DALLAS, Oct. 30, 2019 /PRNewswire/ -- Santander Consumer
USA Holdings Inc. (NYSE: SC) ("SC"
or the "Company") today announced net income for the third quarter
ended September 30, 2019 ("Q3 2019")
of $233 million, or $0.67 per diluted common share.
The Company has declared a cash dividend of $0.22 per share, to be paid on November 22, 2019, to shareholders of record as
of the close of business on November 12,
2019.
Management Quotes
"We had strong results in the third quarter, driven by strong
originations" said Scott Powell, SC President and CEO,
also CEO of Santander US. "We have been working throughout 2019
to deepen our relationship with Fiat Chrysler and with our other
dealer customers. We've made tangible improvements to operations
and customer experience, and the results demonstrate that."
Fahmi Karam, SC Chief Financial Officer, added, "We are
pleased with our third quarter performance and our ability to
continue the momentum from the first half of the year. Credit
performance remains stable as we enter the seasonally weaker part
of the year. We remain focused on generating assets with
strong risk-adjusted returns, managing operating expenses as we
grow and optimizing our capital base by returning capital to our
shareholders."
Q3 2019 Highlights (variances compared to the third
quarter of 2018 ("Q3 2018"), unless otherwise noted):
- Total auto originations of $8.4
billion, up 11%
-
- Core retail auto loan originations of $2.6 billion, up 11%
- Chrysler Capital loan originations of $3.6 billion, up 52%
- Chrysler Capital lease originations of $2.2 billion, down 23%
- Chrysler average quarterly penetration rate of 36%, up from
31%
- Santander Bank, N.A. program
originations of $2.1 billion
- Net finance and other interest income of $1.2 billion, up 5%
- 30-59 delinquency ratio of 9.5%, down 100 basis points
- 59-plus delinquency ratio of 4.7%, down 80 basis points
- Retail Installment Contract ("RIC") gross charge-off ratio of
18.3%, up 70 basis points
- Recovery rate of 55.9%, up 590 basis points
- RIC net charge-off ratio of 8.1%, down 70 basis points
- Troubled Debt Restructuring ("TDR") balance of $4.2 billion, down 27%
- Return on average assets of 2.0%, down from 2.2%
- $3.5 billion in asset-backed
securities "ABS"
- Expense ratio of 2.3%, up from 2.1%
- Common equity tier 1 ("CET1") ratio of 15.4%, down from 16.4%
as of September 30, 2018
Net finance and other interest income1 increased 5
percent to $1.20 billion in Q3 2019
from $1.14 billion in Q3 2018, driven
by increased loan and lease balances.
SC's serviced for others portfolio increased 9 percent to
$10.0 billion as of Q3 2019 versus Q3
2018. Servicing fee income decreased 19 percent to $21 million in Q3 2019, from $26 million in Q3 2018, driven by the change in
the composition of those balances. Fees, commissions and other
increased 14 percent to $96 million
in Q3 2019, from $85 million in Q3
2018, driven by origination fees from the SBNA program.
The Personal Lending portfolio recorded net investment losses of
$87 million in Q3 2019, flat compared
Q3 2018, primarily driven by lower of cost or market adjustments
which included $102 million in
customer default activity, partially offset by a $15 million decrease in market discount,
consistent with typical seasonal patterns.
During Q3 2019 operating expenses were $329 million, up 21 percent from $272 million in Q3 2018, driven by one-time legal
expenses during the quarter. SC's expense ratio increased to 2.3
percent during the quarter, compared to 2.1 percent during the same
period last year.
1Includes Finance receivables held for investment,
Finance receivables held for sale and Leased vehicles.
2Delinquency Ratio is defined as the ratio of end of
period delinquent principal, over 59 days, to end of period gross
balance of the respective portfolio, excludes finance
leases.
3Net Charge-Off Ratio stated on a recorded investment
basis, which is unpaid principal balance adjusted for unaccreted
net discounts, subvention and origination costs.
4Ratio for allowance for credit losses excludes end of
period balances on purchased receivables portfolio of $23 million and finance receivables and personal
loans held for sale of $0.9
billion.
