PR Newswire | Jul 28, 2021 06:15AM EDT

07/28 05:15 CDT

Santander Consumer USA Holdings Inc. Reports Second Quarter 2021 ResultsNet Income of $1.1 Billion and $10.5 Billion in Originations in the Second Quarter 2021 DALLAS, July 28, 2021

DALLAS, July 28, 2021 /PRNewswire/ -- Santander Consumer USA Holdings Inc. (NYSE: SC) ("SC" or the "Company") today announced net income for the second quarter ended June 30, 2021 ("Q2 2021") of $1.1 billion, or $3.45 per diluted common share.

The Company has declared a cash dividend of $0.22 per share, to be paid on August 19, 2021, to shareholders of record as of the close of business on August 9, 2021.

Management Quotes

"The second quarter was another exceptional quarter for us thanks to our team's execution in a highly competitive market. We have positioned SC to benefit from the ongoing tailwinds with consumers and the overall auto industry. Demand for vehicles remains strong, as evidenced by our record originations in the quarter of $10.5 billion, despite the pressure of new vehicle sales due to the chip shortage. For the first time in our Company's history, we experienced a net recovery for the quarter of $79 million supported by record used car prices. Yesterday we announced an important strategic expansion of our partnership with AutoFi to launch a new digital experience for our dealers and consumers. The economic recovery is underway and we are encouraged by the strength of consumers and our portfolio's performance. However, the uncertainty with COVID persists and we are mindful of the potential impact going forward as we continue to remain disciplined in our approach. I am very optimistic about our Company's position in the market, our portfolio and our employee's ability to execute,"said Mahesh Aditya, SC President and CEO.

Fahmi Karam, SC Chief Financial Officer, added, "Our strong performance, which included record net revenues and income, reflects the strength of our disciplined underwriting, dealer and OEM relationships and our team. More than $1 billion in net income represents the most profitable quarter in the Company's history and $1.8 billion in net income in the first half of the year is greater than any single full year. We have significant available liquidity and capital to continue to grow origination volumes and reinvest in the business. We remain focused on generating assets with strong risk-adjusted returns and managing operating expenses, while remaining attentive to the lingering effects of the pandemic on our customers and employees."

Second Quarter of 2021 Highlights (variances compared to second quarter of 2020 ("Q2 2020"), unless otherwise noted)

* Net Income of $1.1 billion; $3.45 EPS * Total auto originations of $10.5 billion, up 34% * Core retail auto loan originations of $3.8 billion, up 79% * Chrysler Capital loan originations of $4.6 billion, down 2% * Chrysler Capital lease originations of $2.1 billion, up 109% * Chrysler average quarterly penetration rate of 34%, down from 37% * Santander Bank, N.A. program originations of $2.6 billion

* Announced launch of new dealer and consumer digital experience through partnership with AutoFi * Net finance and other interest income1 of $1.4 billion, up 33% * 30-59 delinquency ratio of 5.5%, up 120 basis points * 59-plus delinquency ratio2 of 2.4%, flat * Retail Installment Contract ("RIC") gross charge-off ratio of 6.6%, down 450 basis points * Recovery rate of 114.9%, up from 45.7% * RIC net charge-off ratio3 of (1.0)%, down 700 basis points * Allowance ratio of 17.8%, down from 18.9% as of March 31, 2021 * Troubled Debt Restructuring ("TDR") balance of $4.2 billion, down from $4.4 billion as of March 31, 2021 * Executed ~$300 million in off-balance sheet prime loan sales * Return on average assets ("ROA") of 8.9% * Expense ratio of 1.9%, up 20 basis points * Common equity tier 1 ("CET1") ratio of 18.1%

^ Includes Finance receivables held for investment, Finance receivables held1 for sale and Leased vehicles.

^ Delinquency Ratio is defined as the ratio of end of period delinquent2 principal, over 59 days, to end of period gross balance of the respective portfolio, excludes finance leases.

^ Net Charge-Off Ratio stated on a recorded investment basis, which is unpaid3 principal balance adjusted for unaccreted net discounts, subvention and origination costs.

