CONSUMER PORTFOLIO SERVICES, INC.

Previous wording

We were incorporated and began our operations in March 1991. From inception through June 30, 2025, we have originated a total of approximately $23.9 billion of automobile contracts, primarily by purchasing retail installment sales contracts from dealers, and to a lesser degree, by originating loans secured by automobiles directly with consumers. In addition, we acquired a total of approximately $822.3 million of automobile contracts in mergers and acquisitions in 2002, 2003, 2004 and 2011. Recent contract purchase volumes and managed portfolio levels are shown in the table below:

Current wording

We were incorporated and began our operations in March 1991. From inception through September 30, 2025, we have originated a total of approximately $24.3 billion of automobile contracts, primarily by purchasing retail installment sales contracts from dealers, and to a lesser degree, by originating loans secured by automobiles directly with consumers. In addition, we acquired a total of approximately $822.3 million of automobile contracts in mergers and acquisitions in 2002, 2003, 2004 and 2011. Recent contract purchase volumes and managed portfolio levels are shown in the table below:

Previous wording

In May 2021 we began purchasing some contracts for immediate sale to a third-party to whom we refer applications that don’t meet our lending criteria. We service all such contracts on behalf of the third-party. We earn fees for originating the receivable and also servicing fees on active accounts in the third-party portfolio. For the six months ended June 30, 2025, we originated $8.3 million under this third-party program. As of June 30, 2025, our managed portfolio includes $146.4 million of such third-party receivables.

Current wording

In May 2021 we began purchasing some contracts for immediate sale to a third-party to whom we refer applications that don’t meet our lending criteria. We service all such contracts on behalf of the third-party. We earn fees for originating the receivable and also servicing fees on active accounts in the third-party portfolio. For the nine months ended September 30, 2025, we originated $11.0 million under this third-party program. As of September 30, 2025, our managed portfolio includes $132.5 million of such third-party receivables.

Previous wording

Since 1994 we have conducted 105 term securitizations of automobile contracts that we originated. As of June 30, 2025, 17 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.

Current wording

Since 1994 we have conducted 106 term securitizations of automobile contracts that we originated. As of September 30, 2025, 18 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.

Previous wording

Certain of our securitization transactions and 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 June 30, 2025, we were in compliance with all such covenants.

Current wording

Certain of our securitization transactions and 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 events of default were to be accompanied by acceleration of such other indebtedness. As of September 30, 2025, we were in compliance with all such covenants.

Previous wording

Comparison of Operating Results for the three months ended June 30, 2025, with the three months ended June30, 2024

Current wording

Comparison of Operating Results for the three months ended September 30, 2025, with the three months ended September30, 2024

Previous wording

Revenues. During the three months ended June 30, 2025, our revenues were $109.8 million, an increase of $13.9 million, or 14.5% from the prior year revenue of $95.9 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 June 30, 2025, include a $3.0 million mark up to the recorded value of the finance receivables measured at fair value. The 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 a mark up for certain receivables and a mark down to the fair values of selected receivables. The net effect of the marks to the fair value resulted in a net mark up of $3.0 million. There was a $5.5 million mark up to the fair value portfolio in the prior year period.

Current wording

Revenues. During the three months ended September 30, 2025, our revenues were $108.4 million, an increase of $7.8 million, or 7.8% from the prior year revenue of $100.6 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 September 30, 2025, 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 $5.5 million mark up to the fair value portfolio in the prior year period.

