Consumer Portfolio Services Inc (CPSS) 2018 Q2 法說會逐字稿

Good day, everyone, and welcome to the Consumer Portfolio Services 2014 (sic)[2018] First (sic) [Second] Quarter Operating Results Conference Call. Today's call is being recorded. Before we begin, management has asked me to inform you that the conference call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements made during this call that are not statements of historical fact may be deemed to be forward-looking statements. Such forward-looking statements are subject to certain risks that could cause actual results to differ materially from those projected. I refer you to the company's SEC filings 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 now is Mr. Charles Bradley, Chief Executive Officer; and Mr. Jeff Fritz, Chief Financial Officer.

I will now turn the call over to Mr. Bradley.

Thank you, and thank you, everyone, for joining us on our second quarter conference call.

I think in looking at the quarter, it's hard to be somewhat repetitive, but we're going to be somewhat repetitive, and it's about what we would expect. We are very much in what I'll loosely call a holding pattern. We've been talking about the industry every call for the last 2 years in terms of what the industry is doing. And at this point I think the real focus is on the industry.

In terms of the company, we think the market is still very competitive. There's still very aggressive buying patterns from our competitors. And there -- so for us, in sort of the light of those 2 things, we really continue just to focus on credit and collections. We want to improve what we buy. We want to make sure we're buying the best paper possible and probably just continue to improve the trend in terms of what we buy. But also on collections, we've been focused on collections for years. At this point, I think we've got it all going the right way, and we're beginning, slowly but surely, to see some results. We, again, want that to continue. And we worked on all the different branches and all the different aspects of collections to make that happen, and we are seeing good results.

Charge-offs and delinquencies were basically flat. I think that's actually pretty good, given the fact that we're not growing. If you grow your portfolio, it has a tendency to amass those numbers rather effectively. So for us to be able to maintain those numbers in a portfolio that is not growing, then we think we're doing pretty good. And lastly, we did do a $40 million residual deal. We haven't done one in a few years. But when we thought the timing was pretty good, the cost of funds was pretty good, or to put it in another way, the cost of funds in terms of on that deal was the best we've borrowed long-term capital ever in the history of the company, by a lot. Normally, that kind of capital costs something in a double-digit kind of number, and this was substantially less than that. So for us, that was an excellent deal and one we sort of almost couldn't turn down in terms of the opportunity. That will provide money, some for working capital and some for hopefully a rainy day to do something, if we can get some results in the industry going forward.

And I'll talk a little more about all those different things after we go through financials, and I'll turn it over to Jeff to do that.

Thank you, Brad. Welcome, everybody. We'll begin with the revenues, $99.4 million for the quarter. That's down 4% from the first quarter this year of $103.6 million and down 10% from the second quarter of last year. For the 6 months, $202.9 million. That's down 7% for the 6-month period in 2017. So I mean, you can see kind of what's happening here. There are a couple of things that influence these numbers. First of all, portfolio sequentially and year-over-year is actually down slightly as a result of the originations volumes that we've been doing. But more significantly, with the adoption of fair value accounting effective with the 2018 originations, the revenue recognition on that segment of the portfolio is net of consideration for the impact of losses. And so the trade-off is you recognize a little bit less revenue, but as you'll see in a minute, and you may have already noticed, there's no provision for credit losses on those fair value receivables.

Looking at the expenses, $94.7 million for the quarter, that's down 4% from the first quarter this year; however, up 7% from $102.1 million for the second quarter last year.

For the 6 months, $193.7 million is up about 4% for the first 6 months of last year. So we've got some modest increase in a couple of core categories. We have what looks like a significant increase year-over-year in employee costs. But I think, as we mentioned on the last call, again, the fair value accounting requires or results in immediate recognition of significant employee costs related to the originations of the receivables that would otherwise be deferred over the life of the receivables under the traditional accounting.

Looking at the provision for credit losses. $35.5 million is down 12% from the first quarter this year, down 27% from the second quarter of 2017. And on a year-to-date basis, provisions for credit loss is $76 million, down 21% for the first 6 months of last year. As we've talked about, no provisions on the fair value portfolio. The existing portfolio is seasoning and is going to continue to run out as the provisions and the allowance for that should also decrease more or less on the same basis.

