Santander Holdings USA, Inc.

General

SHUSA is the parent holding company of SBNA, a national banking association; SC, a consumer finance company headquartered in Dallas, Texas; BSI, a financial services company headquartered in Miami, Florida that offers a full range of banking services to foreign individuals and corporations based primarily in Latin America; SanCap, an institutional broker-dealer headquartered in New York, which has significant capabilities in market-making via an experienced fixed-income sales and trading team and a focus on structuring and advisory services for asset originators in the real estate and specialty finance markets; SSLLC, a broker-dealer headquartered in Boston, Massachusetts; and several other subsidiaries. SHUSA is headquartered in Boston and SBNA's home office is in Wilmington, Delaware. SSLLC is a registered investment adviser with the SEC. SHUSA's two largest subsidiaries by asset size and revenue are SBNA and SC. SHUSA is a wholly-owned subsidiary of Santander.

The Company specializes in consumer financing focused on vehicle finance, servicing of third-party vehicle financing, and delivering service to dealers and customers across the full credit spectrum. This includes indirect origination and servicing of vehicle loans and leases, principally through manufacturer-franchised dealers in connection with their sale of new and used vehicles to retail consumers, origination of vehicle loans through a web-based direct lending program, purchases of vehicle loans from other lenders, and servicing of automobile and recreational and marine vehicle portfolios for other lenders. The Company sells consumer vehicle loans and leases through flow agreements and, when market conditions are favorable, it accesses the ABS market through securitizations of consumer vehicle loans and leases.

Since May 2013, under the MPLFA with Stellantis, the Company has operated as Stellantis' preferred provider for consumer loans, leases and dealer loans and provides services to Stellantis customers and dealers under the CCAP brand. In the second quarter of 2022, the Company announced it had reached an agreement with Stellantis to amend and extend the MPLFA through December 2025. In June 2022, the Company launched a preferred lender, full spectrum financing program in partnership with MMNA to provide customer and dealer financing programs that will help MMNA achieve its goal of improving the car-buying experience.

During the second half of 2023, the Company entered into numerous new lending agreements with various auto OEMs. These new agreements reinforce the Company’s leadership in the U.S. auto finance market and commitment to forging deep, multi-geography relationships with automotive manufacturers catering to customers across the credit spectrum. These various OEMs have a diverse product lineup, including an increased focus on electric vehicles. In addition, the Company has been chosen by LendingClub to be its primary loan servicer for its auto refinance program.

In addition to specialized consumer finance, the Company also attracts deposits and provides other retail banking services through its network of retail branches with locations in Connecticut, Delaware, Florida, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, and Rhode Island and originates small business, middle market, large and global commercial loans, multifamily loans, and other consumer loans and leases throughout the Mid-Atlantic and Northeastern areas of the United States. For large institutional investors, the Company provides structured products, emerging markets credit and U.S. investment grade credit, U.S. rates, short-term fixed-income, debt and equity capital markets, investment banking, exchange-traded derivatives, and cash equities, benefiting from a combination of Santander’s global reach and access to financial hubs together with extensive local market knowledge and regional expertise.

The Company uses its deposits, public and private borrowings, as well as other financing sources, to fund its loan and investment portfolios.

Acquisition of SC Common Stock

In August 2021, SHUSA entered into a definitive agreement whereby SHUSA agreed to acquire all of the outstanding shares of SC Common Stock not already owned by SHUSA. Under the terms of the definitive agreement, a wholly-owned subsidiary of SHUSA commenced a tender offer to acquire all outstanding shares of SC Common Stock that SHUSA did not already own at a price of $41.50 per share in cash. The transaction was completed on January 31, 2022, at which time SHUSA acquired the remaining 19.8% NCI in SC for approximately $2.5 billion and SC became a wholly-owned subsidiary of SHUSA. As a result of the acquisition, Additional paid in capital decreased by $591.3 million for the difference between the carrying value of the NCI and the amount paid to acquire it.

