Santander Consumer USA Holdings Inc. Reports Second Quarter 2017 Results
DALLAS, July 28, 2017 /PRNewswire/ -- Santander Consumer USA Holdings Inc. (NYSE: SC) ("SC") today announced net income for the second quarter ended June 30, 2017 ("Q2 2017") of $265 million, or $0.74 per diluted common share. During Q2 2017, SC's effective tax rate was 24.0 percent, down from 35.2 percent in the second quarter ended June 30, 2016 ("Q2 2016"). The decreased tax rate for Q2 2017 is associated with Santander Consumer International Puerto Rico, LLC results, leading to a $41 million impact, or $0.11 per diluted common share, of which $14 million, or $0.04 per diluted common share is attributable to Q2 2017.
Q2 2017 Highlights (variances compared to Q2 2016):
-- Announced proposed dividends of $0.03 per share in Q4 2017 and $0.05 per
share in Q1 and Q2 of 2018, following the Comprehensive Capital Analysis
and Review ("CCAR") results of Santander Holdings USA, Inc. ("SHUSA")
-- Total auto originations of $5.5 billion, up 1%
-- Core retail auto loan originations of $2.3 billion, up 36%
-- Chrysler Capital nonprime loan originations of $948 million, up 11%
-- Chrysler Capital prime loan originations of $854 million, down 30%
-- Net finance and other interest income of $1.1 billion, down 6%
-- Net leased vehicle income of $131 million, up 5%
-- Return on average assets of 2.7%, down from 3.0%
-- Common equity tier 1 ("CET1") ratio of 14.3%, up 170 bps
-- Executed asset sales of $536 million through Banco Santander flow
agreement
-- Completed national roll out of Chrysler Capital VIP program with more
than 2,500 dealers enrolled
-- Chrysler penetration rate of 20%, up from 19% at the end of the first
quarter of 2017
-- Issued $2.3 billion in securitizations, including the first public DRIVE
securitization
"We are pleased that following SHUSA's 2017 CCAR results, SC announced proposed dividends to our shareholders of $0.03 per share in the fourth quarter of 2017 and $0.05 per share in the first and second quarters of 2018, as SC and SHUSA continue to make significant improvements to the organization's capital planning processes. While there is still work to be done, I am proud of our diligent and hard work over the last several years as we endeavor to maintain the highest standards of governance, compliance and risk management," said Jason Kulas, President and Chief Executive Officer.
Mr. Kulas continued, "We are also pleased with the progress we have made to further strengthen our relationship with Chrysler. During the quarter, we completed the national roll out of our VIP program with more than 2,500 Chrysler dealers enrolled, executed a second asset sale through the Banco Santander flow agreement, and remain committed to growing our dealer floorplan strategy with Santander Bank NA, all of which support improved penetration rates with Chrysler."
Izzy Dawood, Chief Financial Officer, added, "During the quarter, we continued to demonstrate robust access to the capital markets by executing two securitizations totaling $2.3 billion from our SDART and DRIVE platforms, including our inaugural public DRIVE securitization."
Finance receivables, loans and leases, net(1) of $35 billion as of Q2 2017 increased 3 percent versus December 31, 2016. Net finance and other interest income decreased 6 percent to $1.1 billion in Q2 2017 from $1.2 billion in Q2 2016, driven by a combination of lower retail installment contract ("RIC") balances and higher cost of funds, which was driven primarily by an increase in benchmark rates.
SC's average annual percentage rate ("APR") at the end of Q2 2017 for RICs held for investment was 16.6 percent, down from 16.7 percent at the end of Q2 2016. These APRs are consistent with credit trends in our held for investment portfolio. As of the end of Q2 2017, RICs with FICO(®) scores at origination of less than 540 decreased to 22.4 percent, from 22.9 percent as of the end of Q2 2016, and RICs with FICO(®) scores at origination greater than 640 increased to 14 percent, from 13.3 as of the end of Q2 2016.
