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Form 8-K Santander Consumer USA For: Jul 28

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July 28, 2021 6:11 AM EDT


Exhibit 99.1
logoa01a.jpg
Santander Consumer USA Holdings Inc. Reports
Second Quarter 2021 Results

Net Income of $1.1 Billion and $10.5 Billion in Originations in the Second Quarter 2021

Dallas, TX - July 28, 2021 - PRESS RELEASE
Santander Consumer USA Holdings Inc. (NYSE: SC) (“SC” or the “Company”) today announced net income for the second quarter ended June 30, 2021 ("Q2 2021") of $1.1 billion, or $3.45 per diluted common share.

The Company has declared a cash dividend of $0.22 per share, to be paid on August 19, 2021, to shareholders of record as of the close of business on August 9, 2021.

Management Quotes

“The second quarter was another exceptional quarter for us thanks to our team’s execution in a highly competitive market. We have positioned SC to benefit from the ongoing tailwinds with consumers and the overall auto industry. Demand for vehicles remains strong, as evidenced by our record originations in the quarter of $10.5 billion, despite the pressure of new vehicle sales due to the chip shortage. For the first time in our Company’s history, we experienced a net recovery for the quarter of $79 million supported by record used car prices. Yesterday we announced an important strategic expansion of our partnership with AutoFi to launch a new digital experience for our dealers and consumers. The economic recovery is underway and we are encouraged by the strength of consumers and our portfolio’s performance. However, the uncertainty with COVID persists and we are mindful of the potential impact going forward as we continue to remain disciplined in our approach. I am very optimistic about our Company’s position in the market, our portfolio and our employee’s ability to execute,” said Mahesh Aditya, SC President and CEO.

Fahmi Karam, SC Chief Financial Officer, added, "Our strong performance, which included record net revenues and income, reflects the strength of our disciplined underwriting, dealer and OEM relationships and our team. More than $1 billion in net income represents the most profitable quarter in the Company’s history and $1.8 billion in net income in the first half of the year is greater than any single full year. We have significant available liquidity and capital to continue to grow origination volumes and reinvest in the business. We remain focused on generating assets with strong risk-adjusted returns and managing operating expenses, while remaining attentive to the lingering effects of the pandemic on our customers and employees.”
















1


Second Quarter of 2021 Highlights (variances compared to second quarter of 2020 ("Q2 2020"), unless otherwise noted)
• Net Income of $1.1 billion; $3.45 EPS
• Total auto originations of $10.5 billion, up 34%
◦Core retail auto loan originations of $3.8 billion, up 79%
◦Chrysler Capital loan originations of $4.6 billion, down 2%
◦Chrysler Capital lease originations of $2.1 billion, up 109%
◦Chrysler average quarterly penetration rate of 34%, down from 37%
◦Santander Bank, N.A. program originations of $2.6 billion
• Announced launch of new dealer and consumer digital experience through partnership with AutoFi
• Net finance and other interest income1 of $1.4 billion, up 33%
• 30-59 delinquency ratio of 5.5%, up 120 basis points
• 59-plus delinquency ratio2 of 2.4%, flat
• Retail Installment Contract (“RIC”) gross charge-off ratio of 6.6%, down 450 basis points
• Recovery rate of 114.9%, up from 45.7%
• RIC net charge-off ratio3 of (1.0)%, down 700 basis points
• Allowance ratio of 17.8%, down from 18.9% as of March 31, 2021
• Troubled Debt Restructuring (“TDR”) balance of $4.2 billion, down from $4.4 billion as of March 31, 2021
• Executed ~$300 million in off-balance sheet prime loan sales
• Return on average assets ("ROA") of 8.9%
• Expense ratio of 1.9%, up 20 basis points
• Common equity tier 1 (“CET1”) ratio of 18.1%





































1Includes Finance receivables held for investment, Finance receivables held for sale and Leased vehicles.
2Delinquency 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.
3Net Charge-Off Ratio stated on a recorded investment basis, which is unpaid principal balance adjusted for unaccreted net discounts, subvention and origination costs.
2


Conference Call Information
SC will host a conference call and webcast to discuss its Q2 2021 results and other general matters at 9:00 a.m. Eastern Time on Wednesday, July 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 1398753. 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 Q2 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 1398753, 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; (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; (k) there can be no assurance that the proposed acquisition of all of our outstanding common stock by SHUSA will be agreed upon, approved and ultimately consummated, and the terms of any such transaction may differ materially from those originally proposed by SHUSA; and (l) other 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.







