SANTANDER CONSUMER USA HOLDINGS INC. DALLAS, Jan. 25, 2017 /PRNewswire/ -- Santander Consumer USA Holdings Inc. (NYSE: SC) ("SC") today announced net income for the fourth quarter 2016 of $61 million, or $0.17 cents per diluted common share.
Full year 2016 net income was $766 million, or $2.13 cents per diluted common share.
Fourth Quarter 2016 Key Highlights (variances compared to fourth quarter 2015):
-- Total auto originations of $4.5 billion, down 24%
-- Core retail auto originations of $2.0 billion, up 1%
-- Total Chrysler Capital originations of $2.5 billion, down 36%
-- Total finance and other interest income of $1.6 billion, up 4%
-- Net finance and other interest income of $1.1 billion, down 5%
-- Common equity tier 1 (CET1) ratio of 13.4%, up 220 basis points
-- Issued $3.3 billion in securitizations
Full Year 2016 Key Highlights (variances compared to full year 2015):
-- Total auto originations of $21.9 billion, down 20%
-- Interest on individually acquired retail installment contracts of $4.6
billion, up 3%
-- Net finance and other interest income of $4.7 billion, flat
-- Expense ratio of 2.2%, up 10 basis points
-- Return on average assets of 2.0%
-- Return on average equity of 15.8%
-- Average managed assets of $52.7 billion, up 8%
-- Retail installment contract ("RIC") net charge-off ratio of 7.9%, up 150
basis points
-- Average FICO of retained originations 598, up 14 points
-- Issued $8.0 billion in securitizations
-- Originated more than $170 million through our online, direct-to-consumer
platform, Roadloans.com
-- Real-time call monitoring rolled out for all inbound/outbound call
center lines in 2016
"Full year 2016 results demonstrate SC's continued profitability and solid returns, earning net income of $766 million while also taking a measured approach to originations in a competitive market and improving the credit quality of our balance sheet. As expected, our 2016 vintage-level loss performance continues to come in better than 2015. We expect this positive trend will be reflected in nominal gross losses in future quarters. We continue to believe our consistent focus on disciplined underwriting, compliance and being simple, personal and fair in everything we do is setting SC up for long-term, sustainable and differentiated success," said Jason Kulas, President and Chief Executive Officer.
Mr. Kulas continued, "I would like to thank all our employees, customers and dealers for being an integral part of our success this year. We are optimistic about SC's prospects for 2017 as our fundamentals continue to strengthen, and we remain committed to better serving our customers and creating value for all our stakeholders."
Finance receivables, loans and leases, net(1), increased 4 percent, to $34.2 billion at December 31, 2016, from $32.7 billion at December 31, 2015, driven by an increase in lease assets. Net finance and other interest income decreased 5 percent, to $1.13 billion in the fourth quarter 2016 from $1.19 billion in the fourth quarter 2015, primarily driven by a higher cost of funds and lower interest income from personal installment loans sold in February 2016.
SC's average annual percentage rate (APR) as of the end of the fourth quarter 2016 for retail installment contracts (RICs) held for investment was 16.4 percent, down from 16.8 percent as of the end of the fourth quarter 2015. These APRs are consistent with credit trends in our held for investment portfolio. As of the end of the fourth quarter 2016, RICs with FICO® scores less than 540 decreased to 22.1 percent, from 23.4 percent as of the end of the fourth quarter 2015. In addition, RICs with FICO® scores greater than 640 increased to 13.8 percent, from 12.2 percent.
Net leased vehicle income increased 41 percent to $123 million in the fourth quarter 2016 from $87 million in the fourth quarter 2015 due to continued leasing portfolio growth.
The allowance for credit loss balance of $3.4 billion at December 31, 2016 increased $9 million, or 26 basis points, from the prior quarter end. The allowance ratio(2) increased to 12.6 percent as of December 31, 2016, from 11.9 percent as of December 31, 2015, primarily driven by the increased balance of loans classified as troubled debt restructurings (TDRs) and a denominator effect from slower portfolio growth. A TDR is an accounting classification for assets that meet certain loan modification or extension criteria. Loan modifications and extensions are utilized to offer assistance to some customers experiencing temporary hardship. Under GAAP, the allowance for assets classified as TDRs takes into consideration expected lifetime losses.
