Home  >  News  >  News Release Details

News Release Details

View all news

Santander Consumer USA Holdings Inc. Reports Third Quarter 2020 Results

10/28/20
Net Income of $490 Million; More Than $8 Billion in Originations in the Third Quarter of 2020

DALLAS, Oct. 28, 2020 /PRNewswire/ -- Santander Consumer USA Holdings Inc. (NYSE: SC) ("SC" or the "Company") today announced net income for the third quarter ended September 30, 2020 ("Q3 2020") of $490 million, or $1.58 per diluted common share. The quarter included $46 million of net charge-offs and $293 million of incremental allowance for credit loss primarily driven by balance growth.

On September 30, 2020, the Federal Reserve Board ("FRB") extended to the fourth quarter its interim policy applicable to all CCAR banks prohibiting share repurchases and limiting dividends to average trailing net income. Although SC's standalone income is sufficient to support a dividend, it is consolidated into Santander Holdings USA, Inc.'s ("SHUSA") capital plan and therefore is subject to the FRB's interim policy that utilizes SHUSA's average trailing income to determine the cap on common stock dividends. SC does not currently expect to declare or pay a dividend in the fourth quarter of 2020.

Management Quotes

"As the pandemic continues to affect our country and our industry, our top priority remains serving our dealers, customers and employees. During the quarter we originated more than $8 billion in loans and leases, continued to grow balances and remained disciplined in our underwriting. Our portfolio continues to be resilient as demand for customer deferrals declined significantly and delinquency is at a historic low. These factors, in addition to robust used vehicle prices, led to a solid quarter across the board and positions us to finish the year strong," said Mahesh Aditya, SC President and CEO.

Fahmi Karam, SC Chief Financial Officer, added, "This quarter's results highlight the unique environment we are currently operating in with low losses driven by relief programs and historically high used car prices driving strong net income. We grew reserves in the quarter to over $6 billion, or an 18.4% allowance ratio, driven by increased balances and continued uncertainty in the macro outlook. We are well capitalized with a 13.7% CET1 ratio, and combined with our reserve, we have an industry leading loss absorbing capacity to manage through the pandemic and position us for long-term success."

Third Quarter of 2020 Highlights (variances compared to third quarter of 2019 ("Q3 2019"), unless otherwise noted)

  • Total auto originations of $8.4 billion, flat
    • Core retail auto loan originations of $2.7 billion, up 5%
    • Chrysler Capital loan originations of $3.8 billion, up 6%
    • Chrysler Capital lease originations of $1.9 billion, down 17%
    • Chrysler average quarterly penetration rate of 33%, from 36%
    • Santander Bank, N.A. program originations of $1.1 billion
  • Net finance and other interest income1 of $1.3 billion, up 6%
  • 30-59 delinquency ratio of 5.0%, down 450 basis points
  • 59-plus delinquency ratio2 of 2.4%, down 230 basis points
  • Retail Installment Contract ("RIC") gross charge-off ratio of 6.8%, down 11.5 percentage points
  • Recovery rate of 91.4%, up from 55.9%
  • RIC net charge-off ratio3 of 0.6%, down 750 basis points
  • Troubled Debt Restructuring ("TDR") balance of $3.8 billion, down from $4.2 billion
  • Return on average assets of 4.1%, up from 2.0%
  • $3.3 billion in asset-backed securities "ABS" issued
  • Expense ratio of 1.7%, down from 2.3%
  • Common equity tier 1 ("CET1") ratio of 13.7%, down from 15.4% as of September 30, 2019

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 59 days, to end of period gross balance of the respective portfolio, excludes   finance 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.

Conference Call Information

SC will host a conference call and webcast to discuss its Q3 2020 results and other general matters at 9:00 a.m. Eastern Time on Wednesday, October 28, 2020. The conference call will be accessible by dialing 1-800-289-0438 (U.S. domestic), or 1-323-794-2423 (international), conference ID 2222613. Please join 10 minutes prior to the start of the call. The conference call will also be accessible via live audio webcast through the Investor Relations section of SC's corporate website at http://investors.santanderconsumerusa.com. Choose "Events" and select the information pertaining to the Q3 2020 SC Earnings Conference Call. Additionally, there will be slides accompanying the webcast. Please allow at least 15 minutes prior to the call to register, download and install any necessary software prior to the call.

