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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-KCURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 30, 2019
SANTANDER CONSUMER USA HOLDINGS INC.(Exact name of registrant as specified in its charter)
Delaware(State or other Jurisdiction of Incorporation)
001-36270(Commission File Number)
32-0414408(IRS Employer Identification No.)
1601 Elm St. Suite #800 Dallas, Texas
(Address of Principal Executive Offices)
75201
(Zip Code)
Registrant’s telephone number, including area code: (214) 634-1110
n/a
(Former name or former address if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR 240.12b-2).
Emerging growth company ☐If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On April 30, 2019, Santander Consumer USA Holdings Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended March 31, 2019 . Copies of the Company’s press release and an investor presentation for thequarter ended March 31, 2019 are attached hereto as Exhibits 99.1 and 99.2, respectively, and incorporated herein by reference.
Note: Information in this report (including Exhibits 99.1 and 99.2) furnished pursuant to Item 2.02 shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of thatsection.
Item 9.01. Financial Statements and Exhibits.
Exhibit No. Description
Exhibit 99.1 Press Release of Santander Consumer USA Holdings Inc., dated April 30, 2019
Exhibit 99.2 Presentation Materials of Santander Consumer USA Holdings Inc., dated April 30, 2019
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: April 30, 2019
SANTANDER CONSUMER USA HOLDINGS INC.
By: /s/ Christopher Pfirrman Name: Christopher PfirrmanTitle: Chief Legal Officer
Exhibit 99.1
Contacts:Investor RelationsEvan Black 800.493.8219InvestorRelations@santanderconsumerusa.com
Media RelationsLaurie Kight214.801.6455
Media@santanderconsumerusa.com
Santander Consumer USA Holdings Inc. Reports First Quarter 2019 Net Income of $248 millionTotalAutoOriginationsof$7.0BillionIncreased10%YoY;Declares$0.20PerShareCashDividend
Dallas, TX (April 30, 2019) – Santander Consumer USA Holdings Inc. (NYSE: SC) (“SC” or the “Company”) today announced net income for the first quarter ended March 31, 2019 (“Q1 2019”) of $248 million , or $0.70 per diluted common share.
The Company has declared a cash dividend of $0.20 per share, to be paid on May 20, 2019, to shareholders of record as of the close of business on May 10, 2019.
Management Quotes
“ SantanderConsumerisofftoagoodstartin2019,”said Scott Powell, SC President and CEO, who is also CEO of Santander US .“ Ourstrategyhascontinuedtoshowresultsasweincreasedyear-over-yearoriginationsforafifthconsecutivequarter.Ouroverallperformancewasdrivenbyasustainedfocusonoperationsanddealerexperience,aswellasthestrengthofourpartnershipwithFiatChrysler.”
Juan Carlos Alvarez, SC Chief Financial Officer, added, “ Wearepleasedwithourgoodstarttotheyearsupportedbysolidauctionprices,lowerTDRbalancesanddisciplinedexpensemanagement.”
Q1 2019 Highlights (variancescomparedtothefirstquarterof2018(“ Q12018” ),unlessotherwisenoted):
• Total auto originations of $7.0 billion, up 10%◦ Core retail auto loan originations of $2.6 billion, up 14%◦ Chrysler Capital loan originations of $2.4 billion, up 23%◦ Chrysler Capital lease originations of $2.0 billion, down 6%◦ Chrysler average quarterly penetration rate of 31%, up from 28% from the same quarter last year◦ Santander Bank, N.A. program originations of $1.0 billion
• Net finance and other interest income of $1.1 billion , up 5%• 30-59 delinquency ratio of 8.4% , down 50 basis points• 59-plus delinquency ratio of 4.2% , down 20 basis points• Retail Installment Contract (“RIC”) gross charge-off ratio of 19.5%, up 100 basis points• Recovery rate of 55.9%, up 90 basis points• RIC net charge-off ratio of 8.6% , up 30 basis points• Troubled Debt Restructuring (“TDR”) balance of $4.9 billion , down $462 million vs. December 31, 2018• Return on average assets of 2.2% , down from 2.5%• $2.9 billion in loan asset-backed securities “ABS”• Expense ratio of 2.1% , down from 2.4 %• Common equity tier 1 (“CET1”) ratio of 15.8%, down from 17.0% vs. March 31, 2018
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Net finance and other interest income 1 increased 5 percent to $1.13 billion in Q1 2019 from $1.08 billion in Q1 2018, driven by increased loan and lease balances.
SC's serviced for others portfolio of $8.7 billion as of Q1 2019 remained relatively flat versus the prior year quarter. Servicing fee income decreased 9 percent to $24 million in Q1 2019, from $26 million in Q1 2018, driven by the change in the composition ofthose balances. Fees, commissions and other increased from $ 85 million in Q1 2018 to $ 94 million in Q1 2019, driven by origination fees from the SBNA program.
RIC delinquency ratio 2 of 4.2 percent in Q1 2019 decreased 20 basis points compared to 4.4 percent in Q1 2018.
RIC net charge-off ratio 3 increased to 8.6 percent in Q1 2019 from 8.3 percent in Q1 2018. Provision for credit losses of $551 million in Q1 2019 were up from $510 million the prior year quarter.
Allowance ratio 4 decreased 40 basis points, to 11.0 percent at the end of Q1 2019, from 11.4 percent at the end of Q4 2018.
