PR Newswire | Oct 28, 2020 06:16AM EDT

10/28 05:15 CDT

Santander Consumer USA Holdings Inc. Reports Third Quarter 2020 ResultsNet Income of $490 Million; More Than $8 Billion in Originations in the Third Quarter of 2020 DALLAS, Oct. 28, 2020

DALLAS, Oct. 28, 2020 /PRNewswire/ -- Santander Consumer USA Holdings Inc. (NYSE: SC) ("SC" or the "Company") today announced net income for the third quarter ended September 30, 2020 ("Q3 2020") of $490 million, or $1.58 per diluted common share. The quarter included $46 million of net charge-offs and $293 million of incremental allowance for credit loss primarily driven by balance growth.

On September 30, 2020, the Federal Reserve Board ("FRB") extended to the fourth quarter its interim policy applicable to all CCAR banks prohibiting share repurchases and limiting dividends to average trailing net income. Although SC's standalone income is sufficient to support a dividend, it is consolidated into Santander Holdings USA, Inc.'s ("SHUSA") capital plan and therefore is subject to the FRB's interim policy that utilizes SHUSA's average trailing income to determine the cap on common stock dividends. SC does not currently expect to declare or pay a dividend in the fourth quarter of 2020.

Management Quotes

"As the pandemic continues to affect our country and our industry, our top priority remains serving our dealers, customers and employees. During the quarter we originated more than $8 billion in loans and leases, continued to grow balances and remained disciplined in our underwriting. Our portfolio continues to be resilient as demand for customer deferrals declined significantly and delinquency is at a historic low. These factors, in addition to robust used vehicle prices, led to a solid quarter across the board and positions us to finish the year strong," said Mahesh Aditya, SC President and CEO.

Fahmi Karam, SC Chief Financial Officer, added,"This quarter's results highlight the unique environment we are currently operating in with low losses driven by relief programs and historically high used car prices driving strong net income. We grew reserves in the quarter to over $6 billion, or an 18.4% allowance ratio, driven by increased balances and continued uncertainty in the macro outlook. We are well capitalized with a 13.7% CET1 ratio, and combined with our reserve, we have an industry leading loss absorbing capacity to manage through the pandemic and position us for long-term success."

Third Quarter of 2020 Highlights(variances compared to third quarter of 2019 ("Q3 2019"), unless otherwise noted)

* Total auto originations of $8.4 billion, flat * Core retail auto loan originations of $2.7 billion, up 5% * Chrysler Capital loan originations of $3.8 billion, up 6% * Chrysler Capital lease originations of $1.9 billion, down 17% * Chrysler average quarterly penetration rate of 33%, from 36% * Santander Bank, N.A. program originations of $1.1 billion

* Net finance and other interest income1 of $1.3 billion, up 6% * 30-59 delinquency ratio of 5.0%, down 450 basis points * 59-plus delinquency ratio2 of 2.4%, down 230 basis points * Retail Installment Contract ("RIC") gross charge-off ratio of 6.8%, down 11.5 percentage points * Recovery rate of 91.4%, up from 55.9% * RIC net charge-off ratio3 of 0.6%, down 750 basis points * Troubled Debt Restructuring ("TDR") balance of $3.8 billion, down from $4.2 billion * Return on average assets of 4.1%, up from 2.0% * $3.3 billion in asset-backed securities "ABS" issued * Expense ratio of 1.7%, down from 2.3% * Common equity tier 1 ("CET1") ratio of 13.7%, down from 15.4% as of September 30, 2019

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

2 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.

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.

Conference Call Information

SC will host a conference call and webcast to discuss its Q3 2020 results and other general matters at 9:00 a.m. Eastern Time on Wednesday, October 28, 2020. The conference call will be accessible by dialing 1-800-289-0438 (U.S. domestic), or 1-323-794-2423 (international), conference ID 2222613. Please join 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 SC's corporate website at http://investors.santanderconsumerusa.com. Choose "Events" and select the information pertaining to the Q3 2020 SC Earnings Conference Call. Additionally, there will be slides accompanying the webcast. Please allow at least 15 minutes prior to the call to register, download and install any necessary software prior to the call.

