Delaware
(State or other Jurisdiction of Incorporation)
|
001-36270
(Commission File Number)
|
32-0414408
(IRS Employer Identification No.)
|
|
|
|
|
|
1601 Elm St. Suite #800
Dallas, Texas
(Address of Principal Executive Offices)
|
75201
(Zip Code)
|
Title of each class
|
Trading
Symbol(s)
|
Name of each exchange on which registered
|
Common Stock, $0.01 par value per share
|
SC
|
New York Stock Exchange
|
Exhibit 99.2
|
Exhibit 10.1
|
Dated: July 24, 2019
|
SANTANDER CONSUMER USA HOLDINGS INC.
By:
/s/ Christopher Pfirrman
Name: Christopher Pfirrman
Title: Chief Legal Officer
|
|
|
(i)
|
Non-Competition: Employee shall not, during the Restricted Period, without the prior written consent of Santander, directly or indirectly, on Employee’s behalf or on behalf of or in conjunction with others, as a contractor, agent, shareholder, owner, partner, director, officer, principal, member, employee, or in any other capacity or manner whatsoever, for Employee’s own benefit or for the benefit of any other person or entity, render services or advice to, accept employment with, lend Employee’s name or credit to, work for, participate in the ownership, management, operation, financing, or control of, an entity currently engaged in, or desiring to become engaged in, Competing Activities in the Restricted Area. Notwithstanding the foregoing, nothing in this Agreement restricts Employee from owning less than 1% of any class of securities of such entity as a passive investor, if such securities are listed on a national securities exchange. Employee understands that this provision does not restrict Employee from accepting any employment with any entity that does not engage in Competing Activities.
|
(ii)
|
Non-Solicitation: Employee shall not, during the Restricted Period, without the prior written consent of Santander, directly or indirectly, on Employee’s behalf or on behalf of or in conjunction with others, as a contractor, agent, shareholder, owner, partner, director, officer, principal, member, employee, or in any other capacity or manner whatsoever, solicit business from, attempt to transact business with, transact business with, or interfere with the Company’s relationship with any Customer or Prospective Customer, vendor, supplier, or contractor of the Company. This restriction applies only to business that is a Competitive Activity.
|
(iii)
|
Anti-Raiding: Employee shall not, during the Restricted Period, without the prior written consent of the Company, directly or indirectly, on Employee’s behalf or on behalf of or in conjunction with others, as a contractor, agent, shareholder, owner, partner, director, officer, principal, member, employee, or in any other capacity or manner whatsoever, directly or indirectly solicit for employment, employ, or otherwise engage as an employee, independent contractor, or otherwise, any person who is, or within the 12-month period immediately preceding the date of any such activity was, an employee or contractor engaged by the Company.
|
(a)
|
Work for the best interest of the Company and make Employee’s services available only to the Company and not to Employee’s own account or for any other person or entity without the prior written consent of the Company;
|
(b)
|
Not engage in any activity which conflicts or interferes with the performance of any of the duties and/or responsibilities assigned to Employee by the Company;
|
(c)
|
Promptly disclose to the Company, and not divert, any business opportunities or prospective customers of which Employee becomes aware;
|
(d)
|
Promptly disclose any solicitation of any of the Company’s current, former, or prospective customers or employees by any competitor of the Company of which Employee becomes aware;
|
(e)
|
Not act to antagonize or oppose the interests of the Company; and
|
(f)
|
Not take advantage of any opportunity that Employee’s position may provide to profit beyond the agreed compensation and benefits.
|
10.
|
MISCELLANEOUS.
|
(a)
|
Governing Law. This Agreement is made under and shall be construed according to the laws of the State of Texas.
|
(b)
|
Construction. The parties understand and agree that, should any portion of any clause or paragraph of this Agreement be deemed too broad to permit enforcement to its fullest extent, or should any portion of any clause or paragraph of this Agreement be deemed unreasonable, then said clause or paragraph shall be reformed and enforced to the maximum extent permitted by law. In the event that such portion of any clause or paragraph is deemed incapable of reform, the offending language shall be severed, and the remaining terms and provisions of this Agreement shall remain unaffected, valid, and enforceable for all purposes.
|
(c)
|
Waiver. The waiver by either party of the breach of any of the terms and conditions of, or any right under this Agreement, shall not be deemed to constitute the waiver of any similar right. No such waiver shall be binding or effective unless expressed in writing and signed by the party giving such waiver.