Recorded net investment losses of $67 million in Q1 2019, compared to net investment losses of $87 million in Q1 2018. The current period losses were primarily driven by held for sale accounting for SC's personal lending portfolio. 5
During Q1 2019 SC incurred $291 million of operating expenses, up 1 percent from $288 million in Q1 2018. SC's expense ratio of 2.1 percent for the quarter, down compared to 2.4 percent during the same period last year.
1 Includes Finance receivables held for investment, Finance receivables held for sale and Leased vehicles.2 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.3 Net charge-off ratio stated on a recorded investment basis, which is unpaid principal balance adjusted for unaccreted net discounts, subvention and origination costs.4 Ratio for allowance for credit losses excludes end of period balances on purchased receivables portfolio of $28 million and finance receivables and personal loans held for sale of $1.0 billion .5 The current period losses were primarily driven by $67 million of lower of cost or market adjustments related to the held for sale personal lending portfolio, comprised of $109 million in customer default activity, partially offset by a $42 million decrease in market discount, consistent with typical seasonalpatterns.
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Conference Call InformationSC will host a conference call and webcast to discuss its Q1 2019 results and other general matters at 9:00 a.m. Eastern Time on Tuesday, April 30, 2019. The conference call will be accessible by dialing 888-394-8218 (U.S. domestic), or 323-701-0225(international), conference ID 2036898. 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 websiteat http://investors.santanderconsumerusa.com. Choose "Events" and select the information pertaining to the Q1 2019 SC Earnings Conference Call. Additionally, there will be slides accompanying the webcast. Please allow at least 15 minutes prior to the call toregister, 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 844-512-2921 (U.S. domestic), or 412-317-6671 (international), conference ID 2036898, approximately two hours after the conferencecall. 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 orperformance 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 anduncertainties 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 ourQuarterly Reports on Form 10-Q filed by us with the U.S. Securities and Exchange Commission (SEC). Among the factors that could cause the forward-looking statements in this press release and/or our financial performance to differ materially from thatsuggested by the forward-looking statements are (a) the inherent limitations in internal control over financial reporting; (b) our ability to remediate any material weaknesses in internal controls over financial reporting completely and in a timely manner; (c)continually changing federal, state, and local laws and regulations could materially adversely affect our business; (d) adverse economic conditions in the United States and worldwide may negatively impact our results; (e) our business could suffer if our access tofunding is reduced; (f) significant risks we face implementing our growth strategy, some of which are outside our control; (g) unexpected costs and delays in connection with exiting our personal lending business; (h) our agreement with FCA US LLC may notresult in currently anticipated levels of growth and is subject to certain conditions that could result in termination of the agreement; (i) our business could suffer if we are unsuccessful in developing and maintaining relationships with automobile dealerships; (j)our financial condition, liquidity, and results of operations depend on the credit performance of our loans; (k) loss of our key management or other personnel, or an inability to attract such management and personnel; (l) certain regulations, including but notlimited 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 andamount of dividends and other limitations on our business; and (m) 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 andstatements 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 anyforward-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 uncertaintiesas 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, exceptas 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 2.7 million customers across the full credit spectrum. Thecompany, which began originating retail installment contracts in 1997, had an average managed asset portfolio of approximately $54 billion (as of March 31, 2019 ), and is headquartered in Dallas. ( www.santanderconsumerusa.com )
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Santander Consumer USA Holdings Inc.Financial Supplement
First Quarter 2019
Table of Contents Table 1: Condensed Consolidated Balance Sheets 5Table 2: Condensed Consolidated Statements of Income 6Table 3: Other Financial Information 7Table 4: Credit Quality 9Table 5: Originations 10Table 6: Asset Sales 11Table 7: Ending Portfolio 12Table 8: Reconciliation of Non-GAAP Measures 13
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Table 1: Condensed Consolidated Balance Sheets
March 31,
2019 December 31,
2018Assets (Unaudited, Dollars in thousands)
Cash and cash equivalents $ 76,272 $ 148,436
Finance receivables held for sale, net 974,017 1,068,757
Finance receivables held for investment, net 25,598,716 25,117,454
Restricted cash 2,414,653 2,102,048
Accrued interest receivable 272,014 303,686
Leased vehicles, net 14,388,657 13,978,855
Furniture and equipment, net 61,856 61,280