Conference Call InformationSC will host a conference call and webcast to discuss its Q2 2021 results and other general matters at 9:00 a.m. Eastern Time on Wednesday, July 28, 2021. The conference call will be accessible by dialing 1-866-548-4713 (U.S. domestic), or 1-323-794-2093 (international), conference ID 1398753. 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 Q2 2021 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 1-844-512-2921 (U.S. domestic), or 1-412-317-6671 (international), conference ID 1398753, 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 StatementsThis 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 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; (e) significant risks we face implementing our growth strategy, some of which are outside our control; (f) 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; (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; (j) 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; (k) there can be no assurance that the proposed acquisition of all of our outstanding common stock by SHUSA will be agreed upon, approved and ultimately consummated, and the terms of any such transaction may differ materially from those originally proposed by SHUSA; and (l) other 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 $64 billion (for the second quarter ended June 30, 2021), and is headquartered in Dallas, Texas. (www.santanderconsumerusa.com)

Santander Consumer USA Holdings Inc. Financial Supplement Second Quarter 2021



Table of Contents



Table 1: Condensed Consolidated Balance Sheets

Table 2: Condensed Consolidated Statements of Income

Table 3: Other Financial Information

Table 4: Credit Quality

Table 5: Originations

Table 6: Asset sales

Table 7: Ending Portfolio

Table 8: Reconciliation of Non-GAAP Measures

Table 1: Condensed Consolidated Balance Sheets

June 30, 2021December 31, 2020

Assets (Unaudited, Dollars in thousands)

Cash and cash equivalents $321,976 $ 109,053

Finance receivables held for sale, net 391,209 1,567,527

Finance receivables held for 33,120,008 33,114,638 investment, at amortized cost

Allowance for credit loss (5,818,382) (6,110,633)

Finance receivables held for investment, at 27,301,626 27,004,005 amortized cost, net

Restricted cash 2,660,662 2,221,094

Accrued interest receivable 347,722 415,765

Leased vehicles, net 16,120,051 16,391,107

Furniture and equipment, net 57,419 62,032

Goodwill 74,056 74,056

Intangible assets 79,183 70,128

Other assets 892,030 972,726

Total assets $48,245,934$ 48,887,493

Liabilities and Equity

Liabilities:

Borrowings and other debt obligations $38,202,642$ 41,138,674

Deferred tax liabilities, net 1,718,538 1,263,796

Accounts payable and accrued expenses 682,450 531,369

Other liabilities 412,674 331,693

Total liabilities $41,016,304$ 43,265,532



Equity:

Common stock, $0.01 par value 3,060 3,061

Additional paid-in capital 389,890 393,800

Accumulated other comprehensive income, net (36,855) (50,566)

Retained earnings 6,873,535 5,275,666

Total stockholders' equity $7,229,630 $ 5,621,961

Total liabilities and equity $48,245,934$ 48,887,493

Table 2: Condensed Consolidated Statements of Income

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

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

Interest on finance $1,229,492 $1,236,600 $2,534,143$2,510,419receivables and loans

Leased vehicle income703,916 737,549 1,444,800 1,485,528

Other finance and 3,068 2,657 4,494 10,208 interest income

Total finance and 1,936,476 1,976,806 3,983,437 4,006,155 other interest income

Interest expense 237,195 308,982 490,732 637,816

Leased vehicle 294,720 610,861 718,515 1,163,773 expense

Net finance and other1,404,561 1,056,963 2,774,190 2,204,566 interest income

Credit loss expense (263,751) 861,896 (127,542) 1,769,783 (benefit)

Net finance and other interest income after1,668,312 195,067 2,901,732 434,783 credit loss expense

Profit sharing 50,553 11,530 117,879 25,825

Net finance and other interest income after1,617,759 183,537 2,783,853 408,958 credit loss expense and profit sharing

Investment gains 2,414 (147,582) (12,298) (211,008) (losses), net

Servicing fee income 22,812 19,120 41,506 38,223

Fees, commissions, 50,847 82,069 151,375 177,199 and other

Total other income 76,073 (46,393) 180,583 4,414

Compensation and 156,450 127,643 310,345 260,969 benefits

Repossession expense 38,845 22,289 84,191 79,951

Other expenses 107,915 116,747 203,166 208,432

Total operating 303,210 266,679 597,702 549,352 expenses

Income (loss) before 1,390,622 (129,535) 2,366,734 (135,980) income taxes

Income tax expense 332,420 (32,857) 566,877 (35,315)

