DALLAS, Nov. 9, 2016 /PRNewswire/ -- Santander Consumer
USA Holdings Inc. (NYSE: SC)
("SC") today announced net income for third quarter 2016 of
$214 million, or $0.59 per diluted common share.
Third Quarter 2016 Key Highlights (variances compared to
third quarter 2015):
- One-time tax benefit of $11
million, or $0.03 per diluted
common share
- Total auto originations of $5.2
billion
- Chrysler Capital lease originations of $1.3 billion, down 17%
- Chrysler Capital retail originations of $1.9 billion, down 39%
- Core retail auto originations of $2.0
billion, down 29%
- Net finance and other interest income of $1.2 billion, down 3%
- Return on average assets of 2.2%
- Return on average equity 17.1%
- Expense ratio of 2.2%, up 10 bps
- Average managed assets of $52.7
billion, up 3%
- Common equity tier 1 (CET1) ratio of 13.1%, up 160 bps
"We are pleased to report solid core financial performance in
the third quarter in light of the competitive marketplace. Fewer
originations are in part due to our disciplined underwriting
standards as we are committed to driving originations at the right
price and structure, and in part due to increased competition in
the prime space," said Jason
Kulas, President and Chief Executive Officer. "We are
finalizing a strategic agreement with Banco Santander to originate
and flow prime and near-prime retail loan assets. This strategy
should strengthen our overall relationship with Fiat Chrysler (FCA)
and our Chrysler Capital volume, as well as our serviced for others
strategy."
Mr. Kulas continued, "Our commitment to building a culture of
compliance and putting customers at the center of everything we do
is the foundation of our continued success. We remain confident in
our ability to execute our business plan and deliver value for all
our stakeholders and customers through market cycles."
Finance receivables, loans and leases, net1,
increased 6.1 percent, to $34.7
billion at September 30, 2016, from $32.7 billion at December
31, 2015, driven by an increase in lease assets. Net finance
and other interest income decreased 3 percent to $1.18 billion in the third quarter 2016 from
$1.22 billion in the third quarter
2015, primarily driven by a shift in credit mix as a result of
disciplined underwriting standards, and higher cost of funds,
driven by an increase in spreads and benchmark rates.
SC's average annual percentage rate (APR) as of the end of the
third quarter 2016 for retail installment contracts (RICs) held for
investment was 16.4 percent, down from 16.9 percent as of the end
of the third quarter 2015. These APRs are consistent with credit
trends in our held for investment portfolio. As of the end of the
third quarter 2016, RICs with FICO® scores less than 540
decreased to 22.2 percent, from 23.8 percent as of the end of the
third quarter 2015. In addition, RICs with FICO® scores
greater than 640 increased to 13.8 percent, from 12.6 percent.
Net leased vehicle income increased 47 percent to $135.8 million in the third quarter 2016 from
$92.7 million in the third quarter
2015 as a result of the continued growth of our leasing
portfolio.
The allowance ratio2 increased to 12.4 percent as of
September 30, 2016, from 11.9 percent as of December 31, 2015, primarily driven by the
increased balance of loans classified as troubled debt
restructurings (TDRs). A TDR is an accounting classification for
assets that meet certain loan modification or extension criteria.
Loan modifications and extensions are utilized to offer assistance
to some customers experiencing temporary hardship. Under GAAP, the
allowance for assets classified as TDRs takes into consideration
expected lifetime losses. The allowance ratio as of September 30, 2016 is down from the June 30, 2016 ratio of 12.6%.
SC's RIC net charge-off and delinquency ratio3
increased to 8.7 percent and 4.6 percent, respectively, for the
third quarter 2016 from 8.2 percent and 3.8 percent, respectively,
for the third quarter 2015. The increases in the net charge-off and
delinquency ratios, and in TDR balances, are driven by the aging of
the more nonprime 2015 vintage, and slower portfolio growth since
the prior year third quarter.
"More recently our asset mix has shifted toward higher credit
quality originations, which has impacted APR, and should market
conditions persist, positively impact charge-offs and delinquency
in the future," said Izzy
Dawood, Chief Financial Officer.
Provision for credit losses decreased to $610 million in the third quarter 2016, from
$724 million in the third quarter
2015, driven primarily by the classification of the personal loan
portfolio as held for sale in the prior year quarter. Excluding
personal lending, provision decreased $8
million versus the prior year quarter.
In the third quarter 2016, SC recorded net investment losses of
$106 million, compared to investment
gains of $23 million in the third
quarter 2015. The current period losses were primarily driven by
$98 million of lower of cost or
market adjustments related to the held for sale personal lending
portfolio, including $114 million in
customer default activity and a $19
million decrease in market discount. As mentioned in the
prior paragraph, in the third quarter 2016, personal lending
activity was included in net investment gains (losses) rather than
provision for credit losses due to the classification of the
personal lending assets as held for sale. Excluding the impact of
personal lending, investment losses totaled $10 million.