Federal, state and other income taxes receivable 80,567 97,087
Related party taxes receivable 2,594 734
Goodwill 74,056 74,056
Intangible assets 41,200 35,195
Due from affiliates 6,685 8,920
Other assets 1,054,619 963,347
Total assets $ 45,045,906 $ 43,959,855
Liabilities and Equity Liabilities:
Notes payable — credit facilities $ 5,063,786 $ 4,478,214
Notes payable — secured structured financings 27,080,312 26,901,530
Notes payable — related party 3,503,055 3,503,293
Accrued interest payable 54,655 49,370
Accounts payable and accrued expenses 399,792 422,951
Deferred tax liabilities, net 1,230,531 1,155,883
Due to affiliates 70,526 63,219
Other liabilities 484,719 367,037
Total liabilities $ 37,887,376 $ 36,941,497
Equity: Common stock, $0.01 par value 3,517 3,523
Additional paid-in capital 1,499,092 1,515,572
Accumulated other comprehensive income, net 12,938 33,515
Retained earnings 5,642,983 5,465,748
Total stockholders’ equity $ 7,158,530 $ 7,018,358
Total liabilities and equity $ 45,045,906 $ 43,959,855
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Table 2: Condensed Consolidated Statements of Income
Three Months Ended
March 31,
2019 2018 (Unaudited, Dollars in thousands, except per share amounts)
Interest on finance receivables and loans $ 1,253,580 $ 1,168,540
Leased vehicle income 649,560 504,278
Other finance and interest income 10,247 7,137
Total finance and other interest income 1,913,387 1,679,955
Interest expense 334,382 241,028
Leased vehicle expense 444,019 358,683
Net finance and other interest income 1,134,986 1,080,244
Provision for credit losses 550,879 510,341
Net finance and other interest income after provision for credit losses 584,107 569,903
Profit sharing 6,968 4,377
Net finance and other interest income after provision for credit losses and profit sharing 577,139 565,526
Investment losses, net (67,097) (86,520)
Servicing fee income 23,806 26,182
Fees, commissions, and other 94,376 85,391
Total other income 51,085 25,053
Compensation expense 127,894 122,005
Repossession expense 70,860 72,081
Other operating costs 92,203 93,826
Total operating expenses 290,957 287,912
Income before income taxes 337,267 302,667
Income tax expense 89,764 58,052
Net income $ 247,503 $ 244,615
Net income per common share (basic) $ 0.70 $ 0.68
Net income per common share (diluted) $ 0.70 $ 0.68
Weighted average common shares (basic) 351,515,464 360,703,234
Weighted average common shares (diluted) 352,051,887 361,616,732
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Table 3: Other Financial Information
Three Months Ended
March 31,
Ratios (Unaudited, Dollars in thousands) 2019 2018
Yield on individually acquired retail installment contracts 16.2% 16.0 %
Yield on purchased receivables portfolios 19.3% 27.6 %
Yield on receivables from dealers 3.6% 3.1 %
Yield on personal loans (1) 26.2% 24.5 %
Yield on earning assets (2) 12.9% 13.2 %
Cost of debt (3) 3.8% 3.1 %
Net interest margin (4) 10.0% 10.8 %
Expense ratio (5) 2.1% 2.4 %
Return on average assets (6) 2.2% 2.5 %
Return on average equity (7) 14.0% 14.9 %
Net charge-off ratio on individually acquired retail installment contracts (8) 8.6% 8.3 %
Net charge-off ratio on purchased receivables portfolios (8) —% (4.2)%
Net charge-off ratio on personal loans (8) 41.3% 49.9 %
Net charge-off ratio (8) 8.6% 8.3 %
Delinquency ratio on individually acquired retail installment contracts held for investment, end of period (9) 4.2% 4.4 %
Delinquency ratio on personal loans, end of period (9) 11.9% 11.7 %
Delinquency ratio on loans held for investment, end of period (9) 4.2% 4.4 %
Allowance ratio (10) 11.0% 12.7 %
Common stock dividend payout ratio (11) 28.4% 7.4 %
Common Equity Tier 1 capital ratio (12) 15.8% 17.0 % Charge-offs, net of recoveries, on individually acquired retail installment contracts $ 615,204 $ 541,283
Charge-offs, net of recoveries, on purchased receivables portfolios — (428)
Charge-offs, net of recoveries, on personal loans 239 749
Charge-offs, net of recoveries, on finance leases 172 306
Total charge-offs, net of recoveries $ 615,615 $ 541,910
End of period delinquent principal over 59 days, individually acquired retail installment contracts held for investment 1,224,289 1,160,154
End of period delinquent principal over 59 days, personal loans 165,220 162,061
End of period delinquent principal over 59 days, loans held for investment 1,225,807 1,162,311
End of period assets covered by allowance for credit losses 28,857,519 26,124,390
End of period gross individually acquired retail installment contracts held for investment 28,821,729 26,081,986
End of period gross personal loans 1,393,403 1,387,713
End of period gross finance receivables and loans held for investment 28,864,876 26,141,811
End of period gross finance receivables, loans, and leases held for investment 44,491,987 37,816,402
Average gross individually acquired retail installment contracts held for investment 28,595,315 26,006,518
Average gross personal loans held for investment 2,317 6,010
Average gross individually acquired retail installment contracts held for investment and held for sale $ 28,595,315 $ 26,915,621
Average gross purchased receivables portfolios 29,283 41,209
Average gross receivables from dealers 13,598 15,651
Average gross personal loans held for sale 1,466,300 1,459,308
Average gross finance leases 20,018 22,474
Average gross finance receivables and loans $ 30,124,514 $ 28,454,263
Average gross operating leases 15,425,190 11,441,789
Average gross finance receivables, loans, and leases 45,549,704 39,896,052
Average managed assets 54,433,129 48,516,758
Average total assets 44,488,868 39,677,593
Average debt 35,261,121 31,208,250