Acquisition of PCH

On April 11, 2022, SHUSA acquired 100% ownership of PCH, parent company of APS, an institutional fixed-income broker dealer and a designated primary dealer by the FRB of New York, for approximately $448 million. With the addition of PCH, the Company significantly enhances its infrastructure and capabilities with respect to U.S. fixed-income capital markets. The transaction provides the Company a platform for self-clearing of fixed-income securities, growing its institutional client footprint, and expanding its structuring and advisory capabilities for asset originators. APS had approximately 230 employees serving more than 1,300 active institutional clients from its headquarters in New York and offices in Chicago, San Francisco, Austin, other U.S. locations and Hong Kong.

The acquisition was accounted for as a business combination, with the assets and liabilities of PCH recorded at fair value. Goodwill of approximately $171 million was recorded and assigned to the CIB reporting unit. In addition to goodwill, the Company recorded $39 million of amortizing intangible assets, primarily related to customer relationships and acquired technology. Intangibles will be amortized over their estimated useful lives of nine and three years for customer relationships and technology, respectively.

In February 2023, the Company completed the merger of SIS into APS, with the resulting company renamed SanCap. Following the merger, SanCap, along with SSLLC, now comprise the Broker-Dealers.

Segments

The Company’s reportable segments are focused principally around the customers the Company serves. The Company has identified the following reportable segments: Auto, CBB, C&I, CRE, CIB, and Wealth Management.

•The Auto segment includes the Company's consumer and commercial auto loans and leases and the Company's commercial loans to dealers and dealer floorplan financing products. This includes the Company's specialized consumer finance subsidiary focused on vehicle finance and third-party servicing. The specialized consumer finance primary business is the indirect origination of RICs, principally through manufacturer-franchised dealers in connection with their sale of new and used vehicles to retail consumers. The Company offers a full spectrum of auto financing products and services to captive financing companies. These products and services include consumer RICs and leases, as well as dealer loans for inventory, construction, real estate, working capital and revolving lines of credit. The Company also originates vehicle loans through a web-based direct lending program, purchases vehicle RICs from other lenders, and services automobile, recreational and marine vehicle portfolios for other lenders. All intercompany revenue and fees between consolidated affiliates are eliminated in the consolidated results of the Company.

•The CBB segment includes the products and services provided to consumer and small business banking customers, including consumer deposit, small business banking, unsecured lending, and investment services. This segment offers a wide range of products and services to consumers and business banking customers, including demand and interest-bearing demand deposit accounts, money market and savings accounts, CDs, and retirement savings products. It also offers lending products such as unsecured personal loans, credit cards, and small business loans such as business lines of credit. In addition, the Company makes investment services available to its retail customers, including products such as annuities, mutual funds, managed accounts, and insurance products through a networking agreement with a consolidated affiliate.

•The C&I segment currently provides commercial lines, loans, letters of credit, receivables financing, commercial credit cards, and cash management and deposit services to lower middle market commercial customers and to medium- and large-sized commercial customers, as well as financing and deposits for government entities. This segment also provides niche product financing for specific industries.

•The CRE segment offers CRE loans, CEVF, and multifamily loans, as well as cash management and deposit services to customers. This category also includes community development finance activities, including originating CRA-eligible loans and making CRA-eligible investments.

•The CIB segment serves the needs of global corporate and institutional customers by leveraging the international footprint of Santander to provide financing and banking services to corporations with over $500 million in annual revenues. CIB also includes the Company's institutional broker-dealer that provides services in investment banking, sales, trading, and equity research reports. CIB's offerings and strategy are based on Santander's local and global capabilities in wholesale banking.

•The Wealth Management segment consists of the Company's international private banking and financial operations Services include the full range of banking and asset management services to foreign individuals and corporations based primarily in Latin America

ESG

Our responsible growth strategy includes a focus on addressing global sustainability challenges. We are committed to compliance with all applicable federal, state, and local laws, while contributing to the effective transition towards a more just and sustainable economy by supporting the sustainable transition, reducing our environmental footprint, and identifying, assessing, and managing climate-change-related risks and opportunities applicable to us and our clients in order to build a comprehensive sustainable and green finance proposition.

Our ESG strategy includes:

•Empowering people and business by expanding access to capital, financial education, and training opportunities.

