8-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON DC 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported) October 19, 2016

CONSUMER PORTFOLIO SERVICES, INC.

(Exact Name of Registrant as Specified in Charter)

CALIFORNIA	1-11416	33-0459135
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

3800 Howard Hughes Pkwy, Suite 1400, Las Vegas, NV 89169

(Address of Principal Executive Offices) (Zip Code)

Registrant's telephone number, including area code (949) 753-6800

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.

The information contained in Item 2.03 of this report is hereby incorporated by reference into this Item 1.01. The registrant disclaims any implication that the agreements relating to the transactions described in this report are other than agreements entered into in the ordinary course of its business.

Securitization of Receivables

On October 19, 2016, the registrant Consumer Portfolio Services, Inc. ("CPS") and its wholly owned subsidiary CPS Receivables Five LLC ("Subsidiary") entered into a series of agreements under which Subsidiary purchased from CPS, and sold to CPS Auto Receivables Trust 2016-D (the "Trust"), approximately $140.1 million of subprime automotive receivables (the "Initial Receivables"). Subsidiary also committed to purchase and to sell to the Trust, and CPS committed to sell to Subsidiary, an additional $69.9 million of similar automotive receivables (the "Subsequent Receivables” and together with the Initial Receivables, the “Receivables").

ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On October 17, 2016, the registrant announced its earnings for the quarter ended September 30, 2016.  A copy of the announcement is attached as an exhibit to this report.

As disclosed in the announcement, the registrant hosted a conference call on Tuesday, October 18, 2016, at 1:00 p.m. ET to discuss its results of operation and financial condition. A replay of the conference call will be available through October 25, 2016, by dialing 855 859-2056 (or 404 537-3406 for international participants), with conference identification number 98489886. A broadcast of the conference call will also be available for 90 days after the call via the Company’s web site at www.consumerportfolio.com.

ITEM 2.03. CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT.

CPS, Subsidiary, the Trust and others on October 19, 2016, entered into a series of agreements that, among other things, created long-term obligations that are material to CPS, Subsidiary and the Trust. Under these agreements (i) CPS sold the Initial Receivables to Subsidiary, and committed to sell the Subsequent Receivables to Subsidiary not later than December 3, 2016, (ii) Subsidiary sold the Initial Receivables to the Trust, and committed to sell the Subsequent Receivables to the Trust, (iii) the Trust deposited the Initial Receivables, and committed to deposit the Subsequent Receivables, with Wells Fargo Bank, N.A. ("Wells Fargo"), as trustee of a grantor trust, receiving in return a certificate of beneficial interest (“CBI”) representing beneficial ownership of the Receivables, (iv) the Trust pledged the CBI to Wells Fargo as indenture trustee for benefit of the holders of the Notes (as defined below), (v) the Trust issued and sold $206.3 million of asset-backed Notes, in five classes (such Notes collectively, the "Notes"), (vi) a portion of the proceeds from the sale of the Notes was pledged to Wells Fargo as trustee for benefit of the holders of the Notes, to be used to fund the purchase price of the Subsequent Receivables, and (vii) a cash deposit (the "Reserve Account") in the amount of 1.00% of the aggregate balance of the Initial Receivables was pledged for the benefit of the holders of the Notes.

Security for the repayment of the Notes consists of the Initial Receivables and, when and if sold, the Subsequent Receivables, and the rights to payments relating to the Receivables. The Receivables were purchased by CPS from automobile dealers, and CPS will act as the servicer of the Receivables. Credit enhancement for the Notes consists of over-collateralization and the Reserve Account. Wells Fargo will act as collateral agent and trustee on behalf of the secured parties, and is the backup servicer.

The Notes are obligations only of the Trust, and not of Subsidiary nor of CPS. Nevertheless, the Notes are properly treated as long-term debt obligations of CPS. The sale and issuance of the Notes, treated as secured financings for accounting and tax purposes, are treated as sales for all other purposes, including legal and bankruptcy purposes. None of the assets of the Trust or Subsidiary are available to pay other creditors of CPS or its affiliates.

Upon completion of the anticipated November or December 2016 sale of the Subsequent Receivables to the Trust, the Trust will hold a fixed pool of amortizing assets. The Trust is obligated to pay principal and interest on the Notes on a monthly basis. Interest is payable at fixed rates on the outstanding principal balance of each of the five classes of the Notes, and principal is payable by reference to the aggregate principal balance of the Receivables (adjusted for chargeoffs and prepayments, among other things) and agreed required over-collateralization. The following table sets forth the interest rates and initial principal amounts of the five classes of Notes:

Note Class	Interest Rate	Amount
Class A	1.50 %	$100,170,000
Class B	2.11 %	28,875,000
Class C	2.90 %	32,655,000
Class D	4.53 %	24,570,000
Class E	6.86 %	20,055,000

The 2016-D transaction has initial credit enhancement consisting of a cash deposit equal to 1.00% of the original receivable pool balance and over-collateralization of 2.00%. The final enhancement level requires accelerated payment of principal on the Notes to reach overcollateralization of 5.50% of the then-outstanding receivable pool balance.