Average total equity 7,052,703 6,566,933
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(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 recorded investment basis, net of recoveries, to average unpaid principal balance of the respective held-for-investment portfolio. Effective as of September 30, 2016, the
Company records the charge-off activity for certain personal loans within the provision for credit losses due to the reclassification of these loans from held for sale to held for investment.(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.(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)
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Table 4: Credit Quality
The activity in the credit loss allowance for individually acquired retail installment contracts for the three months ended March 31, 2019 and 2018 was as follows (Unaudited,Dollaramountsinthousands):
Three Months Ended March 31, 2019 Three Months Ended March 31, 2018
Retail Installment Contracts Acquired Individually Retail Installment Contracts Acquired Individually
Allowance for Credit Loss Non-TDR TDR
Non-TDR TDR Balance — beginning of period $ 1,819,360 $ 1,416,743 $ 1,540,315 $ 1,804,132
Provision for credit losses 446,488 104,613 286,451 223,574
Charge-offs (927,457) (466,637) (655,169) (547,343)
Recoveries 552,960 225,930 425,460 235,769
Balance — end of period $ 1,891,351 $ 1,280,649 $ 1,597,057 $ 1,716,132
A summary of delinquencies of our individually acquired retail installment contracts as of March 31, 2019 and December 31, 2018 is as follows (Unaudited,Dollaramountsinthousands):
Delinquent Principal March 31, 2019 December 31, 2018
Principal 30-59 days past due $ 2,417,300 8.4% $ 3,118,869 11.0%
Delinquent principal over 59 days 2 1,224,289 4.2% 1,712,243 6.0%
Total delinquent contracts $ 3,641,589 12.6% $ 4,831,112 17.0%
Within the total delinquent principal above, retail installment contracts acquired individually held for investment that were placed on nonaccrual status, as of March 31, 2019 and December 31, 2018 (Unaudited,Dollaramountsinthousands):
Nonaccrual Principal March 31, 2019 December 31, 2018
Non-TDR $ 724,025 2.5% $ 834,921 2.9%
TDR 537,259 1.9% 733,218 2.6%
Total nonaccrual principal $ 1,261,284 4.4% $ 1,568,139 5.5%
The table below presents the Company’s allowance ratio for TDR and non-TDR individually acquired retail installment contracts as of March 31, 2019 and December 31, 2018 (Unaudited,Dollaramountsinthousands):
Allowance RatiosMarch 31,
2019 December 31,
2018TDR - Unpaid principal balance $ 4,916,251 $ 5,378,603
TDR - Impairment 1,280,649 1,416,743
TDR - Allowance ratio 26.0% 26.3%
Non-TDR - Unpaid principal balance $ 23,905,478 $ 23,054,157
Non-TDR - Allowance 1,891,351 1,819,360Non-TDR Allowance ratio 7.9% 7.9%
Total - Unpaid principal balance $ 28,821,729 $ 28,432,760
Total - Allowance 3,172,000 3,236,103
Total - Allowance ratio 11.0% 11.4%
1 Percent of unpaid principal balance.2 Interest is accrued until 60 days past due in accordance with the Company's account policy for retail installment contracts.
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Table 5: Originations
The Company's originations of individually acquired loans and leases, including revolving loans, average APR, and discount were as follows:
Three Months Ended Three Months Ended
March 31, 2019 March 31, 2018 December 31, 2018Retained Originations (Unaudited, Dollar amounts in thousands)Retail installment contracts $ 4,026,327 $ 3,866,494 $ 3,616,810
Average APR 17.2 % 16.1% 17.1%
Average FICO® (a) 593 611 593
Discount (0.1)% 0.3% 0.5%
Personal loans 288,557 273,328 $ 544,134
Average APR 29.7 % 26.0% 29.5%
Leased vehicles 1,963,580 2,093,604 $ 2,125,925
Finance lease 3,308 2,398 $ 2,706
Total originations retained $ 6,281,772 $ 6,235,824 $ 6,289,575
Sold Originations (b) Retail installment contracts $ — $ 386,956 $ —
Average APR — % 6.8% —%
Average FICO® (b) — 732 —
Total originations sold $ — $ 386,956 $ —
Total originations $ 6,281,772 $ 6,622,780 $ 6,289,575
(a) Unpaid principal balance excluded from the weighted average FICO score is $493 million , $461 million and $408 million for the three months ended March 31, 2019 and 2018 , and the three months ended December 31, 2018 , respectively, as the borrowers on these loans did not have FICO scores atorigination. Of these amounts, $106 million , $54 million , and $100 million , respectively, were commercial loans.
(b) 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 zero , $32 million , zero for the three months ended March 31, 2019 and 2018 , and the three months endedDecember 31, 2018 , respectively, as the borrowers on these loans did not have FICO scores at origination. Of these amounts, zero , $20 million , zero , respectively, were commercial loans.
SBNA Originations ProgramBeginning 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 servicingfor any loans originated on SBNA’s behalf. The Company facilitated the purchase of $1 billion and $24 million of retail installment contacts during the three months ended March 31, 2019 , and March 31, 2018 respectively.
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Table 6: Asset Sales
Three Months Ended Three Months Ended
March 31, 2019 March 31, 2018 December 31, 2018 (Unaudited, Dollar amounts in thousands)Retail installment contracts $ — $ 1,475,253 $ —
Average APR —% 6.5% —%
Average FICO® — 727 —
Total asset sales $ — $ 1,475,253 $ —
There were no asset sales for the three months ended March 31, 2019 and December 31, 2018. Please see the bottom of Table 5 for further details regarding the SBNA Originations Program.
