Santander Consumer USA Holdings Inc. Reports Second Quarter 2015 Results
DALLAS, July 30, 2015 /PRNewswire/ -- Santander Consumer USA Holdings Inc. (NYSE: SC) ("SCUSA") today announced net income for second quarter 2015 of $285.5 million, or $0.79 per diluted common share, up 16 percent from second quarter 2014 net income of $246.5 million, or $0.69 per diluted common share. First quarter 2015 net income was $289.2 million, or $0.81 per diluted common share.
Second Quarter 2015 Key Highlights:
- Total originations of $7.6 billion, up from $7.4 billion originated in prior quarter and $6.7 billion originated in prior year second quarter
- Asset sales of $2.8 billion, up from $1.5 billion in prior quarter and $1.8 billion in prior year second quarter
- Serviced for others portfolio of $13.1 billion, up from $11.2 billion in prior quarter and $8.0 billion in prior year second quarter
- Managed assets of $49.6 billion, up from $46.6 billion in the prior quarter and $38.6 billion in prior year second quarter
- Net charge-off ratio of 5.3%, down from 6.7% in prior quarter and 5.8% in prior year second quarter
- Return on average equity of 28.2%, down from 31.2% in prior quarter and 33.0% in prior year second quarter
- Return on average assets of 3.2%, down from 3.5% in prior quarter and 3.4% in prior year second quarter
- Provision for credit losses of $739 million, up from $606 million in the prior quarter and $589 million in prior year second quarter
- Expense ratio of 2.1%, down from 2.2% in prior quarter and 2.3% in prior year second quarter
"Our company achieved strong results this quarter, producing a 16 percent year-over-year growth in net income. This evidences our robust business model and our team's ability to produce results. We continued to execute against our stated strategy of optimizing the mix of retained assets versus assets sold and serviced for others by originating more than $7.6 billion and selling more than $2.8 billion in assets, further strengthening our balance sheet while growing our consumer finance marketplace. We are confident the effective execution of this strategy will lead to continued growth in the serviced for others portfolio while generating attractive balance sheet returns as well as capital-light fee income," said Jason Kulas, Chief Executive Officer.
In the second quarter, total originations were more than $7.6 billion, including $2.7 billion in Chrysler Capital ("Chrysler") retail loans, $1.4 billion in Chrysler leases originated for our own portfolio, and $229 million in Chrysler lease originations facilitated for an affiliate. Other originations, including other auto and personal loans, totaled $3.3 billion for the second quarter 2015. Second quarter auto originations continued to see a seasonal benefit due to the tax refund season. Personal lending originations increased from a seasonal low in the first quarter, in line with the prior year second quarter.
Finance receivables, loans and leases, net1, increased 9 percent to $31.5 billion at June 30, 2015, from $28.8 billion at December 31, 2014, and increased 19 percent from $26.5 billion at June 30, 2014. Net finance and other interest income increased 16 percent to $1.3 billion in the second quarter 2015 from $1.1 billion in the second quarter 2014, driven by 20 percent growth in the average portfolio. SCUSA's average APR as of the end of the second quarter 2015 for retail installment contracts held for investment was 16.9 percent, up from 16.6 percent as of the end of the first quarter 2015 and 16.3 percent as of the end of the second quarter 2014.
| 1 Includes Finance receivables held for investment, Finance receivables held for sale and Leased vehicles. |
Portfolio trends are reflective of the mix of assets retained at the end of each quarter, which are affected by the credit quality and timing of asset sales, as well as normal seasonality of the business.
The provision for credit losses increased to $739 million in the second quarter 2015, from $606 million in the first quarter 2015, and $589 million in the second quarter 2014. The allowance ratio2 increased to 12.4 percent as of June 30, 2015 from 11.5 percent as of March 31, 2015 and 11.4 percent as of June 30, 2014. The increases from prior quarter were primarily driven by seasonality in our forward looking model, as well as a higher margin retained portfolio mix, which is accretive to future earnings. The increase from prior year is primarily driven by the designation of additional assets as held for sale, as well as higher margin retained portfolio mix.
"The second quarter is largely affected by the seasonality of the provision model, however, it is important to note credit trends are stable and in line with seasonality, the market is competitive, but rationally competitive, and performance is in line or slightly better than management expectations. Higher retained nonprime assets with higher yields are contributing to more revenue and a short-term increase in provisions," said Mr. Kulas.