|
(d)
|
Entire Agreement. This Agreement constitutes the entire agreement between the parties concerning the subject matter hereof. No oral statements or prior written material not specifically incorporated herein shall be of any force and effect, and no changes in or additions to this Agreement shall be recognized unless incorporated herein by written amendment, such amendment to become effective on the date stipulated therein. Employee acknowledges and represents that in executing this Agreement, Employee did not rely, and has not relied, on any communications, promises, statements, inducements, or representation(s), oral or written, by the Company, except as expressly contained in this Agreement. This Agreement will be binding upon and inure to the benefit of the parties hereto and their respective successors, heirs, legal representatives and permitted assigns (if any).
|
•
|
You agree, by signing below, to allow SC to withhold any such reimbursement amounts owed to SC pursuant to this Agreement from other monies due to You upon termination, including but not limited to final pay owed to You in connection with your employment, and You agree to sign at the time of resignation and/or termination any authorizations required to permit SC to make such withholding from final pay.
|
Contacts:
Investor Relations
Evan Black
800.493.8219
InvestorRelations@santanderconsumerusa.com
|
|
Media Relations
Laurie Kight
214.801.6455
MediaRelations@santander.us
|
•
|
Fahmi Karam, SC’s Head of Pricing and Analytics, will succeed Juan Carlos “JC” Alvarez as CFO, effective September 16, 2019. He will continue to lead the Pricing and Analytics group in addition to his new role.
|
•
|
Shawn Allgood, currently EVP at Chrysler Capital, succeeds Richard Morrin as Head of Chrysler Capital and Auto Relationships, effective immediately. Morrin has resigned to assume a CEO role with a privately-held company outside of the auto finance industry.
|
•
|
Juan Carlos “JC” Alvarez, will become CFO of Santander US and Santander Bank, N.A. (“SBNA”), effective September 16, 2019. Alvarez currently serves as the CFO at SC, a role he has held since 2017. Alvarez succeeds Duke Dayal in his capacity as Santander US CFO.
|
•
|
SC announced net income for the second quarter ended June 30, 2019 (“Q2 2019”) of
$368 million
, or
$1.05
per diluted common share.
|
•
|
The Company has declared a cash dividend of $0.22 per share, to be paid on August 15, 2019, to shareholders of record as of the close of business on August 5, 2019.
|
•
|
Total auto originations of
$8.4 billion
, up 5%
|
◦
|
Core retail auto loan originations of
$2.4 billion
, down 7%
|
◦
|
Chrysler Capital loan originations of
$3.5 billion
, up 25%
|
◦
|
Chrysler Capital lease originations of
$2.5 billion
, down 4%
|
◦
|
Chrysler average quarterly penetration rate of 36%, up from 32%
|
◦
|
Santander Bank, N.A. program originations of
$1.9 billion
|
•
|
Net finance and other interest income of
$1.2 billion
, up
5%
|
•
|
30-59 delinquency ratio of
9.4%
, down 20 basis points
|
•
|
59-plus delinquency ratio of
4.7%
, up 20 basis points
|
•
|
Retail Installment Contract (“RIC”) gross charge-off ratio of 16.1%, up 90 basis points
|
•
|
Recovery rate of 60.3%, stable
|
•
|
RIC net charge-off ratio of
6.4%
, up 30 basis points
|
•
|
Troubled Debt Restructuring (“TDR”) balance of
$4.5 billion
, down $397 million vs. March 31, 2019
|
•
|
Return on average assets of
3.2%
