Consumer Portfolio Services, Inc. · NASDAQ:CPSS
Consumer Portfolio Services — Investor Presentation (November 2015)
22 slides from Consumer Portfolio Services's investor presentation, Nov 13, 2015
Slide 1: Consumer Portfolio Services, Inc. Investor Presentation
Consumer Portfolio Services, Inc. Nasdaq: CPSS Investor Presentation As of September 30, 2015
Slide 2: Company Overview
Company Overview Consumer finance company focused on sub-prime auto market Established in 1991. IPO in 1992 Through September 30, 2015, over $12.1 billion in contracts purchased from automobile dealers From 2002 — 2011, four mergers and acquisitions aggregating $822.3 million Irvine, California oper
Slide 3: Recent Financial and Operating Performance
Recent Financial and Operating Performance Pretax Income (sin mm) ya PP SYS ewe New Contract Purchases SOHC PI Pe Gin mm Ris $2,000 4 $1,800 + 81,600 + s1,400 + $1,200 $1,000 Total Managed Portfolio (Sinmm) go yw gh a? eI PCrtaee Return on Managed Assets 40% 3.0% 2.0% 10% 0.0% Be PP OP 2 Ie rage ye
Slide 4: Operational Flow
Operational Flow Automobile Dealership Auto Consumers - a. CPS Systems Proprietary Applications (tiginations System aa crt LL essoiae Bon TDOR i ee | waar = | | Reechabis | easy Sytem Servicing and Collections system ‘Auto Dialer - Workflow “Management
Slide 5: Economic Model
Economic Model > Lower funding costs and improvements in operating leverage offsetting lower contract APRs resulting in steady returns on managed portfolio. Quarter Ended ‘Nine Months Ended September 30, September 30, September 30. September 30, 2015, 2014 2015, 2014 Interest Income 19.0% 20.1% 19.1
Slide 6: U.S. Auto Finance Market
U.S. Auto Finance Market a U.S. Auto Finance Market $1 trillion in auto loans outstanding as of Q2 2015) Approximately 39% is below “prime” (credit score less than 660) (1) Approximately $140 billion in new subprime auto loans in 2014 (2) Historically fragmented market — top 20 players represent 47%
Slide 7: Marketing
Marketing Purchasing contracts from dealers in 48 states across the U.S. As of September 30, 2015 had 119 employee marketing representatives Primarily factory franchised dealers Contract Purchases a) 29% @ Factory Franchised Independents (1) Under the CPS programs for contracts purchased during firs
Slide 8: Historical Origination Volume
(8 in millions) Historical Origination Volume Since inception through September 30, 2015 the Company has purchased over $12.1 billion in contracts New contract purchases have ramped up significantly since financial crisis $1,400 $1,200 $1,000 $800 $600 $400 $200 $0 $1,283 $1,019 $945 $691 $791 $764
Slide 9: Total Managed Portfolio
Total Managed Portfolio » Decline through 2010 was the result of the financial crisis $2,500 $2,156 $2,000 $1,941 $1,566 $1,664 $1,644 $1,500 4 é $1,195 $1,231 2 $1,000 4 589 E $756 $795 “$500 4 1 | $0 + > SE LSPA PEELS
Slide 10: Collateral Description
Collateral Description ( Model Year Primarily late model, pre- owned vehicles 21% New 79% Pre-owned 40% Domestic 60% Imports (1) Under the CPS programs for contracts purchased during the first nine months of 2015. 10
Slide 11: Overview of Lending Programs
Overview of Lending Programs >» CPS’s proprietary scoring models and risk-adjusted pricing result in program offerings covering a wide band of the credit spectrum Avg. Avg Annual Avg, Time Avg. Amount Household on Job Avg. Program® — Yield® Financed Tneome (wears) FICO. Prefered «130% = $19,015. «$8
Slide 12: Quarterly Vintage Credit Profiles
Quarterly Vintage Credit Profiles » Yields and credit metrics are stronger today than at the end of the last cycle (1) 03 O3 2008 = 2010S 2011 = 2012S 2013) 2014S 2015 New Contract Purchases (Sin $330.8 $33.4. $35.3. S812 $143.1 $206.8 $279.3. $287.5 mm) Avg. Yield(2) 18.7% 23.7% 248% 23.4% «= 23.1%
Slide 13: Borrower and Contract Profile
Borrower and Contract Profile” Borrower: + Average age 43 years * Average time in job 6 years + Average time in residence 7 years + Average credit history 13 years + Average household income $55,100 per year + Percentage of homeowners 271% Contract: + Average amount financed $16,470 + Weighted avera
Slide 14: Operations
Operations > 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 and proprietary
Slide 15: Portfolio Financing
Portfolio Financing Y y $200 million in interim funding capacity through two credit facilities » $100 million with Fortress; revolves to April 2017, due in April 2019 » $100 million with Citibank; revolves to August 2016, due in August 2017 Regular issuer of asset-backed securities, providing long-t
Slide 16: Static Pool Performance
Static Pool Performance >» Average of quarterly vintage cumulative net losses as of September 30, 2015 2010 and later vintages in line with 2003-2005 vintages 22.00% 20.00% 18.00% 16.00% 14.00% 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% mas CLIDPP HPPA OG KIWI HSH OS
Slide 17: Summary Balance Sheets
Summary Balance Sheets (1) Geocrie casey betsy Resin Assets Cash s 209° $ m9 Eas) 130 Restricted eash 206.6 175.4 132.3 104.4 Finance recehables, net ofallowance 1,823.4 1,534.5 usa 744.8 Finance receivables, measured at fae value on 17 14s 59.7 Residual interest in seeusitizations : 2 09 as Defemed
Slide 18: Summary Statements of Operations
Summary Statements of Operations (1) ‘Three Months Enxied ES) Sepiember30, Sepiember30, December’. December 31 2015 2014 2014 2012 Revemes Interest income S96 s 739° $ . 21381783 Servicing fees : 02 14 3a 23 thes income 33 29 real 104 9.6 Gainon cancellation of debt : : 110 939 770 3002 2558 1872 Ex
Slide 19: Selected Financial Data
Selected Financial Data (8m millions) Auto contract purchases Total managed portfolio. Risk-adjusted margin (1) Core operating expenses (2) Samount % ofave. mamged portfolio Pretax return on mamged assets (3) ‘Total delingweneies and repo inventory (30+ days past due) Asa of total owned portfolio As
Slide 20: Investment Considerations
Investment Considerations CPS has weathered two. industry cycles to remain one of the few independent public auto finance companies Fifteen consecutive quarters of improving profitability Attractive industry . fundamentals with fewer large competitors than last cycle Credit performance of 2010 and l
Slide 21: Reference to Public Reports
Reference to Public Reports ‘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.
Slide 22: Safe Harbor Statement
Safe Harbor Statement » 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
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