•Supporting the green economy by supporting the sustainable transition for customers and achieving our sustainability goals; and

•Fostering inclusive communities by meeting the needs of underserved individuals and communities and by championing diversity, equity, and inclusion.

Our three most significant climate-related opportunities are:

•Continued financing of renewable energy sources, including wind and solar power;

•Development of diverse products and services that provide climate solutions that assist our clients as they transition to a low-carbon economy, and that result in greater diversification, competitive advantage, and increased revenue; and

•Resource efficiencies to reduce environmental impact, operational costs, and increase the value of fixed assets.

We are committed to a more sustainable economy by addressing climate change and sustainable business practices. We continue to make progress towards meeting our goals which include, but are not limited to:

•Becoming carbon neutral in operations. This goal was first achieved in 2020 and will continue to be achieved through purchase of offsets, while reducing our carbon footprint.

•Reducing consumption of energy (15%), water (25%), and paper (25%), as well as reducing waste to landfills (20%) by 2025.

•Becoming single-use plastic-free at all facilities, where feasible. The goal was first achieved in 2021 and the Company continues to work with suppliers to reduce plastic usage.

•100% purchasing of renewable electricity for facilities, where possible, by 2025.

•Filling 30% of senior positions with women by 2025.

•Eliminating any equal pay gap by 2025.

•Supporting communities via our $13.6 billion Community Plan investment through 2025.

The goals discussed above are ambitious; as such, no guarantees or promises are made that these goals will be met or continued. Furthermore, statistics and metrics included in these disclosures are estimates; they may also be based on assumptions.

For further information, refer to the most recent Santander U.S. annual ESG report available on the Company's website.

Human Capital Management

Our employees are central to our Company’s success. Our Company invests significant resources to maintain a company culture that is Simple, Personal and Fair and to attract, develop and retain the high-caliber workforce needed to meet our corporate goals. We invest in our employees by seeking to create a diverse and inclusive work environment, providing competitive compensation and benefits, quality training and development opportunities, and ensuring a safe and healthy workplace.

Human Resources and Communications Teams

Our HR teams are responsible for:

•Culture, Engagement, and Inclusion – serves as the champion of employee experiences, employee engagement, strategy and best practices, corporate events, diversity, equity and inclusion, and HR communications dedicated to fostering a unified “One Santander.”

•Compensation, Payroll and Benefits and HR Technology – responsible for compensation and benefits strategy and consulting with the business on compensation matters and compensation governance, as well as payroll, benefits, and human capital management support.

•Talent Acquisition – sources, hires, and onboards the best-qualified candidates, from within or outside ofour organization.

•Talent Management – develops, engages, and retains the right talent to ensure the Company operates as a high-performing organization and achieves business objectives.

•Learning & Development – partners with business areas to design, develop, and implement learning solutions that provide employees with the knowledge, skills, and abilities to meet and exceed the organization’s goals and objectives.

•Employee Relations – supports the Company to assist with conflict resolution, internal investigations, and questions on HR policies and procedures for all employees.

DE&I

Santander US remains committed to advancing DE&I for the benefit of our employees, customers, and communities. Our focus on DE&I starts with inclusion, diversity is the outcome, while equity is how we get there. We define diversity as representation beyond race, ethnicity, gender, sexual preference, and identity. Inclusion is the sense of belonging, allowing individuals to feel psychologically safe and driven with purpose. Equity is the fair access to information and opportunities for all. DE&I is an integral part of our culture; by embedding DE&I into our cultural initiatives, we create sustainable practices that align to our business strategies.

In 2023, we established a DE&I Council with representatives from every business unit and functional area across Santander US and 39% of all Santander US employees are members of one or more of our seven Business Resource Groups. As a result of our DE&I strategy, Santander US maintained DE&I engagement scores in the top quartile of the financial industry throughout 2023.

Compensation and Benefits

We provide competitive compensation, benefits, and services that help attract, retain and incentivize our employees. Our compensation and benefits package includes competitive pay, healthcare, retirement benefits, as well as paid time off and holidays, parental leave, disability benefits, military leave, and paid development and volunteer time off, along with other benefits and employee resources. We design our incentive compensation to reward pay for performance while appropriately mitigating risk in line with our corporate behaviors and ethical principles.