For those unable to listen to the live broadcast, a replay of the call will be available on the Company's website or by dialing 844-512-2921 (U.S. domestic), or 412-317-6671 (international), conference ID 2222613, approximately two hours after the conference call. An audio webcast of the call and investor presentation will also be archived on the Investor Relations section of SC's corporate website at http://investors.santanderconsumerusa.com, under "Events".

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 for the year ended December 31, 2019, our subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K, or other applicable documents that are filed or furnished with the U.S. Securities and Exchange Commission (collectively, our "SEC filings"). 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 adverse impact of COVID-19 on our business, financial condition, liquidity and results of operations; (b) continually changing federal, state, and local laws and regulations could materially adversely affect our business; (c) adverse economic conditions in the United States and worldwide may negatively impact our results; (d) a reduction in our access to funding a reduction in ; (e) significant risks we face implementing our growth strategy, some of which are outside our control; (f) unexpected costs and delays in connection with exiting our personal lending business; (g) our agreement with FCA US LLC may not result in currently anticipated levels of growth and is subject to certain conditions that could result in termination of the agreement; (h) our business could suffer if we are unsuccessful in developing and maintaining relationships with automobile dealerships; (i) our financial condition, liquidity, and results of operations depend on the credit performance of our loans; (j) loss of our key management or other personnel, or an inability to attract such management and personnel; (k) certain 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 (l) future changes in our relationship with SHUSA and 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 as new factors emerge from time to time. Any forward-looking statements only speak as of the date of this document, and we undertake no obligation to update any forward-looking information or statements, whether written or oral, to reflect any change, except as required by law. All forward-looking statements attributable to us are expressly qualified by these cautionary statements.

About Santander Consumer USA Holdings Inc.

Santander Consumer USA Holdings Inc. (NYSE: SC) ("SC") is a full-service consumer finance company focused on vehicle finance, third-party servicing and delivering superior service to our more than 3.1 million customers across the full credit spectrum. SC, which began originating retail installment contracts in 1997, had an average managed asset portfolio of approximately $63 billion (for the third quarter ended September 30, 2020), and is headquartered in Dallas, Texas. (www.santanderconsumerusa.com)

CONTACTS:

Investor Relations Evan Black800.493.8219InvestorRelations@santanderconsumerusa.com

Media RelationsLaurie Kight214.801.6455 Media@santanderconsumerusa.com





Santander Consumer USA Holdings Inc.

Financial Supplement

Third Quarter 2020



Table of Contents



Table 1: Condensed Consolidated Balance Sheets 6

Table 2: Condensed Consolidated Statements of Income7

Table 3: Other Financial Information 8

Table 4: Credit Quality 10

Table 5: Originations 12

Table 6: Asset sales 13

Table 7: Ending Portfolio 14

Table 8: Reconciliation of Non-GAAP Measures 15

Table 1: Condensed Consolidated Balance Sheets



September 30, 2020December 31, 2019

Assets (Unaudited, Dollars in thousands)

Cash and cash equivalents $105,616 $81,848

Finance receivables held for sale, net 763,292 1,007,105

Finance receivables held for 33,602,108 30,810,487 investment, at amortized cost

Allowance for credit loss (6,152,378) (3,043,468)

Finance receivables held for 27,449,730 27,767,019 investment, at amortized cost, net

Restricted cash 2,267,154 2,079,239

Accrued interest receivable 428,586 288,615

Leased vehicles, net 16,195,376 16,461,982

Furniture and equipment, net 60,105 59,873

Goodwill 74,056 74,056

Intangible assets 62,341 42,772

Other assets 1,042,665 1,071,020

Total assets $48,448,921 $48,933,529

Liabilities and Equity

Liabilities:

Borrowings and other debt obligations $41,369,347 $39,194,141

Deferred tax liabilities, net 1,095,238 1,468,222

Accounts payable and accrued expenses 524,816 563,277

Other liabilities 364,708 389,269

Total liabilities $43,354,109 $41,614,909



Equity:

Common stock, $0.01 par value 3,061 3,392

Additional paid-in capital 394,428 1,173,262

Accumulated other comprehensive income,(56,882) (26,693) net

Retained earnings 4,754,205 6,168,659

Total stockholders' equity $5,094,812 $7,318,620

Total liabilities and equity $48,448,921 $48,933,529







Table 2: Condensed Consolidated Statements of Income



Three Months Ended September Nine Months Ended September 30, 30,

2020 2019 2020 2019

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

Interest on finance $1,300,694 $1,273,022 $3,811,113 $3,787,700 receivables and loans