During the quarter, SC incurred $284
million of operating expenses, up 9 percent from
$261 million in the third quarter
2015 driven by higher repossession activity and increased
headcount. SC's expense ratio for the quarter increased slightly to
2.2 percent, up from 2.1 percent during the same period last
year.
In line with SC's strategy to leverage its scalable servicing
platform and increase servicing fee income, SC executed asset sales
of $794 million during the third
quarter through existing loan sale programs, under which it retains
servicing. The serviced for others portfolio of $12.2 billion as of September 30, 2016, is
down 18 percent from September 30, 2015. Servicing fee income
increased 1 percent to $36.4 million
in the third quarter 2016, from $35.9
million in the third quarter 2015, driven by the sale of
seasoned nonprime RICs and associated assets, which carry a higher
servicing fee, during the prior year quarter.
1 Includes Finance receivables held for investment,
Finance receivables held for sale and Leased vehicles
2 Excludes end of period balances on purchased
receivables portfolio of $253 million
and finance receivables held for sale of $2.6 billion
3 Net charge-off ratio stated on a recorded investment
basis which is unpaid principal balance adjusted for unaccreted net
discounts, subvention and origination costs
Conference Call Information
SC management will host a conference call and webcast to discuss
the third quarter results and other general matters at 9 a.m. Eastern Time on Wednesday, November 9, 2016. The conference call
will be accessible by dialing 877-604-9668 (U.S. domestic), or
719-325-4870 (international), conference ID 2258671. Please dial in
10 minutes prior to the start of the call. The conference call will
also be accessible via live audio webcast through the Investor
Relations section of the corporate website at
http://investors.santanderconsumerusa.com. Choose "Events" and
select the information pertaining to the Q3 2016 Earnings Call.
Additionally there will be several slides accompanying the webcast.
Please allow at least 15 minutes prior to the call to register,
download and install any necessary software.
For those unable to listen to the live broadcast, a replay will
be available on the company's website or by dialing 844-512-2921
(U.S. domestic), or 412-317-6671 (international), conference ID
2258671, approximately two hours after the event. The dial-in
replay will be available for two weeks after the conference call,
and the webcast replay will be available through November 23,
2016. An investor presentation will also be available by visiting
the Investor Relations page of SC's website
at http://investors.santanderconsumerusa.com.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. Any statements about our expectations, beliefs, plans,
predictions, forecasts, objectives, assumptions, or future events
or performance are not historical facts and may be forward-looking.
These statements are often, but not always, made through the use of
words or phrases such as anticipates, believes, can, could, may,
predicts, potential, should, will, estimates, plans, projects,
continuing, ongoing, expects, intends, and similar words or
phrases. Although we believe that the expectations reflected in
these forward-looking statements are reasonable, these statements
are not guarantees of future performance and involve risks and
uncertainties that are subject to change based on various important
factors, some of which are beyond our control. For additional
discussion of these risks, refer to the section entitled Risk
Factors and elsewhere in our Annual Report on Form 10-K and our
Quarterly Reports on Form 10-Q filed by us with the U.S. Securities
and Exchange Commission (SEC). Among the factors that could cause
the forward-looking statements in this press release and/or our
financial performance to differ materially from that suggested by
the forward-looking statements are (a) the inherent limitations in
internal controls over financial reporting; (b) our ability to
remediate any material weaknesses in internal controls over
financial reporting completely and in a timely manner; (c)
continually changing federal, state, and local laws and regulations
could materially adversely affect our business; (d) adverse
economic conditions in the United States and worldwide may
negatively impact our results; (e) our business could suffer if our
access to funding is reduced; (f) significant risks we face
implementing our growth strategy, some of which are outside our
control; (g) unexpected costs and delays in connection with exiting
our personal lending business; (h) our agreement with Fiat Chrysler
Automobiles US LLC may not result in currently anticipated levels
of growth and is subject to certain performance conditions that
could result in termination of the agreement; (i) our business
could suffer if we are unsuccessful in developing and maintaining
relationships with automobile dealerships; (j) our financial
condition, liquidity, and results of operations depend on the
credit performance of our loans; (k) loss of our key management or
other personnel, or an inability to attract such management and
personnel; (l) certain regulations, including but not limited to
oversight by the Office of the Comptroller of the Currency, the
Consumer Financial Protection Bureau, the European Central Bank,
and the Federal Reserve, whose oversight and regulation may limit
certain of our activities, including the timing and amount of
dividends and other limitations on our business; and (m) future
changes in our relationship with Banco Santander that could
adversely affect our operations. If one or more of the factors
affecting our forward-looking information and statements proves
incorrect, our actual results, performance or achievements could
differ materially from those expressed in, or implied by,
forward-looking information and statements. Therefore, we caution
not to place undue reliance on any forward-looking information or
statements. The effect of these factors is difficult to predict.
