocation. The CODM assesses performance by reviewing the consolidated financial statements, which reflect the financial results of our one reportable operating segment.

Within the Company’s one reportable segment, it provides indirect vehicle financing to motor vehicle dealer’s less credit- worthy borrowers. The Company’s revenue primarily consists of interest income and is derived from the interest recorded on contracts the Company has purchased. The revenue generated from any individual borrower is deemed to be immaterial.

(11) Subsequent Events

On 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 Forward-Looking Statements

Discussions of certain matters contained in this report may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Exchange Act, and as such, may involve risks and uncertainties. You can generally identify forward-looking statements as statements containing the words “will,” “would,” “believe,” “may,” “could,” “expect,” “anticipate,” “intend,” “estimate,” “judgment,” “assume,” “plans,” “goals, “strategy,” “future,” “likely,” “should” or other similar expressions.

Examples of forward-looking statements include, among others, statements we make regarding:

	·	charge-offs and recovery rates;
	·	the willingness or ability of obligors to pay pursuant to contractual terms;
	·	our ability to enforce rights under contracts;
	·	our ability to and rates at which we plan to acquire automobile contracts;
	·	the anticipated levels of recoveries upon sale of repossessed vehicles;
	·	revenues or expenses;
	·	provisions for credit losses;
	·	expected industry and general economic trends;
	·	accrued losses for legal contingencies;
	·	anticipated deferred tax assets;
	·	estimates of taxable income;
	·	our ability to service and repay our debt;
	·	the structuring of securitization transactions as secured financings and the effects of such structures on financial items and future profitability; or
	·	the effect of the change in structure on our profitability and the duration of the period in which our profitability would be affected by the change in securitization structure.

Our actual results, performance and achievements may differ materially from the results, performance and achievements expressed or implied in such forward-looking statements. Some of the factors that might cause such a difference include, but are not limited to, the following:

	·	unexpected exogenous events, such as a widespread public health emergency;
	·	mandates imposed in reaction to such events, such as prohibitions of otherwise permissible activity;
	·	changes in general economic conditions;
	·	changes in performance of our automobile contracts;
	·	increases in interest rates;
	·	our ability to generate sufficient operating and financing cash flows;
	·	competition;
	·	the level of losses incurred on contracts in our managed portfolio;
	·	adverse decisions by courts or regulators;
	·	regulatory changes with respect to consumer finance;
	·	changes in the market for used vehicles;
	·	levels of cash releases from existing pools of contracts;
	·	the terms on which we are able to finance contract purchases;
	·	the willingness or ability of dealers to assign contracts to us on acceptable terms;
	·	the terms on which we are able to complete term securitizations once contracts are acquired;
	·	any breach in the security of our systems; and
	·	such other factors as discussed through the “Risk Factors” section of this report.

Forward-looking statements are neither historical facts nor guarantees of performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, plans and strategies, projections, anticipated events and trends, the economy and other uncertain conditions. Because forward-looking statements relate to the future, they involve risks, uncertainties and assumptions. Actual results may differ from expectations due to many factors beyond our ability to control or predict, including those described herein, and in any documents incorporated by reference in this report. Therefore, you should not rely on any of these forward-looking statements. For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

We undertake no obligation to publicly update any forward-looking information. You are advised to consult any additional disclosure we make in our periodic reports filed with the SEC.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

We are a specialty finance company. Our business is to purchase and service retail automobile contracts originated primarily by franchised automobile dealers and, to a lesser extent, by select independent dealers in the United States in the sale of new and used automobiles, light trucks and passenger vans. Through our automobile contract purchases, we provide indirect financing to the customers of dealers who have limited credit histories or past credit problems, who we refer to as sub-prime customers. We serve as an alternative source of financing for dealers, facilitating sales to customers who otherwise might not be able to obtain financing from traditional sources, such as commercial banks, credit unions and the captive finance companies affiliated with major automobile manufacturers. In addition to purchasing installment purchase contracts directly from dealers, we have also (i) originated vehicle purchase money loans by lending directly to consumers, (ii) acquired installment purchase contracts in four merger and acquisition transactions, and (iii) purchased immaterial amounts of vehicle purchase money loans from non-affiliated lenders. In this report, we refer to all of such contracts and loans as “automobile contracts.”

We were incorporated and began our operations in March 1991. From inception through March 31, 2026, we have originated a total of approximately $25.2 billion of automobile contracts from dealers, and to a lesser degree, by originating loans secured by automobiles directly with consumers. Our recent history of contract purchase volumes and managed portfolio levels are shown in the table below. Managed portfolio comprises both contracts we owned and those we were servicing for third parties.

Contract Purchases and Outstanding Managed Portfolio

	$ in thousands
Period	Contracts Purchased in Period		Managed Portfolio at Period End
2021		1,146,321		2,249,069
2022		1,854,385		3,001,308
2023		1,357,752		3,194,623
2024		1,681,941		3,665,725
2025		1,638,326		3,898,425
Three months ended March 31, 2026		533,220		4,058,335

Our principal executive offices are in Las Vegas, Nevada. Most of our operational and administrative functions take place in Irvine, California. Credit and underwriting functions are performed primarily in that California branch with certain of these functions also performed in our Florida, Nevada, and Virginia branches. We service our automobile contracts from our California, Nevada, Virginia, Florida and Illinois branches.

