Form 8-K Santander Consumer USA For: Apr 30

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April 30, 2019 6:13 AM EDT



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT 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 the quarter 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 that section.

Item 9.01. Financial Statements and Exhibits.
Exhibit No.    Description
Exhibit 99.2


2



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 Pfirrman
Title:    Chief Legal Officer
 
 


 




Exhibit 99.1
sclogoa07.jpg
Contacts:
Investor Relations
Evan Black 
800.493.8219
  
Media Relations
Laurie Kight
214.801.6455

Santander Consumer USA Holdings Inc. Reports First Quarter 2019 Net Income of $248 million
Total Auto Originations of $7.0 Billion Increased 10% YoY; Declares $0.20 Per Share Cash Dividend

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

“Santander Consumer is off to a good start in 2019,” said Scott Powell, SC President and CEO, who is also CEO of Santander US. “Our strategy has continued to show results as we increased year-over-year originations for a fifth consecutive quarter. Our overall performance was driven by a sustained focus on operations and dealer experience, as well as the strength of our partnership with Fiat Chrysler.”

Juan Carlos Alvarez, SC Chief Financial Officer, added, “We are pleased with our good start to the year supported by solid auction prices, lower TDR balances and disciplined expense management.”

Q1 2019 Highlights (variances compared to the first quarter of 2018 (“Q1 2018”), unless otherwise noted):

•
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




1




Net finance and other interest income1 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 of those 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 ratio2 of 4.2 percent in Q1 2019 decreased 20 basis points compared to 4.4 percent in Q1 2018.

RIC net charge-off ratio3 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 ratio4 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.


































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.
4Ratio 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.
5The 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.

2


Conference Call Information
SC 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 website at 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 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 844-512-2921 (U.S. domestic), or 412-317-6671 (international), conference ID 2036898, 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 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 that suggested 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 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 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.

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. The company, 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)

3


Santander Consumer USA Holdings Inc.
Financial Supplement
First Quarter 2019
 
 
 
Table of Contents
 
 
Table 1: Condensed Consolidated Balance Sheets
5

Table 2: Condensed Consolidated Statements of Income
6

Table 3: Other Financial Information
7

Table 4: Credit Quality
9

Table 5: Originations
10

Table 6: Asset Sales
11

Table 7: Ending Portfolio
12

Table 8: Reconciliation of Non-GAAP Measures
13


4


Table 1: Condensed Consolidated Balance Sheets

 
March 31,
2019
 
December 31,
2018
Assets
(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



5


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






6


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


7



(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)




8


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, Dollar amounts in thousands):

 
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, Dollar amounts in thousands):
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 days2
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, Dollar amounts in thousands):
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, Dollar amounts in thousands):
Allowance Ratios
March 31,
2019
 
December 31,
2018
TDR - 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

 
1,819,360

Non-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
%

1Percent of unpaid principal balance.
2Interest is accrued until 60 days past due in accordance with the Company's account policy for retail installment contracts.

9


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, 2018
Retained 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 at origination. 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 ended December 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 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 $1 billion and $24 million of retail installment contacts during the three months ended March 31, 2019, and March 31, 2018 respectively.



10


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.


11


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


$
28,463,236

Average APR
16.8
%

16.7
%
Discount
0.7
%

0.8
%

 

 
Personal loans
$
1,952


$
2,637

Average APR
31.7
%

31.7
%

 

 
Receivables from dealers
$
13,169


$
14,710

Average APR
4.0
%

4.1
%

 

 
Leased vehicles
$
15,606,442


$
15,219,313


 

 
Finance leases
$
20,669


$
19,344




12


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.


13
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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