Pretax earnings, $4.7 million for the quarter. That's up 2% from $4.6 million for the first quarter of this year, but down 41% compared to the second quarter of last year. 6 months' $9.2 million in pretax earnings is down 41% compared to $15.7 million in last year's 6-month period. Net income of $3.2 million, that's up 3% from the first quarter this year, but down 30% compared to $4.6 million for the second quarter of 2017. 6-month numbers for this year, net income $6.3 million is down 31% compared to the $9.1 million for last year.

Diluted earnings per share of $0.13 is up $0.01 or 8% compared to the first quarter of this year and down 24% compared to $0.17 in the second quarter of last year. Year-to-date, diluted earnings per share $0.25 is off $0.07 compared to $0.32 for the 6 months last year.

Moving on to the balance sheet. As Brad mentioned, we did, in May, in the second quarter this year, complete the $40 million residual financing. That's a significant boost to our liquidity position. That doesn't manifest itself directly when you look at the balance sheet cash. Essentially, what it allows us to do is to hold more receivables that are in the -- that we've holding them prior to securitization financing and allows us to use the warehouse facilities a little bit less and saving a couple of bucks on warehouse financing. The other thing you notice when you look at the balance sheet, you can see we've make a distinction between the finance receivables and the allowance for the finance receivables, which are both down about 10% in the sequential quarter and almost 20% year-over-year. And in place of that reduction in that asset class, we have this growing asset class of finance receivables at fair value, which now represent about 20% of the managed portfolio.

Otherwise, the only sort of difference in the balance sheet is you see the line for residual interest financing, which represents the $40 million transaction that Brad alluded to.

If we look at some of the other performance metrics. The net interest margin for the quarter was $74.2 million. That's down 7% from the first quarter of this year and down 15% from the second quarter of last year. For the 6 months, $153.7 million is down 11% for the first 6 months of last year. The blended cost of all the asset-backed securitization debt on the balance sheet for the quarter is about 4.2%, and that compares to -- it's an increase compared to 3.8% a year ago. And so you got a couple of things going on in the asset-backed market. The benchmarks have certainly gone up pretty consistently, or regularly, throughout the last 18 months or so. And we've been able to offset a significant amount of that with somewhat better credit spread execution, but we've certainly seen a general rise in the cost of funds of the asset-backed debt.

The risk-adjusted margin, which takes into account the provision for credit losses, $38.6 million is actually down 1% from the first quarter of this year, but up about 1% from the first quarter of last year. Similarly, up 1% for the 6-month numbers. So what you see there -- what we see there is that the reduction in the provision expense has partially offset the lower net spreads as a result, of the somewhat higher cost of funds.

Core operating expenses were down just very slightly, 1%, at $34 million for the second quarter compared to the first quarter, but they're up about 12% compared to $30 million a year ago. For the 6 months, core operating expenses $68 million is up 12% compared to the 6-month period last year. Again, a significant component of that is the employee costs, which were deferrable in the previous year but are not deferrable in the current period does represent approximately $3 million worth of costs that we recognized this year that we could not defer.

The core operating expenses as a percent of the managed portfolio, 5.8%, is down slightly from 5.9% in the March quarter this year and down about 12% compared to 5.2% in the second quarter last year. The 6-month annualized number is 5.9% compared to 5.2% in the 6 months last year. Again, a smaller managed portfolio is contributing somewhat to that ratio, as well as somewhat higher costs.

Then return on managed assets, pretax, 0.8% for the June quarter is flat with the first quarter and down from about 1.4% in the second quarter last year, and the year-to-date number, again, it's the same, 0.8% compared to 1.4% last year. Fair value and the flat portfolio all contributing to those trends.

Looking at the credit performance metrics briefly. The delinquency number is 10% compared to 8.7% in March and 9.6% a year ago. The losses, 7.5% -- 7.6% are actually down from the first quarter of 8.2% this year. So all these numbers reflect, I think, what Brad alluded to, which was pretty reasonable stability in the servicing operation. The credit performance, might be seeing a little seasonal increase here in the second quarter. But for the most part, I think, these are in line with our expectations. Just going back and looking at the asset-backed market briefly. I know I talked about the compressed spreads. We -- our second quarter deal, we completed in April, and that was 2018-B, and it was $202 million. We had a 3.98% blended coupon, and we had a just slightly higher spread execution compared to the January deal. But then, really, our third quarter deal, which we completed just a couple of weeks ago, although the all-in blended coupon was a little bit higher, we actually had better spread execution in that deal, a July deal, than we had in the April deal. So I think the observation there is that the asset-backed markets continue to be very receptive to our bond offerings, and it continues to be a very bright spot in the business.