If an event of default were to occur under the agreements, the Trustee would have the right to accelerate the maturity of the Notes, in which event the cash proceeds of the Receivables that otherwise would be released to Subsidiary would instead be directed entirely toward repayment of the Notes. Events of default include such events as failure to make required payments on the Notes, breaches of warranties, representations or covenants under any of the agreements or specified bankruptcy-related events. In addition, if the Receivables (pledged as security for the Notes) were to experience net loss ratios that are higher than specified levels, the existence of such a "trigger event" would also require that the cash proceeds of the Receivables that otherwise would be released to Subsidiary would instead be directed to payment of principal on the Notes, until specified increased levels of overcollateralization were achieved.

At such time as the aggregate outstanding principal balance of the Receivables is less than 10% of the intended initial aggregate balance of $210.0 million, CPS will have the option to purchase the Trust estate at fair market value, provided that such purchase price is sufficient to cause the Notes to be redeemed and paid in full, and to cause other obligations of the Trust to be met.

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.

Two exhibits are included in this report:

99.1	News release re October 19, 2016, transaction.
99.2	News release re earnings.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	CONSUMER PORTFOLIO SERVICES, INC.
Dated: October 25, 2016	By: /s/ JEFFREY P. FRITZ
	Jeffrey P. Fritz Executive Vice President and Chief Financial Officer Signing on behalf of the registrant

EX-99.1

  NEWS RELEASE

CPS Announces $206.3 Million Senior Subordinate Asset-Backed Securitization

LAS VEGAS, Nevada, October 19, 2016 (GlobeNewswire) – Consumer Portfolio Services, Inc. (Nasdaq: CPSS) (“CPS” or the “Company”) today announced the closing of its fourth term securitization in 2016.  The transaction is CPS's 22nd senior subordinate securitization since the beginning of 2011 and the fifth consecutive securitization to receive a triple “A” rating on the senior class of notes from two rating agencies.

In the transaction, qualified institutional buyers purchased $206.3 million of asset-backed notes secured by $210.0 million in automobile receivables purchased by CPS.  The sold notes, issued by CPS Auto Receivables Trust 2016-D, consist of five classes.  Ratings of the notes were provided by Standard & Poor’s and DBRS and were based on the structure of the transaction, the historical performance of similar receivables and CPS’s experience as a servicer.

Note Class	Amount	Interest Rate	Average Life	Price	S&P Rating	DBRS Rating
A	$100.17 million	1.50%	.89 years	99.99188%	AAA	AAA
B	$28.88 million	2.11%	2.17 years	99.97964%	AA	AA (high)
C	$32.66 million	2.90%	2.86 years	99.97993%	A	A (low)
D	$24.57 million	4.53%	3.62 years	99.98362%	BBB	BBB (low)
E	$20.06 million	6.86%	4.14 years	99.98198%	BB-	BB (low)

The weighted average coupon on the notes is approximately 3.62%.

The 2016-D transaction has initial credit enhancement consisting of a cash deposit equal to 1.00% of the original receivable pool balance and over-collateralization of 2.00%.  The final enhancement level requires accelerated payment of principal on the notes to reach overcollateralization of 5.50% of the then-outstanding receivable pool balance. The transaction utilizes a pre-funding structure, in which CPS sold approximately $140.1 million of receivables today and plans to sell approximately $69.9 million of additional receivables during November 2016.  This further sale is intended to provide CPS with long-term financing for receivables purchased primarily in the month of October.

The transaction was a private offering of securities, not registered under the Securities Act of 1933, or any state securities law.  All of such securities having been sold, this announcement of their sale appears as a matter of record only.

About Consumer Portfolio Services, Inc.

Consumer Portfolio Services, Inc. is an independent specialty finance company that provides indirect automobile financing to individuals with past credit problems, low incomes or limited credit histories. We purchase retail installment sales contracts primarily from franchised automobile dealerships secured by late model used vehicles and, to a lesser extent, new vehicles. We fund these contract purchases on a long-term basis through the securitization markets and service the loans over their entire contract terms.