Net leased vehicle income increased 5 percent to $131 million in Q2 2017, from $125 million in Q2 2016, as a result of the continued growth of our leasing portfolio.
SC's allowance ratio(2) decreased 10 basis points, to 12.6 percent at the end of Q2 2017, from 12.7 percent at the end of Q1 2017.
SC's RIC net charge-off ratio(3) and delinquency ratio(4) increased to 7.5 percent and 4.7 percent, respectively, in Q2 2017, from 6.0 percent and 4.2 percent, respectively, in Q2 2016. The increase in SC's net charge-off ratio is attributable to a combination of a lower recovery rate, slower portfolio growth since Q2 2016 and the acceleration of bankruptcy related charge-offs. These bankruptcy related charge-offs are primarily timing related and would have likely otherwise occurred in future quarters, as such not changing SC's overall view of vintage losses. The increase in delinquency ratio in Q2 2017 was also impacted by the slower portfolio growth since Q2 2016.
Provision for credit losses increased to $521 million in Q2 2017, from $512 million in Q2 2016.
SC recorded net investment losses of $100 million in Q2 2017, compared to net investment losses of $101 million in Q2 2016. The current period losses were primarily driven by $90 million of lower of cost or market adjustments related to the held for sale personal lending portfolio, comprised of $104 million in customer default activity and a $14 million decrease in market discount, consistent with typical seasonal patterns. Excluding the impact of personal lending, net investment losses totaled $2 million.
During Q2 2017 SC incurred $282 million of operating expenses, up 4 percent from $272 million in Q2 2016, primarily driven by continued investment in compliance and control functions. SC's expense ratio for the quarter increased to 2.2 percent, up from 2.0 percent during the same period last year.
SC executed asset sales of $566 million during Q2 2017, with $536 million in sales generated through the flow agreement with Banco Santander, under which it retains servicing. The serviced for others portfolio of $9.9 billion as of Q2 2017, is down 24 percent from $13 billion in Q2 2016. Servicing fee income decreased 26 percent to $32 million in Q2 2017, from $43 million in Q2 2016. The decline in SC's serviced for others portfolio and servicing fee income are a result of lower prime originations and lower prime asset sales in Q2 2017, compared to the same quarter the prior year, as the prime environment remains highly competitive.
(1 )Includes Finance receivables held for investment, Finance receivables held for sale and Leased vehicles.
(2 )Ratio for allowance for credit losses excludes end of period balances on purchased receivables portfolio of $194 million and finance receivables held for sale of $2.1 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.
(4 )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.
Conference Call Information
SC management will host a conference call and webcast to discuss its Q2 2017 results and other general matters at 9:00 a.m. Eastern Time on Friday, July 28, 2017. The conference call will be accessible by dialing 877-681-3375 (U.S. domestic), or 719-325-2494 (international), conference ID 6461311. 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 SC's corporate website at http://investors.santanderconsumerusa.com. Choose "Events" and select the information pertaining to the Q2 2017 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.
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 6461311, approximately two hours after the event. The dial-in replay will be available for two weeks 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 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 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, 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 asset portfolio of approximately $50 billion (as of June 30, 2017), and is headquartered in Dallas. (www.santanderconsumerusa.com)
Contacts: Media Relations
Investor Relations Laurie Kight
Evan Black 214.801.6455
800.493.8219 SCMedia@santanderconsumerusa.com
InvestorRelations@santanderconsumerusa.com
------------------------------------------
Santander Consumer USA Holdings Inc.
