CPS net income climbs 43% year over year as quarterly originations more than double

Consumer Portfolio Services reported third-quarter net income of $7.0 million, or $0.30 per diluted share, up 43% from a year earlier, as the subprime auto lender's contract purchases more than doubled and its owned portfolio reached a record $4.711 billion.

Total revenue for the quarter ended September 30 was $131.9 million, up 21.7% from $108.4 million a year earlier, and $365.6 million for the first nine months, up 12.5% from $325.1 million. Interest income supplied most of the increase, which the Las Vegas-based company attributed to a larger loan book; interest income was essentially flat as a share of the average owned portfolio (11.3% vs 11.4% a year earlier).

Contract purchases more than double

Expenses scaled with the book. Total operating expenses were $121.8 million against $101.4 million, and interest expense rose to $70.52 million from $59.1 million (the statements are presented in thousands), holding at roughly 58% of operating costs in both periods. The release presents that ratio as evidence of discipline in the cost of borrowings while the portfolio grows. Against the second quarter, revenue was up about 8.7% from $121.4 million and net income up about 11.5% from $6.2 million (or $0.27 per diluted share).

Volume is the engine behind the revenue line. Contract purchases reached $815.3 million from $391.1 million, an increase of 108.5%, and $2.106 billion for the nine months against $1.28 billion. CPS credits a wider dealership base, additions to its sales force, and faster underwriting and funding. Securitized volume rose 69.4% from a year earlier to $734.5 million in the quarter.

“Our accelerating origination volume is demonstrating strong operating leverage in our business, as increases to net income are outpacing revenue and driving solid financial results,” Chief Executive Charles E. Bradley said in the release. He added that a broader dealer network and deeper relationships with existing dealers allow CPS to “accelerate origination volume and capture market share, while remaining selective on the contracts we purchase.”

Credit improves against last year, then stalls

Total delinquencies, including vehicles held in repossession inventory, fell to 12.29% of the portfolio from 13.96% a year earlier. Contracts 31 or more days past due were 10.20% versus 11.12%, and repossession inventory 2.09% versus 2.84%. Annualized net charge-offs dropped to 7.26% from 8.01%, and net recovery rates on repossessed vehicles sold at wholesale auction rose to 32.0% from 28.7% of the account balance at the time of sale.

The sequential comparison is less flattering. Total delinquencies stood at 12.16% at June 30 and 12.29% at September 30, annualized net charge-offs were almost unchanged at 7.28% and 7.26%, and net recovery rates on repossessed vehicles sold at wholesale auction slipped to 32.0% from 33.3%. Net interest margin held at 5.1% of the average portfolio in both quarters. The average owned balance grew 22.2% from a year earlier to $4.58 billion from $3.75 billion, and 9.33% from the $4.19 billion average at June 30. The period-end portfolio was up 25.3% year over year at $4.71 billion from $3.76 billion — the company's 21st consecutive quarter of portfolio growth — and 9.38% larger than the $4.307 billion balance at June 30.

Funding headroom and the Monday call

The quarter's funding moves matter for a lender expanding a $4.711 billion book. CPS renewed one warehouse line of credit and lifted its capacity to $508 million from $335 million, roughly 52% more, and closed its third asset-backed securitization of 2026, which it describes as its 110th and the largest deal in its 35-year history.

Capital is thin relative to assets: shareholders' equity was $324.49 million at September 30, about 6.7% of $4.83 billion in total assets, against equity of $309.54 million at December 31, 2025. The diluted share count fell to 23.32 million from 24.05 million, which the release cites, together with higher net income, in explaining the 50.0% increase in diluted earnings per share to $0.30 from $0.20.

The release contains no revenue or earnings guidance and no consensus comparison, so it cannot support a claim that results beat or missed expectations, and nothing in the documents captured here establishes a share-price reaction. CPS filed the release with the SEC on October 23, 2026 as Form 8-K Exhibit 99.1. Management discusses the quarter on a conference call on Monday, October 26, 2026 at 1:00 p.m. Eastern, with an investor deck posted to the company's investor relations site. The Form 10-Q that follows is the document that will show whether the sequential rise in delinquencies is seasonal or the start of a trend.