$ 14.28 -0.11 (-0.76%) NYSE: SC Volume: 756,888 4:02 PM ET 02/17/17 Pricing delayed 20 minutes

Email Alerts

Email Address *
Mailing Lists *



 
Enter the code shown above.

Contact Investor
Relations

SC Holdings Investor Relations
1-800-493-8219
P.O. Box 961245, Fort Worth, 
TX 76161-1245
Email

Press Release Details

Santander Consumer USA Holdings Inc. Reports Fourth Quarter and Full Year 2016 Results

January 25, 2017

DALLAS, Jan. 25, 2017 /PRNewswire/ -- Santander Consumer USA Holdings Inc. (NYSE: SC) ("SC") today announced net income for the fourth quarter 2016 of $61 million, or $0.17 cents per diluted common share.

Full year 2016 net income was $766 million, or $2.13 cents per diluted common share.

Fourth Quarter 2016 Key Highlights (variances compared to fourth quarter 2015):

  • Total auto originations of $4.5 billion, down 24%
    • Core retail auto originations of $2.0 billion, up 1%
    • Total Chrysler Capital originations of $2.5 billion, down 36%
  • Total finance and other interest income of $1.6 billion, up 4%
  • Net finance and other interest income of $1.1 billion, down 5%
  • Common equity tier 1 (CET1) ratio of 13.4%, up 220 basis points
  • Issued $3.3 billion in securitizations

Full Year 2016 Key Highlights (variances compared to full year 2015):

  • Total auto originations of $21.9 billion, down 20%
  • Interest on individually acquired retail installment contracts of $4.6 billion, up 3%
  • Net finance and other interest income of $4.7 billion, flat
  • Expense ratio of 2.2%, up 10 basis points
  • Return on average assets of 2.0%
  • Return on average equity of 15.8%
  • Average managed assets of $52.7 billion, up 8%
  • Retail installment contract ("RIC") net charge-off ratio of 7.9%, up 150 basis points
  • Average FICO of retained originations 598, up 14 points
  • Issued $8.0 billion in securitizations
  • Originated more than $170 million through our online, direct-to-consumer platform, Roadloans.com
  • Real-time call monitoring rolled out for all inbound/outbound call center lines in 2016

    "Full year 2016 results demonstrate SC's continued profitability and solid returns, earning net income of $766 million while also taking a measured approach to originations in a competitive market and improving the credit quality of our balance sheet. As expected, our 2016 vintage-level loss performance continues to come in better than 2015. We expect this positive trend will be reflected in nominal gross losses in future quarters. We continue to believe our consistent focus on disciplined underwriting, compliance and being simple, personal and fair in everything we do is setting SC up for long-term, sustainable and differentiated success," said Jason Kulas, President and Chief Executive Officer.

    Mr. Kulas continued, "I would like to thank all our employees, customers and dealers for being an integral part of our success this year. We are optimistic about SC's prospects for 2017 as our fundamentals continue to strengthen, and we remain committed to better serving our customers and creating value for all our stakeholders."

    Finance receivables, loans and leases, net1, increased 4 percent, to $34.2 billion at December 31, 2016, from $32.7 billion at December 31, 2015, driven by an increase in lease assets. Net finance and other interest income decreased 5 percent, to $1.13 billion in the fourth quarter 2016 from $1.19 billion in the fourth quarter 2015, primarily driven by a higher cost of funds and lower interest income from personal installment loans sold in February 2016.

    SC's average annual percentage rate (APR) as of the end of the fourth quarter 2016 for retail installment contracts (RICs) held for investment was 16.4 percent, down from 16.8 percent as of the end of the fourth quarter 2015. These APRs are consistent with credit trends in our held for investment portfolio. As of the end of the fourth quarter 2016, RICs with FICO® scores less than 540 decreased to 22.1 percent, from 23.4 percent as of the end of the fourth quarter 2015. In addition, RICs with FICO® scores greater than 640 increased to 13.8 percent, from 12.2 percent.

    Net leased vehicle income increased 41 percent to $123 million in the fourth quarter 2016 from $87 million in the fourth quarter 2015 due to continued leasing portfolio growth.