, down from
3.3%
|
•
|
$3.4 billion in loan asset-backed securities “ABS”
|
•
|
Expense ratio of
2.0%
, down from
2.2
%
|
•
|
Common equity tier 1 (“CET1”) ratio of
15.7%
, down from
16.9%
as of June 30, 2018
|
|
|
|
Table of Contents
|
|
|
Table 1: Condensed Consolidated Balance Sheets
|
5
|
|
Table 2: Condensed Consolidated Statements of Income
|
6
|
|
Table 3: Other Financial Information
|
7
|
|
Table 4: Credit Quality
|
9
|
|
Table 5: Originations
|
10
|
|
Table 6: Asset Sales
|
11
|
|
Table 7: Ending Portfolio
|
12
|
|
Table 8: Reconciliation of Non-GAAP Measures
|
13
|
|
|
June 30,
2019 |
|
December 31,
2018
|
||||
Assets
|
(Unaudited, Dollars in thousands)
|
||||||
Cash and cash equivalents
|
$
|
99,756
|
|
|
$
|
148,436
|
|
Finance receivables held for sale, net
|
1,249,101
|
|
|
1,068,757
|
|
||
Finance receivables held for investment, net
|
25,838,749
|
|
|
25,117,454
|
|
||
Restricted cash
|
2,272,621
|
|
|
2,102,048
|
|
||
Accrued interest receivable
|
277,813
|
|
|
303,686
|
|
||
Leased vehicles, net
|
15,313,369
|
|
|
13,978,855
|
|
||
Furniture and equipment, net
|
59,176
|
|
|
61,280
|
|
||
Federal, state and other income taxes receivable
|
83,427
|
|
|
97,087
|
|
||
Related party taxes receivable
|
4,581
|
|
|
734
|
|
||
Goodwill
|
74,056
|
|
|
74,056
|
|
||
Intangible assets
|
34,117
|
|
|
35,195
|
|
||
Due from affiliates
|
19,581
|
|
|
8,920
|
|
||
Other assets
|
1,089,746
|
|
|
963,347
|
|
||
Total assets
|
$
|
46,416,093
|
|
|
$
|
43,959,855
|
|
Liabilities and Equity
|
|
|
|
||||
Liabilities:
|
|
|
|
||||
Notes payable — credit facilities
|
$
|
6,514,163
|
|
|
$
|
4,478,214
|
|
Notes payable — secured structured financings
|
26,248,528
|
|
|
26,901,530
|
|
||
Notes payable — related party
|
4,002,814
|
|
|
3,503,293
|
|
||
Accrued interest payable
|
46,817
|
|
|
49,370
|
|
||
Accounts payable and accrued expenses
|
431,004
|
|
|
422,951
|
|
||
Deferred tax liabilities, net
|
1,327,342
|
|
|
1,155,883
|
|
||
Due to affiliates
|
91,320
|
|
|
63,219
|
|
||
Other liabilities
|
416,844
|
|
|
367,037
|
|
||
Total liabilities
|
$
|
39,078,832
|
|
|
$
|
36,941,497
|
|
|
|
|
|
||||
Equity:
|
|
|
|
||||
Common stock, $0.01 par value
|
3,481
|
|
|
3,523
|
|
||
Additional paid-in capital
|
1,413,461
|
|
|
1,515,572
|
|
||
Accumulated other comprehensive income, net
|
(20,567
|
)
|
|
33,515
|
|
||
Retained earnings
|
5,940,886
|
|
|
5,465,748
|
|
||
Total stockholders’ equity
|
$
|
7,337,261
|
|
|
$
|
7,018,358
|
|
Total liabilities and equity
|
$
|
46,416,093
|
|
|
$
|
43,959,855
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(Unaudited, Dollars in thousands, except per share amounts)
|
||||||||||||||
Interest on finance receivables and loans
|
$
|
1,261,098
|
|
|
$
|
1,211,006
|
|
|
$
|
2,514,678
|
|
|
$
|
2,379,546
|
|
Leased vehicle income
|
676,236
|
|
|
537,897
|
|
|
1,325,796
|
|
|
1,042,175
|
|
||||
Other finance and interest income
|
11,437
|
|
|
8,494
|
|
|
21,684
|
|
|
15,631
|
|
||||
Total finance and other interest income
|
1,948,771
|
|
|
1,757,397
|
|
|
3,862,158
|
|
|
3,437,352
|
|
||||
Interest expense
|
330,039
|
|
|
273,953
|
|
|
664,421
|
|
|
514,981
|
|
||||
Leased vehicle expense
|
444,442
|
|
|
360,335
|
|
|
888,461
|
|
|
719,018
|
|
||||
Net finance and other interest income
|
1,174,290
|
|
|
1,123,109
|
|
|
2,309,276
|
|
|
2,203,353
|
|
||||
Provision for credit losses
|
430,676
|
|
|
406,544
|
|
|
981,555
|
|
|
916,885
|
|
||||
