Attached files
| file | filename |
|---|---|
| EX-99.2 - EX-99.2 - Santander Consumer USA Holdings Inc. | q12021earningspresentati.htm |
| 8-K - 8-K - Santander Consumer USA Holdings Inc. | sc-20210428.htm |
Exhibit 99.1
Santander Consumer USA Holdings Inc. Reports
First Quarter 2021 Results
Net Income of $742 Million and $8.6 Billion in Originations in the First Quarter 2021
Dallas, TX - April 28, 2021 - PRESS RELEASE
Santander Consumer USA Holdings Inc. (NYSE: SC) (“SC” or the “Company”) today announced net income for the first quarter ended March 31, 2021 ("Q1 2021") of $742 million, or $2.42 per diluted common share.
On April 27, 2021, Santander Holdings USA, Inc. received an exception to the extended interim policy (the "Interim Policy") from the Federal Reserve. As a result, the SC Board of Directors will consider declaring a dividend during the second quarter 2021.
Management Quotes
“Our first quarter results demonstrate the strength of our business model and our people, supported by unprecedented government assistance, resilient consumers and the continued outperformance of the auto industry. All these factors led to record first quarter results, including $742 million in net income, $8.6 billion in loan and lease originations and continued improvement in key credit indicators. We remain dedicated to supporting all of our dealers, our OEM partner, Stellantis, and our customers and employees as we manage through the economic recovery,” said Mahesh Aditya, SC President and CEO.
Fahmi Karam, SC Chief Financial Officer, added, "Our first quarter earnings are a result of disciplined underwriting and risk management before and during the pandemic, strong market share across our dealers, low losses and record used car prices. The quarter was also highlighted by more than $7.0 billion of funding through a series of on and off-balance sheet transactions which will lead to a more efficient balance sheet. We sold our held for sale, unsecured personal loan portfolio, and entered into a forward flow agreement to fund future receivables. We also added approximately $2.5 billion to our serviced for others portfolio, driven by prime loan sales to third parties. Our liquidity and capital levels remain robust, and position the company to continue to manage the remaining uncertainty in the economy, while also driving shareholder value.”
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Strategic Highlights & Balance Sheet Optimization
• Termination of the Federal Reserve Written Agreement dated March 21, 2017
• Declared and paid a $0.22 ordinary dividend and a $0.22 special dividend in March 2021
• Sold ~$1.3 billion held for sale, personal loan portfolio as well as entered into a forward flow agreement to fund 00future obligations
• Executed ~$2.4 billion in off-balance sheet prime loan sales, adding to the serviced for others platform
• Issued ~$3.5 billion of asset-backed securities
• Named Bruce Jackson as Head of Chrysler Capital & Auto Relationships
First Quarter of 2021 Highlights (variances compared to first quarter of 2020 ("Q1 2020"), unless otherwise noted)
• Net Income of $742 million
• Total auto originations of $8.6 billion, up 24%
◦Core retail auto loan originations of $2.8 billion, up 21%
◦Chrysler Capital loan originations of $3.7 billion, up 40%
◦Chrysler Capital lease originations of $2.2 billion, up 7%
◦Chrysler average quarterly penetration rate of 36%, down from 39%
◦Santander Bank, N.A. program originations of $2.0 billion
• Net finance and other interest income2 of $1.4 billion, up 19%
• 30-59 delinquency ratio of 4.4%, down 390 basis points
• 59-plus delinquency ratio1 of 2.2%, down 240 basis points
• Retail Installment Contract (“RIC”) gross charge-off ratio of 9.7%, down 580 basis points
• Recovery rate of 69.1%, up from 50.1%
• RIC net charge-off ratio3 of 3.0%, down 470 basis points
• Allowance ratio of 18.9%, up from 18.5% as of December 31, 2020
• Troubled Debt Restructuring (“TDR”) balance of $4.4 billion, up from $3.9 billion as of December 31, 2020
• Return on average assets ("ROA") of 6.1%
• Expense ratio of 1.8%, down 10 basis points
• Common equity tier 1 (“CET1”) ratio of 16.5%
1Delinquency 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.
2Includes Finance receivables held for investment, Finance receivables held for sale and Leased vehicles.
3Net Charge-Off Ratio stated on a recorded investment basis, which is unpaid principal balance adjusted for unaccreted net discounts, subvention and origination costs.
