Consumer Portfolio Services, Inc. · NASDAQ:CPSS
Consumer Portfolio Services — Investor Presentation (May 2021)
23 slides from Consumer Portfolio Services's investor presentation, May 27, 2021
Slide 1: Consumer Portfolio Services, Inc. Investor Presentation
Consumer Portfolio Services, Inc. Nasdaq: CPSS Investor Presentation As of March 31, 2021
Slide 2: Company overview
» Consumer finance company focused on sub - prime auto market » Established in 1991. IPO in 1992 » Through March 31, 2021, approximately $17.2 billion in contracts originated » Approximately 783 employees as of March 31, 2021 » $205.5 million contract originations in Q1 2021; $742.6 million contract
Slide 3: Pretax income, purchases, managed portfolio, return on assets
$0.00 $2.00 $4.00 $6.00 $8.00 Pretax Income ($ 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% 2.0% Return on Managed Assets (1)
Slide 4: CPS systems and proprietary 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 Underw
Slide 5: Results influenced by fair value accounting, CECL and pandemic
» 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. March 31, 2021 March 31, 2020 December 31, 2020 December 31, 2019 Interest Income 12.4% 13.0% 12.7% 14.0
Slide 6: U.S. market for auto finance and industry players
(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 Q1 2021 » As of March 31, 2021, had 66 employee sales representatives Contracts Purchased in Q1 2021 - $205.5 million Factory Franchised , 90% Independent , 10% 14% 2% 3% 6% 12% 6% 13% 12% 6% 5% 4%
Slide 8: Contract originations since inception
» Since inception through March 31, 2021, the Company has originated approximately $17.2 billion in contracts $206 $0 $200 $400 $600 $800 $1,000 $1,200 ($ in millions)
Slide 9: Total managed portfolio
$2,119 $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 three months ended March 31, 2021 » 25% New » 8% Certified Pre - Owned » 67% Pre - owned » 44% Domestic » 56% Imports Primarily late model, pre - owned vehicles 0% 4% 8% 12% 16% 20% 24% 28% Model Years of Current Year Production
Slide 11: Risk-adjusted pricing programs across sub-prime 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 three months ended March 31, 2021. (2) Contract APR as adjusted for fees charged (or paid) to
Slide 12: Borrower and contract characteristics
(1) Under the CPS programs for contracts purchased for the three months ended March 31, 2021. • Average age 41 years • Average time in job 5 years • Average time in residence 6 years • Average credit history 11 years • Average household income $56,743 per year • Percentage of homeowners 18% 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: 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 » $100 million with Ares / Credit - Suisse; revolves to November 2021, due in November 2023 » Regular issuer of asset - backed securities, providing
Slide 15: Vintage cumulative net losses
» Average of quarterly vintage cumulative net losses as of March 31, 2021 » Improved credit performance of more recent vintages 2016 2017 2018 2019 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% 16.00% 18.00% 20.00% 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 5
Slide 16: Vintage cumulative net losses (early months)
» Average of quarterly vintage cumulative net losses as of March 31, 2021 » Improved credit performance of more recent vintages 2016 2017 2018 2019 -1.00% 1.00% 3.00% 5.00% 7.00% 9.00% 11.00% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 2013 2014 2015 2016 2017 2018 2019
Slide 17: Balance sheet
(1) Numbers may not add due to rounding. ($ in millions) March 31, 2021 December 31, 2020 December 31, 2019 December 31, 2018 Assets Cash 9.2$ 13.5$ 5.3$ 12.8$ Restricted cash 159.4 130.7 135.5 117.3 Finance receivables, net of allowance 337.6 411.3 885.9 1,454.7 Finance receivables, measured at fai
Slide 18: Income statement
(1) Numbers may not add due to rounding. (2) Includes $8.8 million tax benefit in 2020. ($ in millions) March 31, 2021 March 31, 2020 December 31, 2020 December 31, 2019 December 31, 2018 Revenues Interest income 66.1$ 79.2$ 295.0$ 337.1$ 380.3$ Mark to finance receivables at fair value (4.4) (10.4)
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. ($ in millions) March 31, 2021 March 31, 2020 December 31, 2020 Decemb
Slide 20: Investment highlights
» CPS has weathered multiple industry cycles to remain one of the few independent public auto finance companies » Thirty - eight consecutive quarters of pre - tax profits » Attractive industry fundamentals with fewer large competitors than last cycle » Consistent credit performance » Opportunistic,
Slide 21: Impact of the pandemic
» 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: 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 www.sec.gov/edgar/searchedgar/companysearch
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
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