Leased vehicle725,156 706,302 2,210,684 2,032,098 income

Other finance and interest 2,146 9,926 12,354 31,610 income

Total finance and other 2,027,996 1,989,250 6,034,151 5,851,408 interest income

Interest 292,118 335,212 929,934 999,633 expense

Leased vehicle467,172 456,193 1,630,945 1,344,654 expense

Net finance and other 1,268,706 1,197,845 3,473,272 3,507,121 interest income

Credit loss 340,548 566,849 2,110,331 1,548,404 expense

Net finance and other interest 928,158 630,996 1,362,941 1,958,717 income after credit loss expense

Profit sharing30,414 18,125 56,239 38,438

Net finance and other interest income after 897,744 612,871 1,306,702 1,920,279 credit loss expense and profit sharing

Investment (68,989) (86,397) (279,997) (238,281) losses, net

Servicing fee 18,574 21,447 56,797 70,255 income

Fees, commissions, 78,924 96,243 256,123 280,815 and other

Total other 28,509 31,293 32,923 112,789 income

Compensation 127,991 132,271 388,960 382,843 and benefits

Repossession 35,910 62,937 115,861 203,496 expense

Other expenses99,761 134,262 308,193 314,737

Total other 263,662 329,470 813,014 901,076 expenses

Income (loss) before income 662,591 314,694 526,611 1,131,992 taxes

Income tax 172,476 82,156 137,161 283,684 expense

Net income $490,115 $232,538 $389,450 $848,308 (loss)



Net income per common share $1.58 $0.67 $1.21 $2.43 (basic)

Net income per common share $1.58 $0.67 $1.21 $2.42 (diluted)

Weighted average common310,150,293 345,469,657 321,275,907 349,341,627 shares (basic)

Weighted average common$310,307,265$345,956,043$321,492,331$349,855,822shares (diluted)

Number of shares 306,070,972 342,864,213 306,070,972 342,864,213 outstanding







Table 3: Other Financial Information



Three Months Ended September 30,Nine Months Ended September 30,

Ratios (Unaudited, 2020 2019 2020 2019 Dollars in thousands)

Yield on retail installment 14.9 % 16.1 %15.0 %16.1 % contracts

Yield on leased6.0 % 5.9 %4.4 %5.7 % vehicles

Yield on personal loans,25.6 % 26.3 %25.9 %26.2 % held for sale (1)

Yield on earning assets 12.2 % 12.8 %11.6 %12.9 % (2)

Cost of debt 2.8 % 3.6 %3.1 %3.7 % (3)

Net interest 9.9 % 10.0 %9.2 %10.0 % margin (4)

Expense ratio 1.7 % 2.3 %1.8 %2.2 % (5)

Return on average assets 4.1 % 2.0 %1.1 %2.5 % (6)

Return on average equity 38.9 % 12.7 %9.6 %15.7 % (7)

Net charge-off ratio on individually 0.6 % 8.1 %4.7 %7.7 % acquired retail installment contracts (8)

Net charge-off 0.6 % 8.1 %4.7 %7.7 % ratio (8)

Delinquency ratio on individually acquired retail installment 2.4 % 4.7 %2.4 %4.7 % contracts held for investment, end of period (9)

Delinquency ratio on loans held for 2.4 % 4.7 %2.4 %4.7 % investment, end of period (9)

Allowance ratio18.4 % 10.5 %18.4 %10.5 % (10)

Common stock dividend payout13.9 % 32.7 %54.4 %25.5 % ratio (11)

Common Equity Tier 1 capital 13.7 % 15.4 %13.7 %15.4 % ratio (12)

Charge-offs, net of recoveries, on individually$46,078 $592,912 $1,100,138 $ 1,670,543 acquired retail installment contracts

Total charge-offs, 48,125 592,893 $1,103,649 $ 1,672,785 net of recoveries

End of period delinquent amortized cost over 59 days, 817,577 1,394,074 817,577 1,394,074 retail installment contracts held for investment

End of period personal loans delinquent 93,296 176,500 93,296 176,500 principal over 59 days, held for sale

End of period delinquent amortized cost 817,911 1,394,074 817,911 1,394,074 over 59 days, loans held for investment