SC's RIC net charge-off and delinquency ratio(3) increased to 9.4 percent and 5.1 percent, respectively, for the fourth quarter 2016 from 8.9 percent and 4.4 percent, respectively, for the fourth quarter 2015. The increases in the net charge-off and delinquency ratios, and in TDR balances, are driven by the aging of the more nonprime 2015 vintage, and the denominator effect of slower portfolio growth since the prior year fourth quarter.
"We demonstrated strong access to liquidity in 2016, as we added two new warehouse facilities, including one new committed lender, and we continued to be the largest auto ABS issuer in the market in 2016, issuing $8 billion in securitizations across all three of our platforms," said Izzy Dawood, Chief Financial Officer. "Improving our liquidity position as we experienced delays in the filing of our financial statements further evidences the consistency of the cash flows of our originations."
Mr. Dawood continued, "Executing the agreement to flow assets to Banco Santander is a top priority in the first quarter of 2017. Along with the national roll out of the dealer VIP program with our Fiat-Chrysler dealers and our continued focus on dealer floorplan lending through Santander Bank N.A. we believe these strategies will positively impact our volume with Chrysler."
During the year SC increased the amount of dealers participating in the dealer VIP program with approximately 500 dealers as of year end and increased dealer receivable originations ("floorplan") more than 60 percent versus 2015.
Provision for credit losses decreased to $686 million in the fourth quarter 2016, from $851 million in the fourth quarter 2015, as the prior year quarter included a qualitative reserve of $149 million to account for the higher concentration of originations with limited credit experience. This reserve was eliminated as of the end of the third quarter 2016 since the model was able to incorporate the loss estimate.
In the fourth quarter 2016, SC recorded net investment losses of $168 million, compared to losses of $229 million in the fourth quarter 2015. The current period losses were primarily driven by $146 million of lower of cost or market adjustments related to the held for sale personal lending portfolio, including $116 million in customer default activity and a $30 million increase in discount (lower of cost or market) consistent with seasonal origination patterns for this portfolio. Excluding the impact of personal lending, investment losses totaled $23 million driven by losses related to a fourth quarter off-balance sheet securitization and a lower of cost or market adjustment on certain auto assets classified as held for sale.
During the quarter, SC incurred $296 million of operating expenses, up 15 percent from $257 million in the fourth quarter 2015, driven by increased compensation expense, primarily due to the continued investment in our control and compliance infrastructure, a non-recurring expense of approximately $13 million and higher repossession expense.
(1) Includes Finance receivables held for investment, Finance receivables held for sale and Leased vehicles
(2) Excludes end of period balances on purchased receivables portfolio of $158 million and finance receivables held for sale of $2.1 billion
(3) Net charge-off ratio stated on a recorded investment basis which is unpaid principal balance adjusted for unaccreted net discounts, subvention and origination costs
In line with SC's strategy to leverage its scalable servicing platform and increase servicing fee income, SC executed asset sales of $1.4 billion during the fourth quarter through existing loan sale programs and one off-balance sheet securitization, under which it retains servicing. The serviced for others portfolio of $11.9 billion as of December 31, 2016, is down 21 percent from December 31, 2015, driven by lower prime originations and lower prime asset sales, and down 2 percent versus the prior quarter. Servicing fee income decreased 24 percent to $32 million in the fourth quarter 2016, from $42 million in the fourth quarter 2015.
Conference Call Information
SC management will host a conference call and webcast to discuss the fourth quarter results and other general matters at 9 a.m. Eastern Time on Wednesday, January 25, 2017. The conference call will be accessible by dialing 888-503-8172 (U.S. domestic), or 719-325-2434 (international), conference ID 7139377. Please dial in 10 minutes prior to the start of the call. The conference call will also be accessible via live audio webcast through the Investor Relations section of the corporate website at http://investors.santanderconsumerusa.com. Choose "Events" and select the information pertaining to the Q4 2016 Earnings Call. Additionally there will be several slides accompanying the webcast. Please allow at least 15 minutes prior to the call to register, download and install any necessary software.