Our workforce across all of Santander U.S. was approximately 11,800 employees at December 31, 2023. None of our employees is represented by a collective bargaining agreement. At December 31, 2023, the Company's 12-month rolling voluntary attrition rate was 10.6%.

Learning and Development & Talent Management

The Company invests significant resources to train and develop our employees. Our programs provide employees with the resources they need to help achieve their career goals, build management skills, and lead their organization. We deliver numerous learning opportunities to aid in employee development, ensure compliance, and improve business acumen including quarterly compliance curriculums, workplace safety awareness, specialized job role training, and information security training.

Health and Wellness

The Company is committed to the health and safety of our employees. As such, we invest in programs designed to improve physical, mental, and financial well-being. During 2023, the Company sponsored three medical plans that provide comprehensive medical coverage, telemedicine and wellness tools, and condition management and support. To help ensure that healthcare is accessible for all employees, the Company maintains a lower cost medical plan that is entirely co-pay based, has no deductible and includes inclusive family planning benefits.

Competition

The Company’s primary competitors are:

•national and regional banks, credit unions, and independent financial institutions;

•digital and virtual banks;

•the affiliated finance companies of automotive manufacturers; and

•trust companies, full service banks, asset managers, investment advisors, securities dealers, and mutual fund companies.

The Company is subject to substantial competition in attracting and retaining deposits and in lending funds. The primary factors in competing for deposits include the ability to offer attractive rates, the convenience of office locations, the availability of alternate channels of distribution, and servicing capabilities. Direct competition for deposits comes primarily from other national, regional, and state banks, digital banks, thrift institutions, and broker-dealers. Competition for deposits also comes from money market mutual funds, corporate and government securities dealers and credit unions.

The primary factors driving competition for commercial and consumer loans are interest rates, loan origination fees, service levels and the range of products and services offered. Competition for originating loans normally comes from thrift institutions, national and state banks, mortgage bankers, mortgage brokers, finance companies, and insurance companies.

The automotive finance industry is highly competitive. While the used car financing market is fragmented with no single lender accounting for more than 10% of the market, there are a number of competitors in both the new and used car markets that have substantial positions nationally or in the markets in which they operate. The Company competes on the pricing offered on loans and leases as well as the customer service provided to automotive dealer customers. Pricing for these loans and leases is transparent because the Company, like its industry competitors, posts pricing for loans and leases on web-based credit application aggregation platforms. When dealers submit applications for consumers acquiring vehicles, they can compare the Company's pricing against its competitors’ pricing. Dealer relationships are important in the automotive finance industry. Vehicle finance providers tailor product offerings to meet each individual dealer's needs.

The Company seeks to compete effectively through its proprietary credit-scoring system and industry experience, which are used to establish appropriate risk pricing. The Company has built and seeks to develop strong dealer relationships through a nationwide sales force and a long history in the automotive finance space. Further, the Company expects to continue deepening dealer relationships through the captive financing product offerings and believes it can compete effectively by continuing to expand those relationships.

Supervision and Regulation

The U.S. banking industry is highly regulated under various federal laws, including the Truth-in-Lending Act, Equal Credit Opportunity Act, Electronic Fund Transfer Act, Fair Credit Reporting Act, Fair Debt Collection Practices Act, Consumer Leasing Act, Servicemembers Civil Relief Act, Telephone Consumer Protection Act, Financial Institutions Reform, Recovery, and Enforcement Act, the DFA and the GLBA, as well as various state laws. The Company is subject to inspections, examinations, supervision, and regulation by the SEC, the CFPB, the Federal Trade Commission, and the DOJ and by regulatory agencies in each state in which the Company and its subsidiaries transact business.

The activities of the Company and its subsidiaries, including SBNA and SC, are subject to regulation under various U.S. federal laws and regulatory agencies which impose regulations, supervise and conduct examinations, and may affect the operations and management of the Company and its ability to take certain actions, including making distributions to our parent, Santander. SHUSA is a BHC pursuant to the BHC Act. As a BHC, the Company is subject to consolidated supervision by the Federal Reserve, including the FRB of Boston.