The programs we offer to dealers and consumers are intended to serve a wide range of sub-prime customers, primarily through franchised new car dealers. We originate automobile contracts with the intention of financing them on a long-term basis through securitizations. Securitizations are transactions in which we sell a specified pool of contracts to a special purpose subsidiary of ours, which in turn issues asset-backed securities to fund the purchase of the pool of contracts from us.

Securitization and Warehouse Credit Facilities

Throughout the period for which information is presented in this report, we have purchased automobile contracts with the intention of financing them on a long-term basis through securitizations, and on an interim basis through warehouse credit facilities. All such financings have involved identification of specific automobile contracts, sale of those automobile contracts (and associated rights) to one of our special-purpose subsidiaries, and issuance of asset-backed securities to be purchased by institutional investors. Depending on the structure, these transactions may be accounted for under generally accepted accounting principles as sales of the automobile contracts or as secured financings. All of our active securitizations are structured as secured financings.

When structured to be treated as a secured financing for accounting purposes, the subsidiary is consolidated with us. Accordingly, the sold automobile contracts and the related debt appear as assets and liabilities, respectively, on our consolidated balance sheet. We then periodically (i) recognize interest and fee income on the contracts, and (ii) recognize interest expense on the securities issued in the transaction. For automobile contracts acquired after 2017 we take account of estimated credit losses in our computation of a level yield used to determine recognition of interest on the contracts. For contracts acquired before 2018, we adopted CECL on January 1, 2020, and we may, as circumstances warrant, record or reverse expense provisions for credit losses.

Since 1994 we have conducted 108 term securitizations of automobile contracts that we originated. As of March 31, 2026, 19 of those securitizations are active and all are structured as secured financings. We generally conduct our securitizations on a quarterly basis, near the beginning of each calendar quarter, resulting in four securitizations per calendar year.

Our recent history of term securitizations is summarized in the table below:

Recent Asset-Backed Term Securitizations

	$ in thousands
Period	Number of Term Securitizations		Receivables Pledged in Term Securitizations
2020		4		741,867
2021		3		1,145,002
2022		4		1,537,383
2023		4		1,352,114
2024		4		1,533,854
2025		4		1,727,785
Three months ended March 31, 2026		1		352,664

Generally, prior to a securitization transaction we fund our automobile contract purchases primarily with proceeds from warehouse credit facilities. We currently have short-term funding capacity of $702.5 million over three credit facilities. The first credit facility was established in May 2012. This facility was most recently renewed in July 2024, extending the revolving period to July 2026, with an optional amortization period through July 2027. In addition, the capacity was increased from $200 million to $335 million in December 2024.

In November 2015, we entered into a $100 million facility with Ares Agent Services, L.P. In June 2022, we increased the capacity of our credit agreement from $100 million to $200 million. This facility was most recently renewed in March 2024, extending the revolving period to March 2026, followed by an amortization period to March 2028. In March 2026, the revolving period was extended to April 2026. There was nothing outstanding under this facility at March 31, 2026.

In October 2025, we entered into a new $167.5 million facility. This facility has a two year revolving period to October 2027, with an optional amortization period through April 2029.

In a securitization and in our warehouse credit facilities, we are required to make certain representations and warranties, which are generally similar to the representations and warranties made by dealers in connection with our purchase of the automobile contracts. If we breach any of our representations or warranties, we may be required to repurchase the automobile contract at a price equal to the principal balance plus accrued and unpaid interest. We may then be entitled under the terms of our dealer agreement to require the selling dealer to repurchase the contract at a price equal to our purchase price, less any principal payments made by the customer. Subject to any recourse against dealers, we will bear the risk of loss on repossession and resale of vehicles under automobile contracts that we repurchase.

In a securitization, the related special purpose subsidiary may be unable to release excess cash to us if the credit performance of the securitized automobile contracts falls short of pre-determined standards. Such releases represent a material portion of the cash that we use to fund our operations. An unexpected deterioration in the performance of securitized automobile contracts could therefore have a material adverse effect on both our liquidity and results of operations.

In addition, from time to time, we have also completed financings of our residual interests in other securitizations that we and our affiliates previously sponsored. On March 4, 2026, we completed a $50 million securitization of residual interests from previously issued securitizations. In the transaction, qualified institutional buyers 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 (“2026-1 Notes”), issued by CPS Auto Securitization Trust 2026-1, consist of a single class with a coupon of 8.75%.

Receivables we originate and service for third parties are not pledged to our warehouse facilities or included in our securitizations.

Financial Covenants

Our warehouse credit facilities and our residual interest financings contain various financial covenants requiring certain minimum financial ratios. Such covenants include maintaining minimum levels of liquidity and net worth and not exceeding maximum leverage levels. In addition, certain securitization and non-securitization related debt contain cross-default provisions that would allow certain creditors to declare a default if a default occurred under a different facility. As of March 31, 2026 we were in compliance with all such financial covenants.