End of period assets covered by allowance 33,515,634 29,636,174 33,515,634 29,636,174 for credit losses

End of period gross retail installment 33,485,342 29,597,897 33,485,342 29,597,897 contracts held for investment

End of period gross personal 1,211,575 1,322,301 1,211,575 1,322,301 loans held for sale

End of period gross finance receivables and33,489,017 29,633,950 33,489,017 29,633,950 loans held for investment

End of period gross finance receivables, 50,617,356 46,874,858 50,617,356 46,874,858 loans, and leases

Average gross retail installment 31,462,524 29,316,997 30,946,321 28,998,827 contracts held for investment

Average gross retail installment contracts held 32,847,716 29,450,778 31,632,276 29,035,278 for investment and held for sale

Average gross personal loans 1,240,639 1,343,098 1,322,053 1,398,045 held for sale

Average gross finance receivables, 34,135,256 30,855,074 33,008,338 30,495,290 loans and finance leases

Average gross operating 17,146,166 16,902,932 17,447,194 16,135,606 leases

Average gross finance receivables, 51,281,422 47,758,006 50,455,532 46,630,896 loans, and leases

Average managed62,662,686 57,379,308 61,325,546 55,830,429 assets

Average total 47,979,008 46,915,965 47,581,031 45,696,088 assets

Average debt 41,064,441 37,276,505 40,262,948 36,234,826

Average total 5,044,976 7,335,898 5,429,924 7,215,250 equity



(1) Includes Finance and other interest income; excludes fees

"Yield on earning assets" is defined as the ratio of annualized Total(2) 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

"Net interest margin" is defined as the ratio of annualized Net finance(4) 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

"Net charge-off ratio" is defined as the ratio of annualized Charge-offs,(8) on a amortized cost basis, net of recoveries, to average unpaid principal balance of the respective held-for-investment portfolio.

"Delinquency ratio" is defined as the ratio of End of period Delinquent(9) principal over 59 days to End of period gross balance of the respective portfolio, excludes finance leases

"Allowance ratio" is defined as the ratio of Allowance for credit losses,(10) which excludes impairment on purchased receivables portfolios, to End of period assets covered by allowance for credit losses

"Common stock dividend payout ratio" is defined as the ratio of Dividends(11) declared per share of common stock to Earnings per share attributable to the Company's shareholders.

"Common Equity Tier 1 Capital ratio" is a non-GAAP ratio defined as the(12) 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)







Table 4: Credit Quality



The activity in the credit loss allowance for retail installment contracts for the three and nine months ended September 30, 2020 and 2019 was as follows (Unaudited, Dollar amounts in thousands):



Three Months Ended September 30, 2020Three Months Ended September 30, 2019

Retail Installment Contracts Retail Installment Contracts

Allowance for Credit Loss Non-TDR TDR Non-TDR TDR

Balance - beginning of $ 4,818,187 $ 1,037,628 $ 1,961,893 $ 1,156,303 period

Credit loss expense (a) 24,841 314,075 484,626 102,494

Charge-offs (b) (334,938) (200,352) (962,573) (381,490)

Recoveries 392,042 97,171 567,846 183,305

Balance - end of period $ 4,900,132 $ 1,248,522 $ 2,051,792 $ 1,060,612





Nine Months Ended September 30, 2020Nine Months Ended September 30, 2019

Retail Installment Contracts Retail Installment Contracts

Allowance for Credit Non-TDR TDR Non-TDR TDR Loss

Balance - beginning $2,123,878 $914,718 $1,819,360 $1,416,743 of period

Day 1 - Adjustment to allowance 2,030,473 71,833 - - for adoption of CECL standard

Credit loss1,526,545 581,344 1,279,931 266,913 expense (a)

Charge-offs(1,955,706) (617,536) (2,685,931) (1,217,650) (b)

Recoveries 1,174,942 298,163 1,638,432 594,606

Balance - end of $4,900,132 $1,248,522 $2,051,792 $1,060,612 period

(a) Excluded from the credit loss expense is $13 million and $52 millionrelated to retail installment contracts sold in an off-balance sheetsecuritization during the three and nine months ended September 30, 2020,respectively. In addition, credit loss expense includes a net of $72 millionand $60 million in the credit loss expense related to retail installmentcontracts transferred to held for sale and returned to held for investmentduring the three and nine months ended September 30, 2020, respectively.Furthermore, credit loss expense includes $0 million and $20 million related toretail installment contracts transferred to held for sale during the three andnine months ended September 30, 2019, respectively.