Net income (loss) $1,058,202 $(96,678) $1,799,857$(100,665)



Net income per common$3.46 $(0.30) $5.88 $(0.31) share (basic)

Net income per common$3.45 $(0.30) $5.88 $(0.31) share (diluted)

Weighted average 306,057,004 319,773,636 306,082,852326,899,844common shares (basic)

Weighted average common shares 306,289,395 319,878,145 306,327,116327,137,104(diluted)

Number of shares 306,081,081 316,235,387 306,081,081316,235,387outstanding

Table 3: Other Financial Information

Three Months Ended June 30,Six Months Ended June 30,

Ratios (Unaudited, Dollars in 2021 2020 2021 2020 thousands)

Yield on retail installment 15.1 %14.8 % 14.9 %15.0 %contracts

Yield on leased 9.6 %2.9 % 8.5 %3.7 %vehicles

Yield on personal loans, held for sale- %25.6 % 30.4 %26.0 %(1)

Yield on earning 13.2 %10.9 % 12.9 %11.4 %assets (2)

Cost of debt (3) 2.5 %3.1 % 2.5 %3.2 %

Net interest margin 11.3 %8.4 % 11.0 %8.8 %(4)

Expense ratio (5) 1.9 %1.7 % 1.9 %1.8 %

Return on average 8.9 %(0.8) % 7.5 %(0.4) %assets (6)

Return on average 63.2 %(7.7) % 57.0 %(3.6) %equity (7)

Net charge-off ratio on individually acquired retail (1.0) %6.0 % 1.0 %6.9 %installment contracts (8)

Net charge-off ratio(1.0) %6.0 % 1.0 %6.9 %(8)

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

Allowance ratio (10)17.8 %19.2 % 17.8 %19.2 %

Common stock dividend payout 6.4 %* 11.2 %* ratio (11)

Common Equity Tier 118.1 %13.4 % 18.1 %13.4 %capital ratio (12)

Charge-offs, net of recoveries, on individually $(79,223) $461,014 $164,852 $1,054,060 acquired retail installment contracts

End of period delinquent amortized cost over 59 days, 791,144 743,693 791,144 743,693 retail installment contracts held for investment

End of period personal loans delinquent principal- 127,504 - 127,504 over 59 days, held for sale

End of period delinquent amortized cost over 59 days, 791,565 744,170 791,565 744,170 loans held for investment

End of period assets covered by allowance32,774,721 30,522,963 32,774,721 30,522,963 for credit losses

End of period gross retail installment 32,750,571 30,492,634 32,750,571 30,492,634 contracts held for investment

End of period gross personal loans held - 1,283,183 - 1,283,183 for sale

End of period gross finance receivables 32,750,571 30,496,308 32,750,571 30,496,308 and loans held for investment

End of period gross finance receivables,49,610,560 47,729,637 49,610,560 47,729,637 loans, and leases

Average gross retail installment 32,249,024 30,493,604 32,494,401 30,586,535 contracts held for investment

Average gross retail installment contracts held for 32,462,553 31,193,215 32,780,361 31,017,842 investment and held for sale

Average gross finance receivables,32,500,748 32,554,978 33,399,959 32,438,109 loans and finance leases

Average gross 17,118,763 17,492,255 17,189,819 17,584,849 operating leases

Average gross finance receivables,49,619,511 50,047,233 50,589,778 50,022,958 loans, and leases

Average managed 64,483,261 61,001,767 64,245,652 60,652,091 assets

Average total assets47,741,178 46,876,726 48,111,581 47,308,997

Average debt 38,392,143 40,113,885 39,329,703 39,858,355

Average total equity6,692,791 5,033,773 6,318,704 5,573,544



(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 declared per share of common stock to Earnings per share attributable to(11) the Company's shareholders. The Common stock dividend payout ratio for the three and six months ended June 30, 2020 has not been disclosed since the earnings per share for the three and six months ended June 30, 2020 was a negative number.

"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(12) (for a reconciliation from GAAP to this non-GAAP measure, see "Reconciliation of Non-GAAP Measures" in Table 8 of this release). CET1 Ratio is provided as a preliminary calculation.