Results of Operations

Comparison of Operating Results for the three months ended March 31, 2026, with the three months ended March 31, 2025

Revenues. During the three months ended March 31, 2026, our revenues were $112.3 million, an increase of $5.5 million, or 5.1% from the prior year revenue of 106.9 million. The primary reason for the increase in revenues is the increase in interest income resulting from the increase in the average outstanding balance of finance receivables measured at fair value. Revenues for the three months ended March 31, 2026, did not include a mark to the recorded value of the finance receivables measured at fair value. Marks are estimates based on our evaluation of the appropriate fair value and future earnings rate of existing receivables compared to recently acquired receivables and increases or decreases in our estimates of future net losses. In the current period, our re-evaluation of the fair values of these receivables resulted in no marks to finance receivables measured at fair value. There was a $3.5 million mark up to the fair value portfolio in the prior year period.

Interest income for the three months ended March 31, 2026, increased $6.8 million, or 6.7% to $108.7 million from $101.9 million in the prior year. The primary reason for the increase in interest income is the 7.9% increase in the average balance of our loan portfolio over the prior year period. The interest yield on our total loan portfolio decreased to 11.3% from 11.4% in the prior year period. The interest yield on receivables measured at fair value is reduced to take account of expected losses and is therefore less than the yield on other finance receivables. The table below shows the average balance and interest yield of our loan portfolio for the three months ended March 31, 2026 and 2025:

	Three Months Ended March 31,
	2026						2025
	(Dollars in Thousands)
	Average				Interest		Average				Interest
	Balance		Interest		Yield		Balance		Interest		Yield
Interest Earning Assets
Loan Portfolio	$	3,853,746	$	108,721		11.3%	$	3,572,642	$	101,933		11.4%

Other income was $3.6 million for the three months ended March 31, 2026, compared to $1.4 million for the comparable period in 2025. This $2.2 million increase was primarily driven by the dealer recoveries collected for the three months ending March 31, 2026. These dealer recoveries were $2.3 million for the quarter ended March 31, 2026. There were no dealer recoveries in the prior year period. The Company engaged a third party that identifies discrepancies in the values of the vehicles that have been repossessed and sold at auction. The third party attempts to collect the amount of the discrepancy from the dealers and remits the amounts collected to the Company net of fees charged.

Expenses. Our operating expenses consist largely of interest expenses, employee costs, sales and general and administrative expenses. Interest expense is affected by the volume of automobile contracts we purchased during the trailing 12-month period and the use of our warehouse facilities and asset-backed securitizations to finance those contracts and on the interest rates on these facilities. Employee costs and general and administrative expenses are incurred as applications and automobile contracts are received, processed and serviced. Factors that affect margins and net income include changes in the automobile and automobile finance market environments, and macroeconomic factors such as interest rates and changes in the unemployment level.

Employee costs include base salaries, commissions and bonuses paid to employees, and certain expenses related to the accounting treatment of outstanding stock options and are one of our most significant operating expenses. These costs (other than those relating to stock options) generally fluctuate with the level of applications and automobile contracts purchased and serviced.

Other operating expenses consist largely of facilities expenses, telephone and other communication services, credit services, computer services, sales and advertising expenses, and depreciation and amortization.

Total operating expenses were $104.3 million for the three months ended March 31, 2026, compared to $100.1 million for the prior period, an increase of $4.2 million, or 4.2%. The increase is primarily due to increases in interest expense.

Employee costs were $23.0 million during the three months ended March 31, 2026, compared to $25.0 million for the same quarter in the prior year, a decrease of $2.0 million, or 7.9%. The table below summarizes our employees by category as well as contract purchases and units in our managed portfolio as of, and for the three-month periods ended, March 31, 2026, and 2025.

	Three Months Ended March 31,
	2026		2025
	(Dollars in millions)
Contracts purchased (dollars)	$	533.2	$	451.2
Contracts purchased (units)		23,919		20,707
Managed portfolio outstanding (dollars)	$	3,942.2	$	3,614.6
Managed portfolio outstanding (units)		220,310		207,123

Number of Originations staff		191		200
Number of Sales staff		149		120
Number of Servicing staff		546		559
Number of other staff		70		64
Total number of employees		956		943

Increases in headcount among our Sales staff during the three-month period ended, March 31, 2026, and the decrease from the prior year period in the average cost of our Servicing staff, were the largest contributing factors to the increase in headcount and decrease to employee costs for the three-month period ended, March 31, 2026 compared to the prior year period.

General and administrative expenses include costs associated with purchasing and servicing our portfolio of finance receivables, including expenses for facilities, credit services, and telecommunications. General and administrative expenses were $12.9 million, a decrease of $345,000 from $12.6 million in the prior year period.

Interest expense for the three months ended March 31, 2026, was $60.1 million and represented 57.6% of total operating expenses, compared to $54.9 million in the previous year, when it was 54.9% of total operating expenses.