Net finance and other interest income after provision for credit losses
|
743,614
|
|
|
716,565
|
|
|
1,327,721
|
|
|
1,286,468
|
|
||||
Profit sharing
|
13,345
|
|
|
12,853
|
|
|
20,313
|
|
|
17,230
|
|
||||
Net finance and other interest income after provision for credit losses and profit sharing
|
730,269
|
|
|
703,712
|
|
|
1,307,408
|
|
|
1,269,238
|
|
||||
Investment losses, net
|
(84,787
|
)
|
|
(82,634
|
)
|
|
(151,884
|
)
|
|
(169,154
|
)
|
||||
Servicing fee income
|
25,002
|
|
|
27,538
|
|
|
48,808
|
|
|
53,720
|
|
||||
Fees, commissions, and other
|
90,196
|
|
|
77,480
|
|
|
184,572
|
|
|
162,871
|
|
||||
Total other income
|
30,411
|
|
|
22,384
|
|
|
81,496
|
|
|
47,437
|
|
||||
Compensation expense
|
122,678
|
|
|
118,598
|
|
|
250,572
|
|
|
240,603
|
|
||||
Repossession expense
|
69,699
|
|
|
63,660
|
|
|
140,559
|
|
|
135,741
|
|
||||
Other operating costs
|
88,272
|
|
|
94,692
|
|
|
180,475
|
|
|
188,518
|
|
||||
Total operating expenses
|
280,649
|
|
|
276,950
|
|
|
571,606
|
|
|
564,862
|
|
||||
Income before income taxes
|
480,031
|
|
|
449,146
|
|
|
817,298
|
|
|
751,813
|
|
||||
Income tax expense
|
111,764
|
|
|
114,120
|
|
|
201,528
|
|
|
172,172
|
|
||||
Net income
|
$
|
368,267
|
|
|
$
|
335,026
|
|
|
$
|
615,770
|
|
|
$
|
579,640
|
|
|
|
|
|
|
|
|
|
||||||||
Net income per common share (basic)
|
$
|
1.05
|
|
|
$
|
0.93
|
|
|
$
|
1.75
|
|
|
$
|
1.61
|
|
Net income per common share (diluted)
|
$
|
1.05
|
|
|
$
|
0.93
|
|
|
$
|
1.75
|
|
|
$
|
1.60
|
|
Weighted average common shares (basic)
|
351,106,197
|
|
|
361,268,112
|
|
|
351,309,700
|
|
|
360,987,233
|
|
||||
Weighted average common shares (diluted)
|
351,556,349
|
|
|
362,057,614
|
|
|
351,825,554
|
|
|
361,829,283
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
Ratios (Unaudited, Dollars in thousands)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Yield on individually acquired retail installment contracts
|
16.1
|
%
|
|
16.2
|
%
|
|
16.1
|
%
|
|
16.1
|
%
|
||||
Yield on purchased receivables portfolios
|
14.0
|
%
|
|
24.1
|
%
|
|
16.8
|
%
|
|
25.9
|
%
|
||||
Yield on receivables from dealers
|
1.6
|
%
|
|
3.4
|
%
|
|
2.6
|
%
|
|
3.2
|
%
|
||||
Yield on personal loans, held for sale (1)
|
26.3
|
%
|
|
24.6
|
%
|
|
26.2
|
%
|
|
24.5
|
%
|
||||
Yield on earning assets (2)
|
12.9
|
%
|
|
13.5
|
%
|
|
12.9
|
%
|
|
13.4
|
%
|
||||
Cost of debt (3)
|
3.7
|
%
|
|
3.4
|
%
|
|
3.7
|
%
|
|
3.3
|
%
|
||||
Net interest margin (4)
|
10.1
|
%
|
|
10.9
|
%
|
|
10.0
|
%
|
|
10.8
|
%
|
||||
Expense ratio (5)
|
2.0
|
%
|
|
2.2
|
%
|
|
2.1
|
%
|
|
2.3
|
%
|
||||
Return on average assets (6)
|
3.2
|
%
|
|
3.3
|
%
|
|
2.7
|
%
|
|
2.9
|
%
|
||||
Return on average equity (7)
|
20.3
|
%
|
|
19.5
|
%
|
|
17.2
|
%
|
|
17.2
|
%
|
||||
Net charge-off ratio on individually acquired retail installment contracts (8)
|
6.4
|
%
|
|
6.1
|
%
|
|
7.5
|
%
|
|
7.2
|
%
|
||||
Net charge-off ratio (8)
|
6.4
|
%
|
|
6.0
|
%
|
|
7.5
|
%
|
|
7.2
|
%
|
||||
Delinquency ratio on individually acquired retail installment contracts held for investment, end of period (9)
|
4.7
|
%
|
|
4.5
|
%
|
|
4.7
|
%
|
|
4.5
|
%
|
||||
Delinquency ratio on loans held for investment, end of period (9)
|
4.7
|
%
|
|
4.5
|
%
|
|
4.7
|
%
|
|
4.5
|
%
|
||||
Allowance ratio (10)
|
10.8
|
%
|
|
12.1
|
%
|
|
10.8
|
%
|
|
12.1
|
%
|
||||
Common stock dividend payout ratio (11)
|
19.1
|
%
|
|
5.4
|
%
|
|
22.8
|
%
|
|
6.2
|
%
|
||||
Common Equity Tier 1 capital ratio (12)
|
15.7
|
%