For those unable to listen to the live broadcast, a replay of the call will be available on the Company's website or by dialing 844-512-2921 (U.S. domestic), or 412-317-6671 (international), conference ID 2222613, approximately two hours after the conference call. An audio webcast of the call and investor presentation will also be archived on the Investor Relations section of SC's corporate website at http://investors.santanderconsumerusa.com, under "Events".

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements about our expectations, beliefs, plans, predictions, forecasts, objectives, assumptions, or future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through the use of words or phrases such as anticipates, believes, can, could, may, predicts, potential, should, will, estimates, plans, projects, continuing, ongoing, expects, intends, and similar words or phrases. Although we believe that the expectations reflected in these forward-looking statements are reasonable, these statements are not guarantees of future performance and involve risks and uncertainties that are subject to change based on various important factors, some of which are beyond our control. For additional discussion of these risks, refer to the section entitled Risk Factors and elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2019, our subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K, or other applicable documents that are filed or furnished with the U.S. Securities and Exchange Commission (collectively, our "SEC filings"). 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 adverse impact of COVID-19 on our business, financial condition, liquidity and results of operations; (b) continually changing federal, state, and local laws and regulations could materially adversely affect our business; (c) adverse economic conditions in the United States and worldwide may negatively impact our results; (d) a reduction in our access to funding a reduction in ; (e) significant risks we face implementing our growth strategy, some of which are outside our control; (f) unexpected costs and delays in connection with exiting our personal lending business; (g) our agreement with FCA US LLC may not result in currently anticipated levels of growth and is subject to certain conditions that could result in termination of the agreement; (h) our business could suffer if we are unsuccessful in developing and maintaining relationships with automobile dealerships; (i) our financial condition, liquidity, and results of operations depend on the credit performance of our loans; (j) loss of our key management or other personnel, or an inability to attract such management and personnel; (k) 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 (l) future changes in our relationship with SHUSA and Banco Santander that could adversely affect our operations. If one or more of the factors affecting our forward-looking information and statements proves incorrect, our actual results, performance or achievements could differ materially from those expressed in, or implied by, forward-looking information and statements. Therefore, we caution the reader not to place undue reliance on any forward-looking information or statements. The effect of these factors is difficult to predict. Factors other than these also could adversely affect our results, and the reader should not consider these factors to be a complete set of all potential risks or uncertainties as new factors emerge from time to time. Any forward-looking statements only speak as of the date of this document, and we undertake no obligation to update any forward-looking information or statements, whether written or oral, to reflect any change, except as required by law. All forward-looking statements attributable to us are expressly qualified by these cautionary statements.

About Santander Consumer USA Holdings Inc.

Santander Consumer USA Holdings Inc. (NYSE: SC) ("SC") is a full-service consumer finance company focused on vehicle finance, third-party servicing and delivering superior service to our more than 3.1 million customers across the full credit spectrum. SC, which began originating retail installment contracts in 1997, had an average managed asset portfolio of approximately $63 billion (for the third quarter ended September 30, 2020), and is headquartered in Dallas, Texas. (www.santanderconsumerusa.com)

CONTACTS:

Investor Relations
Evan Black
800.493.8219
InvestorRelations@santanderconsumerusa.com

Media Relations
Laurie Kight
214.801.6455
Media@santanderconsumerusa.com



Santander Consumer USA Holdings Inc.