Factors other than these also could adversely affect our results,
and the reader should not consider these factors to be a complete
set of all potential risks or uncertainties. New factors emerge
from time to time, and management cannot assess the impact of any
such factor on our business or the extent to which any factor, or
combination of factors, may cause results to differ materially from
those contained in any forward-looking statement. Any
forward-looking statements only speak as of the date of this
document, and we undertake no obligation to update any
forward-looking information or statements, whether written or oral,
to reflect any change, except as required by law. All
forward-looking statements attributable to us are expressly
qualified by these cautionary statements.
About Santander Consumer USA
Holdings Inc.
Santander Consumer USA Holdings
Inc. (NYSE: SC) ("SC") is a full-service, technology-driven
consumer finance company focused on vehicle finance, third-party
servicing and delivering superior service to our more than 2.7
million customers across the full credit spectrum. The company,
which began originating retail installment contracts in 1997, has a
managed assets portfolio of more than $52
billion (as of September 30, 2016), and is
headquartered in Dallas.
(www.santanderconsumerusa.com)
Santander Consumer USA Holdings Inc.
Financial
Supplement
Third Quarter 2016
Table 1: Condensed
Consolidated Balance Sheets
|
|
|
September
30,
2016
|
|
December
31,
2015
|
Assets
|
(Unaudited, Dollars
in thousands, except per share amounts)
|
Cash and cash
equivalents
|
$
|
75,873
|
|
|
$
|
18,893
|
|
Finance receivables
held for sale, net
|
2,572,429
|
|
|
2,859,575
|
|
Finance receivables
held for investment, net
|
23,686,391
|
|
|
23,367,788
|
|
Restricted
cash
|
2,696,500
|
|
|
2,236,329
|
|
Accrued interest
receivable
|
369,543
|
|
|
395,387
|
|
Leased vehicles,
net
|
8,467,129
|
|
|
6,497,310
|
|
Furniture and
equipment, net
|
62,378
|
|
|
58,007
|
|
Federal, state and
other income taxes receivable
|
101,284
|
|
|
267,636
|
|
Related party taxes
receivable
|
85
|
|
|
71
|
|
Goodwill
|
74,056
|
|
|
74,056
|
|
Intangible
assets
|
33,028
|
|
|
33,016
|
|
Due from
affiliates
|
46,333
|
|
|
58,599
|
|
Other
assets
|
586,607
|
|
|
582,291
|
|
Total
assets
|
$
|
38,771,636
|
|
|
$
|
36,448,958
|
|
Liabilities and
Equity
|
|
|
|
Liabilities:
|
|
|
|
Notes payable —
credit facilities
|
$
|
8,299,229
|
|
|
$
|
6,902,779
|
|
Notes payable —
secured structured financings
|
21,150,666
|
|
|
20,872,900
|
|
Notes payable —
related party
|
2,350,000
|
|
|
2,600,000
|
|
Accrued interest
payable
|
28,796
|
|
|
22,544
|
|
Accounts payable and
accrued expenses
|
354,864
|
|
|
413,269
|
|
Federal, state and
other income taxes payable
|
14,038
|
|
|
2,462
|
|
Deferred tax
liabilities, net
|
1,227,179
|
|
|
881,225
|
|
Due to
affiliates
|
54,848
|
|
|
58,148
|
|
Other
liabilities
|
174,359
|
|
|
263,082
|
|
Total
liabilities
|
33,653,979
|
|
|
32,016,409
|
|
|
|
|
|
Equity:
|
|
|
|
Common stock, $0.01
par value
|
3,584
|
|
|
3,579
|
|
Additional paid-in
capital
|
1,652,786
|
|
|
1,644,151
|
|
Accumulated other
comprehensive income (loss), net
|