Previous wording

Interest income for the six months ended June 30, 2025 increased $34.6 million, or 20.1%, to $207.3 million from $172.7 million in the prior year. The primary reason for the increase in interest income is the 18.6% increase in the average balance of our loan portfolio over the prior year period. The interest yield on our total loan portfolio increased from 11.3% in the prior year period to 11.4% in the current 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 six months ended June 30, 2025 and 2024:

Current wording

Interest income for the three months ended September 30, 2025, increased $14.0 million, or 15.0%, to $107.2 million from $93.2 million in the prior year. The primary reason for the increase in interest income is the 14.2% increase in the average balance of our loan portfolio over the prior year period. The interest yield on our total loan portfolio is 11.4% for both current and in the prior 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 September 30, 2025 and 2024:

Previous wording

Other income was $1.4 million forthe three months ended June 30, 2025, compared to $2.0 million for the comparable period in 2024. This 30.4% decrease was primarily driven by the decrease in origination and servicing fees we earned from third party receivables. These fees were $1.4 million for the quarter ended June 30, 2025, compared to $1.7 million in the prior year period.

Current wording

Other income was $1.3 million forthe three months ended September 30, 2025, compared to $1.9 million for the comparable period in 2024. This $667,000 decrease was primarily driven by the decrease in origination and servicing fees we earned from third party receivables. These fees were $1.2 million for the quarter ended September 30, 2025, compared to $1.6 million in the prior year period.

Previous wording

Total operating expenses were $102.8 million for the three months ended June 30, 2025, compared to $89.2 million for the prior period, an increase of $13.6 million, or 15.3%. The increase is primarily due to increases in interest expense.

Current wording

Total operating expenses were $101.4 million for the three months ended September 30, 2025, compared to $93.7 million for the prior period, an increase of $7.7 million, or 8.2%. The increase is primarily due to increases in interest expense.

Previous wording

Employee costs were $24.4 million during the three months ended June 30, 2025, compared to $23.7 million for the same quarter in the prior year, an increase of $637,000, or 2.7%. 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, June 30, 2025, and 2024:

Current wording

Employee costs were $22.5 million during the three months ended September 30, 2025, compared to $24.2 million for the same quarter in the prior year, a decrease of $1.7 million, or 7.0%. 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, September 30, 2025, and 2024:

Previous wording

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 was $13.2 million, a decrease of $77,000 from $13.3 million in the prior year period.

Current wording

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 $13.4 million, an increase of $145,000 from $13.3 million in the prior year period.

Previous wording

Interest expense for the three months ended June 30, 2025, was $58.7 million and represented 57.1% of total operating expenses, compared to $46.7 million in the previous year, when it was 52.4% of total operating expenses. The $12.0 million increase in interest expense compared to the prior year period was largely due to increases in the average balance of our securitization trust debt, warehouse credit line debt and residual interest financing debt. To a lesser extent, the increase is also due to the increase in the interest rate on our securitization trust debt.

Current wording

Interest expense for the three months ended September 30, 2025, was $59.1 million and represented 58.3% of total operating expenses, compared to $50.1 million in the previous year, when it was 53.4% of total operating expenses. The $9.0 million increase in interest expense compared to the prior year period was largely due to increases in the average balance of our securitization trust debt, warehouse credit line debt and residual interest financing debt. To a lesser extent, the increase is also due to the increase in the interest rate on our securitization trust debt.

Previous wording

Interest on securitization trust debt increased by $7.6 million for the three months ended June 30, 2025, compared to the prior period. The average balance of securitization trust debt increased to $2,811.9 million for the three months ended June 30, 2025, compared to $2,555.2 million for the three months ended June 30, 2024. The annualized average rate on our securitization trust debt was 6.5% for the three months ended June 30, 2025, compared to 5.9% 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:

Current wording

Interest on securitization trust debt increased by $4.6 million for the three months ended September 30, 2025, compared to the prior period. The average balance of securitization trust debt increased to $2.830 million for the three months ended September 30, 2025, compared to $2,706.3 million for the three months ended September 30, 2024. The annualized average rate on our securitization trust debt was 6.7% for the three months ended September 30, 2025, compared to 6.4% 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:

Previous wording

Interest expense on warehouse credit line debt increased by $2.5 million to $8.2 million for the three months ended June 30, 2025, compared to $5.7 million in the prior year period. The increase was primarily due to the higher utilization of our credit lines during the quarter compared to last year. The average balance of our warehouse debt was $353.2 million during the three months ended June 30, 2025, compared to $215.4 million for the same period in 2024. The annualized average rate on our credit line debt was 9.3% for the three months ended June 30, 2025, compared to 10.6% in the prior year period.

