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Santander Consumer USA posts Q4'16 profit of $61.3M

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Santander Consumer USA posts Q4'16 profit of $61.3M

Santander Consumer USA Holdings Inc. reported net income of $61.3 million, or 17 cents per common share, for the fourth quarter of 2016, compared to a net loss of $19.6 million, or 5 cents per share, in the year-ago quarter.

The S&P Capital IQ consensus GAAP EPS estimate for the quarter was 33 cents.

Total originations were $4.72 billion for the most recent quarter, down from $6.25 billion in the year-ago quarter.

The company reported net investment losses of $168.3 million in the fourth quarter of 2016, compared to losses of $229.2 million in the fourth quarter 2015. Net investment losses in the most recent quarter were primarily driven by $146 million of lower of cost or market adjustments related to the held for sale personal lending portfolio, including $116 million in customer default activity and a $30 million increase in discount consistent with seasonal origination patterns for the portfolio. Excluding the impact of personal lending, investment losses totaled $23 million driven by losses related to a fourth-quarter 2016 off-balance sheet securitization and a lower of cost or market adjustment on certain auto assets classified as held for sale.

Provision for credit losses decreased to $685.7 million from $850.7 million.

Net charge-off ratio on individually acquired retail installment contracts increased to 9.4% in the fourth quarter of 2016 from 8.9% in the year-ago period.

The company's delinquency ratio on individually acquired retail installment contracts held for investment rose year over year to 5.1% from 4.4%.

For full year 2016, the company reported net income of $766.5 million, or $2.13 per share, down from $824.0 million, or $2.31 per share in 2015.

The S&P Capital IQ consensus GAAP EPS estimate for 2016 was $2.25.