(26,598)
|
|
|
2,125
|
|
Retained
earnings
|
3,487,885
|
|
|
2,782,694
|
|
Total stockholders'
equity
|
5,117,657
|
|
|
4,432,549
|
|
Total liabilities and
equity
|
$
|
38,771,636
|
|
|
$
|
36,448,958
|
|
Table 2: Condensed
Consolidated Statements of Income
|
|
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
(Unaudited, Dollars
in thousands, except per share amounts)
|
Interest on finance
receivables and loans
|
$
|
1,246,386
|
|
|
$
|
1,285,085
|
|
|
$
|
3,804,322
|
|
|
$
|
3,761,757
|
|
Leased vehicle
income
|
388,501
|
|
|
267,211
|
|
|
1,086,651
|
|
|
742,684
|
|
Other finance and
interest income
|
3,638
|
|
|
9,334
|
|
|
11,440
|
|
|
23,413
|
|
Total finance and
other interest income
|
1,638,525
|
|
|
1,561,630
|
|
|
4,902,413
|
|
|
4,527,854
|
|
Interest
expense
|
207,175
|
|
|
171,420
|
|
|
590,504
|
|
|
470,898
|
|
Leased vehicle
expense
|
252,730
|
|
|
174,545
|
|
|
717,230
|
|
|
518,165
|
|
Net finance and other
interest income
|
1,178,620
|
|
|
1,215,665
|
|
|
3,594,679
|
|
|
3,538,791
|
|
Provision for credit
losses
|
610,398
|
|
|
723,922
|
|
|
1,782,489
|
|
|
1,935,148
|
|
Net finance and other
interest income after provision for credit losses
|
568,222
|
|
|
491,743
|
|
|
1,812,190
|
|
|
1,603,643
|
|
Profit
sharing
|
6,400
|
|
|
11,818
|
|
|
35,640
|
|
|
46,835
|
|
Net finance and other
interest income after provision for credit losses and profit
sharing
|
561,822
|
|
|
479,925
|
|
|
1,776,550
|
|
|
1,556,808
|
|
Investment gains
(losses), net
|
(106,050)
|
|
|
22,684
|
|
|
(276,415)
|
|
|
133,998
|
|
Servicing fee
income
|
36,447
|
|
|
35,910
|
|
|
123,929
|
|
|
88,756
|
|
Fees, commissions,
and other
|
96,285
|
|
|
95,742
|
|
|
294,028
|
|
|
296,476
|
|
Total other
income
|
26,682
|
|
|
154,336
|
|
|
141,542
|
|
|
519,230
|
|
Compensation
expense
|
128,056
|
|
|
114,070
|
|
|
371,242
|
|
|
325,583
|
|
Repossession
expense
|
75,920
|
|
|
60,770
|
|
|
217,816
|
|
|
175,066
|
|
Other operating
costs
|
80,508
|
|
|
86,447
|
|
|
258,509
|
|
|
263,978
|
|
Total operating
expenses
|
284,484
|
|
|
261,287
|
|
|
847,567
|
|
|
764,627
|
|
Income before income
taxes
|
304,020
|
|
|
372,974
|
|
|
1,070,525
|
|
|
1,311,411
|
|
Income tax
expense
|
90,473
|
|
|
136,539
|
|
|
365,334
|
|
|
467,816
|
|
Net income
|
$
|
213,547
|
|
|
$
|
236,435
|
|
|
$
|
705,191
|
|
|
$
|
843,595
|
|
|
|
|
|
|
|
|
|
Net income per common
share (basic)
|
$
|
0.60
|
|
|
$
|
0.66
|
|
|
$
|
1.97
|
|
|
$
|
2.38
|
|
Net income per common
share (diluted)
|
$
|
0.59
|
|
|
$
|
0.66
|
|
|
$
|
1.96
|
|
|
$
|
2.38
|
|
Weighted average
common shares (basic)
|
358,343,781
|
|
|
357,846,564
|
|
|
358,179,618
|
|
|
354,150,973
|
|
Weighted average
common shares (diluted)
|
360,087,749
|
|
|
359,108,197
|
|
|
359,635,034
|
|
|
354,735,772
|
|
Table 3: Other
Financial Information
|
|
|
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Ratios
|
(Unaudited, Dollars
in thousands)
|
|
Yield on individually
acquired retail installment contracts
|
15.9
|
%
|
|
16.7
|
%
|
|
16.2
|
%
|
|
16.8
|
%
|
|
Yield on purchased
receivables portfolios
|
26.7
|
%
|
|
14.3
|
%
|
|
26.0
|
%
|
|
14.3
|
%
|
|
Yield on receivables
from dealers
|
6.7
|
%
|
|
5.2
|
%
|
|
5.2
|
%
