Consumer Portfolio Services, Inc. · NASDAQ:CPSS
Consumer Portfolio Services — Investor Presentation (June 2023)
21 slides from Consumer Portfolio Services's investor presentation, Jun 1, 2023
Slide 1: Consumer Portfolio Services, Inc. Investor Presentation
Consumer Portfolio Services, Inc. Nasdaq: CPSS Investor Presentation As of March 31, 2023
Slide 2: Company overview
» Consumer finance company focused on sub - prime auto market » Established in 1991. IPO in 1992 » Through March 31, 2023, approximately $20.4 billion in contracts originated » Approximately 786 employees as of March 31, 2023 » $415.2 million contract originations in Q1 2023; $1.9 billion contract o
Slide 3: Pretax income, purchases, managed portfolio and return on managed assets
$0.0 $5.0 $10.0 $15.0 $20.0 $25.0 $30.0 $35.0 Pretax Income ($ in mm ) $50 $100 $150 $200 $250 $300 $350 $400 $450 $500 $550 New Contract Purchases ($ in mm) $1,000 $1,500 $2,000 $2,500 $3,000 Total Managed Portfolio ($ in mm) 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% Pre - Tax Return on Managed Assets (1)
Slide 4: CPS proprietary systems and applications
CPS Systems Proprietary Applications Credit Scoring and Decisioning Verifications and Funding Servicing and Collections System Customer Contact – Workflow Management Receivables Accounting System Credit Application Servicing Activities – Five Branch Locations Decline or Approval / Pricing Credit
Slide 5: Return on managed assets components
(1) As a percentage of the average managed portfolio. Percentages may not add due to rounding. March 31, 2023 March 31, 2022 December 31, 2022 December 31, 2021 Interest Income 11.2% 12.3% 12.0% 12.4% Mark to Fin. Recs. at FV - 0.4% 0.6% (0.2%) Servicing and Other Income 0.4% 0.3% 0.4% 0.3% Interest
Slide 6: U.S. market for auto finance
(1) According to Experian Automotive Other National Industry Players » Santander Consumer USA » Exeter Finance Corp » Global Lending Services » Westlake Financial » Credit Acceptance Corp. » GM Financial – Americredit » Capital One » Wells Fargo U.S Market for Auto Finance » $1.6 trillion auto loans
Slide 7: Contracts purchased by geography and dealer type
» Contracts purchased in three months ended March 31, 2023 - $415.2 million » Contracts purchased from dealers in 47 states » Diverse geographic market penetration Factory Franchised , 77% Independent , 23% 9% 3% Originating Dealer Type 9% 7% 8% 6% 6% 5% 5% 3% 2%
Slide 8: Contract originations since inception
» Since inception through March 31, 2023, the Company has originated approximately $20.4 billion in contracts $415 $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800 $2,000 ($ in millions)
Slide 9: Managed portfolio history
$0 $500 $1,000 $1,500 $2,000 $2,500 ($ in millions)
Slide 10: Vehicle mix of contracts purchased
(1) Under the CPS programs for contracts purchased for the year ended March 31, 2023 » 9% New » 12% Certified Pre - Owned » 79% Pre - owned » 47% Domestic » 53% Imports Primarily late model, pre - owned vehicles 0% 4% 8% 12% 16% 20% 24% 28% Model Years of Current Year Production
Slide 11: CPS program offerings across the sub-prime credit spectrum
» CPS’s proprietary scoring models and risk - adjusted pricing result in program offerings covering a wide band of the sub - prime credit spectrum % of Purchases Avg. FICO Avg. Time on Job (years) Avg. Annual Household Income Avg. Amount Financed Avg. Yield (2) Program (1) 3% 670 9.4 $99,512 $22,841
Slide 12: Borrower and contract profile
(1) Under the CPS programs for contracts purchased for the year ended March 31, 2023. • Average age 41 years • Average time in job 4 years • Average time in residence 6 years • Average credit history 9 years • Average household income $69,844 per year • Percentage of homeowners 21% Borrower : • Aver
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 » Decision inputs inclu
Slide 14: Funding: credit facilities and securitizations
» $400 million in interim funding capacity through two credit facilities » $200 million with Citibank; revolves to July 2024, due in July 2025 » $200 million with Ares; revolves to January 2024, due in January 2028 » Regular issuer of asset - backed securities, providing long - term matched funding
Slide 15: Quarterly vintage cumulative net losses
» Average of quarterly vintage cumulative net losses as of March 31, 2023 » Improved credit performance of more recent vintages 2016 2017 2018 2019 2020 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% 16.00% 18.00% 20.00% 1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 55 58 61 2016 2017 2018
Slide 16: Balance sheet
(1) Numbers may not add due to rounding. ($ in millions) March 31, 2023 December 31, 2022 December 31, 2021 December 31, 2020 Assets Cash 10.2$ 13.5$ 29.9$ 13.5$ Restricted cash 158.9 149.3 146.6 130.7 Finance receivables, net of allowance 54.8 70.6 176.2 411.3 Finance receivables, measured at fair
Slide 17: Income statement
(1) Numbers may not add due to rounding. (2) Includes $8.8 million tax benefit in 2020. ($ in millions) March 31, 2023 March 31, 2022 December 31, 2022 December 31, 2021 December 31, 2020 Revenues Interest income 80.1$ 70.1$ 305.2$ 266.3$ 295.0$ Mark to finance receivables at fair value - 2.4 15.3 (
Slide 18: Key performance 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. ($ in millions) March 31, 2023 March 31, 2022 December 31, 2022 Decemb
Slide 19: Investment highlights
» CPS has weathered multiple industry cycles to remain one of the few independent public auto finance companies » Forty - five consecutive quarters of pre - tax profits » Attractive industry fundamentals with fewer large competitors than last cycle » Consistent credit performance » Opportunistic, su
Slide 20: Cautionary 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 www.sec.gov/edgar/searchedgar/companysearch
Slide 21: Forward-looking statements
Forward - looking statements in this presentation include the Company's recorded figures representing allowances for remaining expected lifetime credit losses, its markdown of carrying value for the portion of its portfolio accounted for at fair value, its charge to the provision for credit losses
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