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Conference Call Information
SC will host a conference call and webcast to discuss its Q1 2021 results and other general matters at 9:00 a.m. Eastern Time on Wednesday, April 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 1344654. 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 Q1 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 1344654, 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 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 a reduction in; (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; and (k) 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.
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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 first quarter ended March 31, 2021), and is headquartered in Dallas, Texas. (www.santanderconsumerusa.com)
CONTACTS:
Investor Relations
Evan Black
800.493.8219
InvestorRelations@santanderconsumerusa.com
Media Relations
Laurie Kight
214.801.6455
Media@santanderconsumerusa.com
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Santander Consumer USA Holdings Inc.
Financial Supplement
First 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 | |||||
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Table 1: Condensed Consolidated Balance Sheets
| March 31, 2021 | December 31, 2020 | ||||||||||
| Assets | (Unaudited, Dollars in thousands) | ||||||||||
| Cash and cash equivalents | $ | 415,969 | $ | 109,053 | |||||||
| Finance receivables held for sale, net | — | 1,567,527 | |||||||||
| Finance receivables held for investment, at amortized cost | 32,090,201 | 33,114,638 | |||||||||
| Allowance for credit loss | (6,005,115) | (6,110,633) | |||||||||
| Finance receivables held for investment, at amortized cost, net | 26,085,086 | 27,004,005 | |||||||||
| Restricted cash | 2,623,565 | 2,221,094 | |||||||||
| Accrued interest receivable | 345,769 | 415,765 | |||||||||
| Leased vehicles, net | 16,478,224 | 16,391,107 | |||||||||
| Furniture and equipment, net | 58,081 | 62,032 | |||||||||
| Goodwill | 74,056 | 74,056 | |||||||||
| Intangible assets | 73,833 | 70,128 | |||||||||
| Other assets | 1,079,419 | 972,726 | |||||||||
| Total assets | $ | 47,234,002 | $ | 48,887,493 | |||||||
| Liabilities and Equity | |||||||||||
| Liabilities: | |||||||||||
| Borrowings and other debt obligations | $ | 38,541,624 | $ | 41,138,674 | |||||||
| Deferred tax liabilities, net | 1,497,829 | 1,263,796 | |||||||||
| Accounts payable and accrued expenses | 567,474 | 531,369 | |||||||||
| Other liabilities | 395,222 | 331,693 | |||||||||
| Total liabilities | $ | 41,002,149 | $ | 43,265,532 | |||||||
| Equity: | |||||||||||
| Common stock, $0.01 par value | 3,060 | 3,061 | |||||||||
| Additional paid-in capital | 387,946 | 393,800 | |||||||||
| Accumulated other comprehensive income, net | (41,818) | (50,566) | |||||||||
| Retained earnings | 5,882,665 | 5,275,666 | |||||||||
| Total stockholders’ equity | $ | 6,231,853 | $ | 5,621,961 | |||||||
| Total liabilities and equity | $ | 47,234,002 | $ | 48,887,493 | |||||||
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Table 2: Condensed Consolidated Statements of Income
| Three Months Ended March 31, | |||||||||||
| 2021 | 2020 | ||||||||||
| (Unaudited, Dollars in thousands, except per share amounts) | |||||||||||
| Interest on finance receivables and loans | $ | 1,304,651 | $ | 1,273,819 | |||||||
| Leased vehicle income | 740,884 | 747,979 | |||||||||
| Other finance and interest income | 1,426 | 7,551 | |||||||||
| Total finance and other interest income | 2,046,961 | 2,029,349 | |||||||||
| Interest expense | 253,537 | 328,834 | |||||||||
| Leased vehicle expense | 423,795 | 552,912 | |||||||||
| Net finance and other interest income | 1,369,629 | 1,147,603 | |||||||||
| Credit loss expense | 136,209 | 907,887 | |||||||||
