Santander Consumer USA Holdings Inc. Reports Third Quarter 2017 Net Income of $199 million
DALLAS, Oct. 27, 2017 /PRNewswire/ -- Santander Consumer USA Holdings Inc. (NYSE: SC) ("SC") today announced net income for the third quarter ended September 30, 2017 ("Q3 2017") of $199 million, or $0.55 per diluted common share. This includes a pretax gain of $36 million, or $0.07 per diluted common share from the sale of the majority of the Company's legacy RV/Marine portfolio.
These results build on numerous Q3 2017 milestones:
-- SC announced a new President and CEO, Scott Powell
-- The Federal Reserve Bank of Boston announced the termination of the 2014
Written Agreement with SC's majority owner, Santander Holdings USA, Inc.
("SHUSA"), enabling SHUSA and SC to operate within a normal capital
cycle
-- The Company has declared a cash dividend of $0.03 per share, to be
paid November 17, 2017 to shareholders of record as of the close of
business on November 7, 2017
-- SC's retail installment contract ("RIC") gross and net loss ratios
improved, with YoY decreases of 40 and 20 basis points, respectively
"Our results this quarter demonstrate the continued strength of our business," said Scott Powell, SC President and CEO, also SHUSA CEO. "We have been focused on strengthening our financial and operational performance, delivering returns for all our shareholders and improving risk management. Our credit performance in the third quarter was strong and positively impacted our financial results. The Federal Reserve's termination of its 2014 Written Agreement with SHUSA gives SC the ability to make distributions within a normal capital cycle. We still have work to do to resolve our outstanding regulatory issues, but it is a major turning point for our business."
Other recently announced key leadership changes include:
-- Juan Carlos ("JC") Alvarez was appointed CFO. JC joined SC from SHUSA,
where he served as Corporate Treasurer
-- Sandra ("Sandy") Broderick was appointed EVP, Head of Operations. Sandy
joined SC from US Bank, which she joined in 2017 from JPMorgan Chase &
Co., where she served as Managing Director, Operations Executive from
2002 to March 2017, and as Head of Operations for the automotive finance
business from 2012
-- Rich Morrin, former SC COO, was appointed President, Chrysler Capital
and Auto Relationships
Mr. Powell continued, "I'm pleased to have a strong leadership team in place including JC, Sandy and Rich. JC was instrumental in the work that led to the termination of SHUSA's 2014 Written Agreement with the Federal Reserve, Sandy has significant operations expertise in auto finance, and Rich's new role will allow SC to devote more attention to building our relationship with Fiat Chrysler."
Juan Carlos Alvarez, Chief Financial Officer, added, "We are pleased to report solid financial performance this quarter. We are providing temporary financial relief to our customers affected by the recent hurricanes, primarily in the form of loan extensions. While we expect additional delinquencies and losses associated with this relief effort in subsequent quarters, both gross and net loss ratios decreased versus the prior year quarter, demonstrating improved credit performance in our portfolio."
Q3 2017 Highlights (variances compared to Q3 2016, unless otherwise noted):
-- Retail Installment Contract ("RIC") gross and net loss ratios decreased
40 and 20 basis points, respectively
-- Auction-plus recovery rate of 49.3% remained relatively flat
-- Asset sales of $1.3 billion executed through the Banco Santander flow
agreement
-- $1.8 billion in asset-backed securities (ABS) offered and sold
-- Total auto originations of $5.0 billion, down 3%
-- Core retail auto loan originations of $1.5 billion, down 21%
-- Chrysler Capital nonprime loan originations of $850 million, down 1%
-- Chrysler Capital prime loan originations of $928 million, down 10%
-- Net finance and other interest income of $1.1 billion, down 10%
-- Net leased vehicle income of $118 million, down 13%
-- Return on average assets of 2.0%, down from 2.2%
-- Common equity tier 1 ("CET1") ratio of 15.0%, up 190 bps
Finance receivables, loans and leases, net(1) of $34.4 billion as of September 30, 2017 increased 1 percent versus December 31, 2016. Net finance and other interest income decreased 10 percent to $1.1 billion in Q3 2017 from $1.2 billion in Q3 2016, driven by lower average RIC balances and an increase in benchmark rates.
Net leased vehicle income decreased 13 percent to $118 million in Q3 2017, from $136 million in Q3 2016, due to an increase in leased vehicle depreciation, primarily driven by revised Automotive Leasing Guide ("ALG") residual value forecasts as of Q2 2017. SC depreciates its lease portfolio to forecasted residual values.