Consistent with expected seasonal patterns, SCUSA's net charge-off ratio decreased to 5.3 percent for the second quarter 2015 from 6.7 percent for the first quarter 2015, and 5.8 percent for the second quarter 2014; net charge-off performance benefited from bankruptcy and deficiency sale recoveries. Even excluding these bankruptcy and deficiency sales, credit performance remained slightly better year over year, due to better loan structures. SCUSA's loan delinquency ratio increased to 3.6 percent as of the end of the second quarter 2015 from 3.2 percent at the end of the first quarter 2015, comparable to the 3.8 percent loan delinquency ratio as of the end of the second quarter 2014.
During the quarter, SCUSA incurred $253 million of operating expenses, up 20 percent from $211 million in the second quarter 2014, primarily attributable to a higher headcount, a result of SCUSA's strong managed asset growth over the previous year. SCUSA produced a 2.1 percent expense ratio for the quarter, down from a 2.3 percent expense ratio in the same period last year as we recognize the benefits of scalability from larger managed assets, which should partially offset the impact of any future additional regulatory or compliance costs. SCUSA expects expenses to increase in the back half of the year as credit trends worsen, in line with normal seasonality of the business.
During the quarter, SCUSA executed four securitizations, totaling $4.5 billion3, including a CCART securitization sold through the residual, as well as a series of subordinate bond transactions on the SDART platform to fund residual interests from existing securitizations. Additionally, SCUSA advanced $1.5 billion on new and existing private term amortizing facilities and revolving facilities.
In line with SCUSA's strategy to leverage its servicing platform and increase servicing fee income, SCUSA executed asset sales of $2.8 billion during the quarter. In addition to selling $995 million of assets through existing monthly loan sale programs, $732 million in assets through a CCART securitization and $756 million4 in leases, SCUSA expanded its asset marketplace with the completion of a $253 million sale of prime auto retail installment contracts as well as bankruptcy and deficiency sales realizing $66 million in proceeds.
Servicing fee income totaled $28.0 million in the second quarter 2015, up from $22.1 million in the second quarter 2014, primarily due to the increase in the portfolio of loans and leases serviced for others to $13.1 billion as of June 30, 2015, up from $8.0 billion as of June 30, 2014. For the second quarter 2015, net investment gains, which primarily consist of gains on sale, totaled $86.7 million, up from $21.2 million in the first quarter 2015 and $21.6 million in the second quarter 2014, driven mostly by the timing of asset sales and the execution of a CCART securitization.
| 2 Excludes purchased receivables portfolio and finance receivables held for sale. |
| 3 Net bonds sold of $4.1 billion. |
| 4 Depreciated net capitalized cost. |
Conference Call Information
SCUSA management will host a conference call and webcast to discuss the second quarter results and other general matters at 9 a.m. Eastern Time on Thursday, July 30, 2015. The conference call will be accessible by dialing 844-856-2691 (U.S. domestic), or 815-926-1990 (international), conference ID 76649569. 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 Q2 2015 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 855-859-2056 (U.S. domestic), or 404-537-3406 (international), conference ID 76649569, 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 July 30, 2016. An investor presentation will also be available by visiting the Investor Relations page of SCUSA's website at http://investors.santanderconsumerusa.com.
Non-GAAP Disclosure
This press release includes certain non-GAAP financial measures. A non-GAAP financial measure is a numerical measure of historical or future financial performance, financial position or cash flows that excludes or includes amounts that are required to be disclosed in the most directly comparable measure calculated and presented in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). SCUSA believes that this non-GAAP financial measure provides both management and investors a more complete understanding of the underlying operational results and trends and SCUSA's marketplace performance. This additional information is not meant to be considered in isolation or as a substitute for the numbers prepared in accordance with U.S. GAAP and may not be comparable to similarly titled measures used by other financial institutions.