Investor Relations Contact

Jeffrey P. Fritz, Chief Financial Officer

844-878-CPSS (844-878-2777)

EX-99.2

                                                                                          NEWS RELEASE

CPS ANNOUNCES THIRD QUARTER 2016 EARNINGS

§   Pretax income of $12.5 million

§   Net income of $7.3 million, or $0.26 per diluted share

§   New contract purchases of $242 million

§   Total managed portfolio increases to $2.29 billion from $2.25 billion at June 30, 2016

LAS VEGAS, NV, October 17, 2016 (GlobeNewswire) -- Consumer Portfolio Services, Inc. (Nasdaq: CPSS) (“CPS” or the “Company”) today announced earnings of $7.3 million, or $0.26 per diluted share, for its third quarter ended September 30, 2016.  This compares to net income of $8.8 million, or $0.28 per diluted share, in the third quarter of 2015.

Revenues for the third quarter of 2016 were $108.5 million, an increase of $14.5 million, or 15.5%, compared to $94.0 million for the third quarter of 2015.  Total operating expenses for the third quarter of 2016 were $96.1 million, an increase of $17.7 million, or 22.6%, compared to $78.3 million for the 2015 period.  Pretax income for the third quarter of 2016 was $12.5 million compared to pretax income of $15.6 million in the third quarter of 2015, a decrease of 20.4%.

For the nine months ended September 30, 2016 total revenues were $314.1 million compared to $268.3 million for the nine months ended September 30, 2015, an increase of approximately $45.8 million, or 17.1%.  Total expenses for the nine months ended September 30, 2016 were $277.1 million, an increase of $54.3 million, or 24.4%, compared to $222.7 million for the nine months ended September 30, 2015.  Pretax income for the nine months ended September 30, 2016 was $37.0 million, compared to $45.6 million for the nine months ended September 30, 2015.  Net income for the nine months ended September 30, 2016 was $21.8 million compared to $25.7 million for the nine months ended September 30, 2015.

During the third quarter of 2016, CPS purchased $242.1 million of new contracts compared to $319.1 million during the second quarter of 2016 and $287.5 million during the third quarter of 2015.  The Company's managed receivables totaled $2.292 billion as of September 30, 2016, an increase from $2.254 billion as of June 30, 2016 and $1.941 billion as of September 30, 2015.

Annualized net charge-offs for the third quarter of 2016 were 6.69% of the average owned portfolio as compared to 6.27% for the third quarter of 2015.  Delinquencies greater than 30 days (including repossession inventory) were 10.46% of the total owned portfolio as of September 30, 2016, as compared to 8.81% as of September 30, 2015.

"Our operating results for the third quarter of 2016 were in line with our expectations," said Charles E. Bradley, Jr., Chairman and Chief Executive Officer.  “Our managed portfolio continues to grow and our earnings increased sequentially for the second consecutive quarter, even with a slight decrease in originations volumes.  Our operating leverage continues to improve and our third quarter securitization priced at a lower blended coupon than the prior quarter, reversing a four-quarter trend of consecutively higher blended coupons.”

Conference Call

CPS announced that it will hold a conference call on Tuesday, October 18, 2016, at 1:00 p.m. ET to discuss its quarterly operating results.  Those wishing to participate by telephone may dial-in at 877 312-5502 or 253 237-1131 approximately 10 minutes prior to the scheduled time. The conference identification number is 98489886.

A replay of the conference call will be available between October 18, 2016 and October 25, 2016, beginning two hours after conclusion of the call, by dialing 855 859-2056 or 404 537-3406 for international participants, with conference identification number 98489886.  A broadcast of the conference call will also be available live and for 90 days after the call via the Company’s web site at www.consumerportfolio.com.

About Consumer Portfolio Services, Inc.

Consumer Portfolio Services, Inc. is an independent specialty finance company that provides indirect automobile financing to individuals with past credit problems, low incomes or limited credit histories. We purchase retail installment sales contracts primarily from franchised automobile dealerships secured by late model used vehicles and, to a lesser extent, new vehicles. We fund these contract purchases on a long-term basis primarily through the securitization markets and service the contracts over their lives.

Forward-looking statements in this news release include the Company's recorded revenue, expense and provision for credit losses, because these items are dependent on the Company’s estimates of incurred losses.  The accuracy of such estimates may be adversely affected by various factors, which include (in addition to risks relating to the economy generally) the following: possible increased delinquencies; repossessions and losses on retail installment contracts; incorrect prepayment speed and/or discount rate assumptions; possible unavailability of qualified personnel, which could adversely affect the Company’s ability to service its portfolio; possible increases in the rate of consumer bankruptcy filings, which could adversely affect the Company’s rights to collect payments from its portfolio; other changes in government regulations affecting consumer credit; possible declines in the market price for used vehicles, which could adversely affect the Company’s realization upon repossessed vehicles; and economic conditions in geographic areas in which the Company's business is concentrated. All of such factors also may affect the Company’s future financial results, as to which there can be no assurance. Any implication that the results of the most recently completed quarter are indicative of future results is disclaimed, and the reader should draw no such inference. Factors such as those identified above in relation to the provision for credit losses may affect future performance.