    The allowance for credit loss balance of $3.4 billion at December 31, 2016 increased $9 million, or 26 basis points, from the prior quarter end. The allowance ratio2 increased to 12.6 percent as of December 31, 2016, from 11.9 percent as of December 31, 2015, primarily driven by the increased balance of loans classified as troubled debt restructurings (TDRs) and a denominator effect from slower portfolio growth. A TDR is an accounting classification for assets that meet certain loan modification or extension criteria. Loan modifications and extensions are utilized to offer assistance to some customers experiencing temporary hardship. Under GAAP, the allowance for assets classified as TDRs takes into consideration expected lifetime losses.

    SC's RIC net charge-off and delinquency ratio3 increased to 9.4 percent and 5.1 percent, respectively, for the fourth quarter 2016 from 8.9 percent and 4.4 percent, respectively, for the fourth quarter 2015. The increases in the net charge-off and delinquency ratios, and in TDR balances, are driven by the aging of the more nonprime 2015 vintage, and the denominator effect of slower portfolio growth since the prior year fourth quarter.

    "We demonstrated strong access to liquidity in 2016, as we added two new warehouse facilities, including one new committed lender, and we continued to be the largest auto ABS issuer in the market in 2016, issuing $8 billion in securitizations across all three of our platforms," said Izzy Dawood, Chief Financial Officer. "Improving our liquidity position as we experienced delays in the filing of our financial statements further evidences the consistency of the cash flows of our originations."

    Mr. Dawood continued, "Executing the agreement to flow assets to Banco Santander is a top priority in the first quarter of 2017. Along with the national roll out of the dealer VIP program with our Fiat-Chrysler dealers and our continued focus on dealer floorplan lending through Santander Bank N.A. we believe these strategies will positively impact our volume with Chrysler."

    During the year SC increased the amount of dealers participating in the dealer VIP program with approximately 500 dealers as of year end and increased dealer receivable originations ("floorplan") more than 60 percent versus 2015.

    Provision for credit losses decreased to $686 million in the fourth quarter 2016, from $851 million in the fourth quarter 2015, as the prior year quarter included a qualitative reserve of $149 million to account for the higher concentration of originations with limited credit experience. This reserve was eliminated as of the end of the third quarter 2016 since the model was able to incorporate the loss estimate.

    In the fourth quarter 2016, SC recorded net investment losses of $168 million, compared to losses of $229 million in the fourth quarter 2015. The current period losses were primarily driven by $146 million of lower of cost or market adjustments related to the held for sale personal lending portfolio, including $116 million in customer default activity and a $30 million increase in discount (lower of cost or market) consistent with seasonal origination patterns for this portfolio. Excluding the impact of personal lending, investment losses totaled $23 million driven by losses related to a fourth quarter off-balance sheet securitization and a lower of cost or market adjustment on certain auto assets classified as held for sale.

    During the quarter, SC incurred $296 million of operating expenses, up 15 percent from $257 million in the fourth quarter 2015, driven by increased compensation expense, primarily due to the continued investment in our control and compliance infrastructure, a non-recurring expense of approximately $13 million and higher repossession expense.

    1 Includes Finance receivables held for investment, Finance receivables held for sale and Leased vehicles
    2 Excludes end of period balances on purchased receivables portfolio of $158 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

    In line with SC's strategy to leverage its scalable servicing platform and increase servicing fee income, SC executed asset sales of $1.4 billion during the fourth quarter through existing loan sale programs and one off-balance sheet securitization, under which it retains servicing. The serviced for others portfolio of $11.9 billion as of December 31, 2016, is down 21 percent from December 31, 2015, driven by lower prime originations and lower prime asset sales, and down 2 percent versus the prior quarter. Servicing fee income decreased 24 percent to $32 million in the fourth quarter 2016, from $42 million in the fourth quarter 2015.