Servicing fee income decreased 21 percent to $29 million in Q3 2017, from $36 million in Q3 2016. SC's serviced for others portfolio of $10.0 billion as of Q3 2017, is down 18 percent from $12.2 billion in Q3 2016. The serviced for others portfolio increased versus the prior quarter driven by asset sales of $1.5 billion during Q3 2017, $1.3 billion of which was generated through SC's flow agreement with Banco Santander.
SC's RIC delinquency ratio(2) increased to 5.1 percent in Q3 2017 from 4.6 percent in Q3 2016, primarily due to a lower portfolio balance.
SC's RIC net charge-off ratio(3) and provision for credit losses decreased to 9.1 percent and $536 million in Q3 2017, respectively, from 9.3 percent and $610 million in Q3 2016, respectively, attributable to a combination of improving credit performance and stabilizing recovery rates. The decrease in provision for credit losses was partially offset by additional reserves for customers affected by Hurricanes Harvey and Irma.
SC's allowance ratio(4) increased 20 basis points, to 12.8 percent at the end of Q3 2017, from 12.6 percent at the end of Q2 2017.
SC recorded net investment losses of $53 million in Q3 2017, compared to net investment losses of $106 million in Q3 2016. The current period losses were primarily driven by held for sale accounting for SC's personal lending portfolio(5). Excluding the impact of personal lending, net investment gains totaled $30 million, which includes the $36 million pretax RV/Marine portfolio gain on sale.
During Q3 2017 SC incurred $298 million of operating expenses, up 5 percent from $284 million in Q3 2016, primarily driven by losses recorded for certain contingencies and severance expenses related to management changes. SC's expense ratio for the quarter increased to 2.4 percent, up from 2.2 percent during the same period last year.
(1 )Includes Finance receivables held for investment, Finance receivables held for sale and Leased vehicles.
(2 )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.
(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 )Ratio for allowance for credit losses excludes end of period balances on purchased receivables portfolio of $49 million and finance receivables held for sale of $1.8 billion.
(5 )The current period losses were primarily driven by $84 million of lower of cost or market adjustments related to the held for sale personal lending portfolio, comprised of $108 million in customer default activity, offset by a $24 million decrease in market discount, consistent with typical seasonal patterns.
Conference Call Information
SC management will host a conference call and webcast to discuss its Q3 2017 results and other general matters at 9:00 a.m. Eastern Time on Friday, October 27, 2017. The conference call will be accessible by dialing 877-419-6593 (U.S. domestic), or 719-325-4933 (international), conference ID 7075755. 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 Q3 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 7075755, 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 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 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 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, 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 an average managed asset portfolio of approximately $50 billion (as of September 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
Third 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
September 30, December 31,
2017 2016
---- ----
Assets (Unaudited, Dollars in thousands)
Cash and cash equivalents $397,311 $160,180
Finance receivables held for
sale, net 1,775,459 2,123,415
Finance receivables held for
investment, net 22,667,203 23,481,001
Restricted cash 2,559,246 2,757,299
Accrued interest receivable 330,554 373,274
Leased vehicles, net 9,931,283 8,564,628
Furniture and equipment, net 72,519 67,509
Federal, state and other
income taxes receivable 112,794 87,352
Related party taxes receivable 467 1,087
Goodwill 74,056 74,056
Intangible assets 31,534 32,623
Due from affiliates 26,871 31,270
Other assets 786,260 785,410
Total assets $38,765,557 $38,539,104
=========== ===========
Liabilities and Equity
Liabilities:
Notes payable -credit
facilities $4,965,888 $6,739,817
Notes payable -secured
structured financings 23,258,363 21,608,889
Notes payable - related party 2,369,850 2,975,000
Accrued interest payable 38,012 33,346
Accounts payable and accrued
expenses 336,390 379,021
Deferred tax liabilities, net 1,515,932 1,278,064
