Third quarter originations were down year over year for Consumer Portfolio Services — to $242 million from $287 million in 3Q15, according to earnings released today.
“Our operating results for the third quarter of 2016 were in line with our expectations,” Charles Bradley, CPS chairman and chief executive, said in a statement. “Our managed portfolio continues to grow and our earnings increased sequentially for the second consecutive quarter, even with a slight decrease in originations volumes.”
The company’s 31+ day delinquencies are up to 8.98% this quarter, from 7.31% at the same time a year prior, however repossession inventory remained relatively stagnant at 1.48% — from 1.51% at the same time a year prior.
The company also securitized contracts worth $325 million, up from $292 million YoY for the quarter. CPS was able to increase demand for its securitizations by preselling the lower-rated bonds, Bradley told Auto Finance News back in August.
“Our operating leverage continues to improve and our third quarter securitization priced at a lower blended coupon than the prior quarter, reversing a four-quarter trend of consecutively higher blended coupons,” Bradley said in today’s earnings release.
These figures come at a time when Bradley said he’s “putting away acorns for a rainy day,” as he predicts the onset of a recession coming in the near to mid future.
The next recession won’t hit tomorrow, but “the problem is you don’t know when,” Bradly told attendees of the 2016 Auto Finance Summit in early October. CPS has $300 million in funding across three credit facilities, he said and the company has built two-year revolving credit lines with a one-year amortization period, in order to prepare for the coming hit.
Bradley was also recognized at the summit with an Auto Finance Excellence Award for his leadership and ability to drive consistent profitability through three down credit cycles.