And with that, I'll turn it back over to Brad.

Thank you, Jeff. And talking about the company and the departments. Marketing, there was a time when we thought that our business become a bit of a commodity. With all the automation the dealers had, things like DealerTrack and such, we really thought that if we had the best product, you'd just get the business. That turned out to not be so true. It turns out being in the dealership, working with the dealers is really the best route to getting their business. It doesn't quite follow the footprint of, gee, everything is automated and easy, but nonetheless. So we've had a little bit of a focus to switch back to put more boots on the ground, more people in the field, and that's been our focus this year and it's becoming more effective. Obviously, if you can get more people in those different cities and they're doing -- getting the results we would like, we'll be able to grow that way. So we really can't grow competitively, as we'll get to in a minute, but we can grow by adding more people. So one of the focuses is to get more folks out there, grow that national footprint as much as we can.

In terms of originations. Originations is doing just fine. They can buy as much as we can throw at them, the problem is trying to get enough stuff to come through the door. With that, we've been focused on improving our scoring model, trying to tighten certain areas, find better areas that are performing really well and maybe loosening those slightly. But the 2 together with -- improving the model and keeping originations as the gatekeeper for good credit, is the effective combination we've always had and will continue to work on.

In Collections, as I mentioned earlier, we now think we've got everybody where they're supposed to be. We've got the right staffs. We've got the right management and the right staffing. And so we're really beginning to get a hold of what we want to do. If we were growing, the numbers would look wonderful. The fact that we're not really growing, the numbers still look good, but not great. So we're going to continue to work on that, and hopefully, the numbers will improve even without growth. And hopefully, sometime sooner than later, we'll get to grow again, and then we'll be able to improve that much more dramatically. But either way, Collections appears to be going the right way, and we're very happy with those results.

In terms of securitization, the market still is very strong, as much as the cost of funds, as Jeff alluded to, and I might have mentioned earlier, continues to go up quarter-by-quarter, little by little. It's still not an overly expensive market, but it is substantially higher than it was before. But more importantly at some level is the ease of execution is still there. The capital markets are wide open for doing securitizations. The CPS product is very well received. We have no problem getting those deals done. And so -- and the fact that we were able to go out and do a residual deal fairly easily is also a good thing. And the fact that, like I mentioned earlier, the cost of funds in that deal was the lowest we've ever had for raising that kind of capital shows you that there are parts of this market that we can really work in and do good things with.

Having said that, now we can move on to the industry. And the industry is becoming more interesting every day, and we might also say finally, it's becoming more interesting. Because we've been waiting now for what seems like forever, but probably is more like 2 years to really see. We've been -- everyone in the industry, or people we know in the industry is talking about consolidation and has been for years now. It certainly appears that maybe we're finally getting very close to those things happening.

With sort of interest and just to throw some numbers out there. Our APR a couple of years ago was 19.5%. Generally, for a long, long time, the APR has been in those high 19s. Today, it's dropped into the high 18s. Our acquisition fee, which used to be something like 1 point, is now almost negative 1 point. And so if you look at those numbers, and certainly, CPS is in a position, being in the industry for so long, we sort of could be sort of maybe the middle ground of the whole world out there. But for us, this hearkens back to the time when the banks were in. Only when the banks, who had lower cost of funds, when they were competing with us, were these numbers almost exactly the same as they are today. Now what's interesting is, there aren't any real banks competing with us. Certainly, Santander Consumer is a bank. But for the most part, everybody is still doing the same thing. Everybody is getting their money or using their funding through securitizations. So everybody is playing in that market. So on the one hand, the price of securitizations is creeping up. It's up almost a full point from a couple of years ago, like 3 years ago, and it's up almost 0.5 point from a year ago. So on the one hand, the competitive nature of pricing, both acquisition fee and APR, is going down, yet the cost of doing business is going up in terms of your securitization costs. So that shows you that the margin pressure within the industry is getting more and more interesting every day. And yet, with the car industry slowing down and car dealers margins' being pressed, you kind of wonder where all the business is going. Yet a lot of people out there are growing. And a lot of the people out there, as everyone knows, need to grow. There is probably a tier of large players and then a tier of medium players. For the most part, a couple of years ago, none of them were making any money. Now they're all starting to grow. But the reason they're doing well is because they're growing so fast. Tremendous growth will show much better improvement in delinquencies and losses. It can show -- if you're buying a lot of paper, you can make some money. But everybody said, these companies out there need to do something, whether it's go public, whether it's consolidate, whether it needs to come up with a model that works so they can get bought. Remember that most of these companies today are backed by PE money. And so we want to see how this goes. It's certainly no -- it's certainly common knowledge Santander's Consumer USA put their numbers out the other day. If you -- what's a little interesting, at least we thought, is 1/3 of their portfolio is Chrysler, but 2/3 of their originations is Chrysler. And so the extent they get that deal done, that will change the dynamics of that business a lot. And so we're very interested to see, that seems to be in negotiations today, so probably -- Santander Consumer USA is the largest player in our industry, one of our direct competitors. Having some result there will be very interesting to see how that plays for the industry and how that plays for us. There is other companies out there that are looking to do things too, whether it's go public or make some change. And again, they all seem to be growing and doing different things. Sooner or later, this is going to have to change and come to a head. We think that time is fast approaching.