|
|
16.9
|
%
|
|
15.7
|
%
|
|
16.9
|
%
|
||||
Charge-offs, net of recoveries, on individually acquired retail installment contracts
|
$
|
462,427
|
|
|
$
|
405,651
|
|
|
$
|
1,077,631
|
|
|
$
|
946,934
|
|
Charge-offs, net of recoveries, on purchased receivables portfolios
|
—
|
|
|
(565
|
)
|
|
—
|
|
|
(993
|
)
|
||||
Charge-offs, net of recoveries, on personal loans
|
1,675
|
|
|
515
|
|
|
1,914
|
|
|
1,264
|
|
||||
Charge-offs, net of recoveries, on finance leases
|
175
|
|
|
406
|
|
|
347
|
|
|
712
|
|
||||
Total charge-offs, net of recoveries
|
$
|
464,277
|
|
|
$
|
406,007
|
|
|
$
|
1,079,892
|
|
|
$
|
947,917
|
|
End of period delinquent principal over 59 days, individually acquired retail installment contracts held for investment
|
1,368,427
|
|
|
1,232,521
|
|
|
1,368,427
|
|
|
1,232,521
|
|
||||
End of period delinquent principal over 59 days, personal loans
|
167,033
|
|
|
164,458
|
|
|
167,033
|
|
|
183,919
|
|
||||
End of period delinquent principal over 59 days, loans held for investment
|
1,368,427
|
|
|
1,234,502
|
|
|
1,368,427
|
|
|
1,234,502
|
|
||||
End of period assets covered by allowance for credit losses
|
29,007,585
|
|
|
27,551,134
|
|
|
29,007,585
|
|
|
27,551,134
|
|
||||
End of period gross individually acquired retail installment contracts held for investment
|
28,971,311
|
|
|
27,511,718
|
|
|
28,971,311
|
|
|
27,511,718
|
|
||||
End of period gross personal loans held for sale
|
1,364,956
|
|
|
1,370,888
|
|
|
1,364,956
|
|
|
1,370,888
|
|
||||
End of period gross finance receivables and loans held for investment
|
29,009,846
|
|
|
27,566,517
|
|
|
29,009,846
|
|
|
27,566,517
|
|
||||
End of period gross finance receivables, loans, and leases held for investment
|
45,557,709
|
|
|
40,422,435
|
|
|
45,557,709
|
|
|
40,422,435
|
|
||||
Average gross individually acquired retail installment contracts held for investment
|
29,017,122
|
|
|
26,772,369
|
|
|
28,816,732
|
|
|
26,402,688
|
|
||||
Average gross personal loans held for investment
|
1,337
|
|
|
4,562
|
|
|
1,809
|
|
|
5,304
|
|
||||
Average gross individually acquired retail installment contracts held for investment and held for sale
|
$
|
29,070,738
|
|
|
$
|
27,673,016
|
|
|
$
|
28,834,640
|
|
|
$
|
27,305,408
|
|
Average gross purchased receivables portfolios
|
26,759
|
|
|
37,284
|
|
|
28,020
|
|
|
39,257
|
|
||||
Average gross receivables from dealers
|
13,088
|
|
|
15,361
|
|
|
13,368
|
|
|
15,507
|
|
||||
Average gross personal loans held for sale
|
1,375,306
|
|
|
1,375,877
|
|
|
1,424,717
|
|
|
1,421,861
|
|
||||
Average gross finance leases
|
21,889
|
|
|
20,937
|
|
|
20,994
|
|
|
21,699
|
|
||||
Average gross finance receivables and loans
|
$
|
30,507,780
|
|
|
$
|
29,122,475
|
|
|
$
|
30,321,739
|
|
|
$
|
28,803,732
|
|
Average gross operating leases
|
16,043,654
|
|
|
12,219,612
|
|
|
15,752,705
|
|
|
11,856,109
|
|
||||
Average gross finance receivables, loans, and leases
|
46,551,434
|
|
|
41,342,087
|
|
|
46,074,444
|
|
|
40,659,841
|
|
||||
Average managed assets
|
55,545,503
|
|
|
50,445,203
|
|
|
55,043,583
|
|
|
49,632,691
|
|
||||
Average total assets
|
45,700,887
|
|
|
40,885,720
|
|
|
45,101,873
|
|
|
40,316,990
|
|
||||
Average debt
|
36,152,602
|
|
|
31,898,900
|
|
|
35,715,392
|
|
|
31,589,063
|
|
||||
Average total equity
|
7,273,470
|
|
|
6,879,749
|
|
|
7,163,738
|
|
|
6,724,157
|
|
(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 held-for-investment portfolio.
