Consumer Portfolio Services Inc (CPSS) 2023 Q4 法說會逐字稿

Good day, everyone, and welcome to the Consumer Portfolio Services 2023 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. Any statements made during this call that are not statements of historical facts may be deemed wonderful statements regarding current or historical valuation of receivables because dependent on estimates of future So forward looking still all such forward-looking statements are subject to risks that could cause actual results to differ materially from those. I refer you to the Company's annual report filed on March 15th. For further clarification Company assumes no obligation to update publicly any forward-looking statements, whether as a result of new information, further events or other with us here is Mr. Charles Bradley, Chief Executive Officer, Mr. Danny Bonnie, Chief Financial. I'm Mr. Mike President and Chief Operating Officer of Consumer Portfolio. I will now turn the call over to.

大家好，歡迎參加消費者投資組合服務 2023 年第四季營運業績電話會議。今天的通話正在錄音。在我們開始之前，管理層要求我通知您，本次電話會議可能包含轉發。本次電話會議期間所做的任何非歷史事實陳述的陳述可能被視為有關應收帳款當前或歷史估值的精彩陳述，因為取決於對未來的估計因此仍然具有前瞻性，所有此類前瞻性陳述都面臨可能導致實際結果的風險與那些有實質不同。請您參閱公司3月15日提交的年度報告。為了進一步澄清，本公司不承擔公開更新任何前瞻性陳述的義務，無論是由於新資訊、進一步事件還是其他原因，執行長查爾斯·布拉德利先生和首席財務官丹尼·邦尼先生。我是消費者投資組合總裁兼營運長麥克先生。我現在將把電話轉給。

Thank you and welcome everyone to our Fourth Quarter and Full Year Earnings Call. I'm thinking about this call and what I should say add the real thing was 23, probably in retrospect was what will loosely call a transitional year for us. And in terms of where we want to go with the company, somewhat of a neutral year and harkens back to, I think in late January of 23, when we were looking at our credit performance, we were somewhat surprised and or dismayed, if not shocked that the 22 vintages weren't performing as well as we thought they would. And at that point, we decided we needed to slow things down and figure out what was going on and so we did. So really, unfortunately, at some level we spent I mean, there's good news, bad news. Bad news is we spent most of 23 evaluating the 22 performance and figuring out what went wrong and how to make it better so that we could then move forward and it took some time. One of things we did immediately was we tightened the credit will improve the model, beefed up the collection team and kind of went after making at 22 pay-per-performance best as we possibly could. And so unfortunately, some of our we spent most of 23 waiting to see how 22 into it rather than trying to grow real fast in 23. And that really know how we were going to improve. So what we did find out as the year went on and actually just a first or second quarter as much as we were somewhat dismayed in our performance and how our credit was performing. We found out that almost everyone else industry was doing far far worse. And so that was a bit of an interesting sort of revelation that as much as we didn't like our paper, our paper was doing way better than almost everyone else is, and that is true today. So the question we get all the time is why why did that happen and why did we do better? So as much as it's kind of difficult at the moment to go through the whole thing, I'll just go through a couple of highlights that we determine probably are the cause of why 22 wasn't as good and 23 ended up being better or things we fixed in 23. One of the first things was somebody in our industry came up with a not so brilliant idea of guaranteeing backend from profit to all the dealerships being that we have in a long kind of forever around forever. We realized right away. That was kind of stupid. However, we looked at it in that light and turns out most people in the industry followed along that path. And eventually we came up with a much tighter scaled-back version of what we call the end profit program. And then that probably helped us one of the things that that program did is it boosted LTVs loan-to-values significantly when you're guaranteeing the profits of the year, obviously, it was good program in terms of the dealerships, the dealership low, making us money for sure, an amount of what contract they were writing. We were obviously very skeptical. And so we did it a little bit differently and didn't do it as dramatically as everyone else. And we certainly did it was slower than everyone else. And that turned out to be very significant in helping us do better in the home process of the 22 paper thing that happened is everybody started growing a lot of the rates, really low business is booming. The auction values were great and for some unknown reason a lot of our friends decided to stop fully verifying stipulations, things like proof of income, meaning like I don't know, they had a job things like where do they live, how long have they had a job and dealerships being wonderful folks sort of maybe tend to take advantage of deal of lenders who don't check things. One thing we've always done and we will continue to do no matter how much work it is. As we verify everything we make sure our customers have a job to make sure that they're living where they live. We do a full credit check and everything, and we do it verbally over the phone and for whatever reason, that tends to protect us dramatically in terms of some of the problems that happened in our industry. So if you look at those few things, we went much slower into the guarantee backend than everyone else. We did much more cautiously than everybody else. And we also continue to check all of the steps that you normally would have and some of our friendly competitors did not. And we also realize things weren't what we thought they would be much maybe quicker, but certainly very quickly. And so we were pulling back much faster than some other folks. So as a result of this, as you know, in the 30 years I've been with this company, we've never had a time where our Company stands out so much better than almost everyone else in terms of credit performance, in terms of how we run our models and manage our portfolio. So much as 23 was kind of a not the best year in terms of we want to grow and succeed and expand. And being able to say that we did it pretty much better than everyone else is kind of pretty cool way to say that 23 went and hopefully now that 22 is getting behind us, 23 performance is certainly much better. Some of the changes we made have been very good on. It looks like we're kind of ready to go again. So but looking at 23, that's the story of how we did at fourth quarter. It's sort of the end of when we're beginning to get things going again. So we'll see how it goes. I'll talk more about that and sort of what we think's going to happen next after Mike and Danny go through their pieces I'll turn it over to Mike to do the operations review.