Financial Supplement
Second Quarter 2017
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
June 30, December 31,
2017
2016
----
Assets (Unaudited, Dollars in thousands)
Cash and cash equivalents $341,412 $160,180
Finance receivables held for
sale, net 2,123,103 2,123,415
Finance receivables held for
investment, net 23,634,914 23,481,001
Restricted cash 2,756,879 2,757,299
Accrued interest receivable 330,710 373,274
Leased vehicles, net 9,285,718 8,564,628
Furniture and equipment, net 71,432 67,509
Federal, state and other
income taxes receivable 97,282 87,352
Related party taxes receivable 467 1,087
Goodwill 74,056 74,056
Intangible assets 32,242 32,623
Due from affiliates 23,146 31,270
Other assets 736,121 785,410
Total assets $39,507,482 $38,539,104
=========== ===========
Liabilities and Equity
Liabilities:
Notes payable -credit
facilities $5,624,440 $6,739,817
Notes payable -secured
structured financings 23,747,907 21,608,889
Notes payable - related party 2,276,179 2,975,000
Accrued interest payable 32,743 33,346
Accounts payable and accrued
expenses 335,807 379,021
Deferred tax liabilities, net 1,419,820 1,278,064
Due to affiliates 60,467 50,620
Other liabilities 331,386 235,728
------- -------
Total liabilities 33,828,749 33,300,485
---------- ----------
Equity:
Common stock, $0.01 par value 3,595 3,589
Additional paid-in capital 1,664,903 1,657,611
Accumulated other
comprehensive income, net 27,860 28,259
Retained earnings 3,982,375 3,549,160
--------- ---------
Total stockholders' equity 5,678,733 5,238,619
Total liabilities and equity $39,507,482 $38,539,104
=========== ===========
Table 2: Condensed Consolidated Statements of Income
Three Months Ended Six Months Ended
June 30, June 30,
2017 2016 2017 2016
---- ---- ---- ----
(Unaudited, Dollars in thousands, except per share amounts)
Interest on finance
receivables and loans $1,232,252 $1,271,741 $2,441,438 $2,557,936
Leased vehicle income 429,264 368,358 847,497 698,150
Other finance and
interest income 5,205 3,890 9,030 7,802
Total finance and other
interest income 1,666,721 1,643,989 3,297,965 3,263,888
Interest expense 233,371 198,594 460,460 383,329
Leased vehicle expense 298,224 243,140 588,395 464,500
Net finance and other
interest income 1,135,126 1,202,255 2,249,110 2,416,059
Provision for credit
losses 520,555 511,921 1,155,568 1,172,091
------- ------- --------- ---------
Net finance and other
interest income after
provision for credit
losses 614,571 690,334 1,093,542 1,243,968
Profit sharing 8,443 17,846 16,388 29,240
----- ------ ------ ------
Net finance and other
interest income after
provision for credit
losses and profit
sharing 606,128 672,488 1,077,154 1,214,728
Investment losses, net (99,522) (101,309) (175,921) (170,365)
Servicing fee income 31,953 42,988 63,637 87,482
Fees, commissions, and
other 91,964 95,623 192,159 197,743
------ ------ ------- -------
Total other income 24,395 37,302 79,875 114,860
Compensation expense 127,894 123,344 264,156 243,186
Repossession expense 67,269 68,351 138,568 141,896
Other operating costs 87,252 80,532 184,769 178,001
Total operating
expenses 282,415 272,227 587,493 563,083
------- ------- ------- -------
Income before income
taxes 348,108 437,563 569,536 766,505
Income tax expense 83,433 154,218 161,434 274,861
Net income $264,675 $283,345 $408,102 $491,644
======== ======== ======== ========
Net income per common
share (basic) $0.74 $0.79 $1.14 $1.37
===== ===== ===== =====
Net income per common
share (diluted) $0.74 $0.79 $1.13 $1.37
===== ===== ===== =====
Weighted average common
shares (basic) 359,461,407 358,218,378 359,284,213 358,096,634
=========== =========== =========== ===========
Weighted average common
shares (diluted) 359,828,690 359,867,806 359,928,003 359,426,918
=========== =========== =========== ===========
Table 3: Other Financial Information
Three Months Ended Six Months Ended
June 30, June 30,
2017 2016 2017 2016
---- ---- ---- ----
Ratios (Unaudited, Dollars in thousands)