Interest on securitization trust debt increased by $3.7 million for the three months ended March 31, 2026, compared to the prior period. The average balance of securitization trust debt increased to $3,127.4 million for the three months ended March 31, 2026, compared to $2,861.9 million for the three months ended March 31, 2025. The annualized average rate on our securitization trust debt was 6.2% for the three months ended March 31, 2026, compared to 6.3% in the prior year period. For each quarterly securitization transaction, the blended cost of funds is ultimately the result of many factors including the market interest rates for benchmark swaps of various maturities against which our bonds are priced and the margin over those benchmarks that investors are willing to accept, which in turn, is influenced by investor demand for our bonds at the time of the securitization. These and other factors have resulted in fluctuations in our securitization trust debt interest costs. The blended interest rates of our recent securitizations are summarized in the table below:

Blended Cost of Funds on Recent Asset-Backed Term Securitizations

Period		Blended Cost of Funds
January 2023		6.48%
April 2023		7.17%
July 2023		7.13%
October 2023		7.89%
January 2024		6.51%
April 2024		6.69%
June 2024		6.56%
September 2024		5.52%
January 2025		5.88%
May 2025		5.96%
July 2025		5.43%
October 2025		5.72%
January 2026		5.18%

Interest expense on warehouse credit line debt was $6.5 million for the three months ended March 31, 2026, and in the same period prior year period. The average balance of our warehouse debt was $276.0 million during the three months ended March 31, 2026, compared to $275.8 million for the same period in 2025. The annualized average rate on our credit line debt was 9.4% for the three months ended March 31, 2026, consistent with the same period in the prior year.

Interest expense on subordinated renewable notes was $685,000 for the three months ended March 31, 2026. The average balance of the outstanding subordinated debt was $28.7 million for the three months March 31, 2026, compared to $26.9 million for the prior year period. The average yield of subordinated notes is 9.6% for both current and the prior period.

In June 2021, March 2024, March 20, 2025, and again on March 4, 2026 we completed a securitization of residual interests from other previously issued securitizations in the amount of $50 million, $50 million, $65 million, and $50 million, respectively. Interest expense for these residual interest financings was $4.2 million for the three months ended March 31, 2026, compared to $2.7 million for the same period in 2025.

The following table presents the components of interest income and interest expense and a net interest yield analysis for the three-month periods ended March 31, 2026, and 2025:

	Three Months Ended March 31,
	2026						2025
	(Dollars in thousands)
					Annualized						Annualized
	Average				Average		Average				Average
	Balance (1)		Interest		Yield/Rate		Balance (1)		Interest		Yield/Rate
Interest Earning Assets
Loan Portfolio	$	3,853,746	$	108,721		11.3%	$	3,572,642	$	101,933		11.4%

Interest Bearing Liabilities
Warehouse lines of credit	$	275,980		6,465		9.4%	$	275,816		6,513		9.4%
Residual interest financing		154,594		4,155		10.8%		108,667		2,715		10.0%
Securitization trust debt		3,127,388		48,756		6.2%		2,861,870		45,044		6.3%
Subordinated renewable notes		28,652		685		9.6%		26,945		646		9.6%
	$	3,586,614		60,061		6.7%	$	3,273,298		54,918		6.7%

Net interest income/spread			$	48,660					$	47,015
Net interest yield (2)						4.6%						4.7%
Ratio of average interest earning assets to average interest bearing liabilities						107%						109%

_________________________

(1)	Average balances are based on month end balances except for warehouse lines of credit, which are based on daily balances.
(2)	Annualized net interest income divided by average interest earning assets.

	Three Months Ended March 31, 2026
	Compared to March 31, 2025
	Total			Change Due			Change Due
	Change			to Volume			to Rate
	(In thousands)
Interest Earning Assets
Loan Portfolio	$	6,788		$	7,751			(963	)

Interest Bearing Liabilities
Warehouse lines of credit		(48	)		(48	)		–
Residual interest financing		1,440			1,131			309
Securitization trust debt		3,712			4,494			(782	)
Subordinated renewable notes		39			39			–
		5,143			5,616			(473	)

Net interest income/spread	$	1,645		$	2,135		$	(490	)

Under the fair value method of accounting, we recognize interest income net of expected credit losses. Thus, no provision for credit loss expense is recorded for finance receivables measured at fair value. Finance receivables acquired before 2018 are recorded at cost, and both their total balance and activity is immaterial.

Sales expenses consist primarily of commission-based compensation paid to our employee sales representatives. Our sales representatives earn a salary plus commission based on volume of contract purchases. Sales expense increased by $641,000 to $6.6 million during the three months ended March 31, 2026, from $5.9 million for the same quarter in 2025. We purchased $533.2 million of new contracts during the three months ended March 31, 2026, compared to $451.2 million in the prior year period.

Occupancy expenses were $1.5 million for the three months ending March 31, 2026, which is up from $1.4 million in the first quarter of 2025.

Depreciation and amortization expenses decreased to $225,000 compared to $249,000 in the previous year.

For the three months ended March 31, 2026, we recorded income tax expense of $2.5 million, representing a 31% effective tax rate. In the prior period, our income tax expense was $2.1 million, representing a 31% effective tax rate.

Credit Experience

Our financial results are dependent on the performance of the automobile contracts in which we retain an ownership interest. Broad economic factors such as recession and significant changes in unemployment levels influence the credit performance of our portfolio, as does the weighted average age of the receivables at any given time. The tables below document the delinquency, repossession and net credit loss experience of all such automobile contracts that we originated or own an interest in as of the respective dates shown.