3


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 second quarter ended June 30, 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

4


Santander Consumer USA Holdings Inc.
Financial Supplement
Second 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

5


Table 1: Condensed Consolidated Balance Sheets
June 30, 2021December 31, 2020
Assets(Unaudited, Dollars in thousands)
Cash and cash equivalents$321,976 $109,053 
Finance receivables held for sale, net391,209 1,567,527 
       Finance receivables held for investment, at amortized cost33,120,008 33,114,638 
       Allowance for credit loss(5,818,382)(6,110,633)
Finance receivables held for investment, at amortized cost, net27,301,626 27,004,005 
Restricted cash2,660,662 2,221,094 
Accrued interest receivable347,722 415,765 
Leased vehicles, net16,120,051 16,391,107 
Furniture and equipment, net57,419 62,032 
Goodwill74,056 74,056 
Intangible assets79,183 70,128 
Other assets892,030 972,726 
Total assets$48,245,934 $48,887,493 
Liabilities and Equity
Liabilities:
Borrowings and other debt obligations$38,202,642 $41,138,674 
Deferred tax liabilities, net1,718,538 1,263,796 
Accounts payable and accrued expenses682,450 531,369 
Other liabilities412,674 331,693 
Total liabilities$41,016,304 $43,265,532 
Equity:
Common stock, $0.01 par value3,060 3,061 
Additional paid-in capital389,890 393,800 
Accumulated other comprehensive income, net(36,855)(50,566)
Retained earnings6,873,535 5,275,666 
Total stockholders’ equity$7,229,630 $5,621,961 
Total liabilities and equity$48,245,934 $48,887,493 

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Table 2: Condensed Consolidated Statements of Income
Three Months Ended June 30,Six Months Ended June 30,
 2021202020212020
(Unaudited, Dollars in thousands, except per share amounts)
Interest on finance receivables and loans $1,229,492 $1,236,600 $2,534,143 $2,510,419 
Leased vehicle income703,916 737,549 1,444,800 1,485,528 
Other finance and interest income3,068 2,657 4,494 10,208 
Total finance and other interest income1,936,476 1,976,806 3,983,437 4,006,155 
Interest expense237,195 308,982 490,732 637,816 
Leased vehicle expense294,720 610,861 718,515 1,163,773 
Net finance and other interest income1,404,561 1,056,963 2,774,190 2,204,566 
Credit loss expense (benefit)(263,751)861,896 (127,542)1,769,783 
Net finance and other interest income after credit loss expense1,668,312 195,067 2,901,732 434,783 
Profit sharing50,553 11,530 117,879 25,825 
Net finance and other interest income after credit loss expense and profit sharing1,617,759 183,537 2,783,853 408,958 
Investment gains (losses), net2,414 (147,582)(12,298)(211,008)
Servicing fee income22,812 19,120 41,506 38,223 
Fees, commissions, and other50,847 82,069 151,375 177,199 
Total other income76,073 (46,393)180,583 4,414 
Compensation and benefits156,450 127,643 310,345 260,969 
Repossession expense38,845 22,289 84,191 79,951 
Other expenses107,915 116,747 203,166 208,432 
Total operating expenses303,210 266,679 597,702 549,352 
Income (loss) before income taxes1,390,622 (129,535)2,366,734 (135,980)
Income tax expense332,420 (32,857)566,877 (35,315)
Net income (loss)$1,058,202 $(96,678)$1,799,857 $(100,665)
Net income per common share (basic)$3.46 $(0.30)$5.88 $(0.31)
Net income per common share (diluted)$3.45 $(0.30)$5.88 $(0.31)
Weighted average common shares (basic)306,057,004 319,773,636 306,082,852 326,899,844 
Weighted average common shares (diluted)306,289,395 319,878,145 306,327,116 327,137,104 
Number of shares outstanding 306,081,081 316,235,387 306,081,081 316,235,387 