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 which 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 SEC. Among the factors that could cause our financial performance to differ materially from that suggested by the forward-looking statements are: (a) we operate in a highly regulated industry and continually changing federal, state, and local laws and regulations could materially adversely affect our business; (b) adverse economic conditions in the United States and worldwide may negatively impact our results; (c) our business could suffer if our access to funding is reduced; (d) we face significant risks implementing our growth strategy, some of which are outside our control; (e) our agreement with FCA 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; (f) our business could suffer if we are unsuccessful in developing and maintaining relationships with automobile dealerships; (g) our financial condition, liquidity, and results of operations depend on the credit performance of our loans; (h) loss of our key management or other personnel, or an inability to attract such management and personnel, could negatively impact our business; (i) we are subject to certain regulations, including oversight by the Office of the Comptroller of the Currency, the CFPB, the European Central Bank, and the Federal Reserve, which oversight and regulation may limit certain of our activities, including the timing and amount of dividends and other limitations on our business; and (j) future changes in our relationship with Santander 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 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) ("SCUSA") is a full-service, technology-driven consumer finance company focused on vehicle finance and personal lending products. The company, which began originating retail installment contracts in 1997, has a managed assets portfolio of approximately $50 billion (as of June 30, 2015), has more than two million customers across all credit grades, and is headquartered in Dallas. (www.santanderconsumerusa.com)
Santander Consumer USA Holdings Inc.
Financial Supplement
Second Quarter 2015
| 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 |
11 |
|
| Table 6: Asset Sales |
12 |
|
| Table 7: Ending Portfolio |
13 |
|
| Table 8: Reconciliation of Non-GAAP Measures |
14 |
|
| Table 1: Condensed Consolidated Balance Sheets |
|||
| June 30, |
December 31, |
||
| Assets |
(Unaudited, Dollars in thousands, except per share amounts) |
||
| Cash and cash equivalents |
$ 28,886 |
$ 33,157 |
|
| Finance receivables held for sale |
1,570,416 |
46,585 |
|
| Finance receivables held for investment, net |
24,778,311 |
23,915,551 |
|
| Restricted cash |
3,086,229 |
1,920,857 |
|
| Accrued interest receivable |
394,970 |
364,676 |
|
| Leased vehicles, net |
5,189,904 |
4,862,783 |
|
| Furniture and equipment, net |
50,786 |
41,218 |
|
| Federal, state and other income taxes receivable |
234,944 |
502,035 |
|
| Related party taxes receivable |
— |
459 |
|
| Deferred tax asset |
5,152 |
21,244 |
|
| Goodwill |
74,056 |
74,056 |
|
| Intangible assets |
53,642 |
53,682 |
|
| Due from affiliates |
86,268 |
102,457 |
|
| Other assets |
486,355 |
403,416 |
|
| Total assets |
$ 36,039,919 |
$ 32,342,176 |
|
| Liabilities and Equity |
|||
| Liabilities: |
|||
| Notes payable — credit facilities |
$ 6,012,337 |
$ 6,402,327 |
|
| Notes payable — secured structured financings |
20,340,365 |
17,718,974 |
|
| Notes payable — related party |
4,260,000 |
3,690,000 |
|
| Accrued interest payable |
21,805 |