感謝並歡迎大家參加我們的第四季和全年財報電話會議。我正在考慮這個電話，我應該說的是，真正的事情是 23 歲，回想起來，這可能是我們的過渡年。就我們希望與公司一起走向何方而言，有點中性的一年，我想在 23 月下旬，當我們查看我們的信用表現時，我們感到有些驚訝和/或沮喪，如果不是的話令人震驚的是，這22 個年份的表現沒有我們想像的那麼好。那時，我們決定需要放慢速度，弄清楚發生了什麼，所以我們就這麼做了。所以真的，不幸的是，在某種程度上我們花了我的意思是，有好消息，也有壞消息。壞消息是，我們花了 23 小時的大部分時間來評估 22 小時的表現，並找出出了什麼問題以及如何改進，以便我們可以繼續前進，這花了一些時間。我們立即做的一件事是我們收緊了信貸以改進模型，加強了收款團隊，並盡可能地追求按績效付費 22 美元。不幸的是，我們中的一些人花了 23 的大部分時間來等待 22 的發展，而不是試圖在 23 中真正快速成長。這確實知道我們將如何改進。隨著時間的推移，我們確實發現了什麼，實際上只是第一季或第二季度，我們對我們的業績和信用表現感到有些沮喪。我們發現幾乎所有其他行業的表現都差得多。因此，這是一個有趣的啟示，儘管我們不喜歡我們的論文，但我們的論文比幾乎其他所有人都做得更好，今天也是如此。因此，我們一直面臨的問題是為什麼會發生這種情況以及為什麼我們做得更好？因此，儘管目前要回顧整個事情有點困難，但我只會回顧一些我們認為可能是導致 22 不那麼好而 23 最終變得更好的亮點，或者我們在 23 中修復了一些問題。首先要做的事情之一是我們行業中的某人想出了一個不太聰明的想法，即保證所有經銷商的後端利潤，這是我們在很長一段時間內永遠存在的。我們立刻意識到了。這有點愚蠢。然而，我們從這個角度看待它，結果發現業內大多數人都遵循了這條道路。最後我們提出了一個更嚴格的縮減版本，我們稱之為最終利潤計畫。然後，這可能對我們有幫助，該計劃所做的一件事是，當你保證當年的利潤時，它顯著提高了貸款價值比，顯然，就經銷商而言，這是一個很好的計劃，經銷商低，肯定能讓我們賺錢，相當於他們所寫合約的金額。我們顯然非常懷疑。所以我們的做法有點不同，沒有像其他人那樣戲劇化。我們當然比其他人慢。事實證明，這對於幫助我們在 22 紙的家庭流程中做得更好非常重要，發生的事情是每個人都開始提高很多利率，而真正低的業務正在蓬勃發展。拍賣價值很高，出於某種未知的原因，我們的許多朋友決定停止完全驗證規定，例如收入證明，意思是我不知道，他們有工作，例如他們住在哪裡，工作多久他們有一份工作，經銷商是很棒的人，他們可能傾向於利用不檢查事情的貸方的交易。這是我們一直在做的一件事，無論工作量有多大，我們都會繼續做下去。當我們驗證一切時，我們確保我們的客戶有一份工作，以確保他們生活在他們居住的地方。我們會進行全面的信用檢查和一切，並且我們透過電話口頭進行，無論出於何種原因，這往往會在我們行業中發生的一些問題方面極大地保護我們。因此，如果你看一下這幾件事，我們進入保證後端的速度比其他人慢得多。我們做事比其他人謹慎得多。我們也會繼續檢查您通常會執行的所有步驟，而我們的一些友好競爭對手則不會執行這些步驟。我們也意識到事情並不像我們想像的那樣，它們可能會更快，但肯定非常快。所以我們比其他人撤退的速度快得多。因此，正如你所知，在我在這家公司工作的30 年裡，我們公司從未有過這樣的時期，在信用表現方面，在信用表現方面，我們公司比幾乎所有其他公司都表現得更好。我們如何運行我們的模型並管理我們的投資組合。就我們想要成長、成功和擴張而言，23 年並不是最好的一年。能夠說我們比其他人做得好得多，這是一種非常酷的方式，可以說 23 已經過去了，希望現在 22 已經落後於我們，23 的表現肯定要好得多。我們所做的一些改變非常有效。看起來我們已經準備好再次出發了。所以，看看 23，這就是我們在第四季的表現。這是我們開始重新開始工作的結束。所以我們會看看事情進展如何。我將更多地討論這一點，以及我們認為在邁克和丹尼瀏覽完他們的作品後接下來會發生什麼，我會將其交給邁克進行操作審查。

Thanks, Brad. I'm just sort of follow up on what Brad was talking about in terms of portfolio performance since that is the number one priority at the Company right now.