(b) Charge-offs for retail installment contracts includes partial write-down ofloans to the collateral value less estimated costs to sell, for which abankruptcy notice was received. There is no additional ACL on these loans.







A summary of delinquencies of our retail installment contracts as of September30, 2020 and December 31, 2019 is as follows (Unaudited, Dollar amounts in thousands):



Delinquent Balance September 30, 2020

Amount Percent

Amortized cost, 30-59 days past due 1,673,713 5.0 %

Delinquent amortized cost over 59 days 817,577 2.4 %

Total delinquent balance at amortized cost $ 2,491,290 7.4 %



Delinquent Balance December 31, 2019

Amount Percent

Principal 30-59 days past due $ 2,972,495 9.7 %

Delinquent principal over 59 days 1,578,452 5.1 %

Total delinquent principal (a) $ 4,550,947 14.8 %

(a) The table includes balances based on UPB. Difference between amortized costand UPB was not material.







The retail installment contracts held for investment that were placed on nonaccrual status, as of September 30, 2020 and December 31, 2019 (Unaudited,Dollar amounts in thousands):



Nonaccrual Balance September 30, 2020

Amount Percent

Non-TDR 623,428 1.9 %

TDR 301,647 0.9 %

Total non-accrual loans (a) $ 925,075 2.8 %



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





Nonaccrual Balance December 31, 2019

Amount Percent

Non-TDR $ 1,099,462 3.6 %

TDR 516,119 1.7 %

Total nonaccrual principal (a) $ 1,615,581 5.3 %

(a) The table includes balances based on UPB. Difference between amortized costand UPB was not material.







The table below presents the Company's allowance ratio for TDR and non-TDR individually acquired retail installment contracts as of September 30, 2020 and December 31, 2019 (Unaudited, Dollar amounts in thousands):



Allowance Ratios September 30, 2020December 31, 2019

TDR - Unpaid principal balance $3,801,948 $ 3,859,040

TDR - Impairment 1,248,522 914,718

TDR - Allowance ratio 32.8 %23.7 %



Non-TDR - Unpaid principal balance$29,667,444 $ 26,895,551

Non-TDR - Allowance 4,900,132 2,123,878

Non-TDR Allowance ratio 16.5 %7.9 %



Total - Unpaid principal balance $33,469,392 $ 30,754,591

Total - Allowance 6,148,654 3,038,596

Total - Allowance ratio 18.4 %9.9 %



The Company's allowance for credit losses increased $0.3 billion and $3.1 billion for the three and nine months ended September 30, 2020. For the three months ended September 30, 2020, the increase was primarily due to a portfolio growth. For the nine months ended September 30, 2020, the primary drivers were $2.1 billion increase at CECL adoption on January 1, 2020, driven mainly by the addition of lifetime expected credit losses for non-TDR loans, and additional reserves specific to COVID-19 risk.





Table 5: Originations



The Company's originations of loans and leases, including revolving loans, average APR, and dealer discount (net of dealer participation) were as follows:



Three Months Ended Nine Months Ended Three Months Ended

September 30,September 30,September 30, September 30, June 30, 2020 2020 2019 2020 2019

Retained (Unaudited, Dollar amounts in thousands) Originations

Retail installment $5,344,755 $4,080,028 $13,608,298 $12,056,003 $ 5,098,496 contracts

Average APR 13.7 %16.0 %13.8 %16.5 %11.7 %

Average FICO637 599 631 598 657 (r) (a)

Discount (1.3) %(0.7) %(1) %(0.4) %(0.9) %



Personal 305,039 322,335 923,112 954,105 $ 347,238 loans (b)

Average APR 29.4 %29.7 %29.4 %29.8 %29.6 %



Leased 1,856,166 2,225,117 4,863,504 6,708,827 $ 986,617 vehicles



Finance 4,087 4,859 9,016 $12,989 $ 1,927 lease

Total originations$7,510,047 $6,632,339 $19,403,930 $19,731,924 $ 6,434,278 retained



Sold Originations

Retail installment $80,144 $- $761,323 $- $ - contracts

Average APR 5.2 %- %4.8 %- %- %

Average FICO738 - 734 - - (r) (c)

