CONSUMER PORTFOLIO SERVICES, INC. Commitments Disclosure
(10) Commitments and Contingencies
Leases
The Company has operating leases for corporate offices, equipment, software and hardware. The Company has entered into operating leases for the majority of its real estate locations, primarily office space. These leases are generally for periods of three to seven years with various renewal options. The depreciable life of leased assets is limited by the expected lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheet and the related lease expense is recognized on a straight-line basis over the lease term.
We determine if a contract contains a lease at contract inception. Right-of-use assets and liabilities are recognized based on the present value of lease payments over the lease term. In determining the present value of lease payments, we use the Company’s incremental borrowing rate. Right-of-use assets are included in other assets and lease liabilities are included in accounts payable and accrued expenses in our Condensed Consolidated Balance Sheet.
The following table presents the supplemental balance sheet information related to leases:
| December 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| (In thousands) | ||||||||
| Operating Leases | ||||||||
| Operating lease right-of-use assets | $ | 53,225 | $ | 51,093 | ||||
| Less: Accumulated amortization right-of-use assets | (36,281 | ) | (31,644 | ) | ||||
| Operating lease right-of-use assets, net | $ | 16,944 | $ | 19,449 | ||||
| Operating lease liabilities | $ | (19,236 | ) | $ | (21,471 | ) | ||
| Finance Leases | ||||||||
| Property and equipment, at cost | $ | 4,097 | $ | 3,794 | ||||
| Less: Accumulated depreciation | (3,684 | ) | (3,488 | ) | ||||
| Property and equipment, net | $ | 413 | $ | 306 | ||||
| Finance lease liabilities | $ | (428 | ) | $ | (315 | ) | ||
| Weighted Average Discount Rate | ||||||||
| Operating lease | 5.0% | 5.0% | ||||||
| Finance lease | 6.4% | 6.5% | ||||||
Maturities of lease liabilities were as follows:
| (In thousands) | Operating | Finance | ||||||
| Year Ending December 31, | Lease | Lease | ||||||
| 2026 | $ | 5,583 | $ | 228 | ||||
| 2027 | 5,756 | 170 | ||||||
| 2028 | 5,937 | 48 | ||||||
| 2029 | 4,331 | 10 | ||||||
| 2030 | 1,171 | – | ||||||
| Thereafter | 596 | – | ||||||
| Total undiscounted lease payments | 23,374 | 456 | ||||||
| Less amounts representing interest | (4,138 | ) | (28 | ) | ||||
| Lease Liability | $ | 19,236 | $ | 428 | ||||
The following table presents the leases expense included in Occupancy, General and administrative on our Condensed Consolidated Statement of Operations:
| Year Ended December 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| (In thousands) | ||||||||||||
| Operating lease cost | $ | 5,001 | $ | 3,582 | $ | 5,547 | ||||||
| Finance lease cost | 219 | 115 | 158 | |||||||||
| Total lease cost | $ | 5,220 | $ | 3,697 | $ | 5,705 | ||||||
The following table presents the supplemental cash flow information related to leases:
| Year Ended December 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| (In thousands) | ||||||||||||
| Cash paid for amounts included in the measurement of lease liabilities: | ||||||||||||
| Operating cash flows from operating leases | $ | 5,271 | $ | 5,308 | $ | 5,547 | ||||||
| Operating cash flows from finance leases | 190 | 97 | 152 | |||||||||
| Financing cash flows from finance leases | 28 | 18 | 6 | |||||||||
Legal Proceedings
Consumer Litigation. We are routinely involved in various legal proceedings resulting from our consumer finance activities and practices, both continuing and discontinued. Consumers can and do initiate lawsuits against us alleging violations of law applicable to collection of receivables, and such lawsuits sometimes allege that resolution as a class action is appropriate. For the most part, we have legal and factual defenses to consumer claims, which we routinely contest or settle (for immaterial amounts) depending on the particular circumstances of each case.
In General. There can be no assurance as to the outcomes of the matters described above. We record at each measurement date our best estimate of probable incurred losses for legal contingencies, if any. The amount of losses that may ultimately be incurred cannot be estimated with certainty. However, based on such information as is available to us, the Company is not currently a party to any such material proceedings.
Accordingly, we believe that the ultimate resolution of legal proceedings should not have a material adverse effect on our consolidated financial condition. We note, however, that in light of the uncertainties inherent in contested proceedings there can be no assurance that the ultimate resolution of these matters will not be material to our operating results for a particular period, depending on, among other factors, the size of the loss or liability imposed and the level of our income for that period.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 16, 2026 | Showing above |
| 2024 | Mar 12, 2025 | |
| 2023 | Mar 15, 2024 | |
| 2022 | Mar 15, 2023 | |
| 2021 | Mar 16, 2022 | |
| 2020 | Mar 10, 2021 | |
| 2019 | Mar 16, 2020 | |
| 2018 | Mar 13, 2019 | |
| 2017 | Mar 7, 2018 | |
| 2016 | Mar 7, 2017 | |
| 2015 | Mar 9, 2016 | |
About Commitments Disclosures
Commitments and contingencies disclosures catalog a company's off-balance-sheet obligations and legal exposures — purchase commitments, guarantee arrangements, pending litigation, and regulatory proceedings. These items represent potential future cash outflows that may not appear as liabilities on the balance sheet until they become probable and estimable.
Key signals: litigation reserves and disclosed loss ranges quantify management's estimate of legal exposure, but unquantified "reasonably possible" losses often represent the larger risk. Watch for changes in language around pending cases — shifts from "remote" to "reasonably possible" or increases in estimated loss ranges signal deteriorating outcomes. Unconditional purchase obligations and take-or-pay contracts create fixed cost structures that reduce operational flexibility. Guarantee arrangements for subsidiaries or joint ventures can create cascading obligations. Compare the total commitment schedule against projected free cash flow to assess whether the company can meet its obligations without additional financing.