Consumer Portfolio Services, Inc 8-K, filed Mar 24, 2025
Consumer Portfolio Services, Inc. (CPSS)
About this 8-K
Consumer Portfolio Services, Inc filed this 8-K on March 24, 2025, reporting on events of March 21, 2025.
Items reported
- Item 7.01: Regulation FD disclosure
- Item 9.01: Financial statements and exhibits
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON DC 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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ITEM 7.01. REGULATION FD DISCLOSURE.
We are today making available one presentation consisting of 19 slides. A copy is attached as an exhibit. Although the exhibit is an update of similar presentations made available from time to time as an exhibit to a report on Form 8-K, we are not undertaking to update further any of the information that is contained in the attached presentation. The same presentation furnished as an exhibit to this report will be made available on our website, at this address:
http://ir.consumerportfolio.com/events-and-presentations/presentations
We routinely post important information, including news releases and reports to the U.S. Securities and Exchange Commission, on our website.
The information furnished in this report shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
Neither financial statements nor pro forma financial information are filed with this report.
(d) Exhibits
One exhibit is attached:
| 99.1 | Company Summary as of December 31, 2024 |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| CONSUMER PORTFOLIO SERVICES, INC. | |
| Dated: March 24, 2025 | By: /s/ Denesh Bharwani |
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Denesh Bharwani Executive Vice President and Chief Financial Officer Signing on behalf of the registrant |
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Exhibit 99.1
The Subprime Source Since 1991 December 2024 Investor Presentation
SAFE HARBOR STATEMENT Forward - looking statements in this presentation include the Company’s expectations of growth and the Company's recorded figures representing allowances for remaining expected lifetime credit losses, its estimates of fair value (most significantly for its receivables accounted for at fair value), its provision for credit losses, its entries offsetting the preceding, and figures derived from any of the preceding. In each case, such figures are forward - looking statements because they are dependent on the Company’s estimates of losses to be incurred in the future. The accuracy of such statements may be adversely affected by various factors, which include the following: possible increased delinquencies; repossessions and losses on retail installment contracts; incorrect prepayment speed and/or discount rate assumptions; possible unavailability of qualified personnel, which could adversely affect the Company’s ability to service its portfolio; possible increases in the rate of consumer bankruptcy filings, which could adversely affect the Company’s rights to collect payments from its portfolio; other changes in government regulations affecting consumer credit; possible declines in the market price for used vehicles, which could adversely affect the Company’s realization upon repossessed vehicles; economic conditions in geographic areas in which the Company's business is concentrated; and our ability to generate sufficient operating and financing cash flows. Any or all of such factors also may affect the Company’s future financial results, as to which there can be no assurance. Any implication that the results of the most recently completed quarter are indicative of future results is disclaimed, and the reader should draw no such inference. Factors such as those identified above in relation to losses to be incurred in the future may affect future performance. 2
COMPANY OVERVIEW Consumer Portfolio Services specializes in purchasing and servicing automobile contracts originated by licensed motor vehicle dealers in the sale of new and used automobiles, light trucks and passenger vans. Through our purchases, we provide indirect financing to dealers for sub - prime customers. We serve as an alternative source of financing for dealers, allowing sales to customers who otherwise might not be able to obtain financing. $3.6 Billion Managed Portfolio (1) NASDAQ Listed: CPSS Average Management Tenure is 24 Years - 300+ Combined Years at CPS HQ in Las Vegas, NV Operating Branches in NV, CA, IL, VA and FL 933 Employees (1) 9,100 Daily Applications Received from Dealers (1) Established in 1991. IPO 1992 53 Consecutive Profitable Quarters (1) 103 ABS Deals to Date (1) As of December 31, 2024 3
