Santander Consumer USA Holdings Inc
Santander Consumer USA — FY2020 Earnings Presentation
28 slides from Santander Consumer USA's earnings presentation, Feb 3, 2021
Slide 1: Fourth Quarter and Full Year 2020
Fourth Quarter and Full Year 2020 February 3, 2021 Exhibit 99.2
Slide 2: Important Information
IMPORTANT INFORMATION 2 Forward-Looking Statements This presentation 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 event
Slide 3: 2020 Earnings Highlights
Despite COVID-19 challenges, SC produced positive operating results while strengthening the balance sheet entering 2021 3 2020 Earnings Highlights Results COVID-19 Response Credit Performance Liquidity & Capital ► Net income of $911 million in FY 2020 and $521 million in Q4 2020 ► Total auto origina
Slide 4: Economic Indicators
07 08 09 10 11 12 13 14 15 16 17 18 19 20 Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec -31.4% 33.4% -2.8% -0.2% 2.7% 1.7% 1.3% 2.5% 2.5% 2.0% 1.9% 2.9% 2.2% 2.1% 4.0% 38.0 52.9 52.5 64.5 65.1 78.1 92.6 96.5 113.7 122.1 128.1 126.5 88.6 14.7% 7.3% 9.9% 9.3% 8.5% 7.9% 6.7% 5.6% 5.0% 4.7% 4.
Slide 5: Auto Industry Overview
17.3 17.2 17.1 16.6 11.4 13.0 17.0 16.3 39.2 39.8 39.8 40.0 32.0 36.0 38.0 38.0 136.0 140.5 139.9 141.1 141.9 149.3 161.2 161.1 118.4 122.0 121.8 117.9 121.6 126.8 139.5 135.1 1Q 2019 2Q 2019 3Q 2019 4Q 2019 1Q 2020 2Q 2020 3Q 2020 4Q 2020 5 Auto Industry Overview Used Vehicle Price Indices3 Used Ve
Slide 6: Quarterly and Full Year Originations
6 Quarterly and Full Year Originations 1 Approximate FICOs 2 Includes nominal capital lease originations 3 4 Includes SBNA Originations Asset Sales and SBNA Originations remain off of SC’s balance sheet in the Service For Others portfolio Three Months Ended Twelve Months Ended ($ in Millions) Q4 202
Slide 7: 2020 Monthly Originations
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YoY 22% 22% 45% 125% 79% 45% 23% 6% 23% 5% -4% -11% $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YoY -7% -13% -12% -40% -24% -5% -11% -19% 2% -15% -10% -14% $0 $100 $200 $300 $400 $500 $600 Jan Feb Mar Apr
Slide 8: Fiat Chrysler (FCA) Relationship
31.9% 32.5% 28.0% 33.8% 33.6% 4Q19 3Q20 4Q20 FY'19 FY'20 543 507 499 2,204 1,821 4Q19 3Q20 4Q20 FY'19 FY'20 8 Fiat Chrysler (FCA) Relationship FCA Sales1 (units in ‘000s) Chrysler Penetration Rate2 SC continues to partner with FCA to drive sales • Support both retail and lease incentives • Penetrati
Slide 9: Serviced for Others (SFO) Platform
85% 85% 85% 83% 86% 15% 15% 15% 17% 14% $10,414 $10,331 $11,211 $11,511 $11,563 4Q19 1Q20 2Q20 3Q20 4Q20 Related Party 3rd Party 9 Serviced for Others (SFO) Platform Serviced for others balance growth driven by prime originations through FCA and the SBNA program Successfully converted one external p
Slide 10: Diversified Funding and Liquidity
1.1 1.5 0.6 $1.7 $1.5 Q3 2020 Q4 2020 Asset Sales SBNA Originations 11.2 10.8 2.5 2.5 0.5 0.5 $14.2 $13.8 Q3 2020 Q4 2020 Revolving Contingent Term 2.8 4.2 9.3 7.8 $12.1 $12.0 Q3 2020 Q4 2020 Revolving Unused Used $8.6 $7.2 Q3 2020 Q4 2020 Amortizing$18.8 $18.9 Q3 2020 Q4 2020 ► $2.7B of new issuanc
Slide 11: Q4 2020 Financial Results
11 Q4 2020 Financial Results Three Months Ended (Unaudited, Dollars in Thousands, except per share) December 31, 2020 September 30, 2020 December 31, 2019 Interest on finance receivables and loans $1,315,290 $1,300,694 $1,262,266 Net leased vehicle income 293,143 257,984 214,693 Other finance and in
Slide 12: FY 2020 Financial Results
12 FY 2020 Financial Results Twelve Months Ended (Unaudited, Dollars in Thousands, except per share) December 31, 2020 December 31, 2019 YoY Interest on finance receivables and loans $5,126,403 $5,049,966 2% Net leased vehicle income 872,882 902,137 (3%) Other finance and interest income 13,862 42,2
Slide 13: Customer Relief Loan Deferrals
13 Customer Relief Loan Deferrals * Approximate data from March 1, 2020 – December 31, 2020 1 Excludes deferrals with payments due in December 31, 2020 Since the beginning of the pandemic through the end of the fourth quarter, ~697,000 unique accounts received deferrals • 92% of unique accounts that
Slide 14: Quarterly Delinquency & Loss
SC Recovery Rates1 (% of Gross Loss) Net Charge-off Rates2 14 Quarterly Delinquency & Loss Delinquency Ratios: 30-59 Days Delinquent, RICs, HFI Delinquency Ratios: >59 Days Delinquent, RICs, HFI Gross Charge-off Rates Late stage delinquencies decreased 200 bps YoY Gross charge-off rate decreased 740
Slide 15: Loss and Recovery Ratios (Annualized)
-3.0% 0.0% 3.0% 6.0% 9.0% 12.0% 15.0% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2019 11.3 8.7 5.8 6.1 6.1 7.0 8.0 7.5 8.6 8.6 7.3 8.7 2020 9.3 7.3 6.6 8.7 6.4 3.1 1.2 -1.4 1.9 2.1 3.7 4.8 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2019 49.0 54.6 66.1 62.5 62.4 56.0 55.2 59.2 53.2 52.9 57.