|
(9)
|
“Delinquency ratio” is defined as the ratio of End of period Delinquent principal over 59 days to End of period gross balance of the respective portfolio, excludes finance leases
|
(10)
|
“Allowance ratio” is defined as the ratio of Allowance for credit losses, which excludes impairment on purchased receivables portfolios, to End of period assets covered by allowance for credit losses
|
(11)
|
“Common stock dividend payout ratio” is defined as the ratio of Dividends declared per share of common stock to Earnings per share attributable to the Company's shareholders.
|
(12)
|
“Common Equity Tier 1 Capital ratio” is a non-GAAP ratio defined as the ratio of Total common equity tier 1 capital to Total risk-weighted assets (for a reconciliation from GAAP to this non-GAAP measure, see “Reconciliation of Non-GAAP Measures” in Table 8 of this release)
|
|
Three Months Ended June 30, 2019
|
|
Three Months Ended June 30, 2018
|
||||||||||||
|
Retail Installment Contracts Acquired Individually
|
|
Retail Installment Contracts Acquired Individually
|
||||||||||||
Allowance for Credit Loss
|
Non-TDR
|
|
TDR
|
|
Non-TDR
|
|
TDR
|
||||||||
|
|||||||||||||||
Balance — beginning of period
|
$
|
1,891,351
|
|
|
$
|
1,280,649
|
|
|
$
|
1,597,057
|
|
|
$
|
1,716,132
|
|
Provision for credit losses
|
365,604
|
|
|
63,414
|
|
|
263,648
|
|
|
144,750
|
|
||||
Charge-offs
|
(795,901
|
)
|
|
(369,523
|
)
|
|
(605,658
|
)
|
|
(412,710
|
)
|
||||
Recoveries
|
517,626
|
|
|
185,371
|
|
|
396,667
|
|
|
216,050
|
|
||||
Transfers to held-for-sale
|
(16,787
|
)
|
|
(3,608
|
)
|
|
—
|
|
|
—
|
|
||||
Balance — end of period
|
$
|
1,961,893
|
|
|
$
|
1,156,303
|
|
|
$
|
1,651,714
|
|
|
$
|
1,664,222
|
|
|
Six Months Ended June 30, 2019
|
|
Six Months Ended June 30, 2018
|
||||||||||||
|
Retail Installment Contracts Acquired Individually
|
|
Retail Installment Contracts Acquired Individually
|
||||||||||||
Allowance for Credit Loss
|
Non-TDR
|
|
TDR
|
|
Non-TDR
|
|
TDR
|
||||||||
|
|||||||||||||||
Balance — beginning of period
|
$
|
1,819,360
|
|
|
$
|
1,416,743
|
|
|
$
|
1,540,315
|
|
|
$
|
1,804,132
|
|
Provision for credit losses
|
$
|
812,092
|
|
|
$
|
168,027
|
|
|
550,099
|
|
|
368,324
|
|
||
Charge-offs
|
$
|
(1,723,358
|
)
|
|
$
|
(836,160
|
)
|
|
(1,260,827
|
)
|
|
(960,053
|
)
|
||
Recoveries
|
$
|
1,070,586
|
|
|
$
|
411,301
|
|
|
822,127
|
|
|
451,819
|
|
||
Transfers to held-for-sale
|
$
|
(16,787
|
)
|
|
$
|
(3,608
|
)
|
|
—
|
|
|
—
|
|
||
Balance — end of period
|
$
|
1,961,893
|
|
|
$
|
1,156,303
|
|
|
$
|
1,651,714
|
|
|
$
|
1,664,222
|
|
Delinquent Principal
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||
Principal 30-59 days past due
|
$
|
2,723,639
|
|
|
9.4
|
%
|
|
$
|
3,118,869
|
|
|
11.0
|
%
|
Delinquent principal over 59 days
2
|
1,367,310
|
|
|
4.7
|
%
|
|
1,712,243
|
|
|
6.0
|
%
|
||
Total delinquent contracts
|
$
|
4,090,949
|
|
|
14.1
|
%
|
|
$
|
4,831,112
|
|
|
17.0
|
%
|
Nonaccrual Principal
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||
