Consumer Portfolio Services, Inc. · NASDAQ:CPSS
Consumer Portfolio Services — Investor Presentation (March 2019)
23 slides from Consumer Portfolio Services's investor presentation, Mar 19, 2019
Slide 1: Consumer Portfolio Services, Inc. Investor Presentation
Consumer Portfolio Services, Inc. Nasdaq: CPSS Investor Presentation As of December 31, 2018
Slide 2: Company Overview
Company Overview Consumer finance company focused on sub-prime auto market Established in 1991. IPO in 1992 Through December 31, 2018, approximately $15.2 billion in contracts originated From 2002 — 2011, four mergers and acquisitions aggregating $822.3 million Irvine, California operating headquart
Slide 3: Recent Financial and Operating Performance
Recent Financial and Operating Performance Total Managed Portfolio Pretax Income (sin mm) 400 Sinmm $12.00 : $10.00 $8.00 Ad DO Siete ss New Contract Purch: me snmn) Return on Managed Assets 0.0% TLL Rayos Rn LOPS LL S (2) Equal to annuatized pretax income as a percentage of the average managed port
Slide 4: Operational Flow CPS Systems
Operational Flow CPS Systems Proprietary Applications Git i Originations System Automobile Angteaton Dealership aoe necro KOATDOA Gy Gite + spbeteste pad ia reo Png Uren > Underwriting Package Shop Negotiate Receivables Apply-for Credit Accounting System Servieing and Colletions 4 Sensing Aten Fie B
Slide 5: Economic Model
Economic Model > Recent results reflect upward tick in cost of funds due to rising interest rate environment. Quarter Ended ‘Twelve Months Ended December 31, December31, December 31, December 31. 2018 2017 2018 2017 Interest Income, 15.0% 18.0% 16.2% 18.2% Servicing and Other Income 0.4% 0.4% 0.4% 0
Slide 6: U.S. Auto Finance Market
U.S. Auto Finance Market U.S. Auto Finance \{ Other National Market Industry Players $1.2 trillion in auto Joans outstanding as of 04 2018 Santander Consumer USA Approximately $604.4 billion in new GM Financial/AmeriCredit auto loans in 2018 2) Capital One Approximately 38% of Q4 2018 auto loans ori
Slide 7: Marketing
Marketing » Purchasing contracts from dealers in 48 states across the U.S. + As of December 31, 2018 had 81 employee marketing representatives » Primarily factory franchised dealers Contract Purchases (1) 9) ik Factory Franchised 50.18 (1) Under the CPS programs for contracts purchased during 2018.
Slide 8: Historical Origination Volume
Historical Origination Volume » Since inception through December 31, 2018 the Company has originated approximately $15.2 billion in contracts $1,200 $061 $1,089 $1,000 so4s | - $859 $902 = 8800 $764 — 3 5 $600 $552. & $400 - pea $284 $200 | $113 Ir $9 | iti 8 490? ao re ao? ao? a oss Ar ot ggt® (Sin
Slide 9: Total Managed Portfolio
Total Managed Portfolio » Decline through 2010 was the result of the financial crisis $2,500 geaoe 82.334 82.380 $2,000 $2,031 $1,644 > $1,500 2 $1,195 $1,231 $1,000 || $898 : $756 $795 $500 || ae Ml so +=. _, » = 2 oS» & ff
Slide 10: Collateral Description
Collateral Description « 28% 24% 20% Primarily late model, pre- owned vehicles 16% 26% New 12% 74% Pre-owned 44% Domestic 56% Imports 4% 8% ~ 0% ~ (1) Under the CPS programs for contracts purchased during 2018
Slide 11: Overview of Lending Programs
Overview of Lending Programs >» — CPS’s proprietary scoring models and risk-adjusted pricing result in program offerings coverinig a wide band of the sub-prime credit spectrum Avg. Annual Avg. Avg. Amount Household Avg. Timeon Avg. %ot Program () Yield Financed Income Job (vears) FICO Purchases Pref
Slide 12: Borrower and Contract Profile
Borrower and Contract Profile” Borrower: * Average age + Average time in job Average time in residence Average credit history Average household income Percentage of homeowners Contract: + Average amount financed + Weighted average monthly payment Weighted average term Weighted average APR + Average
Slide 13: Operations
Operations 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 > Uses both cr
Slide 14: Portfolio Financing
Portfolio Financing $300 million in interim funding capacity through three credit facilities > $100 million with Fortress; revolves to April 2021, due in April 2023 > $100 million with Citibank; revolves to August 2020, due in August 2021 » $100 million with Ares / Credit-Suisse; revolves to Novembe
Slide 15: Static Pool Performance
Static Pool Performance Average of quarterly vintage cumulative net losses as of December 31, 2018 Recent pool performance in line with business model economics 20.00% cree 2006 2007 16.00% 2013 14.00% ia 12.00% 2015 2016 10.00% + 2017 8.00% 6.00% 4.00% + 2.00% 7 9 M1 13 15 17 19 21 23 25 27 29 31 3
Slide 16: Static Pool Performance
Static Pool Performance Average of quarterly vintage cumulative net losses as of December 31, 2018 Recent pool performance in line with business model economics 16.00% 3.4.5 6 7 S$ 9 1011 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34.35 36
Slide 17: Creating Shareholder Value
18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 Consumer Portfolio Services, Inc. Creating Shareholder Value mmm Pre-tax Income $ in Millions - Let Axis Book Value per Share in $ = Right Axis Bri SP SEBS SP BOW Be OS SLE SSL ES SLES SK go 3e St KF ws a OOS DS PS CE SS FF KK oS 10.00 E
Slide 18: Summary Balance Sheets
Summary Balance Sheets (1) hanes December31, December 31, December31, December 31, 2018, 2017 2016. 2015 Assets Cash 8 pss 2? 8 Bos 193 Restricted cash 1173 120 112.8 106.1 Finance receivables, net ofallowance 1,454.7 2,195.8 2172.4 1,909.5 Finance receivables, measured at fir value S21 z z - Deferr
Slide 19: Summary Statements of Operations
Summary Statements of Operations (1) “Theos Months Ended Years Ended ceember 3 December 31, (Sin mitions) ae eee aa s8 8 1051 8 3803 $402 4090 24 24 5 102 133 512 1072 300.8 cre 223 Employee costs 200 192 793 730 635 Genera and administrative 149 a 372 50.3 487 Interest 264 237 101s 923 799 Provisio
Slide 20: Selected Financial Data
Selected Financial Data ‘Three Months Ended. ‘Years Ended Giocte December 31, December 31, December 31, December 31, 2018. 2017 2017 2016 Auto contract purchases 3S 2518 S$ 1908 S 8591 S$ Loses ‘Total managed portfolio 5 23809 $ 23335 § S 23335 $2,308 Risk-adjusted margin (1) 8 307 S 309 $1582 S 158
Slide 21: Investment Considerations
Investment Considerations CPS has weathered two industry cycles to remain one of the few independent public auto finance companies Twenty-seven consecutive quarters of profitability (measured on a pre-tax basis) Attractive industry fundamentals with fewer large competitors than last cycle Consistent
Slide 22: 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.g
Slide 23: 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
Consumer Portfolio Services — Investor Presentation (March 2019) on 6ix