Conference Call Information
SC will host a conference call and webcast to discuss its Q3
2019 results and other general matters at 9:00 a.m. Eastern
Time on Wednesday, October 30, 2019. The conference call
will be accessible by dialing 866-548-4713 (U.S. domestic), or
323-794-2093 (international), conference ID 7619760. Please join 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 SC's corporate website
at http://investors.santanderconsumerusa.com. Choose "Events"
and select the information pertaining to the Q3 2019 SC Earnings
Conference Call. Additionally, there will be slides accompanying
the webcast. Please allow at least 15 minutes prior to the call to
register, download and install any necessary software prior to the
call.
For those unable to listen to the live broadcast, a replay of
the call will be available on the Company's website or by dialing
844-512-2921 (U.S. domestic), or 412-317-6671 (international),
conference ID 7619760, approximately two hours after the conference
call. An audio webcast of the call and investor presentation will
also be archived on the Investor Relations section of SC's
corporate website
at http://investors.santanderconsumerusa.com, under
"Events".
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 control 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 FCA US LLC
may not result in currently anticipated levels of growth and is
subject to certain 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
SHUSA and 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 the reader 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 as new factors emerge from time to
time. 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 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, had an average managed asset
portfolio of approximately $57
billion (as of September 30, 2019), and is
headquartered in Dallas.
(www.santanderconsumerusa.com)
CONTACTS:
Investor Relations
Evan Black
800.493.8219
InvestorRelations@santanderconsumerusa.com
Media Relations
Laurie Kight
214.801.6455
MediaRelations@santander.us
Annette Rogers
469.563.4157
Media@santanderconsumerusa.com
Santander Consumer
USA Holdings Inc.
Financial
Supplement
Third Quarter
2019
|
|
Table of
Contents
|
|
Table 1: Condensed
Consolidated Balance Sheets
|
5
|
|
Table 2: Condensed
Consolidated Statements of Income
|
6
|
|
Table 3: Other
Financial Information
|
7
|
|
Table 4: Credit
Quality
|
9
|
|
Table 5:
Originations
|
10
|
|
Table 6: Asset
Sales
|
11
|
|
Table 7: Ending
Portfolio
|
12
|
|
Table 8:
Reconciliation of Non-GAAP Measures
|
13
|
|
Table 1: Condensed
Consolidated Balance Sheets
|
|
|
September
30, 2019
|
|
December
31,
2018
|
Assets
|
(Unaudited, Dollars
in thousands)
|
Cash and cash
equivalents
|
$
|
38,589
|
|
|
$
|
148,436
|
|
Finance receivables
held for sale, net
|
925,611
|
|
|
1,068,757
|
|
Finance receivables
held for investment, net
|
26,500,359
|
|
|
25,117,454
|
|
Restricted
cash
|
2,245,526
|
|
|
2,102,048
|
|
Accrued interest
receivable
|
282,311
|
|
|
303,686
|
|
Leased vehicles,
net
|
16,037,817
|
|
|
13,978,855
|
|
Furniture and
equipment, net
|
56,020
