SANTANDER CONSUMER USA HOLDINGS INC. DALLAS, Jan. 27, 2016 /PRNewswire/ -- Santander Consumer USA Holdings Inc. (NYSE: SC) ("SC") today announced net income for fourth quarter 2015 of $68 million, or $0.19 per diluted common share, compared to third quarter 2015 net income of $224 million, or $0.62 per diluted common share, and fourth quarter 2014 of $247 million, or $0.69 per diluted common share. Fourth quarter 2015 earnings were negatively impacted by lower of cost or market ("LOCM") adjustments on the held for sale personal lending portfolio, driven by seasonal balance increases. Fourth quarter 2014 earnings were positively impacted by provision model adjustments.
Full year 2015 net income was $866 million, or $2.41 per diluted common share, up 13 percent from $766 million, or $2.15 per diluted common share in 2014, and up 3 percent from 2014 core net income(1) of $842 million, or $2.37 per diluted common share.
Fourth Quarter 2015 Highlights (All comparisons are 4Q15 versus 4Q14):
-- Net finance and other interest income of $1.3 billion, up 17%
-- Total originations of $6.2 billion, up 2%
-- Serviced for others portfolio of $15.0 billion, up 47%
-- Average managed assets of $52.5 billion, up 23%
Full Year 2015 Highlights (All comparisons are full year 2015 versus full year 2014):
-- Net finance and other interest income of $4.9 billion, up 14%
-- Total auto originations of $27.9 billion, up 6%
-- Retail installment contract ("RIC") net charge-off ratio of 7.3%; after
adjusting for LOCM impairments(1 )RIC net charge-off ratio of 7.0%, up
10 basis points
-- Total asset sales of $9.2 billion, up 31%
-- Servicing fee income of $131 million, up 81%
-- Expense ratio of 2.1%, down 10 basis points from core full year 2014
expense ratio(1)
"Full year results remain strong with net income of $866 million, an increase of 3 percent over the prior year core net income. We continue to be strategic in our originations approach, maintaining disciplined underwriting practices and selectivity while growing auto originations six percent over the prior year. Recognizing our reported results for the quarter are challenging, there are several factors that are not a true reflection of the earnings power of our franchise. I would like to thank our employees, customers and dealers for being a large part of another successful year. SC's fundamentals remain robust and we remain committed to generating shareholder value," said Jason Kulas, Chief Executive Officer.
In the fourth quarter, total originations were more than $6.2 billion, including $2.9 billion in Chrysler Capital retail loans and $1.0 billion in Chrysler Capital leases. Other originations, including other auto and personal loans, totaled $2.3 billion for the fourth quarter 2015. New incentive programs in Chrysler Capital drove an increase in retail loan originations. Full year auto originations were $27.9 billion, up 6 percent compared to 2014.
Finance receivables, loans and leases held for investment, net, increased 4 percent to $30.0 billion at December 31, 2015, from $28.8 billion at December 31, 2014. Net finance and other interest income increased 17 percent to $1.3 billion in the fourth quarter 2015 from $1.1 billion in the fourth quarter 2014, driven by 15 percent growth in the average portfolio. SC's average APR as of the end of the fourth quarter 2015 for retail installment contracts held for investment was 16.8 percent, in line with 16.9 percent as of the end of the third quarter 2015 and up from 16.0 percent as of the end of the fourth quarter 2014. The year-over-year APR increase is driven by the opportunity to increase originations in a disciplined manner within lower FICO buckets at appropriate returns.
The provision for credit losses increased to $800 million in the fourth quarter 2015 from $560 million in the fourth quarter 2014. Fourth quarter 2014 was benefited by $149 million in model impacts, including seasonality and a reduction in months' coverage, neither of which impacted provision in fourth quarter 2015. Fourth quarter 2014 also was benefited by $58 million due to outperformance in net charge-offs. Additionally, effective in the fourth quarter 2015, SC recognized changes in value of the personal lending portfolio, including customer defaults, as LOCM adjustments in net investment gains (losses), rather than recognizing provisions and charge-offs on this portfolio.
After adjusting for these impacts and net growth and mix of the portfolio, fourth quarter 2015 provision was impacted by $41 million related to deterioration of forward-looking loss expectations, consistent with the trends in net charge-off ratio and delinquencies. SC's net charge-off ratio and delinquency ratio on the individually acquired retail installment contract portfolio increased to 9.6 percent and 4.4 percent, respectively, for the fourth quarter 2015 from 8.1 percent and 4.2 percent, respectively, for the fourth quarter 2014. Full year 2015 net charge-off ratio on the individually acquired retail installment contract portfolio was 7.3 percent. After adjusting for LOCM impairments, the net charge-off ratio of 7.0 percent was up 10 basis points compared to 2014.