Delinquency, Repossession and Extension Experience (1)

Total Managed Portfolio (Excludes Third Party Portfolio)

	March 31, 2026				March 31, 2025				December 31, 2025
	Number of				Number of				Number of
	Contracts		Amount		Contracts		Amount		Contracts		Amount
	(Dollars in thousands)
Delinquency Experience
Gross servicing portfolio (1)		220,310	$	3,942,218		207,123	$	3,614,555		212,718	$	3,778,647
Period of delinquency (2)
31-60 days		12,551		217,661		11,800		195,595		15,639		272,499
61-90 days		5,262		86,272		6,020		95,712		7,163		118,304
91+ days		3,426		48,929		4,161		61,037		3,806		56,223
Total delinquencies (2)		21,239		352,862		21,981		352,344		26,608		447,026
Amount in repossession (3)		7,098		103,555		6,214		93,997		7,462		111,152
Total delinquencies and amount in repossession (2)		28,337	$	456,417		28,195	$	446,341		34,070	$	558,178


Delinquencies as a percentage of gross servicing portfolio		9.64%		8.95%		10.61%		9.75%		12.51%		11.83%

Total delinquencies and amount in repossession as a percentage of gross servicing portfolio		12.86%		11.58%		13.61%		12.35%		16.02%		14.77%

Extension Experience
Contracts with one extension, accruing		38,462	$	713,435		34,239	$	616,697		41,504	$	759,863
Contracts with two or more extensions, accruing		55,411		903,092		47,578		716,420		58,326		927,980
		93,873		1,616,527		81,817		1,333,117		99,830		1,687,843

Contracts with one extension, non-accrual (4)		2,495		36,432		3,203		48,729		3,008		45,848
Contracts with two or more extensions, non-accrual (4)		5,259		76,649		4,122		61,109		5,285		77,351
		7,754		113,081		7,325		109,838		8,293		123,199

Total contracts with extensions		101,627	$	1,729,608		89,142	$	1,442,955		108,123	$	1,811,043

____________________________________

	(1)	All amounts and percentages are based on the amount remaining to be repaid on each automobile contract. The information in the table represents the gross principal amount of all automobile contracts we have purchased, including automobile contracts subsequently sold in securitization transactions that we continue to service. The table does not include certain contracts we have serviced for third parties on which we earn servicing fees only and have no credit risk.
	(2)	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. Automobile contracts less than 31 days delinquent are not included. The delinquency aging categories shown in the tables reflect the effect of extensions.
	(3)	Amount in repossession represents financed vehicles that have been repossessed but not yet liquidated.
	(4)	Amount in repossession and accounts past due more than 90 days are on non-accrual.

Net Charge-Off Experience (1)

Total Managed Portfolio (Excludes Third Party Portfolio)

	Finance Receivables Portfolio

	March 31,		March 31,		December 31,
	2026		2025		2025
	(Dollars in thousands)
Average servicing portfolio outstanding	$	3,853,746	$	3,572,642	$	3,693,796
Annualized net charge-offs as a percentage of average servicing portfolio (2)		8.57%		7.54%		7.76%

_________________________

	(1)	All amounts and percentages are based on the principal amount scheduled to be paid on each automobile contract.
	(2)	Net charge-offs include the remaining principal balance, after the application of the net proceeds from the liquidation of the vehicle (excluding accrued and unpaid interest) and amounts collected subsequent to the date of charge-off, including some recoveries which have been classified as other income in the accompanying interim consolidated financial statements. March 31, 2026, and March 31, 2025, percentages represent three months ended March 31, 2026, and March 31, 2025, annualized. December 31, 2025, represents 12 months ended December 31, 2025.

Extensions

In certain circumstances we will grant obligors one-month payment extensions to assist them with temporary cash flow problems. In general, an obligor will not be permitted more than two such extensions in any 12-month period and no more than eight over the life of the contract. The only modification of terms is to advance the obligor’s next due date, generally by one month, though in some cases we may permit a longer extension, and in any case an advance in the maturity date corresponding to the advance of the due date. There are no other concessions such as a reduction in interest rate, forgiveness of principal or of accrued interest. Accordingly, we consider such extensions to be insignificant delays in payments.

The basic question in deciding to grant an extension is whether or not we will (a) be delaying the inevitable repossession and liquidation or (b) risk losing the vehicle as a result of not being able to locate the obligor and vehicle. In both of those situations, the loss would likely be higher than if the vehicle had been repossessed without the extension. The benefits of granting an extension include minimizing current losses and delinquencies, minimizing lifetime losses, getting the obligor’s account current (or close to it) and building goodwill so that the obligor might prioritize us over other creditors on future payments. Our servicing staff are trained to identify when a past due obligor is facing a temporary problem that may be resolved with an extension. In some cases, the extension will be granted in conjunction with our receiving all or a portion of a past due payment from the obligor, thereby indicating an additional monetary and psychological commitment to the contract on the obligor’s part.

The credit assessment for granting an extension is initially made by our collector, who bases the recommendation on the collector’s discussions with the obligor. In such assessments the collector will consider, among other things, the following factors: (1) the reason the obligor has fallen behind in payments; (2) whether or not the reason for the delinquency is temporary, and if it is, have conditions changed such that the obligor can begin making regular monthly payments again after the extension; (3) the obligor's past payment history, including past extensions if applicable; and (4) the obligor’s willingness to communicate and cooperate on resolving the delinquency. If the collector believes the obligor is a good candidate for an extension, he must obtain approval from his supervisor, who will review the same factors stated above prior to offering the extension to the obligor. During 2020 we incorporated an algorithmic extension score card which provides our staff with an objective and quantitative assessment of whether or not a obligor is a good candidate for an extension, based on the current circumstances of the account. The extension score card was developed by our internal risk management team and is derived from the post-extension performance of accounts in our managed portfolio.

