Consumer Portfolio Services, Inc. · NASDAQ:CPSS
Consumer Portfolio Services — Investor Presentation (December 2021)
23 slides from Consumer Portfolio Services's investor presentation, Dec 7, 2021
Slide 1: Consumer Portfolio Services, Inc. Investor Presentation
Consumer Portfolio Services, Inc. Nasdaq: CPSS Investor Presentation As of September 30, 2021
Slide 2: Company overview
» Consumer finance company focused on sub - prime auto market » Established in 1991. IPO in 1992 » Through September 30, 2021, approximately $17.9 billion in contracts originated » Approximately 751 employees as of September 30, 2021 » $818.3 million contract originations in nine months ended Septem
Slide 3: Pretax income, purchases, managed portfolio, return on assets
$0.0 $5.0 $10.0 $15.0 $20.0 Pretax Income ($ in mm ) $50 $100 $150 $200 $250 $300 $350 New Contract Purchases ($ 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% Return on Managed Assets (1) (1) Pre - tax income as a percentage of average managed portfoli
Slide 4: CPS proprietary systems and 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: Return on managed assets results
» 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. September 30, 2021 September 30, 2020 December 31, 2020 December 31, 2019 Interest Income 12.5% 12.8% 12
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 dealer mix
» Contracts purchased in nine months ended September 30, 2021 - $818.3 million » Contracts purchased from dealers in 46 states » Diverse geographic market penetration Factory Franchised , 88% Independent , 12% 14% 2% 3% 6% 12% 6% 13% 12% 6% 5% Originating Dealer Type 12% 10% 6% 5% 2% 5% 3%
Slide 8: Contract originations since inception
» Since inception through September 30, 2021, the Company has originated approximately $17.8 billion in contracts $818 $0 $200 $400 $600 $800 $1,000 $1,200 ($ in millions) Nine Months Ended September 30, 2021
Slide 9: Total managed portfolio
$2,162 $0 $500 $1,000 $1,500 $2,000 $2,500 ($ in millions)
Slide 10: Vehicle mix of purchased contracts
(1) Under the CPS programs for contracts purchased for the nine months ended September 30, 2021 » 20% New » 10% Certified Pre - Owned » 70% Pre - owned » 43% Domestic » 57% 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 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 (1) Under the CPS programs for contracts purchased for the nine months ended September 30, 2021. (2) Contract APR as adjusted for fees charged (or paid)
Slide 12: Borrower and contract characteristics
(1) Under the CPS programs for contracts purchased for the nine months ended September 30, 2021. • Average age 42 years • Average time in job 4 years • Average time in residence 6 years • Average credit history 10 years • Average household income $60,174 per year • Percentage of homeowners 18% Borro
Slide 13: 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 securitization
» $200 million in interim funding capacity through two credit facilities » $100 million with Citibank; revolves to December 2022, due in December 2023 » $100 million with Ares / Credit - Suisse; revolves to December 2021, due in November 2023 » Regular issuer of asset - backed securities, providing
Slide 15: Cumulative net losses by vintage
» Average of quarterly vintage cumulative net losses as of September 30, 2021 » Improved credit performance of more recent vintages 2015 2016 2017 2018 2019 2020 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% 16.00% 18.00% 20.00% 1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 55 58 61 2015 2
Slide 16: Cumulative net losses by vintage
» Average of quarterly vintage cumulative net losses as of September 30, 2021 » Improved credit performance of more recent vintages 2015 2016 2017 2018 2019 2020 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% 9.00% 1 4 7 10 13 16 19 22 2015 2016 2017 2018 2019 2020 Since 2016, each succussive
Slide 17: Balance sheet
(1) Numbers may not add due to rounding. ($ in millions) September 30, 2021 December 31, 2020 December 31, 2019 December 31, 2018 Assets Cash 28.8$ 13.5$ 5.3$ 12.8$ Restricted cash 145.0 130.7 135.5 117.3 Finance receivables, net of allowance 213.9 411.3 885.9 1,454.7 Finance receivables, measured a
Slide 18: Income statement
(1) Numbers may not add due to rounding. (2) Includes $8.8 million tax benefit in 2020. ($ in millions) September 30, 2021 September 30, 2020 December 31, 2020 December 31, 2019 December 31, 2018 Revenues Interest income 67.0$ 72.6$ 295.0$ 337.1$ 380.3$ Mark to finance receivables at fair value - (3
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) September 30, 2021 September 30, 2020 December 31, 202
Slide 20: Investment highlights
» CPS has weathered multiple industry cycles to remain one of the few independent public auto finance companies » Thirty - nine consecutive quarters of pre - tax profits » Attractive industry fundamentals with fewer large competitors than last cycle » Consistent credit performance » Opportunistic, s
Slide 21: COVID-19 pandemic impact and recovery
» Originations volumes recovering in 2021 after being down significantly in 2020. » 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 transit
Slide 22: Any person considering an investment in securities issued by CPS is urged to
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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