Financial Supplement

Third Quarter 2020



Table of Contents




Table 1: Condensed Consolidated Balance Sheets

6

Table 2: Condensed Consolidated Statements of Income

7

Table 3: Other Financial Information

8

Table 4: Credit Quality

10

Table 5: Originations

12

Table 6: Asset sales

13

Table 7: Ending Portfolio

14

Table 8: Reconciliation of Non-GAAP Measures

15

 

Table 1: Condensed Consolidated Balance Sheets



September 30, 2020


December 31, 2019

Assets

(Unaudited, Dollars in thousands)

Cash and cash equivalents

$

105,616



$

81,848


Finance receivables held for sale, net

763,292



1,007,105


       Finance receivables held for investment, at amortized cost

33,602,108



30,810,487


       Allowance for credit loss

(6,152,378)



(3,043,468)


Finance receivables held for investment, at amortized cost, net

27,449,730



27,767,019


Restricted cash

2,267,154



2,079,239


Accrued interest receivable

428,586



288,615


Leased vehicles, net

16,195,376



16,461,982


Furniture and equipment, net

60,105



59,873


Goodwill

74,056



74,056


Intangible assets

62,341



42,772


Other assets

1,042,665



1,071,020


Total assets

$

48,448,921



$

48,933,529


Liabilities and Equity




Liabilities:




Borrowings and other debt obligations

$

41,369,347



$

39,194,141


Deferred tax liabilities, net

1,095,238



1,468,222


Accounts payable and accrued expenses

524,816



563,277


Other liabilities

364,708



389,269


Total liabilities

$

43,354,109



$

41,614,909






Equity:




Common stock, $0.01 par value

3,061



3,392


Additional paid-in capital

394,428



1,173,262


Accumulated other comprehensive income, net

(56,882)



(26,693)


Retained earnings

4,754,205



6,168,659


Total stockholders' equity

$

5,094,812



$

7,318,620


Total liabilities and equity

$

48,448,921



$

48,933,529





Table 2: Condensed Consolidated Statements of Income



Three Months Ended September 30,


Nine Months Ended September 30,


2020


2019


2020


2019


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

Interest on finance receivables and loans

$

1,300,694



$

1,273,022



$

3,811,113



$

3,787,700


Leased vehicle income

725,156



706,302



2,210,684



2,032,098


Other finance and interest income

2,146



9,926



12,354



31,610


Total finance and other interest income

2,027,996



1,989,250



6,034,151



5,851,408


Interest expense

292,118



335,212



929,934



999,633


Leased vehicle expense

467,172



456,193



1,630,945



1,344,654


Net finance and other interest income

1,268,706



1,197,845



3,473,272



3,507,121


Credit loss expense

340,548



566,849



2,110,331



1,548,404


Net finance and other interest income after credit loss expense

928,158



630,996



1,362,941



1,958,717


Profit sharing

30,414



18,125



56,239



38,438


Net finance and other interest income after credit loss expense and profit sharing

897,744



612,871



1,306,702



1,920,279


Investment losses, net

(68,989)



(86,397)



(279,997)



(238,281)


Servicing fee income

18,574



21,447



56,797



70,255


Fees, commissions, and other

78,924



96,243



256,123



280,815


Total other income

28,509



31,293



32,923



112,789


Compensation and benefits

127,991



132,271



388,960



382,843


Repossession expense

35,910



62,937



115,861



203,496


Other expenses

99,761



134,262



308,193



314,737


Total other expenses

263,662



329,470



813,014



901,076


Income (loss) before income taxes

662,591



314,694



526,611



1,131,992


Income tax expense

172,476



82,156



137,161



283,684


Net income (loss)

$

490,115



$

232,538



$

389,450



$

848,308










Net income per common share (basic)

$

1.58



$

0.67



$

1.21



$

2.43


Net income per common share (diluted)

$

1.58



$

0.67



$

1.21



$

2.42


Weighted average common shares (basic)

310,150,293



345,469,657



321,275,907



349,341,627


Weighted average common shares (diluted)

$

310,307,265



$

345,956,043



$

321,492,331



$

349,855,822


Number of shares outstanding

306,070,972



342,864,213



306,070,972



342,864,213





Table 3: Other Financial Information



Three Months Ended September 30,


Nine Months Ended September 30,

Ratios (Unaudited, Dollars in thousands)