THE CPS ADVANTAGE • Repo - Skip Scorecard • Deficiency Scorecard • Dealer Scorecard • Asset Scorecard • Collection Behavior Scorecard • Extension Scorecard • Applicant Scorecard • Deal Scorecard • Early Payment Default Scorecard Originations Servicing (Collection) Servicing (Recovery) Asset & Dealers CPS is a leader in Machine Learning (ML) and Artificial Intelligence (AI). • Industry leading disciplined modeling framework: Linear/Logistic Regression, Neural Network, Decision Tree, Ensemble Model, Time Series, Machine Learning, Random Forest • Continuous model training and recalibration Proprietary Modeling and Scorecards Instant Credit Decisions Leads CPS to Higher Quality Loans Risk Department Led by Industry Veterans Decades of Historical Performance Data Shape our Models 4
LEADERSHIP Charles “Brad” Bradley CEO, Chairman of the Board • CEO since 1992 • Chairman of the Board since 2001 • 33 years at CPS Mike Lavin President, COO, CLO • President since 2022 • COO since 2019. CLO since 2014 • 23 Years at CPS Danny Bharwani CFO • CFO since 2022 • 27 years at CPS CPS’ senior management team consists of 13 executives that are led by Brad, Mike and Danny. Each has significant industry experience and, on average, 24 years with CPS. Combined, senior management has over 300 years of auto lending experience just at CPS . 5
MARKET • $1.5 trillion auto loans outstanding at Q3 2024 (1) • ~15% of auto financings in Q3 2024 were sub - prime (1) Large Total Addressable Market (TAM) • Capital - intensive • Highly regulated industry High Barrier to Entry • Few dominant players • Compete on rates and fees Small, Fragmented Market Dynamics Footprint Powered by Bing © GeoNames, Microsoft, TomTom (1) According to Experian Automotive (2) As of December 31, 2024 6 6% 8% 10% 5% 5% • Highest volume originating states for CPS (2) • Contracts purchased in 47 states (2)
PRODUCT OFFERING Meta 14.42% $102,634 3% Preferred 16.27% $89,288 17% Super Alpha 18.59% $83,131 21% Alpha Plus 20.90% $81,510 23% Alpha 22.15% $63,142 26% Standard 24.01% $60,076 7% Mercury / Delta 24.91% $56,737 2% First Time Buyer 24.34% $49,788 2% Overall 20.11% $25,298 $22,535 $20,379 $16,314 $14,518 $14,039 $21,931 $74,655 583 569 560 576 586 572 585 576 100% % of Purchases Avg. Yield Program (1) Avg. Amount Financed $24,828 $26,270 Avg. Annual Household Income Avg. Time on Job (years) 8.9 7.2 5.8 5.0 4.2 3.4 3.9 2.7 5.1 Avg. FICO 665 (1) Under the CPS programs for contracts purchased for the twelve months ended December 31, 2024. 7
ORIGINATION CHARACTERISTICS 100.0% 105.0% 110.0% 115.0% 120.0% 125.0% 130.0% Loan to Value 8.5% 9.0% 9.5% 10.0% 10.5% 11.0% 11.5% 12.0% Payment to Income 590 585 580 575 570 565 560 555 550 545 FICO 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% APR $0 $5,000 $10,000 $15,000 $20,000 $25,000 Amount Financed 67.0 67.5 68.0 68.5 69.0 69.5 70.0 70.5 Original Term 8
DEMAND FOR OUR LENDING PROGRAMS 0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 Applications vs. Funded Loans Approved Applications 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Applications Contracts Funded 52% Average Approval Rate 13,100 Approved Dealer Network Strong Demand for our Lending Programs Auto Decisioning Proprietary AI Driven Scorecard Selective Funding Answers Within Seconds to Dealers 9
WHO IS OUR CUSTOMER? CPS Customer 42 Years Old on Average 5 Years Average Job Time 7 Years Average Length at Residence 9 Years Credit History on Average 24.0% Homeowners 10.6% Average Payment to Income $75,000 Average Household Income 34.3% Average Debt to Income 10 Amounts for CPS programs for contracts purchased for the twelve months ended, December 31, 2024.
WHAT DO OUR CUSTOMERS DRIVE? Certified Pre - Owned, 18% Pre - Owned, 73% VEHICLE TYPE New, 9% Factory Franchised, 72% ORIGINATING DEALERSHIP Independent, 28% Domestic, 48% 11 Charts show data for CPS programs for contracts purchased for the twelve months ended December 31, 2024. Imports , 52% VEHICLE MAKE
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PORTFOLIO PERFORMANCE Data shown is CNL performance by origination quarter, and as of December 31, 2024. 12 22.00% 20.00% 18.00% 16.00% 14.00% 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% CNL Percentage 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 57 59 61 63 65 67 69 71 73 75 77 79 81 83 Months Seasoned 2016 - Q1 2018 - Q2 2020 - Q3 2022 - Q4 2016 - Q2 2018 - Q3 2020 - Q4 2023 - Q1 2016 - Q3 2018 - Q4 2021 - Q1 2023 - Q2 2016 - Q4 2019 - Q1 2021 - Q2 2023 - Q3 2017 - Q1 2019 - Q2 2021 - Q3 2023 - Q4 2017 - Q2 2019 - Q3 2021 - Q4 2024 - Q1 2017 - Q3 2019 - Q4 2022 - Q1 2024 - Q2 2017 - Q4 2020 - Q1 2022 - Q2 2024 - Q3 2018 - Q1 2020 - Q2 2022 - Q3 2024 - Q4