For those unable to listen to the live broadcast, a replay will be available on the company's website or by dialing 844-512-2921 (U.S. domestic), or 412-317-6671 (international), conference ID 7139377, approximately two hours after the event. The dial-in replay will be available for two weeks after the conference call, and the webcast replay will be available through February 8, 2017. An investor presentation will also be available by visiting the Investor Relations page of SC's website at http://investors.santanderconsumerusa.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements about our expectations, beliefs, plans, predictions, forecasts, objectives, assumptions, or future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through the use of words or phrases such as anticipates, believes, can, could, may, predicts, potential, should, will, estimates, plans, projects, continuing, ongoing, expects, intends, and similar words or phrases. Although we believe that the expectations reflected in these forward-looking statements are reasonable, these statements are not guarantees of future performance and involve risks and uncertainties that are subject to change based on various important factors, some of which are beyond our control. For additional discussion of these risks, refer to the section entitled Risk Factors and elsewhere in our Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q filed by us with the U.S. Securities and Exchange Commission (SEC). Among the factors that could cause the forward-looking statements in this press release and/or our financial performance to differ materially from that suggested by the forward-looking statements are (a) the inherent limitations in internal controls over financial reporting; (b) our ability to remediate any material weaknesses in internal controls over financial reporting completely and in a timely manner; (c) continually changing federal, state, and local laws and regulations could materially adversely affect our business; (d) adverse economic conditions in the United States and worldwide may negatively impact our results; (e) our business could suffer if our access to funding is reduced; (f) significant risks we face implementing our growth strategy, some of which are outside our control; (g) unexpected costs and delays in connection with exiting our personal lending business; (h) our agreement with Fiat Chrysler Automobiles US LLC may not result in currently anticipated levels of growth and is subject to certain performance conditions that could result in termination of the agreement; (i) our business could suffer if we are unsuccessful in developing and maintaining relationships with automobile dealerships; (j) our financial condition, liquidity, and results of operations depend on the credit performance of our loans; (k) loss of our key management or other personnel, or an inability to attract such management and personnel; (l) certain regulations, including but not limited to oversight by the Office of the Comptroller of the Currency, the Consumer Financial Protection Bureau, the European Central Bank, and the Federal Reserve, whose oversight and regulation may limit certain of our activities, including the timing and amount of dividends and other limitations on our business; and (m) future changes in our relationship with Banco Santander that could adversely affect our operations. If one or more of the factors affecting our forward-looking information and statements proves incorrect, our actual results, performance or achievements could differ materially from those expressed in, or implied by, forward-looking information and statements. Therefore, we caution the reader not to place undue reliance on any forward-looking information or statements. The effect of these factors is difficult to predict. Factors other than these also could adversely affect our results, and the reader should not consider these factors to be a complete set of all potential risks or uncertainties. New factors emerge from time to time, and management cannot assess the impact of any such factor on our business or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statement. Any forward-looking statements only speak as of the date of this document, and we undertake no obligation to update any forward-looking information or statements, whether written or oral, to reflect any change, except as required by law. All forward-looking statements attributable to us are expressly qualified by these cautionary statements.
About Santander Consumer USA Holdings Inc.
Santander Consumer USA Holdings Inc. (NYSE: SC) ("SC") is a full-service, technology-driven consumer finance company focused on vehicle finance, third-party servicing and delivering superior service to our more than 2.7 million customers across the full credit spectrum. The company, which began originating retail installment contracts in 1997, has a managed asset portfolio of approximately $52 billion (as of December 31, 2016), and is headquartered in Dallas. (www.santanderconsumerusa.com)
Santander Consumer USA Holdings Inc.
