Consumer Portfolio Services, Inc. · NASDAQ:CPSS
Consumer Portfolio Services — Investor Presentation (February 2013)
23 slides from Consumer Portfolio Services's investor presentation, Feb 25, 2013
Slide 1: Investor Presentation As of December 31, 2012
1 Investor Presentation As of December 31, 2012
Slide 2: Consumer finance company focused on the sub-prime auto market
Consumer finance company focused on the sub - prime auto market Established in 1991; IPO in 1992 Through December 31, 2012, over $9.6 billion in contract purchases from auto dealers Irvine, California headquarters and three strategically located servicing branches in Virginia, Florida and Il
Slide 3: Key performance charts: delinquencies, charge-offs, portfolio, income
0.0% 2.0% 4.0% 6.0% 8.0% 31+ Delinquencies (2) 3 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% Net Charge - offs (2) $600 $650 $700 $750 $800 $850 $900 Total Managed Portfolio ($ in mm) $0.00 $1.00 $2.00 $3.00 $4.00 $5.00 Pretax Income ($ in mm ) $25 $50 $75 $100 $125 $150 New Contract Purchases ($ in mm) (1) Equal
Slide 4: Growth in managed portfolio and lower funding costs drive operating leverage
Growth in managed portfolio and declines in funding costs are driving enhanced operating leverage and profitability (1) As a percentage of the average managed portfolio. Percentages may not add due to rounding. Quarter Ended Dec. 2012 (1) Quarter Ended Sept. 2012 (1) Quarter Ended Dec. 2011 (1) In
Slide 5: U.S. Auto Finance Market
U.S. Auto Finance Market 2006 U.S. auto financing = $405 billion (1) $216 billion new; $189 billion used Company estimates 20%, or $81 billion is “subprime” Historically fragmented market Few dominant long - term players Significant barriers to entry Other National Industry Players GM Financial/Amer
Slide 6: Purchase contracts from dealers across the U.S.
Purchase contracts from dealers in over 45 states across the U.S. As of December 31, 2012 had 77 employee marketing representatives, 34 in the field and 43 in - house Primarily factory franchised dealers (1) Under the CPS programs for contracts purchased during 2012. 71% 29% Contract Purchases
Slide 7: New contract purchases since inception
$0 $200 $400 $600 $800 $1,000 $1,200 $1,400 ($ in millions) Since inception through December 2012 the Company has purchased over $9.6 billion in contracts New contract purchases have ramped up significantly since financial crisis 7
Slide 8: Managed portfolio
$595 $744 $907 $1,122 $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 Managed portfolio is growing again
Slide 9: Contract purchases by model year and vehicle type
0% 2% 4% 6% 8% 10% 12% 14% 16% Model Year • 9% New • 91% Pre - owned • 52% Domestic • 48% Foreign Primarily late model, pre - owned vehicles 9 (1) Under the CPS programs for contracts purchased in 2012.
Slide 10: Proprietary scoring models and risk-adjusted pricing programs
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 2012. (2) Contract APR as adjusted for fees charged (or paid) to dealer. Program (1) Avg. Yield (2) Avg. Am
Slide 11: Yields and credit metrics stronger than end of last cycle
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) W
Slide 12: Borrower and contract profile
• Average age 42 years • Average time in job 7 years • Average time in residence 6 years • Average credit history 13 years • Average household income $56,052 per year • Percentage of homeowners 26% Borrower: • Average amount financed $15,313 • Weighted average monthly payment $435 • Average term 60
Slide 13: Contract originations and servicing
Contract Originations Centralized contract originations at Irvine HQ ▪ Maximizes control and efficiencies ▪ Certain functions performed at Florida office Proprietary auto - decisioning system ▪ Makes initial credit decision on over 99% of incoming applications ▪ Uses both criteria and proprietar
Slide 14: Funding and liquidity
$200 million in interim funding capacity through two credit facilities › $100 million with Goldman Sachs/Fortress due in March 2013 › $100 million with Citibank due in May 2013 Regular issuer of asset - backed securities, which provides long - term matched funding › $7.7 billion in approximately
Slide 15: Delinquencies and net charge-offs
15 2.00% 4.00% 6.00% 8.00% 10.00% 2.00% 4.00% 6.00% 8.00% 10.00% Delinquencies Net Charge - Offs Net Charge-Offs (1) 31+ Delinquencies (2) (1) Annualized for quarterly period. (2) Includes repossession inventory. . Consistent year - over - year improvement in CPS portfolio delinquencies and net ch
Slide 16: Vintage cumulative net losses
0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% 16.00% 18.00% 20.00% Months Seasoned 2002 2003 2004 2005 2006 2007 2008 2010 2011 2012 Average of quarterly vintage cum. net losses as of December 31, 2012 2010 and later vintages in line or better than best vintages from last cycle 16
Slide 17: Recovery rates and Manheim Index
17 30.00% 35.00% 40.00% 45.00% 50.00% 55.00% 100.00 105.00 110.00 115.00 120.00 125.00 130.00 Manheim Index Recovery Rate Manheim Used Vehicle Value Index (Quarterly Avg.) (1) CPS Recovery Rate Quarterly Avg. (2) (1) Wholesale used vehicle prices (on a mix, mileage, and seasonally adjusted basis). (
Slide 18: Balance sheet
18 ($ in millions) December 31, 2012 December 31, 2011 December 31, 2010 December 31, 2009 Assets Cash $ 13.0 $ 10.1 $ 16.3 $ 12.4 Restricted Cash 104.4 159.2 124.0 128.5 Finance receivables, net of allowance 744.7 506.3 552.5 840.1 Finance receivables measured at fair value 59.7 160.3 --- --- Resid
Slide 19: Income statement
19 Three Months Ended Years Ended ($ in millions) Dec.31, 2012 Dec. 31, 2011 Dec. 31, 2012 Dec. 31, 2011 Dec. 31, 2010 Revenues Interest income $ 48.1 $ 41.2 $ 175.3 $ 127.9 $ 137.1 Servicing fees 0.4 0.8 2.3 4.3 7.7 Other i ncome 2.1 3.7 9.6 10.9 10.4 50.6 45.8 187.2 143.1 155.2 Expenses Employee c
Slide 20: Selected operating metrics
(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. Three Months Ended Years Ended ($ in millions) December 31, 2012 Decem
Slide 21: CPS has weathered two industry cycles
CPS has weathered two industry cycles to remain one of the few independent public auto finance companies Five quarters of improving profitability and operating performance Attractive industry fundamentals with fewer large competitors than last cycle Credit performance of 2010 and later vinta
Slide 22: Risk factors and SEC filings notice
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: Forward-looking statements
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,
Consumer Portfolio Services — Investor Presentation (February 2013) on 6ix