DALLAS, Jan. 29, 2020
/PRNewswire/ -- Santander Consumer USA Holdings Inc. (NYSE: SC) ("SC" or the
"Company") today announced net income for the fourth quarter ended
December 31, 2019 ("Q4 2019") of
$146 million, or $0.43 per diluted common share. Net income for
the full year 2019 ("2019") was $994
million, or $2.86 per diluted
common share.
The Company has declared a cash dividend of $0.22 per share, to be paid on February 20, 2020, to shareholders of record as
of the close of business on February 10,
2020.
Management Quotes
"We are pleased with our full year 2019 results and the
milestones we have accomplished across the organization. We made
important management appointments which were all internally
sourced, demonstrating the depth of the leadership team, reached a
mutually beneficial agreement and achieved our highest-ever annual
penetration rate of thirty-four percent with Fiat Chrysler, and
continued to optimize capital through increased dividends and a
robust share repurchase plan, including the announced tender
offer" said Mahesh Aditya, SC President and CEO.
Fahmi Karam, SC Chief Financial Officer, added, "2019 marked
another strong year for the Company, reaching nearly $1 billion in net income, more than $31 billion in originations with strong returns
and the lowest full-year net charge-off ratio in the last four
years. We were pleased to see key credit metrics improve across the
portfolio, demonstrating our efforts to enhance our operations and
pricing functions as well as the continued strength of the
consumer. The acquisition from Gateway One Lending demonstrates the
Company's ability to deploy capital toward accretive transactions
and partner with other large, and well-regarded financial
institutions to leverage our best-in-class servicing platform. We
remain focused on generating assets with strong risk-adjusted
returns and managing operating expenses, while also working toward
a more efficient capital base."
2019 Corporate Milestones
- $31.3 billion of originations
across loans and leases, all-time high
- $994 million of net income,
all-time high1
- 7.8% retail installment loan net charge-off ratio, four-year
low
- Fiat Chrysler - reached mutually beneficial agreement and
achieved an average annual penetration rate of 34%
- Completed acquisition of $1.0
billion auto loan portfolio from Gateway One Lending
- Leading auto loan and lease ABS issuer with $11.9 billion in ABS and launched first-ever
nonprime revolving ABS platform "SREV"
- Continued to grow and diversify our funding sources, including
originating $7 billion in auto loans
through our partnership with Santander
Bank
- Returned more than $600 million
of capital to our shareholders through increased dividends and open
market share repurchases.
- Several key leadership appointments: Mahesh Aditya (President
& Chief Executive Officer), Fahmi
Karam (Chief Financial Officer) and Shawn Allgood (Head of Chrysler Capital and Auto
Relationships)
2019 Key Financial Highlights (variances compared to the full
year 2018 ("2018")
- Total auto originations of $31.3
billion, up 9%
- Net finance and other interest income of $4.7 billion, up 4%
- RIC net charge-off ratio of 7.8%, down 70 basis points
- Return on average assets ("ROA") of 2.2%
- Expense ratio of 2.1%
Fourth Quarter of 2019 Highlights (variances compared to the
fourth quarter of 2018 ("Q4 2018"), unless otherwise noted)
- Total auto originations of $7.5
billion, up 9%
-
- Core retail auto loan originations of $2.4, up 9%
- Chrysler Capital loan originations of $3.2, up 29%
- Chrysler Capital lease originations of $1.8, down 15%
- Chrysler average quarterly penetration rate of 32%, up from
29%
- Santander Bank, N.A. program
originations of $1.9 billion
- Net finance and other interest income2 of
$1.2 billion, up 1%
- 30-59 delinquency ratio of 9.7%, down 130 basis points
- 59-plus delinquency ratio3 of 5.1%, down 90 basis
points
- Retail Installment Contract ("RIC") gross charge-off ratio of
17.3%, down 290 basis points
- Recovery rate of 52.2%, up 490 basis points
- RIC net charge-off ratio4 of 8.3%, down 230 basis
points
- Troubled Debt Restructuring ("TDR") balance of $3.9 billion, down 28%
- Return on average assets of 1.2%, up from 1.0%
- $2.2 billion in asset-backed
securities "ABS"
- Expense ratio of 2.1%, up from 1.9%
- Common equity tier 1 ("CET1") ratio of 14.8%, down from 15.7%
as of December 31, 2018
1Excludes the impact of 2017 corporate tax reform
2Includes Finance receivables held for investment,
Finance receivables held for sale and Leased vehicles.