2020


2019


2020


2019

Yield on retail installment contracts

14.9

%


16.1

%


15.0

%


16.1

%

Yield on leased vehicles

6.0

%


5.9

%


4.4

%


5.7

%

Yield on personal loans, held for sale (1)

25.6

%


26.3

%


25.9

%


26.2

%

Yield on earning assets (2)

12.2

%


12.8

%


11.6

%


12.9

%

Cost of debt (3)

2.8

%


3.6

%


3.1

%


3.7

%

Net interest margin (4)

9.9

%


10.0

%


9.2

%


10.0

%

Expense ratio (5)

1.7

%


2.3

%


1.8

%


2.2

%

Return on average assets (6)

4.1

%


2.0

%


1.1

%


2.5

%

Return on average equity (7)

38.9

%


12.7

%


9.6

%


15.7

%

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

0.6

%


8.1

%


4.7

%


7.7

%

Net charge-off ratio (8)

0.6

%


8.1

%


4.7

%


7.7

%

Delinquency ratio on individually acquired retail installment contracts held for investment, end of period (9)

2.4

%


4.7

%


2.4

%


4.7

%

Delinquency ratio on loans held for investment, end of period (9)

2.4

%


4.7

%


2.4

%


4.7

%

Allowance ratio (10)

18.4

%


10.5

%


18.4

%


10.5

%

Common stock dividend payout ratio (11)

13.9

%


32.7

%


54.4

%


25.5

%

Common Equity Tier 1 capital ratio (12)

13.7

%


15.4

%


13.7

%


15.4

%

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

$

46,078



$

592,912



$

1,100,138



$

1,670,543


Total charge-offs, net of recoveries

48,125



592,893



$

1,103,649



$

1,672,785


End of period delinquent amortized cost over 59 days, retail installment contracts held for investment

817,577



1,394,074



817,577



1,394,074


End of period personal loans delinquent principal over 59 days, held for sale

93,296



176,500



93,296



176,500


End of period delinquent amortized cost over 59 days, loans held for investment

817,911



1,394,074



817,911



1,394,074


End of period assets covered by allowance for credit losses

33,515,634



29,636,174



33,515,634



29,636,174


End of period gross retail installment contracts held for investment

33,485,342



29,597,897



33,485,342



29,597,897


End of period gross personal loans held for sale

1,211,575



1,322,301



1,211,575



1,322,301


End of period gross finance receivables and loans held for investment

33,489,017



29,633,950



33,489,017



29,633,950


End of period gross finance receivables, loans, and leases

50,617,356



46,874,858



50,617,356



46,874,858


Average gross retail installment contracts held for investment

31,462,524



29,316,997



30,946,321



28,998,827


Average gross retail installment contracts held for investment and held for sale

32,847,716



29,450,778



31,632,276



29,035,278


Average gross personal loans held for sale

1,240,639



1,343,098



1,322,053



1,398,045


Average gross finance receivables, loans and finance leases

34,135,256



30,855,074



33,008,338



30,495,290


Average gross operating leases

17,146,166



16,902,932



17,447,194



16,135,606


Average gross finance receivables, loans, and leases

51,281,422



47,758,006



50,455,532



46,630,896


Average managed assets

62,662,686



57,379,308



61,325,546



55,830,429


Average total assets

47,979,008



46,915,965



47,581,031



45,696,088


Average debt

41,064,441



37,276,505



40,262,948



36,234,826


Average total equity

5,044,976



7,335,898



5,429,924



7,215,250


















(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 amortized cost basis, net of recoveries, to average unpaid principal balance of the respective held-for-investment portfolio.

(9)

"Delinquency ratio" is defined as the ratio of End of period Delinquent principal over 59 days to End of period gross balance of the respective portfolio, excludes finance leases

(10)

"Allowance ratio" is defined as the ratio of Allowance for credit losses, which excludes impairment on purchased receivables portfolios, to End of period assets covered by allowance for credit losses

(11)

"Common stock dividend payout ratio" is defined as the ratio of Dividends declared per share of common stock to Earnings per share attributable to the Company's shareholders.