Financial Supplement
Fourth Quarter and Full Year 2016
Table 1: Consolidated Balance Sheets
December 31, December 31,
2016 2015
---- ----
(Unaudited, Dollars in thousands)
Assets
Cash and cash equivalents $160,180 $18,893
Finance receivables held for
sale, net 2,123,415 2,859,575
Finance receivables held for
investment, net 23,481,001 23,367,788
Restricted cash 2,757,299 2,236,329
Accrued interest receivable 373,274 395,387
Leased vehicles, net 8,564,628 6,497,310
Furniture and equipment, net 67,509 58,007
Federal, state and other income
taxes receivable 87,352 267,636
Related party taxes receivable 1,087 71
Goodwill 74,056 74,056
Intangible assets 32,623 33,016
Due from affiliates 31,270 58,599
Other assets 785,410 582,291
------- -------
Total assets $38,539,104 $36,448,958
=========== ===========
Liabilities and Equity:
Liabilities:
Notes payable -credit
facilities $6,886,681 $6,902,779
Notes payable -secured
structured financings 21,462,025 20,872,900
Notes payable - related party 2,975,000 2,600,000
Accrued interest payable 33,346 22,544
Accounts payable and accrued
expenses 379,021 413,269
Federal, state and other income
taxes payable 18,201 2,462
Deferred tax liabilities, net 1,278,064 881,225
Due to affiliates 50,620 58,148
Other liabilities 217,527 263,082
------- -------
Total liabilities 33,300,485 32,016,409
---------- ----------
Equity:
Common stock, $0.01 par value 3,589 3,579
Additional paid-in capital 1,657,611 1,644,151
Accumulated other comprehensive
income (loss), net 28,259 2,125
Retained earnings 3,549,160 2,782,694
--------- ---------
Total stockholders' equity 5,238,619 4,432,549
--------- ---------
Total liabilities and equity $38,539,104 $36,448,958
=========== ===========
Table 2: Consolidated Statements of Income
Three Months Ended Twelve Months Ended
December 31, December 31,
------------ ------------
2016 2015 2016 2015
---- ---- ---- ----
(Unaudited, Dollars in thousands, except per share amounts)
Interest on finance
receivables and loans $1,222,468 $1,270,072 $5,026,790 $5,031,829
Leased vehicle income 401,020 295,109 1,487,671 1,037,793
Other finance and interest
income 3,695 (5,251) 15,135 18,162
----- ------ ------ ------
Total finance and other
interest income 1,627,183 1,559,930 6,529,596 6,087,784
Interest expense 216,980 157,893 807,484 628,791
Leased vehicle expense 278,229 208,255 995,459 726,420
------- ------- ------- -------
Net finance and other
interest income 1,131,974 1,193,782 4,726,653 4,732,573
Provision for credit
losses 685,711 850,723 2,468,200 2,785,871
------- ------- --------- ---------
Net finance and other
interest income after
provision for credit
losses 446,263 343,059 2,258,453 1,946,702
Profit sharing 12,176 10,649 47,816 57,484
------ ------ ------ ------
Net finance and other
interest income after
provision for credit
losses and profit sharing 434,087 332,410 2,210,637 1,889,218
Investment gains (losses),
net (168,344) (229,212) (444,759) (95,214)
Servicing fee income 32,205 42,357 156,134 131,113
Fees, commissions, and
other 88,143 89,268 382,171 385,744
------ ------ ------- -------
Total other income (47,996) (97,587) 93,546 421,643
Compensation expense 126,982 108,458 498,224 434,041
Repossession expense 75,539 66,456 293,355 241,522
Other operating costs 93,384 81,708 351,893 345,686
------ ------ ------- -------
Total operating expenses 295,905 256,622 1,143,472 1,021,249
------- ------- --------- ---------
Income before income taxes 90,186 (21,799) 1,160,711 1,289,612
Income tax expense 28,911 (2,244) 394,245 465,572
------ ------ ------- -------
Net income $61,275 $(19,555) $766,466 $824,040