17,432 |
|
| Accounts payable and accrued expenses |
395,990 |
315,130 |
|
| Federal, state and other income taxes payable |
1,268 |
319 |
|
| Deferred tax liabilities, net |
556,013 |
492,303 |
|
| Due to affiliates |
47,295 |
48,688 |
|
| Other liabilities |
159,396 |
98,654 |
|
| Total liabilities |
31,794,469 |
28,783,827 |
|
| Equity: |
|||
| Common stock, $0.01 par value |
3,578 |
3,490 |
|
| Additional paid-in capital |
1,682,097 |
1,560,519 |
|
| Accumulated other comprehensive income (loss) |
(5,726) |
3,553 |
|
| Retained earnings |
2,565,501 |
1,990,787 |
|
| Total stockholders' equity |
4,245,450 |
3,558,349 |
|
| Total liabilities and equity |
$ 36,039,919 |
$ 32,342,176 |
|
| Table 2: Condensed Consolidated Statements of Income |
|||||||
| For the Three Months Ended |
For the Six Months Ended |
||||||
| 2015 |
2014 |
2015 |
2014 |
||||
| (Unaudited, Dollars in thousands, except per share amounts) |
|||||||
| Interest on finance receivables and loans |
$ 1,321,245 |
$ 1,163,448 |
$ 2,551,247 |
$ 2,303,777 |
|||
| Leased vehicle income |
355,137 |
218,938 |
688,083 |
366,061 |
|||
| Other finance and interest income |
6,738 |
874 |
14,079 |
1,124 |
|||
| Total finance and other interest income |
1,683,120 |
1,383,260 |
3,253,409 |
2,670,962 |
|||
| Interest expense |
150,622 |
128,314 |
299,478 |
252,760 |
|||
| Leased vehicle expense |
281,118 |
179,135 |
554,182 |
299,204 |
|||
| Net finance and other interest income |
1,251,380 |
1,075,811 |
2,399,749 |
2,118,998 |
|||
| Provision for credit losses |
738,735 |
589,136 |
1,344,716 |
1,287,730 |
|||
| Net finance and other interest income after provision for credit losses |
512,645 |
486,675 |
1,055,033 |
831,268 |
|||
| Profit sharing |
21,501 |
24,056 |
35,017 |
56,217 |
|||
| Net finance and other interest income after provision for credit losses and profit sharing |
491,144 |
462,619 |
1,020,016 |
775,051 |
|||
| Investment gains, net |
86,667 |
21,602 |
107,914 |
57,416 |
|||
| Servicing fee income |
28,043 |
22,099 |
52,846 |
32,504 |
|||
| Fees, commissions, and other |
94,268 |
95,030 |
195,401 |
184,334 |
|||
| Total other income |
208,978 |
138,731 |
356,161 |
274,254 |
|||
| Salary and benefits expense |
110,973 |
93,689 |
211,513 |
295,604 |
|||
| Repossession expense |
55,470 |
45,648 |
114,296 |
94,079 |
|||
| Other operating costs |
86,985 |
71,889 |
172,998 |
139,991 |
|||
| Total operating expenses |
253,428 |
211,226 |
498,807 |
529,674 |
|||
| Income before income taxes |
446,694 |
390,124 |
877,370 |
519,631 |
|||
| Income tax expense |
161,230 |
143,643 |
302,656 |
191,684 |
|||
| Net income |
$ 285,464 |
$ 246,481 |
$ 574,714 |
$ 327,947 |
|||
| Net income per common share (basic) |
$ 0.80 |
$ 0.71 |
$ 1.63 |
$ 0.94 |
|||
| Net income per common share (diluted) |
$ 0.79 |
$ 0.69 |
$ 1.61 |
$ 0.92 |
|||
| Dividends declared per common share |
$ — |
$ 0.15 |
$ — |
$ 0.15 |
|||
| Weighted average common shares (basic) |
355,091,818 |
348,826,897 |
352,272,552 |
348,465,666 |
|||
| Weighted average common shares (diluted) |
359,193,738 |
356,381,921 |
355,932,481 |
356,008,288 |
|||
| Table 3: Other Financial Information |
||||||||
| For the Three Months Ended |
For the Six Months Ended June 30, |
|||||||
| 2015 |
2014 |
2015 |
2014 |
|||||
| Ratios |
(Unaudited, Dollars in thousands) |
|||||||
| Yield on individually acquired retail installment contracts |
17.6% |
17.6% |
17.4% |
17.6% |
||||
| Yield on purchased receivables portfolios |
13.7% |
14.8% |
13.9% |
15.3% |
||||
| Yield on receivables from dealers |
4.7% |
3.9% |