    Conference Call Information

    SC management will host a conference call and webcast to discuss the fourth quarter results and other general matters at 9 a.m. Eastern Time on Wednesday, January 25, 2017. The conference call will be accessible by dialing 888-503-8172 (U.S. domestic), or 719-325-2434 (international), conference ID 7139377. Please dial in 10 minutes prior to the start of the call. The conference call will also be accessible via live audio webcast through the Investor Relations section of the corporate website at http://investors.santanderconsumerusa.com. Choose "Events" and select the information pertaining to the Q4 2016 Earnings Call. Additionally there will be several slides accompanying the webcast. Please allow at least 15 minutes prior to the call to register, download and install any necessary software.

    For those unable to listen to the live broadcast, a replay will be available on the company's website or by dialing 844-512-2921 (U.S. domestic), or 412-317-6671 (international), conference ID 7139377, approximately two hours after the event. The dial-in replay will be available for two weeks after the conference call, and the webcast replay will be available through February 8, 2017. An investor presentation will also be available by visiting the Investor Relations page of SC's website at http://investors.santanderconsumerusa.com.

    Forward-Looking Statements

    This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements about our expectations, beliefs, plans, predictions, forecasts, objectives, assumptions, or future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through the use of words or phrases such as anticipates, believes, can, could, may, predicts, potential, should, will, estimates, plans, projects, continuing, ongoing, expects, intends, and similar words or phrases. Although we believe that the expectations reflected in these forward-looking statements are reasonable, these statements are not guarantees of future performance and involve risks and uncertainties that are subject to change based on various important factors, some of which are beyond our control. For additional discussion of these risks, refer to the section entitled Risk Factors and elsewhere in our Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q filed by us with the U.S. Securities and Exchange Commission (SEC). Among the factors that could cause the forward-looking statements in this press release and/or our financial performance to differ materially from that suggested by the forward-looking statements are (a) the inherent limitations in internal controls over financial reporting; (b) our ability to remediate any material weaknesses in internal controls over financial reporting completely and in a timely manner; (c) continually changing federal, state, and local laws and regulations could materially adversely affect our business; (d) adverse economic conditions in the United States and worldwide may negatively impact our results; (e) our business could suffer if our access to funding is reduced; (f) significant risks we face implementing our growth strategy, some of which are outside our control; (g) unexpected costs and delays in connection with exiting our personal lending business; (h) our agreement with Fiat Chrysler Automobiles US LLC may not result in currently anticipated levels of growth and is subject to certain performance conditions that could result in termination of the agreement; (i) our business could suffer if we are unsuccessful in developing and maintaining relationships with automobile dealerships; (j) our financial condition, liquidity, and results of operations depend on the credit performance of our loans; (k) loss of our key management or other personnel, or an inability to attract such management and personnel; (l) certain regulations, including but not limited to oversight by the Office of the Comptroller of the Currency, the Consumer Financial Protection Bureau, the European Central Bank, and the Federal Reserve, whose oversight and regulation may limit certain of our activities, including the timing and amount of dividends and other limitations on our business; and (m) future changes in our relationship with Banco Santander that could adversely affect our operations. If one or more of the factors affecting our forward-looking information and statements proves incorrect, our actual results, performance or achievements could differ materially from those expressed in, or implied by, forward-looking information and statements. Therefore, we caution 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. New factors emerge from time to time, and management cannot assess the impact of any such factor on our business or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statement. Any forward-looking statements only speak as of the date of this document, and we undertake no obligation to update any forward-looking information or statements, whether written or oral, to reflect any change, except as required by law. All forward-looking statements attributable to us are expressly qualified by these cautionary statements.

    About Santander Consumer USA Holdings Inc.

    Santander Consumer USA Holdings Inc. (NYSE: SC) ("SC") is a full-service, technology-driven consumer finance company focused on vehicle finance, third-party servicing and delivering superior service to our more than 2.7 million customers across the full credit spectrum. The company, which began originating retail installment contracts in 1997, has a managed asset portfolio of approximately $52 billion (as of December 31, 2016), and is headquartered in Dallas. (www.santanderconsumerusa.com)

    Santander Consumer USA Holdings Inc.
    Financial Supplement
    Fourth Quarter and Full Year 2016

    Table 1: Consolidated Balance Sheets 






    December 31,


    December 31,


    2016


    2015


    (Unaudited, Dollars in thousands)