謝謝，布拉德。我只是對布拉德在投資組合績效方面所談論的內容進行跟進，因為這是公司目前的首要任務。

I'll also add that there were some macro economic issues that we're sort of weighing on the vintages 2022 and early 2023. Obviously, inflation and rising interest rates were headwinds that we could not control along with the guaranteed back end problem that that Brad talked about. It jacked up the amount financed and jacked up the car payments. I'm putting stress on the consumer, but in fairness, that's been balanced out with a fantastic unemployment numbers. That is probably the most critical metric to judging the viability of our business, and that is near historical low and also the ever the other bullet that can really hurt the a recession. And I think that most economic pundits, our opining that we are going to avoid a recession soft or hard, so low unemployment, no recession still means that our business is quite viable as Brad alluded to, the 2022 vintages started off challenging, but seem to have leveled out at the end of 2023. Our servicing practices definitely helped that. I'll talk about that in a minute. Likewise, the first half of 20 into 2023 vintages are equally challenging. But again, we've seen steady improvement on those vintages, and we expect them to be more in line with our historical CML's. Some anecdotally, anecdotally, we were recently at a major asset-backed security conference, and we routinely heard from investors and bankers that are 2022 vintages in 2023 vintages, far outweighed our portfolio, our competitors' performance in the space. So even though we are quite thrilled with the challenges that 2022 and 2023, early 2023 had on. We are very pleased with our performance in our space. And for the fourth quarter, DQ, including repossession inventory ended up at 14.55% of the total total portfolio as compared to 12.68% in the same quarter of 2020 to the all important annualized net charge-offs metric in the fourth quarter was ended up at 7.74% of the portfolio as compared to 5.83% in the same quarter in 2022 extensions were up slightly in the quarter, but well within our historical numbers. Our extensions to active account ratio is actually a little bit below our historical numbers on the recovery front, we generally want to see recoveries in the low 40s. They've dropped a bit into the high 30s as used car prices dropped hurting us at the auction and there remains a dearth of repo agents who left the industry during COVID. This affects the timing of our retail repo and sale come with that being said, and canvassing and benchmarking the market, we believe our repo and sale timing remains the best in the industry and regardless of where we're at in the recoveries. Another great collection trend for us that we saw towards the end of the year is our parts group. That's our potential delinquencies. One to 29 day bucket had its best performance in two years. This is important because the better you do in the pots, the better you do in the later buckets as the roll rate consequentially affected. Another good trend we saw in our collection practices is our right party contact has gone from 4% to 8%. This correlates to more promises to pay and the more promises to pay you have the more dollars you collect. So that's a very good trend. And we also put in a new outreach program early in the collection stage where we introduce ourselves to our customers. But the main thing we're trying to do in this introductory is to get our customers to sign up for recurring payments. This has been an initial successes. We've seen a 25% increase in our recurring payment sign-ups. This very much helps our collection performance. As Brad alluded to, we definitely beefed up our collection staff in 2023. We took it from 287 collectors to 423 collectors. This has lowered the accounts per collector from six 75 to a much more comfortable 515. This allows the collector to have more time to work the accounts and equally important, Skip trace problem accounts manually.