======= ======== ======== ========
Net income per common
share (basic) $0.17 $(0.05) $2.14 $2.32
===== ====== ===== =====
Net income per common
share (diluted) $0.17 $(0.05) $2.13 $2.31
===== ====== ===== =====
Weighted average common
shares (basic) 358,582,203 357,927,012 358,280,814 355,102,742
=========== =========== =========== ===========
Weighted average common
shares (diluted) 360,323,179 361,956,163 359,165,172 356,163,076
=========== =========== =========== ===========
Table 3: Other Financial Information
Three Months Ended Twelve Months Ended
December 31, December 31,
------------ ------------
2016 2015 2016 2015
---- ---- ---- ----
Ratios (Unaudited, Dollars in thousands)
Yield on individually
acquired retail installment
contracts 15.8% 16.4 % 16.1% 16.7 %
Yield on purchased
receivables portfolios 18.1% 25.6 % 24.3% 16.2 %
Yield on receivables from
dealers 5.1% 5.3 % 5.2% 5.0 %
Yield on personal loans (1) 22.9% 20.0 % 23.9% 20.3 %
Yield on earning assets (2) 13.5% 14.4 % 14.1% 14.8 %
Cost of debt (3) 2.8% 2.1 % 2.6% 2.1 %
Net interest margin (4) 11.3% 12.7 % 12.0% 13.1 %
Expense ratio (5) 2.3% 2.0 % 2.2% 2.1 %
Return on average assets (6) 0.6% (0.2)% 2.0% 2.4 %
Return on average equity (7) 4.7% (1.8)% 15.8% 20.1 %
Net charge-off ratio on
individually acquired retail
installment contracts (8) 9.4% 8.9 % 7.9% 6.7 %
Adjusted net charge-off
ratio on individually
acquired retail installment
contracts (8) 9.4% 8.9 % 7.9% 6.4 %
Net charge-off ratio on
purchased receivables
portfolios (8) 1.3% 3.5 % - (0.5)%
Net charge-off ratio on
receivables from dealers (8) 1.5% - 0.5% -
Net charge-off ratio on
personal loans (8) (9) - - - 40.8 %
Adjusted net charge-off
ratio on personal loans (8)
(9) - - - 17.9 %
Net charge-off ratio (8) (9) 8.9% 8.3 % 7.4% 8.4 %
Adjusted net charge-off
ratio (8) (9) 8.9% 8.3 % 7.4% 7.0 %
Delinquency ratio on
individually acquired retail
installment contracts held
for investment, end of
period (10) 5.1% 4.4 % 5.1% 4.4 %
Delinquency ratio on personal
loans, end of period (10) 11.3% 6.9 % 11.3% 6.9 %
Delinquency ratio on loans
held for investment, end of
period (10) 5.1% 4.6 % 5.1% 4.6 %
Allowance ratio (11) 12.6% 11.9 % 12.6% 11.9 %
Common Equity Tier 1 capital
ratio (12) 13.4% 11.2 % 13.4% 11.2 %
Other Financial Information
Charge-offs, net of
recoveries, on individually
acquired retail installment
contracts $674,442 $611,526 $2,257,848 $1,795,771
Charge-offs, net of
recoveries, on purchased
receivables portfolios 790 3,383 (17) (2,720)
Charge-offs, net of
recoveries, on receivables
from dealers 258 - 393 -
Charge-offs, net of
recoveries, on personal
loans - - - 673,294
Charge-offs, net of
recoveries, on capital
leases 2,219 19,859 9,384 30,907
----- ------ ----- ------
Total charge-offs, net of
recoveries $677,709 $634,768 $2,267,608 $2,497,252
End of period Delinquent
principal over 60 days,
individually acquired retail
installment contracts held
for investment $1,386,218 $1,191,567 $1,386,218 $1,191,567
End of period Delinquent
principal over 60 days,
personal loans $176,873 $168,906 $176,873 $168,906
End of period Delinquent
principal over 60 days,
loans held for investment $1,392,789 $1,377,770 $1,392,789 $1,377,770
End of period assets covered
by allowance for credit
losses $27,229,276 $27,007,816 $27,229,276 $27,007,816
End of period Gross finance
receivables and loans held
for investment $27,427,578 $27,368,579 $27,427,578 $27,368,579
End of period Gross finance
receivables, loans, and
leases held for investment $37,040,531 $34,694,875 $37,040,531 $34,694,875
Average Gross individually
acquired retail installment