SBNA is a national bank chartered under the National Bank Act and subject to supervision by the OCC, which has the ability to limit certain of its activities, such as the timing and amount of dividends and certain transactions that it might otherwise desire to enter into, such as merger and acquisition opportunities, or to impose other limitations on the Bank’s growth and is insured by the FDIC.

The Broker-Dealers are subject to regulation under FINRA as well as state regulatory authorities.

In addition, the Company is directly and indirectly, through its relationship with Santander, subject to certain other banking and financial services regulations, including oversight by the European Central Bank.

Refer to the "Regulatory Matters" section within Item 7- MD&A for discussion of current regulatory matters impacting the Company. Additional legal and regulatory matters affecting the Company’s activities are further discussed in Part I, Item 1A-Risk Factors of this Annual Report on Form 10-K.

BHC Activity and Acquisition Restrictions

Federal laws restrict the types of activities in which BHCs may engage, and subject them to a range of supervisory requirements, including regulatory enforcement actions for violations of laws and policies. BHCs may engage in the business of banking and managing and controlling banks, as well as closely related activities.

The Company would be required to obtain approval from the Federal Reserve if the Company were to acquire 5% or more of any class of voting shares of any depository institution or any holding company of a depository institution.

Control of the Company or the Bank

Under the Change in Bank Control Act, individuals, corporations or other entities acquiring SHUSA's common stock may, alone or together with other investors, be deemed to control the Company and thereby the Bank. Ownership of more than 10% of SHUSA’s capital stock may be deemed to constitute “control” if certain other control factors are present. If deemed to control the Company, those persons or groups would be required to obtain the Federal Reserve's approval to acquire the Company’s common stock and could be subject to certain ongoing reporting procedures and restrictions under federal law and regulations.

Standards for Safety and Soundness

The federal banking agencies adopted certain operational and managerial standards for depository institutions, including internal audit system components, loan documentation requirements, asset growth parameters, IT and data security practices, and compensation standards for officers, directors and employees.

Insurance of Accounts and Regulation by the FDIC

SBNA is a member of the DIF, which is administered by the FDIC. SBNA's deposits are insured up to applicable limits by the FDIC. The FDIC assesses deposit insurance premiums and is authorized to conduct examinations of, and require reporting by, FDIC-insured institutions like SBNA. It also may prohibit any FDIC-insured institution from engaging in any activity the FDIC determines by regulation or order to pose a serious risk to the DIF. The FDIC also has the authority to initiate enforcement actions against banking institutions and may terminate an institution’s deposit insurance if it determines that the institution has engaged in unsafe or unsound practices or is in an unsafe or unsound condition.

The FDIC charges financial institutions deposit premium assessments to ensure it has reserves to cover deposits that are under FDIC-insured limits, which is currently $250,000 per depositor per ownership category for each ownership deposit account category.

The FDIC published a final rule on November 16, 2023 to charge certain banks a special assessment to recover the costs associated with protecting uninsured depositors following the bank closures during 2023. Based on the final rule, SBNA is required to pay a total of $61.5 million over the course of eight consecutive quarters beginning in the first quarter of 2024. SBNA has accrued for the full amount of the special assessment during the fourth quarter of 2023. The FDIC has recently communicated that it will increase the assessment for all banks which will be reported in its June 2024 special assessment invoice. Refer to the “Regulatory Matters” section of the MD&A for further details.

FDIC insurance premium expenses, inclusive of the special assessment above, were $139.6 million and $44.0 million for the years ended December 31, 2023 and 2022, respectively. Refer to the Deposit Insurance and Assessments Section of "Regulatory Matters" for additional details on the FDIC insurance premium rate increase in 2023.

Restrictions on Dividends and Subsidiary Banking Institution Capital Distributions

Under the FDIA, IDIs must be classified in one of five defined tiers (well-capitalized, adequately-capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized). Under OCC regulations, an institution is considered “well-capitalized” if it (i) has a total risk-based capital ratio of 10% or greater, (ii) has a Tier 1 risk-based capital ratio of 8% or greater, (iii) has a CET1 capital ratio of 6.5% or greater, (iv) has a Tier 1 leverage ratio of 5% or greater and (v) is not subject to any order or written directive to meet and maintain a specific capital level. As of December 31, 2023, SBNA met the criteria to be classified as “well capitalized.”

