Consumer Portfolio Services, Inc. · NASDAQ:CPSS
Consumer Portfolio Services — Investor Presentation (September 2022)
21 slides from Consumer Portfolio Services's investor presentation, Sep 16, 2022
Slide 1: Consumer Portfolio Services, Inc. Investor Presentation
Consumer Portfolio Services, Inc. Nasdaq: CPSS Investor Presentation As of June 30, 2022
Slide 2: Company overview
» Consumer finance company focused on sub - prime auto market » Established in 1991. IPO in 1992 » Through June 30, 2022, approximately $19.1 billion in contracts originated » Approximately 799 employees as of June 30, 2022 » $958.1 million contract originations in six months ended June 2022; $1.1 b
Slide 3: Pretax income, contract purchases, managed portfolio and return
$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 $2,500 Total Managed Portfolio ($ in mm) 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% Pre - Tax Return on Managed Assets (1) (1) Pr
Slide 4: CPS systems and proprietary 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: Managed portfolio performance as percentage of average portfolio
(1) As a percentage of the average managed portfolio. Percentages may not add due to rounding. June 30, 2022 June 30, 2021 December 31, 2021 December 31, 2020 Interest Income 12.3% 12.4% 12.4% 12.7% Mark to Fin. Recs. at FV 0.8% -- (0.2%) (1.3%) Servicing and Other Income 0.3% 0.3% 0.3% 0.2% Interes
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 » $1.3 trillion auto loans
Slide 7: Contracts purchased and originating dealer type
» Contracts purchased in six months ended June 30, 2022 - $958.1 million » Contracts purchased from dealers in 47 states » Diverse geographic market penetration Factory Franchised , 79% Independent , 21% 10% 9% 3% Originating Dealer Type 8% 4% 5% 5% 2% 4% 2% 2%
Slide 8: Contract origination volume
» Since inception through June 30, 2022, the Company has originated approximately $19.1 billion in contracts » 2022 Q2 volume was 33.7% greater than the first quarter of 2022 and nearly double the volume from the second quarter of 2021 $958 $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 ($ in millions)
Slide 9: Total managed portfolio
$2,555 $0 $500 $1,000 $1,500 $2,000 $2,500 ($ in millions)
Slide 10: Contract purchase mix by vehicle type
(1) Under the CPS programs for contracts purchased for the six months ended June 30, 2022 » 11% New » 12% Certified Pre - Owned » 77% 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: 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 Program (1) Avg. Yield (2) Avg. Amount Financed Avg. Annual Household Income Avg. Time on Job (years) Avg. FICO % of Purchases Meta 8.54% $27,029 $95,111
Slide 12: Borrower and contract characteristics
(1) Under the CPS programs for contracts purchased for the six months ended June 30, 2022. • Average age 42 years • Average time in job 5 years • Average time in residence 6 years • Average credit history 11 years • Average household income $69,636 per year • Percentage of homeowners 24% Borrower :
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 and securitizations
» $400 million in interim funding capacity through two credit facilities » $200 million with Citibank; revolves to July 2024, due in July 2025 » $200 million with Ares; revolves to January 24, due in January 2028 » Regular issuer of asset - backed securities, providing long - term matched funding »
Slide 15: Vintage cumulative net losses
» Average of quarterly vintage cumulative net losses as of March 31, 2022 » Improved credit performance of more recent vintages 2015 2016 2017 2018 2019 2020 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% 16.00% 18.00% 20.00% 1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 55 58 61 64 2015 20
Slide 16: Balance sheet
(1) Numbers may not add due to rounding. ($ in millions) June 30, 2022 December 31, 2021 December 31, 2020 December 31, 2019 Assets Cash 11.3$ 29.9$ 13.5$ 5.3$ Restricted cash 157.0 146.6 130.7 135.5 Finance receivables, net of allowance 113.3 176.2 411.3 885.9 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) June 30, 2022 June 30, 2021 December 31, 2021 December 31, 2020 December 31, 2019 Revenues Interest income 75.7$ 65.4$ 266.3$ 295.0$ 337.1$ Mark to finance receivables at fair value 4.7 - (4.4) (2
Slide 18: Selected operating and credit 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) June 30, 2022 June 30, 2021 December 31, 2021 December
Slide 19: Investment highlights
» CPS has weathered multiple industry cycles to remain one of the few independent public auto finance companies » Forty - three consecutive quarters of pre - tax profits » Attractive industry fundamentals with fewer large competitors than last cycle » Consistent credit performance » Opportunistic, s
Slide 20: Risk factors reference
1A, “Risk Factors," of CPS’s most recent annual report on Form 10 - K and subsequent reports on Form 10 - Q, which reports are on file with the Commission and available for review at the Commission's website. Such description of risk factors is incorporated herein by reference.
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
Consumer Portfolio Services — Investor Presentation (September 2022) on 6ix