Table 4: Credit Quality



The activity in the credit loss allowance for retail installment contracts for the three and six month ended June 30, 2021 and 2020 was as follows (Unaudited, Dollar amounts in thousands):



Three Months Ended June Three Months Ended June 30, 2021 30, 2020

Retail Installment Retail Installment Contracts Contracts

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

Balance - beginning of$4,662,633$1,338,708$4,482,663$973,236 period

Credit loss expense (282,249) 16,350 744,511 116,419 (benefit)

Charge-offs (a) (540,998) 8,457 (721,218) (127,617)

Recoveries 460,284 151,479 312,231 75,590

Balance - end of $4,299,670$1,514,994$4,818,187$1,037,628period

Six Months Ended June 30, Six Months Ended June 30, 2021 2020

Retail Installment Retail Installment Contracts Contracts

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

Balance - beginning of$4,792,464$1,314,170$2,123,878$914,718 period

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

Credit loss expense (242,190) 115,072 1,501,704 267,268 (benefit)

Charge-offs (a) (1,127,791)(194,004) (1,620,768)(417,184)

Recoveries 877,187 279,756 782,900 200,993

Balance - end of $4,299,670$1,514,994$4,818,187$1,037,628period

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

A summary of delinquencies of our retail installment contracts as of June 30,2021 and December 31, 2020 is as follows (Unaudited, Dollar amounts in thousands):



Delinquent Balance June 30, 2021

Amount Percent

Amortized cost, 30-59 days past due $1,816,384 5.5 %

Delinquent amortized cost over 59 days 791,144 2.4 %

Total delinquent balance at amortized cost $2,607,528 7.9 %



Delinquent Balance December 31, 2020

Amount Percent

Principal 30-59 days past due $1,971,766 6.0 %

Delinquent principal over 59 days 1,038,869 3.1 %

Total delinquent principal (a) $3,010,635 9.1 %

The retail installment contracts held for investment that were placed on nonaccrual status, as of June 30, 2021 and December 31, 2020 (Unaudited, Dollar amounts in thousands):



Nonaccrual Balance June 30, 2021

Amount Percent

Non-TDR $ 585,677 1.8 %

TDR 318,933 1.0 %

Total non-accrual loans (a) $ 904,610 2.8 %

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



Nonaccrual Balance December 31, 2020

Amount Percent

Non-TDR $748,026 2.3 %

TDR 385,021 1.2 %

Total nonaccrual principal (a)$1,133,0473.5 %

The table below presents the Company's allowance ratio for TDR and non-TDR individually acquired retail installment contracts as of June 30, 2021 and December 31, 2020 (Unaudited, Dollar amounts in thousands):



Allowance Ratios June 30, 2021 December 31, 2020

TDR - Unpaid principal balance $ 4,161,892 $ 3,945,040

TDR - Impairment 1,514,994 1,314,170

TDR - Allowance ratio 36.4% 33.3%



Non-TDR - Unpaid principal balance $ 28,576,765 $ 28,977,299

Non-TDR - Allowance 4,299,670 4,792,464

Non-TDR Allowance ratio 15.0% 16.5%



Total - Unpaid principal balance $ 32,738,657 $ 32,922,339

Total - Allowance 5,814,664 6,106,634

Total - Allowance ratio 17.8% 18.5%



The Company's ACL decreased $0.2 billion and $0.3 billion for the three and six months ended June 30, 2021. The decrease was primarily due to an improved macroeconomic outlook and a decrease of lifetime expected credit losses for non-TDR loans mainly due to credit quality and performance.