(12)

"Common Equity Tier 1 Capital ratio" is a non-GAAP ratio defined as the ratio of Total common equity tier 1 capital to Total risk-weighted assets (for a reconciliation from GAAP to this non-GAAP measure, see "Reconciliation of Non-GAAP Measures" in Table 8 of this release)




Table 4: Credit Quality


The activity in the credit loss allowance for retail installment contracts for the three and nine months ended September 30, 2020 and 2019 was as follows (Unaudited, Dollar amounts in thousands):



Three Months Ended September 30, 2020


Three Months Ended September 30, 2019


Retail Installment Contracts


Retail Installment Contracts

Allowance for Credit Loss

Non-TDR


TDR


Non-TDR


TDR


Balance — beginning of period

$

4,818,187



$

1,037,628



$

1,961,893



$

1,156,303


Credit loss expense (a)

24,841



314,075



484,626



102,494


Charge-offs (b)

(334,938)



(200,352)



(962,573)



(381,490)


Recoveries

392,042



97,171



567,846



183,305


Balance — end of period

$

4,900,132



$

1,248,522



$

2,051,792



$

1,060,612











Nine Months Ended September 30, 2020


Nine Months Ended September 30, 2019


Retail Installment Contracts


Retail Installment Contracts

Allowance for Credit Loss

Non-TDR


TDR


Non-TDR


TDR


Balance — beginning of period

$

2,123,878



$

914,718



$

1,819,360



$

1,416,743


Day 1 - Adjustment to allowance for adoption of CECL standard

2,030,473



71,833






Credit loss expense (a)

1,526,545



581,344



1,279,931



266,913


Charge-offs (b)

(1,955,706)



(617,536)



(2,685,931)



(1,217,650)


Recoveries

1,174,942



298,163



1,638,432



594,606


Balance — end of period

$

4,900,132



$

1,248,522



$

2,051,792



$

1,060,612



(a) Excluded from the credit loss expense is $13 million and $52 million related to retail installment contracts sold in an off-balance sheet securitization during the three and nine months ended September 30, 2020, respectively. In addition, credit loss expense includes a net of $72 million and $60 million in the credit loss expense related to retail installment contracts transferred to held for sale and returned to held for investment during the three and nine months ended September 30, 2020, respectively. Furthermore, credit loss expense includes $0 million and $20 million related to retail installment contracts transferred to held for sale during the three and nine months ended September 30, 2019, respectively.


(b) Charge-offs for retail installment contracts includes partial write-down of loans to the collateral value less estimated costs to sell, for which a bankruptcy notice was received. There is no additional ACL on these loans.




A summary of delinquencies of our retail installment contracts as of September 30, 2020 and December 31, 2019 is as follows (Unaudited, Dollar amounts in thousands):


Delinquent Balance

September 30, 2020


Amount


Percent

Amortized cost, 30-59 days past due

1,673,713



5.0

%

Delinquent amortized cost over 59 days

817,577



2.4

%

Total delinquent balance at amortized cost

$

2,491,290



7.4

%





Delinquent Balance

December 31, 2019


Amount


Percent

Principal 30-59 days past due

$

2,972,495



9.7

%

Delinquent principal over 59 days

1,578,452



5.1

%

Total delinquent principal (a)

$

4,550,947



14.8

%


(a) The table includes balances based on UPB. Difference between amortized cost and UPB was not material.




The retail installment contracts held for investment that were placed on nonaccrual status, as of September 30, 2020 and December 31, 2019 (Unaudited, Dollar amounts in thousands):


Nonaccrual Balance

September 30, 2020


Amount


Percent

Non-TDR

623,428



1.9

%

TDR

301,647



0.9

%

Total non-accrual loans (a)

$

925,075



2.8

%








(a) The table includes balances based on amortized cost.