3Delinquency 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.
4Net 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 will host a conference
call and webcast to discuss its Q4 2019 results and other general
matters at 9:00 a.m. Eastern Time on Wednesday,
January 29, 2020. The conference call will be accessible by
dialing 866-548-4713 (U.S. domestic), or 323-794-2093
(international), conference ID 9192771. 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 Q4 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 9192771, 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 2.9 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
$59 billion (for the fourth quarter
ended December 31, 2019), and is
headquartered in Dallas.
(www.santanderconsumerusa.com)
CONTACTS:
Investor Relations
Evan Black
800.493.8219
InvestorRelations@santanderconsumerusa.com
Media Relations
Annette Rogers
469.563.4157
Media@santanderconsumerusa.com
Santander Consumer
USA Holdings Inc.
|
Financial
Supplement
|
Fourth Quarter
2019
|
|
|
Table of
Contents
|
|
Table 1:
Consolidated Balance Sheets
|
7
|
Table 2:
Consolidated Statements of Income
|
8
|
Table 3: Other
Financial Information
|
9
|
Table 4: Credit
Quality
|
11
|
Table 5:
Originations
|
13
|
Table 6: Asset
Sales
|
14
|
Table 7: Ending
Portfolio
|
15
|
Table 8:
Reconciliation of Non-GAAP Measures
|
16
|
Table 1:
Consolidated Balance Sheets
|
|
|
|
|
|
December 31,
2019
|
|
December 31,
2018
|
Assets
|
(Unaudited, Dollars
in thousands)
|
Cash and cash
equivalents
|
$
|
81,848
|
|
|
$
|
148,436
|
|
Finance receivables
held for sale, net
|
1,007,105
|
|
|
1,068,757
|
|
Finance receivables
held for investment, net
|
27,767,019
|
|
|
25,117,454
|
|
Restricted cash and
cash equivalents
|
2,079,239
|
|
|
2,102,048
|
|
Accrued interest
receivable
|
288,615
|
|
|
303,686
|
|
Leased vehicles,
net
|
16,461,982
|
|
|
13,978,855
|
|
Furniture and
equipment, net
|
59,873
|
|
|
61,280
|
|
Goodwill
|
74,056
|
|
|
74,056
|
|
Intangible
assets
|
42,772
|
|
|
35,195
|
|
Due from
affiliates
|
30,841
|
|
|
9,654
|
|
Other
assets
|
1,040,179
|
|
|
1,060,434
|
|
Total
assets
|
$
|
48,933,529
|
|
|
$
|
43,959,855
|
|
Liabilities and
Equity
|
|
|
|
Liabilities:
|
|
|
|
Total borrowings and
other debt obligations
|
$
|
39,194,141
|
|
|
$
|
34,883,037
|
|
Accounts payable and
accrued expenses
|
499,326
|
|
|
472,321
|
|
Deferred tax
liabilities, net
|
1,468,222
|
|
|
1,155,883
|
|
Due to
affiliates
|
88,681
|
|
|
63,219
|
|
Other
liabilities
|
364,539
|
|
|
367,037
|
|
Total
liabilities
|
$
|
41,614,909
|
|
|
$
|
36,941,497
|
|
|
|
|
|
Equity:
|
|
|
|
Common stock, $0.01
par value
|
3,392
|
|
|
3,523
|
|
Additional paid-in
capital
|
1,173,262
|
|
|
1,515,572
|
|
Accumulated other
comprehensive income, net
|
(26,693)
|
|
|
33,515
|
|
Retained
earnings
|
6,168,659
|
|
|
5,465,748
|
|
Total stockholders'
equity
|
$
|
7,318,620
|
|
|
$
|
7,018,358
|
|
Total liabilities and
equity
|
$
|
48,933,529
|
|
|
$
|
43,959,855
|
|
Table 2:
Consolidated Statements of Income
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Twelve Months
Ended December 31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
(Unaudited, Dollars
