Santander Consumer USA Holdings Inc. (NYSE:SC) Q3 2019 Earnings Conference Call - Final Transcript

Oct 30, 2019 • 09:00 am ET


Santander Consumer USA Holdings Inc. (NYSE:SC) Q3 2019 Earnings Conference Call - Final Transcript


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Good morning, and welcome to the Santander Consumer USA Holdings' Third Quarter 2019 Earnings Conference Call. Today's conference is being recorded. [Operator Instructions]. Following today's presentation, the floor will be opened for your questions. [Operator Instructions]. It is now my pleasure to introduce your host, Evan Black, Vice President of Investor Relations. Evan, the floor is yours.

Evan Black

Thank you, Audra[. Good morning and thanks everyone for joining today's call. In the room, we have Scott Powell, President and Chief Executive Officer; and Fahmi Karam, Chief Financial Officer. As you are aware, certain statements made today may be forward-looking. Please refer to our public SEC filings and Risk Factors with respect to these statements. We will also reference non-GAAP financial measures that we believe will be useful for investors and a reconciliation of those measures to GAAP is included in the 8-K today, October 30th, 2019.

And with that, I'll turn it over to Scott Powell.

Scott Powell

Thanks, Evan. Good morning, everybody. Thanks for joining our call to discuss our third quarter results. I do want to say how pleased I am to be sitting here with Fahmi Karam, our new CFO at Santander Consumer. As you all know, Juan Carlos Alvarez is now Santander's ex-CFO and continues to work with us. I know you all miss him already, but Fahmi, I know will do a great job in his current role. Fahmi has been working here for many years. He has had a number of different roles including Strategy, Corporate Development and was most recently our Head of Pricing and Analytics. So he knows the business inside and out. He is absolutely the right person for the job. It's great to have them here, and I think you all will like getting to know Fahmi. So pleased to have you here Fahmi.

So let's turn to Slide 3 in the presentation and I'll give you a quick overview of our highlights. So net income came in at $233 million. Earnings per share for the quarter totaled $0.67 per share. Our after-tax ROA was 2%. We had a very strong quarter on originations. Originations came in at $8.4 billion in total volume which is up 11% year-over-year. We remain really focused on improving the dealer experience, especially in our origination operations and focusing on process.

Our non-FCA core business came in at $2.6 billion which is up 11%. Chrysler loans were $3.6 billion, up 52% and that's really driven by the program we have with Santander Bank where our prime volume -- they did prime volume of $2.1 billion during the third quarter. Chrysler leases were $2.2 billion, which is down 23% year-over-year, and were down year-to-date 12%. We can talk more about that in Q&A for sure.

Total Chrysler originations, though, were up 9% year-over-year. And during the third quarter, our penetration rate with Chrysler came in at 36%, which is up from 31% a year ago which again continues to reflect the strength of our relationship with FCA and all the