Yield on individually acquired
retail installment contracts 16.1% 16.1% 15.8% 16.3%
Yield on purchased receivables
portfolios 20.4% 26.4% 20.3% 25.8%
Yield on receivables from dealers 5.6% 3.6% 5.4% 4.5%
Yield on personal loans (1) 25.3% 23.6% 25.0% 23.1%
Yield on earning assets (2) 13.7% 14.2% 13.5% 14.4%
Cost of debt (3) 3.0% 2.5% 2.9% 2.5%
Net interest margin (4) 11.3% 12.2% 11.2% 12.4%
Expense ratio (5) 2.2% 2.0% 2.3% 2.1%
Return on average assets (6) 2.7% 3.0% 2.1% 2.6%
Return on average equity (7) 19.1% 24.0% 15.0% 21.3%
Net charge-off ratio on
individually acquired retail
installment contracts (8) 7.5% 6.0% 8.2% 7.0%
Net charge-off ratio on purchased
receivables portfolios (8) 0.8% (1.4)% 0.7% (0.7)%
Net charge-off ratio on
receivables from dealers (8) - 0.8% - 0.4%
Net charge-off ratio on personal
loans (8) 39.0% - 61.3% -
Net charge-off ratio (8) 7.5% 5.9% 8.2% 6.9%
Delinquency ratio on individually
acquired retail installment
contracts held for investment,
end of period (9) 4.7% 4.2% 4.7% 4.2%
Delinquency ratio on personal
loans, end of period (9) 12.7% 12.1% 12.7% 12.1%
Delinquency ratio on loans held
for investment, end of period (9) 4.7% 4.2% 4.7% 4.2%
Allowance ratio (10) 12.6% 12.6% 12.6% 12.6%
Common Equity Tier 1 capital ratio
(11) 14.3% 12.6% 14.3% 12.6%
Other Financial Information
Charge-offs, net of recoveries,
on individually acquired retail
installment contracts $512,621 $412,246 $1,111,554 $952,559
Charge-offs, net of recoveries,
on purchased receivables
portfolios 419 (1,037) 772 (1,061)
Charge-offs, net of recoveries,
on receivables from dealers - 135 - 135
Charge-offs, net of recoveries,
on personal loans 1,321 - 4,779 -
Charge-offs, net of recoveries,
on capital leases 1,278 2,599 2,592 5,070
-----
Total charge-offs, net of
recoveries $515,639 $413,943 $1,119,697 $956,703
End of period Delinquent principal
over 60 days, individually
acquired retail installment
contracts held for investment $1,287,334 $1,142,648 $1,287,334 $1,142,648
End of period Delinquent principal
over 60 days, personal loans $177,615 $168,020 $177,615 $168,020
End of period Delinquent principal
over 60 days, loans held for
investment $1,292,326 $1,151,627 $1,292,326 $1,151,627
End of period assets covered by
allowance for credit losses $27,342,511 $27,338,761 $27,342,511 $27,338,761
End of period Gross finance
receivables and loans held for
investment $27,512,362 $27,577,127 $27,512,362 $27,577,127
End of period Gross personal loans $1,400,369 $1,391,859 $1,400,369 $1,391,859
End of period Gross finance
receivables, loans, and leases
held for investment $37,916,523 $36,747,203 $37,916,523 $36,747,203
Average Gross individually
acquired retail installment
contracts held for investment $27,168,965 $27,674,279 $27,136,965 $27,384,765
Average Gross personal loans held
for investment $13,566 $2,278 $15,587 $6,111
Average Gross individually
acquired retail installment
contracts $28,202,716 $29,015,183 $28,235,651 $28,624,094
Average Gross purchased
receivables portfolios 202,097 297,663 211,494 317,789
Average Gross receivables from
dealers 68,810 71,576 69,361 73,706
Average Gross personal loans 1,402,416 1,376,633 1,450,002 1,550,680
Average Gross capital leases 25,752 48,161 28,235 54,179
------
Average Gross finance receivables,
loans and capital leases $29,901,791 $30,809,216 $29,994,743 $30,620,448
Average Gross finance receivables,
loans, and leases $40,093,171 $39,516,716 $40,011,065 $38,858,731
Average Managed assets $50,435,958 $53,237,279 $50,844,426 $53,050,984
Average Total assets $39,216,971 $38,089,236 $39,063,816 $37,576,941
Average Debt $31,519,486 $31,576,856 $31,545,144 $31,227,922
Average Total equity $5,540,371 $4,726,601 $5,434,973 $4,609,561
(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. Effective as of September
30, 2016, the Company records the
charge-off activity for certain
personal loans within the provision
for credit losses due to the
reclassification of these loans from
held for sale to held for
investment.