The fourth quarter 2015 provision of $800 million is up from $744 million in the third quarter 2015, despite the reclassification of personal lending impacts out of this line item, primarily due to the removal of modeled seasonality as of September 30, 2015. The increase is also attributable to normal seasonal trends, as the net charge-off ratio and delinquency ratio on individually acquired retail installment contracts increased from the third quarter 2015 ratios of 8.8 percent (7.9 percent adjusted(1)) and 3.8 percent, respectively.
Net investment gains (losses) were negative for the fourth quarter of 2015, due to the classification of $232 million in LOCM adjustments on the personal lending portfolio in this line. These adjustments are attributable to customer default activity, which no longer is recorded in provision for credit losses, as well as market discounts on seasonally higher balances.
"This quarter, seasonal balance increases and seasonally high customer default activity drove net investment losses on our personal lending portfolio, which was classified as held-for-sale as of the beginning of the quarter. Balances on this portfolio and customer defaults both generally decline throughout the first half of the year, so we expect smaller LOCM adjustments over the next couple of quarters," said Jennifer Davis, Deputy Chief Financial Officer.
During the quarter, SC incurred $239 million of operating expenses, up 4 percent from $230 million in the fourth quarter 2014. The increase was primarily attributable to SC's strong average managed asset growth of 23 percent. SC produced a 1.8 percent expense ratio for the quarter, down from a 2.2 percent expense ratio in the same period last year. Full year 2015 expense ratio of 2.1 percent, down from the 2014 expense ratio of 2.5 percent (2.2 percent adjusted(1)).
Although the ABS markets saw some volatility in the fourth quarter, SC continued to demonstrate access to liquidity, executing two securitizations totaling $1.9 billion, inclusive of $788 million sold through a CCART transaction. Additionally, SC advanced $1.8 billion on new and existing private term amortizing facilities.
In addition to the CCART transaction and in line with SC's strategy to leverage its scalable servicing platform and increase servicing fee income, SC executed asset sales of $1.1 billion through existing loan sale programs.
Servicing fee income totaled $42 million in the fourth quarter 2015, up from $20 million in the fourth quarter 2014, primarily due to the increase in the portfolio of loans and leases serviced for others to $15.0 billion as of December 31, 2015, up from $10.3 billion as of December 31, 2014.
(1 )For a reconciliation from GAAP to this non-GAAP measure, see Reconciliation of Non-GAAP Measures in Table 8 of this release.
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 27, 2016. The conference call will be accessible by dialing 877-397-0286 (U.S. domestic), or 719-325-4752 (international), conference ID 868223. 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 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 877-870-5176 (U.S. domestic), or 858-384-5517 (international), conference ID 868223, 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 January 27, 2017. An investor presentation will also be available by visiting the Investor Relations page of SC'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"). SC believes that this non-GAAP financial measure provides both management and investors a more complete understanding of the underlying operational results and trends and SC'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 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 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) we may incur unexpected costs and delays in connection with exiting our personal lending business; (f) 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; (g) our business could suffer if we are unsuccessful in developing and maintaining relationships with automobile dealerships; (h) our financial condition, liquidity, and results of operations depend on the credit performance of our loans; (i) loss of our key management or other personnel, or an inability to attract such management and personnel, could negatively impact our business; (j) 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, whose oversight and regulation may limit certain of our activities, including the timing and amount of dividends and other limitations on our business; and (k) 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) ("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 2.5 million customers across the full credit spectrum. The company, which began originating retail installment contracts in 1997, has a managed assets portfolio of $53 billion (as of December 31, 2015), and is headquartered in Dallas. (www.santanderconsumerusa.com)
Contacts: Media Relations
Laurie Kight
Investor Relations 214.801.6455
Evan Black & Kristina Carbonneau LKight@santanderconsumerusa.com
800.493.8219
InvestorRelations@santanderconsumerusa.com
------------------------------------------
Santander Consumer USA Holdings Inc.