Unfortunately for us, we're not in a position. We've been -- we don't have PE money that we need to do something with. We have been profitable for a long, long time. We would like to grow again; we'd like to get more profitable. We'd like to get our stock price up. It is very difficult to do that. If you take all these little pieces I just described, it is a very tough environment to sort of grow, sort of what we feel is the correct way. But we're working on it. We're doing everything we can so that when these things change, which we think, hopefully, will be in 6 months or a year or less, we'll be in a position to take advantage of the changes in the marketplace and really get back in the game in a big way. But for now, we're just going to have to wait and see. It is interesting that, again, there aren't big banks playing, yet the costs -- the competitive nature is like then. So, we'll see where we go.

In terms of the overall economy, we probably think the economy is fine. The economy will probably be fine the rest of this year and all of next. After that, we probably get more guarded in our appraisal of what's going to go on going forward. But finally, I think, and patience is the key word here, is to see what happens in our industry. And hopefully, that will happen in the next 6 months to a year.

So we'll take questions at this point.

(Operator Instructions) Our first question comes from John Rowan of Janney.

If it's so difficult to grow responsibly in this environment, right, why not cut costs? I mean, if I look at your net revenue, right, so I kind of eliminate some of the issues with fair value accounting. Your net revenue is actually up 4% year-over-year, but your operating expenses, even when I back out that $3 million of kind of nonrecurring employee costs, they're up 4%. I realize there's not a significant difference -- or they're up 5%. There's not a massive chasm between those 2 numbers. But without kind of a time frame as to when we're going to get back to responsible growth, why not cut costs in this environment? Because obviously, your net income and everything is down pretty substantially year-over-year.

The problem -- I somewhat agree with that. I think in the position we're in today, the problem is, if you cut costs and all of a sudden, you need to grow, then you really wasted all the quality people you've hired and grown into the positions. For us to truly cut costs -- people cost is the most expensive part of our business by far. We're not -- I mean, to close a branch, it would substantially hurt what we're doing. And so we do have some sunk overhead at this point. We have some space; we could probably contract some. But like you said, in the end, we probably have to go through a fairly significant effort of really cut some -- meaningful costs would take some real moves. And at that point, we would then be about as thin as we'd want to be to the extent it's a growth environment. Part of the problem is, a year ago -- if you had told me a year ago or 2 years ago that the next 2 years are going to be super slow, you're going to have to sit around and wait, we would have cut costs like crazy. To the extent, we thought and everyone in the industry said, this is going -- this consolidation is going to happen in '16 and '17, we thought we were in the right spot. Today, I think we are in right spot given what's going on sort of in the world today. So that -- we've had to stomach those costs for what almost is 1.5 year or more. And I wonder whether it's wise to not stomach them for 6 more months. I think, given where we sit, we're in a much better position to take advantage rather than sort of take those costs. And to give you the analogy, I guess the part we would sort of like to take credit for is, in '07 or '08 and even back in '01, when these other recessions hit, we probably cut costs faster, quicker, more deeply than anyone in our entire industry, and that benefited us greatly. But we also knew what was going on. We knew that tough times were coming for the next few years, and we cut quickly. We didn't say, gee, we'll hang in there, and it'll all be okay. We did what we needed to do very fast and very efficiently, and it paid very large dividends. Today, though, we don't have those circumstances. We don't know that this thing's going to fall down for the next couple of years. A couple of years from now, we may be faced with another recession and have that choice. Today, there's enough noise in the industry between those big players and a lot of medium players, that probably, having the staffing, as much as it's more expensive today, will pay far better dividends in the future. It's almost like raising the capital. We didn't need that money, but it was the cheapest capital we've seen in 20 years, and yet to extent we can have an opportunity to use it, it's going to be the best money we ever spent. Knowing the golden rule or whatever the rule is that when you most need money is when it's most expensive. And so the time to raise it when -- is when it isn't. So I mean, I think, your point's well taken, but I also think we have enough things going on today to justify where we sit. Again, hindsight is always 20/20. And if I had known we had 2 years to slow or to sit, we might have gone a lot slower in building the staff or keeping the staff than we would have now. But with what I think is 6 months to 1 year at the most, it might be sort of tough to make that change today.