(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 (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
Amounts related to our individually acquired retail installment contracts as of and for the three and six months ended June 30, 2017 and 2016, are as follows:
(Unaudited, Dollars in thousands)
Three Months Ended June 30, Six Months Ended June 30,
2017 2016 2017 2016
---- ---- ---- ----
Credit loss
allowance -
beginning of
period $3,441,219 $3,320,227 $3,411,055 $3,197,414
Provision for
credit losses 518,370 514,755 1,147,467 1,177,881
Charge-offs (1,111,715) (1,032,517) (2,336,412) (2,183,145)
Recoveries 599,094 620,271 1,224,858 1,230,586
Credit loss
allowance -end
of period $3,446,968 $3,422,736 $3,446,968 $3,422,736
========== ========== ========== ==========
Net charge-offs $512,621 $412,246 $1,111,554 $952,559
Average unpaid
principal balance
(UPB) 27,168,965 27,674,279 27,136,965 27,384,765
Charge-off
ratio(1) 7.5% 6.0% 8.2% 7.0%
June 30, 2017(2) December 31, 2016(2)
Principal
30-59 days
past due $2,701,257 9.9% $2,911,800 10.7%
Delinquent
principal
over 59
days(3) 1,412,377 5.2% 1,520,105 5.6%
Total
delinquent
contracts $4,113,634 15.1% $4,431,905 16.3%
========== ==== ========== ====
June 30, December 31,
2017 2016
---- ----
TDR -Unpaid
principal balance $5,880,317 $5,599,567
TDR - Impairment 1,686,159 1,611,295
TDR allowance
ratio 28.7% 28.8%
Non-TDR - Unpaid
principal balance $21,360,225 $21,528,406
Non-TDR -
Allowance 1,760,809 1,799,760
Non-TDR allowance
ratio 8.2% 8.4%
Total -Unpaid
principal balance $27,240,542 $27,127,973
Total - Allowance 3,446,968 3,411,055
Total allowance
ratio 12.7% 12.6%
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 held-for-
investment portfolio
2 Percent of unpaid principal
balance.
3 Interest is accrued until 60
days past due in accordance
with the Company's account
policy for retail installment
contracts.