我還要補充一點，我們正在考慮 2022 年和 2023 年初的一些宏觀經濟問題。顯然，通貨膨脹和利率上升是我們無法控制的逆風，以及布拉德談到的保證的後端問題。它增加了融資金額並增加了汽車付款。我給消費者施加了壓力，但公平地說，這已經被驚人的失業率所抵消。這可能是判斷我們業務生存能力最關鍵的指標，而且接近歷史低點，也是真正能夠損害經濟衰退的另一顆子彈。我認為大多數經濟專家認為我們將避免軟衰退或硬衰退，如此低的失業率，沒有衰退仍然意味著我們的業務相當可行，正如布拉德提到的那樣，2022 年的年份一開始就充滿挑戰，但似乎到 2023 年底趨於平穩。我們的服務實務無疑對此有所幫助。我稍後會討論這個問題。同樣，2023 年上半年的 20 個年份也同樣充滿挑戰。但我們再次看到這些年份的穩定改進，我們預計它們將更符合我們歷史上的 CML。有趣的是，我們最近參加了一次重要的資產支持證券會議，我們經常從投資者和銀行家那裡聽到，2022 年和2023 年的年份，遠遠超過了我們的投資組合和競爭對手在該領域的表現。因此，儘管我們對 2022 年和 2023 年以及 2023 年初面臨的挑戰感到非常興奮。我們對我們在空間中的表現非常滿意。第四季度，DQ（包括收回庫存）佔總投資組合的 14.55%，而 2020 年同一季度為 12.68%。第四季度所有重要的年化淨沖銷指標最終為與2022 年同一季度的5.83% 相比，投資組合的7.74% 延期在本季度略有上升，但完全在我們的歷史數字之內。我們的活躍帳戶比率實際上略低於我們在復甦方面的歷史數據，我們通常希望看到復甦在 40 左右。由於二手車價格下跌對拍賣會造成傷害，而且在新冠疫情期間離開該行業的回購代理商仍然很少，因此它們的價格已經跌至 30 多美元。話雖如此，這會影響我們零售回購和銷售的時機，透過對市場的調查和基準測試，我們相信我們的回購和銷售時機仍然是業界中最好的，無論我們處於復甦的哪個階段。我們在年底看到的另一個重要的收藏趨勢是我們的零件組。這就是我們潛在的違約行為。1 至 29 天的桶子創下了兩年來的最佳表現。這很重要，因為你在底池中做得越好，你在後面的桶中做得越好，因為滾動率會相應地受到影響。我們在催收實務中看到的另一個良好趨勢是，我們的正確當事人聯繫比例從 4% 增加到了 8%。這與支付的承諾越多相關，支付的承諾越多，您收到的美元就越多。所以這是一個非常好的趨勢。我們還在收集階段的早期實施了一項新的外展計劃，向客戶介紹自己。但我們在本介紹中要做的主要事情是讓我們的客戶註冊定期付款。這已取得初步成功。我們發現定期付款註冊量增加了 25%。這對我們的收集效能非常有幫助。正如 Brad 所提到的，我們肯定會在 2023 年加強我們的收藏人員隊伍。我們將其從 287 名收藏家減少到 423 名收藏家。這使得每個收藏家的帳戶從 6 個 75 減少到更舒適的 515。這使得收集員有更多的時間來處理帳戶，並且同樣重要的是，可以手動跳過追蹤問題帳戶。

One of the final things we did is we also beefed up our nearshore operation. We didn't necessarily add more nearshore collectors, but we reassigned our strategies. So what we're doing is we're putting the nearshore collectors and the power dialer, which frees up our domestic collectors to do more manual collecting. All of these servicing tactics are unique to us, and we think that. But for the unique approaches we've taken our servicing, the performance would have been slightly worse. So we're happy with our servicing performance.

我們所做的最後一件事是我們也加強了近岸業務。我們不一定要增加更多的近岸收集器，但我們重新分配了策略。因此，我們正在做的是放置近岸收集器和電源撥號器，這使我們的國內收集器能夠進行更多的手動收集。所有這些服務策略對我們來說都是獨一無二的，我們認為這一點。如果不是我們採用的獨特服務方法，效能會稍差一些。因此，我們對我們的服務表現感到滿意。

Switching to originations, the fourth quarter remained solid as we purchased 301 million of new contracts. That compares to $322 million in Q3 of 2023 and 428 million during the fourth quarter of 2022. For the year, we did $1.3 billion in new contracts, which compares to $1.8 billion in 2022. The pullback from 2022 to 2023 was purposeful and intentional and definitely a function of our consistent credit tightening, which we think we began first in the market in March of 2022. We continued that tightening in 2023 and actually continue tightening as we head into 2024. And specifically, we tightened the LTV cap payments, which is important in certain programs segments. We tightened job stability and residence requirements and we made less exceptions on deals that were declined, while this has lowered our overall approval percentage on more significantly. And more importantly, we've knocked down the LTVs, which is a leading metric to predicting losses. And while 2022 is a record year for us. And certainly, we were excited and pleased despite the pullback in 2023, it actually ended up being the second best originations year in our 30 plus history. So all things considered quite a good year in the originations volume to that effect. And again, despite the pullback, we were able to grow the total managed portfolio, which now stands at 3.195 billion, which is an increase from 3 billion at the end of 2022. So we're pleased with that from the view of the slide. If the slight uptick quarter over quarter reflects strong demand in the subprime auto business space. And actually, we received more applications in 2023 than we did in our record year of 2022. One of the worst things that we could say in this call that subprime auto market is downsizing. That's just not true with our applications volume. The subprime auto market is certainly very strong. What are the things that we're looking at in terms of portfolio performance in originations is affordability for our customers. We continue to hold firm on our payment to debt or I'm sorry, our payment to income and debt to income ratios remain the same and have remained the same over the last five to seven years. That's good. Our monthly payment remained relatively low for our space at around $535 This compares to the average subprime payment of around $600. And of course, the new car payment around $775. So we're keeping an eye on affordability in our space. We continue to hold a strong APR in the fourth quarter as we registered an average APR of 21%, which is about on pace for where we were at at the end of 2022 in terms of competition, there's more than enough business for everybody in our space. One interesting thing that we see is we don't necessarily lose some lose business to our direct competitors that sit on top of us in the space, but we actually lose business to credit unions. But what we've seen is a wave of credit unions come into this space. They see that with their low interest rates, they don't get they don't make money, they get killed on the analysis. And then they exit the space and then a whole new wave of credit unions come in and learn the same thing. But we have seen in the last three months as more and more credit unions are actually leaving the space, which is freeing up more business for the rest of the normal competitors in our market harm.