|
|
|
61,280
|
|
Federal, state and
other income taxes receivable
|
82,151
|
|
|
97,087
|
|
Related party taxes
receivable
|
4,732
|
|
|
734
|
|
Goodwill
|
74,056
|
|
|
74,056
|
|
Intangible
assets
|
36,627
|
|
|
35,195
|
|
Due from
affiliates
|
16,003
|
|
|
8,920
|
|
Other
assets
|
979,213
|
|
|
963,347
|
|
Total
assets
|
$
|
47,279,015
|
|
|
$
|
43,959,855
|
|
Liabilities and
Equity
|
|
|
|
Liabilities:
|
|
|
|
Notes payable —
credit facilities
|
$
|
5,460,581
|
|
|
$
|
4,478,214
|
|
Notes payable —
secured structured financings
|
26,919,490
|
|
|
26,901,530
|
|
Notes payable —
related party
|
5,252,571
|
|
|
3,503,293
|
|
Accrued interest
payable
|
47,862
|
|
|
49,370
|
|
Accounts payable and
accrued expenses
|
392,103
|
|
|
422,951
|
|
Deferred tax
liabilities, net
|
1,403,635
|
|
|
1,155,883
|
|
Due to
affiliates
|
81,626
|
|
|
63,219
|
|
Other
liabilities
|
375,945
|
|
|
367,037
|
|
Total
liabilities
|
$
|
39,933,813
|
|
|
$
|
36,941,497
|
|
|
|
|
|
Equity:
|
|
|
|
Common stock, $0.01
par value
|
3,429
|
|
|
3,523
|
|
Additional paid-in
capital
|
1,276,314
|
|
|
1,515,572
|
|
Accumulated other
comprehensive income, net
|
(31,836)
|
|
|
33,515
|
|
Retained
earnings
|
6,097,295
|
|
|
5,465,748
|
|
Total stockholders'
equity
|
$
|
7,345,202
|
|
|
$
|
7,018,358
|
|
Total liabilities and
equity
|
$
|
47,279,015
|
|
|
$
|
43,959,855
|
|
Table 2: Condensed
Consolidated Statements of Income
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30, 2019
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
(Unaudited, Dollars
in thousands, except per share amounts)
|
Interest on finance
receivables and loans
|
$
|
1,273,022
|
|
|
$
|
1,227,129
|
|
|
$
|
3,787,700
|
|
|
$
|
3,606,675
|
|
Leased vehicle
income
|
706,302
|
|
|
583,097
|
|
|
2,032,098
|
|
|
1,625,272
|
|
Other finance and
interest income
|
9,926
|
|
|
8,522
|
|
|
31,610
|
|
|
24,153
|
|
Total finance and
other interest income
|
1,989,250
|
|
|
1,818,748
|
|
|
5,851,408
|
|
|
5,256,100
|
|
Interest
expense
|
335,212
|
|
|
285,583
|
|
|
999,633
|
|
|
800,564
|
|
Leased vehicle
expense
|
456,193
|
|
|
389,076
|
|
|
1,344,654
|
|
|
1,108,094
|
|
Net finance and other
interest income
|
1,197,845
|
|
|
1,144,089
|
|
|
3,507,121
|
|
|
3,347,442
|
|
Provision for credit
losses
|
566,849
|
|
|
597,914
|
|
|
1,548,404
|
|
|
1,514,799
|
|
Net finance and other
interest income after provision for credit losses
|
630,996
|
|
|
546,175
|
|
|
1,958,717
|
|
|
1,832,643
|
|
Profit
sharing
|
18,125
|
|
|
1,652
|
|
|
38,438
|
|
|
18,882
|
|
Net finance and other
interest income after provision for credit losses and profit
sharing
|
612,871
|
|
|
544,523
|
|
|
1,920,279
|
|
|
1,813,761
|
|
Investment losses,
net
|
(86,397)
|
|
|
(86,320)
|
|
|
(238,281)
|
|
|
(255,474)
|
|
Servicing fee
income
|
21,447
|
|
|
26,409
|
|
|
70,255
|
|
|
80,129
|
|
Fees, commissions,
and other
|
96,243
|
|
|
84,552
|
|
|
280,815
|
|
|
247,423
|
|
Total other
income
|
31,293
|
|
|
24,641
|
|
|
112,789
|
|
|
72,078
|
|
Compensation
expense
|
132,271
|
|
|
119,722
|
|
|
382,843
|
|
|
360,325
|
|
Repossession
expense
|
62,937
|
|
|
62,189
|
|
|
203,496