in thousands, except per share amounts)
|
Interest on finance
receivables and loans
|
$
|
1,262,266
|
|
|
$
|
1,235,889
|
|
|
$
|
5,049,966
|
|
|
$
|
4,842,564
|
|
Leased vehicle
income
|
732,160
|
|
|
632,447
|
|
|
2,764,258
|
|
|
2,257,719
|
|
Other finance and
interest income
|
10,624
|
|
|
9,082
|
|
|
42,234
|
|
|
33,235
|
|
Total finance and
other interest income
|
2,005,050
|
|
|
1,877,418
|
|
|
7,856,458
|
|
|
7,133,518
|
|
Interest
expense
|
332,171
|
|
|
311,196
|
|
|
1,331,804
|
|
|
1,111,760
|
|
Leased vehicle
expense
|
517,467
|
|
|
427,662
|
|
|
1,862,121
|
|
|
1,535,756
|
|
Net finance and other
interest income
|
1,155,412
|
|
|
1,138,560
|
|
|
4,662,533
|
|
|
4,486,002
|
|
Provision for credit
losses
|
545,345
|
|
|
690,786
|
|
|
2,093,749
|
|
|
2,205,585
|
|
Net finance and other
interest income after provision for credit losses
|
610,067
|
|
|
447,774
|
|
|
2,568,784
|
|
|
2,280,417
|
|
Profit
sharing
|
14,293
|
|
|
14,255
|
|
|
52,731
|
|
|
33,137
|
|
Net finance and other
interest income after provision for credit losses and profit
sharing
|
595,774
|
|
|
433,519
|
|
|
2,516,053
|
|
|
2,247,280
|
|
Investment losses,
net
|
(168,406)
|
|
|
(146,164)
|
|
|
(406,687)
|
|
|
(401,638)
|
|
Servicing fee
income
|
21,079
|
|
|
26,711
|
|
|
91,334
|
|
|
106,840
|
|
Fees, commissions,
and other
|
83,304
|
|
|
86,035
|
|
|
364,119
|
|
|
333,458
|
|
Total other
income
|
(64,023)
|
|
|
(33,418)
|
|
|
48,766
|
|
|
38,660
|
|
Compensation
expense
|
127,900
|
|
|
122,475
|
|
|
510,743
|
|
|
482,800
|
|
Repossession
expense
|
58,565
|
|
|
66,846
|
|
|
262,061
|
|
|
264,777
|
|
Other operating
costs
|
123,010
|
|
|
67,147
|
|
|
437,747
|
|
|
346,095
|
|
Total operating
expenses
|
309,475
|
|
|
256,468
|
|
|
1,210,551
|
|
|
1,093,672
|
|
Income before income
taxes
|
222,276
|
|
|
143,633
|
|
|
1,354,268
|
|
|
1,192,268
|
|
Income tax
expense
|
76,214
|
|
|
39,295
|
|
|
359,898
|
|
|
276,342
|
|
Net income
|
$
|
146,062
|
|
|
$
|
104,338
|
|
|
$
|
994,370
|
|
|
$
|
915,926
|
|
|
|
|
|
|
|
|
|
Net income per common
share (basic)
|
$
|
0.43
|
|
|
$
|
0.29
|
|
|
$
|
2.87
|
|
|
$
|
2.55
|
|
Net income per common
share (diluted)
|
$
|
0.43
|
|
|
$
|
0.29
|
|
|
$
|
2.86
|
|
|
$
|
2.54
|
|
Weighted average
common shares (basic)
|
340,020,380
|
|
|
356,783,962
|
|
|
346,992,162
|
|
|
359,861,764
|
|
Weighted average
common shares (diluted)
|
340,448,254
|
|
|
357,396,989
|
|
|
347,507,507
|
|
|
360,672,417
|
|
Table 3: Other
Financial Information
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Twelve Months
Ended December 31,
|
Ratios (Unaudited,
Dollars in thousands)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Yield on retail
installment contracts
|
15.7
|
%
|
|
16.1
|
%
|
|
16.0
|
%
|
|
16.2
|
%
|
Yield on purchased
receivables portfolios
|
14.4
|
%
|
|
19.1
|
%
|
|
15.6
|
%
|
|
23.8
|
%
|
Yield on receivables
from dealers
|
1.4
|
%
|
|
2.2
|
%
|
|
1.8
|
%
|
|
3.0
|
%
|
Yield on leased
vehicles
|
4.9
|
%
|
|
5.5
|
%
|
|
5.5
|
%
|
|
5.5
|
%
|
Yield on personal
loans, held for sale (1)
|
25.7
|
%
|
|
25.1
|
%
|
|
26.0
|
%
|
|
24.6
|
%
|
Yield on earning
assets (2)
|
12.2
|
%
|
|
13.0
|
%
|
|
12.7
|
%
|
|
13.2
|
%
|
Cost of debt
