Consumer Portfolio Services, Inc. reported a 50% increase in diluted earnings per share for the third quarter of 2026, driven by a 109% surge in loan origination volume. The Las Vegas-based specialty finance company posted net income of $7.0 million, up 43% from the same period in 2025, marking a significant acceleration in profitability relative to revenue growth.
The company's total revenue for the quarter reached $131.9 million, a 22% increase over the prior year. This growth was primarily fueled by interest income generated from an expanding loan portfolio. New contract purchases totaled $815.3 million in the third quarter of 2026, more than doubling the $391.1 million recorded in the third quarter of 2025. For the first nine months of 2026, contract purchases amounted to $2.106 billion, a 65.2% increase compared to $1.275 billion in the same period of 2025.
Charles E. Bradley, Chief Executive Officer of Consumer Portfolio Services, attributed the results to strong operating leverage and an expanding dealership network. He noted that broadening dealer relationships and deepening existing ones allowed the company to accelerate volume while maintaining selectivity in contract purchases. The company stated that increases in net income outpaced revenue increases, demonstrating efficiency across its operations.
Operational metrics reflected improved credit performance alongside volume growth. The total owned portfolio reached a record $4.711 billion as of September 30, 2026, up 25.3% from $3.760 billion a year earlier. This represents the 21st consecutive quarter of portfolio growth for the firm. Total delinquencies, including repossession inventory, decreased to 12.29% in the third quarter of 2026, down from 13.96% in the prior year period.
Credit quality indicators continued to improve on other fronts as well. Annualized net charge-offs fell to 7.26% of the average portfolio in the third quarter of 2026, compared to 8.01% in the third quarter of 2025. Net recovery rates on repossessed collateral sold at wholesale auction rose to 32.0%, an increase from 28.7% in the prior year period.
To support its rapid origination pace, Consumer Portfolio Services expanded its capital structure during the quarter. The company renewed one of its warehouse lines of credit, increasing capacity from $335 million to $508 million, an expansion of approximately 52%. Additionally, the firm closed its third asset-backed securitization of 2026 during the quarter. This transaction, which primarily included loan originations from the second quarter of 2026, was the company's 110th securitization and the largest deal in its 35-year history.
For the nine months ended September 30, 2026, total operating expenses were $338.5 million, compared to $304.3 million in the prior year period. Interest expense comprised approximately 58% of total operating expenses for both the third quarter and the first nine months of 2026 and 2025, which the company described as demonstrating discipline in its borrowing cost structure.