4.9% |
4.0% |
||||
| Yield on personal loans (1) |
20.4% |
25.2% |
20.7% |
26.2% |
||||
| Yield on earning assets (2) |
15.6% |
16.0% |
15.4% |
16.3% |
||||
| Cost of debt (3) |
2.0% |
2.0% |
2.0% |
2.0% |
||||
| Net interest margin (4) |
13.9% |
14.3% |
13.7% |
14.5% |
||||
| Expense ratio (5) |
2.1% |
2.3% |
2.2% |
3.0% |
||||
| Return on average assets (6) |
3.2% |
3.4% |
3.4% |
2.3% |
||||
| Return on average equity (7) |
28.2% |
33.0% |
29.6% |
22.6% |
||||
| Net charge-off ratio on individually acquired retail installment contracts (8) |
4.5% |
5.2% |
5.3% |
5.7% |
||||
| Net charge-off ratio on purchased receivables portfolios (8) |
(3.3)% |
4.3% |
(2.2)% |
4.9% |
||||
| Net charge-off ratio on personal loans (8) |
16.3% |
18.1% |
16.9% |
15.6% |
||||
| Net charge-off ratio (8) |
5.3% |
5.8% |
6.0% |
6.1% |
||||
| Delinquency ratio on individually acquired retail installment contracts, end of period (9) |
3.3% |
3.4% |
3.3% |
3.4% |
||||
| Delinquency ratio on personal loans, end of period (9) |
6.8% |
8.2% |
6.8% |
8.2% |
||||
| Delinquency ratio, end of period (9) |
3.6% |
3.8% |
3.6% |
3.8% |
||||
| Tangible common equity to tangible assets (10) |
11.5% |
10.0% |
11.5% |
10.0% |
||||
| Common stock dividend payout ratio (11) |
— |
21.2% |
— |
16.0% |
||||
| Allowance to loans (12) |
12.4% |
11.4% |
12.4% |
11.4% |
||||
| Other Financial Information |
||||||||
| Charge-offs, net of recoveries, on individually acquired retail installment contracts |
$ 306,889 |
$ 303,326 |
$ 690,546 |
$ 648,114 |
||||
| Charge-offs, net of recoveries, on purchased receivables portfolios |
(5,116) |
15,320 |
(7,666) |
38,843 |
||||
| Charge-offs, net of recoveries, on unsecured consumer loans |
89,261 |
60,448 |
182,746 |
98,737 |
||||
| Charge-offs, net of recoveries, on capital leases |
7,838 |
$ — |
8,021 |
$ — |
||||
| Total charge-offs, net of recoveries |
$ 398,872 |
$ 379,094 |
$ 873,647 |
$ 785,694 |
||||
| End of period Individually acquired retail installment contracts Delinquent principal over 60 days |
$ 869,190 |
$ 799,455 |
$ 869,190 |
$ 799,455 |
||||
| End of period Personal loans Delinquent principal over 60 days |
$ 153,485 |
$ 119,443 |
$ 153,485 |
$ 119,443 |
||||
| End of period Delinquent principal over 60 days |
$ 1,052,561 |
$ 1,016,020 |
$ 1,052,561 |
$ 1,016,020 |
||||
| End of period assets covered by allowance for credit losses |
$ 28,507,008 |
$ 25,210,483 |
$ 28,507,008 |
$ 25,210,483 |
||||
| End of period Gross finance receivables and loans |
$ 29,020,270 |
$ 26,483,290 |
$ 29,020,270 |
$ 26,483,290 |
||||
| End of period Gross finance receivables, loans, and leases |
$ 34,878,554 |
$ 30,545,276 |
$ 34,878,554 |
$ 30,545,276 |
||||
| Average Gross individually acquired retail installment contracts |
$ 27,000,474 |
$ 23,372,480 |
$ 26,117,672 |
$ 22,824,981 |
||||
| Average Gross purchased receivables portfolios |
612,821 |
1,416,163 |
689,472 |
1,591,711 |
||||
| Average Gross receivables from dealers |
99,369 |
130,769 |
100,690 |
129,579 |
||||
| Average Gross personal loans |
2,184,577 |
1,333,612 |
2,162,490 |
1,267,853 |
||||
| Average Gross capital leases |
136,973 |
10,139 |
124,045 |
5,794 |
||||
| Average Gross finance receivables, loans and capital leases |
$ 30,034,214 |
$ 26,263,163 |
$ 29,194,369 |
$ 25,819,918 |
||||
| Average Gross finance receivables, loans, and leases |
$ 35,965,910 |
$ 30,086,959 |
$ 35,048,586 |
$ 29,136,572 |
||||
| Average Managed assets |
$ 48,113,052 |
$ 37,152,056 |
$ 46,266,080 |
$ 35,183,237 |
||||
| Average Total assets |
$ 35,188,090 |