Current wording

Interest expense on warehouse credit line debt increased by $2.7 million to $6.7 million for the three months ended September 30, 2025, compared to $4.0 million in the prior year period. The increase was primarily due to the higher utilization of our credit lines during the quarter compared to last year. The average balance of our warehouse debt was $284.6 million during the three months ended September 30, 2025, compared to $132.3 million for the same period in 2024. The annualized average rate on our credit line debt was 9.4% for the three months ended September 30, 2025, compared to 12.1% in the prior year period.

Previous wording

Interest expense on subordinated renewable notes was $684,000 for the three months ended June 30, 2025. The average balance of the outstanding subordinated debt was $28.0 million for the three months June 30, 2025, compared to $22.3 million for the prior year period. The average yield of subordinated notes is 9.7% for both current and in the prior period.

Current wording

Interest expense on subordinated renewable notes was $722,000 for the three months ended September 30, 2025. The average balance of the outstanding subordinated debt was $29.0 million for the three months September 30, 2025, compared to $23.2 million for the prior year period. The average yield of subordinated notes is 10.0% for both current and the prior period.

Previous wording

In June 2021, March 2024, and again on June 30, 2025, we completed a securitization of residual interests from other previously issued securitizations in the amount of $50 million, $50 million, and $65 million, respectively. Interest expense for these residual interest financings was $4.2 million for the three months ended June 30, 2025, compared to 2.5 million for the same period in 2024.

Current wording

In June 2021, March 2024, and again on March 20, 2025, we completed a securitization of residual interests from other previously issued securitizations in the amount of $50 million, $50 million, and $65 million, respectively. Interest expense for these residual interest financings was $4.1 million for the three months ended September 30, 2025, compared to 2.5 million for the same period in 2024.

Previous wording

For the three months ended June 30, 2025, we recorded a reduction to provision for credit losses on finance receivables in the amount of $781,000. The reserve decrease was primarily due to better than expected recovery rates and a decrease in lifetime expected credit losses resulting from improved credit performance as our previous estimates for future losses exceeded actual incurred losses. This compares to $2.0 million in reductions to provision for credit losses for the three months ended June 30, 2024.

Current wording

For the three months ended September 30, 2025, we recorded a reduction to provision for credit losses on finance receivables in the amount of $712,000. The reserve decrease was primarily due to better-than-expected recovery rates and a decrease in lifetime expected credit losses resulting from improved credit performance as our previous estimates for future losses exceeded actual incurred losses. This compares to $994,000 in reductions to provision for credit losses for the three months ended September 30, 2024.

Previous wording

Sales expenses consist primarily of commission-based compensation paid to our employee sales representatives. Our sales representatives earn a salary plus commissions based on volume of contract purchases. Sales expense decreased to $5.7 million during the three months ended June 30, 2025 from $5.9 million for the same quarter in 2024. We purchased $433.0 million of new contracts during the three months ended June 30, 2025 compared to $431.9 million in the prior year period.

Current wording

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 decreased by $41,000 to $5.7 million during the three months ended September 30, 2025, from $5.7 million for the same quarter in 2024. We purchased $391.1 million of new contracts during the three months ended September 30, 2025, compared to $445.9 million in the prior year period.

Previous wording

Occupancy expenses was $1.4 million for the three months ending June 30, 2025, which is up from $1.3 million in the second quarter of 2024.

Current wording

Occupancy expenses were $1.2 million for the three months ending September 30, 2025, which is down from $1.3 million in the third quarter of 2024.

Previous wording

For the three months ended June 30, 2025, we recorded income tax expense of $2.2 million, representing a 31% effective tax rate. In the prior period, our income tax expense was $2.0 million, representing a 30% effective tax rate.

Current wording

For the three months ended September 30, 2025, we recorded income tax expense of $2.2 million, representing a 31% effective tax rate. In the prior period, our income tax expense was $2.1 million, representing a 30% effective tax rate.