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Table 7: Ending Portfolio
Ending outstanding balance, average APR and remaining unaccreted dealer discount of our held for investment portfolio as of March 31, 2019 , and December 31, 2018 , are as follows:
March 31, 2019 December 31, 2018
( Unaudited, Dollar amounts in thousands)Retail installment contracts $ 28,849,755 $ 28,463,236Average APR 16.8% 16.7%Discount 0.7% 0.8%
Personal loans $ 1,952 $ 2,637Average APR 31.7% 31.7%
Receivables from dealers $ 13,169 $ 14,710Average APR 4.0% 4.1%
Leased vehicles $ 15,606,442 $ 15,219,313
Finance leases $ 20,669 $ 19,344
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Table 8: Reconciliation of Non-GAAP Measures
March 31,
2019 March 31,
2018
( Unaudited, Dollar amounts in thousands)
Total equity $ 7,158,530 $ 6,713,532
Deduct: Goodwill, intangibles, and other assets, net of deferred tax liabilities 163,444 169,870
Deduct: Accumulated other comprehensive income (loss), net 12,938 63,211
Tier 1 common capital $ 6,982,148 $ 6,480,451
Risk weighted assets (a) $ 44,260,896 $ 38,191,687
Common Equity Tier 1 capital ratio (b) 15.8% 17.0%(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.
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Exhibit 99.2 First Quarter 2019 April 30th, 2019
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 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 filed by us with the U.S. Securities and Exchange Commission (SEC). Among the factors that could cause the forward-looking statements in this presentation and/or our financial performance to differ materially from that suggested by the forward- looking statements are: (a) the inherent limitations in internal controls over financial reporting; (b) our ability to remediate any material weaknesses in internal controls over financial reporting completely and in a timely manner; (c) continually changing federal, state, and local laws and regulations could materially adversely affect our business; (d) adverse economic conditions in the United States and worldwide may negatively impact our results; (e) our business could suffer if our access to funding is reduced; (f) significant risks we face implementing our growth strategy, some of which are outside our control; (g) unexpected costs and delays in connection with exiting our personal lending business; (h) 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; (i) our business could suffer if we are unsuccessful in developing and maintaining relationships with automobile dealerships; (j) our financial condition, liquidity, and results of operations depend on the credit performance of our loans; (k) loss of our key management or other personnel, or an inability to attract such management and personnel; (l) 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 (m) future changes in our relationship with Banco Santander which 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. 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.
Q1 2019 HIGHLIGHTS 3 » Total auto originations of $7.0 billion, up 10% YoY » Core retail auto loan originations of $2.6 billion, up 14% YoY » Chrysler Capital loan originations of $2.4 billion, up 23% YoY » Chrysler Capital lease originations of $2.0 billion, down 6% YoY » Chrysler average quarterly penetration rate of 31%, up from 28% in Q1 2018 » Santander Bank, N.A. Program originations of $1.0 billion » Net finance and other interest income of $1.1 billion, up 5% YoY » 30-59 delinquency ratio of 8.4%, down 50 basis points YoY » 59-plus delinquency ratio of 4.2%, down 20 basis points YoY » Retail Installment Contract “RIC” gross charge-off ratio of 19.5%, up 100 basis points YoY » Recovery rate of 55.9%, up 90 basis points YoY » RIC net charge-off ratio of 8.6%, up 30 basis points YoY » Troubled Debt Restructuring (“TDR”) balance of $4.9 billion, down $462 million QoQ » Return on average assets of 2.2%, down from 2.5% YoY » $2.9 billion in loan asset-backed securities “ABS” » Expense ratio of 2.1%, down from 2.4% YoY » Common equity tier 1 (“CET1”) ratio of 15.8%, down from 17.0% YoY