contracts $28,604,117 $27,560,674 $28,652,897 $26,818,625
Average Gross purchased
receivables portfolios 241,404 385,420 286,354 562,512
Average Gross receivables
from dealers 69,745 76,598 71,997 89,867
Average Gross personal loans 1,405,187 2,309,474 1,413,440 2,229,080
Average Gross capital leases 34,584 94,670 45,949 114,605
------ ------ ------ -------
Average Gross finance
receivables, loans and
capital leases $30,355,037 $30,426,836 $30,470,637 $29,814,689
Average Gross finance
receivables, loans, and
leases $39,941,127 $37,531,621 $39,289,341 $36,140,498
Average Managed assets $52,038,692 $52,485,567 $52,731,119 $48,919,418
Average Total assets $38,513,454 $36,039,307 $37,944,529 $35,050,503
Average Debt $31,416,694 $30,137,927 $31,330,686 $29,699,885
Average Total equity $5,185,840 $4,447,457 $4,850,653 $4,096,042
(1) Includes Finance and other
interest income; excludes fees
(2) "Yield on earning assets" is
defined as the ratio of
annualized Total finance and
other interest income, net of
Leased vehicle expense, to
Average gross finance
receivables, loans and leases
(3) "Cost of debt" is defined as the
ratio of annualized Interest
expense to Average debt
(4) "Net interest margin" is defined
as the ratio of annualized Net
finance and other interest
income to Average gross finance
receivables, loans and leases
(5) "Expense ratio" is defined as the
ratio of annualized Operating
expenses to Average managed
assets
(6) "Return on average assets" is
defined as the ratio of
annualized Net income to Average
total assets
(7) "Return on average equity" is
defined as the ratio of
annualized Net income to Average
total equity
(8) "Net charge-off ratio" is
defined as the ratio of
annualized Charge-offs, on a
recorded investment basis, net
of recoveries, to average unpaid
principal balance of the
respective portfolio
(9) Effective as of September 30,
2015, changes in the value of
the personal lending portfolio
driven by customer default
activity are classified in net
investment gains (losses) due to
the classification of the
portfolio as held for sale. As
there was accordingly no charge-
off activity on personal loans
for the three months ended
December 31, 2015, the
annualized charge-off rate on
personal loans reported as of
September 30, 2015 has been used
as the full year charge- off
rate. The average gross balance
of personal loans used in the
full year charge-off rate was
$2,201,551. Additionally, the
denominators of the aggregate
Net charge-off ratios for the
three and twelve months ended
December 31, 2015 have been
adjusted to $28,123,241 and
$29,279,874, respectively, to
exclude Personal Lending
balances for the three months
ended December 31, 2015.
(10) "Delinquency ratio" is defined as
the ratio of End of period
Delinquent principal over 60
days to End of period gross
balance of the respective
portfolio, excludes capital
leases
(11) "Allowance ratio" is defined as
the ratio of Allowance for
credit losses, which excludes
impairment on purchased
receivables portfolios, to End
of period assets covered by
allowance for credit losses
(12) "Common Equity Tier 1 Capital
ratio" is a non-GAAP ratio
defined as the ratio of Total
common equity tier 1 capital to
Total risk-weighted assets
Table 4: Credit Quality
Amounts related to our
individually acquired retail
installment contracts as of
and for the three and twelve
months December 31, 2016 and
2015, are as follows:
(Unaudited, Dollars in
thousands)
Three Months Ended December 31, Twelve Months Ended December 31,
------------------------------- --------------------------------
2016 2015 2016 2015
---- ---- ---- ----
Credit loss