Our next question comes from David Scharf of JMP Securities.

I hope you won't be insulted when I say the commentary on competition, the asset-backed market so forth, I mean, it pretty much sounds exactly the same as what we've been hearing for the last few quarters. So I won't bother you with questions on those. But maybe following up on John's question, first of all, can you remind us how many cities or regions you're in? And as you think about adding bodies this year, I mean, what the magnitude of expanding your footprint is supposed to look like.

Well, the easy answer is net overall, we're not going to add any bodies. At this point, what you really do is you sort of fine-tune. If 10 collectors aren't performing, you lose those collectors. We're not adding or replacing new collectors. The portfolio -- and one of the problems is that, obviously, the portfolio ages. It's going to -- and even at this point it stays relatively the same, the balances drop but the account numbers don't. And so you still need folks to service those accounts even though the overall dollars drop, and we don't make quite as much money because of that, you still have the accounts to service. But the easy answer is we have plenty of people, or we have enough people, and to the extent we have people who are underperforming, those people go, and that's how we cut the workforce. And that goes across all levels of the company, collections, originations, marketing, whatever it is. The only place where we're still adding folks, and again, I'm not so sure even that's really a net positive, is in the marketing area. So to the extent we add a few folks there, I would easily say that short of something changing in the industry or us getting a portfolio to service or something of that nature, we would see the headcount shrink rather than grow for the rest of this year, to say the least. I think if something doesn't change, at this point, what we'll probably do, as I said, nothing will change for the rest of the year in terms of growth. If anything, we subtract. To the extent the portfolio begins to shrink, then we would subtract accordingly with that. We have 5 branches, 3 on the East Coast -- or 2 on the East Coast, 1 in the Midwest and 1 -- and 2 sort of in the West. For us to make a real monumental change, we would have to wipe out one of those branches, and it just wouldn't be the smart thing to do. It takes so long to develop a branch, have it function and be totally performing at a great level, which they all are at this point, and it's actually something that's hard to say in any business and the way we have been running it, it's taken a while to develop those 5 strong centers. So we wouldn't really want to close one just to save costs if we thought we would need one and would have to do it again. But remember that, in the growth mode, which we hope to adventure soon or at some point this year, then having those 5 branches is the fastest way to grow effectively and be able to service a portfolio. So that's what we have is 5 branches. We wouldn't expect the headcount to grow at all this year net. And we're going to, again, hope for something to happen. If this continues much longer, we would probably look to do something.

Got it, got it. And as we think about the spread landscape over the next 6 to 12 months. I mean, you had noted how pricing is down to the high 18s, kind of 100 basis points off where you would typically see the industry this part of the cycle. We're certainly counting on funding costs continuing to creep up, notwithstanding the tightening spreads you've been able to benefit from. But on the pricing side, do you feel comfortable that high 18s is a reasonable floor that we should be thinking about over the next year? Or are there any indications that it might come down lower?

I mean, I think, I would like to think that is. The easy answer is much like the auction results. We thought a long time it has trended down, and they've now flattened out about where we thought they would. We'd probably make the same assumption on the APR, it staying, give or take, where it is. It could drop a little bit more. I don't see it dropping substantially. Again, if you take everything I said, the APRs are down, the acquisition fees are down, the cost of funds are up, lots of folks are growing, lots of people bought a lot of risky paper, and to the extent they're trying to grow now, are buying probably riskier paper still, this isn't going to last. It just can't. And so as much as it's repetitive, I feel strongly -- more strongly today given the news in the last few days or last few months that we've done the right thing, and we're just going to have to see. But to your question, I think the APR should hang in there. I don't -- I can't imagine that there can be more competitive pressure beyond what there already is given the state of affairs going on.