Nonaccrual Balance

December 31, 2019


Amount


Percent

Non-TDR

$

1,099,462



3.6

%

TDR

516,119



1.7

%

Total nonaccrual principal (a)

$

1,615,581



5.3

%


(a) The table includes balances based on UPB. Difference between amortized cost and UPB was not material.




The table below presents the Company's allowance ratio for TDR and non-TDR individually acquired retail installment contracts as of September 30, 2020 and December 31, 2019 (Unaudited, Dollar amounts in thousands):



Allowance Ratios

September 30, 2020


December 31, 2019


TDR - Unpaid principal balance

$

3,801,948



$

3,859,040


TDR - Impairment

1,248,522



914,718


TDR - Allowance ratio

32.8

%


23.7

%






Non-TDR - Unpaid principal balance

$

29,667,444



$

26,895,551


Non-TDR - Allowance

4,900,132



2,123,878


Non-TDR Allowance ratio

16.5

%


7.9

%






Total - Unpaid principal balance

$

33,469,392



$

30,754,591


Total - Allowance

6,148,654



3,038,596


Total - Allowance ratio

18.4

%


9.9

%










The Company's allowance for credit losses increased $0.3 billion and $3.1 billion for the three and nine months ended September 30, 2020. For the three months ended September 30, 2020, the increase was primarily due to a portfolio growth. For the nine months ended September 30, 2020, the primary drivers were $2.1 billion increase at CECL adoption on January 1, 2020, driven mainly by the addition of lifetime expected credit losses for non-TDR loans, and additional reserves specific to COVID-19 risk.



Table 5: Originations


The Company's originations of loans and leases, including revolving loans, average APR, and dealer discount (net of dealer participation) were as follows:



Three Months Ended


Nine Months Ended


Three Months Ended


September 30,
2020


September 30,
2019


September 30,
2020


September 30,
2019


June 30, 2020

Retained Originations

(Unaudited, Dollar amounts in thousands)

Retail installment contracts

$

5,344,755



$

4,080,028



$

13,608,298



$

12,056,003



$

5,098,496


Average APR

13.7

%


16.0

%


13.8

%


16.5

%


11.7

%

Average FICO® (a)

637



599



631



598



657


Discount

(1.3)

%


(0.7)

%


(1)

%


(0.4)

%


(0.9)

%













Personal loans (b)

305,039



322,335



923,112



954,105



$

347,238


Average APR

29.4

%


29.7

%


29.4

%


29.8

%


29.6

%












Leased vehicles

1,856,166



2,225,117



4,863,504



6,708,827



$

986,617













Finance lease

4,087



4,859



9,016



$

12,989



$

1,927


Total originations retained

$

7,510,047



$

6,632,339



$

19,403,930



$

19,731,924



$

6,434,278













Sold Originations











Retail installment contracts

$

80,144



$



$

761,323



$



$


Average APR

5.2

%


%


4.8

%


%


%

Average FICO® (c)

738





734






Total originations sold

$

80,144



$



$

761,323



$



$













Total originations (excluding SBNA Originations Program)

$

7,590,191



$

6,632,339



$

20,165,253



$

19,731,924



$

6,434,278






















(a)

Unpaid principal balance excluded from the weighted average FICO score is $571 million, $440 million, $1.5 billion, $1.4 billion and $586 million for the three months ended September 30, 2020 and 2019, the nine months ended September 30, 2020 and 2019, and for the three months ended June 30, 2020, respectively, as the borrowers on these loans did not have FICO scores at origination. Of these amounts, $145 million, $154 million, $386 million, $401 million and $102 million, respectively, were commercial loans.



(b)

Included in the total origination volume is $72 million, $62 million, $151 million, $138 million and $58 million for the three months ended September 30, 2020 and 2019, the nine months ended September 30, 2020 and 2019, and for the three months ended June 30, 2020, respectively, related to newly opened accounts.