Previous wording

Comparison of Operating Results for the six months ended June 30, 2025 with the six months ended June 30, 2024

Current wording

Comparison of Operating Results for the nine months ended September 30, 2025 with the nine months ended September 30, 2024

Previous wording

Revenues. During the six months ended June 30, 2025, our revenues were $216.6 million, an increase of $29.0 million, or 15.5%, from the prior year revenue of $187.6 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 six months ended June 30, 2025 include a $6.5 million mark up to the recorded value of the finance receivables measured at fair value. The 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 a mark up for certain receivables and a mark down to the fair values of selected receivables. The net effect of the marks to the fair value resulted in a net mark up of $6.5 million.. There was a $10.5 million mark up to the fair value portfolio in the prior year period.

Current wording

Revenues. During the nine months ended September 30, 2025, our revenues were $325.1 million, an increase of $36.9 million, or 12.8%, from the prior year revenue of $288.2 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 nine months ended September 30, 2025 include a $6.5 million mark up to the recorded value of the finance receivables measured at fair value. The 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 a mark up for certain receivables and a mark down to the fair values of selected receivables. The net effect of the marks to the fair value resulted in a net mark up of $6.5 million. There was a $16.0 million mark up to the fair value portfolio in the prior year period.

Previous wording

Interest income for the three months ended June 30, 2025, increased $17.0 million, or 19.2%, to $105.4 million from $88.4 million in the prior year. The primary reason for the increase in interest income is the 18.0% increase in the average balance of our loan portfolio over the prior year period. The interest yield on our total loan portfolio increased from 11.3% in the prior year period to 11.4% in the current 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 June 30, 2025 and 2024:

Current wording

Interest income for the nine months ended September 30, 2025 increased $48.7 million, or 18.3%, to $314.5 million from $265.8 million in the prior year. The primary reason for the increase in interest income is the 17.1% increase in the average balance of our loan portfolio over the prior year period. The interest yield on our total loan portfolio increased from 11.3% in the prior year period to 11.4% in the current 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 nine months ended September 30, 2025 and 2024:

Previous wording

Other income was $2.8 million forthe six months ended June 30, 2025 compared to $4.5 million for the comparable period in 2024. This 36.4% decrease was primarily driven by the decrease in origination and servicing fees we earned from third party receivables. These fees were $2.8 million for the six months ended June 30, 2025 compared to $3.8 million in the prior year period.

Current wording

Other income was $4.1 million forthe nine months ended September 30, 2025 compared to $6.4 million for the comparable period in 2024. This $2.3 million decrease was primarily driven by the decrease in origination and servicing fees we earned from third party receivables. These fees were $4.1 million for the nine months ended September 30, 2025 compared to $5.5 million in the prior year period.

Previous wording

Total operating expenses were $202.9 million for the six months ended June 30, 2025, compared to $174.4 million for the prior period, an increase of $28.5 million, or 16.3%. The increase is primarily due to increases in interest expense and a decrease in the reduction to provision for credit losses. To a lesser extent, increases to employee costs and sales expenses also contributed to the increase in operating expenses during the period.

Current wording

Total operating expenses were $304.3 million for the nine months ended September 30, 2025, compared to $268.1 million for the prior period, an increase of $36.2 million, or 13.5% The increase is primarily due to increases in interest expense and a decrease in the reduction to provision for credit losses. To a lesser extent, increases to sales expenses also contributed to the increase in operating expenses during the period.

Previous wording

Employee costs were $49.4 million during the six months ended June 30, 2025 compared to $48.1 million for the same period in the prior year. The table below summarizes our employees by category as well as contract purchases and units in our managed portfolio as of, and for the six-month periods ended, June 30, 2025 and 2024:

Current wording

Employee costs were $71.9 million during the nine months ended September 30, 2025 compared to $72.3 million for the same period in the prior year. The table below summarizes our employees by category as well as contract purchases and units in our managed portfolio as of, and for the nine-month periods ended, September 30, 2025 and 2024:

Previous wording

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 $26.7 million for the six months ended June 30, 2025, an increase of $287,000 from $27.0 million in the prior year period.

