Consumer Portfolio Services, Inc. · NASDAQ:CPSS
Consumer Portfolio Services — Investor Presentation (March 2021)
23 slides from Consumer Portfolio Services's investor presentation, Mar 25, 2021
Slide 1: Consumer Portfolio Services, Inc. Investor Presentation
Consumer Portfolio Services, Inc. Nasdaq: CPSS Investor Presentation As of December 31, 2020
Slide 2: Company overview
» Consumer finance company focused on sub - prime auto market » Established in 1991. IPO in 1992 » Through December 31, 2020, approximately $17.0 billion in contracts originated » From 2002 – 2011, four mergers and acquisitions aggregating $822.3 million » Headquarters in Las Vegas, Nevada. Branches
Slide 3: Pretax income, purchases and managed portfolio trends
$0.00 $2.00 $4.00 $6.00 Pretax Income ($ in mm ) $50 $100 $150 $200 $250 $300 New Contract Purchases ($ in mm) $1,000 $1,500 $2,000 $2,500 Total Managed Portfolio ($ in mm) 0.0% 1.0% Return on Managed Assets (1)
Slide 4: CPS proprietary systems and applications
CPS Systems Proprietary Applications Credit Decisioning AOA / DOA Underwriting Servicing and Collections System Customer Contact – Workflow Management Receivables Accounting System Credit Application Servicing Activities – Five Branch Locations Decline or Approval / Pricing Credit Bureaus Underwriti
Slide 5: Results as percentage of average managed portfolio
» Results influenced by transition to fair value accounting, early adoption of CECL and the pandemic (1) As a percentage of the average managed portfolio. Percentages may not add due to rounding. December 31, 2020 December 31, 2019 December 31, 2020 December 31, 2019 Interest Income 12.3% 13.8% 12.7
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 from dealers across the U.S.
» Contracts purchased from dealers in 46 states across the U.S. in 2020 » As of December 31, 2020 had 59 employee sales representatives Contracts Purchased in 2020 - $742.6 million Factory Franchised , 89% Independent , 11% 14% 2% 3% 6% 12% 6%
Slide 8: Contract purchases since inception
» Since inception through December 31, 2020 the Company has originated approximately $17.0 billion in contracts $743 $0 $200 $400 $600 $800 $1,000 $1,200 ($ in millions)
Slide 9: Total managed portfolio
$2,250 $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 full year of 2020 » 24% New » 8% Certified Pre - Owned » 68% Pre - owned » 45% Domestic » 55% Imports Primarily late model, pre - owned vehicles 0% 4% 8% 12% 16% 20% 24% 28% Model Years of Current Year Production
Slide 11: CPS programs and 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 (1) Under the CPS programs for contracts purchased for the full year of 2020. (2) Contract APR as adjusted for fees charged (or paid) to dealer. Program
Slide 12: Borrower and contract profile
(1) Under the CPS programs for contracts purchased for the full year of 2020. • Average age 42 years • Average time in job 5 years • Average time in residence 6 years • Average credit history 11 years • Average household income $58,760 per year • Percentage of homeowners 19% Borrower : • Average amo
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
» $200 million in interim funding capacity through two credit facilities » $100 million with Citibank; revolves to December 2022, due in December 2023 » $100 million with Ares / Credit - Suisse; revolves to November 2021, due in November 2023 » Regular issuer of asset - backed securities, providing
Slide 15: Vintage cumulative net losses
» Average of quarterly vintage cumulative net losses as of December 31, 2020 » Improved credit performance of more recent vintages 2017 2018 2019 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% 16.00% 18.00% 20.00% 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57
Slide 16: Vintage cumulative net losses, early periods
» Average of quarterly vintage cumulative net losses as of December 31, 2020 » Improved credit performance in recent vintages 2017 2018 2019 -1.00% 1.00% 3.00% 5.00% 7.00% 9.00% 11.00% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 2006 2007 2013 2014 2015 2016 2017 2018 2019
Slide 17: Balance sheet
(1) Numbers may not add due to rounding. ($ in millions) December 31, 2020 December 31, 2019 December 31, 2018 December 31, 2017 Assets Cash 13.5$ 5.3$ 12.8$ 12.7$ Restricted cash 130.7 135.5 117.3 112.0 Finance receivables, net of allowance 411.3 885.9 1,454.7 2,195.8 Finance receivables, measured
Slide 18: Income statement
(1) Numbers may not add due to rounding. (2) Includes $8.8 million tax benefit in 2020. ($ in millions) December 31, 2020 December 31, 2019 December 31, 2020 December 31, 2019 December 31, 2018 Revenues Interest income 67.7$ 83.3$ 295.0$ 337.1$ 380.3$ Mark to finance receivables at fair value (6.5)
Slide 19: Key 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) December 31, 2020 December 31, 2019 December 31, 2020
Slide 20: Investment highlights
» CPS has weathered multiple industry cycles to remain one of the few independent public auto finance companies » Thirty - seven consecutive quarters of pre - tax profits » Attractive industry fundamentals with fewer large competitors than last cycle » Consistent credit performance » Opportunistic,
Slide 21: 2020 pandemic impact
» Originations volumes down significantly in 2020 compared to 2019. » Each quarter of 2020 results include provisions for credit losses and mark downs to fair value receivables due to pandemic. » April 2020 furlough / layoff of 11% of workforce. » Approximately 35% of workforce transitioned to work
Slide 22: Investor notice and risk factors
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.h
Slide 23: 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 f
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