If capital levels fall to significantly or critically undercapitalized levels, further material restrictions can be imposed, including restrictions on interest payable on accounts, dismissal of management and, in critically undercapitalized situations, appointment of a receiver or conservator. Critically undercapitalized institutions generally may not, beginning 60 days after becoming critically undercapitalized, make any payment of principal or interest on their subordinated debt. All but well-capitalized institutions are prohibited from accepting brokered deposits without prior regulatory approval. Pursuant to FDIC and OCC regulations, institutions which are not categorized as well-capitalized or adequately-capitalized are restricted from making capital distributions, which include cash dividends, stock redemptions and repurchases, cash-out mergers, interest payments on certain convertible debt and other transactions charged to the institution’s capital account.

Federal banking laws, regulations and policies limit SBNA’s ability to pay dividends and make other distributions to the Company. SBNA must obtain prior OCC approval to declare a dividend or make any other capital distribution if, after such dividend or distribution: (1) the Bank’s total distributions to the Company within that calendar year would exceed 100% of its net income during the year plus retained net income for the prior two years; (2) the Bank would not meet capital levels imposed by the OCC in connection with any order, (3) the Bank has negative retained earnings, or (4) the Bank is not adequately capitalized at the time. In addition, the OCC's prior approval is required if the OCC deems the Bank to be in troubled condition or a problem institution.

Any dividends declared and paid have the effect of reducing SBNA’s Tier 1 capital to average consolidated assets and risk-based capital ratios. During 2023, 2022, and 2021, SBNA did not pay dividends to SHUSA.

Federal Reserve Regulation

Under Federal Reserve regulations, the Bank generally has been required to maintain a reserve against its transaction accounts (primarily interest-bearing and non-interest-bearing checking accounts). Because reserves must generally be maintained in cash or in low-interest-bearing accounts, the effect of the reserve requirements is to reduce an institution’s asset yields.

FHLB System

The FHLB system was created in 1932 and consists of 11 regional FHLBs. FHLBs are federally-chartered but privately owned institutions created by Congress. Each FHLB is owned by its member institutions. As a member, the Bank is required to make minimum investments in FHLB stock based on its level of borrowings from the FHLB. The Bank is a member of and held investments in the FHLB of Pittsburgh which totaled $287.1 million as of December 31, 2023, compared to $184.5 million at December 31, 2022. The Bank utilizes advances from the FHLB to fund balance sheet growth, provide liquidity and for asset and liability management purposes. The Bank had access to advances with the FHLB of up to $13.4 billion at December 31, 2023, and had outstanding advances of $6.6 billion. The level of borrowing capacity the Bank has with the FHLB of Pittsburgh is contingent upon the level of qualified collateral the Bank holds at a given time.

The Bank received $22.4 million and $4.6 million in dividends on its stock in the FHLB of Pittsburgh in 2023 and 2022, respectively.

Anti-Money Laundering and the USA Patriot Act

Several federal laws, including the Bank Secrecy Act, the Money Laundering Control Act, and the USA Patriot Act require all financial institutions to, among other things, implement policies and procedures relating to anti-money laundering, compliance, suspicious activities, currency transaction reporting and due diligence on customers. The USA Patriot Act substantially broadened existing anti-money laundering legislation and the extraterritorial jurisdiction of the U.S., imposed compliance and due diligence obligations, created criminal penalties, compelled the production of documents located both inside and outside the U.S., including those of non-U.S. institutions that have a correspondent relationship in the U.S., and clarified the safe harbor from civil liability to clients. The U.S. Treasury has issued a number of regulations that further clarify the USA Patriot Act’s requirements and provide more specific guidance on their application.

