Santander Consumer USA Holdings Inc
Santander Consumer USA — Q3 2021 Earnings Presentation
24 slides from Santander Consumer USA's earnings presentation, Oct 27, 2021
Slide 1: Third Quarter 2021
Third Quarter 2021 October 27, 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, strategies, beliefs, plans, predictions, forecasts, objectives, assumptions, or
Slide 3: Q3 2021 Earnings Highlights
Q3 results reflect continued strong portfolio performance and used vehicle prices with signs of credit normalization 3 Q3 2021 Earnings Highlights Results Capital & Liquidity Credit Performance ► Net Income of $763 million in Q3 2021, or $2.49 of diluted EPS ► Net interest margin of 10.8%, up 90 bps
Slide 4: Economic Indicators
-0.3% -3.3% 3.1% 1.2% 2.4% 1.5% 2.9% 2.1% 2.9% 3.2% 3.4% 2.1% 33.4% 0.5% 59.8 53.1 48.5 45.4 70.3 79.7 86.0 103.0 104.1 119.8 138.4 125.1 101.8 109.3 08 09 10 11 12 13 14 15 16 17 18 19 20 21 Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep 4 Economic Indicators Consumer Confidence1 U.S. Unem
Slide 5: Auto Industry Overview
139.9 141.1 141.9 149.3 161.2 161.1 179.2 200.4 204.8 39.8 40.0 32.0 36.0 38.0 38.0 40.5 39.0 35.7 121.8 117.9 121.6 126.8 139.5 135.1 151.4 184.2 196.7 3Q 2019 4Q 2019 1Q 2020 2Q 2020 3Q 2020 4Q 2020 1Q 2021 2Q 2021 3Q 2021 17.1 16.6 11.4 13.0 17.0 16.3 17.7 15.4 12.2 1 U.S. Bureau of Economic Anal
Slide 6: Quarterly Originations
6 Quarterly Originations 1 Approximate FICOs 2 Includes nominal capital lease originations 3 Includes SBNA retail originations of $1.5 billion and lease originations of $249 million for the current period 4 SBNA originations remain off of SC’s balance sheet in the Service For Others portfolio Three
Slide 7: Monthly Originations by Segment
1 Approximate FICOs $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 -6% -6% 41% 106% 27% 11% -15% -5% -21% '19 v '21 YoY -12% -18% 24% 23% -3% 5% -24% -24% -19% $0 $100 $200 $300 $400 $500 $600 $700 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov
Slide 8: Stellantis Relationship
32.5% 28.0% 36.2% 33.8% 26.5% 3Q 2020 4Q 2020 1Q 2021 2Q 2021 3Q 2021 507 499 470 485 411 3Q 2020 4Q 2020 1Q 2021 2Q 2021 3Q 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
83% 86% 74% 77% 79% 17% 14% 26% 23% 21% $11,511 $11,563 $14,216 $15,094 $15,151 3Q 2020 4Q 2020 1Q 2021 2Q 2021 3Q21 Related Party 3rd Party 9 Serviced for Others (SFO) Platform Serviced for others balance growth driven by prime originations and asset sales ~$1.8B in SBNA originations1 ~$278M in off
Slide 10: Diversified Funding and Liquidity
11.0 11.8 0.8 $11.8 $11.8 2Q 2021 3Q 2021 Revolving Used Unused 2.6 1.8 0.3 0.3 $2.9 $2.1 2Q 2021 3Q 2021 Auto Loans SBNA Originations $5.2 $4.2 2Q 2021 3Q 2021 Amortizing $22.0 $24.7 2Q 2021 3Q 2021 ► $6.2B of new issuance in Q3: 1 SDART, 1 DRIVE, 1 SRT Total unutilized capacity of approximately $1
Slide 11: Q3 2021 Financial Results
Three Months Ended (Unaudited, Dollars in Thousands, except per share) September 30, 2021 June 30, 2021 September 30, 2020 Interest on finance receivables and loans $1,215,121 $1,229,492 $1,300,694 Net leased vehicle income 345,075 409,196 257,984 Other finance and interest income 1,631 3,068 2,146
Slide 12: Quarterly Delinquency & Loss