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Table 3: Other Financial Information
Three Months Ended June 30,Six Months Ended June 30,
Ratios (Unaudited, Dollars in thousands)2021202020212020
Yield on retail installment contracts15.1 %14.8 %14.9 %15.0 %
Yield on leased vehicles9.6 %2.9 %8.5 %3.7 %
Yield on personal loans, held for sale (1)— %25.6 %30.4 %26.0 %
Yield on earning assets (2)13.2 %10.9 %12.9 %11.4 %
Cost of debt (3)2.5 %3.1 %2.5 %3.2 %
Net interest margin (4)11.3 %8.4 %11.0 %8.8 %
Expense ratio (5)1.9 %1.7 %1.9 %1.8 %
Return on average assets (6)8.9 %(0.8)%7.5 %(0.4)%
Return on average equity (7)63.2 %(7.7)%57.0 %(3.6)%
Net charge-off ratio on individually acquired retail installment contracts (8)(1.0)%6.0 %1.0 %6.9 %
Net charge-off ratio (8)(1.0)%6.0 %1.0 %6.9 %
Delinquency ratio on individually acquired retail installment contracts held for investment, end of period (9)2.4 %2.4 %2.4 %2.4 %
Allowance ratio (10)17.8 %19.2 %17.8 %19.2 %
Common stock dividend payout ratio (11)6.4 %*11.2 %*
Common Equity Tier 1 capital ratio (12)18.1 %13.4 %18.1 %13.4 %
Charge-offs, net of recoveries, on individually acquired retail installment contracts$(79,223)$461,014$164,852 $1,054,060
End of period delinquent amortized cost over 59 days, retail installment contracts held for investment791,144 743,693791,144 743,693
End of period personal loans delinquent principal over 59 days, held for sale— 127,504— 127,504
End of period delinquent amortized cost over 59 days, loans held for investment791,565 744,170791,565 744,170
End of period assets covered by allowance for credit losses32,774,721 30,522,96332,774,721 30,522,963
End of period gross retail installment contracts held for investment32,750,571 30,492,63432,750,571 30,492,634
End of period gross personal loans held for sale— 1,283,183— 1,283,183
End of period gross finance receivables and loans held for investment32,750,571 30,496,30832,750,571 30,496,308
End of period gross finance receivables, loans, and leases49,610,560 47,729,63749,610,560 47,729,637
Average gross retail installment contracts held for investment32,249,024 30,493,60432,494,401 30,586,535
Average gross retail installment contracts held for investment and held for sale32,462,553 31,193,21532,780,361 31,017,842
Average gross finance receivables, loans and finance leases32,500,748 32,554,97833,399,959 32,438,109
Average gross operating leases17,118,763 17,492,25517,189,819 17,584,849
Average gross finance receivables, loans, and leases49,619,511 50,047,23350,589,778 50,022,958
Average managed assets64,483,261 61,001,76764,245,652 60,652,091
Average total assets47,741,178 46,876,72648,111,581 47,308,997
Average debt38,392,143 40,113,88539,329,703 39,858,355
Average total equity6,692,791 5,033,7736,318,704 5,573,544

(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
8


and six months ended June 30, 2020 has not been disclosed since the earnings per share for the three and six months ended June 30, 2020 was a negative number.
(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). CET1 Ratio is provided as a preliminary calculation.






















































9


Table 4: Credit Quality

The activity in the credit loss allowance for retail installment contracts for the three and six month ended June 30, 2021 and 2020 was as follows (Unaudited, Dollar amounts in thousands):
Three Months Ended June 30, 2021Three Months Ended June 30, 2020
Retail Installment ContractsRetail Installment Contracts
Allowance for Credit LossNon-TDRTDRNon-TDRTDR
Balance — beginning of period$4,662,633 $1,338,708 $4,482,663 $973,236 
Credit loss expense (benefit)(282,249)16,350 744,511 116,419 
Charge-offs (a)(540,998)8,457 (721,218)(127,617)
Recoveries460,284 151,479 312,231 75,590 
Balance — end of period$4,299,670 $1,514,994 $4,818,187 $1,037,628 

