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Santander Consumer USA Holdings Inc. Reports Third Quarter 2021 Results

10/27/21
Net Income of $763 Million and $7.8 Billion in Originations in the Third Quarter 2021

DALLAS, Oct. 27, 2021 /PRNewswire/ -- Santander Consumer USA Holdings Inc. (NYSE: SC) ("SC" or the "Company") today announced net income for the third quarter ended September 30, 2021 ("Q3 2021") of $763 Million, or $2.49 per diluted common share. 

The Company's parent, Santander Holdings USA, Inc. ("SHUSA"), has requested regulatory approval to authorize the SC Board of Directors to consider declaring a dividend in the fourth quarter. To date, approval has not been received.

Third Quarter of 2021 Highlights (variances compared to third quarter of 2020 ("Q3 2020"), unless otherwise noted)

  • Net Income of $763 million in Q3 2021, or $2.49 of diluted EPS
  • Total auto originations of $7.8 billion, down 7%
    • Core retail auto loan originations of $3.1 billion, up 17%
    • Chrysler Capital loan originations of $2.8 billion, down 27%
    • Chrysler Capital lease originations of $1.8 billion, down 2%
    • Chrysler average quarterly penetration rate of 27%, down from 33%
    • Santander Bank, N.A. program originations of $1.8 billion1
  • Donated $50 million to the SC Foundation
  • Announced launch of new dealer and consumer digital experience through partnership with AutoFi
  • Net finance and other interest income2 of $1.3 billion, up 5.8%
  • 30-59 delinquency ratio3 of 6.8%, up 180 basis points
  • 59-plus delinquency ratio3 of 3.3%, up 90 basis points
  • Retail Installment Contract ("RIC") gross charge-off ratio of 7.7%, up 90 basis points
  • Recovery rate of 74.4%, down from 91.4%
  • RIC net charge-off ratio4 of 2.0%, up 140 basis points
  • Allowance ratio of 17.4%, down from 17.8% as of June 30, 2021
  • Troubled Debt Restructuring ("TDR") balance of $4.0 billion, down from $4.2 billion as of June 30, 2021
  • Executed ~$300 million in off-balance sheet prime loan sales
  • Return on average assets ("ROA") of 6.3%
  • Expense ratio of 2.2%, up 50 basis points
  • Common equity tier 1 ("CET1") ratio of 19.5%

 

1Includes SBNA retail originations of $1.5 billion and lease originations of $249 million for the current period

2Includes Finance receivables held for investment, Finance receivables held for sale and Leased vehicles.

3Delinquency Ratio is defined as the ratio of end of period delinquent principal, categorized as either 30-59 or over 59 days, to end of period gross balance of the respective portfolio, excludes finance leases.

4Net Charge-Off Ratio stated on a recorded investment basis, which is unpaid principal balance adjusted for unaccreted net discounts, subvention and origination costs.

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, strategies, 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, seeks, believes, can, could, may, predicts, potential, should, would, will, estimates, plans, projects, continuing, ongoing, expects, intends, and similar words or phrases. Examples of forward-looking statements include, but are not limited to, all statements we make relating to revenue, earnings, margins, growth rates, and other financial results for future periods. 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 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"). 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 include the following: (a) the adverse impact of COVID-19 or any future outbreak of any contagious diseases 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 could materially impact consumer spending behavior, unemployment and demand for our products, which could negatively impact our results; (d) the effects of inflation; (e) a reduction in our access to funding; (f) significant risks we face implementing our growth strategy, some of which are outside our control; (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 regulators, including but not limited to 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; (l) there can be no assurance that the proposed acquisition of all of our outstanding common stock by Santander Holdings USA, Inc. ("SHUSA") will be approved and ultimately consummated, and the terms of any such transaction may differ materially from those originally proposed by SHUSA; (m) other future changes in our relationship with SHUSA and Banco Santander, S.A. that could adversely affect our operations; (n) our expectations regarding future litigation both known and unknown; (o) our inability to accurately forecast the amount and timing of future collections could have a material adverse effect on our results of operations; (p) our reputation is a key asset to our business, and our business may be affected by how we are perceived in the marketplace; and (q) our debt could negatively impact our business, prevent us from satisfying our debt obligations and adversely affect our financial condition. 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 $65 billion (for the third quarter ended September 30, 2021), and is headquartered in Dallas, Texas. (www.santanderconsumerusa.com)

 

Santander Consumer USA Holdings Inc.