allowance -
beginning of
period $3,401,285 $2,982,699 $3,197,414 $2,586,685
Provision for
credit losses 684,213 826,241 2,471,490 2,433,617
Charge-offs (1,293,743) (1,143,727) (4,723,648) (3,897,480)
Recoveries 619,301 532,201 2,465,800 2,101,709
Transfers to
held-for-
sale - - - (27,117)
--- --- --- -------
Credit loss
allowance -
end of period $3,411,056 $3,197,414 $3,411,056 $3,197,414
========== ========== ========== ==========
Net charge-offs $674,442 $611,526 $2,257,848 $1,795,771
Average unpaid
principal
balance (UPB) 28,604,117 27,560,674 28,652,897 26,818,625
Charge-off
ratio1 9.4% 8.9% 7.9% 6.7%
December 31, 2016(2) December 31, 2015(2)
------------------- -------------------
Principal 31-60
days past due $2,735,577 10.1% $2,454,986 9.1%
Delinquent
principal over
60 days 1,386,218 5.1% 1,191,567 4.4%
--------- --- --------- ---
Total
delinquent
contracts $4,121,795 15.2% $3,646,553 13.6%
========== ==== ========== ====
December 31, December 31,
2016 2015
---- ----
(Dollar amounts in thousands)
TDR -
Unpaid
principal
balance $5,599,567 $4,579,931
Non-TDR -
Unpaid
principal
balance $21,528,406 $22,284,015
Total -
Unpaid
principal
balance $27,127,973 $26,863,946
Total -
Allowance $3,411,056 $3,197,414
Total
allowance
ratio 12.6% 11.9%
(1) "Net charge-off ratio"
is defined as the ratio of
annualized Charge-offs, on
a recorded investment basis,
net of recoveries, to
average unpaid principal
balance of the respective
portfolio
(2) Percent of unpaid
principal balance.
Table 5: Originations
Three Months Ended Twelve Months Ended Three Months Ended
------------------ ------------------- ------------------
December 31, December 31, December 31, December 31, September 30,
2016 2015 2016 2015 2016
---- ---- ---- ---- ----
Retained Originations (Unaudited, Dollar amounts in thousands)
---------------------
Retail installment
contracts $3,068,154 $3,830,337 $12,726,912 $16,692,229 $3,281,112
Average APR 15.4% 13.9% 15.7% 16.9% 14.7%
Average FICO(R) (a) 604 608 598 584 612
Discount 0.3% 1.5% 0.5% 1.8% 0.1%
Personal loans $190,143 $304,748 $199,424 $887,483 $ -
Average APR 25.2% 24.4% 25.1% 21.2% -
Discount - - - - -
Leased vehicles $971,865 $1,009,526 $5,584,149 $5,132,053 $1,300,375
Capital lease
receivables $1,424 $2,338 $7,401 $67,244 $2,319
------ ------ ------ ------- ------
Total originations
retained $4,231,586 $5,146,949 $18,517,886 $22,779,009 $4,583,806
Sold Originations (b)
--------------------
Retail installment
contracts $484,916 $1,098,674 $3,573,658 $5,419,730 $580,242
Average APR 4.4% 2.6% 4.3% 4.2% 3.2%
Average FICO(R) (c) 746 758 745 743 760
--- --- --- --- ---
Total originations
sold $484,916 $1,098,674 $3,573,658 $5,419,730 $580,242
Total SC originations $4,716,502 $6,245,623 $22,091,544 $28,198,739 $5,164,048
Facilitated
Originations
-------------
Leased vehicles $ - $ - $ - $632,471 $ -
Total originations $4,716,502 $6,245,623 $22,091,544 $28,831,210 $5,164,048
========== ========== =========== =========== ==========
(a) Unpaid principal balance
excluded from the weighted
average FICO score is $426
million, $688 million, $2.1
billion, $3.2 billion and $492
million for the three months
ended December 31, 2016 and
2015, the twelve months ended
December 31, 2016 and 2015, and
the three months ended
September 30, 2016,
respectively, as the borrowers
on these loans did not have
FICO scores at origination. Of
these amounts, $71 million,
$215 million, $364 million,
$650 million, and $74 million,
respectively, were commercial
loans.
(b) Only includes assets both
originated and sold in the
period. Total asset sales for
the period are shown in Table
6.