|
|
5.0
|
%
|
|
Yield on personal
loans (1)
|
23.4
|
%
|
|
20.0
|
%
|
|
21.8
|
%
|
|
20.5
|
%
|
|
Yield on earning
assets (2)
|
13.8
|
%
|
|
15.0
|
%
|
|
14.2
|
%
|
|
15.0
|
%
|
|
Cost of debt
(3)
|
2.6
|
%
|
|
2.3
|
%
|
|
2.5
|
%
|
|
2.1
|
%
|
|
Net interest margin
(4)
|
11.8
|
%
|
|
13.1
|
%
|
|
12.2
|
%
|
|
13.2
|
%
|
|
Expense ratio
(5)
|
2.2
|
%
|
|
2.1
|
%
|
|
2.1
|
%
|
|
2.1
|
%
|
|
Return on average
assets (6)
|
2.2
|
%
|
|
2.6
|
%
|
|
2.5
|
%
|
|
3.2
|
%
|
|
Return on average
equity (7)
|
17.1
|
%
|
|
22.2
|
%
|
|
19.8
|
%
|
|
28.2
|
%
|
|
Net charge-off ratio
on individually acquired retail installment contracts
(8)
|
8.7
|
%
|
|
8.2
|
%
|
|
7.4
|
%
|
|
5.9
|
%
|
|
Net charge-off ratio
on purchased receivables portfolios (8)
|
0.4
|
%
|
|
1.3
|
%
|
|
(0.4)%
|
|
|
(1.3)%
|
|
|
Net charge-off ratio
on receivables from dealers (8)
|
—
|
|
|
—
|
|
|
0.2
|
%
|
|
—
|
|
|
Net charge-off ratio
on personal loans (8)***
|
—
|
|
|
85.9
|
%
|
|
—
|
|
|
40.8
|
%
|
|
Net charge-off ratio
(8)
|
8.3
|
%
|
|
13.8
|
%
|
|
6.9
|
%
|
|
8.4
|
%
|
|
Delinquency ratio on
individually acquired retail installment contracts held for
investment, end of period (9)
|
4.6
|
%
|
|
3.8
|
%
|
|
4.6
|
%
|
|
3.8
|
%
|
|
Delinquency ratio on
personal loans, end of period (9)
|
13.4
|
%
|
|
7.3
|
%
|
|
13.4
|
%
|
|
7.3
|
%
|
|
Delinquency ratio on
loans held for investment, end of period (9)
|
4.6
|
%
|
|
3.8
|
%
|
|
4.6
|
%
|
|
3.8
|
%
|
|
Allowance ratio
(10)
|
12.4
|
%
|
|
11.1
|
%
|
|
12.4
|
%
|
|
11.1
|
%
|
|
Common Equity Tier 1
capital ratio (11)
|
13.1
|
%
|
|
11.5
|
%
|
|
13.1
|
%
|
|
11.5
|
%
|
|
|
|
|
|
|
|
|
|
Other Financial
Information
|
|
|
|
|
|
|
|
|
Charge-offs, net of
recoveries, on individually acquired retail installment
contracts
|
$
|
630,847
|
|
|
$
|
564,820
|
|
|
$
|
1,583,406
|
|
|
$
|
1,184,245
|
|
|
Charge-offs, net of
recoveries, on purchased receivables portfolios
|
254
|
|
|
1,563
|
|
|
(807)
|
|
|
(6,103)
|
|
|
Charge-offs, net of
recoveries, on receivables from dealers
|
—
|
|
|
—
|
|
|
135
|
|
|
—
|
|
|
Charge-offs, net of
recoveries, on personal loans***
|
—
|
|
|
490,548
|
|
|
—
|
|
|
673,294
|
|
|
Charge-offs, net of
recoveries, on capital leases
|
2,095
|
|
|
3,027
|
|
|
7,165
|
|
|
11,048
|
|
|
Total charge-offs,
net of recoveries
|
$
|
633,196
|
|
|
$
|
1,059,958
|
|
|
$
|
1,589,899
|
|
|
$
|
1,862,484
|
|
|
End of period
Delinquent principal over 60 days, individually acquired retail
installment contracts held for investment
|
$
|
1,260,255
|
|
|
$
|
1,012,042
|
|
|
$
|
1,260,255
|
|
|
$
|
1,012,042
|
|
|
End of period
Delinquent principal over 60 days, personal loans
|
$
|
179,443
|
|
|
$
|
165,759
|
|
|
$
|
179,443
|
|
|
$
|
165,759
|
|
|
End of period
Delinquent principal over 60 days, loans held for
investment
|
$
|
1,267,950
|
|
|
$
|
1,034,471
|
|
|
$
|
1,267,950
|
|
|
$
|
1,034,471
|
|
|
End of period assets
covered by allowance for credit losses
|
$
|
27,490,290
|
|
|
$
|
26,907,346
|
|
|
$
|
27,490,290
|
|
|
$
|
26,907,346
|
|
|
End of period Gross
finance receivables and loans held for investment
|
$
|
27,706,307
|
|
|
$
|
27,319,991
|
|
|
$
|
27,706,307
|
|
|
$
|
27,319,991
|
|
|
End of period Gross