After receiving an extension, an account remains subject to our normal policies and procedures for interest accrual, reporting delinquency and recognizing charge-offs. We believe that a prudent extension program is an integral component to mitigating losses in our portfolio of sub-prime automobile receivables. The table below summarizes the status, as of March 31, 2026, for accounts that received extensions from 2014 through 2025:

Period of Extension		# Extensions Granted		Active or Paid Off at March 31, 2026		% Active or Paid Off at March 31, 2026		Charged Off > 6 Months After Extension		% Charged Off > 6 Months After Extension		Charged Off <= 6 Months After Extension		% Charged Off <= 6 Months After Extension		Avg Months to Charge Off Post Extension


	2014		25,773		10,417		40.4%		14,486		56.2%		869		3.4%		25

	2015		53,319		21,929		41.1%		30,058		56.4%		1,329		2.5%		26

	2016		80,897		34,902		43.1%		43,007		53.2%		2,954		3.7%		26

	2017		133,847		54,601		40.8%		68,336		51.1%		10,712		8.0%		23

	2018		121,531		55,545		45.7%		53,641		44.1%		11,879		9.8%		20

	2019		71,548		40,404		56.5%		22,951		32.1%		7,411		10.4%		20

	2020		83,170		53,727		64.6%		25,121		30.2%		4,032		4.8%		24

	2021		47,010		31,276		66.5%		14,498		30.8%		1,236		2.6%		24

	2022		56,142		34,232		61.0%		19,956		35.5%		1,954		3.5%		20

	2023		83,113		51,205		61.6%		28,649		34.5%		3,259		3.9%		17

	2024		90,484		67,956		75.1%		19,887		22.0%		2,641		2.9%		13

	2025		110,200		102,293		92.8%		4,854		4.4%		3,053		2.8%		6

______________________

Note: Table excludes extensions on portfolios serviced for third parties

We view these results as a confirmation of the effectiveness of our extension program. We consider accounts that have had extensions and were active or paid off as of March 31, 2026, to be successful. Successful extensions result in continued payments of interest and principal (including payment in full in many cases). Without the extension, however, the account may have defaulted, and we would have likely incurred a substantial loss and no additional interest revenue.

For extension accounts that ultimately charged off, we consider accounts that charged off more than six months after the extension to be at least partially successful. In such cases, despite the ultimate loss, we received additional payments of principal and interest that otherwise we would not have received.

Additional information about our extensions is provided in the tables below:

	Three Months Ended March 31,		Three Months Ended March 31,		Year Ended December 31,
	2026		2025		2025

Average number of extensions granted per month		10,233		7,390		9,183

Average number of outstanding accounts		216,170		205,203		210,100

Average monthly extensions as % of average outstandings		4.7%		3.6%		4.4%

____________________

Note: Table excludes portfolios originated and owned by third parties

	March 31, 2026				March 31, 2025				December 31, 2025
	Number of Contracts		Amount		Number of Contracts		Amount		Number of Contracts		Amount
					(Dollars in thousands)

Contracts with one extension		40,957	$	749,867		37,442	$	665,427		41,504	$	759,863
Contracts with two extensions		24,606		433,061		22,345		377,895		24,171		421,363
Contracts with three extensions		15,304		252,937		13,685		221,613		14,963		246,175
Contracts with four extensions		9,975		156,060		7,785		108,780		9,490		146,777
Contracts with five extensions		6,326		91,211		4,586		46,605		5,754		77,884
Contracts with six extensions		4,459		46,473		3,299		22,635		3,948		35,781
		101,627	$	1,729,609		89,142	$	1,442,955		99,830	$	1,687,843

Managed portfolio (excluding originated and owned by 3rd parties)		220,310	$	3,942,218		207,123	$	3,614,555		212,718	$	3,778,647

___________________

Note: Table excludes portfolios originated and owned by third parties

Since 2019, we have been able to reduce extensions by working with our servicing staff to be more selective in granting extensions including, where appropriate, to exhaust all possibilities of payment by the customer before granting an extension. However, as delinquency rates have risen, so has the average number of extensions granted.

Non-Accrual Receivables

It is not uncommon for our obligors to fall behind in their payments. However, with the diligent efforts of our servicing staff and systems for managing our collection efforts, we regularly work with our customers to resolve delinquencies. Our staff is trained to employ a counseling approach to assist our customers with their cash flow management skills and help them to prioritize their payment obligations to avoid losing their vehicle to repossession. Through our experience, we have learned that once a contract becomes greater than 90 days past due, it is more likely than not that the delinquency will not be resolved and will ultimately result in a charge-off. Contracts originated since January 2018 are accounted for at fair value and the economic impact of late payments is incorporated into the estimated net yield on those contracts.