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 Six Months Ended Three Months Ended

June 30, June 30, June 30, 2021June 30, 2020March 31, 2021 2021 2020

Retained (Unaudited, Dollar amounts in thousands) Originations

Retail installment $5,871,823$5,098,496$10,115,312 $8,832,741 $ 4,383,146 contracts

Average APR 14.4% 11.7 % 14.7% 13.3 % 15.0%

Average FICO608 657 606 635 606 (r) (a)

Premium (2.3)% (0.9)% (2.0)% (0.8)% (1.6)%



Personal - 347,238 - 618,073 $ - loans (b)

Average APR -% 29.6 % -% 29.5 % -%



Leased 2,067,741 986,617 4,222,247 3,007,338 $ 2,154,506 vehicles



Finance 2,534 1,927 5,331 $4,929 $ 2,796 lease

Total originations$7,942,098$6,434,278$14,342,890 $12,463,081 $ 6,540,448 retained



Sold Originations

Retail installment $- $- $235,395 $111,981 $ 95,738 contracts

Average APR -% -% 7.7 % 4.4 % 9.5%

Average FICO- - 699 722 688 (r) (c)



Personal $- $- $292,709 $- $ 292,709 Loans (d)

Average APR -% -% 29.7% $- 29.7%



Total originations$- $- $528,104 $111,981 $ 388,447 sold



Total originations (excluding $7,942,098$6,434,278$14,870,994 $12,575,062 $ 6,928,895 SBNA Originations Program)



Unpaid principal balance excluded from the weighted average FICO score is $559 million, $586 million, $1.0 billion, $1.0 billion and $450 million(a) for the three months ended June 30, 2021 and 2020, six months ended June 30, 2021 and 2020, and for the three months ended March 31, 2021, respectively, as the borrowers on these loans did not have FICO scores at origination. Of these amounts, $187 million, $102 million, $341 million, $241 million and $154 million, respectively, were commercial loans.

(b) Included in the total origination volume is $58 million and $79 million for the three and six months ended June 30, 2020, respectively, related to newly opened accounts.

Only includes assets both originated and sold in the period. Total asset sales for the period are shown in table 6. Unpaid principal balance(c) excluded from the weighted average FICO score is zero, $8 million, zero, $9 million and $2 million for the three and six months ended June 30, 2021 and 2020, and for the three months ended March 31, 2021, respectively, as the borrowers on these loans did not have FICO scores at origination. Of these amounts, the commercial loans were zero.

(d) Included in the total origination volume is $25 million for the three months ended March 31, 2021 related to newly opened accounts.

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 $2.6 billion and $4.5 billion of retail installment contacts during the three and six months ended June 30, 2021, respectively.

Table 6: Asset Sales

Three Three Months Ended Six Months Ended Months Ended

June 30, June 30, June 30, June 30, March 31, 2021 2020 2021 2020 2021

Assets Sold (Unaudited, Dollar amounts in thousands)

Retail installment $309,784$512,286$2,690,569$512,286$2,380,785contracts

Average APR 5.9% 6.4% 4.2% 6.4% 4.0%

Average FICO(r) $716 691 737 691 740



Personal loans $- - 1,253,476 - $1,253,476

Average APR -% -% 29.7% -% 29.7%

Discount - - - - -



Total asset sales $309,784$512,286$3,944,045$512,286$3,634,261



Table 7: Ending Portfolio



Ending outstanding balance, average APR and remaining unaccreted net discount of our held for investment portfolio as of June 30, 2021 and December 31, 2020, are as follows:



June 30, 2021 December 31, 2020

(Unaudited, Dollar amounts in thousands)

Retail installment contracts $ 32,750,571 $ 32,937,036

Average APR 15.7% 15.2%

Premium (0.74)% (0.15)%



Leased vehicles $ 16,835,839 $ 17,259,468



Finance leases $ 24,150 $ 26,150



Table 8: Reconciliation of Non-GAAP Measures

June 30, June 30, 2021 2020

(Unaudited, Dollar amounts in thousands)

Total equity $7,229,630 $4,895,465

Add: Adjustment due to CECL capital relief (c) 1,759,037 1,769,430

Deduct: Goodwill, intangibles, and other assets, 164,585 154,943 net of deferred tax liabilities

Deduct: Accumulated other comprehensive income (36,855) (63,705) (loss), net

Tier 1 common capital $8,860,937 $6,573,657

Risk weighted assets (a)(c) 49,014,663 48,997,902

Common Equity Tier 1 capital ratio (b)(c) 18.1% 13.4%



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 2020 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(c) rule to address the impact of CECL on regulatory capital by allowing banking organizations, 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 elected this alternative option instead of the one described in the December 2018 rule.

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SOURCE Santander Consumer USA Holdings Inc.