Consumer Portfolio Services, Inc. · NASDAQ:CPSS
Consumer Portfolio Services — Investor Presentation (May 2019)
23 slides from Consumer Portfolio Services's investor presentation, May 31, 2019
Slide 1: Investor Presentation As of March 31, 2019
Investor Presentation As of March 31, 2019
Slide 2: Company overview
2 » Consumer finance company focused on sub - prime auto market » Established in 1991. IPO in 1992 » Through March 31, 2019, approximately $15.5 billion in contracts originated » From 2002 – 2011, four mergers and acquisitions aggregating $822.3 million » Irvine, California operating headquarters; B
Slide 3: Managed portfolio, pretax income and contract purchases
3 $1,000 $1,200 $1,400 $1,600 $1,800 $2,000 $2,200 $2,400 Total Managed Portfolio ($ in mm) $0.00 $2.00 $4.00 $6.00 $8.00 Pretax Income ($ in mm ) $50 $100 $150 $200 $250 New Contract Purchases ($ in mm) (1) Equal to annualized pretax income as a percentage of the average managed portfolio. 0.0% 1.0
Slide 4: CPS Systems Proprietary Applications
4 CPS Systems Proprietary Applications Credit Decisioning AOA / DOA Underwriting Servicing and Collections System Auto Dialer –Workflow Management Receivables Accounting System Credit Application Servicing Activities –Five Branch Locations Decline or Approval / Pricing Credit Bureaus Underwriting Pa
Slide 5: Fair value accounting transition and return on assets
5 » Recent results influenced by transition to fair value accounting effective January 2018 (1) As a percentage of the average managed portfolio. Percentages may not add due to rounding. March 31, 2019 March 31, 2018 December 31, 2018 December 31, 2017 Interest Income 14.4% 17.3% 16.2% 18.2% Servici
Slide 6: U.S. Auto Finance Market
U.S. Auto Finance Market $1.2 trillion in auto loans outstanding as of Q4 2018 (1) Approximately 38% of Q4 2018 auto loans originated were below “prime” (credit score less than 660) (1) Approximately $604.4 billion in new auto loans in 2018 (2) Historically fragmented market Few dominant long - term
Slide 7: Dealer relationships and contract purchases
» Purchasing contracts from dealers in 48 states across the U.S. » As of March 31, 2019 had 74 employee marketing representatives » Primarily factory franchised dealers 7 (1) Under the CPS programs for contracts purchased during Q1 2019. 86% 14% Contract Purchases (1) Factory Franchised Independent
Slide 8: Contract originations by year
$284 $113 $552 $764 $945 $243 $0 $200 $400 $600 $800 $1,000 $1,200 ($ in millions) $1,089 8 » Since inception through March 31, 2019 the Company has originated approximately $15.5 billion in contracts $1,061 $859 $902
Slide 9: Total managed portfolio growth
$756 $795 $898 $1,231 $1,644 $2,031 $2,308 $2,334 $2,381 $2,393 $0 $500 $1,000 $1,500 $2,000 $2,500 ($ in millions) 9
Slide 10: Vehicle mix of contract purchases
0% 4% 8% 12% 16% 20% 24% 28% Model Years of Current Year Production 10 • 23% New • 77% Pre - owned • 47% Domestic • 53% Imports Primarily late model, pre - owned vehicles (1) Under the CPS programs for contracts purchased during Q1 2019
Slide 11: Credit programs and borrower profile by program
11 » CPS’s proprietary scoring models and risk - adjusted pricing result in program offerings covering a wide band of the sub - prime credit spectrum (1) Under the CPS programs for contracts purchased during Q1 2019. (2) Contract APR as adjusted for fees charged (or paid) to dealer. Program (1) Avg.
Slide 12: Borrower and contract characteristics
• Average age 42 years • Average time in job 5 years • Average time in residence 6 years • Average credit history 11 years • Average household income $55,496 per year • Percentage of homeowners 21% Borrower : • Average amount financed $17,432 • Weighted average monthly payment $459 • 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
» $300 million in interim funding capacity through three credit facilities » $100 million with Fortress; revolves to April 2021, due in April 2023 » $100 million with Citibank; revolves to August 2020, due in August 2021 » $100 million with Ares / Credit - Suisse; revolves to November 2019, due in N
Slide 15: Vintage cumulative net losses
15 » Average of quarterly vintage cumulative net losses as of March 31, 2019 » Improved credit performance of more recent vintages 2017 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% 16.00% 18.00% 20.00% 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 2006 2007 201
Slide 16: Vintage cumulative net losses (early periods)
16 » Average of quarterly vintage cumulative net losses as of March 31, 2019 » Improved credit performance of more recent vintages 2017 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% 16.00% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 2006 2007 2013 2014 2015
Slide 17: Pre-tax income and book value per share
- 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 - 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00 9.00 10.00 Pre-tax Inc
Slide 18: Balance sheet
($ in millions) March 31, 2019 December 31, 2018 December 31, 2017 December 31, 2016 Assets Cash 8.9$ 12.8$ 12.7$ 13.9$ Restricted cash 135.5 117.3 112.0 112.8 Finance receivables, net of allowance 1,296.2 1,454.7 2,195.8 2,172.4 Finance receivables, measured at fair value 997.5 821.1 - - Deferred t
Slide 19: Income statement
19 ($ in millions) March 31, 2019 March 31, 2018 December 31, 2018 December 31, 2017 December 31, 2016 Revenues Interest income 85.8$ 100.9$ 380.3$ 424.2$ 409.0$ Other income 2.4 2.7 9.5 10.2 13.3 88.2 103.6 389.8 434.4 422.3 Expenses Employee costs 19.1 20.6 79.3 73.0 65.5 General and administrativ
Slide 20: Key financial and credit metrics
20 (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) March 31, 2019 March 31, 2018 December 31, 2018 Dec
Slide 21: Investment highlights
» CPS has weathered multiple industry cycles to remain one of the few independent public auto finance companies » Thirty consecutive quarters of pre - tax profits » Attractive industry fundamentals with fewer large competitors than last cycle » Consistent credit performance 21 » Growing portfolio en
Slide 22: 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 23: 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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