Consumer Portfolio Services, Inc. Reports 2008 Fourth Quarter and Full Year Operating Results

Business Wire, March 31, 2009

IRVINE, Calif. -- Consumer Portfolio Services, Inc. (Nasdaq: CPSS) (“CPS” or the “Company”) today announced operating results for its fourth quarter and year ended December 31, 2008.

Total revenues for the fourth quarter of 2008 decreased approximately $34.9 million, or 31.9%, to $74.6 million, compared to $109.5 million for the fourth quarter of 2007. Total operating expenses for the fourth quarter of 2008 were $111.9 million, an increase of $8.4 million, or 8.1%, as compared to $103.5 million for the 2007 period.

Net loss for the fourth quarter of 2008 was $(23.4) million, or $(1.22) per diluted share, compared to net income of $3.5 million, or $0.17 per diluted share, for the fourth quarter of 2007. The financial results for the fourth quarter of 2008 were negatively impacted by an increase in the provision for credit losses due to the weakening economy combined with reduced net interest margin as the managed portfolio has declined.

For the year ended December 31, 2008 total revenues decreased approximately $26.1 million, or 6.6%, to $368.4 million, compared to $394.6 million for the year ended December 31, 2007. Total operating expenses for the year ended December 31, 2008 were $411.9 million, an increase of $41.3 million, or 11.1%, as compared to $370.6 million for the year ended December 31, 2007.

Net loss for the full year 2008 was $(26.1) million, or $(1.36) per diluted share, compared to net income of $13.9 million, or $0.61 per diluted share, for 2007. As previously reported, the financial results for 2008 were also negatively impacted by the completion of the structured whole loan sale in September 2008, which resulted in a $14.0 million loss on sale.

During the fourth quarter of 2008, CPS purchased $7.3 million of contracts from dealers as compared to $33.6 million during the third quarter of 2008 and $265.8 million during the fourth quarter of 2007. For 2008, CPS purchased $296.8 million of contracts from dealers as compared to $1,282.3 million in 2007. The Company's managed receivables totaled $1,664.1 million as of December 31, 2008, a decrease of $462.1 million, or 21.7%, from $2,126.2 million as of December 31, 2007, as follows ($ in millions):

[Table Omitted]

Annualized net charge-offs during the December 2008 quarter were 9.97% of the average owned portfolio as compared to 6.34% during the 2007 quarter. Annualized net charge-offs for the full year 2008 were 7.74% of the average owned portfolio as compared to 5.26% for the full year 2007. Delinquencies greater than 30 days (including repossession inventory) were 8.59% of the total owned portfolio as of December 31, 2008, as compared to 6.31% as of December 31, 2007. The increase in net charge-off and delinquency percentages can be partly attributed to the aging of the portfolio and the decrease in the size of the managed portfolio as new contract purchases have not replaced portfolio run-off.

“2008 was a challenging period with the capital markets frozen for much of the year and the weakening economic picture,” said Charles E. Bradley, Jr., President and Chief Executive Officer. “We took several significant steps, however, to preserve liquidity and maintain our franchise. These included decreasing our monthly operating expenses, substantially repaying our warehouse credit lines, and greatly reducing new contract purchases. In addition, we raised the yield on our new contract purchases by over 500 basis points while significantly improving our credit metrics. Our current focus of maximizing portfolio collections and servicing our best dealer relationships should serve us well as the economy and capital markets stabilize and recover throughout 2009 and into 2010.”

Conference Call

CPS announced that it will hold a conference call next Tuesday, April 7, 2009, at 1:30 p.m. ET to discuss its quarterly results. Those wishing to participate by telephone may dial-in at 973-582-2717 approximately 10 minutes prior to the scheduled time.

A replay will be available between April 7, 2009 and April 14, 2009, beginning one hour after conclusion of the call, by dialing 800-642-1687 or 706-645-9291 for international participants, with pin number 93246086. A broadcast of the conference call will also be available live and for 30 days after the call via the Company’s web site at www.consumerportfolio.com and at www.streetevents.com.

About Consumer Portfolio Services, Inc.

Consumer Portfolio Services, Inc. is a specialty finance company engaged in purchasing and servicing new and used retail automobile contracts originated primarily by franchised automobile dealerships and to a lesser extent by select independent dealers of used automobiles in the United States. We serve as an alternative source of financing for dealers, facilitating sales to sub-prime customers, who have limited credit history, low income or past credit problems and who otherwise might not be able to obtain financing from traditional sources.