    Assets 




    Cash and cash equivalents

    $                            160,180


    $                              18,893

    Finance receivables held for sale, net

    2,123,415


    2,859,575

    Finance receivables held for investment, net

    23,481,001


    23,367,788

    Restricted cash

    2,757,299


    2,236,329

    Accrued interest receivable

    373,274


    395,387

    Leased vehicles, net

    8,564,628


    6,497,310

    Furniture and equipment, net

    67,509


    58,007

    Federal, state and other income taxes receivable

    87,352


    267,636

    Related party taxes receivable

    1,087


    71

    Goodwill

    74,056


    74,056

    Intangible assets

    32,623


    33,016

    Due from affiliates

    31,270


    58,599

    Other assets

    785,410


    582,291

    Total assets

    $                       38,539,104


    $                       36,448,958

    Liabilities and Equity:




    Liabilities:




    Notes payable — credit facilities

    $                         6,886,681


    $                         6,902,779

    Notes payable — secured structured financings

    21,462,025


    20,872,900

    Notes payable —  related party

    2,975,000


    2,600,000

    Accrued interest payable

    33,346


    22,544

    Accounts payable and accrued expenses

    379,021


    413,269

    Federal, state and other income taxes payable

    18,201


    2,462

    Deferred tax liabilities, net

    1,278,064


    881,225

    Due to affiliates

    50,620


    58,148

    Other liabilities

    217,527


    263,082

    Total liabilities

    33,300,485


    32,016,409





    Equity:




    Common stock, $0.01 par value

    3,589


    3,579

    Additional paid-in capital

    1,657,611


    1,644,151

    Accumulated other comprehensive income (loss), net

    28,259


    2,125

    Retained earnings

    3,549,160


    2,782,694

    Total stockholders' equity

    5,238,619


    4,432,549

    Total liabilities and equity

    $                       38,539,104


    $                       36,448,958

     

    Table 2: Consolidated Statements of Income





    Three Months Ended
    December 31,


    Twelve Months Ended
    December 31,


    2016


    2015


    2016


    2015


    (Unaudited, Dollars in thousands, except per share amounts)

    Interest on finance receivables and loans

    $      1,222,468


    $      1,270,072


    $     5,026,790


    $      5,031,829

    Leased vehicle income

    401,020


    295,109


    1,487,671


    1,037,793

    Other finance and interest income

    3,695


    (5,251)


    15,135


    18,162

    Total finance and other interest income

    1,627,183


    1,559,930


    6,529,596


    6,087,784

    Interest expense

    216,980


    157,893


    807,484


    628,791

    Leased vehicle expense

    278,229


    208,255


    995,459


    726,420

    Net finance and other interest income

    1,131,974


    1,193,782


    4,726,653


    4,732,573

    Provision for credit losses

    685,711


    850,723


    2,468,200


    2,785,871

    Net finance and other interest income after provision for credit losses

    446,263


    343,059


    2,258,453


    1,946,702

    Profit sharing

    12,176


    10,649


    47,816


    57,484

    Net finance and other interest income after provision for credit losses and profit sharing

    434,087


    332,410


    2,210,637


    1,889,218

    Investment gains (losses), net

    (168,344)


    (229,212)


    (444,759)


    (95,214)

    Servicing fee income

    32,205


    42,357


    156,134


    131,113

    Fees, commissions, and other

    88,143


    89,268


    382,171


    385,744

    Total other income

    (47,996)


    (97,587)


    93,546


    421,643

    Compensation expense

    126,982


    108,458


    498,224


    434,041

    Repossession expense

    75,539


    66,456


    293,355


    241,522

    Other operating costs

    93,384


    81,708


    351,893


    345,686

    Total operating expenses

    295,905


    256,622


    1,143,472


    1,021,249

    Income before income taxes

    90,186


    (21,799)


    1,160,711


    1,289,612

    Income tax expense

    28,911


    (2,244)


    394,245


    465,572

    Net income

    $         61,275


    $         (19,555)


    $       766,466


    $       824,040









    Net income per common share (basic)

    $             0.17


    $             (0.05)


    $             2.14


    $             2.32

    Net income per common share (diluted)