ECONOMIC INDICATORS 4 U.S. Auto Sales1 Consumer Confidence3 Units in Millions Index Q1 1966=100 2 Max 101.4 Used Sales Quarterly Total New SAAR Retail Fleet 20 20 98.4 17.3 18 17.318 16 16 13.4 14 13.014 12 12 9.4 10 9.0 10 8 8 ORIGINATIONS 6 6 4.3 3.9 4 4 2 2 Min 55 0 U.S. GDP4 US Unemployment Statistics5 % % Max: 4.2 Max:10.0 2.2 2.2 CREDIT 4.1 3.8 Min -4.0 Min: 3.7 1 New car: JD Power Index, monthly data as of March 31, 2019 2 Used car: Edmunds’ data, one quarter lag, data as of December 31, 2018 3 University of Michigan, monthly 4 U.S. Bureau of Economic Analysis, one quarter lag, monthly data as of December 31, 2018 5 U.S. Bureau of Labor Statistics, monthly
AUTO INDUSTRY ANALYSIS 5 Used Vehicle Indices1 SC Recovery Rates Manheim: Seasonally Adjusted JD Power: Not Seasonally Adjusted % 150 Manheim (Left Axis) JDP Used-Vehicle Price Index (Right Axis) Auction Only Recovery Rate2 Recovery Rate (Quarterly) 3 60% 145 55.9% 140 55.0% 136.0 55% 135 130 50.0% 130.8 50% 125 46.8% 118.8 120.2 120 45% SEVERITY 115 110 40% 105 100 35% Industry Net Loss Rates4 Industry 60+ Day Delinquency Rates4 % % Subprime Max 13.6% Subprime Max: 5.9% 5.6% 10.0% 9.6% CREDIT Min 3.3% Min: 1.7% 1 Manheim, Inc.; Indexed to a basis of 100 at 1995 levels; JD Power Used-Vehicle Price Index (not seasonally adjusted) 2 Auction Only - includes all auto-related recoveries including inorganic/purchased receivables from auction lanes only 3 Recovery Rate – Per the financial statements includes insurance proceeds, bankruptcy/deficiency sales, and timing impacts 4 Standard & Poor’s Rating Services (ABS Auto Trust Data – two-months lag on data, as of January 31, 2019)
DIVERSIFIED UNDERWRITING ACROSS 6 THE CREDIT SPECTRUM Strong originations and stable flows into the SBNA originations program Three Months Ended Originations % Variance ($ in Millions) Q1 2019 Q4 2018 Q1 2018 QoQ YoY Total Core Retail Auto $ 2,620 $ 2,221 $ 2,293 18% 14% Chrysler Capital Loans (<640)1 1,331 1,337 1,086 0% 23% Chrysler Capital Loans (≥640)1 1,112 1,176 899 (5%) 24% Total Chrysler Capital Retail $ 2,443 $ 2,512 $ 1,985 (3%) 23% Total Leases2 1,967 2,129 2,096 (8%) (6%) Total Auto Originations3 $ 7,030 $ 6,862 $ 6,374 2% 10% Total Personal Lending 289 544 273 (47%) 6% Total SC Originations $ 7,318 $ 7,406 $ 6,647 (1%) 10% Asset Sales4 $ - $ - $ 1,475 NA NA SBNA Originations4 $ 1,036 $ 1,116 $ 24 (7%) NM Average Managed Assets5 $ 54,433 $ 53,804 $ 48,517 1% 12% 1 Approximate FICOs 2 Includes nominal capital lease originations 3 Includes SBNA Originations 4 Asset Sales and SBNA Originations remain off of SC’s balance sheet, servicing rights retained
FIAT CHRYSLER (FCA) RELATIONSHIP 7 Originations growth across all loan channels » Chrysler Capital average quarterly penetration rate of 31% versus 28% YoY FCA Sales1 Dealer Floorplan2 Outstanding (units in millions) ($ in millions) $2,803 2.26 2.25 2.24 $2,681 2.07 $2,484 $2,133 $2,156 0.51 0.56 0.51 0.51 0.50 2015 2016 2017 2018 2019 1Q18 2Q18 3Q18 4Q18 1Q19 YTD Full Year 1 FCA filings; sales as reported on 03/31/2019 2 Dealer receivables originated through SBNA
SERVICED FOR OTHERS (SFO) PLATFORM 8 $1.0 billion in SBNA program originations Serviced for Others Balances, End of Period ($ in millions) $9,511 $9,195 $8,985 $8,723 $8,744 1Q18 2Q18 3Q18 4Q18 1Q19 Santander Flow Sales 1,475 1,156 275 SBNA Originations 24 29 685 1,116 1,036 Other1 972 1 Other includes 2Q18 portfolio conversion
Q1 2019 FINANCIAL RESULTS 9 Three Months Ended (Unaudited, Dollars in Thousands, except per share) % Variance March 31, 2019 December 31, 2018 March 31, 2018 QoQ YoY Interest on finance receivables and loans $ 1,253,580 $ 1,235,889 $ 1,168,540 1% 7% Net leased vehicle income 205,541 204,785 145,595 0% 41% Other finance and interest income 10,247 9,082 7,137 13% 44% Interest expense 334,382 311,196 241,028 7% 39% Net finance and other interest income $ 1,134,986 $ 1,138,560 $ 1,080,244 0% 5% Provision for credit losses 550,879 690,786 510,341 (20%) 8% Profit sharing 6,968 14,255 4,377 (51%) 59% Total other income 51,085 (33,418) 25,053 (253%) 104% Total operating expenses 290,957 256,468 287,912 13% 1% Income before tax $ 337,267 $ 143,633 $ 302,667 135% 11% Income tax expense 89,763 39,295 58,052 128% 55% Net income $ 247,504 $ 104,338 $ 244,614 137% 1% Diluted EPS ($) $ 0.70 $ 0.29 $ 0.68 141% 3% Average total assets $ 44,488,770 $ 43,458,471 $ 39,677,593 2% 12% Average managed assets $ 54,433,129 $ 53,804,349 $ 48,516,758 1% 12%
