Good day, everyone, and welcome to the Consumer Portfolio Services 2024 fourth quarter operating results conference call. Today's call is being recorded. Before we begin, management has asked me to inform you that this conference call may contain forward-looking statements. Any statements made during this call that are not statements of historical facts may be deemed forward-looking statements. Statements regarding current or historical valuation of receivables because dependent on estimates of future events, also are forward-looking statements. All such forward-looking statements are subject to risks that could cause actual results to differ materially from those projected. I refer you to the company's annual report filed March 15th for further clarification. The company assumes no obligation to update publicly any forward-looking statements, whether as a result of new information, further events, or otherwise. With us here is Mr. Charles Bradley, Chief Executive Officer, Mr. Danny Bharwani, Chief Financial Officer, and Mr. Mike Lavin, President and Chief Operating Officer of Consumer Portfolio Services. I would now like to turn the call over to Mr. Bradley.

Thank you, and welcome everyone to our fourth quarter and year-end conference call. I think looking back in the fourth quarter and the whole year, 2024 was a year of what we will loosely call cautious growth. While we waited to prove out the changes in credit. As most people know and certainly everyone in the industry, 2022 was a very difficult year and even parts of 2023, in terms of credit performance. And so for the most part, we had bad credit. And so now it appears, you know, we thought sort of the first certainly, 2022 was not particularly great. The beginning of 2023 was not particularly great, but the end of 2023 has now proven to be much better. And all of 2024 is proving out to be much better. So we finally made a distinctive change in terms of the credit approach. Which sets us up. And part of what we did while we were waiting for the credit to improve was to set ourselves up to be able to grow more aggressively in the coming year. So we actually did all that. We now have a better credit performance. Our originations growth was not quite as strong as the year before, but still very good. And again, we have sort of set the stage for what could be a very good year in 2025. But that was really the focus of 2024. I will touch on some more highlights on that a little bit later. But for now, I will turn the conference call over to Danny Bharwani.

Thank you, Brad. So revenues for the quarter were $105.3 million, which is a 5% increase over the $100.6 million of revenues in our third quarter. And it is a 14% increase from the $92 million for the fourth quarter of 2023. For the year, $393.5 million of revenues is a 12% increase over the $352 million revenues in 2023. This increase in revenues being driven by strong growth in loan originations. For the quarter, we originated $458 million in new auto loans, which is a 52% increase over the $302 million in the fourth quarter of 2023. Loan originations for the year $1.68 billion is a 24% increase from the $1.36 billion in 2023. This is then in turn driving an increase in our fair value portfolio, which now sits at $3.5 billion and is yielding 11.3%. Remembering that this 11.3% yield is net of losses. The expenses for the quarter were $98 million compared to $82.1 million in the fourth quarter of 2023. For the year, expenses were $366.1 million. Which is 26% higher than the $290.9 million in 2023. The expenses in the for the year period, 2024 versus 2023 include adjustments to our CECL portfolio for excess loan provisions that amounted to $5.3 million in the 2024 period. Compared to $22.3 million in the 2023 period. So there is a big decrease in these loan provision adjustments on our legacy CECL portfolio from 2023 to 2024. The other big driver of expenses is the interest expense. Which is still continues to be higher than the prior year both on a quarter and year basis. This can largely be attributed to higher rates, but also in part to our portfolio growth, which is driving increasing our securitization debt. Pretax earnings for the quarter is $7.4 million. Is…

Thanks, Danny. I will run through some operational notes here. As Danny mentioned, we had a really good fourth quarter in originations. And that was a 41% increase over the fourth quarter of originations in 2023. Danny also mentioned we had a great originations year in 2024, which was actually a 24% increase recent growth, from our originations in 2023. So 24% increase in growth was quite good. We ended the year 2024 with a portfolio balance of $3.41 billion, which is a company record, which is up from $3.32 billion at the end of 2023. The growth in originations increase was a result of a few factors. First, as Brad mentioned, we sort of set the growth up in 2024 and 2023 as we hired approximately 25 new sales reps in 2023 and opened some new territories. Typically, it takes about nine months for those reps to season. And get their pipeline full and develop the territory. And we started to see the impact of those hires at the tail end at the tail end of 2023 and mostly through the year 2024. Of note, in 2024, we hired 42 new sales reps and opened new territories. In anticipation of our growth goals for 2025. So we are cycling up or we are ramping up our market share and our sales reps a year in advance of our growth anticipation. Second, we were able to grow our large dealer group base, which we define as ten car lots per dealer. Ten car lots plus per dealer, We took it from 20% of our originations to 28% of originations We were able to land several large dealer groups with over 100 car lots per dealer and also increased our business with our existing large dealer group base. We look forward…

Thanks, Mike. So looking back you can tell we did a lot in 2024 in terms of setting ourselves for future growth, even though we did grow quite substantially in 2024. Again, probably the primary focus in 2024 was to make sure that the credit performance was going to be what we expected. Currently, the portfolio is over almost 60%. It is from 2024 forward, all better credit than before. The 2022 vintages, which are probably the weakest, is around 20%. As that peels off, both that paper did not perform as well, but also it is expensive in terms of the capital markets. So we are in a good trend in terms of that. This or lower cost of funds paper, occupies more and more of the portfolio. That was really an important part. It seems to have worked really well for us. As I have also mentioned, we spent a lot of time gearing up for growth this year. That should work out just fine. So in terms of the capital markets, securitization is doing very well. We continue to have very good success with all securitizations. Capital markets remain very strong. It appears there is very good access to money in terms of growth capital, which is necessary for us to keep going. So in many different fronts, we are in a very good spot as we ended 2024. And move into 2025. So I think going forward, you know, we should hopefully put the 2022 vintages and their performance behind us almost, you know, by the end of 2025 certainly, they will be gone and not important. Just then we layer in another very good growth year 2025. The NIM is going to continue to improve. We are going to benefit from the structure we have already put in place so that as the portfolio grows, expenses should be even less percentage as we go forward. So, again, across all fronts, we are in very good shape. We are not particularly worried about the economy, remain strong. As Mike pointed out, the unemployment rate looks very favorable going forward. Something we care about almost more than anything else. So all good, all steam ahead, with that, I look forward to having the next call in April, which is not too far away. Thank you all for attending today, and have a wonderful day.

Thank you. This concludes today's teleconference. A replay will be available beginning two hours from now for twelve months via the company's website at www.consumerportfolio.com. Please disconnect your lines at this time, and have a wonderful day.