    $             0.17


    $             (0.05)


    $             2.13


    $             2.31

    Weighted average common shares (basic)

    358,582,203


    357,927,012


    358,280,814


    355,102,742

    Weighted average common shares (diluted)

    360,323,179


    361,956,163


    359,165,172


    356,163,076

     

    Table 3: Other Financial Information






    Three Months Ended
    December 31,


    Twelve Months Ended
    December 31,


    2016


    2015


    2016


    2015

    Ratios

    (Unaudited, Dollars in thousands)

    Yield on individually acquired retail installment contracts

    15.8%


    16.4 %


    16.1%


    16.7 %

    Yield on purchased receivables portfolios

    18.1%


    25.6 %


    24.3%


    16.2 %

    Yield on receivables from dealers

    5.1%


    5.3 %


    5.2%


    5.0 %

    Yield on personal loans (1)

    22.9%


    20.0 %


    23.9%


    20.3 %

    Yield on earning assets (2)

    13.5%


    14.4 %


    14.1%


    14.8 %

    Cost of debt (3)

    2.8%


    2.1 %


    2.6%


    2.1 %

    Net interest margin (4)

    11.3%


    12.7 %


    12.0%


    13.1 %

    Expense ratio (5)

    2.3%


    2.0 %


    2.2%


    2.1 %

    Return on average assets (6)

    0.6%


    (0.2)%


    2.0%


    2.4 %

    Return on average equity (7)

    4.7%


    (1.8)%


    15.8%


    20.1 %

    Net charge-off ratio on individually acquired retail installment contracts (8)

    9.4%


    8.9 %


    7.9%


    6.7 %

    Adjusted net charge-off ratio on individually acquired retail installment contracts (8)

    9.4%


    8.9 %


    7.9%


    6.4 %

    Net charge-off ratio on purchased receivables portfolios (8)

    1.3%


    3.5 %



    (0.5)%

    Net charge-off ratio on receivables from dealers (8)

    1.5%



    0.5%


    Net charge-off ratio on personal loans (8) (9)




    40.8 %

    Adjusted net charge-off ratio on personal loans (8) (9)




    17.9 %

    Net charge-off ratio (8) (9)

    8.9%


    8.3 %


    7.4%


    8.4 %

    Adjusted net charge-off ratio (8) (9)

    8.9%


    8.3 %


    7.4%


    7.0 %

    Delinquency ratio on individually acquired retail installment contracts held for investment, end of period (10)

    5.1%


    4.4 %


    5.1%


    4.4 %

    Delinquency ratio on personal loans, end of period (10)

    11.3%


    6.9 %


    11.3%


    6.9 %

    Delinquency ratio on loans held for investment, end of period (10)

    5.1%


    4.6 %


    5.1%


    4.6 %

    Allowance ratio (11)

    12.6%


    11.9 %


    12.6%


    11.9 %

    Common Equity Tier 1 capital ratio (12)

    13.4%


    11.2 %


    13.4%


    11.2 %









    Other Financial Information








    Charge-offs, net of recoveries, on individually acquired retail installment contracts

    $         674,442


    $        611,526


    $      2,257,848


    $     1,795,771

    Charge-offs, net of recoveries, on purchased receivables portfolios

    790


    3,383


    (17)


    (2,720)

    Charge-offs, net of recoveries, on receivables from dealers

    258



    393


    Charge-offs, net of recoveries, on personal loans




    673,294

    Charge-offs, net of recoveries, on capital leases

    2,219


    19,859


    9,384


    30,907

    Total charge-offs, net of recoveries

    $           677,709


    $          634,768


    $        2,267,608


    $     2,497,252

    End of period Delinquent principal over 60 days, individually acquired retail installment contracts held for investment