DELINQUENCY AND LOSS 10 Delinquency: Individually Acquired Retail Installment Contracts, Held for Investment 11.0% 10.5% 9.6% 8.9% » 30-59 delinquency ratios down 50 basis points YoY 8.4% » >59 delinquency ratios down 20 basis points YoY 6.0% 5.5% 4.4% 4.5% 4.2% Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 30-59 >59 Credit: Individually Acquired Retail Installment Contracts, 23.0% Held for Investment 120.0% 20.2% 19.5% 18.5% 110.0% 17.6% 18.0% 100.0% 15.2% 90.0% 13.0% » YoY gross charge-off ratio increased 100 basis points 10.6% 80.0% 8.3% 8.8% 8.6% » YoY net charge-off ratio increased 30 basis points 70.0% 8.0% 6.1% » YoY recovery rate increased 90 basis points 60.0% 60.2% 50.0% 3.0% 55.0% 55.9% 50.0% 47.3% 40.0% -2.0% Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 30.0% Gross Charge-off Ratio Net Charge-off Ratio Recovery Rate (as % of recorded investment)
CREDIT QUALITY: LOSS DETAIL 11 Q1 2018 to Q1 2019 Retail Installment Contract Net Charge-Off Walk ($ in millions) ($17) $33 $58 $615 $541 Q1 2018 Balance Gross Loss Performance Recoveries & Other Q1 2019
PROVISION AND RESERVES 12 Q4 2018 to Q1 2019 ALLL Reserve Walk ($ in millions) $17 ($9) $235 ($307) » QoQ allowance decreased $64 million • New volume and performance adjustment were offset by TDR migration1 and liquidations and other $3,240 $3,176 Q4 2018 New Volume Performance TDR Migration Liquidations & Q1 2019 Adjustment Other Provision Expense and Allowance Ratio ($ in millions) $800 $691 15% $700 $598 $600 $551 $510 $500 Allowance to loans ratio decreased 40 bps to 11.0% QoQ 13% » $407 $400 » Provision for credit losses increased $41 million YoY 12.7% $300 12.1% 12% $200 11.7% 11.4% $100 11.0% $0 10% Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Provision for credit losses Allowance Ratio 1 TDR migration – the allowance for assets classified as TDRs or “troubled debt restructuring” takes into consideration expected lifetime losses, typically requiring .additional coverage 2 Explanation of quarter over quarter variance are estimates
TDR BALANCE COMPOSITION BY VINTAGE 13 TDR balances are down quarter over quarter TDR Balance by Origination Vintage ($ in billions) $6.30 $6.31 $6.10 $5.89 $6.10 $5.79 2% $5.76 6% 4% 8% 16% 20% $5.38 10% 24% $4.92 14% 26% 1% 35% 37% 27% 17% 37% 37% 27% 36% 27% 34% 29% 32% 27% 31% 24% 22% 29% 20% 18% 17% 16% 32% 15% 28% 23% 21% 18% 16% 14% 12% 11% 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2013 & Prior 2014 2015 2016 2017 2018
EXPENSE MANAGEMENT 14 Operating expenses totaled $291 million, an increase of 1% versus the same quarter last year $60,002 $53,804 $54,433 $52,472 $50,445 $50,002 $48,517 5.0% $40,002 $291 $30,002 $288 $277 $272 $256 3.0% $20,002 2.4% 2.2% $10,002 2.1% 2.1% 1.9% $2 1.0% Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Average Managed Assets Total Expenses Expense Ratio ($ millions) ($ millions)
FUNDING AND LIQUIDITY 15 Total funding of $45.4 billion at the end Q1 2019, flat from $45.2 billion at the end of Q4 2018 Asset-Backed Securities Financings ($ Billions) ($ Billions) Amortizing Revolving 19.3 19.7 10.1 10.1 7.7 7.6 5.9 5.3 4.2 4.8 Q4 2018 Q1 2019 Q4 2018 Q1 2019 Q4 2018 Q1 2019 Unused Used » $2.9 billion in 1 SDART and 2 DRIVE transactions » $17.7 billion in commitments from 12 lenders1 » 52% unused capacity on revolving lines at Q1 2019 Santander SBNA Originations ($ Billions) ($ Billions) Term Revolving Contingent 7.0 7.0 1.1 1.0 3.5 3.5 0.5 0.5 3.0 3.0 Q4 2018 Q1 2019 Q4 2018 Q1 2019 » $7.0 billion in total commitments » Stable SBNA flow program originations 1 Does not include repo facilities
CONSISTENT CAPITAL GENERATION 16 SC has exhibited a strong ability to generate earnings and capital, while growing assets CET1 1 TCE/TA 2 17.0% 16.9% 16.9% 16.6% 16.4% 16.5% 15.7% 15.8% 15.8% 15.7% Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 $ in millions Tangible Assets $39,924 $41,052 $42,701 $43,851 $44,931 Tangible Common Equity $6,608 $6,928 $7,035 $6,909 $7,043 1 Common Equity Tier 1 (CET1) Capital Ratio is a non-GAAP financial measure that begins with stockholders’ equity and then adjusts for AOCI, goodwill/intangibles, DTAs, .cash flow hedges and other regulatory exclusions over risk-weighted assets. See appendix for further details. 2 Tangible common equity to tangible assets is a non-GAAP financial measure defined as the ratio of Total equity, excluding Goodwill and intangible assets, to Total assets, .excluding Goodwill and intangible assets
APPENDIX