50.1% 45.7% 91.4% 64.2% 69.1% 114.9% 74.4% 7.7% 6.0% 0.6% 3.5% 3.0% -1.0% 2.0% Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 15.5% 11.1% 6.8% 9.9% 9.7% 6.6% 7.7% 4.6% 2.4% 2.4% 3.1% 2.2% 2.4% 3.3% SC Recovery Rates1 (% of Gross Loss) Net Charge-off Rates2 12 Quarterly Delinquency & Loss De
Slide 13: Loss and Recovery Ratios (Annualized)
13 Loss and Recovery Ratios (Annualized) Gross Charge-off Ratio (%) Recovery Rates (% of Gross Loss) Net Charge-off Ratio (%) 2019 2020 2021 0.0 5.0 10.0 15.0 20.0 25.0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2019 (%) 22.3 19.1 17.0 16.1 16.1 15.8 17.9 18.4 18.5 18.3 17.1 16.1 2020 (%) 17.2
Slide 14: Loss Detail
14 Loss Detail Net Charge-off Walk, ($ in Millions) Net charge offs of $162M, up $116M YoY $53M increase due to lower recovery rate $8M increase due to higher gross charge- off rate $55M increase due to other adjustments ($340) ($167) 3Q 2020 $53 $46 Recoveries $55 $8 Gross Loss Performance Other 3Q
Slide 15: Allowance Walk Q2 2021 to Q3 2021
$5,815 $5,696 $85 ($173) ($31) 2Q 2021 Economic Factors Credit Quality & Portfolio Mix Balance 3Q 2021 15 Allowance Walk Q2 2021 to Q3 2021 Allowance for Credit Loss Walk (RICs, HFI 1 $ in Millions) Allowance for credit loss decreased by $119M QoQ $85M increase due to moderating macroeconomic factor
Slide 16: Allowance Ratios
16 Allowance Ratios Dollars in Millions (Unaudited) (Unaudited) (Unaudited) (Unaudited) Sep 30, June 30, Sep 30, January 1, 2021 2021 2020 2020 TDR Unpaid principal balance $3,952 $4,162 $3,802 $3,859 TDR Impairment $1,298 $1,515 $1,249 $950 TDR Allowance ratio 32.8% 36.4% 32.9% 24.6% Non-TDR Unpaid
Slide 17: Expense Management
$264 $318 $294 $303 $362 1.7% 2.0% 1.8% 1.9% 2.2% -2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% $- $50 $100 $150 $200 $250 $300 $350 $400 3Q 2020 4Q 2020 1Q 2021 2Q 2021 3Q 2021 Operating Expense Expense Ratio 17 Expense Management Operating Expenses ($ in Millions) Operating expenses and expense ratio incre
Slide 18: CET1 Ratio
3Q 2020 4Q 2020 1Q 2021 2Q 2021 3Q 2021 Tier 1 common capital $6,834 $7,341 $7,916 $8,861 $9,536 Risk weighted assets $49,883 $50,424 $47,996 $49,015 $48,831 CET1 13.7% 14.6% 16.5% 18.1% 19.5% 13.7% 14.6% 16.5% 18.1% 19.5% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% $60,000 $70,000 $80,000 $90,000 $100,000 $1
Slide 19: Appendix
APPENDIX
Slide 20: Diversified Underwriting Across Full Credit Spectrum
58% 55% 55% 52% 41% 42% 45% 45% 48% 59% $6,525 $5,486 $6,456 $8,430 $5,995 3Q20 3Q20 1Q21 2Q21 3Q21 New Used 9% 10% 9% 9% 8% 8% 8% 8% 8% 8% 21% 22% 22% 22% 24% 14% 15% 15% 15% 17% 48% 45% 47% 46% 42% $6,525 $5,486 $6,456 $8,430 $5,995 3Q20 4Q20 1Q21 2Q21 3Q21 No FICOs <540 540-599 600-639 >=6402 20
Slide 21: Held for Investment Credit Trends
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 % 3 .0 % 9 .6 % 1 5 .0 % 3 4 .3 % 2 0 .8 % 1 7 .3 % Commercial No FICOs <540 540-599 600-639 >=640 Q
Slide 22: Excluding Personal Lending Detail
* The losses for the three months ended September 30, 2020 were primarily driven by $57 million of lower of cost or market adjustments ..related to the held for sale personal ..lending portfolio, comprised of $81 million in customer default activity, and a $24 million favorable ..market discount. 22
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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