finance receivables, loans, and leases held for
investment
|
$
|
37,295,993
|
|
|
$
|
34,188,834
|
|
|
$
|
37,295,993
|
|
|
$
|
34,188,834
|
|
|
Average Gross
individually acquired retail installment contracts
|
$
|
28,970,039
|
|
|
$
|
27,687,564
|
|
|
$
|
28,710,402
|
|
|
$
|
26,596,429
|
|
|
Average Gross
purchased receivables portfolios
|
266,749
|
|
|
467,643
|
|
|
301,026
|
|
|
618,362
|
|
|
Average Gross
receivables from dealers
|
70,392
|
|
|
81,490
|
|
|
72,735
|
|
|
93,817
|
|
|
Average Gross
personal loans
|
1,343,099
|
|
|
2,284,951
|
|
|
1,572,297
|
|
|
2,201,551
|
|
|
Average Gross capital
leases
|
39,974
|
|
|
120,334
|
|
|
49,625
|
|
|
122,366
|
|
|
Average Gross finance
receivables, loans and capital leases
|
$
|
30,690,253
|
|
|
$
|
30,641,982
|
|
|
$
|
30,706,085
|
|
|
$
|
29,632,525
|
|
|
Average Gross finance
receivables, loans, and leases
|
$
|
40,037,873
|
|
|
$
|
37,040,857
|
|
|
$
|
39,299,213
|
|
|
$
|
35,701,048
|
|
|
Average Managed
assets
|
$
|
52,675,379
|
|
|
$
|
50,961,182
|
|
|
$
|
52,983,740
|
|
|
$
|
47,812,496
|
|
|
Average Total
assets
|
$
|
38,473,832
|
|
|
$
|
36,035,588
|
|
|
$
|
37,844,330
|
|
|
$
|
34,753,501
|
|
|
Average
Debt
|
$
|
31,671,237
|
|
|
$
|
30,416,494
|
|
|
$
|
31,343,204
|
|
|
$
|
29,575,308
|
|
|
Average Total
equity
|
$
|
4,994,511
|
|
|
$
|
4,268,855
|
|
|
$
|
4,736,826
|
|
|
$
|
3,991,071
|
|
|
|
(1)
|
Includes Finance and
other interest income; excludes fees
|
(2)
|
"Yield on earning
assets" is defined as the ratio of annualized Total finance and
other interest income, net of Leased vehicle expense, to Average
gross finance receivables, loans and leases
|
(3)
|
"Cost of debt" is
defined as the ratio of annualized Interest expense to Average
debt
|
(4)
|
"Net interest margin"
is defined as the ratio of annualized Net finance and other
interest income to Average gross finance receivables, loans and
leases
|
(5)
|
"Expense ratio" is
defined as the ratio of annualized Operating expenses to Average
managed assets
|
(6)
|
"Return on average
assets" is defined as the ratio of annualized Net income to Average
total assets
|
(7)
|
"Return on average
equity" is defined as the ratio of annualized Net income to Average
total equity
|
(8)
|
"Net charge-off
ratio" is defined as the ratio of annualized Charge-offs, on a
recorded investment basis, net of recoveries, to average unpaid
principal balance of the respective portfolio
|
(9)
|
"Delinquency ratio"
is defined as the ratio of End of period Delinquent principal over
60 days to End of period gross balance of the respective portfolio,
excludes capital leases
|
(10)
|
"Allowance ratio" is
defined as the ratio of Allowance for credit losses, which excludes
impairment on purchased receivables portfolios, to End of period
assets covered by allowance for credit losses
|
(11)
|
"Common Equity Tier 1
Capital ratio" is a non-GAAP ratio defined as the ratio of Total
common equity tier 1 capital to Total risk-weighted
assets
|
|
***Total charge-offs,
net of recoveries, on personal loans for the three and nine months
ended September 30, 2015 includes non-recurring impairment charge
of $377,598. Adjusted ratio totals 19.8% and 17.9%,
respectively.