Liquidity and Capital Resources

Our business requires substantial cash to support our purchases of automobile contracts and other operating activities. Our primary sources of cash have been cash flows from the proceeds from term securitization transactions and other sales of automobile contracts, amounts borrowed under various revolving credit facilities (also sometimes known as warehouse credit facilities), customer payments of principal and interest on finance receivables, fees for origination of automobile contracts, and releases of cash from securitization transactions and their related spread accounts. Our primary uses of cash have been the purchases of automobile contracts, repayment of amounts borrowed under lines of credit, securitization transactions and otherwise, operating expenses such as employee, interest, occupancy expenses and other general and administrative expenses, the establishment of spread accounts and initial overcollateralization, if any, the increase of credit enhancement to required levels in securitization transactions, and income taxes. There can be no assurance that internally generated cash will be sufficient to meet our cash demands. The sufficiency of internally generated cash will depend on the performance of securitized pools (which determines the level of releases from those pools and their related spread accounts), the rate of expansion or contraction in our managed portfolio, and the terms upon which we are able to acquire and borrow against automobile contracts.

Net cash provided by operating activities for the three-month period ended March 31, 2026 was $83.8 million, an increase of $9.9 million, compared to net cash provided by operating activities for the three-month period ended March 31, 2026 of $73.9 million. Net cash from operating activities is generally provided by net income from operations adjusted for significant non-cash items such as our provision for credit losses and marks to finance receivables measured at fair value.

Net cash used in investing activities was $250.7 million for the three months ended March 31, 2026 compared to $194.1 million in the prior year period. Net cash used in investing activities generally relates to new purchases of automobile contracts net of principal payments and other proceeds received during the period. Purchases of finance receivables excluding acquisition fees were $524.9 million and $449.6 million during the first three months of 2026 and 2025, respectively.

Net cash provided by financing activities for the three months ended March 31, 2026 was $180.1 million compared to $166.3 million in the prior year period. Cash provided by financing activities is primarily related to the issuance of securitization trust debt, reduced by the amount of repayment of securitization trust debt and net proceeds or repayments on our warehouse lines of credit and other debt. In the first three months of 2026, we issued $345.6 million in new securitization trust debt compared to $442.4 million for the same period in 2025. We repaid $340.2 million in securitization trust debt in the three months ended March 31, 2026 compared to repayments of securitization trust debt of $293.0 million in the prior year period. In the three months ended March 31, 2026, we had net advances on warehouse lines of credit of $141.5 million, compared to net repayments from warehouse lines of credit of $45.8 million in the prior year’s period.

We purchase automobile contracts from dealers for a cash price approximately equal to their principal amount, adjusted for an acquisition fee which may either increase or decrease the automobile contract purchase price. Those automobile contracts generate cash flow, however, over a period of years. We have been dependent on warehouse credit facilities to purchase automobile contracts and our securitization transactions for long term financing of our contracts. In addition, we have accessed other sources, such as residual financings and subordinated debt in order to finance our continuing operations.

The acquisition of automobile contracts for subsequent financing in securitization transactions, and the need to fund spread accounts and initial overcollateralization, if any, and increase credit enhancement levels when those transactions take place, results in a continuing need for capital. The amount of capital required is most heavily dependent on the rate of our automobile contract purchases, the required level of initial credit enhancement in securitizations, and the extent to which the previously established trusts and their related spread accounts either release cash to us or capture cash from collections on securitized automobile contracts. Of those, the factor most subject to our control is the rate at which we purchase automobile contracts.

We are and may in the future be limited in our ability to purchase automobile contracts due to limits on our capital. As of March 31, 2026, we had unrestricted cash of $6.9 million and $178.5 million aggregate available borrowings under our three warehouse credit facilities (assuming the availability of sufficient eligible collateral). As of March 31, 2026, we had approximately $5.3 million of such eligible collateral. Our plans to manage our liquidity include maintaining our rate of automobile contract purchases at a level that matches our available capital, and, as appropriate, minimizing our operating costs. During the three-month period ended March 31, 2026, we completed one securitizations aggregating $345.6 million of notes sold.

Our liquidity will also be affected by releases of cash from the trusts established with our securitizations. While the specific terms and mechanics of each spread account vary among transactions, our securitization agreements generally provide that we will receive excess cash flows, if any, only if the amount of credit enhancement has reached specified levels and the net losses related to the automobile contracts in the pool are below certain predetermined levels. In the event delinquencies or net losses on the automobile contracts exceed such levels, the terms of the securitization may require increased credit enhancement to be accumulated for the particular pool. There can be no assurance that collections from the related trusts will continue to generate sufficient cash.

Our warehouse credit facilities contain various financial covenants requiring certain minimum financial ratios and results. Such covenants include maintaining minimum levels of liquidity and net worth and not exceeding maximum leverage levels. 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 financial covenants.

We currently have and will continue to have a substantial amount of outstanding indebtedness. At March 31, 2026, we had approximately $3,668.2 million of debt outstanding. Such debt consisted primarily of $2,992.2 million of securitization trust debt, and also included $467.1 million of warehouse lines of credit, $181.4 million of residual interest financing debt and $27.5 million in subordinated renewable notes.

Although we believe we are able to service and repay our debt, there is no assurance that we will be able to do so. If our plans for future operations do not generate sufficient cash flows and earnings, our ability to make required payments on our debt would be impaired. If we fail to pay our indebtedness when due, it could have a material adverse effect on us and may require us to issue additional debt or equity securities.