轉向來源，第四季保持穩定，我們購買了 3.01 億份新合約。相較之下，2023 年第三季為 3.22 億美元，2022 年第四季為 4.28 億美元。今年，我們簽訂了 13 億美元的新合同，而 2022 年為 18 億美元。從 2022 年到 2023 年的回檔是有目的和有意的，而且絕對是我們持續信貸緊縮的結果，我們認為我們是在 2022 年 3 月在市場上首先開始的。我們在 2023 年繼續實行緊縮政策，並在進入 2024 年時實際上繼續緊縮政策。具體來說，我們收緊了 LTV 支付上限，這在某些節目領域非常重要。我們收緊了工作穩定性和居住要求，並減少了對被拒絕的交易的例外情況，但這更顯著地降低了我們的整體支持率。更重要的是，我們降低了生命週期價值（LTV），這是預測損失的主要指標。2022 年對我們來說是創紀錄的一年。當然，儘管 2023 年有所回落，我們還是感到興奮和高興，實際上它最終成為我們 30 多年曆史上第二好的起源年。因此，就這一點而言，所有事情都被認為是創始卷中相當好的一年。同樣，儘管有所回落，我們仍能夠增加管理投資組合總額，目前已達到 31.95 億美元，比 2022 年底的 30 億美元有所增加。從投影片的角度來看，我們對此感到滿意。如果季度環比小幅上升反映了次級汽車業務領域的強勁需求。事實上，我們在 2023 年收到的申請數量比創紀錄的 2022 年還要多。我們在這次電話會議中可以說的最糟糕的事情之一是次級汽車市場正在縮小規模。對於我們的應用程式數量而言，情況並非如此。次貸汽車市場無疑非常強勁。我們在起源投資組合績效方面關注的是客戶的承受能力。我們繼續堅持我們的債務支付，或者對不起，我們的收入支付和債務與收入比率保持不變，並且在過去五到七年中保持不變。那挺好的。我們的空間每月付款仍然相對較低，約為 535 美元，而次級抵押貸款的平均付款約為 600 美元。當然，新車付款約為 775 美元。因此，我們正在密切關注我們領域的承受能力。我們在第四季度繼續保持強勁的年利率，因為我們的平均年利率為 21%，這與我們在 2022 年底的競爭水平持平，我們的每個人都有足夠的業務。空間。我們看到的一件有趣的事情是，我們不一定會因在該領域處於領先地位的直接競爭對手而失去一些業務，但我們實際上會因信用合作社而失去業務。但我們看到的是信用合作社進入這一領域的浪潮。他們發現，由於利率低，他們不知道自己賺不到錢，他們會在分析中被殺死。然後他們退出這個領域，然後一波全新的信用社進來並學到同樣的東西。但我們在過去三個月中看到，越來越多的信用合作社實際上正在離開這個空間，這為我們市場中其他正常競爭對手釋放了更多業務。

Turning to a couple of technology updates. We put in our brand-new Generation eight machine learning-based AI model in October of 2023 from this model as a fresh is an update and a refresh of our Gen seven model that launched in 2021. We remained on schedule with refreshing our model every 18 months or so. And this model on relies and is based on the last two years of originations, obviously making account further COVID related portfolio performance and utilizes new alternative data. We've got a new fraud score that we think will save us hundreds of thousand dollars a month in synthetic fraud avoidance, and we believe that this is our Best Buy Box yet. The initial results from this model is quite quite positive. And we also continue to use our business with air platforms to increase efficiency and accuracy. This is not a new. This is not a new thing for us. We've been we've been sort of on a bandwagon for the last five years. Obviously, we use machine learning in our in our originations model. We have a new well. We've been using it for about a year. It's an AI machine learning base and document document review. I live in our originations, which is increasing efficiency. We are testing new AI, voice bots and new AI textbooks. What we've learned in the last seven, eight years is texting is probably the best collection tactic. We believe we've found the best voice bot in the market and, you know, connecting that voice bot to to our texting platform should certainly help our collections performance on.