Financial Supplement
Fourth 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
December 31, December 31,
2015 2014
---- ----
Assets (Unaudited, Dollars in thousands)
Cash and
cash
equivalents $18,893 $33,157
Finance
receivables
held for
sale, net 2,868,603 46,585
Finance
receivables
held for
investment,
net 23,464,147 23,915,551
Restricted
cash 2,236,329 1,920,857
Accrued
interest
receivable 405,464 364,676
Leased
vehicles,
net 6,516,030 4,862,783
Furniture
and
equipment,
net 58,007 41,218
Federal,
state and
other
income
taxes
receivable 274,238 502,035
Related
party taxes
receivable - 459
Deferred tax
asset - 21,244
Goodwill 74,056 74,056
Intangible
assets, net 53,316 53,682
Due from
affiliates 42,665 102,457
Other assets 549,644 403,416
Total assets $36,561,392 $32,342,176
=========== ===========
Liabilities and Equity
Liabilities:
Notes
payable -
credit
facilities $6,902,779 $6,402,327
Notes
payable -
secured
structured
financings 20,872,900 17,718,974
Notes
payable -
related
party 2,600,000 3,690,000
Accrued
interest
payable 22,544 17,432
Accounts
payable and
accrued
expenses 413,269 315,130
Federal,
state and
other
income
taxes
payable 2,462 319
Deferred tax
liabilities,
net 882,110 492,303
Related
party taxes
payable 342 -
Due to
affiliates 145,013 48,688
Other
liabilities 277,862 98,654
------- ------
Total
liabilities 32,119,281 28,783,827
---------- ----------
Equity:
Common
stock,
$0.01 par
value 3,579 3,490
Additional
paid-in
capital 1,579,263 1,560,519
Accumulated
other
comprehensive
income, net 2,125 3,553
Retained
earnings 2,857,144 1,990,787
--------- ---------
Total
stockholders'
equity 4,442,111 3,558,349
Total
liabilities
and equity $36,561,392 $32,342,176
=========== ===========
Table 2: Condensed Consolidated Statements of Income
For the Three Months Ended For the Year Ended
December 31, December 31,
------------ ------------
2015 2014 2015 2014
---- ---- ---- ----
(Unaudited, Dollars in thousands, except per share amounts)
Interest on finance
receivables and loans $1,319,359 $1,150,242 $5,205,261 $4,631,847
Leased vehicle income 425,266 300,536 1,502,886 929,745
Other finance and
interest income 5,264 4,432 28,677 8,068
Total finance and other
interest income 1,749,889 1,455,210 6,736,824 5,569,660
Interest expense 157,893 141,308 628,791 523,203
Leased vehicle expense 336,449 240,635 1,186,983 740,236
Net finance and other
interest income 1,255,547 1,073,267 4,921,050 4,306,221
Provision for credit
losses 799,978 559,524 2,888,834 2,616,943
------- ------- --------- ---------
Net finance and other
interest income after
provision for credit
losses 455,569 513,743 2,032,216 1,689,278
Profit sharing 10,649 8,152 57,484 74,925
------ ----- ------ ------
Net finance and other
interest income after
provision for credit
losses and profit
sharing 444,920 505,591 1,974,732 1,614,353
Investment gains
(losses), net (225,608) 21,334 (116,127) 116,765
Servicing fee income 42,357 19,576 131,113 72,627
Fees, commissions, and
other 86,602 92,546 375,079 368,279
------ ------ ------- -------
Total other income
(loss) (96,649) 133,456 390,065 557,671
Compensation expense 95,408 98,093 443,212 482,637
Repossession expense 66,456 56,200 241,522 201,017
Other operating costs 77,432 76,163 340,712 278,382
------ ------ ------- -------
Total operating
expenses 239,296 230,456 1,025,446 962,036
------- ------- --------- -------
Income before income
taxes 108,975 408,591 1,339,351 1,209,988
Income tax expense 41,232 161,558 472,994 443,639
Net income $67,743 $247,033 $866,357 $766,349
======= ======== ======== ========
Net income per common
share (basic) $0.19 $0.71 $2.44 $2.20
===== ===== ===== =====
Net income per common
share (diluted) $0.19 $0.69 $2.41 $2.15
===== ===== ===== =====
Dividends declared per
common share $ - $ - $ - $0.15
=== === === === === === =====
Weighted average common
shares (basic) 357,927,012 348,998,644 355,102,742 348,723,472
=========== =========== =========== ===========
Weighted average common
shares (diluted) 361,956,163 355,856,631 358,883,643 355,722,363
=========== =========== =========== ===========
Table 3: Other Financial Information
For the Three Months Ended For the Year Ended
December 31, December 31,
------------ ------------
2015 2014 2015 2014