Due to affiliates 67,059 50,620
Other liabilities 328,829 235,728
------- -------
Total liabilities 32,880,323 33,300,485
---------- ----------
Equity:
Common stock, $0.01 par value 3,598 3,589
Additional paid-in capital 1,672,392 1,657,611
Accumulated other
comprehensive income, net 27,481 28,259
Retained earnings 4,181,763 3,549,160
--------- ---------
Total stockholders' equity 5,885,234 5,238,619
Total liabilities and equity $38,765,557 $38,539,104
=========== ===========
Table 2: Condensed Consolidated Statements of Income
Three Months Ended Nine Months Ended
September 30, September 30,
2017 2016 2017 2016
---- ---- ---- ----
(Unaudited, Dollars in thousands, except per share amounts)
Interest on finance
receivables and loans $1,185,059 $1,246,386 $3,626,497 $3,804,322
Leased vehicle income 457,932 388,501 1,305,429 1,086,651
Other finance and
interest income 6,385 3,638 15,415 11,440
Total finance and
other interest income 1,649,376 1,638,525 4,947,341 4,902,413
Interest expense 250,674 207,175 711,134 590,504
Leased vehicle expense 339,581 252,730 927,976 717,230
Net finance and other
interest income 1,059,121 1,178,620 3,308,231 3,594,679
Provision for credit
losses 536,447 610,398 1,692,015 1,782,489
------- ------- --------- ---------
Net finance and other
interest income after
provision for credit
losses 522,674 568,222 1,616,216 1,812,190
Profit sharing 5,945 6,400 22,333 35,640
----- ----- ------ ------
Net finance and other
interest income after
provision for credit
losses and profit
sharing 516,729 561,822 1,593,883 1,776,550
Investment losses, net (52,592) (106,050) (228,513) (276,415)
Servicing fee income 28,673 36,447 92,310 123,929
Fees, commissions, and
other 82,866 96,285 275,025 294,028
------ ------ ------- -------
Total other income 58,947 26,682 138,822 141,542
Compensation expense 134,169 128,056 398,325 371,242
Repossession expense 66,877 75,920 205,445 217,816
Other operating costs 96,857 80,508 281,626 258,509
Total operating
expenses 297,903 284,484 885,396 847,567
------- ------- ------- -------
Income before income
taxes 277,773 304,020 847,309 1,070,525
Income tax expense 78,385 90,473 239,819 365,334
Net income $199,388 $213,547 $607,490 $705,191
======== ======== ======== ========
Net income per common
share (basic) $0.55 $0.60 $1.69 $1.97
===== ===== ===== =====
Net income per common
share (diluted) $0.55 $0.59 $1.69 $1.96
===== ===== ===== =====
Weighted average
common shares (basic) 359,619,083 358,343,781 359,397,063 358,179,618
=========== =========== =========== ===========
Weighted average
common shares
(diluted) 360,460,353 360,087,749 360,069,449 359,635,034
=========== =========== =========== ===========
Table 3: Other Financial Information
Three Months Ended Nine Months Ended
September 30, September 30,
2017 2016 2017 2016
---- ---- ---- ----
Ratios (Unaudited, Dollars in thousands)
Yield on individually acquired
retail installment contracts 15.6% 15.9% 15.8% 16.2%
Yield on purchased receivables
portfolios 17.4% 26.7% 20.1% 26.0%
Yield on receivables from dealers 6.0% 6.7% 5.7% 5.2%
Yield on personal loans (1) 24.4% 23.4% 24.9% 21.8%
Yield on earning assets (2) 13.0% 13.8% 13.4% 14.2%
Cost of debt (3) 3.2% 2.6% 3.0% 2.5%
Net interest margin (4) 10.5% 11.8% 11.0% 12.2%
Expense ratio (5) 2.4% 2.2% 2.3% 2.1%
Return on average assets (6) 2.0% 2.2% 2.1% 2.5%
Return on average equity (7) 13.8% 17.1% 14.6% 19.8%
Net charge-off ratio on
individually acquired retail
installment contracts (8) 9.1% 9.3% 8.5% 7.7%
Net charge-off ratio on purchased
receivables portfolios (8) 2.6% 0.4% 1.2% (0.4)%
Net charge-off ratio on
receivables from dealers (8) - - - 0.2%
Net charge-off ratio on personal
loans (8) 67.2% - 62.7% -
Net charge-off ratio (8) 9.1% 9.2% 8.5% 7.7%
Delinquency ratio on individually
acquired retail installment
contracts held for investment, end
of period (9) 5.1% 4.6% 5.1% 4.6%
Delinquency ratio on personal
loans, end of period (9) 13.8% 13.4% 13.8% 13.4%
Delinquency ratio on loans held for
investment, end of period (9) 5.1% 4.6% 5.1% 4.6%
Allowance ratio (10) 12.8% 12.4% 12.8% 12.4%
Common Equity Tier 1 capital ratio
(11) 15.0% 13.1% 15.0% 13.1%
Other Financial Information
Charge-offs, net of recoveries, on
individually acquired retail
installment contracts $611,130 $630,847 $1,722,684 $1,583,406
Charge-offs, net of recoveries, on
purchased receivables portfolios 769 254 1,541 (807)
Charge-offs, net of recoveries, on
receivables from dealers - - - 135
Charge-offs, net of recoveries, on
personal loans 1,771 - 6,550 -