轉向一些技術更新。我們於 2023 年 10 月推出了全新的第八代基於機器學習的人工智慧模型，這是對 2021 年推出的第七代模型的更新和刷新。我們按計劃每 18 個月左右更新一次模型。該模型依賴並基於過去兩年的起源，顯然進一步考慮了與新冠病毒相關的投資組合表現並利用了新的替代數據。我們有了一個新的詐欺評分，我們認為該評分每月可以在避免綜合詐欺方面節省數十萬美元，而且我們相信這是我們的百思買盒子。該模型的初步結果非常積極。我們也繼續利用我們的空中平台業務來提高效率和準確性。這並不是什麼新鮮事。這對我們來說不是什麼新鮮事。過去五年來，我們一直在追隨潮流。顯然，我們在我們的起源模型中使用了機器學習。我們有一口新井。我們已經使用它大約一年了。它是一個AI機器學習庫和文件文件審查。我生活在我們的起源中，這正在提高效率。我們正在測試新的人工智慧、語音機器人和新的人工智慧教科書。我們在過去七、八年中了解到，發送簡訊可能是最好的催收策略。我們相信我們已經找到了市場上最好的語音機器人，並且您知道，將該語音機器人連接到我們的簡訊平台肯定會有助於我們的產品系列表現。

One other thing of note on is our real estate platform. We were we were lucky enough to have most of our leases come up for renewal post COVID. So we were able to leverage the softening commercial real estate market and we renewed or moved four of our five leases within the last within the last quarter, believe it or not. And we're looking at a $10.8 million savings in those in that real estate footprint over the next four years. We've also leveraged what we think are best in class work-from-home platform to reduce our space as well.

另一件值得注意的事情是我們的房地產平台。我們很幸運，我們的大部分租約在新冠疫情後都得到了續約。因此，我們能夠利用疲軟的商業房地產市場，無論您相信與否，我們在上個季度的最後一個租賃合約中續簽或搬遷了其中的四個。我們預計在未來四年內，房地產業務將節省 1,080 萬美元。我們也利用我們認為最好的在家工作平台來減少我們的空間。

So with that, I'll turn it back to Danny.

那麼，我會把它轉回給丹尼。

Thanks, Mike. I'll go over the financial results for the revenues for the fourth quarter 92 million, that's an 11% increase over the $83 million from the fourth quarter of 2022. For the full year, revenues were 352 million, a 7% increase over the full year revenue of 329.7 in 2022, of course, our largest component of revenue is interest income. The fair value portfolio is now up to 2.7 billion and that portfolio is yielding 11.3% remembering that that yield is net of credit losses. Also included in revenues for the quarter and for the year are marks to our fair value portfolio. In the fourth quarter, we booked a markup of 6 million to that fair value portfolio. That's compared to or for the full year, it was 12 million in markup for the fair value portfolio. That's compared to $15.3 million in fair value markups for the prior year 2022 period. The markup is a result of better than expected performance in that fair value portfolio.

謝謝，麥克。我將回顧第四季度營收 9,200 萬美元的財務業績，比 2022 年第四季的 8,300 萬美元成長了 11%。全年收入是3.52億，比2022年全年收入329.7成長7%，當然我們收入最大的組成部分是利息收入。公允價值投資組合目前高達 27 億美元，該投資組合的收益率為 11.3%（記住該收益率已扣除信貸損失）。本季和全年的收入也包括我們的公允價值投資組合的標記。第四季度，我們為該公允價值投資組合預訂了 600 萬美元的加價。與全年相比，公允價值投資組合的加價為 1,200 萬美元。相較之下，2022 年同期的公允價值加價為 1,530 萬美元。加價是由於此公允價值投資組合的績效優於預期的結果。

Looking at expenses, $82.1 million for the fourth quarter is 27% higher than the 64.7 in the fourth quarter 22 for the full year $290.9 million in expenses is 36% higher than the 213.5 in 2022. A couple of things of note under expenses, we continue to see reverse negative loss provisions from our L. portfolio. That's the portfolio that we originated prior to 2018. That's not accounted for under fair value. We booked a lifetime loss reserve on that portfolio and the results are coming in on that a better need than we expected. So we're able to reverse any loss reserves that are no longer required. That number was $1.6 million in the fourth quarter, $22.3 million for the full year. And those numbers compare to $4.7 million in the fourth quarter of 22 and 28.1 million for the full year 22. Also another large mover in terms of expenses is interest expense that has increased to $40.2 million in the fourth quarter from $28.9 million in the fourth quarter of last year. For the full year interest expenses of $146.6 million compared to $87.5 million in 2022. Largely those increase in interest expense is largely attributable to higher rates, but there some smaller component of that that can be attributed to portfolio growth.

