Consumer Portfolio Services, Inc. · NASDAQ:CPSS
Consumer Portfolio Services — Investor Presentation (November 2013)
22 slides from Consumer Portfolio Services's investor presentation, Nov 12, 2013
Slide 1: Investor Presentation As of September 30, 2013
1 Investor Presentation As of September 30, 2013
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 September 30, 2013, over $10.2 billion in contract purchases from auto dealers Irvine, California headquarters and three strategically located servicing branches in Virginia, Florida and
Slide 3: Managed portfolio, pretax income, purchases and return on managed assets
3 $800 $850 $900 $950 $1,000 $1,050 $1,100 $1,150 $1,200 Total Managed Portfolio ($ in mm) $2.00 $3.00 $4.00 $5.00 $6.00 $7.00 $8.00 $9.00 $10.00 $11.00 Pretax Income ($ in mm ) $30 $60 $90 $120 $150 $180 $210 New Contract Purchases ($ in mm) (1) Equal to annualized pretax income as a percentage of
Slide 4: Growth in managed portfolio driving operating leverage and profitability
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 September 2013 (1) Quarter Ended June 2013 (1) Quarter Ended September 20
Slide 5: U.S. Auto Finance Market
U.S. Auto Finance Market Over $700 billion in auto loans outstanding as of Q4 2012 (1) Approximately 20% is “subprime” (credit score less than 620) (1) Over $300 billion in auto loans written in 2012, with appx . 25% subprime (2) Historically fragmented market Few dominant long - term players Signif
Slide 6: Purchase contracts from dealers across the U.S.
Purchase contracts from dealers in over 46 states across the U.S. As of September 30, 2013 had 100 employee marketing representatives, 45 in the field and 55 in - house Primarily factory franchised dealers (1) Under the CPS programs for contracts purchased during the first nine months of 2013.
Slide 7: New contract purchases since inception
$447 $691 $1,019 $1,283 $297 $9 $113 $284 $552 $591 $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 ($ in millions) Since inception through September 2013 the Company has purchased over $ 10.2 billion in contracts New contract purchases have ramped up significantly since financial crisis 7
Slide 8: Managed portfolio growth
$1,167 $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: Portfolio by model year and vehicle type
0% 2% 4% 6% 8% 10% 12% 14% Model Year • 10% New • 90% Pre - owned • 48% Domestic • 52% Foreign Primarily late model, pre - owned vehicles 9 (1) Under the CPS programs for contracts purchased during the first nine months of 2013.
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 the first nine months of 2013. (2) Contract APR as adjusted for fees charged (or paid) to dealer. Program (
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 characteristics
• Average age 42 years • Average time in job 7 years • Average time in residence 6 years • Average credit history 13 years • Average household income $56,796 per year • Percentage of homeowners 27% Borrower: • Average amount financed $15,650 • Weighted average monthly payment $447 • Average term 61
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: credit facilities, securitizations and corporate debt
$200 million in interim funding capacity through two credit facilities › $100 million with Goldman Sachs/Fortress due in March 2017 › $100 million with Citibank due in June 2016 Regular issuer of asset - backed securities, which provides long - term matched funding › $8.3 billion in over 60 deal
Slide 15: Vintage cumulative net losses
0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% 16.00% 18.00% 20.00% 22.00% Months Seasoned 2002 2003 2004 2005 2006 2007 2008 2010 2011 2012 Average of quarterly vintage cum. net losses as of September 30, 2013 2010 and later vintages in line or better than best vintages from last cycle 15
Slide 16: Recovery rates and Manheim Index
16 30.00% 35.00% 40.00% 45.00% 50.00% 55.00% 100.00 105.00 110.00 115.00 120.00 125.00 130.00 Manheim Index Recovery Rate Manheim Used Vehicle Value Index (Quarterly Avg.) (1) CPS Recovery Rate Quarterly Avg. (2) (1) Wholesale used vehicle prices (on a mix, mileage, and seasonally adjusted basis). (
Slide 17: Balance sheet
17 ($ in millions) September 30, 2013 December 31, 2012 December 31, 2011 December 31, 2010 Assets Cash $ 24.1 $ 13.0 $ 10.1 $ 16.3 Restricted Cash 129.5 104.4 159.2 124.0 Finance receivables, net of allowance 1,046.8 744.7 506.3 552.5 Finance receivables measured at fair value 21.2 59.7 160.3 --- R
Slide 18: Income statement
18 Nine Months Ended Years Ended ($ in millions) September 30 , 2013 September 30,2012 Dec. 31, 2012 Dec. 31, 2011 Dec. 31, 2010 Revenues Interest income $ 167.4 $ 127.2 $ 175.3 $ 127.9 $ 137.1 Servicing fees 2.5 1.9 2.3 4.3 7.7 Other i ncome 8.3 7.5 9.6 10.9 10.4 Gain on cancellation of debt 10.9 -
Slide 19: 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. Nine Months Ended Years Ended ($ in millions) September 30, 2013 Septe
Slide 20: CPS has weathered two industry cycles
CPS has weathered two industry cycles to remain one of the few independent public auto finance companies Eight quarters of improving profitability and operating performance Attractive industry fundamentals with fewer large competitors than last cycle Credit performance of 2010 and later vint
Slide 21: Risk factors 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 22: Forward-looking statement disclaimer
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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