Financial Supplement

Third Quarter 2021



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

8

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, 2021


December 31, 2020

Assets

(Unaudited, Dollars in thousands)

Cash and cash equivalents

$

2,106,405



$

109,053


Finance receivables held for sale, net

359,561



1,567,527


       Finance receivables held for investment, at amortized cost

33,183,439



33,114,638


       Allowance for credit loss

(5,699,698)



(6,110,633)


Finance receivables held for investment, at amortized cost, net

27,483,741



27,004,005


Restricted cash

2,248,667



2,221,094


Accrued interest receivable

323,469



415,765


Leased vehicles, net

15,529,610



16,391,107


Furniture and equipment, net

62,168



62,032


Goodwill

74,056



74,056


Intangible assets

75,176



70,128


Other assets

811,597



972,726


Total assets

$

49,074,450



$

48,887,493


Liabilities and Equity




Liabilities:




Borrowings and other debt obligations

$

38,431,858



$

41,138,674


Deferred tax liabilities, net

1,855,859



1,263,796


Accounts payable and accrued expenses

554,581



531,369


Other liabilities

299,422



331,693


Total liabilities

$

41,141,720



$

43,265,532






Equity:




Common stock, $0.01 par value

3,061



3,061


Additional paid-in capital

391,343



393,800


Accumulated other comprehensive income, net

(31,194)



(50,566)


Retained earnings

7,569,520



5,275,666


Total stockholders' equity

$

7,932,730



$

5,621,961


Total liabilities and equity

$

49,074,450



$

48,887,493


 

Table 2: Condensed Consolidated Statements of Income



Three Months Ended September 30,


Nine Months Ended September 30,


2021


2020


2021


2020


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

Interest on finance receivables and loans

$

1,215,121



$

1,300,694



$

3,749,264



$

3,811,113


Leased vehicle income

670,334



725,156



2,115,134



2,210,684


Other finance and interest income

1,631



2,146



6,125



12,354


Total finance and other interest income

1,887,086



2,027,996



5,870,523



6,034,151


Interest expense

218,747



292,118



709,479



929,934


Leased vehicle expense

325,259



467,172



1,043,774



1,630,945


Net finance and other interest income

1,343,080



1,268,706



4,117,270



3,473,272


Credit loss expense (benefit)

42,058



340,548



(85,484)



2,110,331


Net finance and other interest income after credit loss expense

1,301,022



928,158



4,202,754



1,362,941


Profit sharing

41,009



30,414



158,888



56,239


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

1,260,013



897,744



4,043,866



1,306,702


Investment gains (losses), net

5,241



(68,989)



(7,057)



(279,997)


Servicing fee income

19,975



18,574



61,481



56,797


Fees, commissions, and other

48,867



78,924



200,242



256,123


Total other income

74,083



28,509



254,666



32,923


Compensation and benefits

149,669



127,991



460,014



388,960


Repossession expense

33,349



35,910



117,540



115,861


Other expenses

179,147



99,761



382,313



308,193


Total operating expenses

362,165



263,662



959,867



813,014


Income (loss) before income taxes

971,931



662,591



3,338,665



526,611


Income tax expense

208,607



172,476



775,484



137,161


Net income (loss)

$

763,324



$

490,115



$

2,563,181



$

389,450










Net income per common share (basic)

$

2.49



$

1.58



$

8.37



$

1.21


Net income per common share (diluted)

$

2.49



$

1.58



$

8.37



$

1.21


Weighted average common shares (basic)

