Consumer Portfolio Services, Inc. · NASDAQ:CPSS
Consumer Portfolio Services — Investor Presentation (March 2015)
21 slides from Consumer Portfolio Services's investor presentation, Mar 10, 2015
Slide 1: Investor Presentation As of December 31, 2014
Investor Presentation As of December 31 , 2014
Slide 2: Company overview
2 » Consumer finance company focused on sub - prime auto market » Established in 1991. IPO in 1992 » Through December 31, 2014, over $11.3 billion in contracts purchased from automobile dealers » From 2002 – 2011, four mergers and acquisitions aggregating $822.3 million » Irvine, California operatin
Slide 3: Managed portfolio, pretax income, purchases and return on managed assets
3 $850 $1,050 $1,250 $1,450 $1,650 Total Managed Portfolio ($ in mm) $4.00 $6.00 $8.00 $10.00 $12.00 $14.00 Pretax Income ($ in mm ) $30 $80 $130 $180 $230 $280 New Contract Purchases ($ in mm) (1) Equal to annualized pretax income as a percentage of the average managed portfolio. 0.0% 1.0% 2.0% 3.0
Slide 4: Returns on managed portfolio
4 » Lower funding costs and improvements in operating leverage offsetting lower contract APRs resulting in steady returns on managed portfolio. (1) As a percentage of the average managed portfolio. Percentages may not add due to rounding. Quarter Ended December 31, 2014 September 30, 2014 December 3
Slide 5: U.S. Auto Finance Market
U.S. Auto Finance Market Over $800 billion in auto loans outstanding as of Q1 2014 (1) Approximately 35% is “subprime” (credit score less than 620) (1) Approximately $140 billion in new subprime auto loans in 2014 (2) Historically fragmented market Few dominant long - term players Significant barrie
Slide 6: Dealer relationships and marketing representatives
» Purchasing contracts from dealers in 48 states across the U.S. » As of December 31, 2014 had 130 employee marketing representatives, 56 in the field and 74 in - house » Primarily factory franchised dealers 6 (1) Under the CPS programs for contracts purchased during 2014. 66% 34% Contract Purchases
Slide 7: New contract purchases
$ 284 $691 $1,019 $1,283 $297 $9 $113 $552 $764 $945 $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 ($ in millions) 7 » Since inception through December 31, 2014 the Company has purchased over $11.3 billion in contracts » New contract purchases have ramped up significantly since financial crisis
Slide 8: Total managed portfolio
$1,231 $1,122 $1,644 $1,566 $2,126 $1,664 $1,195 $756 $795 $898 $0 $500 $1,000 $1,500 $2,000 $2,500 ($ in millions) 8 » Decline through 2010 was the result of the financial crisis
Slide 9: Contract purchases by vehicle type and model year
0% 2% 4% 6% 8% 10% 12% 14% 16% 18% Model Year 9 • 16% New • 84% Pre - owned • 45% Domestic • 55% Imports Primarily late model, pre - owned vehicles (1) Under the CPS programs for contracts purchased during 2014.
Slide 10: Credit programs and risk-adjusted pricing
10 » CPS’s proprietary scoring models and risk - adjusted pricing result in program offerings covering a wide band of the credit spectrum (1) Under the CPS programs for contracts purchased during 2014. (2) Contract APR as adjusted for fees charged (or paid) to dealer. Program (1) Avg. Yield (2) Avg.
Slide 11: Yields and credit metrics versus last cycle
11 » Yields and credit metrics are significantly stronger today than at the end of the last cycle (1) (1) For new contracts purchased during the calendar quarter under the CPS programs. Averages are weighted by principal balance. (2) Contract APR as adjusted for fees charged (or paid) to dealer . (3
Slide 12: Borrower and contract characteristics
• Average age 42 years • Average time in job 6 years • Average time in residence 6 years • Average credit history 13 years • Average household income $54,615 per year • Percentage of homeowners 26% Borrower : • Average amount financed $15,941 • Weighted average monthly payment $463 • Weighted averag
Slide 13: Contract originations and servicing
Contract Originations » Centralized contract originations at Irvine HQ » Maximizes control and efficiencies » Certain functions performed at Florida and Nevada offices » Proprietary auto - decisioning system » Makes initial credit decision on over 99% of incoming applications » Uses both criteria an
Slide 14: Funding and securitizations
» $200 million in interim funding capacity through two credit facilities » $100 million with Goldman Sachs/Fortress; revolver to April 2015, due in March 2017 » $100 million with Citibank; revolver to August 2016, due in August 2017 » Regular issuer of asset - backed securities, providing long - ter
Slide 15: Vintage cumulative net losses
0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% 16.00% 18.00% 20.00% 22.00% Months Seasoned 2002 2003 2004 2005 2006 2007 2008 2010 2011 2012 2013 2014 15 » Average of quarterly vintage cumulative net losses as of December 31, 2014 » 2010 and later vintages in line or better than 2003 - 2005 vint
Slide 16: Balance sheet
($ in millions) December 31, 2014 December 31, 2013 December 31, 2012 December 31, 2011 Assets Cash 17.9$ 22.1$ 13.0$ 10.1$ Restricted cash 175.4 132.3 104.4 159.2 Finance receivables, net of allowance 1,534.5 1,115.4 744.8 506.3 Finance receivables, measured at fair value 1.7 14.5 59.7 160.3 Residu
Slide 17: Income statement
17 ($ in millions) December 31, 2014 December 31, 2013 December 31, 2014 December 31, 2013 December 31, 2012 Revenues . . . Interest income 79.7$ 63.9$ 286.7$ 231.3$ 175.3$ Servicing fees 0.2 0.6 1.4 3.1 2.3 Other income 3.5 2.1 12.1 10.4 9.6 Gain on cancellation of debt - - - 11.0 - 83.4 66.6 300.2
Slide 18: Operating and credit metrics
18 (1) Revenues less interest expense and provision for credit losses. (2) Total expenses less provision for credit losses and interest expense. (3) Equal to annualized pretax income as a percentage of the average managed portfolio. ($ in millions) December 31, 2014 December 31, 2013 December 31, 20
Slide 19: Investment highlights
» CPS has weathered two industry cycles to remain one of the few independent public auto finance companies » Thirteen consecutive quarters of improving profitability and operating performance » Attractive industry fundamentals with fewer large competitors than last cycle » Credit performance of 2010
Slide 20: Any person considering an investment in securities issued by CPS is urged to
Any person considering an investment in securities issued by CPS is urged to review the materials filed by CPS with the U . S . Securities and Exchange Commission ("Commission") . Such materials may be found by inquiring of the Commission‘s EDGAR search page (http : //www . sec . gov/edgar/searche
Slide 21: Information included in the preceding slides is believed to be accurate, but is
Information included in the preceding slides is believed to be accurate, but is not necessarily complete . Such information should be reviewed in its appropriate context . The implication that historical trends will continue in the future, or that past performance is indicative of future results,
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