|
|
|
197,930
|
|
Other operating
costs
|
134,262
|
|
|
90,431
|
|
|
314,737
|
|
|
278,949
|
|
Total operating
expenses
|
329,470
|
|
|
272,342
|
|
|
901,076
|
|
|
837,204
|
|
Income before income
taxes
|
314,694
|
|
|
296,822
|
|
|
1,131,992
|
|
|
1,048,635
|
|
Income tax
expense
|
82,156
|
|
|
64,874
|
|
|
283,684
|
|
|
237,047
|
|
Net income
|
$
|
232,538
|
|
|
$
|
231,948
|
|
|
$
|
848,308
|
|
|
$
|
811,588
|
|
|
|
|
|
|
|
|
|
Net income per common
share (basic)
|
$
|
0.67
|
|
|
$
|
0.64
|
|
|
$
|
2.43
|
|
|
$
|
2.25
|
|
Net income per common
share (diluted)
|
$
|
0.67
|
|
|
$
|
0.64
|
|
|
$
|
2.42
|
|
|
$
|
2.24
|
|
Weighted average
common shares (basic)
|
345,469,657
|
|
|
360,725,330
|
|
|
349,341,627
|
|
|
360,898,973
|
|
Weighted average
common shares (diluted)
|
345,956,043
|
|
|
361,445,223
|
|
|
349,855,822
|
|
|
361,714,123
|
|
Table 3: Other
Financial Information
|
|
|
Three Months
Ended September 30,
|
|
Nine Months
Ended September 30,
|
Ratios (Unaudited,
Dollars in thousands)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Yield on individually
acquired retail installment contracts
|
16.1
|
%
|
|
16.3
|
%
|
|
16.1
|
%
|
|
16.1
|
%
|
Yield on purchased
receivables portfolios
|
14.0
|
%
|
|
23.2
|
%
|
|
16.0
|
%
|
|
25.1
|
%
|
Yield on receivables
from dealers
|
0.7
|
%
|
|
3.4
|
%
|
|
2.0
|
%
|
|
3.3
|
%
|
Yield on personal
loans, held for sale (1)
|
26.3
|
%
|
|
24.9
|
%
|
|
26.2
|
%
|
|
24.6
|
%
|
Yield on earning
assets (2)
|
12.8
|
%
|
|
13.3
|
%
|
|
12.9
|
%
|
|
13.3
|
%
|
Cost of debt
(3)
|
3.6
|
%
|
|
3.5
|
%
|
|
3.7
|
%
|
|
3.3
|
%
|
Net interest margin
(4)
|
10.0
|
%
|
|
10.6
|
%
|
|
10.0
|
%
|
|
10.7
|
%
|
Expense ratio
(5)
|
2.3
|
%
|
|
2.1
|
%
|
|
2.2
|
%
|
|
2.2
|
%
|
Return on average
assets (6)
|
2.0
|
%
|
|
2.2
|
%
|
|
2.5
|
%
|
|
2.6
|
%
|
Return on average
equity (7)
|
12.7
|
%
|
|
13.1
|
%
|
|
15.7
|
%
|
|
15.8
|
%
|
Net charge-off ratio
on individually acquired retail installment contracts
(8)
|
8.1
|
%
|
|
8.8
|
%
|
|
7.7
|
%
|
|
7.7
|
%
|
Net charge-off ratio
(8)
|
8.1
|
%
|
|
8.8
|
%
|
|
7.7
|
%
|
|
7.7
|
%
|
Delinquency ratio on
individually acquired retail installment contracts held for
investment, end of period (9)
|
4.7
|
%
|
|
5.5
|
%
|
|
4.7
|
%
|
|
5.5
|
%
|
Delinquency ratio on
loans held for investment, end of period (9)
|
4.7
|
%
|
|
5.5
|
%
|
|
4.7
|
%
|
|
5.5
|
%
|
Allowance ratio
(10)
|
10.5
|
%
|
|
11.7
|
%
|
|
10.5
|
%
|
|
11.7
|
%
|
Common stock dividend
payout ratio (11)
|
32.7
|
%
|
|
31.1
|
%
|
|
25.5
|
%
|
|
13.3
|
%
|
Common Equity Tier 1
capital ratio (12)
|
15.4
|
%
|
|
16.4
|
%
|
|
15.4
|
%
|
|
16.4
|
%
|
Charge-offs, net of
recoveries, on individually acquired retail installment
contracts
|
$
|
592,912
|
|
|
$
|
613,210
|
|
|
$
|
1,670,543
|
|
|
$
|
1,560,144
|
|
Charge-offs, net of
recoveries, on purchased receivables portfolios
|
—
|
|
|
(331)
|
|
|
—
|
|
|
(1,324)
|
|
Charge-offs, net of
recoveries, on personal loans
|
(34)
|
|
|
84
|
|
|
1,880
|
|
|
1,348
|
|
Charge-offs, net of
recoveries, on finance leases
|
15
|
|
|
227
|
|
|
362
|
|
|
939
|
|
Total charge-offs,
net of recoveries
|
$
|
592,893