    $        1,386,218


    $       1,191,567


    $        1,386,218


    $     1,191,567

    End of period Delinquent principal over 60 days, personal loans

    $           176,873


    $          168,906


    $           176,873


    $        168,906

    End of period Delinquent principal over 60 days, loans held for investment

    $        1,392,789


    $       1,377,770


    $        1,392,789


    $     1,377,770

    End of period assets covered by allowance for credit losses

    $      27,229,276


    $     27,007,816


    $      27,229,276


    $   27,007,816

    End of period Gross finance receivables and loans held for investment

    $      27,427,578


    $     27,368,579


    $      27,427,578


    $   27,368,579

    End of period Gross finance receivables, loans, and leases held for investment

    $      37,040,531


    $     34,694,875


    $      37,040,531


    $   34,694,875

    Average Gross individually acquired retail installment contracts

    $      28,604,117


    $     27,560,674


    $      28,652,897


    $   26,818,625

    Average Gross purchased receivables portfolios

    241,404


    385,420


    286,354


    562,512

    Average Gross receivables from dealers

    69,745


    76,598


    71,997


    89,867

    Average Gross personal loans

    1,405,187


    2,309,474


    1,413,440


    2,229,080

    Average Gross capital leases

    34,584


    94,670


    45,949


    114,605

    Average Gross finance receivables, loans and capital leases

    $      30,355,037


    $     30,426,836


    $      30,470,637


    $   29,814,689

    Average Gross finance receivables, loans, and leases

    $      39,941,127


    $     37,531,621


    $      39,289,341


    $   36,140,498

    Average Managed assets

    $      52,038,692


    $     52,485,567


    $      52,731,119


    $   48,919,418

    Average Total assets

    $       38,513,454


    $     36,039,307


    $      37,944,529


    $   35,050,503

    Average Debt

    $       31,416,694


    $     30,137,927


    $      31,330,686


    $   29,699,885

    Average Total equity

    $         5,185,840


    $       4,447,457


    $        4,850,653


    $     4,096,042



    (1)

    Includes Finance and other interest income; excludes fees

    (2)

    "Yield on earning assets" is defined as the ratio of annualized Total finance and other interest income, net of Leased vehicle expense, to Average gross finance receivables, loans and leases

    (3)

    "Cost of debt" is defined as the ratio of annualized Interest expense to Average debt

    (4)

    "Net interest margin" is defined as the ratio of annualized Net finance and other interest income to Average gross finance receivables, loans and leases

    (5)

    "Expense ratio" is defined as the ratio of annualized Operating expenses to Average managed assets

    (6)

    "Return on average assets" is defined as the ratio of annualized Net income to Average total assets

    (7)

    "Return on average equity" is defined as the ratio of annualized Net income to Average total equity

    (8)

    "Net charge-off ratio" is defined as the ratio of annualized Charge-offs, on a recorded investment basis, net of recoveries, to average unpaid principal balance of the respective portfolio

    (9)

    Effective as of September 30, 2015, changes in the value of the personal lending portfolio driven by customer default activity are classified in net investment gains (losses) due to the classification of the portfolio as held for sale. As there was accordingly no charge-off activity on personal loans for the three months ended December 31, 2015, the annualized charge-off rate on personal loans reported as of September 30, 2015 has been used as the full year charge- off rate. The average gross balance of personal loans used in the full year charge-off rate was $2,201,551. Additionally, the denominators of the aggregate Net charge-off ratios for the three and twelve months ended December 31, 2015 have been adjusted to $28,123,241 and $29,279,874, respectively, to exclude Personal Lending balances for the three months ended December 31, 2015.

    (10)

    "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

    (11)

    "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

    (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

     

    Table 4: Credit Quality


    Amounts related to our individually acquired retail installment contracts as of and for the three and twelve months December 31, 2016 and 2015, are as follows:


    (Unaudited, Dollars in thousands)



    Three Months Ended December 31,


    Twelve Months Ended December 31,

    2016


    2015


    2016


    2015

    Credit loss allowance — beginning of period

    $       3,401,285


    $       2,982,699


    $       3,197,414


    $       2,586,685

    Provision for credit losses

    684,213


    826,241


    2,471,490


    2,433,617

    Charge-offs

    (1,293,743)


    (1,143,727)


    (4,723,648)


    (3,897,480)

    Recoveries

    619,301


    532,201


    2,465,800


    2,101,709

    Transfers to held-for-sale




    (27,117)