Six Months Ended June 30, 2021Six Months Ended June 30, 2020
Retail Installment ContractsRetail Installment Contracts
Allowance for Credit LossNon-TDRTDRNon-TDRTDR
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 (benefit)(242,190)115,072 1,501,704 267,268 
Charge-offs (a)(1,127,791)(194,004)(1,620,768)(417,184)
Recoveries877,187 279,756 782,900 200,993 
Balance — end of period$4,299,670 $1,514,994 $4,818,187 $1,037,628 
(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 June 30, 2021 and December 31, 2020 is as follows (Unaudited, Dollar amounts in thousands):
Delinquent BalanceJune 30, 2021
AmountPercent
Amortized cost, 30-59 days past due$1,816,384 5.5 %
Delinquent amortized cost over 59 days791,144 2.4 %
Total delinquent balance at amortized cost$2,607,528 7.9 %
Delinquent BalanceDecember 31, 2020
AmountPercent
Principal 30-59 days past due$1,971,766 6.0 %
Delinquent principal over 59 days1,038,869 3.1 %
Total delinquent principal (a)$3,010,635 9.1 %














10


The retail installment contracts held for investment that were placed on nonaccrual status, as of June 30, 2021 and December 31, 2020 (Unaudited, Dollar amounts in thousands):
Nonaccrual BalanceJune 30, 2021
AmountPercent
Non-TDR$585,677 1.8 %
TDR318,933 1.0 %
Total non-accrual loans (a)$904,610 2.8 %
(a) The table includes balances based on amortized cost.
Nonaccrual BalanceDecember 31, 2020
AmountPercent
Non-TDR$748,026 2.3 %
TDR 385,021 1.2 %
Total nonaccrual principal (a)$1,133,047 3.5 %

The table below presents the Company’s allowance ratio for TDR and non-TDR individually acquired retail installment contracts as of June 30, 2021 and December 31, 2020 (Unaudited, Dollar amounts in thousands):
Allowance RatiosJune 30, 2021December 31, 2020
TDR - Unpaid principal balance$4,161,892$3,945,040
TDR - Impairment1,514,9941,314,170
TDR - Allowance ratio36.4 %33.3 %
Non-TDR - Unpaid principal balance$28,576,765$28,977,299
Non-TDR - Allowance4,299,6704,792,464
Non-TDR Allowance ratio15.0 %16.5 %
Total - Unpaid principal balance$32,738,657$32,922,339
Total - Allowance5,814,6646,106,634
Total - Allowance ratio17.8 %18.5 %

The Company’s ACL decreased $0.2 billion and $0.3 billion for the three and six months ended June 30, 2021. The decrease was primarily due to an improved macroeconomic outlook and a decrease of lifetime expected credit losses for non-TDR loans mainly due to credit quality and performance.

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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 EndedSix Months EndedThree Months Ended
June 30, 2021June 30, 2020June 30, 2021June 30, 2020March 31, 2021
Retained Originations(Unaudited, Dollar amounts in thousands)
Retail installment contracts$5,871,823$5,098,496$10,115,312$8,832,741$4,383,146
Average APR14.4 %11.7 %14.7 %13.3 %15.0 %
Average FICO® (a)608657606635606
Premium(2.3)%(0.9)%(2.0)%(0.8)%(1.6)%
Personal loans (b)—347,238—618,073$—
Average APR— %29.6 %— %29.5 %— %
Leased vehicles2,067,741986,6174,222,2473,007,338$2,154,506
Finance lease 2,5341,9275,331$4,929$2,796
Total originations retained$7,942,098$6,434,278$14,342,890$12,463,081$6,540,448
Sold Originations
Retail installment contracts$—$—$235,395$111,981$95,738
Average APR— %— %7.7 %4.4 %9.5 %
Average FICO® (c)——699722688
Personal Loans (d)$—$—$292,709$—$292,709
Average APR— %— %29.7%$—29.7 %
Total originations sold $—$—$528,104$111,981$388,447
Total originations (excluding SBNA Originations Program)$7,942,098$6,434,278$14,870,994$12,575,062$6,928,895

