Slide 1: Investor Presentation As of June 30, 2012
1 Investor Presentation As of June 30, 2012
Slide 2: Company overview
Consumer finance company focused on the sub - prime auto market Established in 1991; IPO in 1992 Through June 30, 2012, approximately $9.2 billion in contract purchases from auto dealers Irvine, California headquarters and three strategically located servicing branches in Virginia, Florida a
Slide 3: Key performance charts: delinquencies, charge-offs, portfolio, net income
0.0% 2.0% 4.0% 6.0% 8.0% 31+ Delinquencies 3 0.0% 2.0% 4.0% 6.0% 8.0% Net Charge - offs $600 $650 $700 $750 $800 $850 Total Managed Portfolio ($ in mm) $0.00 $0.25 $0.50 $0.75 $1.00 $1.25 $1.50 Net Income ($ in mm ) $50.0 $75.0 $100.0 $125.0 $150.0 New Contract Purchases ($ in mm)
Slide 4: U.S. Auto Finance Market
U.S. Auto Finance Market 2006 U.S. auto financing = $405 billion (1) $216 billion new; $189 billion used Company estimates 20%, or $81 billion is “subprime” Historically fragmented market Few dominant long - term players Significant barriers to entry Other National Market Players GM Financial/AmeriC
Slide 5: Purchase contracts from dealers across the U.S.
Purchase contracts from dealers across the U.S. As of June 30, 2012 the Company had 34 employee marketing reps in the field and 28 in - house Primarily factory franchised dealers (1) Under the CPS programs for contracts purchased in the first half of 2012. 74% 26% Contract Purchases (1) Factor
Slide 6: Contract purchases since inception
$0 $200 $400 $600 $800 $1,000 $1,200 $1,400 ($ in millions) Since inception through June 2012 the Company has purchased $9.2 billion in contracts New contract purchases have ramped up significantly since financial crisis 6
Slide 7: Primarily late model, pre-owned vehicles
0% 2% 4% 6% 8% 10% 12% 14% 16% 18% Model Year • 10% New • 90% Pre - owned • 54% Domestic • 46% Foreign Primarily late model, pre - owned vehicles 7 (1) Under the CPS programs for contracts purchased in the first half of 2012.
Slide 8: Risk-adjusted pricing across the credit spectrum
CPS’s risk - adjusted pricing results in program offerings covering a wide band of the credit spectrum (1) Under the CPS programs for contracts purchased in the first half of 2012. (2) Contract APR as adjusted for fees charged (or paid) to dealer. Program (1) Avg. Yield (2) Avg. Amount Financed Av
Slide 9: Borrower and contract characteristics
• Average age 41 years • Average time in job 6 years • Average time in residence 6 years • Average credit history 13 years • Average household income $55,452 per year • Percentage of homeowners 25% Borrower: • Average amount financed $15,333 • Average monthly payment $417 • Average term 61 months •
Slide 10: Contract originations and servicing
Contract Originations Centralized contract originations at Irvine HQ ▪ Maximizes control and efficiencies Proprietary auto - decisioning system ▪ Makes initial credit decision on over 99% of incoming applications ▪ Uses both criteria and proprietary scorecards in credit and pricing decisions P
Slide 11: Funding capacity and securitizations
$200 million in funding capacity through two credit facilities › $100 million with Goldman Sachs/Fortress due in December 2012 › $100 million with Citibank due in May 2013 Regular issuer of asset - backed securities, which provides long - term matched funding › $8.2 billion in over 60 deals from
Slide 12: Managed portfolio
$595 $744 $907 $1,122 $1,566 $2,126 $1,664 $1,195 $ 756 $ 795 $806 0 500 1,000 1,500 2,000 2,500 ($ in Millions) 12 Decline through 2010 was the result of the financial crisis. Managed portfolio is growing again.
Slide 13: Portfolio delinquencies
0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% 9.00% CPS Portfolio (1) Portfolio delinquencies (31+) are improving significantly 13 (1) Three - quarter rolling averages.
Slide 14: Vintage cumulative net losses
0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% 16.00% 18.00% 20.00% Months Seasoned 2002 2003 2004 2005 2006 2007 2008 2010 2011 Average of quarterly vintage cum. net losses as of June 30, 2012 2010 and later vintages in line or better than 2003 and 2004 vintages 14
Slide 15: Recovery rates and Manheim Index
15 30.00% 35.00% 40.00% 45.00% 50.00% 55.00% 100.00 105.00 110.00 115.00 120.00 125.00 130.00 Manheim Index Recovery Rate Manheim Used Vehicle Value Index (Quarterly Avg.) (1) CPS Recovery Rate Quarterly Avg. (2) (1) Wholesale used vehicle prices (on a mix, mileage, and seasonally adjusted basis). (
Slide 16: Balance sheet
16 ($ in millions) June 30, 2012 December 31, 2011 December 31, 2010 December 31, 2009 Assets Cash $ 10.2 $ 10.1 $ 16.3 $ 12.4 Restricted Cash 127.8 159.2 124.0 128.5 Finance receivables, net of allowance 604.7 506.3 552.5 840.1 Finance receivables measured at fair value 102.4 160.3 --- --- Residual
Slide 17: Income statement
17 Six Months Ended Years Ended ($ in millions) June 30, 2012 June 30, 2011 December 31, 2011 December 31, 2010 December 31, 2009 Revenues Interest income $ 82.2 $ 56.4 $ 127.9 $ 137.1 $ 208.2 Servicing fees 1.4 2.5 4.3 7.7 4.6 Other i ncome 5.1 4.6 10.9 10.4 11.1 88.7 63.5 143.1 155.2 223.9 Expense
Slide 18: Key financial and operating metrics
(1) Revenues less interest expense and provision for credit losses. (2) Total expenses less provision for credit losses and interest expense. ($ in millions) Six Months Ended Years Ended June 30, 2012 June 30, 2011 December 31, 2011 December 31, 2010 December 31, 2009 Auto contract purchases $257.8
Slide 19: Investment highlights
CPS has weathered two industry cycles to remain one of the few independent public auto finance companies Three quarters of improving profitability and operating performance Attractive industry fundamentals with fewer large competitors than last cycle Disciplined approach to credit quality an
Slide 20: Risk factors reference
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 . gov/edgar/searche
Slide 21: Forward-looking statements
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 of future results,