306,093,379



310,150,293



306,086,399



321,275,907


Weighted average common shares (diluted)

306,378,733



310,307,265



306,354,463



321,492,331


Number of shares outstanding

306,111,379



306,070,972



306,111,379



306,070,972


 

Table 3: Other Financial Information



Three Months Ended September
30,


Nine Months Ended September
30,

Ratios (Unaudited, Dollars in thousands)

2021


2020


2021


2020

Yield on retail installment contracts

14.6

%


14.9

%


14.8

%


15.0

%

Yield on leased vehicles

8.4

%


6.0

%


8.4

%


4.4

%

Yield on personal loans, held for sale (1)

%


25.6

%


29.0

%


25.9

%

Yield on earning assets (2)

12.6

%


12.2

%


12.8

%


11.6

%

Cost of debt (3)

2.3

%


2.8

%


2.4

%


3.1

%

Net interest margin (4)

10.8

%


9.9

%


10.9

%


9.2

%

Expense ratio (5)

2.2

%


1.7

%


2.0

%


1.8

%

Return on average assets (6)

6.3

%


4.1

%


7.1

%


1.1

%

Return on average equity (7)

40.3

%


38.9

%


50.8

%


9.6

%

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

2.0

%


0.6

%


1.3

%


4.7

%

Net charge-off ratio (8)

2.0

%


0.6

%


1.3

%


4.7

%

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

3.4

%


2.4

%


3.4

%


2.4

%

Allowance ratio (10)

17.4

%


18.4

%


17.4

%


18.4

%

Common stock dividend payout ratio (11)

8.8

%


13.9

%


10.5

%


54.4

%

Common Equity Tier 1 capital ratio (12)

19.5

%


13.7

%


19.5

%


13.7

%

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

$

161,943



$

46,078


$

326,795



$

1,100,138

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

1,106,673



817,577


1,106,673



817,577

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



93,296




93,296

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

1,107,073



817,911


1,107,073



817,911

End of period assets covered by allowance for credit losses

32,767,052



33,515,634


32,767,052



33,515,634

End of period gross retail installment contracts held for investment

32,742,544



33,485,342


32,742,544



33,485,342

End of period gross personal loans held for sale



1,211,575




1,211,575

End of period gross finance receivables and loans held for investment

32,742,544



33,489,017


32,742,544



33,489,017

End of period gross finance receivables, loans, and leases

48,879,467



50,617,356


48,879,467



50,617,356

Average gross retail installment contracts held for investment

32,762,939



31,462,524


32,576,199



30,946,321

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

33,186,854



32,847,716


32,906,959



31,632,276

Average gross finance receivables, loans and finance leases

33,222,223



34,135,256


33,351,219



33,008,338

Average gross operating leases

16,465,976



17,146,166


16,935,680



17,447,194

Average gross finance receivables, loans, and leases

49,688,199



51,281,422


50,286,899



50,455,532

Average managed assets

64,640,255



62,662,686


64,316,796



61,325,546

Average total assets

48,594,272



47,979,008


48,291,222



47,581,031

Average debt

38,296,862



41,064,441


39,029,273



40,262,948

Average total equity

7,578,893



5,044,976


6,731,687



5,429,924


















(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). CET1 Ratio is provided as a preliminary calculation.

 

Table 4: Credit Quality


The activity in the credit loss allowance for retail installment contracts for the three and nine month ended September 30, 2021
and 2020 was as follows (Unaudited, Dollar amounts in thousands):



Three Months Ended September 30, 2021


Three Months Ended September 30, 2020


Retail Installment Contracts


Retail Installment Contracts

Allowance for Credit Loss

Non-TDR


TDR


Non-TDR


TDR


Balance — beginning of period

$

4,299,670



$

1,514,994



$

4,818,187



$

1,037,628


Credit loss expense (benefit)

188,195



(144,772)



24,841



314,075


Charge-offs (a)

(427,659)