從支出來看，第四季的 8,210 萬美元比第四季的 64.7 成長了 27%。22 全年的支出為 2.909 億美元，比 2022 年的 213.5 成長了 36%。在費用項下，有幾件事值得注意，我們繼續看到 L. 投資組合中的反向負損失撥備。這是我們在 2018 年之前創建的投資組合。這沒有計入公允價值。我們對該投資組合預訂了終身損失準備金，結果顯示該需求比我們預期的更好。因此，我們能夠沖銷不再需要的任何損失準備金。第四季這一數字為 160 萬美元，全年為 2,230 萬美元。與這些數字相比，22 年第四季為 470 萬美元，22 年全年為 2,810 萬美元。支出方面的另一個重要推動因素是利息支出，從去年第四季的 2,890 萬美元增加到第四季的 4,020 萬美元。全年利息支出為 1.466 億美元，而 2022 年為 8,750 萬美元。利息支出的增加很大程度上是由於利率上升，但其中較小的一部分可以歸因於投資組合的成長。

Pretax earnings, $9.8 million for the fourth quarter compared to 18.3 plan. It's a 46% reduction from the prior year fourth quarter. For the year, $61.1 million is a 47% reduction from $116.2 million in 2022. Likewise, net income follows those same trends, $7.2 million for the quarter compared to 14.1 a year ago quarter for the year 2023, $45.3 million of net income versus $86 million in 2022.

第四季稅前收益為 980 萬美元，計劃為 18.3 美元。與去年第四季相比減少了 46%。今年的支出為 6,110 萬美元，比 2022 年的 1.162 億美元減少了 47%。同樣，淨利潤也遵循同樣的趨勢，本季淨利潤為 720 萬美元，而 2023 年同期為 14.1 美元；淨利潤為 4,530 萬美元，而 2022 年淨利為 8,600 萬美元。

Moving over to the balance sheet. Couple of things of note here. Our finance receivables at fair value now at $2.7 million, like I said earlier, 2.7 billion excuse me, is 10% higher than the 2.5 billion where we were at the end of 2022.

轉向資產負債表。這裡有幾件事值得注意。我們的財務應收帳款現在以公允價值計算為 270 萬美元，就像我之前所說的，對不起，是 27 億美元，比 2022 年底的 25 億美元高出 10%。

Looking at our debt balance, the one thing of note here is our securitization debt is 2.265 billion at the end of 23 versus 2.1 at the end of 22. Doing the math that's a 7% increase on the debt compared to a 10% increase on that fair value assets. So we're able to manage with the with lower leverage on and building up our balance sheet is that certainly a sign of strength for our balance sheet.

看看我們的債務餘額，值得注意的一件事是，我們的證券化債務在 23 年底為 22.65 億美元，而 22 年底為 2.1 億。計算一下，債務增加了 7%，而公允價值資產增加了 10%。因此，我們能夠以較低的槓桿率進行管理，並建立我們的資產負債表，這無疑是我們資產負債表實力的標誌。

Looking at the shareholders' equity at the end of the year, 274.7 is the highest in our history. That's 20% higher than the $28.4 million at the end of 2022. And that's driven by 49 consecutive quarters of pretax profit that we've been able to generate over the last 12 years and change.

從年末股東權益來看，274.7是我們史上最高的。這比 2022 年底的 2,840 萬美元高出 20%。這是由我們在過去 12 年中連續 49 個季度產生並發生變化的稅前利潤所推動的。

Looking at other metrics, our net interest margin of 51.74% less than the 54.1 a year ago. For the year period, our net interest margin is 205.4 is 15% lower than 2022. Core operating expenses are $43.5 million, 7% higher than the 40.6 million in the fourth quarter of 22. For the year, core operating expenses is 166.6 million for 23 versus 154.1 in 2022 is an 8% increase. Our return on our annualized core operating expenses as a percentage of the managed portfolio, it is now 5.9% for the fourth quarter of 23 is flat from the fourth quarter of 22. But on an annualized basis, the 23 period came in at 5.7 is a reduction from the 6.1% we saw in 2022. So we're starting to see some operating leverage improvement as the portfolio grows.

從其他指標來看，我們的淨利差為 51.74%，低於一年前的 54.1%。年內，我們的淨利差為 205.4，比 2022 年低 15%。核心營運支出為4,350萬美元，比22年第四季的4,060萬美元成長7%。今年，23 的核心營運支出為 1.666 億美元，比 2022 年的 154.1 美元成長了 8%。我們的年化核心營運支出報酬率佔管理投資組合的百分比，目前 23 年第四季為 5.9%，與 22 年第四季持平。但以年化計算，23 期的成長率為 5.7，比 2022 年的 6.1% 有所下降。因此，隨著投資組合的成長，我們開始看到營運槓桿有所改善。

Our return on managed assets for the quarter, 1.3 for the year, it's 2.1 versus 4.6% in 2022.

我們本季管理資產的報酬率為 1.3%，全年為 2.1%，而 2022 年為 4.6%。

That's it for the financial results. I'll turn the call over to Brett.