Total originations$80,144 $- $761,323 $- $ - sold



Total originations (excluding $7,590,191 $6,632,339 $20,165,253 $19,731,924 $ 6,434,278 SBNA Originations Program)



Unpaid principal balance excluded from the weighted average FICO score is $571 million, $440 million, $1.5 billion, $1.4 billion and $586 million for the three months ended September 30, 2020 and 2019, the nine months ended(a) September 30, 2020 and 2019, and for the three months ended June 30, 2020, respectively, as the borrowers on these loans did not have FICO scores at origination. Of these amounts, $145 million, $154 million, $386 million, $401 million and $102 million, respectively, were commercial loans.

Included in the total origination volume is $72 million, $62 million, $151 million, $138 million and $58 million for the three months ended September(b) 30, 2020 and 2019, the nine months ended September 30, 2020 and 2019, and for the three months ended June 30, 2020, respectively, related to newly opened accounts.

Unpaid principal balance excluded from the weighted average FICO score is(c) $11 million and $80 million for the three and nine months ended September 30, 2020, respectively, as the borrowers on these loans did not have FICO scores at origination.

SBNA Originations Program

Beginning in 2018, the Company agreed to provide SBNA with origination support services in connection with the processing, underwriting and purchase of retail loans, primarily from Chrysler dealers. In addition, the Company agreed to perform the servicing for any loans originated on SBNA's behalf. The Company facilitated the purchase of $1.1 billion and $3.9 billion of retail installment contacts during the three and nine months ended September 30, 2020, respectively.







Table 6: Asset Sales



Three Months Ended Nine Months Ended Three Months Ended

September 30,September 30, September 30,September 30, June 30, 2020 2020 2019 2020 2019

Assets Sold (Unaudited, Dollar amounts in thousands)

Retail installment $636,301 $ - $1,148,587 $ - $512,286 contracts

Average APR 4.9 %- % 5.6 %- % 6.4 %

Average FICO$735 - 715 - 691 (r)







Table 7: Ending Portfolio



Ending outstanding balance, average APR and remaining unaccreted net discountof our held for investment portfolio as of September 30, 2020 and December 31, 2019, are as follows:



September 30, 2020 December 31, 2019

(Unaudited, Dollar amounts in thousands)

Retail installment contracts $ 33,485,342 $ 30,776,038

Average APR 15.2 % 16.1 %

Discount 0.05 % 0.3 %



Receivables from dealers $ 3,675 $ 12,668

Average APR 3.9 % 4.0 %



Leased vehicles $ 17,101,722 $ 17,562,782



Finance leases $ 26,617 $ 27,584









Table 8: Reconciliation of Non-GAAP Measures



September 30, 2020September 30, 2019

(Unaudited, Dollar amounts in thousands)

Total equity $5,094,812 $7,345,202

Add: Adjustment due to CECL capital 1,842,536 - relief (c)

Deduct: Goodwill, intangibles, and other assets, net of deferred tax 159,907 150,644 liabilities

Deduct: Accumulated other (56,882) (31,836) comprehensive income (loss), net

Tier 1 common capital $6,834,323 $7,226,394

Risk weighted assets (a)(c) 49,882,540 46,870,019

Common Equity Tier 1 capital ratio (b)13.7 % 15.4 % (c)



Under the banking agencies' risk-based capital guidelines, assets and credit equivalent amounts of derivatives and off-balance sheet exposures(a) 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.

As described in our 2019 annual report on Form 10-K, on January 1, 2020, we adopted ASU 2016-13, Financial Instruments -Credit Losses ("CECL"), which upon adoption resulted in a reduction to our opening retained earnings balance, net of income tax, and increase to the allowance for credit losses of approximately $2 billion. As also described in our 2019 10-K, the U.S. banking agencies in December 2018 had approved a final rule to address the impact of CECL on regulatory capital by allowing banking organizations,(c) including the Company, the option to phase in the day-one impact of CECL until the first quarter of 2023. In March 2020, the U.S. banking agencies issued an interim final rule that provides banking organizations with an alternative option to delay for two years an estimate of CECL's effect on regulatory capital, relative to the incurred loss methodology's effect on regulatory capital, followed by a three-year transition period. The Company is electing this alternative option instead of the one described in the December 2018 rule.

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SOURCE Santander Consumer USA Holdings Inc.