    Credit loss allowance — end of period

    $       3,411,056


    $       3,197,414


    $       3,411,056


    $       3,197,414









    Net charge-offs

    $          674,442


    $          611,526


    $       2,257,848


    $       1,795,771

    Average unpaid principal balance (UPB)

    28,604,117


    27,560,674


    28,652,897


    26,818,625

    Charge-off ratio1

    9.4%


    8.9%


    7.9%


    6.7%




    December 31, 20162


    December 31, 20152

    Principal 31-60 days past due

    $         2,735,577


    10.1%


    $         2,454,986


    9.1%

    Delinquent principal over 60 days

    1,386,218


    5.1%


    1,191,567


    4.4%

    Total delinquent contracts

    $         4,121,795


    15.2%


    $         3,646,553


    13.6%

     


    December 31,


    December 31,


    2016


    2015


    (Dollar amounts in thousands)

    TDR - Unpaid principal balance

    $        5,599,567


    $        4,579,931

    Non-TDR - Unpaid principal balance

    $      21,528,406


    $      22,284,015

    Total - Unpaid principal balance

    $      27,127,973


    $      26,863,946

    Total - Allowance

    $        3,411,056


    $        3,197,414

    Total allowance ratio

    12.6%


    11.9%


    1 "Net charge-off ratio" is defined as the ratio of annualized Charge-offs, on a recorded investment basis, net of recoveries, to average unpaid principal balance of the respective portfolio

    2 Percent of unpaid principal balance.

     

    Table 5: Originations










    Three Months Ended


    Twelve Months Ended


    Three Months Ended


    December 31,


    December 31,


    December 31,


    December 31,


    September 30,


    2016


    2015


    2016


    2015


    2016

    Retained Originations  

    (Unaudited, Dollar amounts in thousands)

    Retail installment contracts

    $      3,068,154


    $      3,830,337


    $   12,726,912


    $   16,692,229


    $      3,281,112

    Average APR

    15.4%


    13.9%


    15.7%


    16.9%


    14.7%

    Average FICO® (a)

    604


    608


    598


    584


    612

    Discount

    0.3%


    1.5%


    0.5%


    1.8%


    0.1%











    Personal loans

    $         190,143


    $         304,748


    $         199,424


    $         887,483


    $                  —

    Average APR

    25.2%


    24.4%


    25.1%


    21.2%


    Discount















    Leased vehicles

    $         971,865


    $      1,009,526


    $      5,584,149


    $      5,132,053


    $      1,300,375











    Capital lease receivables

    $             1,424


    $             2,338


    $             7,401


    $           67,244


    $             2,319

    Total originations retained

    $      4,231,586


    $      5,146,949


    $   18,517,886


    $   22,779,009


    $      4,583,806











    Sold Originations (b)










    Retail installment contracts

    $         484,916


    $      1,098,674


    $      3,573,658


    $      5,419,730


    $         580,242

    Average APR

    4.4%


    2.6%


    4.3%


    4.2%


    3.2%

    Average FICO® (c)

    746


    758


    745


    743


    760

    Total originations sold

    $         484,916


    $      1,098,674


    $      3,573,658


    $      5,419,730


    $         580,242











    Total SC originations

    $      4,716,502


    $      6,245,623


    $   22,091,544


    $   28,198,739


    $      5,164,048











    Facilitated Originations










    Leased vehicles

    $                  —


    $                  —


    $                  —


    $         632,471


    $                  —











    Total originations

    $      4,716,502


    $      6,245,623


    $   22,091,544


    $   28,831,210


    $      5,164,048



    (a) 

    Unpaid principal balance excluded from the weighted average FICO score is $426 million, $688 million, $2.1 billion, $3.2 billion and $492 million for the three months ended December 31, 2016 and 2015, the twelve months ended December 31, 2016 and 2015, and the three months ended September 30, 2016, respectively, as the borrowers on these loans did not have FICO scores at origination. Of these amounts, $71 million, $215 million, $364 million, $650 million, and $74 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 $50 million, $137 million, $451 million, $647 million and $59 million for the three months ended December 31, 2016 and 2015, the twelve months ended December 31, 2016 and 2015, and the three months ended September 30, 2016, respectively, as the borrowers on these loans did not have FICO scores at origination. Of these amounts, $8 million, $2 million, $86 million, $108 million, and zero, respectively, were commercial loans.