|
|
|
$
|
613,190
|
|
|
$
|
1,672,785
|
|
|
$
|
1,561,107
|
|
End of period
delinquent principal over 59 days, retail installment contracts
held for investment
|
1,394,074
|
|
|
1,560,736
|
|
|
1,394,074
|
|
|
1,560,736
|
|
End of period
delinquent principal over 59 days, personal loans
|
176,500
|
|
|
177,916
|
|
|
176,500
|
|
|
177,916
|
|
End of period
delinquent principal over 59 days, loans held for
investment
|
1,394,074
|
|
|
1,562,486
|
|
|
1,394,074
|
|
|
1,562,486
|
|
End of period assets
covered by allowance for credit losses
|
29,636,174
|
|
|
28,281,165
|
|
|
29,636,174
|
|
|
28,281,165
|
|
End of period gross
retail installment contracts held for investment
|
29,597,897
|
|
|
28,243,007
|
|
|
29,597,897
|
|
|
28,243,007
|
|
End of period gross
personal loans held for sale
|
1,322,301
|
|
|
1,336,664
|
|
|
1,322,301
|
|
|
1,336,664
|
|
End of period gross
finance receivables and loans held for investment
|
29,633,950
|
|
|
28,293,857
|
|
|
29,633,950
|
|
|
28,293,857
|
|
End of period gross
finance receivables, loans, and leases held for
investment
|
46,874,858
|
|
|
42,700,297
|
|
|
46,874,858
|
|
|
42,700,297
|
|
Average gross retail
installment contracts held for investment
|
29,316,997
|
|
|
27,919,080
|
|
|
28,998,827
|
|
|
26,928,172
|
|
Average gross
personal loans held for investment
|
—
|
|
|
3,623
|
|
|
1,266
|
|
|
4,761
|
|
Average gross
individually acquired retail installment contracts held for
investment and held for sale
|
$
|
29,450,778
|
|
|
$
|
28,060,492
|
|
|
$
|
29,035,278
|
|
|
$
|
27,615,084
|
|
Average gross
purchased receivables portfolios
|
24,297
|
|
|
34,059
|
|
|
26,781
|
|
|
37,545
|
|
Average gross
receivables from dealers
|
12,924
|
|
|
15,070
|
|
|
13,226
|
|
|
15,363
|
|
Average gross
personal loans held for sale
|
1,343,098
|
|
|
1,350,852
|
|
|
1,398,045
|
|
|
1,398,555
|
|
Average gross finance
leases
|
23,977
|
|
|
20,034
|
|
|
21,960
|
|
|
21,183
|
|
Average gross finance
receivables and loans
|
$
|
30,855,074
|
|
|
$
|
29,480,507
|
|
|
$
|
30,495,290
|
|
|
$
|
29,087,730
|
|
Average gross
operating leases
|
16,902,932
|
|
|
13,607,010
|
|
|
16,135,606
|
|
|
12,458,508
|
|
Average gross finance
receivables, loans, and leases
|
47,758,006
|
|
|
43,087,517
|
|
|
46,630,896
|
|
|
41,546,238
|
|
Average managed
assets
|
57,379,308
|
|
|
52,472,270
|
|
|
55,830,429
|
|
|
50,594,560
|
|
Average total
assets
|
46,915,965
|
|
|
41,985,751
|
|
|
45,696,088
|
|
|
40,900,603
|
|
Average
debt
|
37,276,505
|
|
|
32,706,778
|
|
|
36,234,826
|
|
|
32,002,094
|
|
Average total
equity
|
7,335,898
|
|
|
7,105,340
|
|
|
7,215,250
|
|
|
6,845,767
|
|
|
|
(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 held-for-investment
portfolio.
|
(9)
|
"Delinquency ratio"
is defined as the ratio of End of period Delinquent principal over
59 days to End of period gross balance of the respective portfolio,
excludes finance 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 stock
dividend payout ratio" is defined as the ratio of Dividends
declared per share of common stock to Earnings per share
attributable to the Company's shareholders.