(c)

Unpaid principal balance excluded from the weighted average FICO score is $11 million and $80 million for the three and nine months ended September 30, 2020, respectively, as the borrowers on these loans did not have FICO scores at origination.

SBNA Originations Program

Beginning in 2018, the Company agreed to provide SBNA with origination support services in connection with the processing, underwriting and purchase of retail loans, primarily from Chrysler dealers. In addition, the Company agreed to perform the servicing for any loans originated on SBNA's behalf. The Company facilitated the purchase of $1.1 billion and $3.9 billion of retail installment contacts during the three and nine months ended September 30, 2020, respectively.




Table 6: Asset Sales



Three Months Ended


Nine Months Ended


Three Months Ended


September 30,
2020


September 30,
2019


September 30,
2020


September 30,
2019


June 30, 2020

Assets Sold

(Unaudited, Dollar amounts in thousands)

Retail installment contracts

$

636,301



$



$

1,148,587



$



$

512,286


Average APR

4.9

%


%


5.6

%


%


6.4

%

Average FICO®

$

735





715





691
























Table 7: Ending Portfolio


Ending outstanding balance, average APR and remaining unaccreted net discount of our held for investment portfolio as of September 30, 2020 and December 31, 2019, are as follows:



September 30, 2020


December 31, 2019


(Unaudited, Dollar amounts in thousands)

Retail installment contracts

$

33,485,342



$

30,776,038


Average APR

15.2

%


16.1

%

Discount

0.05

%


0.3

%





Receivables from dealers

$

3,675



$

12,668


Average APR

3.9

%


4.0

%





Leased vehicles

$

17,101,722



$

17,562,782






Finance leases

$

26,617



$

27,584













Table 8: Reconciliation of Non-GAAP Measures



September 30, 2020


September 30, 2019


(Unaudited, Dollar amounts in thousands)

Total equity

$

5,094,812



$

7,345,202


Add: Adjustment due to CECL capital relief (c)

1,842,536




Deduct: Goodwill, intangibles, and other assets, net of deferred tax liabilities

159,907



150,644


Deduct: Accumulated other comprehensive income (loss), net

(56,882)



(31,836)


Tier 1 common capital

$

6,834,323



$

7,226,394


Risk weighted assets (a)(c)

49,882,540



46,870,019


Common Equity Tier 1 capital ratio (b)(c)

13.7

%


15.4

%









(a)

Under the banking agencies' risk-based capital guidelines, assets and credit equivalent amounts of derivatives and off-balance sheet exposures are assigned to broad risk categories. The aggregate dollar amount in each risk category is multiplied by the associated risk weight of the category. The resulting weighted values are added together with the measure for market risk, resulting in the Company's total Risk weighted assets.



(b)

CET1 is calculated under Basel III regulations required as of January 1, 2015. The fully phased-in capital ratios are non-GAAP financial measures.



(c)

As described in our 2019 annual report on Form 10-K, on January 1, 2020, we adopted ASU 2016-13, Financial Instruments -Credit Losses ("CECL"), which upon adoption resulted in a reduction to our opening retained earnings balance, net of income tax, and increase to the allowance for credit losses of approximately $2 billion. As also described in our 2019 10-K, the U.S. banking agencies in December 2018 had approved a final rule to address the impact of CECL on regulatory capital by allowing banking organizations, including the Company, the option to phase in the day-one impact of CECL until the first quarter of 2023. In March 2020, the U.S. banking agencies issued an interim final rule that provides banking organizations with an alternative option to delay for two years an estimate of CECL's effect on regulatory capital, relative to the incurred loss methodology's effect on regulatory capital, followed by a three-year transition period. The Company is electing this alternative option instead of the one described in the December 2018 rule.

 

 

Cision View original content:http://www.prnewswire.com/news-releases/santander-consumer-usa-holdings-inc-reports-third-quarter-2020-results-301161431.html

SOURCE Santander Consumer USA Holdings Inc.

Categories: Press Releases
View all news

Contact Investor Relations

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

Email