(a)Unpaid principal balance excluded from the weighted average FICO score is $559 million, $586 million, $1.0 billion, $1.0 billion and $450 million for the three months ended June 30, 2021 and 2020, six months ended June 30, 2021 and 2020, and for the three months ended March 31, 2021, respectively, as the borrowers on these loans did not have FICO scores at origination. Of these amounts, $187 million, $102 million, $341 million, $241 million and $154 million, respectively, were commercial loans.
(b)Included in the total origination volume is $58 million and $79 million for the three and six months ended June 30, 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 zero, $8 million, zero, $9 million and $2 million for the three and six months ended June 30, 2021 and 2020, and for the three months ended March 31, 2021, 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 $2.6 billion and $4.5 billion of retail installment contacts during the three and six months ended June 30, 2021, respectively.


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Table 6: Asset Sales
Three Months EndedSix Months EndedThree Months Ended
June 30, 2021June 30, 2020June 30, 2021June 30, 2020March 31, 2021
Assets Sold(Unaudited, Dollar amounts in thousands)
Retail installment contracts$309,784$512,286$2,690,569$512,286$2,380,785
Average APR5.9 %6.4 %4.2 %6.4 %4.0 %
Average FICO®$716691737691740
Personal loans$——1,253,476—$1,253,476
Average APR— %— %29.7 %— %29.7 %
Discount— — — — — 
Total asset sales$309,784$512,286$3,944,045$512,286$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 June 30, 2021 and December 31, 2020, are as follows:
June 30, 2021December 31, 2020
(Unaudited, Dollar amounts in thousands)
Retail installment contracts$32,750,571$32,937,036
Average APR15.7 %15.2 %
Premium(0.74)%(0.15)%
Leased vehicles $16,835,839$17,259,468
Finance leases$24,150$26,150


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Table 8: Reconciliation of Non-GAAP Measures
June 30, 2021June 30, 2020
(Unaudited, Dollar amounts in thousands)
Total equity$7,229,630$4,895,465
Add: Adjustment due to CECL capital relief (c)1,759,0371,769,430
Deduct: Goodwill, intangibles, and other assets, net of deferred tax liabilities164,585154,943
Deduct: Accumulated other comprehensive income (loss), net(36,855)(63,705)
Tier 1 common capital$8,860,937$6,573,657
Risk weighted assets (a)(c)49,014,66348,997,902
Common Equity Tier 1 capital ratio (b)(c)18.1 %13.4 %
(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.

15
Second Quarter 2021 July 28, 2021 Exhibit 99.2

 
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 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; (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; (k) there can be no assurance that the proposed acquisition of all of our outstanding common stock by SHUSA will be agreed upon, approved and ultimately consummated, and the terms of any such transaction may differ materially from those originally proposed by SHUSA; and (l) other 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.

 
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 auto originations of $10.5 billion in Q2 2021, up 34% YoY ► Through Santander Bank, originated $2.6 billion in auto loans in Q2 2021 ► In July, announced the launch of a new dealer and consumer digital experience through partnership with AutoFi ► CET1 ratio of 18.1% ► Executed ~$300 million in off-balance sheet prime loan sales ► The Company has declared a cash dividend of $0.22 per share, to be paid on August 19, 2021, to shareholders of record as of the close of business on August 9, 2021 ► ~$14 billion in unutilized committed liquidity ► 30 to 59 delinquency ratio of 5.5%, up 120 basis points YoY ► 59-plus delinquency ratio of 2.4%, flat YoY ► Gross charge-off ratio of 6.6%, down 450 basis points ► Recovery rate of 114.9%, up from 45.7% YoY ► Net charge-off ratio of (1.0)%, down 700 basis points YoY ► CECL Allowance ratio of 17.8%, down from 18.9% QoQ