Fair enough. That's consistent with what we're hearing from a number of folks. Lastly, just on capital allocation. I mean, obviously, you've always been an assertive repurchaser of your shares at these levels. I mean, the stock has obviously retreated in the last couple of weeks, ever since that 2-million-share warrant was exercised and represents a new overhang. I mean, is there any potential to sort of take out that 2 million position in a one-off transaction?

I mean, there's always a potential for it. I think -- we talked with those folks and sort of we'd have a conversation about it. And I think it's unfortunate that it's coming into the market, but it certainly can't last forever, and given -- and we're still actively buying shares. So it is an overhang. I don't see it lasting that long, so we'll see. We talk to them on a frequent basis.

Our next question comes from Kyle Joseph of Jefferies.

Most of them have been asked. We talked about yields, we talked about cost of funds, but just in terms of your newer vintages, just want to get a sense for the economics on these vintages versus the legacy book. And the one real factor we haven't covered is losses. But just the loss content on the new book you're originating at fair value and how that compares to your legacy book?

Well, we would like to think that everything we originated since the middle of '16 is better than anything we originated before. We also probably would safely say that, overall, everything we've originated since early '13 is better than anything we've done in the past. So that -- we would expect that trend to continue. Our target loss number is 16%. I think we're -- we may have already gotten there. It's hard to tell yet. But that's certainly where we're looking to go, I think probably our high watermark. And certainly, we had a few pools that got as high as 18%. We have a few pools that will probably be in the 17% range. So again, where we think, probably, if I were going to guess, a fairly educated guess, we'd probably argue that our pools are in that 16% range at this point. They could be better. It's a little early to tell just exactly where they are today. But we like where they're going. That's about as good as I could say today.

Got it. And then just in terms of modeling going forward and looking at the provision and the allowance this quarter, should the allowance on the legacy portfolio kind of wind down at the same rate as the overall portfolio? Or is there a little bit of a delay there? I'm just wondering because it looks like the reserve was, in fact, increased on a year-over-year basis if you look at the ALL, and so just wondering about the cadence of that?

I think, Kyle what you'll see is the allowance as a percentage of the legacy portfolio will -- even as the provisions come down, I think the allowance as a percentage of that portfolio will trend upward slightly as we go through the year, and then it will sort of level off. If you recall, the methodology we employed for the allowance was to grow the allowance on new originations over the first 12 months. And so, like, where we're at today, for example, everything in the legacy portfolio, except for the last 6 months of 2017 originations, has a full, kind of 12-month allowance. But by the time we get to the end of the year, everything in the legacy portfolio will have a full 12-month allowance. And so I think what your observation should be for the rest of the year is a slight trend upward as a -- for the allowance as a percentage of the portfolio and then a leveling out thereafter.

There are no further questions. I'd like to turn the call back over to Mr. Bradley for any additional or closing remarks.

Thank you. I think you can almost see some of the -- feel some of the frustration from the calls, but trust me, we feel just as much. We think we have a very good model. We think we have a very good setup. We would like nothing better than to start growing the portfolio and start getting a bigger share of the market. I can only hope that will happen sooner. We are doing everything we can to expand our marketplace, our footprint and grow that way. But at the moment, you can see the compression between the spreads and the margins coming in, there's absolute -- folks pushing to get things done here. And the best way to -- if we wanted to do something, we would grow real fast, buy as much as we could, we'd cut our costs to do it and then go where we want to go. That's not our game plan. So we have to wait and see what other folks do. But hopefully, we'll see soon. Certainly some of the announcements folks have made in the last few months to 6 months, those announcements should come through in the next less than 6 months, and then we'll have to see where we stand then. Again, thanks, everyone, for attending, and we'll speak to you next quarter.

Thank you. This does conclude today's teleconference. A replay will be available beginning 2 hours from now until August 1 at 4:00 p.m. Eastern time by dialing 1 (855) 859-2056 or (404) 537-3406. The conference identification number is 25558910. A broadcast of the conference call will also be available live and for 90 days after the call via the company's website at www.consumerportfolio.com. Please disconnect your lines at this time, and have a wonderful day.