(206,111)



(334,938)



(200,352)


Recoveries

338,097



133,730



392,042



97,171


Balance — end of period

$

4,398,303



$

1,297,841



$

4,900,132



$

1,248,522




Nine Months Ended September 30, 2021


Nine Months Ended September 30, 2020


Retail Installment Contracts


Retail Installment Contracts

Allowance for Credit Loss

Non-TDR


TDR


Non-TDR


TDR


Balance — beginning of period

$

4,792,464



$

1,314,170



$

2,123,878



$

914,718


Day 1 - Adjustment to allowance for adoption of CECL standard





2,030,473



71,833


Credit loss expense (benefit)

(252,963)



169,268



1,526,545



581,344


Charge-offs (a)

(1,356,482)



(599,083)



(1,955,706)



(617,536)


Recoveries

1,215,284



413,486



1,174,942



298,163


Balance — end of period

$

4,398,303



$

1,297,841



$

4,900,132



$

1,248,522



(a)

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, 2021 and December 31, 2020 is as follows (Unaudited, Dollar amounts in thousands):


Delinquent Balance


September 30, 2021



Amount


Percent

Amortized cost, 30-59 days past due


$

2,253,907



6.8

%

Delinquent amortized cost over 59 days


1,106,673



3.3

%

Total delinquent balance at amortized cost


$

3,360,580



10.1

%






Delinquent Balance


December 31, 2020



Amount


Percent

Principal 30-59 days past due


$

1,971,766



6.0

%

Delinquent principal over 59 days


1,038,869



3.1

%

Total delinquent principal (a)


$

3,010,635



9.1

%

 

The retail installment contracts held for investment that were placed on nonaccrual status, as of September 30, 2021 and December 31, 2020 (Unaudited, Dollar amounts in thousands):


Nonaccrual Balance

September 30, 2021


Amount


Percent

Non-TDR

$

818,292



2.5

%

TDR

391,834



1.2

%

Total non-accrual loans (a)

$

1,210,126



3.7

%

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



Nonaccrual Balance


December 31, 2020



Amount



Percent

Non-TDR

$

748,026



2.3

%

TDR


385,021



1.2

%

Total nonaccrual principal (a)

$

1,133,047



3.5

%

 

The table below presents the Company's allowance ratio for TDR and non-TDR individually acquired retail installment contracts as of September 30, 2021 and December 31, 2020 (Unaudited, Dollar amounts in thousands):


Allowance Ratios

September 30, 2021


December 31, 2020

TDR - Unpaid principal balance

$

3,952,344


$

3,945,040

TDR - Impairment

1,297,841


1,314,170

TDR - Allowance ratio

32.8%


33.3%





Non-TDR - Unpaid principal balance

$

28,779,433


$

28,977,299

Non-TDR - Allowance

4,398,303


4,792,464

Non-TDR Allowance ratio

15.3%


16.5%





Total - Unpaid principal balance

$

32,731,777


$

32,922,339

Total - Allowance

5,696,144


6,106,634

Total - Allowance ratio

17.4%


18.5%









The Company's ACL decreased $0.1 billion and $0.4 billion for the three and nine months ended September 30, 2021. The decrease was primarily due to an improved macroeconomic outlook as well as credit quality and performance.

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,
2021


September 30,
2020


September 30,
2021


September 30,
2020


June 30, 2021

Retained Originations

(Unaudited, Dollar amounts in thousands)

Retail installment contracts

$

4,432,175


$

5,344,755


$

14,298,345


$

13,608,298


$

5,871,823

Average APR

14.8%


13.7 %


15.0%


13.8 %


14.4 %

Average FICO® (a)

606


637


603


631


608

Premium

(2.4)%


(1.3)%


(2.1)%


(1.0)%


(2.3)%











Personal loans (b)