Financial Privacy and Cyber Security

U.S. banking agencies and other federal and state government agencies have increased their attention on cybersecurity and data privacy risks and have proposed enhanced risk management standards that would apply to us. Under the GLBA, financial institutions are required to disclose to their retail customers their policies and practices with respect to sharing nonpublic customer information with their affiliates and non-affiliates, how they maintain customer confidentiality, and how they secure customer information. Customers are required under the GLBA to be provided with the opportunity to “opt out” of information sharing with non-affiliates, subject to certain exceptions.

The Company and its subsidiaries use credit bureau data in their underwriting activities. Use of such data is regulated under the Fair Credit Reporting Act which regulates reporting information to credit bureaus, prescreening individuals for credit offers, sharing of information between affiliates, and using affiliate data for marketing purposes.

In 2020, the California Consumer Privacy Act took effect, requiring for-profit businesses which conduct business in California, among other things, to notify affected individuals when there has been a security breach of their personal data, and imposes increased privacy and security obligations of entities handling certain personal information of individuals. Other states are considering analogous legislation.

Effective in April 2022, federal banking regulators imposed a rule which requires a banking organization to notify its primary federal regulator of any significant computer-security incident as soon as possible and no later than 36 hours after it has been determined that a cyber incident has occurred. That rule defines a significant computer-security incident as an incident that has materially affected or is reasonably likely to materially affect, the viability of a banking organization’s key operations or its ability to deliver banking products and services, or the stability of the financial sector.

In July 2023, the SEC adopted new rules relating to disclosure of cybersecurity risk management, strategy, governance, and incidents by public companies. These new rules have two primary requirements for domestic public companies: (1) disclosure of material cybersecurity incidents on Form 8-K within four business days of determining that a cybersecurity matter is material and (2) annual disclosure of a company’s risk management, strategy, and governance relating to cybersecurity matters on Form 10-K, included within Item 1C - Cybersecurity.

Environmental Laws

Environmentally-related hazards are a source of high risk and potentially significant liability for financial institutions related to their loans. Environmentally contaminated properties owned by an institution’s borrowers may result in a drastic reduction in the value of the collateral securing the institution’s loans to such borrowers, high environmental cleanup costs to the borrower affecting its ability to repay its loans, the subordination of any lien in favor of the institution to a state or federal lien securing clean-up costs, and liability to the institution for cleanup costs if it forecloses on the contaminated property or becomes involved in the management of the borrower. In addition to property examinations, the Company performs environmental reviews of its clients in oil & gas, metals, mining, and other industries with an environmental impact. To minimize this risk, SBNA may require an environmental examination of, and reports with respect to, the property of any borrower or prospective borrower if circumstances affecting the property indicate a potential for contamination, taking into consideration the potential loss to the institution in relation to the burdens to the borrower. Such examination must be performed by an engineering firm experienced in environmental risk studies and acceptable to the institution, and the costs of such examinations and reports are the responsibility of the borrower. These costs may be substantial and may deter a prospective borrower from entering into a loan transaction with SBNA. The Company is not aware of any borrower which is currently subject to any environmental investigation or clean-up proceeding or any other environmental matter that is likely to have a material adverse effect on the financial condition or results of operations of SHUSA or its subsidiaries.

Securities and Investment Regulation

The Company conducts its securities and investment business activities through its subsidiaries SanCap and SSLLC. SanCap and SSLLC are registered broker-dealers with the SEC and members of FINRA. SanCap's activities include investment banking, acting as a market maker of U.S. fixed-income securities and self-clearing fixed-income securities, and trading and offering research reports of Latin American and European equity and fixed income securities. SSLLC is also a registered investment adviser with the SEC, and BSI conducts certain securities transactions exempt from SEC registration on behalf of its clients.

Written Agreements and Regulatory Actions

See the “Regulatory Matters” section of the MD&A and Note 22 of the Consolidated Financial Statements in this Annual Report on Form 10-K for a description of current regulatory actions.

Corporate Information

All reports filed electronically by the Company with the SEC, including the Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, as well as any amendments to those reports, are accessible on the SEC’s website atwww.sec.gov. Our filings are also accessible through our website at: https://www.santanderus.com/us/investorshareholderrelations. The information contained on our website is not being incorporated herein and is provided for the information of the reader.