這就是財務業績。我會把電話轉給布雷特。

Thank you, Danny. As you are going to hear from both the reports that as much as 23 or 22 wasn't the best of the years. We've done quite well through it in many different areas.

謝謝你，丹尼。正如您將從兩份報告中聽到的那樣，多達 23 或 22 並不是年度最佳。我們在許多不同領域都做得很好。

Looking at the industry. It's kind of about that. Everyone's still struggling with the 22 paper. And even in some cases, some people's 23 paper has not started out particularly well, either, but on ours and ours is we're kind of happy where we sit there and I think it can create some opportunities for the Company and that our people are certainly going to be kind of conservative going forward, at least until they understand that their models are working again, but they've corrected their models sufficiently to where people can grow again. So we might have a little bit of a head start in terms of getting back in the game than some of our friendly competitors. There certainly will be some opportunities that probably one or two of the folks won't make it that might be interesting opportunity wise, but also the fact that we can start growing and sort of put 22 behind us and be proud of what we did in 22. But again, in terms of our what we want the company to do, we'd like to get back to that game much more than we have been. And also you would think at some point down the road at some lower rates and with a lower rate environment, obviously our margins improve our performance will be great that way. So towards the end of this year and 24, that might be a benefit as well in terms of the overall economy, who knows whether we'll have a hypothetical soft landing, but certainly looking likely make it somewhere there. But generally speaking, we think it's going to be a decent economy, if not a good economy. So we're happy on those fronts. And almost most important by far in any of that is unemployment. Unemployment looks great. And unemployment is the one thing that can cause or industry problems. It does not appear to be a problem at all. It shouldn't be a problem for a long time or at least significantly many time. So we can get growing again and really take advantage of the position we're in. And so having said that 22 is top 23 was sort of that transition for making 20 to go away and getting things ready to go for 24 to now that we're into 24. Hopefully, it's all full steam ahead and a bright future. And again, so it's still kind of remarkable that through all that our company has done so well in terms of how our paper performed in 22 and even 23. So we were super, super proud of our people and what we've done to do it. And I certainly think 23 and everything we've done during 23 has well positioned us for 24 to be a very good year. Want to thank you all for joining us today, and we'll be back to you rather soon with our first quarter report in a month or two a month or so. Thank you.

縱觀行業。有點像這個。大家還在為22號論文而苦苦掙扎。即使在某些情況下，有些人的23 篇論文一開始也不是特別好，但就我們和我們的論文而言，我們對坐在那裡感到很高興，我認為這可以為公司和我們的員工創造一些機會未來肯定會變得保守，至少在他們明白他們的模型再次發揮作用之前，但他們已經充分糾正了他們的模型，使人們能夠再次成長。因此，在重返遊戲方面，我們可能會比一些友好的競爭對手稍微領先一些。肯定會有一些機會，可能只有一兩個人無法實現，這可能是一個有趣的機會，但事實上，我們可以開始成長，把 22 放在身後，並為我們在 2019 年所做的事情感到自豪。 22.但同樣，就我們希望公司做的事情而言，我們比以往更希望回到這款遊戲。而且你也會認為，在未來的某個時刻，在較低的利率和較低的利率環境下，顯然我們的利潤率會提高我們的業績，那會很棒。因此，到今年年底和 24 日，這可能對整體經濟也有利，誰知道我們是否會實現假設的軟著陸，但看起來肯定會實現這一目標。但總的來說，我們認為這將是一個體面的經濟，即使不是一個好的經濟。所以我們在這些方面很高興。到目前為止，其中最重要的是失業。失業看起來很棒。失業是可能導致行業問題的一件事。這看起來根本不是問題。在很長一段時間內，或至少在很多時間內，這不應該是一個問題。這樣我們就可以再次成長並真正利用我們所處的位置。所以說22是前23是一種過渡，讓20消失並為24做好準備，現在我們進入24。希望一切都全力以赴，前景光明。再說一次，我們公司在 22 年甚至 23 年的論文表現方面表現如此出色，這仍然是一件了不起的事情。因此，我們對我們的員工以及我們為此所做的一切感到非常非常自豪。我當然認為 23 以及我們在 23 期間所做的一切都為我們做好了準備，讓 24 成為非常好的一年。感謝大家今天加入我們，我們很快就會在一兩個月左右的時間內帶著我們的第一季回報回覆你們。謝謝。

Thank you.

謝謝。

This concludes today's teleconference. A replay will be available beginning two hours from now for 12 months via the company, w. w. w. dot consumer portfolio.com. Please disconnect.

今天的電話會議到此結束。從現在起兩小時後，將透過公司 w 提供重播，為期 12 個月。 w。 w。點消費者投資組合.com。請斷開連線。

Your lines at this time and have a wonderful day.

你此時的台詞，祝你有美好的一天。