Charge-offs, net of recoveries, on
capital leases 1,193 2,095 3,785 7,165
-----
Total charge-offs, net of
recoveries $614,863 $633,196 $1,734,560 $1,589,899
End of period Delinquent principal
over 60 days, individually
acquired retail installment
contracts held for investment $1,338,635 $1,260,255 $1,338,635 $1,260,255
End of period Delinquent principal
over 60 days, personal loans $183,919 $179,443 $183,919 $179,443
End of period Delinquent principal
over 60 days, loans held for
investment $1,342,335 $1,267,950 $1,342,335 $1,267,950
End of period assets covered by
allowance for credit losses $26,367,894 $27,490,290 $26,367,894 $27,490,290
End of period Gross finance
receivables and loans held for
investment $26,395,085 $27,706,307 $26,395,085 $27,706,307
End of period Gross personal loans $1,337,114 $1,337,692 $1,337,114 $1,337,692
End of period Gross finance
receivables, loans, and leases
held for investment $37,418,133 $37,295,993 $37,418,133 $37,295,993
Average Gross individually acquired
retail installment contracts held
for investment $26,762,472 $27,075,151 $26,976,810 $27,276,903
Average Gross personal loans held
for investment $10,549 $6,937 $13,935 $6,869
Average Gross individually acquired
retail installment contracts $28,144,133 $28,970,039 $28,182,386 $28,710,402
Average Gross purchased receivables
portfolios 120,245 266,749 176,792 301,026
Average Gross receivables from
dealers 53,715 70,392 63,401 72,735
Average Gross personal loans 1,367,445 1,343,099 1,419,223 1,572,297
Average Gross capital leases 22,544 39,974 26,415 49,625
------
Average Gross finance receivables,
loans and capital leases $29,708,082 $30,690,253 $29,868,217 $30,706,085
Average Gross finance receivables,
loans, and leases $40,419,023 $40,037,873 $40,125,969 $39,299,213
Average Managed assets $49,998,111 $52,675,379 $50,555,068 $52,983,740
Average Total assets $39,496,278 $38,473,832 $39,192,434 $37,844,330
Average Debt $31,554,026 $31,671,237 $31,538,355 $31,343,204
Average Total equity $5,764,119 $4,994,511 $5,542,255 $4,736,826
(1) Includes Finance and other interest
income; excludes fees
"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,
(2) loans and leases
(3) "Cost of debt" is defined as the
ratio of annualized Interest
expense to Average debt
"Net interest margin" is defined as
the ratio of annualized Net finance
and other interest income to
Average gross finance receivables,
(4) 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
"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
(8) for investment.
"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
(9) capital leases
"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
(10) losses
"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
(11) release)
Table 4: Credit Quality
Amounts related to our individually acquired retail installment contracts as of and for the three and nine months ended September 30, 2017 and 2016, are as follows:
(Unaudited, Dollars in thousands)
Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
---- ---- ---- ----
Credit loss
allowance -
beginning of
period $3,446,968 $3,422,736 $3,411,055 $3,197,414
Provision for
credit losses 535,427 609,396 1,682,894 1,787,277
Charge-offs (1,206,059) (1,246,760) (3,542,471) (3,429,905)
Recoveries 594,929 615,913 1,819,787 1,846,499
Credit loss
allowance -end
of period $3,371,265 $3,401,285 $3,371,265 $3,401,285
========== ========== ========== ==========
Net charge-offs $611,130 $630,847 $1,722,684 $1,583,406
Average unpaid
principal
balance (UPB) 26,762,472 27,075,151 26,976,810 27,276,903
Charge-off
ratio(1) 9.1% 9.3% 8.5% 7.7%
September 30, 2017(2) December 31, 2016(2)
Principal
30-59 days
past due $2,574,165 9.8% $2,911,800 10.7%
Delinquent
principal
over 59
days(3) 1,460,793 5.5% 1,520,105 5.6%
Total
delinquent
contracts $4,034,958 15.3% $4,431,905 16.3%
========== ==== ========== ====
September 30, December 31,
2017 2016
---- ----
TDR -Unpaid
principal
balance $6,276,659 $5,599,567
TDR -
Impairment 1,782,114 1,611,295
TDR allowance
ratio 28.4% 28.8%
Non-TDR -
Unpaid
principal
balance $20,044,330 $21,528,406
Non-TDR -
Allowance 1,589,151 1,799,760
Non-TDR
allowance
ratio 7.9% 8.4%
Total -Unpaid
principal
balance $26,320,989 $27,127,973
Total -
Allowance 3,371,265 3,411,055
Total allowance
ratio 12.8% 12.6%
"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-
1 investment portfolio
2 Percent of unpaid principal
balance.
Interest is accrued until 60
days past due in accordance
with the Company's account
policy for retail installment
3 contracts.