 
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 98.0 118.9 126.4 121.5 98.1 127.3 4 Economic Indicators Consumer Confidence1 U.S. Unemployment Statistics2 U.S. GDP QoQ Change3 Consumer confidence index increased to 127.3, the highest level since the onset of the pandemic Unemployment rate of 5.9% in June lowest since the beginning of the pandemic but remains above pre- pandemic levels US GDP increased 7.6% in Q2 2021 vs. Q1 2021, as the economy reopens 1 The Conference Board’s consumer confidence index, monthly data as of June 30, 2021 2 U.S. Bureau of Labor Statistics, monthly data as of June 30, 2021 3 U.S. Bureau of Economic (BEA) Analysis, quarterly data as of March 31, 2021 * U.S. GDP Q2 2021: Federal Reserve Bank of Atlanta, GDPNow advance estimate as of July 19, 2021 *

 
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 Analysis, Light Weight Vehicle Sales: Autos and Light Trucks, monthly data as of June 30, 2021 2 Cox Automotive, 13-Month Rolling Used-Vehicle SAAR, monthly data as of June 30, 2021 3 Manheim, Inc.; Indexed to a basis of 100 at 1995 levels; JD Power Used-Vehicle Price Index (not seasonally adjusted), both monthly, quarter end 5 Auto Industry Overview Used Vehicle Price Indices3 Used Vehicle SAAR2 Used vehicle prices moderated slightly in June from the record levels at the beginning of the quarter as demand outpaced supply Used auto sales of 39M, down 4% QoQ driven by continued pressure on used car supply JDP Manheim New Vehicle SAAR1 Auto sales of 15.4M, down 13% QoQ driven by significant inventory shortage

 
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 Retail Auto 3,812$ 2,797$ 2,135$ 36% 79% Chrysler Capital Loans (<640) 1 1,597 1,317 1,131 21% 41% Chrysler Capital Loans (≥640) 1 3,021 2,343 3,557 29% (15%) Total Chrysler Capital Retail 4,618 3,660 4,688 26% (2%) Total Leases 2 2,070 2,157 989 (4%) 109% Total Auto Originations 3 10,500$ 8,614$ 7,812$ 22% 34% SBNA Originations 4 2,558$ 1,977$ 1,724$ 29% 48% % Variance

 
$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 $100 $200 $300 $400 $500 $600 $700 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec '20 v '21 YoY -8% -12% 47% 258%127% 29% '19 v '21 YoY 5% 2% 20% -3% -17% -33% $0 $200 $400 $600 $800 $1,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec '20 v '21 YoY 5% 3% 52% 174% 58% 44% '19 v '21 YoY 1% -11% 26% 54% 44% 77% $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 Core Retail Auto ($ in Millions) Chrysler Lease ($ in Millions) Chrysler Capital Loans, <6401 ($ in Millions) Chrysler Capital Loans, ≥6401 ($ in Millions) 2019 2020 2021 7 Monthly Originations 1 Approximate FICOs

 
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 retail and lease incentives • Penetration rate of 33.8%, down 330 bps due to fewer CCAP exclusive incentives compared to the beginning of the pandemic 1 Stellantis filings; sales as reported on 07/01/2021

 
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 ~$300M in off-balance sheet prime loan sales also increased SFO balances Serviced for Others Balances, End of Period ($ in Millions)

 
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) Santander2 ($ in Billions) SBNA Originations and Asset Sales ($ in Billions) ► 94% unused capacity on warehouse lines from 12 lenders ► $3.0B in unutilized revolving and contingent liquidity ► Executed ~$300M in off-balance sheet prime loan sales ► $2.6B of prime loans flowed to SBNA 1 2 1 Total outstanding as of June 30, 2021 2 Total commitment as of June 30, 2021 10 $20.0 $22.0 1Q 2021 2Q 2021

 
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 income 3,068 1,426 2,657 Interest expense 237,195 253,537 308,982 Net finance and other interest income $1,404,561 $1,369,629 $1,056,963 Credit Loss Expense (263,751) 136,209 861,896 Profit sharing 50,553 67,326 11,530 Total other income 76,073 104,510 (46,393) Total operating expenses 303,210 294,492 266,679 Income before tax $1,390,622 $976,112 ($129,535) Income tax expense 332,420 234,457 (32,857) Net income $1,058,202 $741,655 ($96,678) Diluted EPS ($) $3.45 $2.42 ($0.30) Average total assets $47,741,178 $48,262,590 $46,876,726 Average managed assets $64,483,261 $63,779,438 $61,001,767

