California based Consumer Portfolio Services Inc. will focus on market expansion rather than loosening credit requirements, CEO Charles Bradley said today.
Speaking on the company’s first quarter earnings call Wednesday, Bradley said the company had 117 marketing representatives on the ground. The goal is to grow that to 150.
“Put those boots on the ground and you get business,” said Bradley.
Later, CPS Chief Financial Officer Jeffrey Fritz told Auto Finance News that the growth was more a matter of strategy. He said the company would focus on adding more marketing reps in metro areas where CPS has seen success already.
Right now, the company has existing dealer relationships in 44 states.
“Consistently, our top states are California, Texas, Florida, Pennsylvania, New Jersey, Illinois and Ohio, all those states are consistent performers,” said Fritz.
During the earnings call, Bradley said first quarter originations were “pretty much” right where CPS wants them. The company brought in $189.9 million in new auto loan contracts in 1Q2014, up from $173.4 million in 4Q2013.
Bradley said the company’s goal for 2014 would be someplace north of $800 million.
The company’s total managed portfolio 1Q 2014 grew to $1.3 billion, compared to $1.2 billion for 4Q2013.
Regarding compliance and collections, he said the company was in a good position and in a better place than the competition. Disparate impact is a major focus, according to Bradley, and CPS is working with its dealer base to keep them apprised of the pertinent regulations. He also said the company invested in some internal education with staff regarding appropriate collection practices.
Acknowledging the fiercely competitive lender landscape, Bradley said that some players were pushing hard, trying to make numbers for investors. He did not specify which companies he meant. He also said that other players had gotten increasingly aggressive because they are about to go public. CPS has taken a different route and actually tightened up its credit slightly over the past year, according to Bradley.
“The market looks a lot like it did back in the 1990’s,” he said.
Looking ahead a couple of years, Bradley thinks the conservative strategy will put CPS in a strong position with good margins that will enable them to take advantage of future acquisition opportunities.
“We’re in a good position if some of the other people don’t work out the right way,” he said.