ECONOMIC MODEL Interest Income 2024 (1) 2023 (1) 11.4% 11.3% Mark to Fin. Recs. at FV Servicing and Other Income Interest Expense Net Interest Margin Provision for Credit Losses Core Operating Expenses 0.6% 0.8% 0.2% 0.4% (6.1%) (5.4%) 6.1% 7.0% 0.1% 0.2% (5.4%) (5.9%) Quarter Ended (1) December 31, December 30, Pretax Return on Assets 0.9% 1.3% (1) Statement of Operations nine months ended, as a percentage of the average managed portfolio at December 31, 2024. Percentages may not add due to rounding. 13
SUMMARY BALANCE SHEET December 31, 2024 December 31, 2023 Assets Cash $ $ Restricted cash Finance receivables, net of allowance 6.2 119.3 24.7 Finance receivables, measured at fair value 2,722.7 Deferred tax assets, net 3.7 Other assets 11.7 125.7 5.0 3,313.8 1.0 36.7 27.2 3,493.9 $ 2,903.7 $ Liabilities Accounts payable and accrued expenses $ 62.5 $ Warehouse lines of credit 234.0 Residual interest financing 49.9 Securitization trust debt 2,265.4 Subordinated renewable notes 70.1 410.9 99.2 2,594.4 26.5 17.2 2,629.0 Shareholders' equity 3,201.1 292.8 274.7 3,493.9 $ 2,903.7 $ Summary Balance Sheet ($ in millions) (1) (1) Numbers may not add due to rounding . 14
SUMMARY STATEMENT OF OPERATIONS (1) Numbers may not add due to rounding. Interest income Mark to finance receivables at fair value $ 98.2 $ 83.3 5.0 Other income 2.1 6.0 2.7 Total Revenues 105.3 92.0 Employee costs 23.9 23.2 General and administrative 22.3 20.2 Interest 52.5 40.3 Provision for credit losses (0.7) (1.6) Total Expenses 98.0 82.1 Pretax income 7.3 Income tax expense 2.2 9.9 2.7 Net income 5.1 $ 7.2 $ EPS (fully diluted) 0.21 $ 0.29 $ Summary Statement of Operations ($ in millions) (1) Three Months Ended December 31, December 31, 2024 2023 15
SELECTED FINANCIAL DATA ($ in millions) December 31, 2024 December 31, 2023 Auto contract purchases 457.8 Total portfolio 3,491.0 Risk - adjusted margin (1) 53.5 $ $ $ Core operating expenses (2) $ Amount 46.2 $ % of avg. managed portfolio 5.4% $ 301.8 $ 2,970.1 $ 53.3 $ 43.5 5.9% Pretax return on managed assets (3) 0.9% 1.3% Total delinquencies and repo inventory (30+ days past due) As a % of total owned portfolio 14.85% 14.55% Annualized net charge - offs As a % of total owned portfolio 8.02% 7.74% Three Months Ended Total expenses less provision for credit losses and interest expense. (1) Revenues less interest expense and provision for credit losses. (2) (3) Equal to annualized pretax income as a percentage of the average managed portfolio . 16
SHAREHOLDER VALUE Continuous Improvements to Shareholder Value NASDAQ Listed Stock - Ticker Symbol: CPSS $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 Dec - 17 Mar - 18 Jun - 18 Sep - 18 Dec - 18 Mar - 19 Jun - 19 Sep - 19 Dec - 19 Mar - 20 Jun - 20 Sep - 20 Dec - 20 Mar - 21 Jun - 21 Sep - 21 Dec - 21 Mar - 22 Jun - 22 Sep - 22 Dec - 22 Mar - 23 Jun - 23 Sep - 23 Dec - 23 Mar - 24 Jun - 24 Sep - 24 Dec - 24 $0.00 $1.00 $2.00 $3.00 $4.00 $5.00 $7.00 $6.00 $8.00 $9.00 $10.00 $11.00 $12.00 $13.00 $14.00 $15.00 Pre - tax Income $ in Thousands - Left Axis Book Value per Share in $ - Right Axis 17
INVESTMENT OUTLOOK Continuous Growth Strong macroeconomic factors AI - driven Originations Scorecard Strong Fundamentals • 3.3 million applications in 2024 • $1.68 billion in sub - prime auto contracts funded in 2024 • Managed portfolio is at largest amount in company history • Raised Wtd. Avg APRs in originations from 17.72% in Dec 2022 to 20.11% in December 2024 • Favorable demand for used vehicles • New vehicle pricing increase and increasing sales despite rising interest rates • Improves efficiency and customer satisfaction • Upcoming AI Scorecard Refresh (refresh every 18 - 24 months) • Industry leading technology in all facets of our business • Decreased leverage on the portfolio puts CPS in a position to grow faster than competitors • Increasing shareholder equity - highest in company history • Decreasing core operating expenses, while portfolio grows Investor Relations Contact Tom Colton and Alec Wilson Gateway Group, Inc. Phone: 949 - 574 - 3860 Email: CPSS@gateway - grp.com 18
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 www.sec.gov/edgar/searchedgar/companysearch.html using CPS's ticker symbol, which is "CPSS." Risk factors that should be considered are described in Item 1A, “Risk Factors," of CPS’s most recent annual report on Form 10 - K and subsequent reports on Form 10 - Q, which reports are on file with the Commission and available for review at the Commission's website. Such description of risk factors is incorporated herein by reference. 19