 
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 Delinquent, RICs, HFI Gross Charge-off Rates Late stage delinquencies flat YoY Gross charge-off rate decreased 450 bps YoY 1 Recovery Rate – Per the financial statements includes insurance proceeds, bankruptcy/deficiency sales, and timing impacts 2 Net Charge-off rates on retail installment contracts, held for investment SC’s Q2 recovery rate of 115% remains elevated due to low gross losses and continued strength in wholesale auction prices Net charge-off rate decreased 700 bps YoY Early stage delinquencies increased 120 bps YoY Delinquencies and charge-offs remain low due to disciplined underwriting, government stimulus and strong used vehicle prices 60.3% 55.9% 52.2% 50.1% 45.7% 91.4% 64.2% 69.1% 114.9% 16.1% 18.3% 17.3% 15.5% 11.1% 6.8% 9.9% 9.7% 6.6% 4.7% 4.7% 5.1% 4.6% 2.4% 2.4% 3.1% 2.2% 2.4% 9.4% 9.5% 9.7% 4.3% 5.0% 6.0% 4.4% 5.5%

 
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 50.0 75.0 100.0 125.0 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 (%) 49.0 54.6 66.1 62.5 62.4 56.0 55.2 59.2 53.2 52.9 57.5 46.2 2020 (%) 46.0 53.0 52.1 32.1 49.1 62.1 81.7 126.1 76.4 78.2 60.5 54.8 2021 (%) 58.9 63.1 86.8 110.8 127.0 107.1 13 Loss and Recovery Ratios (Annualized) Gross Charge-off Ratio (%) Recovery Rates (% of Gross Loss) Net Charge-off Ratio (%) 2019 2020 2021 (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 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 2021 (%) 4.2 3.5 1.2 -0.8 -1.7 -0.4

 
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) ($51) 2Q 2020 ($340) Gross Loss Performance $18 Recoveries ($167) Other 2Q 2021Balance

 
$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 decrease due to improvements in credit quality & portfolio mix $91M decrease due to improved macroeconomic factors Credit loss expense of ($264M) in Q2 2021 due to net recovery and reserve releases $1,126M decrease YoY driven by net recovery and reserve release in Q2 2021, compared to net charge-offs and reserve build in Q2 2020 Credit Loss Expense ($ in Millions) 1 Allowance for credit loss related to retail installment contracts, held for investment 461 48 296 243 (79) 400 293 (42) (107) (185) $862 $341 $254 $136 ($264) 2Q 2020 3Q 2020 4Q 2020 1Q 2021 2Q 2021 Net Charge-offs Build Release

 
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% ~24.6% Non-TDR Unpaid principal balance $28,577 $27,443 $26,528 $26,896 Non-TDR Allowance $4,300 $4,663 $4,818 ~$4,150 Non-TDR Allowance ratio 15.0% 17.0% 18.2% ~15.4% Total Unpaid principal balance $32,739 $31,800 $30,475 $30,755 Total Allowance $5,815 $6,001 $5,856 ~$5,100 Total Allowance ratio 17.8% 18.9% 19.2% ~16.5% TDR allowance ratio increased 570bps QoQ, driven by higher delinquencies in the extended population and lower credit quality Non-TDR allowance ratio decreased 200 bps, due to improved credit profile of originations, lower delinquency and strong performance Total allowance ratio decreased 110bps

 
$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 driven by benefits, insurance costs and repo expense as business activities normalize Expense ratio up 20bps YoY

 
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 phase-in impact. 2 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 Common Equity Tier 1 Capital Ratio 1 2

 
APPENDIX

 
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 RIC; Retail Installment Contract 2 No FICO score obtained; Includes commercial loans. $28,820 $25,781 $26,584 $26,725 $28,861 Average Loan Balance in Dollars

 
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 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 21 Held for Investment Credit Trends Retail Installment Contracts1 1 Held for investment; excludes assets held for sale