|
Table 4: Credit
Quality
|
|
Amounts related to
our individually acquired retail installment contracts as of and
for the three and nine months ended September 30, 2016 and
2015, are as follows:
|
|
(Unaudited,
Dollars in thousands)
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Credit loss
allowance — beginning of period
|
$
|
3,422,736
|
|
|
$
|
2,927,624
|
|
|
$
|
3,197,414
|
|
|
$
|
2,586,685
|
|
Provision for credit
losses
|
609,396
|
|
|
619,895
|
|
|
1,787,277
|
|
|
1,607,376
|
|
Charge-offs
|
(1,246,760)
|
|
|
(1,062,598)
|
|
|
(3,429,905)
|
|
|
(2,753,753)
|
|
Recoveries
|
615,913
|
|
|
497,778
|
|
|
1,846,499
|
|
|
1,569,508
|
|
Transfers to
held-for-sale
|
—
|
|
|
—
|
|
|
—
|
|
|
(27,117)
|
|
Credit loss
allowance — end of period
|
$
|
3,401,285
|
|
|
$
|
2,982,699
|
|
|
$
|
3,401,285
|
|
|
$
|
2,982,699
|
|
|
|
|
|
|
|
|
|
Net
charge-offs
|
$
|
630,847
|
|
|
$
|
564,820
|
|
|
$
|
1,583,406
|
|
|
$
|
1,184,245
|
|
Average unpaid
principal balance (UPB)
|
28,970,039
|
|
|
27,687,564
|
|
|
28,710,402
|
|
|
26,596,429
|
|
Charge-off
ratio1
|
8.7
|
%
|
|
8.2
|
%
|
|
7.4
|
%
|
|
5.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
20162
|
|
December 31,
20152
|
Principal 31-60 days
past due
|
$
|
2,536,940
|
|
|
|
9.3
|
%
|
|
$
|
2,454,986
|
|
|
|
9.1
|
%
|
Delinquent principal
over 60 days
|
1,260,255
|
|
|
|
4.6
|
%
|
|
1,191,567
|
|
|
|
4.4
|
%
|
Total delinquent
contracts
|
$
|
3,797,195
|
|
|
|
13.9
|
%
|
|
$
|
3,646,553
|
|
|
|
13.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September
30,
2016
|
|
December
31,
2015
|
TDR - Unpaid
principal balance
|
|
|
|
|
|
|
|
|
$
|
5,332,767
|
|
|
$
|
4,579,931
|
|
TDR -
Impairment
|
|
|
|
|
|
|
|
|
|
1,588,028
|
|
|
1,363,023
|
|
TDR allowance
ratio
|
|
|
|
|
|
|
|
|
|
29.8
|
%
|
|
29.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-TDR - Unpaid
principal balance
|
|
|
|
|
|
|
|
|
$
|
22,038,228
|
|
|
$
|
22,284,015
|
|
Non-TDR -
Allowance
|
|
|
|
|
|
|
|
|
|
1,813,257
|
|
|
1,834,391
|
|
Non-TDR allowance
ratio
|
|
|
|
|
|
|
|
|
|
8.2
|
%
|
|
8.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Total - Unpaid
principal balance
|
|
|
|
|
|
|
|
|
$
|
27,370,995
|
|
|
$
|
26,863,946
|
|
Total -
Allowance
|
|
|
|
|
|
|
|
|
|
3,401,285
|
|
|
3,197,414
|
|
Total allowance
ratio
|
|
|
|
|
|
|
|
|
|
12.4
|
%
|
|
11.9
|
%
|
|
|
1
|
"Net charge-off
ratio" is defined as the ratio of annualized Charge-offs, on a
recorded investment basis, net of recoveries, to average unpaid
principal balance of the respective portfolio
|
2
|
Percent of unpaid
principal balance.
|
Table 5:
Originations
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
Three Months
Ended
|
|
September 30,
2016
|
|
September 30,
2015
|
|
September 30,
2016
|
|
September 30,
2015
|
|
June 30,
2016
|
Retained
Originations
|
(Unaudited, Dollar
amounts in thousands)
|
Retail installment
contracts
|
$
|
3,281,112
|
|
|
$
|
4,650,381
|
|
|
$
|
10,545,592
|
|
|
$
|
13,602,409
|
|
|
$
|
3,176,087
|
|
Average
APR
|
14.7
|
%
|
|
16.1
|
%
|
|
15.1
|
%
|
|
17.2
|
%
|
|
14.0
|
%
|
Average FICO®
(a)
|
612
|
|
|
596
|
|
|
606
|
|
|
584
|
|
|
624
|
|
Discount
|
0.1
|
%
|
|
1.1
|
%
|
|
0.4
|
%
|
|
2.1
|
%
|
|
0.2
|
%
|
|
|
|
|
|
|
|
|
|
|
Personal
loans
|
$
|
—
|
|
|
$
|
158,328
|
|
|
$
|
9,281
|
|
|
$
|
582,735
|
|
|
$
|
9,272
|
|
Average
APR
|
—
|
|
|
21.0
|
%
|
|
25.0
|
%
|
|
19.4
|
%
|
|
25.0
|
%
|
Discount
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
Leased
vehicles
|
$
|
1,300,375
|
|
|
$
|
1,568,104
|
|
|
$
|
4,612,284
|
|
|
$
|
4,122,527
|
|
|
$
|
1,694,829
|
|
|
|
|
|
|
|
|
|
|
|
Capital lease
receivables
|
$
|
2,319
|
|
|
$
|
1,103
|
|
|
$
|
5,977
|
|
|
$
|
64,906
|
|
|
$
|
1,805
|
|
Total originations
retained
|
$
|
4,583,806
|
|
|
$
|
6,377,916
|
|
|
$
|
15,173,134
|
|
|
$
|
18,372,577
|
|
|
