Investor Presentation As of March 31, 2018
Irvine, California operating Consumer finance company headquarters; Branches in focused on sub-prime auto Nevada, Illinois, Virginia and market Florida Established in 1991. IPO in Approximately 1,008 employees 1992 $859.1 million contract Through March 31, 2018, originations in 2017; $210.6 approximately $14.6 billion in million contract originations in contracts originated three months ended March 31, 2018 From 2002 – 2011, four mergers and acquisitions $2.3 billion outstanding managed portfolio at March aggregating $822.3 million 31, 2018 2
Total Managed Portfolio Pretax Income ($ in mm ) ($ in mm) $2,400 $12.00 $2,200 $10.00 $2,000 $8.00 $1,800 $6.00 $1,600 $4.00 $1,400 $2.00 $1,200 $0.00 $1,000 New Contract Purchases Return on Managed Assets (1) ($ in mm) $200 2.0% $150 1.0% $100 0.0% $50 (1) Equal to annualized pretax income as a percentage of the average managed portfolio. 3
CPS Systems Proprietary Applications Credit Bureaus Originations System Credit Automobile Application Dealership Credit Decisioning AOA / DOA Decline or Approval / Pricing Underwriting Underwriting Package Shop -- Receivables Negotiate -- Accounting Apply for Credit System Servicing and Collections System Servicing Activities – Five Branch Locations Auto Dialer – Workflow Management Auto Consumers 4
Recent results reflect upward tick in cost of funds due to rising interest rate environment. Quarter Ended Twelve Months Ended March 31, March 31, December 31, December 31, 2018 2017 2017 2016 Interest Income 17.3% 18.1% 18.2% 18.4% Servicing and Other Income 0.5% 0.5% 0.4% 0.6% Interest Expense (4.1%) (3.8%) (4.0%) (3.6%) Net Interest Margin 13.6% 14.8% 14.7% 15.4% Provision for Credit Losses (6.9%) (8.2%) (8.0%) (8.0%) Core Operating Expenses (5.9%) (5.3%) (5.3%) (5.1%) Pretax Return on Assets 0.8% 1.3% 1.4% 2.2% (1) As a percentage of the average managed portfolio. Percentages may not add due to rounding. 5
Other National U.S. Auto Finance Market Industry Players $1.1 trillion in auto loans outstanding as of Q4 2017 (1) Santander Consumer USA Approximately 39% of Q4 2017 auto loans GM Financial/AmeriCredit originated were below “prime” (credit score less than 660) (1) Capital One Approximately $225 billion in new Chase Custom subprime auto loans in 2016 (2) Wells Fargo Historically fragmented market Westlake Financial Credit Acceptance Corp. Few dominant long-term players Exeter Finance Corp. Significant barriers to entry (1) According to Experian Automotive. (2) According to Royal Media, Big Wheels 2017 6
Purchasing contracts from dealers in 48 states across the U.S. As of March 31, 2018 had 80 employee marketing representatives Primarily factory franchised dealers Contract Purchases (1) 22% Factory Franchised Independents 78% (1) Under the CPS programs for contracts purchased during first quarter of 2018. 7
Since inception through March 31, 2018 the Company has originated approximately $14.6 billion in contracts $1,200 $1,089 $1,061 $945 $1,000 $859 $764 $800 ($ in millions) $552 $600 $400 $297 $284 $211 $200 $113 $9 $0 8
Decline through 2010 was the result of the financial crisis $2,500 $ 2,334 $2,332 $2,308 $2,031 $2,000 $1,644 $1,500 ($ in millions) $1,231 $1,195 $898 $1,000 $795 $756 $500 $0 9
Model Years of Current Year Production 24% 20% Primarily late model, pre- 16% owned vehicles 12% • 23% New • 77% Pre-owned 8% • 46% Domestic 4% • 54% Imports 0% (1) Under the CPS programs for contracts purchased during first quarter 2018 10
CPS’s proprietary scoring models and risk-adjusted pricing result in program offerings covering a wide band of the sub-prime credit spectrum Avg. Annual Avg. Avg. Amount Household Avg. Time on Avg. % of Program (1) Yield (2) Financed Income Job (years) FICO Purchases Preferred 12.21% $19,864 $75,071 8.7 610 4% Super Alpha 14.66% $19,582 $70,226 7.7 587 8% Alpha Plus 16.82% $18,385 $59,099 6.3 578 19% Alpha 19.03% $16,608 $50,648 5.4 571 43% Standard 21.68% $13,601 $44,402 3.6 576 13% Mercury / Delta 22.73% $13,111 $42,261 3.3 560 8% First Time 27.72% $11,933 $34,964 2.0 576 4% Buyer Bravo 22.27% $12,210 $42,149 2.9 548 1% Overall 18.75% $16,117 $51,518 5.1 574 100% (1) Under the CPS programs for contracts purchased during first quarter 2018. (2) Contract APR as adjusted for fees charged (or paid) to dealer. 11