|
(12)
|
"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 (for a
reconciliation from GAAP to this non-GAAP measure, see
"Reconciliation of Non-GAAP Measures" in Table 8 of this
release)
|
Table 4: Credit Quality
The activity in the credit loss allowance for individually
acquired retail installment contracts for the three and nine months
ended September 30, 2019 and 2018 was as follows
(Unaudited, Dollar amounts in thousands):
|
Three Months Ended
September 30, 2019
|
|
Three Months Ended
September 30, 2018
|
|
|
Retail Installment
Contracts Acquired
Individually
|
|
Retail Installment
Contracts Acquired
Individually
|
|
Allowance for
Credit Loss
|
Non-TDR
|
|
TDR
|
|
Non-TDR
|
|
TDR
|
|
|
|
Balance — beginning of period
|
$
|
1,961,893
|
|
|
$
|
1,156,303
|
|
|
$
|
1,651,714
|
|
|
$
|
1,664,222
|
|
|
Provision for credit
losses *
|
484,626
|
|
|
102,494
|
|
|
380,496
|
|
|
217,447
|
|
|
Charge-offs
|
(962,573)
|
|
|
(381,490)
|
|
|
(701,393)
|
|
|
(524,429)
|
|
|
Recoveries
|
567,846
|
|
|
183,305
|
|
|
410,045
|
|
|
202,568
|
|
|
Balance — end of period
|
$
|
2,051,792
|
|
|
$
|
1,060,612
|
|
|
$
|
1,740,862
|
|
|
$
|
1,559,808
|
|
|
|
* Includes impact for
individually acquired retail installment contracts transferred back
from held for sale
|
|
Nine Months Ended
September 30, 2019
|
|
Nine Months Ended
September 30, 2018
|
|
|
Retail Installment
Contracts Acquired
Individually
|
|
Retail Installment
Contracts Acquired
Individually
|
|
Allowance for
Credit Loss
|
Non-TDR
|
|
TDR
|
|
Non-TDR
|
|
TDR
|
|
|
|
Balance — beginning of period
|
$
|
1,819,360
|
|
|
$
|
1,416,743
|
|
|
$
|
1,540,315
|
|
|
$
|
1,804,132
|
|
|
Provision for credit
losses
|
$
|
1,279,931
|
|
|
$
|
266,913
|
|
|
930,595
|
|
|
585,771
|
|
|
Charge-offs
|
$
|
(2,685,931)
|
|
|
$
|
(1,217,650)
|
|
|
(1,962,220)
|
|
|
(1,484,482)
|
|
|
Recoveries
|
$
|
1,638,432
|
|
|
$
|
594,606
|
|
|
1,232,172
|
|
|
654,387
|
|
|
Balance — end of period
|
$
|
2,051,792
|
|
|
$
|
1,060,612
|
|
|
$
|
1,740,862
|
|
|
$
|
1,559,808
|
|
|
A summary of delinquencies of our individually acquired retail
installment contracts as of September 30, 2019 and
December 31, 2018 is as follows (Unaudited, Dollar amounts
in thousands):
Delinquent
Principal
|
September 30,
2019
|
|
December 31,
2018
|
Principal 30-59 days
past due
|
$
|
2,806,640
|
|
|
9.5
|
%
|
|
$
|
3,118,869
|
|
|
11.0
|
%
|
Delinquent principal
over 59 days
|
1,392,955
|
|
|
4.7
|
%
|
|
1,712,243
|
|
|
6.0
|
%
|
Total delinquent
contracts
|
$
|
4,199,595
|
|
|
14.2
|
%
|
|
$
|
4,831,112
|
|
|
17.0
|
%
|
The retail installment contracts acquired individually held for
investment that were placed on nonaccrual status, as of
September 30, 2019 and December 31, 2018 (Unaudited,
Dollar amounts in thousands):
Nonaccrual
Principal
|
September 30,
2019
|
|
December 31,
2018
|
Non-TDR
|
$
|
927,027
|
|
|
3.1
|
%
|
|
$
|
834,921
|
|
|
2.9
|
%
|
TDR
|
511,990
|
|
|
1.7
|
%
|
|
733,218
|
|
|
2.6
|
%
|
Total nonaccrual
principal
|
$
|
1,439,017
|
|
|
4.8
|
%
|
|
$
|
1,568,139
|
|
|
5.5
|
%
|
The table below presents the Company's allowance ratio for TDR
and non-TDR individually acquired retail installment contracts as
of September 30, 2019 and December 31, 2018
(Unaudited, Dollar amounts in thousands):
Allowance
Ratios
|
September
30, 2019
|
|
December
31, 2018
|
TDR - Unpaid
principal balance
|
$
|
4,221,473
|
|
|
$
|
5,378,603
|
|
TDR -
Impairment
|
1,060,612
|
|
|
1,416,743
|
|
TDR - Allowance
ratio
|
25.1
|
%
|
|
26.3
|
%
|
|
|
|
|
Non-TDR - Unpaid
principal balance
|
$
|
25,353,223
|
|
|
$
|
23,054,157
|
|
Non-TDR -
Allowance
|
2,051,792
|
|
|
1,819,360
|
|
Non-TDR Allowance
ratio
|
8.1
|
%
|
|
7.9
|
%
|