---- ---- ---- ----
Ratios (Unaudited, Dollars in thousands)
Yield on individually acquired
retail installment contracts 17.1% 16.7% 17.4% 17.3%
Yield on purchased receivables
portfolios 25.7% 14.7% 15.8% 15.1%
Yield on receivables from dealers 5.3% 5.3% 5.0% 4.1%
Yield on personal loans (1) 20.0% 20.5% 20.3% 23.1%
Yield on earning assets (2) 15.1% 14.9% 15.4% 15.7%
Cost of debt (3) 2.1% 2.1% 2.1% 2.0%
Net interest margin (4) 13.4% 13.1% 13.6% 14.1%
Expense ratio (5) 1.8% 2.2% 2.1% 2.5%
Adjusted expense ratio (5)a 1.8% 2.2% 2.1% 2.2%
Return on average assets (6) 0.8% 3.1% 2.5% 2.6%
Adjusted return on average assets
(6)a 0.8% 3.1% 2.5% 2.8%
Return on average equity (7) 6.1% 29.1% 21.1% 24.7%
Adjusted return on average equity
(7)a 6.1% 29.1% 21.1% 27.2%
Net charge-off ratio on
individually acquired retail
installment contracts (8) 9.6% 8.1% 7.3% 6.9%
Adjusted net charge-off ratio on
individually acquired retail
installment contracts (8)a 9.6% 8.1% 7.0% 6.9%
Net charge-off ratio on purchased
receivables portfolios (8) 3.5% 5.2% (0.5)% 4.5%
Net charge-off ratio on personal
loans (8) (9) - 18.3% 40.8% 17.6%
Adjusted net charge-off ratio on
personal loans (8) (9)a - 18.3% 17.9% 17.6%
Net charge-off ratio (8) (9) 9.5% 8.6% 9.0% 7.3%
Adjusted net charge-off ratio (8)
(9)a 9.5% 8.6% 7.5% 7.3%
Delinquency ratio on individually
acquired retail installment
contracts held for investment,
end of period (10) 4.4% 4.2% 4.4% 4.2%
Delinquency ratio on personal
loans, end of period (10) 6.9% 6.5% 6.9% 6.5%
Delinquency ratio, end of period
(10) 4.6% 4.5% 4.6% 4.5%
Common stock dividend payout ratio
(11) - - - 6.8%
Allowance ratio (12) 12.2% 11.5% 12.2% 11.5%
Common Equity Tier 1 capital ratio
(13) 11.2% n/a 11.2% n/a
Other Financial Information
Charge-offs, net of recoveries,
on individually acquired retail
installment contracts $658,432 $492,434 $1,959,635 $1,617,351
Charge-offs, net of recoveries,
on purchased receivables
portfolios 3,383 12,086 (2,720) 59,657
Charge-offs, net of recoveries,
on personal loans - 86,045 673,294 264,720
Charge-offs, net of recoveries,
on capital leases 6,857 402 17,905 402
-----
Total charge-offs, net of
recoveries $668,672 $590,967 $2,648,114 $1,942,130
End of period Individually
acquired retail installment
contracts Delinquent principal
over 60 days $1,191,567 $1,030,580 $1,191,567 $1,030,580
End of period Personal loans
Delinquent principal over 60 days 168,906 138,400 168,906 138,400
End of period Delinquent principal
over 60 days $1,377,770 $1,241,453 $1,377,770 $1,241,453
End of period assets covered by
allowance for credit losses $27,031,332 $26,875,389 $27,031,332 $26,875,389
End of period Gross finance
receivables and loans held for
investment $27,392,095 $27,721,744 $27,392,095 $27,721,744
End of period Gross finance
receivables, loans, and leases
held for investment 34,737,111 33,226,211 34,737,111 33,226,211
Average Gross individually
acquired retail installment
contracts $27,560,674 $24,399,879 $26,818,625 $23,556,137
Average Gross purchased
receivables portfolios 385,420 935,734 562,512 1,321,281
Average Gross receivables from
dealers 76,598 99,363 89,867 118,358
Average Gross personal loans 2,309,474 1,878,501 2,229,080 1,505,387
Average Gross capital leases 100,549 71,555 116,414 30,648
-------
Average Gross finance receivables,
loans and capital leases $30,432,715 $27,385,032 $29,816,498 $26,531,811
Average Gross finance receivables,
loans, and leases $37,546,370 $32,650,643 $36,148,709 $30,642,923
Average Managed assets $52,485,567 $42,676,247 $48,919,418 $38,296,610
Average Total assets $36,056,323 $31,491,655 $35,066,836 $29,780,754
Average Debt $30,137,927 $27,429,389 $29,699,885 $26,158,708
Average Total equity $4,427,061 $3,399,942 $4,098,287 $3,097,915
a Non-GAAP measure; see reconciliation in Table 8
(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) 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
(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, which excludes
impairment on purchased
receivables portfolios, to End
of period assets covered by
allowance for credit losses
(13) "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. The
ratio was not reported in 2014
as it was implemented with the
Basel III regulatory framework
in 2015.