| Net finance and other interest income after credit loss expense | 1,233,420 | 239,716 | |||||||||
| Profit sharing | 67,326 | 14,295 | |||||||||
| Net finance and other interest income after credit loss expense and profit sharing | 1,166,094 | 225,421 | |||||||||
| Investment losses, net | (14,712) | (63,426) | |||||||||
| Servicing fee income | 18,694 | 19,103 | |||||||||
| Fees, commissions, and other | 100,528 | 95,130 | |||||||||
| Total other income | 104,510 | 50,807 | |||||||||
| Compensation and benefits | 153,895 | 133,326 | |||||||||
| Repossession expense | 45,346 | 57,662 | |||||||||
| Other expenses | 95,251 | 91,685 | |||||||||
| Total operating expenses | 294,492 | 282,673 | |||||||||
| Income (loss) before income taxes | 976,112 | (6,445) | |||||||||
| Income tax expense | 234,457 | (2,458) | |||||||||
| Net income (loss) | $ | 741,655 | $ | (3,987) | |||||||
| Net income per common share (basic) | $ | 2.42 | $ | (0.01) | |||||||
| Net income per common share (diluted) | $ | 2.42 | $ | (0.01) | |||||||
| Weighted average common shares (basic) | 306,108,987 | 334,026,052 | |||||||||
| Weighted average common shares (diluted) | 306,325,155 | 334,346,122 | |||||||||
| Number of shares outstanding | 306,033,735 | 321,117,187 | |||||||||
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Table 3: Other Financial Information
| Three Months Ended March 31, | |||||||||||
| Ratios (Unaudited, Dollars in thousands) | 2021 | 2020 | |||||||||
| Yield on retail installment contracts | 14.8 | % | 15.3 | % | |||||||
| Yield on leased vehicles | 7.3 | % | 4.4 | % | |||||||
| Yield on personal loans, held for sale (1) | 34.7 | % | 26.5 | % | |||||||
| Yield on earning assets (2) | 12.7 | % | 11.8 | % | |||||||
| Cost of debt (3) | 2.5 | % | 3.3 | % | |||||||
| Net interest margin (4) | 10.7 | % | 9.2 | % | |||||||
| Expense ratio (5) | 1.8 | % | 1.9 | % | |||||||
| Return on average assets (6) | 6.1 | % | (0.03) | % | |||||||
| Return on average equity (7) | 50.1 | % | (0.3) | % | |||||||
| Net charge-off ratio on individually acquired retail installment contracts (8) | 3.0 | % | 7.7 | % | |||||||
| Net charge-off ratio (8) | 3.0 | % | 7.7 | % | |||||||
| Delinquency ratio on individually acquired retail installment contracts held for investment, end of period (9) | 2.2 | % | 4.6 | % | |||||||
| Allowance ratio (10) | 18.9 | % | 17.7 | % | |||||||
| Common stock dividend payout ratio (11) | 18.2 | % | * | ||||||||
| Common Equity Tier 1 capital ratio (12) | 16.5 | % | 13.8 | % | |||||||
| Charge-offs, net of recoveries, on individually acquired retail installment contracts | $ | 244,075 | $ | 593,046 | |||||||
| End of period delinquent amortized cost over 59 days, retail installment contracts held for investment | 698,620 | 1,418,857 | |||||||||
| End of period personal loans delinquent principal over 59 days, held for sale | — | 161,639 | |||||||||
| End of period delinquent amortized cost over 59 days, loans held for investment | 699,005 | 1,419,865 | |||||||||
| End of period assets covered by allowance for credit losses | 31,840,959 | 30,781,350 | |||||||||
| End of period gross retail installment contracts held for investment | 31,813,760 | 30,741,144 | |||||||||
| End of period gross personal loans held for sale | — | 1,341,361 | |||||||||
| End of period gross finance receivables and loans held for investment | 31,813,760 | 30,753,640 | |||||||||
| End of period gross finance receivables, loans, and leases | 49,114,776 | 48,598,983 | |||||||||
| Average gross retail installment contracts held for investment | 32,569,618 | 30,718,119 | |||||||||
| Average gross retail installment contracts held for investment and held for sale | 32,853,151 | 30,768,423 | |||||||||
| Average gross finance receivables, loans and finance leases | 33,909,419 | 32,242,390 | |||||||||
