Santander Consumer USA Holdings Inc
Santander Consumer USA — Q2 2021 Earnings Presentation
24 slides from Santander Consumer USA's earnings presentation, Jul 28, 2021
Slide 1: Second Quarter 2021
Second Quarter 2021 July 28, 2021 Exhibit 99.2
Slide 2: Important Information
IMPORTANT INFORMATION 2 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 even
Slide 3: Q2 2021 Earnings Highlights
Record Q2 results reflects strong business model, resilient US consumer and robust used vehicle prices 3 Q2 2021 Earnings Highlights Results Capital & Liquidity Credit Performance ► Net Income of $1.1 billion in Q2 2021, or $3.45 of diluted EPS ► Net interest margin of 11.3%, up 290bps YoY ► Total a
Slide 4: Economic Indicators
0.8% -4.1% 2.7% 1.7% 2.5% 0.9% 2.6% 2.7% 1.2% 2.6% 4.2% 2.0% -31.4% 7.6% 08 09 10 11 12 13 14 15 16 17 18 19 20 21 Jun Jun Jun Jun Jun Jun Jun Jun Jun Jun Jun Jun Jun Jun 5.6% 9.5% 9.4% 9.1% 8.2% 7.5% 6.1% 5.3% 4.9% 4.3% 4.0% 3.7% 11.1% 5.9% 50.4 49.3 52.9 58.5 62.0 81.4 85.2 101.4 98.0 118.9 126.4
Slide 5: Auto Industry Overview
140.5 139.9 141.1 141.9 149.3 161.2 161.1 179.2 200.4 122.0 121.8 117.9 121.6 126.8 139.5 135.1 151.4 184.2 39.8 39.8 40.0 32.0 36.0 38.0 38.0 40.5 39.0 2Q 2019 3Q 2019 4Q 2019 1Q 2020 2Q 2020 3Q 2020 4Q 2020 1Q 2021 2Q 2021 17.2 17.1 16.6 11.4 13.0 17.0 16.3 17.7 15.4 1 U.S. Bureau of Economic Anal
Slide 6: Quarterly Originations
6 Quarterly Originations 1 Approximate FICOs 2 Includes nominal capital lease originations 3 4 Includes SBNA Originations SBNA Originations remain off of SC’s balance sheet in the Service For Others portfolio Three Months Ended Originations ($ in Millions) Q2 2021 Q1 2021 Q2 2020 QoQ YoY Total Core
Slide 7: Monthly Originations
$0 $200 $400 $600 $800 $1,000 $1,200 $1,400 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec '20 v '21 YoY 9% 68% 126% 2% -17% -32% '19 v '21 YoY 33% 104%228%128% 48% -1% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec '20 v '21 YoY -6% -6% 41% 106% 27% 11% '19 v '21 YoY -12% -18% 24% 23% -3% 5% $0 $
Slide 8: Stellantis Relationship
37.1% 32.5% 28.0% 36.2% 33.8% 2Q 2020 3Q 2020 4Q 2020 1Q 2021 2Q 2021 367 507 499 470 485 2Q 2020 3Q 2020 4Q 2020 1Q 2021 2Q 2021 8 Stellantis Relationship Stellantis Sales1 (units in ‘000s) Chrysler Capital Penetration Rate SC continues to partner with Stellantis to drive sales • Support both retai
Slide 9: Serviced for Others (SFO) Platform
85% 83% 86% 74% 77% 15% 17% 14% 26% 23% $11,211 $11,511 $11,563 $14,216 $15,094 2Q 2020 3Q 2020 4Q 2020 1Q 2021 2Q 2021 Related Party 3rd Party 9 Serviced for Others (SFO) Platform Serviced for others balance growth driven by prime originations through Stellantis ~$2.6B in SBNA originations ~$300M i
Slide 10: Diversified Funding and Liquidity
9.4 11.0 2.4 0.8 $11.8 $11.8 1Q 2021 2Q 2021 Revolving Used Unused ► $5.3B of new issuance in Q2: 1 SDART, 1 DRIVE, 1 SRT Total unutilized capacity of approximately $14 billion at the end of Q2 2021 Diversified Funding and Liquidity Asset-Backed Securities1 ($ in Billions) Financings ($ in Billions)
Slide 11: Q2 2021 Financial Results
11 Q2 2021 Financial Results Three Months Ended (Unaudited, Dollars in Thousands, except per share) June 30, 2021 March 31, 2021 June 30, 2020 Interest on finance receivables and loans $1,229,492 $1,304,651 $1,236,600 Net leased vehicle income 409,196 317,089 126,688 Other finance and interest incom
Slide 12: Quarterly Delinquency & Loss