(3)
|
3.5
|
%
|
|
3.6
|
%
|
|
3.6
|
%
|
|
3.4
|
%
|
Net interest margin
(4)
|
9.5
|
%
|
|
10.2
|
%
|
|
9.9
|
%
|
|
10.6
|
%
|
Expense ratio
(5)
|
2.1
|
%
|
|
1.9
|
%
|
|
2.1
|
%
|
|
2.1
|
%
|
Return on average
assets (6)
|
1.2
|
%
|
|
1.0
|
%
|
|
2.2
|
%
|
|
2.2
|
%
|
Return on average
equity (7)
|
8.0
|
%
|
|
5.9
|
%
|
|
13.7
|
%
|
|
13.3
|
%
|
Net charge-off ratio
on individually acquired retail installment contracts
(8)
|
8.3
|
%
|
|
10.6
|
%
|
|
7.8
|
%
|
|
8.5
|
%
|
Net charge-off ratio
on purchased receivables portfolios (8)
|
—
|
%
|
|
(2.0)
|
%
|
|
—
|
%
|
|
(4.1)
|
%
|
Net charge-off ratio
on personal loans (8)
|
—
|
|
|
0.1
|
%
|
|
0.1
|
%
|
|
0.1
|
%
|
Net charge-off ratio
(8)
|
8.2
|
%
|
|
10.6
|
%
|
|
7.8
|
%
|
|
8.5
|
%
|
Delinquency ratio on
individually acquired retail installment contracts held for
investment, end of period (9)
|
5.1
|
%
|
|
6.0
|
%
|
|
5.1
|
%
|
|
6.0
|
%
|
Delinquency ratio on
loans held for investment, end of period (9)
|
5.1
|
%
|
|
6.0
|
%
|
|
5.1
|
%
|
|
6.0
|
%
|
Allowance ratio
(10)
|
9.9
|
%
|
|
11.4
|
%
|
|
9.9
|
%
|
|
11.4
|
%
|
Common stock dividend
payout ratio (11)
|
51.2
|
%
|
|
69.0
|
%
|
|
29.3
|
%
|
|
19.6
|
%
|
Common Equity Tier 1
capital ratio (12)
|
14.8
|
%
|
|
15.7
|
%
|
|
14.8
|
%
|
|
15.7
|
%
|
Charge-offs, net of
recoveries, on individually acquired retail installment
contracts
|
$
|
618,269
|
|
|
$
|
754,625
|
|
|
$
|
2,288,812
|
|
|
$
|
2,314,769
|
|
Charge-offs, net of
recoveries, on purchased receivables portfolios
|
—
|
|
|
(159)
|
|
|
—
|
|
|
(1,483)
|
|
Charge-offs, net of
recoveries, on personal loans, held for sale
|
(23)
|
|
|
268
|
|
|
1,857
|
|
|
1,616
|
|
Charge-offs, net of
recoveries, on finance leases
|
407
|
|
|
703
|
|
|
769
|
|
|
1,642
|
|
Total charge-offs,
net of recoveries
|
$
|
618,653
|
|
|
$
|
755,437
|
|
|
$
|
2,291,438
|
|
|
$
|
2,316,544
|
|
End of period
delinquent principal over 59 days, retail installment contracts
held for investment
|
1,578,452
|
|
|
1,712,243
|
|
|
1,578,452
|
|
|
1,712,243
|
|
End of period
delinquent principal over 59 days, personal loans
|
175,152
|
|
|
177,369
|
|
|
175,152
|
|
|
177,369
|
|
End of period
delinquent principal over 59 days, loans held for
investment
|
1,580,048
|
|
|
1,713,775
|
|
|
1,580,048
|
|
|
1,713,775
|
|
End of period assets
covered by allowance for credit losses
|
30,816,291
|
|
|
28,469,451
|
|
|
30,816,291
|
|
|
28,469,451
|
|
End of period gross
retail installment contracts held for investment
|
30,776,038
|
|
|
28,432,760
|
|
|
30,776,038
|
|
|
28,432,760
|
|
End of period gross
personal loans held for sale
|
1,481,037
|
|
|
1,529,433
|
|
|
1,481,037
|
|
|
1,529,433
|
|
End of period gross
finance receivables and loans held for investment
|
30,788,706
|
|
|
28,480,583
|
|
|
30,788,706
|
|
|
28,480,583
|
|
End of period gross
finance receivables, loans, and leases held for
investment
|
48,379,072
|
|
|
43,719,240
|
|
|
48,379,072
|
|
|
43,719,240
|
|
Average gross retail
installment contracts held for investment
|
29,959,060
|
|
|
28,395,046
|
|
|
29,248,201
|
|
|
27,227,705
|
|
Average gross
personal loans held for investment
|
—
|
|
|
2,934
|
|
|
969
|
|
|
4,314
|
|
Average gross