| Average gross operating leases | 17,281,874 | 17,735,640 | |||||||||
| Average gross finance receivables, loans, and leases | 51,191,293 | 49,978,030 | |||||||||
| Average managed assets | 63,779,438 | 60,207,338 | |||||||||
| Average total assets | 48,262,590 | 47,690,751 | |||||||||
| Average debt | 40,070,243 | 39,692,456 | |||||||||
| Average total equity | 5,922,904 | 6,006,455 | |||||||||
(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 amortized cost 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. The Common stock dividend payout ratio for the three months ended March 31, 2020 has not been disclosed since the earnings per share for the three months ended March 31, 2020 was a negative number
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(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)
Table 4: Credit Quality
The activity in the credit loss allowance for retail installment contracts for the three month ended March 31, 2021 and 2020 was as follows (Unaudited, Dollar amounts in thousands):
| Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | ||||||||||||||||||||||
| Retail Installment Contracts | Retail Installment Contracts | ||||||||||||||||||||||
| Allowance for Credit Loss | Non-TDR | TDR | Non-TDR | TDR | |||||||||||||||||||
| Balance — beginning of period | $ | 4,792,464 | $ | 1,314,170 | $ | 2,123,878 | $ | 914,718 | |||||||||||||||
| Day 1 - Adjustment to allowance for adoption of CECL standard | — | — | 2,030,473 | 71,833 | |||||||||||||||||||
| Credit loss expense | 40,059 | 98,722 | 757,193 | 150,850 | |||||||||||||||||||
| Charge-offs (a) | (586,793) | (202,461) | (899,550) | (289,567) | |||||||||||||||||||
| Recoveries | 416,903 | 128,277 | 470,669 | 125,402 | |||||||||||||||||||
| Balance — end of period | $ | 4,662,633 | $ | 1,338,708 | $ | 4,482,663 | $ | 973,236 | |||||||||||||||
(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 March 31, 2021 and December 31, 2020 is as follows (Unaudited, Dollar amounts in thousands):
| Delinquent Balance | March 31, 2021 | |||||||||||||
| Amount | Percent | |||||||||||||
| Amortized cost, 30-59 days past due | $ | 1,409,974 | 4.4 | % | ||||||||||
| Delinquent amortized cost over 59 days | 698,620 | 2.2 | % | |||||||||||
| Total delinquent balance at amortized cost | $ | 2,108,594 | 6.6 | % | ||||||||||
| 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 March 31, 2021 and December 31, 2020 (Unaudited, Dollar amounts in thousands):
| Nonaccrual Balance | March 31, 2021 | ||||||||||
| Amount | Percent | ||||||||||
| Non-TDR | $ | 544,228 | 1.7 | % | |||||||
| TDR | 260,408 | 0.8 | % | ||||||||
| Total non-accrual loans (a) | $ | 804,636 | 2.5 | % | |||||||
(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) | $ | 1,133,047 | 3.5 | % | ||||||||||
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The table below presents the Company’s allowance ratio for TDR and non-TDR individually acquired retail installment contracts as of March 31, 2021 and December 31, 2020 (Unaudited, Dollar amounts in thousands):
| Allowance Ratios | March 31, 2021 | December 31, 2020 | |||||||||
| TDR - Unpaid principal balance | $ | 4,357,438 | $ | 3,945,040 | |||||||
| TDR - Impairment | 1,338,708 | 1,314,170 | |||||||||
| TDR - Allowance ratio | 30.7 | % | 33.3 | % | |||||||
| Non-TDR - Unpaid principal balance | $ | 27,442,853 | $ | 28,977,299 | |||||||
| Non-TDR - Allowance | 4,662,633 | 4,792,464 | |||||||||
| Non-TDR Allowance ratio | 17.0 | % | 16.5 | % | |||||||
| Total - Unpaid principal balance | $ | 31,800,291 | $ | 32,922,339 | |||||||
| Total - Allowance | 6,001,341 | 6,106,634 | |||||||||
| Total - Allowance ratio | 18.9 | % | 18.5 | % | |||||||
The Company’s ACL decreased $0.1 billion for the three months ended March 31, 2021. For the three months ended March 31, 2021, the decrease was primarily due to balance and improved macroeconomic outlook.