305,039



923,112


$

Average APR

—%


29.4 %


—%


29.4 %


—%











Leased vehicles

1,577,539


1,856,166


5,799,786


4,863,504


$

2,067,741











Finance lease

2,816


4,087


8,147


$

9,016


$

2,534

Total originations retained

$

6,012,530


$

7,510,047


$

20,106,278


$

19,403,930


$

7,942,098











Sold Originations










Retail installment contracts

$

39,325


$

80,144


$

523,862


$

761,323


$

Average APR

4.9%


5.2 %


5.3%


4.8 %


—%

Average FICO® (c)

730


738


720


734












Personal Loans (d)

$


$


$

292,709


$


$

Average APR

—%


—%


29.7%


$


—%











Total originations sold

$

39,325


$

80,144


$

816,571


$

761,323


$











Total originations (excluding SBNA Originations Program)

$

6,051,855


$

7,590,191


$

20,922,849


$

20,165,253


$

7,942,098






















(a)

Unpaid principal balance excluded from the weighted average FICO score is $386 million, $571 million, $1.4 billion, $1.5 billion and $559 million for the three months ended September 30, 2021 and 2020, nine months ended September 30, 2021 and 2020, and for the three months ended June 30, 2021, respectively, as the borrowers on these loans did not have FICO scores at origination. Of these amounts, $129 million, $145 million, $469 million, $386 million and $187 million, respectively, were commercial loans.

(b)

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

(c)

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 $3 million, $28 million, $11 million, $80 million and $0 million for the three and nine months ended September 30, 2021 and 2020, and for the three months ended June 30, 2021, respectively, as the borrowers on these loans did not have FICO scores at origination. Of these amounts, the commercial loans were zero.

(d)

Included in the total origination volume is $25 million for the three months ended March 31, 2021 related to newly opened accounts.

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 $1.5 billion and $6.1 billion of retail installment contacts during the three and nine months ended September 30, 2021, respectively.

Table 6: Asset Sales



Three Months Ended


Nine Months Ended


Three Months Ended


September 30,
2021


September 30,
2020


September 30,
2021


September 30,
2020


June 30, 2021

Assets Sold

(Unaudited, Dollar amounts in thousands)

Retail installment contracts

$

277,898


$

636,301


$

2,968,467


$

1,148,587


$

309,784

Average APR

3.4%


4.9 %


4.2%


5.6 %


5.9 %

Average FICO®

$

737


735


737


715


716











Personal loans

$



1,253,476



$

Average APR

— %


— %


29.7%


— %


— %

Discount
















Total asset sales

$

277,898


$

636,301


$

4,221,943


$

1,148,587


$

309,784





















 

Table 7: Ending Portfolio


Ending outstanding balance, average APR and remaining unaccreted net discount of our held for investment portfolio as of September 30, 2021 and December 31, 2020, are as follows:



September 30, 2021


December 31, 2020


(Unaudited, Dollar amounts in thousands)

Retail installment contracts

$

32,742,544


$

32,937,036

Average APR

15.2%


15.2%

Premium

(0.96)%


(0.15)%





Leased vehicles

$

16,112,416


$

17,259,468





Finance leases

$

24,508


$

26,150









 

Table 8: Reconciliation of Non-GAAP Measures



September 30, 2021


September 30, 2020


(Unaudited, Dollar amounts in thousands)

Total equity

$

7,932,730


$

5,094,812

Add: Adjustment due to CECL capital relief (c)

1,729,366


1,842,536

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

156,942


159,907

Deduct: Accumulated other comprehensive income (loss), net

(31,194)


(56,882)

Tier 1 common capital

$

9,536,348


$

6,834,323

Risk weighted assets (a)(c)

48,830,527


49,882,540

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

19.5%


13.7%










(a)

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

(b)

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

(c)

As described in our 2020 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 elected this alternative option instead of the one described in the December 2018 rule.

 

Cision View original content:https://www.prnewswire.com/news-releases/santander-consumer-usa-holdings-inc-reports-third-quarter-2021-results-301409526.html

SOURCE Santander Consumer USA Holdings Inc.

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