Non-TDR
|
$
|
864,619
|
|
|
3.0
|
%
|
|
$
|
834,921
|
|
|
2.9
|
%
|
TDR
|
546,495
|
|
|
1.9
|
%
|
|
733,218
|
|
|
2.6
|
%
|
||
Total nonaccrual principal
|
$
|
1,411,114
|
|
|
4.9
|
%
|
|
$
|
1,568,139
|
|
|
5.5
|
%
|
Allowance Ratios
|
June 30,
2019 |
|
December 31,
2018 |
||||
TDR - Unpaid principal balance
|
$
|
4,519,334
|
|
|
$
|
5,378,603
|
|
TDR - Impairment
|
1,156,303
|
|
|
1,416,743
|
|
||
TDR - Allowance ratio
|
25.6
|
%
|
|
26.3
|
%
|
||
|
|
|
|
||||
Non-TDR - Unpaid principal balance
|
$
|
24,451,977
|
|
|
$
|
23,054,157
|
|
Non-TDR - Allowance
|
1,961,893
|
|
|
1,819,360
|
|
||
Non-TDR Allowance ratio
|
8.0
|
%
|
|
7.9
|
%
|
||
|
|
|
|
||||
Total - Unpaid principal balance
|
$
|
28,971,311
|
|
|
$
|
28,432,760
|
|
Total - Allowance
|
3,118,196
|
|
|
3,236,103
|
|
||
Total - Allowance ratio
|
10.8
|
%
|
|
11.4
|
%
|
|
Three Months Ended
|
|
Six Months Ended
|
|
Three Months Ended
|
||||||||||||||
|
June 30, 2019
|
|
June 30, 2018
|
|
June 30, 2019
|
|
June 30, 2018
|
|
March 31, 2019
|
||||||||||
Retained Originations
|
(Unaudited, Dollar amounts in thousands)
|
||||||||||||||||||
Retail installment contracts
|
$
|
3,949,648
|
|
|
$
|
4,630,704
|
|
|
$
|
7,975,975
|
|
|
$
|
8,014,110
|
|
|
$
|
4,026,327
|
|
Average APR
|
16.2 %
|
|
|
16.8
|
%
|
|
16.7 %
|
|
|
17.0
|
%
|
|
17.2
|
%
|
|||||
Average FICO® (a)
|
601
|
|
|
602
|
|
|
597
|
|
|
599
|
|
|
593
|
|
|||||
Discount
|
(0.5
|
)%
|
|
0.004
|
%
|
|
(0.3
|
)%
|
|
0.2
|
%
|
|
(0.1
|
)%
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Personal loans
|
343,214
|
|
|
340,088
|
|
|
631,770
|
|
|
613,416
|
|
|
$
|
288,557
|
|
||||
Average APR
|
29.7
|
%
|
|
27.1
|
%
|
|
29.8
|
%
|
|
28.3
|
%
|
|
29.7
|
%
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Leased vehicles
|
2,520,130
|
|
|
2,632,052
|
|
|
4,483,710
|
|
|
4,725,657
|
|
|
$
|
1,963,580
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Finance lease
|
4,822
|
|
|
2,058
|
|
|
8,129
|
|
|
$
|
4,456
|
|
|
$
|
3,308
|
|
|||
Total originations retained
|
$
|
6,817,814
|
|
|
$
|
7,604,902
|
|
|
$
|
13,099,584
|
|
|
$
|
13,357,639
|
|
|
$
|
6,281,772
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Sold Originations (b)
|
|
|
|
|
|
|
|
|
|
||||||||||
Retail installment contracts
|
$
|
—
|
|
|
$
|
683,935
|
|
|
$
|
—
|
|
|
$
|
1,553,979
|
|
|
$
|
—
|
|
Average APR
|
—
|
%
|
|
7.6
|
%
|
|
—
|
%
|
|
7.3
|
%
|
|
—
|
%
|
|||||
Average FICO® (b)
|
—
|
|
|
726
|
|
|
—
|
|
|
726
|
|
|
—
|
|
|||||
Total originations sold
|
$
|
—
|
|
|
$
|
683,935
|
|
|
$
|
—
|
|
|
$
|
1,553,979
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total originations (excluding SBNA Originations Program)
|
$
|
6,817,814
|
|
|
$
|
8,288,837
|
|
|
$
|
13,099,584
|
|
|
$
|
14,911,618
|
|
|
$
|
6,281,772
|
|
(a)
|
Unpaid principal balance excluded from the weighted average FICO score is
$448 million
,
$594 million
,
$941 million
,
$1 billion
and
$493 million
for the
three
months ended
June 30, 2019
and
2018
, the
six
months ended
June 30, 2019