$ 29,306,142 |
$ 34,212,891 |
$ 28,525,476 |
||||
| Average Debt |
$ 29,977,311 |
$ 25,852,175 |
$ 29,242,830 |
$ 25,190,609 |
||||
| Average Total equity |
$ 4,056,174 |
$ 2,988,213 |
$ 3,884,544 |
$ 2,897,741 |
||||
| (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, net of recoveries, to average balance of the respective portfolio |
|||||||
| (9) |
"Delinquency ratio" is defined as the ratio of End of period Delinquent principal over 60 days to End of period gross balance of the respective portfolio* |
|||||||
| (10) |
"Tangible common equity to tangible assets" is defined as the ratio of Total equity, excluding Goodwill and intangible assets, to Total assets, excluding Goodwill and intangible assets (for a reconciliation from GAAP to this non-GAAP measure, see "Reconciliation of Non-GAAP Measures" on Page 14 of this release) |
|||||||
| (11) |
"Common stock dividend payout ratio" is defined as the ratio of Dividends declared per share of common stock to Earnings per share |
|||||||
| (12) |
"Allowance ratio" is defined as the ratio of Allowance for credit losses to End of period assets covered by allowance for credit losses* |
|||||||
| *Ratio excludes receivables held for sale |
||||||||
| Table 4: Credit Quality |
|||||||
| Amounts as of three and six months ended June 30, 2015 are as follows: |
|||||||
| (Dollars in thousands) |
|||||||
| Three Months Ended June 30, 2015 |
|||||||
| Retail Installment |
Personal |
||||||
| Credit loss allowance — beginning of period |
$ 2,822,712 |
$ 352,878 |
|||||
| Provision for credit losses |
613,823 |
121,118 |
|||||
| Charge-offs |
(835,283) |
(97,218) |
|||||
| Recoveries |
528,394 |
7,957 |
|||||
| Credit loss allowance — end of period |
$ 3,129,646 |
$ 384,735 |
|||||
| Net charge-offs |
306,889 |
89,261 |
|||||
| Average unpaid principal balance (UPB) |
$ 27,000,474 |
$ 2,184,577 |
|||||
| Charge-off ratio |
4.5% |
16.3% |
|||||
| Six Months Ended June 30, 2015 |
|||||||
| Retail Installment |
Personal Loans |
||||||
| Credit loss allowance — beginning of period |
$ 2,726,338 |
$ 348,660 |
|||||
| Provision for credit losses |
1,120,971 |
218,821 |
|||||
| Charge-offs |
(1,762,276) |
(196,908) |
|||||
| Recoveries |
1,071,730 |
14,162 |
|||||
| Transfers to held for sale |
(27,117) |
— |
|||||
| Credit loss allowance — end of period |
$ 3,129,646 |
$ 384,735 |
|||||
| Net charge-offs |
$ 690,546 |
$ 182,746 |
|||||
| Average unpaid principal balance (UPB) |
26,117,672 |
2,162,490 |
|||||
| Charge-off ratio |
5.3% |
16.9% |
|||||
| Retail Installment Contracts Acquired Individually |
Personal |
||||||
| Principal, 31-60 days past due |
$ 2,010,352 |
7.7% |
$ 57,285 |
2.5% |
|||
| Delinquent principal over 60 days |
869,190 |
3.3% |
153,485 |
6.8% |
|||
| Total delinquent principal |
$ 2,879,542 |
11.1% |
$ 210,770 |
9.3% |
|||
| Table 5: Originations |
|||||||||
| Three Months Ended |
Six Months Ended |
Three Months Ended |
|||||||
| June 30, 2015 |
June 30, 2014 |
June 30, 2015 |
June 30, 2014 |
March 31, 2015 |
|||||
| Retained Originations |
(Dollars in thousands) |
||||||||
| Retail installment contracts |
$ 4,765,800 |
$ 3,466,983 |
$ 9,054,701 |
$ 7,643,978 |
$ 4,791,581 |
||||
| Average APR |
17.2% |
15.0% |
17.6% |
15.6% |
16.9% |
||||
| Discount |
2.5% |
3.7% |
3.1% |
3.5% |
3.4% |
||||
| Personal loans |
$ 257,915 |
$ 262,617 |
$ 424,407 |
$ 370,519 |
$ 166,492 |
||||
| Average APR |
19.4% |
20.0% |
18.9% |
20.2% |
18.1% |
||||
| Discount |
— |
— |
— |
— |
— |
||||
| Receivables from dealers |
$ — |
$ 17,806 |
$ — |
$ 32,629 |
$ — |
||||