     

    Table 6: Asset Sales











    Asset sales may include assets originated in prior periods.












    Three Months Ended


    Twelve Months Ended


    Three Months Ended


    December 31,


    December 31,


    December 31,


    December 31,


    September 30,


    2016


    2015


    2016


    2015


    2016


    (Unaudited, Dollar amounts in thousands)

    Retail installment contracts

    $      1,381,036


    $      1,869,113


    $      3,694,019


    $      7,862,520


    $         793,804

    Average APR

    6.3%


    4.5%


    4.2%


    7.2%


    3.0%

    Average FICO®

    721


    766


    746


    704


    762











    Personal loans

    $                  —


    $                  —


    $         869,349


    $                  —


    $                  —

    Average APR



    17.9%













    Leased vehicles

    $                  —


    $                  —


    $                  —


    $      1,316,958


    $                  —

    Total asset sales

    $      1,381,036


    $      1,869,113


    $      4,563,368


    $      9,179,478


    $         793,804

     

    Table 7: Ending Portfolio





    Ending outstanding balance, average APR and remaining unaccreted discount of our held for investment portfolio as of December 31, 2016, and December 31, 2015, are as follows:






    December 31, 2016


    December 31, 2015


    (Unaudited, Dollar amounts in thousands)

    Retail installment contracts

    $            27,358,147


    $            27,223,768

    Average APR

    16.4%


    16.8%

    Discount

    2.3%


    2.7%





    Personal loans

    $                   11,839


    $                        941

    Average APR

    31.5%


    20.9%





    Receivables from dealers

    $                   69,431


    $                   76,941

    Average APR

    4.9%


    4.6%





    Leased vehicles

    $              9,612,953


    $              7,326,296





    Capital leases

    $                   31,872


    $                   66,929

     

    Table 8: Reconciliation of 2015 Non-GAAP Measures


    (Dollars in thousands)



    For the Year Ended


    December 31, 2015

    Charge-offs, net of recoveries on personal loans

    $               673,294

    Deduct: LOCM adjustment on personal loans

    (377,598)

    Adjusted Net charge-offs on personal loans

    $               295,696





    Average gross personal loans1

    $            2,201,551

    Net charge-off ratio on personal loans

    40.8%

    Adjusted net charge-off ratio on personal loans

    17.9%



    Charge-offs, net of recoveries on retail installment contracts acquired individually

    $            1,795,771

    Deduct: LOCM adjustment on retail installment contracts acquired individually

    (73,388)

    Adjusted Net charge-offs on retail installment contracts acquired individually

    $            1,722,383





    Average Gross retail installment contracts acquired individually

    $          26,818,625

    Net charge-off ratio on retail installment contracts acquired individually

    6.7%

    Adjusted Net charge-off ratio on retail installment contracts acquired individually

    6.4%



    Total charge-offs, net of recoveries

    $            2,497,252

    Deduct: LOCM adjustment on personal loans

    (377,598)

    Deduct: LOCM adjustment on retail installment contracts acquired individually

    (73,388)

    Adjusted Net charge-offs total

    $            2,046,266





    Average Gross finance receivables and loans1

    $          29,279,874

    Net charge-off ratio

    8.4%

    Adjusted Net charge-off ratio total

    7.0%


    1 The denominators of the Personal Lending Net charge-off ratios and the aggregate Net charge-off ratios for the three and twelve months ended December 31, 2015 have been adjusted to exclude Personal Lending balances for the three months ended December 31, 2015.

     

    Contacts:


    Investor Relations

    Media Relations

    Evan Black

    Laurie Kight

    800.493.8219

    214.801.6455

    InvestorRelations@santanderconsumerusa.com 

    SCMedia@santanderconsumerusa.com

     

     

    To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/santander-consumer-usa-holdings-inc-reports-fourth-quarter-and-full-year-2016-results-300396404.html

    SOURCE Santander Consumer USA Holdings Inc.