 
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, consistent with typical seasonal patterns. The losses for the three months ended June 30, 2020 were primarily driven by $122 million of lower of cost or market adjustments related to ..the held for sale personal ..lending portfolio, comprised of $87 million in customer default activity, and a $35 million in market discount. 22 Excluding Personal Lending Detail Total Personal Lending Excluding Personal Lending Total Personal Lending Excluding Personal Lending Total Personal Lending Excluding Personal Lending Interest on finance receivables and loans $ 1,229,492 $ - $ 1,229,492 $ 1,304,651 $ 88,260 $ 1,216,391 $ 1,236,600 $ 83,808 $ 1,152,792 Net leased vehicle income 409,196 - 409,196 317,089 - 317,089 126,688 - 126,688 Other finance and interest income 3,068 - 3,068 1,426 - 1,426 2,657 - 2,657 Interest expense 237,195 - 237,195 253,537 9,566 243,971 308,982 11,016 297,966 Net finance and other interest income $ 1,404,561 $ - $ 1,404,561 $ 1,369,629 $ 78,694 $ 1,290,935 $ 1,056,963 $ 72,792 $ 984,171 Provision for credit losses $ (263,751) $ (23) $ (263,728) $ 136,209 $ (12) $ 136,221 $ 861,896 $ - $ 861,896 Profit sharing 50,553 - 50,553 67,326 29,234 38,092 11,530 6,587 4,943 Investment gains (losses), net1 $ 2,414 $ (1,262) $ 3,676 $ (14,711) $ (38,603) $ 23,892 $ (147,582) (121,642)$ $ (25,940) Servicing fee income 22,812 - 22,812 18,694 - 18,694 19,120 - 19,120 Fees, commissions and other 50,847 - 50,847 100,527 45,299 55,228 82,069 36,911 45,158 Total other income $ 76,073 $ (1,262) $ 77,335 $ 104,510 $ 6,696 $ 97,814 $ (46,393) $ (84,731) $ 38,338 Average gross individually acquired retail installment contracts, held for investment and held for sale $ 32,462,553 $ - $ 32,853,151 - $ 31,193,215 - Average gross personal loans - - - $ 1,016,007 - $ 1,307,609 Average gross operating leases $ 17,118,763 $ - $ 17,281,874 $ - $ 17,492,255 $ - June 30, 2020 Three Months Ended, (Unaudited, Dollars in Thousands) June 30, 2021 March 31, 2021

 
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 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. Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Total equity $7,229,630 $6,231,853 $5,621,961 $5,094,812 $4,895,465 Deduct: Goodwill and intangibles 153,239 147,889 144,184 136,397 127,215 Tangible common equity $7,076,391 $6,083,964 $5,477,777 $4,958,415 $4,768,250 Total assets $48,245,934 $47,234,002 $48,887,493 $48,448,921 $47,268,695 Deduct: Goodwill and intangibles 153,239 147,889 144,184 136,397 127,215 Tangible assets $48,092,695 $47,086,113 $48,743,309 $48,312,524 $47,141,480 Equity to assets ratio 15.0% 13.2% 11.5% 10.5% 10.4% Tangible common equity to tangible assets 14.7% 12.9% 11.2% 10.3% 10.1% Total equity $7,229,630 $6,231,853 $5,621,961 $5,094,812 $4,895,465 Add: Adjustment due to CECL capital relief (c) 1,759,037 1,805,720 1,832,099 1,842,536 1,769,430 Deduct: Goodwill and other intangible assets, net of DTL 164,585 163,359 163,659 159,907 154,943 Deduct: Accumulated other comprehensive income, net (36,855) (41,818) (50,566) (56,882) (63,705) Tier 1 common capital $8,860,937 $7,916,032 $7,340,967 $6,834,323 $6,573,657 Risk weighted assets (a)(c) $49,014,663 $47,995,845 $50,424,476 $49,882,540 $48,997,902 Common Equity Tier 1 capital ratio (b)(c) 18.1% 16.5% 14.6% 13.7% 13.4% Three Months Ended (Unaudited, Dollars in Thousands)

 
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