Current wording

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 $40.1 million for the nine months ended September 30, 2025, a decrease of $141,000 from $40.3 million in the prior year period.

Previous wording

Interest expense for the six months ended June 30, 2025 was $113.6 million, compared to $88.7 million in the previous year, an increase of $24.9 million.

Current wording

Interest expense for the nine months ended September 30, 2025, was $172.7 million, compared to $138.7 million in the previous year, an increase of $34.0 million.

Previous wording

Interest on securitization trust debt increased by $16.7 million for the six months ended June 30, 2025 compared to the prior period. The average balance of securitization trust debt increased to $2,836.9 million for the six months ended June 30, 2025 compared to $2,471.7 million for the six months ended June 30, 2024. The annualized average rate on our securitization trust debt was 6.4% for the six months ended June 30, 2025 compared to 6.0% in the prior year period. The blended interest rates on new term securitizations have been increasing since 2022. 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:

Current wording

Interest on securitization trust debt increased by $21.3 million for the nine months ended September 30, 2025, compared to the prior period. The average balance of securitization trust debt increased to $2,834.4 million for the nine months ended September 30, 2025, compared to $2,549.9 million for the nine months ended September 30, 2024. The annualized average rate on our securitization trust debt was 6.5% for the nine months ended September 30, 2025, compared to 6.1% in the prior year period. The blended interest rates on new term securitizations have been increasing since 2022. 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:

Previous wording

Interest expense on warehouse credit line debt increased by $4.7 million to $14.7 million for the six months ended June 30, 2025 compared to $10.0 million in the prior year period. The increase was due to higher rates on the debt during the six month period compared to last year. The average balance of our warehouse debt was $314.7 million during the six months ended June 30, 2025 compared to $190.1 million for the same period in 2024. The annualized average rate on our credit line debt was 9.4% for the six months ended June 30, 2025 compared to 10.5% in the prior year period.

Current wording

Interest expense on warehouse credit line debt increased by $7.4 million to $21.4 million for the nine months ended September 30, 2025 compared to $14.0 million in the prior year period. The increase was due to higher rates on the debt during the nine month period compared to last year. The average balance of our warehouse debt was $304.6 million during the nine months ended September 30, 2025 compared to $170.7 million for the same period in 2024. The annualized average rate on our credit line debt was 9.4% for the nine months ended September 30, 2025 compared to 11.0% in the prior year period.

Previous wording

Interest expense on subordinated renewable notes was $1.3 million for the six months ended June 30, 2025. The average balance of the outstanding subordinated debt increased by $5.9 million to $27.5 million for the six months ended June 30, 2025 compared to $21.6 million for the prior year. The average yield of subordinated notes was 9.7% in the current and prior period.

Current wording

Interest expense on subordinated renewable notes was $2.1 million for the nine months ended September 30, 2025. The average balance of the outstanding subordinated debt increased by $5.9 million to $28.0 million for the nine months ended September 30, 2025 compared to $22.1 million for the prior year. The average yield of subordinated notes was 9.8% in the current and prior period.

Previous wording

In June 2021, we completed a residual interest financing of our residual interests from previously issued securitizations in the amount of $50.0 million. In March 2024, we completed a new residual interest financing of our residual interests from previously issued securitizations in the amount of $50.0 million. Interest expense on the residual interest financing was $7.0 million for the six months ended June 30, 2025 compared to $3.7 million for the same period in 2024.

Current wording

In June 2021, March 2024, and again on March 20, 2025, we completed a securitization of residual interests from other previously issued securitizations in the amount of $50 million, $50 million, and $65 million, respectively. Interest expense on the residual interest financing was $11.0 million for the nine months ended September 30, 2025 compared to $6.2 million for the same period in 2024.