Table 5: Originations
Three Months Ended Six Months Ended Three Months
Ended
-----
June 30, 2017 June 30, 2016 June 30, 2017 June 30, 2016 March 31, 2017
------------- ------------- ------------- ------------- --------------
Retained
Originations (Unaudited, Dollar amounts in thousands)
-------------
Retail installment
contracts $3,750,752 $3,176,087 $6,669,307 $7,482,180 $3,185,373
Average APR 15.6% 14.0% 16.7% 14.9% 17.0%
Average FICO(R) (a) 612 624 598 609 593
Discount 0.3% 0.2% 0.4% 0.5% 0.4%
Personal loans $5,660 $9,272 $5,660 $9,281 $ -
Average APR 25.7% 25.0% 25.7% 25.0% -
Leased vehicles $1,426,957 $1,694,829 $3,027,616 $3,311,909 $1,600,659
Capital lease $1,001 $1,805 $2,178 $3,658 $1,177
Total originations
retained $5,184,370 $4,881,993 $9,704,761 $10,807,028 $4,787,209
Sold Originations (b)
--------------------
Retail installment
contracts $304,748 $547,007 $1,172,771 $1,403,717 $601,205
Average APR 6.6% 3.6% 6.2% 3.0% 5.8%
Average FICO(R) (c) 725 754 727 758 727
Total originations
sold $304,748 $547,007 $1,172,771 $1,403,717 $601,205
Total originations $5,489,118 $5,429,000 $10,877,532 $12,210,745 $5,388,414
========== ========== =========== =========== ==========
(a) Unpaid principal balance
excluded from the weighted
average FICO score is $503
million, $509 million, $1
billion, $1.3 billion, and $443
million for the three months
ended June 30, 2017 and 2016,
the six months ended June 30,
2017 and 2016, and the three
months ended March 31, 2017,
respectively, as the borrowers
on these loans did not have
FICO scores at origination. Of
these amounts, $49 million, $99
million, $77 million, $296
million, and $40 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.
(c) Unpaid principal balance
excluded from the weighted
average FICO score is $39
million, $64 million, $156
million, $175 million, and $80
million for the three months
ended June 30, 2017 and 2016,
the six months ended June 30,
2017 and 2016, and the three
months ended March 31, 2017,
respectively, as the borrowers
on these loans did not have
FICO scores at origination. Of
these amounts, $14 million,
zero, $58 million, zero, and
$31 million, respectively, were
commercial loans.
Table 6: Asset Sales
Asset sales may include assets originated in prior periods.
Three Months Ended Six Months Ended Three Months
Ended
-----
June 30, 2017 June 30, 2016 June 30, 2017 June 30, 2016 March 31, 2017
------------- ------------- ------------- ------------- --------------
(Unaudited, Dollar amounts in thousands)
Retail
installment
contracts $566,309 $659,224 $1,496,899 $1,519,179 $930,590
Average APR 6.6% 3.5% 6.2% 2.9% 5.9%
Average
FICO(R) 725 758 726 762 726
Personal
loans $ - $ - $ - $869,349 $ -
Average APR - - - 17.9% -
Total asset
sales $566,309 $659,224 $1,496,899 $2,388,528 $930,590
======== ======== ========== ========== ========
Table 7: Ending Portfolio
Ending outstanding balance, average APR and remaining unaccreted dealer discount of our held for investment portfolio as
of June 30, 2017, and December 31, 2016, are as follows:
June 30, 2017 December 31, 2016
------------- -----------------
(Unaudited, Dollar amounts in thousands)
Retail
installment
contracts $27,434,063 $27,358,147
Average APR 16.6% 16.4%
Discount 1.6% 2.3%
Personal loans $11,926 $19,361
Average APR 31.8% 31.5%
Receivables from
dealers $66,373 $69,431
Average APR 5.2% 4.9%
Leased vehicles $10,380,491 $9,612,953
Capital leases $23,670 $31,872
Table 8: Reconciliation of Non-GAAP Measures
June 30, 2017 June 30, 2016
------------- -------------
(Unaudited, Dollar amounts in thousands)
Total equity $5,678,733 $4,876,712
Deduct: Goodwill,
intangibles, and
other assets, net of
deferred tax
liabilities 177,619 196,962
Deduct: Accumulated
other comprehensive
income (loss), net 27,860 (50,766)
------ -------
Tier 1 common capital $5,473,254 $4,730,516
Risk weighted assets
(a) $38,368,928 $37,460,349
Common Equity Tier 1
capital ratio (b) 14.3% 12.6%
(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.
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SOURCE Santander Consumer USA Holdings Inc.