Investor Relations Contact

Jeffrey P. Fritz, Chief Financial Officer

844 878-2777

Consumer Portfolio Services, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
		Three months ended						Nine months ended
		September 30,						September 30,
	2016			2015				2016			2015
Revenues:
Interest income	$	105,376		$	90,584		$	303,748		$	257,843
Servicing fees		26			73			73			283
Other income		3,114			3,334			10,278			10,215
		108,516			93,991			314,099			268,341
Expenses:
Employee costs		16,688			15,254			47,510			42,884
General and administrative		6,316			5,005			18,216			14,949
Interest		20,893			14,848			58,442			41,709
Provision for credit losses		46,262			37,411			134,881			106,533
Other expenses		5,902			5,824			18,040			16,668
		96,061			78,342			277,089			222,743
Income before income taxes		12,455			15,649			37,010			45,598
Income tax expense		5,107			6,806			15,175			19,885
Net income	$	7,348		$	8,843		$	21,835		$	25,713
Earnings per share:
Basic	$	0.31		$	0.34		$	0.89		$	0.99
Diluted	$	0.26		$	0.28		$	0.75		$	0.81
Number of shares used in computing earnings
per share:
Basic		23,894			26,093			24,574			25,989
Diluted		28,503			31,476			29,253			31,796
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
		September 30,			December 31,
	2016			2015
Assets:
Cash and cash equivalents	$	11,494		$	19,322
Restricted cash and equivalents		116,403			106,054
Total cash and cash equivalents		127,897			125,376
Finance receivables		2,257,151			1,985,093
Allowance for finance credit losses		(96,843)			(75,603)
Finance receivables, net		2,160,308			1,909,490
Finance receivables measured at fair value		7			61
Deferred tax assets, net		43,197			37,597
Other assets		57,626			56,401
	$	2,389,035		$	2,128,925
Liabilities and Shareholders' Equity:
Accounts payable and accrued expenses	$	33,563		$	29,509
Warehouse lines of credit		81,683			194,056
Residual interest financing		6,856			9,042
Securitization trust debt		2,073,409			1,720,021
Subordinated renewable notes		14,353			15,138
		2,209,864			1,967,766
Shareholders' equity		179,171			161,159
	$	2,389,035		$	2,128,925
Operating and Performance Data ($ in millions)
		At and for the					At and for the
		Three months ended						Nine months ended
		September 30,						September 30,
		2016			2015			2016			2015
Contracts purchased	$	242.09		$	287.54		$	873.50		$	791.33
Contracts securitized		325.00			292.77			1,005.00			778.22
Total managed portfolio	$	2,291.86		$	1,940.55		$	2,291.86		$	1,940.55
Average managed portfolio		2,281.62			1,903.23			2,198.93			1,797.23
Allowance for finance credit losses as % of fin. receivables		4.29%			4.14%
Aggregate allowance as % of fin. receivables (1)		5.28%			5.07%
Delinquencies
31+ Days		8.98%			7.31%
Repossession Inventory		1.48%			1.51%
Total Delinquencies and Repo. Inventory		10.46%			8.81%
Annualized net charge-offs as % of average owned portfolio		6.69%			6.27%			7.05%			6.50%
Recovery rates (2)		36.1%			40.0%			38.4%			42.7%
		For the						For the
		Three months ended						Nine months ended
		September 30,						September 30,
		2016			2015			2016			2015
		$ (3)	% (4)		$ (3)	% (4)		$ (3)	% (4)		$ (3)	% (4)
Interest income		$          105.38	18.5%		$           90.58	19.0%		$          303.75	18.4%		$          257.84	19.1%
Servicing fees and other income		3.14	0.6%		3.41	0.7%		10.35	0.6%		10.50	0.8%
Interest expense		(20.89)	-3.7%		(14.85)	-3.1%		(58.44)	-3.5%		(41.71)	-3.1%
Net interest margin		87.62	15.4%		79.14	16.6%		255.66	15.5%		226.63	16.8%
Provision for credit losses		(46.26)	-8.1%		(37.41)	-7.9%		(134.88)	-8.2%		(106.53)	-7.9%
Risk adjusted margin		41.36	7.3%		41.73	8.8%		120.78	7.3%		120.10	8.9%
Core operating expenses		(28.91)	-5.1%		(26.08)	-5.5%		(83.77)	-5.1%		(74.50)	-5.5%
Pre-tax income		$           12.46	2.2%		$           15.65	3.3%		$           37.01	2.2%		$           45.60	3.4%
(1)  Includes allowance for finance credit losses and allowance for repossession inventory.
(2)  Wholesale auction liquidation amounts (net of expenses) as a percentage of the account balance at the time of sale.
(3)  Numbers may not add due to rounding.
(4)  Annualized percentage of the average managed portfolio.  Percentages may not add due to rounding.