| Average APR |
— |
3.8% |
— |
3.5% |
— |
||||
| Discount |
— |
— |
— |
— |
— |
||||
| Leased vehicles |
$ 1,424,308 |
$ 889,381 |
$ 2,554,423 |
$ 2,101,380 |
$ 1,130,115 |
||||
| Capital leases |
$ 8,073 |
$ 16,527 |
$ 63,803 |
$ 19,573 |
$ 55,730 |
||||
| Total originations retained |
$ 6,456,096 |
$ 4,653,314 |
$ 12,097,334 |
$ 10,168,079 |
$ 6,143,918 |
||||
| Sold Originations¹ |
|||||||||
| Retail installment contracts |
$ 927,586 |
$ 1,059,718 |
$ 2,234,410 |
$ 2,495,359 |
$ 804,144 |
||||
| Average APR |
4.3% |
4.1% |
5.1% |
4.3% |
4.7% |
||||
| Leased vehicles |
$ — |
$ 389,657 |
$ — |
$ 389,657 |
$ — |
||||
| Total originations sold |
$ 927,586 |
$ 1,449,375 |
$ 2,234,410 |
$ 2,885,016 |
$ 804,144 |
||||
| Total SCUSA originations |
$ 7,383,682 |
$ 6,102,689 |
$ 14,331,744 |
$ 13,053,095 |
$ 6,948,062 |
||||
| Facilitated Originations |
|||||||||
| Receivables from dealers |
$ — |
$ 108,759 |
$ — |
$ 253,512 |
$ — |
||||
| Leased vehicles |
228,572 |
486,446 |
632,471 |
732,114 |
403,899 |
||||
| Total originations facilitated for affiliates |
$ 228,572 |
$ 595,205 |
$ 632,471 |
$ 985,626 |
$ 403,899 |
||||
| Total originations |
$ 7,612,254 |
$ 6,697,894 |
$ 14,964,215 |
$ 14,038,721 |
$ 7,351,961 |
||||
| ¹Only includes assets both originated and sold in the period. Total asset sales for the period are shown on page 12. |
|||||
| Table 6: Asset Sales |
|||||||||
| Asset sales may include assets originated in prior periods. |
|||||||||
| Three Months Ended |
Six Months Ended |
Three Months Ended |
|||||||
| June 30, 2015 |
June 30, 2014 |
June 30, 2015 |
June 30, 2014 |
March 31, 2015 |
|||||
| (Dollars in thousands) |
|||||||||
| Asset Sales |
|||||||||
| Retail installment contracts |
$ 2,016,675 |
$ 1,384,174 |
$ 2,935,753 |
$ 3,069,898 |
$ 919,078 |
||||
| Average APR |
5.6% |
4.3% |
5.3% |
5.0% |
4.7% |
||||
| Leased vehicles |
$ 755,624 |
$ 369,114 |
$ 1,316,958 |
$ 369,114 |
$ 561,334 |
||||
| Total asset sales |
$ 2,772,299 |
$ 1,753,288 |
$ 4,252,711 |
$ 3,439,012 |
$ 1,480,412 |
||||
| Table 7: Ending Portfolio |
|||
| Ending outstanding balance, average APR and remaining unaccreted discount as of June 30, 2015 and December 31, 2014 are as follows: |
|||
| June 30, 2015 |
December 31, 2014 |
||
| (Dollars in thousands) |
|||
| Retail installment contracts |
$ 26,540,938 |
$ 25,401,461 |
|
| Average APR |
16.9% |
16.0% |
|
| Discount |
2.3% |
2.1% |
|
| Personal loans |
$ 2,261,726 |
$ 2,128,769 |
|
| Average APR |
22.8% |
23.1% |
|
| Discount |
0.1% |
0.1% |
|
| Receivables from dealers |
$ 91,612 |
$ 100,164 |
|
| Average APR |
4.3% |
4.3% |
|
| Discount |
— |
— |
|
| Leased vehicles |
$ 5,858,284 |
$ 5,504,467 |
|
| Capital leases |
$ 125,994 |
$ 91,350 |
|
| Table 8: Reconciliation of Non-GAAP Measures |
||||
| June 30, 2015 |
June 30, 2014 |
|||
| (Dollars in thousands, except per share data) |
||||
| Total equity |
$ 4,245,450 |
$ 3,102,258 |
||
| Deduct: Goodwill and intangibles |
127,698 |
127,693 |
||
| Tangible common equity |
$ 4,117,752 |
$ 2,974,565 |
||
| Total assets |
$ 36,039,919 |
$ 29,732,396 |
||
| Deduct: Goodwill and intangibles |
127,698 |
127,693 |
||
| Tangible assets |
$ 35,912,221 |
$ 29,604,703 |
||
| Equity to assets ratio |
11.8% |
10.4% |
||
| Tangible common equity to tangible assets |
11.5% |
10.0% |
||
| Contacts: Investor Relations Evan Black & Kristina Carbonneau 800.493.8219 |
Media Relations Laurie Kight 214.801.6455 |
SOURCE Santander Consumer USA Inc.
Related Links
http://www.santanderconsumerusa.com
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