Item 4. Controls and Procedures

We maintain a system of internal controls and procedures designed to provide reasonable assurance as to the reliability of our published financial statements and other disclosures included in this report. As of the end of the period covered by this report, we evaluated the effectiveness of the design and operation of such disclosure controls and procedures. Based upon that evaluation, the principal executive officer (Charles E. Bradley, Jr.) and the principal financial officer (Denesh Bharwani) concluded that the disclosure controls and procedures are effective in recording, processing, summarizing and reporting, on a timely basis, material information relating to us that is required to be included in our reports filed under the Securities Exchange Act of 1934. There has been no change in our internal controls over financial reporting during our most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings

The information provided under the caption “Legal Proceedings,” Note 8 to the Unaudited Condensed Consolidated Financial Statements, included in Part I of this report, is incorporated herein by reference.

Item 1A. Risk Factors

We remind the reader that risk factors are set forth in Item 1A of our report on Form 10-K, filed with the U.S. Securities and Exchange Commission on March 16, 2026. Where we are aware of material changes to such risk factors as previously disclosed, we set forth below an updated discussion of such risks. The reader should note that the other risks identified in our report on Form 10-K remain applicable.

We have substantial indebtedness.

We have and will continue to have a substantial amount of indebtedness. At March 31, 2026, we had approximately $3,668.2 million debt outstanding. Such debt consisted primarily of $2,992.2 million of securitization trust debt and $467.1 million of debt from warehouse lines of credit. Our securitization trust debt has increased by $5.6 million while our warehouse lines of credit debt has increased by $142.3 million since December 31, 2025 (each net of deferred financing costs). 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. We had $27.5 million and $29.0 million in subordinated renewable notes outstanding at March 31, 2026, and December 31, 2025, respectively. In June 2021, March 2024, March 2025, and again on March 2026, we completed a securitization of residual interests from other previously issued securitizations in the amounts of $50 million, $50 million, $65 million, and $50 million, respectively. As of March 31, 2026, $181.4 million of the residual interest debt remains outstanding.

Our substantial indebtedness could adversely affect our financial condition by, among other things:

	·	increasing our vulnerability to general adverse economic and industry conditions.

	·	requiring us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing the amounts available for working capital, capital expenditures and other general corporate purposes.

	·	limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate.

	·	placing us at a competitive disadvantage compared to our competitors that have less debt; and

	·	limiting our ability to borrow additional funds.

Although we believe we are able to service and repay such debt, there is no assurance that we will be able to do so. If we do not generate sufficient operating profits, our ability to make the required payments on our debt would be impaired. Failure to pay our indebtedness when due could have a material adverse effect.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

During the three months ended March 31, 2026, we repurchased 126,622 shares from existing shareholders, as reflected in the table below.

Issuer Purchases of Equity Securities

	Total Number of Shares		Average Price Paid		Total Number of Shares Purchased as Part of Publicly Announced Plans or		Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or
Period(1)	Purchased		per Share		Programs		Programs (2)

Jan 2026		44,599	$	8.95		44,599	$	6,714,613
February 2026		35,375		8.79		35,375	$	6,403,515
March 2026		46,648		8.03		46,648	$	6,028,988
Total		126,622	$	8.57		126,622

____________________

	(1)	Each monthly period is the calendar month.
	(2)	Through March 31, 2026, our board of directors had authorized the purchase of up to $128.2 million of our outstanding securities, which program was first announced in our annual report for the year 2002, filed on March 26, 2003. All purchases described in the table above were under the plan announced in March 2003, which has no fixed expiration date.

Item 5. Other Information

During the quarter ended March 31, 2026, no director or officer adopted or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement, as each term is defined in Item 408(a) of Regulation S-K.

Item 6. Exhibits

The Exhibits listed below are filed with this report.


4.14	Instruments defining the rights of holders of long-term debt of certain consolidated subsidiaries of the registrant are omitted pursuant to the exclusion set forth in subdivisions (b)(iv)(iii)(A) and (b)(v) of Item 601 of Regulation S-K (17 CFR 229.601). The registrant agrees to provide copies of such instruments to the United States Securities and Exchange Commission upon request.
10.1.0	Auto Receivables Trust 2026-A Purchase Agreement dated January 1, 2026, between registrant and CPS Receivables Five LLC**
31.1	Rule 13a-14(a) Certification of the Chief Executive Officer of the registrant
31.2	Rule 13a-14(a) Certification of the Chief Financial Officer of the registrant
32	Section 1350 Certifications*
101.INS	Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (formatted in inline XBRL, and included in exhibit 101).

* These Certifications shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. These Certifications shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the registration statement specifically states that such Certifications are incorporated therein.

** Certain portions of this exhibit have been omitted pursuant to Item 601(b)(10) of Regulation S-K.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	CONSUMER PORTFOLIO SERVICES, INC.
	(Registrant)

Date: May 8, 2026	By:	/s/ CHARLES E. BRADLEY, JR.
		Charles E. Bradley, Jr.
		Chief Executive Officer
		(Principal Executive Officer)

Date: May 8, 2026	By:	/s/ DENESH BHARWANI
		Denesh Bharwani
		Executive Vice President and Chief Financial Officer
		(Principal Financial Officer)

CONSUMER PORTFOLIO SERVICES, INC. 10-Q