Previous wording

The following table presents the components of interest income and interest expense and a net interest yield analysis for the six-month periods ended June 30, 2025 and 2024:

Current wording

The following table presents the components of interest income and interest expense and a net interest yield analysis for the nine-month periods ended September 30, 2025 and 2024:

Previous wording

For the six months ended June 30, 2025, we recorded a reduction to provision for credit losses on finance receivables in the amount of $1.8 million. The reserve decrease was primarily due to better than expected recovery rates and a decrease in lifetime expected credit losses resulting from improved credit performance as our previous estimates for future losses exceeded actual incurred losses. This compares to $3.6 million in reductions to provision for credit losses for the six months ended June 30, 2024.

Current wording

For the nine months ended September 30, 2025, we recorded a reduction to provision for credit losses on finance receivables in the amount of $2.5 million. The reserve decrease was primarily due to better-than-expected recovery rates and a decrease in lifetime expected credit losses resulting from improved credit performance as our previous estimates for future losses exceeded actual losses incurred. This compares to $4.6 million in reductions to provision for credit losses for the nine months ended September 30, 2024.

Previous wording

Sales expenses consist primarily of commission-based compensation paid to our employee sales representatives. Our sales representatives earn a salary plus commissions based on volume of contract purchases and sales of ancillary products and services that we offer our dealers. Sales expense increased to $11.6 million during the six months ended June 30, 2025 from $10.8 million in the same period in 2024. We purchased $884.2 million of new contracts during the six months ended June 30, 2025 compared to $778.2 million in the prior year period.

Current wording

Sales expenses consist primarily of commission-based compensation paid to our employee sales representatives. Our sales representatives earn a salary plus commissions based on volume of contract purchases and sales of ancillary products and services that we offer our dealers. Sales expense increased to $17.3 million during the nine months ended September 30, 2025 from $16.5 million in the same period in 2024. We purchased $1,275.3 million of new contracts during the nine months ended September 30, 2025 compared to $1,224.1 million in the prior year period.

Previous wording

Occupancy expenses was $2.8 million for the six months ending June 30, 2025, which is down from $3.0 million for the same period in 2024.

Current wording

Occupancy expenses were $4.0 million for the nine months ending September 30, 2025, which is down from $4.3 million for the same period in 2024.

Previous wording

Depreciation and amortization expenses increased to $249,000 compared to $221,000 in the previous year.

Current wording

Depreciation and amortization expenses increased to $705,000 compared to $650,000 in the previous year.

Previous wording

For the six months ended June 30, 2025, we recorded income tax expense of $4.3 million, representing a 31% effective tax rate. In the prior period, our income tax expense was $4.0 million, representing a 30% effective tax rate.

Current wording

For the nine months ended September 30, 2025, we recorded income tax expense of $6.4 million, representing a 31% effective tax rate. In the prior period, our income tax expense was $6.0 million, representing a 30% effective tax rate.

Previous wording

(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. June 30, 2025, and June 30, 2024, percentages represent three months ended June 30, 2025, and June 30, 2024, annualized. December 31, 2024, represents 12 months ended December 31, 2024.

Current wording

(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. September 30, 2025, and September 30, 2024, percentages represent nine months ended September 30, 2025, and September 30, 2024, annualized. December 31, 2024, represents 12 months ended December 31, 2024.

Previous wording

We view these results as a confirmation of the effectiveness of our extension program. For example, of the accounts granted extensions in 2019, 57.8% were either paid in full or active and performing as of June 30, 2025. Each of these successful accounts represent continued payments of interest and principal (including payment in full in many cases), where without the extension we likely would have incurred a substantial loss and no interest revenue after the extension.

Current wording

We view these results as a confirmation of the effectiveness of our extension program. For example, of the accounts granted extensions in 2019, 57.6% were either paid in full or active and performing as of September 30, 2025. Each of these successful accounts represent continued payments of interest and principal (including payment in full in many cases), where without the extension we likely would have incurred a substantial loss and no interest revenue after the extension.