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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 | Three Months Ended | ||||||||||||||||
| March 31, 2021 | March 31, 2020 | December 31, 2020 | |||||||||||||||
| Retained Originations | (Unaudited, Dollar amounts in thousands) | ||||||||||||||||
| Retail installment contracts | $ | 4,383,146 | $ | 3,846,226 | $ | 3,954,958 | |||||||||||
| Average APR | 15.0 | % | 15.3 | % | 15.1 | % | |||||||||||
| Average FICO® (a) | 606 | 607 | 609 | ||||||||||||||
| Discount/(premium) | (1.6) | % | (0.8) | % | (1.4) | % | |||||||||||
| Personal loans (b) | — | 270,835 | $ | 526,541 | |||||||||||||
| Average APR | — | % | 29.8 | % | 29.5 | % | |||||||||||
| Leased vehicles | 2,154,506 | 2,020,721 | $ | 1,956,559 | |||||||||||||
| Finance lease | 2,796 | 3,002 | $ | 3,026 | |||||||||||||
| Total originations retained | $ | 6,540,448 | $ | 6,140,784 | $ | 6,441,084 | |||||||||||
| Sold Originations | |||||||||||||||||
| Retail installment contracts | $ | 95,738 | $ | — | $ | — | |||||||||||
| Average APR | 9.5 | % | — | % | — | % | |||||||||||
| Average FICO® (c) | 688 | — | — | ||||||||||||||
| Personal Loans (d) | $ | 292,709 | $ | — | $ | — | |||||||||||
| Average APR | 29.7 | % | — | % | — | % | |||||||||||
| Total originations sold | $ | 388,447 | $ | — | $ | — | |||||||||||
| Total originations (excluding SBNA Originations Program) | $ | 6,928,895 | $ | 6,140,784 | $ | 6,441,084 | |||||||||||
(a)Unpaid principal balance excluded from the weighted average FICO score is $450 million, $432 million, and $392 million for the three months ended March 31, 2021 and 2020, and for the three months ended December 31, 2020, respectively, as the borrowers on these loans did not have FICO scores at origination. Of these amounts, $154 million, $139 million, and $153 million, respectively, were commercial loans.
(b)Included in the total origination volume is $21 million, and $143 million for the three months ended March 31, 2020 and December 31, 2020, respectively, related to newly opened accounts.
(c)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 $2 million, zero, and zero for the three months ended March 31, 2021 and 2020, and for the three months ended December 31, 2020, 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 $2.0 billion of retail installment contacts during the three months ended March 31, 2021.
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Table 6: Asset Sales
| Three Months Ended | Three Months Ended | ||||||||||||||||
| March 31, 2021 | March 31, 2020 | December 31, 2020 | |||||||||||||||
| Assets Sold | (Unaudited, Dollar amounts in thousands) | ||||||||||||||||
| Retail installment contracts | $ | 2,380,785 | $ | — | $ | — | |||||||||||
| Average APR | 4.0 | % | — | % | — | % | |||||||||||
| Average FICO® | $ | 740 | — | — | |||||||||||||
| Personal loans | $ | 1,253,476 | — | $ | — | ||||||||||||
| Average APR | 29.7 | % | — | % | — | % | |||||||||||
| Total asset sales | $ | 3,634,261 | $ | — | $ | — | |||||||||||
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Table 7: Ending Portfolio
Ending outstanding balance, average APR and remaining unaccreted net discount of our held for investment portfolio as of March 31, 2021 and December 31, 2020, are as follows:
| March 31, 2021 | December 31, 2020 | ||||||||||
(Unaudited, Dollar amounts in thousands) | |||||||||||
| Retail installment contracts | $ | 31,813,760 | $ | 32,937,036 | |||||||
| Average APR | 15.9 | % | 15.2 | % | |||||||
| Discount/(premium) | (0.48) | % | (0.15) | % | |||||||
| Leased vehicles | $ | 17,273,817 | $ | 17,259,468 | |||||||
| Finance leases | $ | 27,199 | $ | 26,150 | |||||||
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Table 8: Reconciliation of Non-GAAP Measures
| March 31, 2021 | March 31, 2020 | ||||||||||
(Unaudited, Dollar amounts in thousands) | |||||||||||
| Total equity | $ | 6,231,853 | $ | 5,146,103 | |||||||
| Add: Adjustment due to CECL capital relief (c) | 1,805,720 | 1,669,466 | |||||||||
| Deduct: Goodwill, intangibles, and other assets, net of deferred tax liabilities | 163,359 | 153,712 | |||||||||
| Deduct: Accumulated other comprehensive income (loss), net | (41,818) | (63,655) | |||||||||
| Tier 1 common capital | $ | 7,916,032 | $ | 6,725,512 | |||||||
| Risk weighted assets (a)(c) | 47,995,845 | 48,829,941 | |||||||||
| Common Equity Tier 1 capital ratio (b)(c) | 16.5 | % | 13.8 | % | |||||||
(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.
(c)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 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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