6.4% 8.1% 8.3% 7.7% 6.0% 0.6% 3.5% 3.0% -1.0% Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 SC Recovery Rates1 (% of Gross Loss) Net Charge-off Rates2 12 Quarterly Delinquency & Loss Delinquency Ratios: 30-59 Days Delinquent, RICs, HFI Delinquency Ratios: >59 Days Delinquen
Slide 13: Loss and Recovery Ratios (Annualized)
0.0 5.0 10.0 15.0 20.0 25.0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2019 (%) 22.3 19.1 17.0 16.1 16.1 15.8 17.9 18.4 18.5 18.3 17.1 16.1 2020 (%) 17.2 15.6 13.7 12.9 12.6 8.1 6.7 5.5 7.9 9.5 9.5 10.7 2021 (%) 10.3 9.4 9.4 7.4 6.3 6.0 0.0 25.0 5
Slide 14: Loss Detail
14 Loss Detail Net Charge-off Walk, ($ in Millions) Net recoveries of $79M, down $540M YoY $340M decrease due to improved recovery performance $167M decrease due to lower gross charge-off rate $51M decrease due to debt sales & other adjustments $18M increase due to higher loan balances $461 ($79) ($
Slide 15: Allowance Walk Q1 2021 to Q2 2021
$6,001 $5,815 $188 ($283) ($91) 1Q 2021 Balance Credit Quality & Portfolio Mix Economic Factors 2Q 2021 15 Allowance Walk Q1 2021 to Q2 2021 Allowance for Credit Loss Walk (RICs, HFI 1 $ in Millions) Allowance for credit loss decreased by $186M QoQ $188M increase due to higher asset balances $283M d
Slide 16: Allowance Ratios
16 Allowance Ratios Dollars in Millions (Unaudited) (Unaudited) (Unaudited) (Estimated) Allowance Ratios June 30, 2021 March 31, 2021 June 30, 2020 January 1, 2020 TDR Unpaid principal balance $4,162 $4,357 $3,947 $3,859 TDR Impairment $1,515 $1,339 $1,038 ~$950 TDR Allowance ratio 36.4% 30.7% 26.3%
Slide 17: Expense Management
$267 $264 $318 $294 $303 1.7% 1.7% 2.0% 1.8% 1.9% -2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% $- $50 $100 $150 $200 $250 $300 $350 $400 2Q 2020 3Q 2020 4Q 2020 1Q 2021 2Q 2021 Operating Expense Expense Ratio 17 Expense Management Operating Expenses ($ in Millions) Operating expenses increased $36M YoY driv
Slide 18: CET1 Ratio
18 CET1 Ratio Record quarterly results led to an increase in CET1 ratio of 160bps, offset by risk weighted assets growth Ordinary dividend of $0.22 declared 1 CET1 is calculated under Basel III regulations required as of January 1, 2015. Please see the appendix for further details related to CECL ph
Slide 19: Appendix
APPENDIX
Slide 20: Diversified Underwriting Across Full Credit Spectrum
11% 7% 9% 10% 9% 12% 7% 8% 8% 8% 23% 15% 21% 22% 21%15% 10% 14% 15% 15% 39% 61% 48% 45% 47% $6,823 $6,525 $5,486 $6,456 $8,430 2Q20 3Q20 4Q20 1Q21 2Q21 No FICOs <540 540-599 600-639 >=640 2 20 Diversified Underwriting Across Full Credit Spectrum Originations by Credit (RICs)1 New/Used Originations 1
Slide 21: Held for Investment Credit Trends
2 .6 % 1 0 .1 % 1 6 .7 % 3 2 .6 % 1 9 .2 % 1 8 .8 % 2 .5 % 1 0 .1 % 1 5 .3 % 3 0 .8 % 1 8 .3 % 2 3 .0 % 2 .6 % 9 .8 % 1 5 .3 % 3 1 .7 % 1 9 .0 % 2 1 .6 % 2 .8 % 9 .8 % 1 5 .6 % 3 3 .4 % 2 0 .1 % 1 8 .3 % 2 .9 % 9 .7 % 1 5 .4 % 3 4 .1 % 2 0 .5 % 1 7 .4 % Commercial No FICOs <540 540-599 600-639 >=640
Slide 22: Excluding Personal Lending Detail
1 The losses for the three months ended March 31, 2021 were primarily driven by $39 million of lower of cost or market adjustments related to ..the held for sale personal lending portfolio, comprised of $65 million in customer default activity, and a $26 million decrease in market ..discount, consis
Slide 23: Reconciliation of Non-GAAP Measures
23 Reconciliation of Non-GAAP Measures 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 associ
Slide 24: Thank You
Our purpose is to help people and business prosper. Our culture is based on believing that everything we do should be: Thank You
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