individually acquired retail installment contracts held for
investment and held for sale
|
$
|
29,936,775
|
|
|
$
|
28,395,046
|
|
|
$
|
29,271,168
|
|
|
$
|
27,756,099
|
|
Average gross
purchased receivables portfolios
|
22,285
|
|
|
31,543
|
|
|
25,673
|
|
|
36,075
|
|
Average gross
receivables from dealers
|
12,754
|
|
|
14,822
|
|
|
13,110
|
|
|
15,229
|
|
Average gross
personal loans held for sale
|
1,364,877
|
|
|
1,401,626
|
|
|
1,393,456
|
|
|
1,404,261
|
|
Average gross finance
leases
|
26,607
|
|
|
19,422
|
|
|
23,123
|
|
|
20,736
|
|
Average gross finance
receivables and loans
|
$
|
31,363,298
|
|
|
$
|
29,862,459
|
|
|
$
|
30,726,530
|
|
|
$
|
29,232,400
|
|
Average gross
operating leases
|
17,395,639
|
|
|
14,857,635
|
|
|
16,440,242
|
|
|
13,048,396
|
|
Average gross finance
receivables, loans, and leases
|
48,758,937
|
|
|
44,720,094
|
|
|
47,166,772
|
|
|
42,280,796
|
|
Average managed
assets
|
58,909,208
|
|
|
53,804,349
|
|
|
56,600,892
|
|
|
51,328,934
|
|
Average total
assets
|
47,875,073
|
|
|
43,458,471
|
|
|
46,244,782
|
|
|
41,541,102
|
|
Average
debt
|
38,185,199
|
|
|
34,223,818
|
|
|
36,727,416
|
|
|
32,570,257
|
|
Average total
equity
|
7,339,351
|
|
|
7,114,411
|
|
|
7,243,438
|
|
|
6,905,796
|
|
|
|
(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 twelve
months ended months ended December 31,
2019 and 2018 was as follows (Unaudited, Dollar amounts
in thousands):
|
Three Months Ended
December 31, 2019
|
|
Three Months Ended
December 31, 2018
|
Allowance for
Credit Loss
|
Non-TDR
|
|
TDR
|
|
Non-TDR
|
|
TDR
|
|
Balance — beginning of period
|
$
|
2,051,792
|
|
|
$
|
1,060,612
|
|
|
$
|
1,740,862
|
|
|
$
|
1,559,808
|
|
Provision for credit
losses *
|
494,069
|
|
|
50,392
|
|
|
503,382
|
|
|
186,676
|
|
Charge-offs
|
(950,993)
|
|
|
(341,668)
|
|
|
(888,142)
|
|
|
(544,843)
|
|
Recoveries
|
529,010
|
|
|
145,382
|
|
|
463,258
|
|
|
215,102
|
|
Balance — end of period
|
$
|
2,123,878
|
|
|
$
|
914,718
|
|
|
$
|
1,819,360
|
|
|
$
|
1,416,743
|
|
|
* Includes impact for
individually acquired retail installment contracts transferred back
from held for sale
|
|
Twelve Months
Ended December 31, 2019
|
|
Twelve Months
Ended December 31, 2018
|
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
|
$
|
1,774,000
|
|
|
$
|
317,305
|
|
|
1,433,977
|
|
|
772,448
|
|
Charge-offs
|
$
|
(3,636,924)
|
|
|
$
|
(1,559,318)
|
|
|
(2,850,361)
|
|
|
(2,029,325)
|
|
Recoveries
|
$
|
2,167,442
|
|
|
$
|
739,988
|
|
|
1,695,429
|
|
|
869,488
|
|
Balance — end of period
|
$
|
2,123,878
|
|
|
$
|
914,718
|
|
|
$
|
1,819,360
|
|
|
$
|
1,416,743
|
|
A summary of delinquencies of our individually acquired retail
installment contracts as of December 31,
2019 and 2018 is as follows (Unaudited, Dollar amounts in
thousands):
Delinquent
Principal
|
December 31,
2019
|
|
December 31,
2018
|
Principal 30-59 days
past due
|
$
|
2,972,495
|
|
|
9.7
|
%
|
|
$
|
3,118,869
|
|
|
11.0
|
%
|
Delinquent principal
over 59 days
|
1,578,452
|
|
|
5.1
|
%
|
|
1,712,243
|
|
|
6.0
|
%
|
Total delinquent
contracts
|
$
|
4,550,947
|
|
|
14.8
|
%
|
|
$
|
4,831,112
|
|
|
17.0
|
%
|
The retail installment contracts acquired individually held for