Slide 16: Loss Detail
16 Loss Detail Net Charge-off Walk, ($ in Millions) Net charge-offs for RICs decreased to $296M, down $322M YoY $131M increase in losses due to higher loan balances and other items $337M decrease due to lower gross charge-off rate $116M decrease due to improved recovery performance $618 $296 $131 ($
Slide 17: Allowance Walk (2020)
17 Allowance Walk (2020) Allowance for Credit Loss Walk (RICs, HFI 1 $ in Millions) 1 Allowance for credit loss related to retail installment contracts, held for investment $3,039 $2,102 $315 $5,456 $400 $5,856 $293 $6,149 ($42) $6,107 9.9% 16.5% 17.8% 19.2% 18.4% 18.5% 5.0% 10.0% 15.0% 20.0% 25.0%
Slide 18: Allowance Walk (Q4 2020)
618 593 461 46 296 (73) 315 400 293 (42) $545 $908 $861 $339 $254 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Net Charge-offs Build Release $6,149 $6,107 $83 ($125) 3Q 2020 Portfolio & Economic Factors Balance 4Q 2020 18 Allowance Walk (Q4 2020) Q3 2020 to Q4 2020 Allowance for Credit Loss Walk (RICs, H
Slide 19: Allowance Ratios
19 Allowance Ratios Dollars in Millions (Unaudited) (Unaudited) (Estimated)1 (Audited) Allowance Ratios December 31, 2020 September 30, 2020 January 1, 2020 December 31, 2019 TDR Unpaid principal balance $3,945 $3,802 $3,859 $3,859 TDR Impairment $1,314 $1,249 ~$950 $915 TDR Allowance ratio 33.3% 32
Slide 20: Expense Management
20 Expense Management $309 $283 $267 $264 $318 2.1% 1.9% 1.7% 1.7% 2.0% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% $- $50 $100 $150 $200 $250 $300 $350 $400 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Operating Expense Expense Ratio Operating Expenses ($ in Millions) Operating expenses increased $9M YoY du
Slide 21: CET1 Ratio
Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Tier 1 common capital $7,193 $6,726 $6,574 $6,834 $7,341 Risk weighted assets $48,762 $48,830 $48,998 $49,883 $50,424 CET1 14.8% 13.8% 13.4% 13.7% 14.6% 14.8% 13.8% 13.4% 13.7% 14.6% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% $60,000 $70,000 $80,000 $90,
Slide 22: Appendix
Appendix
Slide 23: Diversified Underwriting Across Full Credit Spectrum
10% 11% 7% 9% 10% 10% 11% 7% 8% 8% 21% 24% 15% 21% 22% 14% 15% 10% 14% 15% 45% 39% 61% 48% 45% $5,674 $4,927 $6,823 $6,525 $5,486 4Q19 1Q20 2Q20 3Q20 4Q20 No FICO <540 540-599 600-639 >640 2 23 Diversified Underwriting Across Full Credit Spectrum Originations by Credit (RICs)1 New/Used Originations
Slide 24: Held for Investment Credit Trends
2 .4 % 1 0 .0 % 1 6 .9 % 3 1 .9 % 1 9 .0 % 1 9 .8 % 2 .5 % 1 2 .4 % 1 6 .7 % 3 1 .9 % 1 8 .9 % 1 7 .5 % 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 % Commercial Unknown <540 540-599 600-639 >=
Slide 25: Excluding Personal Lending Detail - Quarterly
25 Excluding Personal Lending Detail - Quarterly 1 The current period losses were primarily driven by $114 million of lower of cost or market adjustments related to the held for sale personal ..lending portfolio, comprised of $55 million in customer default activity, and a $59 million increase in ma
Slide 26: Excluding Personal Lending Detail – Full Year
26 Excluding Personal Lending Detail – Full Year Personal lending earned $67 million before operating expenses and taxes in FY 2020 1 The FY 2020 period losses were primarily driven by $355 million of lower of cost or market adjustments related to the held for sale personal ..lending portfolio, comp
Slide 27: Reconciliation of Non-GAAP Measures
27 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 28: 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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