|
|
|
|
Total - Unpaid
principal balance
|
$
|
29,574,696
|
|
|
$
|
28,432,760
|
|
Total -
Allowance
|
3,112,404
|
|
|
3,236,103
|
|
Total - Allowance
ratio
|
10.5
|
%
|
|
11.4
|
%
|
Table 5: Originations
The Company's originations of individually acquired loans and
leases, including revolving loans, average APR, and discount were
as follows:
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
Three Months
Ended
|
|
September 30,
2019
|
|
September 30,
2018
|
|
September 30,
2019
|
|
September 30,
2018
|
|
June 30,
2019
|
Retained
Originations
|
(Unaudited, Dollar
amounts in thousands)
|
Retail installment
contracts
|
$
|
4,080,028
|
|
|
$
|
4,014,963
|
|
|
$
|
12,056,003
|
|
|
$
|
11,756,642
|
|
|
$
|
3,949,648
|
|
Average
APR
|
16.0
|
%
|
|
17.3
|
%
|
|
16.5
|
%
|
|
17.4
|
%
|
|
16.2
|
%
|
Average FICO®
(a)
|
599
|
|
|
596
|
|
|
598
|
|
|
595
|
|
|
601
|
|
Discount
|
(0.7)
|
%
|
|
0.3
|
%
|
|
(0.4)
|
%
|
|
0.3
|
%
|
|
(0.5)
|
%
|
|
|
|
|
|
|
|
|
|
|
Personal
loans
|
322,335
|
|
|
325,120
|
|
|
954,105
|
|
|
938,536
|
|
|
$
|
343,214
|
|
Average
APR
|
29.7
|
%
|
|
28.8
|
%
|
|
29.8
|
%
|
|
29.4
|
%
|
|
29.7
|
%
|
|
|
|
|
|
|
|
|
|
|
Leased
vehicles
|
2,225,117
|
|
|
2,890,841
|
|
|
6,708,827
|
|
|
7,616,498
|
|
|
$
|
2,520,130
|
|
|
|
|
|
|
|
|
|
|
|
Finance
lease
|
4,859
|
|
|
2,633
|
|
|
12,989
|
|
|
$
|
7,088
|
|
|
$
|
4,822
|
|
Total originations
retained
|
$
|
6,632,339
|
|
|
$
|
7,233,557
|
|
|
$
|
19,731,924
|
|
|
$
|
20,318,764
|
|
|
$
|
6,817,814
|
|
|
|
|
|
|
|
|
|
|
|
Sold Originations
(b)
|
|
|
|
|
|
|
|
|
|
Retail installment
contracts
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,826,411
|
|
|
$
|
—
|
|
Average
APR
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
7.3
|
%
|
|
—
|
%
|
Average FICO®
(b)
|
—
|
|
|
—
|
|
|
—
|
|
|
727
|
|
|
—
|
|
Total originations
sold
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,826,411
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
Total originations
(excluding SBNA Originations Program)
|
$
|
6,632,339
|
|
|
$
|
7,233,557
|
|
|
$
|
19,731,924
|
|
|
$
|
22,145,175
|
|
|
$
|
6,817,814
|
|
|
|
(a)
|
Unpaid principal
balance excluded from the weighted average FICO score is $440
million, $744 million, $1.4 billion, $1.5 billion, and $448 million
for the three months ended September 30, 2019 and 2018, the
nine months ended September 30, 2019 and 2018 and the three
months ended June 30, 2019 respectively, as the borrowers on
these loans did not have FICO scores at origination. Of these
amounts, $154 million, $80 million, $401 million, $147 million and
$141 million, respectively, were commercial loans.
|
(b)
|
Only includes assets
both originated and sold in the period. Total asset sales for the
period are shown in Table 6. Unpaid principal balance excluded from
the weighted average FICO score is zero, $26 million,
zero, $144 million and zero for the three months ended
September 30, 2019 and 2018,the nine months ended
September 30, 2019 and 2018, and the three months ended
June 30, 2019, respectively, as the borrowers on these loans
did not have FICO scores at origination. Of these amounts, zero and
$76 million, respectively, were commercial loans.
|
SBNA Originations Program
Beginning in 2018, the
Company agreed to provide SBNA with origination support services in
connection with the processing, underwriting and purchase of retail
loans, primarily from Chrysler dealers. In addition, the Company
agreed to perform the servicing for any loans originated on SBNA's
behalf. The Company facilitated the purchase of $2.1 billion and $5
billion of retail installment contacts during the three and
nine months ended September 30, 2019, respectively.