(c) Unpaid principal balance
excluded from the weighted
average FICO score is $50
million, $137 million, $451
million, $647 million and $59
million for the three months
ended December 31, 2016 and
2015, the twelve months ended
December 31, 2016 and 2015, and
the three months ended
September 30, 2016,
respectively, as the borrowers
on these loans did not have
FICO scores at origination. Of
these amounts, $8 million, $2
million, $86 million, $108
million, and zero,
respectively, were commercial
loans.
Table 6: Asset Sales
Asset sales may include assets originated in prior periods.
Three Months Ended Twelve Months Ended Three Months Ended
------------------ ------------------- ------------------
December 31, December 31, December 31, December 31, September 30,
2016 2015 2016 2015 2016
---- ---- ---- ---- ----
(Unaudited, Dollar amounts in thousands)
Retail
installment
contracts $1,381,036 $1,869,113 $3,694,019 $7,862,520 $793,804
Average APR 6.3% 4.5% 4.2% 7.2% 3.0%
Average
FICO(R) 721 766 746 704 762
Personal
loans $ - $ - $869,349 $ - $ -
Average APR - - 17.9% - -
Leased
vehicles $ - $ - $ - $1,316,958 $ -
-------------------- -------------------- -------------------- ---------- --------------------
Total asset
sales $1,381,036 $1,869,113 $4,563,368 $9,179,478 $793,804
========== ========== ========== ========== ========
Table 7: Ending Portfolio
Ending outstanding balance, average APR and remaining unaccreted discount of our held for investment portfolio as of December 31,
2016, and December 31, 2015, are as follows:
December 31, 2016 December 31, 2015
----------------- -----------------
(Unaudited, Dollar amounts in thousands)
Retail
installment
contracts $27,358,147 $27,223,768
Average APR 16.4% 16.8%
Discount 2.3% 2.7%
Personal loans $11,839 $941
Average APR 31.5% 20.9%
Receivables from
dealers $69,431 $76,941
Average APR 4.9% 4.6%
Leased vehicles $9,612,953 $7,326,296
Capital leases $31,872 $66,929
Table 8: Reconciliation of 2015 Non-
GAAP Measures
(Dollars in thousands)
For the Year Ended
December 31, 2015
-----------------
Charge-offs, net of recoveries on
personal loans $673,294
Deduct: LOCM adjustment on personal
loans (377,598)
--------
Adjusted Net charge-offs on personal
loans $295,696
========
Average gross personal loans(1) $2,201,551
Net charge-off ratio on personal loans 40.8%
----
Adjusted net charge-off ratio on
personal loans 17.9%
====
Charge-offs, net of recoveries on
retail installment contracts acquired
individually $1,795,771
Deduct: LOCM adjustment on retail
installment contracts acquired
individually (73,388)
-------
Adjusted Net charge-offs on retail
installment contracts acquired
individually $1,722,383
==========
Average Gross retail installment
contracts acquired individually $26,818,625
Net charge-off ratio on retail
installment contracts acquired
individually 6.7%
---
Adjusted Net charge-off ratio on
retail installment contracts acquired
individually 6.4%
===
Total charge-offs, net of recoveries $2,497,252
Deduct: LOCM adjustment on personal
loans (377,598)
Deduct: LOCM adjustment on retail
installment contracts acquired
individually (73,388)
-------
Adjusted Net charge-offs total $2,046,266
==========
Average Gross finance receivables and
loans(1) $29,279,874
Net charge-off ratio 8.4%
---
Adjusted Net charge-off ratio total 7.0%
===
(1) The denominators of the
Personal Lending Net charge-off
ratios and the aggregate Net
charge-off ratios for the three
and twelve months ended December
31, 2015 have been adjusted to
exclude Personal Lending
balances for the three months
ended December 31, 2015.
Contacts:
Investor Relations Media Relations
Evan Black Laurie Kight
800.493.8219 214.801.6455
InvestorRelations@santanderconsumerusa.com SCMedia@santanderconsumerusa.com
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/santander-consumer-usa-holdings-inc-reports-fourth-quarter-and-full-year-2016-results-300396404.html
SOURCE Santander Consumer USA Holdings Inc.