investment that were placed on nonaccrual status, as of
December 31, 2019 and 2018
(Unaudited, Dollar amounts in thousands):
Nonaccrual
Principal
|
December 31,
2019
|
|
December 31,
2018
|
Non-TDR
|
$
|
1,099,462
|
|
|
3.6
|
%
|
|
$
|
834,921
|
|
|
2.9
|
%
|
TDR
|
516,119
|
|
|
1.7
|
%
|
|
733,218
|
|
|
2.6
|
%
|
Total nonaccrual
principal
|
$
|
1,615,581
|
|
|
5.3
|
%
|
|
$
|
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 December 31, 2019 and 2018
(Unaudited, Dollar amounts in thousands):
Allowance
Ratios
|
December 31,
2019
|
|
December 31,
2018
|
TDR - Unpaid
principal balance
|
$
|
3,859,040
|
|
|
$
|
5,378,603
|
|
TDR -
Impairment
|
914,718
|
|
|
1,416,743
|
|
TDR - Allowance
ratio
|
23.7
|
%
|
|
26.3
|
%
|
|
|
|
|
Non-TDR - Unpaid
principal balance
|
$
|
26,895,551
|
|
|
$
|
23,054,157
|
|
Non-TDR -
Allowance
|
2,123,878
|
|
|
1,819,360
|
|
Non-TDR Allowance
ratio
|
7.9
|
%
|
|
7.9
|
%
|
|
|
|
|
Total - Unpaid
principal balance
|
$
|
30,754,591
|
|
|
$
|
28,432,760
|
|
Total -
Allowance
|
3,038,596
|
|
|
3,236,103
|
|
Total - Allowance
ratio
|
9.9
|
%
|
|
11.4
|
%
|
Table 5: Originations
The Company's originations of individually acquired loans and
leases, including revolving loans, average APR, and dealer discount
(net of dealer participation) were as follows:
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
Three Months
Ended
|
|
December 31,
2019
|
|
December 31,
2018
|
|
December 31,
2019
|
|
December 31,
2018
|
|
September 30,
2019
|
Retained
Originations
|
(Unaudited, Dollar
amounts in thousands)
|
Retail installment
contracts
|
$
|
3,779,615
|
|
|
$
|
3,616,810
|
|
|
$
|
15,835,618
|
|
|
$
|
15,379,778
|
|
|
$
|
4,080,028
|
|
Average
APR
|
15.8
|
%
|
|
17.1
|
%
|
|
16.3
|
%
|
|
17.3
|
%
|
|
16.0
|
%
|
Average FICO®
(a)
|
598
|
|
|
593
|
|
|
598
|
|
|
595
|
|
|
599
|
|
Discount
|
(0.8)
|
%
|
|
0.5
|
%
|
|
(0.5)
|
%
|
|
0.2
|
%
|
|
(0.7)
|
%
|
|
|
|
|
|
|
|
|
|
|
Personal loans
(b)
|
513,347
|
|
|
544,134
|
|
|
1,467,452
|
|
|
1,482,670
|
|
|
$
|
322,335
|
|
Average
APR
|
29.8
|
%
|
|
29.5
|
%
|
|
29.8
|
%
|
|
29.6
|
%
|
|
29.7
|
%
|
|
|
|
|
|
|
|
|
|
|
Leased
vehicles
|
1,811,662
|
|
|
2,125,925
|
|
|
8,520,489
|
|
|
9,742,423
|
|
|
$
|
2,225,117
|
|
|
|
|
|
|
|
|
|
|
|
Finance
lease
|
4,600
|
|
|
2,706
|
|
|
17,589
|
|
|
$
|
9,794
|
|
|
$
|
4,859
|
|
Total originations
retained
|
$
|
6,109,224
|
|
|
$
|
6,289,575
|
|
|
$
|
25,841,148
|
|
|
$
|
26,614,665
|
|
|
$
|
6,632,339
|
|
|
|
|
|
|
|
|
|
|
|
Sold Originations
(c)
|
|
|
|
|
|
|
|
|
|
Retail installment
contracts
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,820,085
|
|
|
$
|
—
|
|
Average
APR
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
7.3
|
%
|
|
—
|
%
|
Average FICO®
(d)
|
—
|
|
|
—
|
|
|
—
|
|
|
727
|
|
|
—
|
|
Total originations
sold
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,820,085
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
Total originations
(excluding SBNA Originations Program)
|
$
|
6,109,224
|
|
|
$
|
6,289,575
|
|
|
$
|
25,841,148
|
|
|
$
|
28,434,750
|
|
|
$
|
6,632,339
|
|
|
|
(a)
|
Unpaid principal
balance excluded from the weighted average FICO score is $404