Table 6: Asset
Sales
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September 30,
2019
|
|
September 30,
2018
|
|
September 30,
2019
|
|
September 30,
2018
|
|
(Unaudited, Dollar
amounts in thousands)
|
Retail installment
contracts
|
$
|
—
|
|
|
$
|
274,609
|
|
|
$
|
—
|
|
|
$
|
2,905,922
|
|
Average
APR
|
—
|
%
|
|
7.5
|
%
|
|
—
|
%
|
|
7.2
|
%
|
Average
FICO®
|
—
|
|
|
727
|
|
|
—
|
|
|
726
|
|
|
|
|
|
|
|
|
|
Total asset
sales
|
$
|
—
|
|
|
$
|
274,609
|
|
|
$
|
—
|
|
|
$
|
2,905,922
|
|
There were no asset sales during 2019, since it has been
replaced with SBNA originations program.
Table 7: Ending Portfolio
Ending outstanding balance, average APR and remaining unaccreted
net discount of our held for investment portfolio as of
September 30, 2019, and December 31, 2018, are as
follows:
|
September 30,
2019
|
|
December 31,
2018
|
|
(Unaudited, Dollar
amounts in thousands)
|
Retail installment
contracts
|
$
|
29,597,907
|
|
|
$
|
28,463,236
|
|
Average
APR
|
16.5
|
%
|
|
16.7
|
%
|
Discount
|
0.4
|
%
|
|
0.8
|
%
|
|
|
|
|
Personal loans
(a)
|
$
|
—
|
|
|
$
|
2,637
|
|
Average
APR
|
—
|
%
|
|
31.7
|
%
|
|
|
|
|
Receivables from
dealers
|
$
|
12,841
|
|
|
$
|
14,710
|
|
Average
APR
|
4.0
|
%
|
|
4.1
|
%
|
|
|
|
|
Leased
vehicles
|
$
|
17,215,473
|
|
|
$
|
15,219,313
|
|
|
|
|
|
Finance
leases
|
$
|
25,435
|
|
|
$
|
19,344
|
|
|
|
(a)
|
The remaining balance
of personal loans, held for investment, was charged off during the
quarter ended June 30, 2019.
|
Table 8:
Reconciliation of Non-GAAP Measures
|
|
|
September
30,
2019
|
|
September
30,
2018
|
|
(Unaudited, Dollar
amounts in thousands)
|
Total
equity
|
$
|
7,345,202
|
|
|
$
|
7,141,215
|
|
Deduct:
Goodwill, intangibles, and other assets, net of deferred tax
liabilities
|
150,644
|
|
|
162,643
|
|
Deduct:
Accumulated other comprehensive income (loss), net
|
(31,836)
|
|
|
56,601
|
|
Tier 1 common
capital
|
$
|
7,226,394
|
|
|
$
|
6,921,971
|
|
Risk weighted assets
(a)
|
$
|
46,870,019
|
|
|
$
|
42,256,218
|
|
Common Equity Tier 1
capital ratio (b)
|
15.4
|
%
|
|
16.4
|
%
|
|
|
(a)
|
Under the banking
agencies' risk-based capital guidelines, assets and credit
equivalent amounts of derivatives and off-balance sheet exposures
are assigned to broad risk categories. The aggregate dollar amount
in each risk category is multiplied by the associated risk weight
of the category. The resulting weighted values are added together
with the measure for market risk, resulting in the Company's total
Risk weighted assets.
|
(b)
|
CET1 is calculated
under Basel III regulations required as of January 1, 2015. The
fully phased-in capital ratios are non-GAAP financial
measures.
|
View original
content:http://www.prnewswire.com/news-releases/santander-consumer-usa-holdings-inc-reports-third-quarter-2019-results-300947789.html
SOURCE Santander Consumer USA
Holdings Inc.