Table 4: Credit Quality
Amounts as of and for the three and twelve months ended December 31, 2015 and 2014 are as follows:
(Unaudited, Dollars in thousands)
Three Months Ended December 31,
Retail Installment
Contracts
Acquired
Individually 2015 2014
---- ----
Credit loss
allowance -
beginning of
period $3,159,102 $2,793,199
Provision for
credit losses 781,514 425,573
Charge-offs (1,190,632) (955,372)
Recoveries 532,200 462,938
Credit loss
allowance -end
of period $3,282,184 $2,726,338
========== ==========
Net charge-offs $658,432 $492,434
Average unpaid
principal balance
(UPB) 27,560,674 24,399,879
Charge-off ratio 9.6% 8.1%
Year Ended December 31,
Retail Installment
Contracts
Acquired
Individually 2015 2014
---- ----
Credit loss
allowance -
beginning of year $2,726,338 $2,132,634
Provision for
credit losses 2,542,598 2,211,055
Charge-offs (4,061,343) (3,341,047)
Recoveries 2,101,708 1,723,696
Impact of loans
transferred to
held for sale (27,117) -
Credit loss
allowance -end
of year $3,282,184 $2,726,338
========== ==========
Net charge-offs $1,959,635 $1,617,351
Average unpaid
principal balance
(UPB) 26,818,625 23,556,137
Charge-off
ratio(1) 7.3% 6.9%
December 31,
Retail
Installment
Contracts
Acquired
Individually 2015(2) 2014(2)
------ ------
Principal,
31-60
days
past
due $2,454,986 9.1% $2,319,203 9.4%
Delinquent
principal
over
60
days 1,191,567 4.4% 1,030,580 4.2%
--------- ---------
Total
delinquent
principal $3,646,553 13.6% $3,349,783 13.6%
========== ==== ========== ====
(1) Net charge-off performance was
impacted by lower of cost or
market adjustments on loans
sold and designated as held for
sale.
(2) Percent of unpaid principal
balance.
Table 5: Originations
Three Months Ended Year Ended
------------------ ----------
December 31, September 30, December 31, December 31, December 31,
2015 2015 2014 2015 2014
---- ---- ---- ---- ----
Retained Originations (Unaudited, Dollars in thousands)
---------------------
Retail installment
contracts $3,830,337 $4,650,381 $3,220,019 $16,692,229 $13,531,801
Average APR 13.9% 16.1% 14.2% 16.9% 15.6%
Discount 1.5% 1.7% 1.0% 2.5% 3.4%
Personal loans $304,748 $158,328 $562,178 $887,483 $1,182,171
Average APR 24.4% 21.0% 20.5% 21.2% 20.1%
Discount - - - - -
Receivables from
dealers $ - $ - $ - $ - $25,515
Average APR - - - - 4.1%
Discount - - - - -
Leased vehicles $1,009,526 $1,568,104 $721,932 $5,132,053 $4,111,146
Capital leases $2,338 $1,103 $42,368 $67,244 $93,444
Total originations
retained $5,146,949 $6,377,916 $4,546,497 $22,779,009 $18,944,077
Sold Originations(1)
-------------------
Retail installment
contracts $1,098,674 $1,243,456 $1,016,165 $5,419,730 $6,049,653
Average APR 2.6% 2.4% 4.1% 4.2% 4.8%
Receivables from
dealers $ - $ - $ - $ - $8,724
Average APR - - - - 5.3%
Leased vehicles $ - $ - $ - $ - $369,114
Total originations
sold $1,098,674 $1,243,456 $1,016,165 $5,419,730 $6,427,491
Total SC originations $6,245,623 $7,621,372 $5,562,662 $28,198,739 $25,371,568
Facilitated Originations
------------------------
Receivables from
dealers $ - $ - $ - $ - $392,920
Leased vehicles - - 564,875 632,471 1,761,512
Total originations
facilitated for
affiliates $ - $ - $564,875 $632,471 $2,154,432
Total Originations $6,245,623 $7,621,372 $6,127,537 $28,831,210 $27,526,000
========== ========== ========== =========== ===========
Only includes assets both
originated and sold in
the period. Total asset
sales for the period are
(1) shown in Table 6.