$
|
4,881,993
|
|
|
|
|
|
|
|
|
|
|
|
Sold Originations
(b)
|
|
|
|
|
|
|
|
|
|
Retail installment
contracts
|
$
|
580,242
|
|
|
$
|
1,243,456
|
|
|
$
|
2,201,659
|
|
|
$
|
3,580,539
|
|
|
$
|
547,007
|
|
Average
APR
|
3.2
|
%
|
|
2.4
|
%
|
|
3.0
|
%
|
|
4.1
|
%
|
|
3.6
|
%
|
Average FICO®
(c)
|
760
|
|
|
753
|
|
|
759
|
|
|
745
|
|
|
754
|
|
Total originations
sold
|
$
|
580,242
|
|
|
$
|
1,243,456
|
|
|
$
|
2,201,659
|
|
|
$
|
3,580,539
|
|
|
$
|
547,007
|
|
|
|
|
|
|
|
|
|
|
|
Total SC
originations
|
$
|
5,164,048
|
|
|
$
|
7,621,372
|
|
|
$
|
17,374,793
|
|
|
$
|
21,953,116
|
|
|
$
|
5,429,000
|
|
|
|
|
|
|
|
|
|
|
|
Facilitated
Originations
|
|
|
|
|
|
|
|
|
|
Leased
vehicles
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
632,471
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
Total
originations
|
$
|
5,164,048
|
|
|
$
|
7,621,372
|
|
|
$
|
17,374,793
|
|
|
$
|
22,585,587
|
|
|
$
|
5,429,000
|
|
|
|
(a)
|
Unpaid principal
balance excluded from the weighted average FICO score is $492
million, $938 million, $1.8 billion, $2.7 billion and $509 million
for the three months ended September 30, 2016 and 2015, the
nine months ended September 30, 2016 and 2015, and the three
months ended June 30, 2016, respectively, as the borrowers on
these loans did not have FICO scores at origination.
|
(b)
|
Only includes assets
both originated and sold in the period. Total asset sales for the
period are shown in Table 6.
|
(c)
|
Unpaid principal
balance excluded from the weighted average FICO score is $59
million, $160 million, $263 million, $391 million and $64 million
for the three months ended September 30, 2016 and 2015, the
nine months ended September 30, 2016 and 2015, and the three
months ended June 30, 2016, respectively, as the borrowers on
these loans did not have FICO scores at origination.
|
Table 6: Asset
Sales
|
|
Asset sales may
include assets originated in prior periods.
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
Three Months
Ended
|
|
September 30,
2016
|
|
September 30,
2015
|
|
September 30,
2016
|
|
September 30,
2015
|
|
June 30,
2016
|
|
(Unaudited, Dollar
amounts in thousands)
|
Retail installment
contracts
|
$
|
793,804
|
|
|
$
|
3,057,654
|
|
|
$
|
2,312,983
|
|
|
$
|
5,993,407
|
|
|
$
|
659,224
|
|
Average
APR
|
3.0
|
%
|
|
10.7
|
%
|
|
2.9
|
%
|
|
8.0
|
%
|
|
3.5
|
%
|
Average
FICO®
|
762
|
|
|
661
|
|
|
762
|
|
|
694
|
|
|
758
|
|
|
|
|
|
|
|
|
|
|
|
Personal
loans
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
869,349
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Average
APR
|
—
|
|
|
—
|
|
|
17.9
|
%
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
Leased
vehicles
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,316,958
|
|
|
$
|
—
|
|
Total asset
sales
|
$
|
793,804
|
|
|
$
|
3,057,654
|
|
|
$
|
3,182,332
|
|
|
$
|
7,310,365
|
|
|
$
|
659,224
|
|
Table 7: Ending
Portfolio
|
|
Ending outstanding
balance, average APR and remaining unaccreted discount of our held
for investment portfolio as of September 30, 2016, and
December 31, 2015, are as follows:
|
|
|
September 30,
2016
|
|
December 31,
2015
|
|
(Unaudited, Dollar
amounts in thousands)
|
Retail installment
contracts
|
$
|
27,624,259
|
|
|
$
|
27,223,768
|
|
Average
APR
|
16.4
|
%
|
|
16.8
|
%
|
Discount
|
2.3
|
%
|
|
2.7
|
%
|
|
|
|
|
Personal
loans
|
$
|
11,682
|
|
|
$
|
941
|
|
Average
APR
|
24.1
|
%
|
|
20.9
|
%
|
|
|
|
|
Receivables from
dealers
|
$
|
70,366
|
|
|
$
|
76,941
|
|
Average
APR
|
4.7
|
%
|
|
4.6
|
%
|
|
|
|
|
Leased
vehicles
|
$
|
9,552,439
|
|
|
$
|
7,326,296
|
|
|
|
|
|
Capital
leases
|
$
|
37,247
|
|
|
$
|
66,929
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/santander-consumer-usa-holdings-inc-reports-third-quarter-2016-results-300359672.html
SOURCE Santander Consumer USA
Holdings Inc.