Borrower : • Average age 42 years • Average time in job 5 years • Average time in residence 6 years • Average credit history 11 years • Average household income $51,518 per year • Percentage of homeowners 22% Contract: • Average amount financed $16,117 • Weighted average monthly payment $424 • Weighted average term 69 months • Weighted average APR 19.0% • Average LTV 111.6 % (1) Under the CPS programs for contracts purchased during first quarter of 2018. 12
Servicing Contract Originations Centralized contract originations at Geographically dispersed servicing Irvine HQ centers enhance coverage and staffing flexibility and drive portfolio Maximizes control and efficiencies performance Certain functions performed at Florida and Nevada offices Early contact on past due accounts; commencing as early as first day after Proprietary auto-decisioning system due date Makes initial credit decision on over 99% of incoming applications Early stage workload supplemented by Uses both criteria and proprietary automated intelligent predictive dialer, scorecards in credit and pricing text message reminders and two-way text decisions message communications. Pre-funding verification of employment, income and residency Workloads allocated based on Protects against potential fraud specialization and behavioral scorecards, which enhances efficiencies 13
$300 million in interim funding capacity through three credit facilities $100 million with Fortress; revolves to April 2019, due in April 2021 $100 million with Citibank; revolves to August 2018, due in August 2019 $100 million with Ares / Credit-Suisse; revolves to November 2019, due in November 2021 Regular issuer of asset-backed securities, providing long-term matched funding $12.8 billion in 78 deals from 1994 through April 2018. Completed 28 senior subordinated securitizations since the beginning of 2011. In April 2018 transaction, sold five tranches of rated bonds from triple “A” down to double “B” with a blended coupon of 3.99%. At March 31, 2018, total corporate debt of $16.3 million in subordinated unsecured retail notes. May 2018, $40 million residual financing. 14
Average of quarterly vintage cumulative net losses as of March 31, 2018 Recent pool performance in line with business model economics 20.00% 2006 18.00% 2007 2011 16.00% 2012 2013 14.00% 2014 12.00% 2015 2016 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% 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 15
Average of quarterly vintage cumulative net losses as of March 31, 2018 Recent pool performance in line with business model economics 18.00% 2006 16.00% 2007 2011 14.00% 2012 2013 12.00% 2014 2015 10.00% 2016 8.00% 6.00% 4.00% 2.00% 0.00% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 16
18,000 10.00 Pre-tax Income $ in Millions - Left Axis 9.00 16,000 Book Value per Share in $ 8.00 - Right Axis 14,000 7.00 12,000 6.00 10,000 5.00 8,000 4.00 6,000 3.00 4,000 2.00 2,000 1.00 - - 17
March 31, December 31, December 31, December 31, ($ in millions) 2018 2017 2016 2015 Assets Cash $ 11.6 $ 12.7 $ 13.9 $ 19.3 Restricted cash 130.8 112.0 112.8 106.1 Finance receivables, net of allowance 1,991.0 2,195.8 2,172.4 1,909.5 Finance receivables, measured at fair value 209.9 - - - Deferred tax assets, net 32.3 32.4 42.8 37.6 Other assets 63.4 71.9 68.5 56.4 $ 2,439.0 $ 2,424.8 $ 2,410.4 $ 2,128.9 Liabilities Accounts payable and accrued expenses $ 33.6 $ 28.7 $ 25.0 $ 29.5 Warehouse lines of credit 121.7 112.4 103.4 194.1 Securitization trust debt 2,080.1 2,083.2 2,080.9 1,720.0 Subordinated renewable notes 16.3 16.6 14.9 15.1 2,251.7 2,240.9 2,224.2 1,967.7 Shareholders' equity 187.3 183.9 186.2 161.2 $ 2,439.0 $ 2,424.8 $ 2,410.4 $ 2,128.9 (1) Numbers may not add due to rounding. 18
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