million, $408 million, $1.8 billion, $1.9 billion, and $440 million
as the borrowers on these loans did not have FICO scores at
origination and $181 million, $100 million , $582 million, $76
million and $154 million of commercial loans, for the three months
ended December 31, 2019 and 2018, the twelve months ended December
31, 2019 and 2018 and the three months ended September 30, 2019,
respectively.
|
(b)
|
Included in the total
origination volume is $133 million, $150 million, $270 million,
$304 million, and $62 million for the three months ended December
31, 2019 and 2018, the twelve months ended December 31, 2019 and
2018 and the three months ended September 30, 2019, respectively,
related to newly opened accounts.
|
(c)
|
There were no sales
in 2019.
|
(d)
|
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, zero, zero,
$143 million and zero as the borrowers on these loans
did not have FICO scores at origination and zero, zero, zero, $76
and zero million of commercial loans, for the three months ended
December 31, 2019 and 2018,the twelve months ended December 31,
2019 and 2018, and the three months ended September 30, 2019,
respectively.
|
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 $1.9 billion and $7.0
billion of retail installment contacts during the three and
twelve months ended December 31,
2019, respectively.
Table 6: Asset
Sales
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Twelve Months
Ended December 31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
(Unaudited, Dollar
amounts in thousands)
|
Retail installment
contracts
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,905,922
|
|
Average
APR
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
7.2
|
%
|
Average
FICO®
|
—
|
|
|
—
|
|
|
—
|
|
|
726
|
|
Total asset
sales
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
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
December 31, 2019, and 2018, are as
follows:
|
December 31,
2019
|
|
December 31,
2018
|
|
(Unaudited, Dollar
amounts in thousands)
|
Retail installment
contracts
|
$
|
30,776,038
|
|
|
$
|
28,463,236
|
|
Average
APR
|
16.1
|
%
|
|
16.7
|
%
|
Discount
|
0.3
|
%
|
|
0.8
|
%
|
|
|
|
|
Personal loans
(a)
|
$
|
—
|
|
|
$
|
2,637
|
|
Average
APR
|
—
|
%
|
|
31.7
|
%
|
|
|
|
|
Receivables from
dealers
|
$
|
12,668
|
|
|
$
|
14,710
|
|
Average
APR
|
4.0
|
%
|
|
4.1
|
%
|
|
|
|
|
Leased
vehicles
|
$
|
17,562,782
|
|
|
$
|
15,219,313
|
|
|
|
|
|
Finance
leases
|
$
|
27,584
|
|
|
$
|
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
|
|
|
|
|
|
December 31,
2019
|
|
December 31,
2018
|
|
(Unaudited, Dollar
amounts in thousands)
|
Total
equity
|
7,318,620
|
|
|
7,018,358
|
|
Deduct: Goodwill,
intangibles, and other assets, net of deferred tax
liabilities
|
152,756
|
|
|
161,516
|
|
Deduct: Accumulated
other comprehensive income (loss), net
|
(26,693)
|
|
|
33,515
|
|
Tier 1 common
capital
|
7,192,557
|
|
|
6,823,327
|
|
Risk weighted assets
(a)
|
48,761,825
|
|
|
43,547,594
|
|
Common Equity Tier 1
capital ratio (b)
|
14.8
|
%
|
|
15.7
|
%
|
|
|
(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-fourth-quarter-and-full-year-2019-results-300995078.html
SOURCE Santander Consumer USA
Holdings Inc.