Table 6: Asset Sales
Asset sales may include assets originated in prior periods.
Three Months Ended Year Ended
------------------ ----------
December 31, September 30, December 31, December 31, December 31,
2015 2015 2014 2015 2014
---- ---- ---- ---- ----
Asset Sales (Unaudited, Dollars in thousands)
-----------
Retail
installment
contracts $1,869,113 $3,057,654 $1,137,471 $7,862,520 $6,620,620
Average APR 4.5% 10.7% 4.1% 7.2% 4.8%
Receivables from
dealers $ - $ - $ - $ - $18,227
Average APR - - - - 4.7%
Leased vehicles $ - $ - $ - $1,316,958 $369,114
--- --- --- --- --- --- --------
Total asset
sales $1,869,113 $3,057,654 $1,137,471 $9,179,478 $7,007,961
========== ========== ========== ========== ==========
Table 7: Ending Portfolio
Ending outstanding balance, average APR and remaining unaccreted discount as of December 31, 2015 and 2014 are as follows:
December 31, 2015 December 31, 2014
----------------- -----------------
(Unaudited, Dollars in thousands)
Retail
installment
contracts $27,223,768 $25,401,461
Average APR 16.8% 16.0%
Discount 2.0% 2.1%
Personal loans $941 $2,128,769
Average APR 20.9% 23.1%
Discount - 0.1%
Receivables from
dealers $76,941 $100,164
Average APR 4.6% 4.3%
Discount - -
Leased vehicles $7,345,016 $5,504,467
Capital leases $90,445 $91,350
Table 8: Reconciliation of Non-GAAP Measures
(Dollars in thousands, except per share data)
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 $1,959,635
Deduct: LOCM adjustment on
retail installment
contracts acquired
individually (73,388)
Adjusted Net charge-offs
on retail installment
contracts acquired
individually $1,886,247
==========
Average Gross retail
installment contracts
acquired individually $26,818,625
Net charge-off ratio on
retail installment
contracts acquired
individually 7.3%
---
Adjusted Net charge-off
ratio on retail
installment contracts
acquired individually 7.0%
===
Total charge-offs, net of
recoveries $2,648,114
Deduct: LOCM adjustment on
personal loans (377,598)
Deduct: LOCM adjustment on
retail installment
contracts acquired
individually (73,388)
Adjusted Net charge-offs
total $2,197,128
==========
Average Gross finance
receivables and loans(1) $29,279,874
Net charge-off ratio 9.0%
---
Adjusted Net charge-off
ratio total 7.5%
===
Three Months Ended
September 30, 2015
------------------
Charge-offs, net of
recoveries on retail
installment contracts
acquired individually $610,657
Deduct: LOCM adjustment on
retail installment
contracts acquired
individually (64,140)
Adjusted Net charge-offs
on retail installment
contracts acquired
individually $546,517
========
Average Gross retail
installment contracts
acquired individually $27,687,564
Net charge-off ratio on
retail installment
contracts acquired
individually 8.8%
---
Adjusted Net charge-off
ratio on retail
installment contracts
acquired individually 7.9%
===
(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.
For the Year Ended
December 31, 2014
-----------------
Net income $766,349
Add back:
Stock compensation
recognized upon initial
public offering ("IPO"),
net of tax 74,428
Other IPO-related
expenses, net of tax 1,409
-----
Core net income $842,186
========
Weighted average common
shares (diluted) 355,722,363
Net income per common
share (diluted) $2.15
Core net income per common
share (diluted) $2.37
=====
Average total assets $29,780,754
Return on average assets 2.6%
Core return on average
assets 2.8%
===
Average total equity $3,097,915
Return on average equity 24.7%
Core return on average
equity 27.2%
====
Operating expenses $962,036
Deduct:
Stock compensation
recognized upon IPO, net
of tax (117,654)
Other IPO-related
expenses, net of tax (2,175)
Core operating expenses $842,207
========
Average managed assets 38,296,610
Expense ratio 2.5%
Core expense ratio 2.2%
===
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-2015-results-300210464.html
SOURCE Santander Consumer USA Holdings Inc.