and
2018
, and for the three months ended
March 31, 2019
respectively, as the borrowers on these loans did not have FICO scores at origination. Of these amounts,
$141 million
,
$44 million
,
$247 million
,
$77 million
and
$106 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. Unpaid principal balance excluded from the weighted average FICO score is
zero
,
$54 million
,
zero
,
$121 million
and
zero
for the
three
months ended
June 30, 2019
and
2018
,the
six
months ended
June 30, 2019
and
2018
, and the
three
months ended
March 31, 2019
, respectively, as the borrowers on these loans did not have FICO scores at origination. Of these amounts,
zero
,
$26 million
,
zero
,
$67 million
and
zero
, respectively, were commercial loans.
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30, 2019
|
|
June 30, 2018
|
|
June 30, 2019
|
|
June 30, 2018
|
||||||||
|
(Unaudited, Dollar amounts in thousands)
|
||||||||||||||
Retail installment contracts
|
$
|
—
|
|
|
$
|
1,156,060
|
|
|
$
|
—
|
|
|
$
|
2,631,313
|
|
Average APR
|
—
|
%
|
|
7.5
|
%
|
|
—
|
%
|
|
7.0
|
%
|
||||
Average FICO®
|
—
|
|
|
724
|
|
|
—
|
|
|
726
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Total asset sales
|
$
|
—
|
|
|
$
|
1,156,060
|
|
|
$
|
—
|
|
|
$
|
2,631,313
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
|
(
Unaudited,
Dollar amounts in thousands)
|
||||||
Retail installment contracts
|
$
|
28,996,835
|
|
|
$
|
28,463,236
|
|
Average APR
|
16.8
|
%
|
|
16.7
|
%
|
||
Discount
|
0.5
|
%
|
|
0.8
|
%
|
||
|
|
|
|
||||
Personal loans (a)
|
$
|
—
|
|
|
$
|
2,637
|
|
Average APR
|
—
|
%
|
|
31.7
|
%
|
||
|
|
|
|
||||
Receivables from dealers
|
$
|
13,010
|
|
|
$
|
14,710
|
|
Average APR
|
4.0
|
%
|
|
4.1
|
%
|
||
|
|
|
|
||||
Leased vehicles
|
$
|
16,524,600
|
|
|
$
|
15,219,313
|
|
|
|
|
|
||||
Finance leases
|
$
|
23,263
|
|
|
$
|
19,344
|
|
|
June 30,
2019
|
|
June 30,
2018
|
||||
|
(
Unaudited,
Dollar amounts in thousands)
|
||||||
Total equity
|
$
|
7,337,261
|
|
|
$
|
7,033,636
|
|
Deduct: Goodwill, intangibles, and other assets, net of deferred tax liabilities
|
152,264
|
|
|
166,241
|
|
||
Deduct: Accumulated other comprehensive income (loss), net
|
(21,568
|
)
|
|
62,449
|
|
||
Tier 1 common capital
|
$
|
7,206,565
|
|
|
$
|
6,804,946
|
|
Risk weighted assets (a)
|
$
|
45,849,574
|
|
|
$
|
40,251,526
|
|
Common Equity Tier 1 capital ratio (b)
|
15.7
|
%
|
|
16.9
|
%
|
(a)
|
Under the banking agencies' risk-based capital guidelines, assets and credit equivalent amounts of derivatives and off-balance sheet exposures are assigned to broad risk categories. The aggregate dollar amount in each risk category is multiplied by the associated risk weight of the category. The resulting weighted values are added together with the measure for market risk, resulting in the Company's total Risk weighted assets.
|
(b)
|
CET1 is calculated under Basel III regulations required as of January 1, 2015. The fully phased-in capital ratios are non-GAAP financial measures.
|