DIVERSIFIED UNDERWRITING ACROSS FULL CREDIT SPECTRUM 18 Originations by Credit (RIC only) ($ in millions) $4,278 $5,344 $4,700 $4,733 $5,063 >640 600-640 28% 540-599 31% 29% 33% 31% <540 16% 17% No FICO 15% 15% 16% Commercial 28% 26% 27% 25% 26% 14% 14% 14% 13% 13% 12% 12% 12% 11% 12% 2% 1% 2% 2% 2% 1Q18 2Q18 3Q18 4Q18 1Q19 New/Used Originations ($ in millions) $4,278 $5,344 $4,700 $4,733 $5,063 40% 42% 50% 43% 48% Used New 60% 58% 50% 57% 52% 1Q18 2Q18 3Q18 4Q18 1Q19 Average loan balance in dollars $21,700 $22,926 $23,110 $24,097 $23,274 1 RIC; Retail Installment Contract 2 Loans to commercial borrowers; no FICO score obtained
HELD FOR INVESTMENT CREDIT TRENDS 19 Retail Installment Contracts1 33.0% 32.9% 32.7% 32.6% 32.4% 21.6% 21.0% 20.3% 19.8% 19.4% 18.4% 18.2% 18.0% 17.8% 17.6% 16.4% 16.2% 15.9% 15.4% 15.0% 11.3% 11.2% 11.2% 11.0% 10.9% 2.2% 1.9% 1.9% 1.9% 1.9% Commercial Unknown <540 540-599 600-639 >=640 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 1 Held for investment; excludes assets held for sale
EXCLUDING PERSONAL LENDING DETAIL 20 Personal lending earned $68 million before operating expenses and taxes As of and for the Three Months Ended (Unaudited, Dollars in Thousands) March 31, 2019 December 31, 2018 March 31, 2018 Excluding Excluding Excluding Personal Personal Personal Total Personal Total Personal Total Personal Lending Lending Lending Lending Lending Lending Interest on finance receivables and loans $ 1,253,580 $ 96,022 $ 1,157,558 $ 1,235,890 $ 87,863 $ 1,148,027 $ 1,168,540 $ 89,260 $ 1,079,280 Net leased vehicle income 205,541 - 205,541 204,785 - 204,785 145,595 - 145,595 Other finance and interest income 10,247 - 10,247 9,082 - 9,082 7,137 - 7,137 Interest expense 334,382 12,561 321,821 311,196 12,303 298,893 241,028 10,992 230,036 Net finance and other interest income $ 1,134,986 $ 83,461 $ 1,051,525 $ 1,138,561 $ 75,560 $ 1,063,001 $ 1,080,243 $ 78,268 $ 1,001,975 Provision for credit losses $ 550,879 $ 83 $ 550,796 $ 690,786 $ 133 $ 690,652 $ 510,342 $ 102 $ 510,240 Profit sharing (6,968) 2,057 (9,025) (14,255) (6,829) (7,426) (4,377) 207 (4,584) Investment gains (losses), net1 $ (67,097) $ (67,691) $ 594 $ (146,163) $ (145,756) $ (407) $ (86,520) $ (58,963) $ (27,557) Servicing fee income 23,806 - 23,806 26,711 - 26,711 26,182 - 26,182 Fees, commissions and other 94,376 50,535 43,841 86,034 47,701 38,333 85,391 49,487 35,904 Total other income $ 51,085 $ (17,156) $ 68,241 $ (33,418) $ (98,055) $ 64,637 $ 25,053 $ (9,476) $ 34,529 Average gross individually acquired retail installment $ 28,595,315 - $ 28,395,046 - $ 26,915,621 - contracts, held for investment and held for sale Average gross personal loans - $ 1,466,300 - $ 1,401,626 - $ 1,459,308 Average gross operating leases $ 15,425,190 $ - $ 14,857,635 $ - $ 11,441,789 $ - 1 The current period losses were primarily driven by $67 million of lower of cost or market adjustments related to the held for sale personal lending portfolio, .comprised of $109 million in customer default activity, partially offset by a $42 million decrease in market discount, consistent with typical seasonal patterns.
RECONCILIATION OF NON-GAAP MEASURES 21 (Unaudited, dollars in thousands) March 31, 2019 December 31, 2018 September 30, 2018 June 30, 2018 March 31, 2018 Total equity $ 7,158,530 $ 7,018,358 $ 7,141,215 $ 7,033,636 $ 6,713,532 Deduct: Goodwill and intangibles 115,256 109,251 106,233 105,669 105,144 Tangible common equity $ 7,043,274 $ 6,909,107 $ 7,034,982 $ 6,927,967 $ 6,608,388 Total assets $ 45,045,906 $ 43,959,855 $ 42,806,955 $ 41,157,189 $ 40,028,740 Deduct: Goodwill and intangibles 115,256 109,251 106,233 105,669 105,144 Tangible assets $ 44,930,650 $ 43,850,604 $ 42,700,722 $ 41,051,520 $ 39,923,596 Equity to assets ratio 15.9% 16.0% 16.7% 17.1% 16.8% Tangible common equity to tangible assets 15.7% 15.8% 16.5% 16.9% 16.6% Total equity $ 7,158,530 $ 7,018,358 $ 7,141,215 $ 7,033,636 $ 6,713,532 Deduct: Goodwill and other intangible assets, net of deferred tax liabilities 163,444 161,516 162,643 166,241 169,870 Deduct: Accumulated other comprehensive income, net 12,938 33,515 56,601 62,449 63,211 Tier 1 common capital $ 6,982,148 $ 6,823,327 $ 6,921,971 $ 6,804,946 $ 6,480,451 Risk weighted assets (a) $ 44,260,896 $ 43,547,594 $ 42,256,218 $ 40,251,526 $ 38,191,687 Common Equity Tier 1 capital ratio (b) 15.8% 15.7% 16.4% 16.9% 17.0% 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 and the Bank's total Risk weighted assets b) CET1 is calculated under Basel III regulations required as of January 1, 2015.
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