Table 5: Originations
Three Months Ended Nine Months Ended Three Months
Ended
-----
September 30, September 30, September 30, September 30, June 30,
2017 2016 2017 2016
2017
----
Retained
Originations (Unaudited, Dollar amounts in thousands)
-------------
Retail installment
contracts $2,570,228 $3,281,112 $8,619,961 $10,545,592 $3,750,752
Average APR 16.1% 14.7% 17.2% 15.1% 15.6%
Average FICO(R) (a) 605 612 591 606 612
Discount 1.2% 0.1% 0.8% 0.4% 0.3%
Personal loans $ - $ - $5,660 $9,281 $5,660
Average APR - - 25.7% 25.0% 25.7%
Leased vehicles $1,665,776 $1,300,375 $4,693,392 $4,612,284 $1,426,957
Capital lease $2,477 $2,319 $4,655 $5,977 $1,001
Total originations
retained $4,238,481 $4,583,806 $13,323,668 $15,173,134 $5,184,370
Sold Originations (b)
--------------------
Retail installment
contracts $757,720 $580,242 $2,550,065 $2,201,659 $304,748
Average APR 6.0% 3.2% 6.2% 3.0% 6.6%
Average FICO(R) (c) 729 760 727 759 725
Total originations
sold $757,720 $580,242 $2,550,065 $2,201,659 $304,748
Total originations $4,996,201 $5,164,048 $15,873,733 $17,374,793 $5,489,118
========== ========== =========== =========== ==========
Unpaid principal balance excluded
from the weighted average FICO score
is $311 million, $492 million, $1.2
billion, $1.8 billion, and $503
million for the three months ended
September 30, 2017 and 2016, the
nine months ended September 30, 2017
and 2016, and the three months ended
June 30, 2017, respectively, as the
borrowers on these loans did not
have FICO scores at origination. Of
these amounts, $37 million, $74
million, $95 million, $370 million,
and $49 million, respectively, were
(a) 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 $93 million, $59 million, $319
million, $263 million, and $39
million for the three months ended
September 30, 2017 and 2016, the
nine months ended September 30, 2017
and 2016, and the three months ended
June 30, 2017, respectively, as the
borrowers on these loans did not
have FICO scores at origination. Of
these amounts, $26 million, zero,
$102 million, zero, and $14 million,
(c) respectively, were commercial loans.
Table 6: Asset Sales
Asset sales may include assets originated in prior periods.
Three Months Ended Nine Months Ended Three Months
Ended
-----
September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016 June 30, 2017
------------------ ------------------ ------------------ ------------------ -------------
(Unaudited, Dollar amounts in thousands)
Retail
installment
contracts $1,482,134 $793,804 $2,979,033 $2,312,983 $566,309
Average APR 6.2% 3.0% 6.2% 2.9% 6.6%
Average
FICO(R) 716 762 721 762 725
Personal
loans $ - $ - $ - $869,349 $ -
Average APR - - - 17.9% -
Total asset
sales $1,482,134 $793,804 $2,979,033 $3,182,332 $566,309
========== ======== ========== ========== ========
Table 7: Ending Portfolio
Ending outstanding balance, average APR and remaining unaccreted dealer discount of our held for investment
portfolio as of September 30, 2017, and December 31, 2016, are as follows:
September 30, December 31,
2017 2016
-------------- -------------
(Unaudited, Dollar amounts in
thousands)
Retail
installment
contracts $26,369,828 $27,358,147
Average APR 16.7% 16.4%
Discount 1.6% 2.3%
Personal loans $9,188 $19,361
Average APR 31.9% 31.5%
Receivables from
dealers $16,069 $69,431
Average APR 4.2% 4.9%
Leased vehicles $11,001,400 $9,612,953
Capital leases $21,648 $31,872
Table 8: Reconciliation of Non-GAAP Measures
September 30, 2017 September 30, 2016
------------------ ------------------
(Unaudited, Dollar amounts in thousands)
Total equity $5,885,234 $5,117,657
Deduct: Goodwill,
intangibles, and
other assets, net of
deferred tax
liabilities 172,502 191,850
Deduct: Accumulated
other comprehensive
income (loss), net 27,481 (26,598)
------ -------
Tier 1 common capital $5,685,251 $4,952,405
Risk weighted assets
(a) $37,828,130 $37,828,982
Common Equity Tier 1
capital ratio (b) 15.0% 13.1%
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
(a) weighted assets.
CET1 is calculated under
Basel III regulations
required as of January 1,
2015. The fully phased-in
capital ratios are non-GAAP
(b) financial measures.
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SOURCE Santander Consumer USA Holdings Inc.
