Santander Holdings USA, Inc.

Previous wording

In December 2023, SBNA acquired a 20 percent interest in the Structured LLC for approximately $1.1 billion. The Structured LLC was established by the FDIC to hold and service a $9.0 billion portfolio primarily consisting of New York based rent-controlled and rent-stabilized multifamily loans retained by the FDIC following a recent bank failure. SBNA's 20 percent interest is reported as an AFS debt security that had a fair value of approximately $1.1 billion and $1.1 billion at March 31, 2024 and December 31, 2023, respectively As of March 31, 2024, SBNA serviced approximately $8.9 billion of multi-family loans for the Structured LLC and receives a market rate servicing fee in the accompanying Condensed Consolidated Statements of Operations.

Current wording

In December 2023, SBNA acquired a 20 percent interest in the Structured LLC for approximately $1.1 billion. The Structured LLC was established by the FDIC to hold and service a $9.0 billion portfolio primarily consisting of New York based rent-controlled and rent-stabilized multifamily loans retained by the FDIC following a recent bank failure. SBNA's 20 percent interest is reported as an AFS debt security that had a fair value of approximately $1.1 billion and $1.1 billion at June 30, 2024 and December 31, 2023, respectively As of June 30, 2024, SBNA serviced approximately $8.8 billion of multi-family loans for the Structured LLC and receives a market rate servicing fee in the accompanying Condensed Consolidated Statements of Operations.

Previous wording

The unemployment rate at March 31, 2024 was 3.8% compared to 3.5% one year ago. According to the U.S. Bureau of Labor Statistics, employment continued to trend up in government, health care, social assistance, and construction.

Current wording

The unemployment rate at June 30, 2024 was 4.1% compared to 3.8% at March 31, 2024 and 3.6% one year ago. According to the U.S. Bureau of Labor Statistics, employment continued to trend up in government, health care, social assistance, and construction.

Previous wording

The ten-year Treasury bond rate at March 31, 2024 was 4.21%, up from 3.87% at December 31, 2023.

Current wording

The ten-year Treasury bond rate at June 30, 2024 was 4.34%, up from 3.87% at December 31, 2023.

Previous wording

One of the primary metrics used by the market to monitor the strength of the used car market is the Manheim Used Vehicle Index. The Manheim Used Vehicle Value Index, based on the 1997 Manheim based index, decreased from 204 at December 31, 2023 to 203.1 at March 31, 2024.

Current wording

One of the primary metrics used by the market to monitor the strength of the used car market is the Manheim Used Vehicle Index. The Manheim Used Vehicle Value Index, based on the 1997 Manheim based index, decreased from 204 at December 31, 2023 to 196.1 at June 30, 2024.

Previous wording

The failure of several large U.S. banking institutions in early 2023 has led to increased market uncertainty. The Company was not materially impacted by these events; however, changing market conditions are considered a significant risk factor to the Company. These factors have increased competition and pricing on customer deposits over the short and medium term, and heightened market and regulatory focus and reform on liquidity, capital, and interest rate risk. As a result, the FDIC published a proposed rule, which was finalized 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 with the first quarter 2024 assessment period. SBNA accrued for the full amount of the special assessment during the fourth quarter of 2023. In the first quarter of 2024, the FDIC communicated that it will increase the assessment for all banks, which will be reported in its June 2024 special assessment invoice. The Company did not adjust its FDIC special assessment accrual in the first quarter of 2024, as there was uncertainty as to the incremental charges that will ultimately be levied by the FDIC. The Company will re-evaluate its accrual upon receipt of FDIC communications expected in the second quarter of 2024. Refer to the “Regulatory Matters” section of the MD&A for further details. These changing market conditions and uncertainty will likely present challenges in the growth of net interest income, and increased credit risk and associated credit loss expense, and could have an overall impact on the Company's results of operations. It is not possible to quantify the impact of changing market conditions, uncertainty, or regulatory action on the Company's results of operations.

Current wording

The failure of several large U.S. banking institutions in early 2023 has led to increased market uncertainty. The Company was not materially impacted by these events; however, changing market conditions are considered a significant risk factor to the Company. These factors have increased competition and pricing on customer deposits over the short and medium term, and heightened market and regulatory focus and reform on liquidity, capital, and interest rate risk. As a result, the FDIC published a proposed rule, which was finalized 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 initial final rule, SBNA would be required to pay a total of $61.5 million over the course of eight consecutive quarters beginning with the first quarter 2024 assessment period. SBNA accrued for the full amount of the special assessment during the fourth quarter of 2023. In the first quarter of 2024, the FDIC communicated that it would increase the assessment for all banks, which was reported in its June 2024 special assessment invoice. During the second quarter of 2024, SBNA recorded an additional $10.7 million to be paid over the course of two additional quarters. Refer to the “Regulatory Matters” section of the MD&A for further details. These changing market conditions and uncertainty will likely present challenges in the growth of net interest income, and increased credit risk and associated credit loss expense, and could have an overall impact on the Company's results of operations. It is not possible to quantify the impact of changing market conditions, uncertainty, or regulatory action on the Company's results of operations.

Previous wording

On March 4, 2020, the Federal Reserve adopted a final rule to simplify capital rules for large banks. Under the final rule, firms' supervisory stress test results are now used to establish the size of the SCB requirement. The SCB is calculated as the maximum decline in CET1 in the severely adverse scenario (subject to a 2.5% floor) plus four quarters of dividends. The rule results in new firm-specific regulatory capital expectations which are equal to 4.5% of CET1 plus the SCB, any GSIB surcharge, and any countercyclical capital buffer. The GSIB buffer is applicable only to the largest and most complex firms and does not apply to SHUSA. In the event a firm falls below its new minimums, the rule imposes restrictions on capital distributions and discretionary bonuses. Firms continue to submit a capital plan annually. Supervisory expectations for capital planning processes do not change under the final rule. As of March 31, 2024, SHUSA's SCB CET1 minimum requirement was 7.0%.

Current wording

On March 4, 2020, the Federal Reserve adopted a final rule to simplify capital rules for large banks. Under the final rule, firms' supervisory stress test results are now used to establish the size of the SCB requirement. The SCB is calculated as the maximum decline in CET1 in the severely adverse scenario (subject to a 2.5% floor) plus four quarters of dividends. The rule results in new firm-specific regulatory capital expectations which are equal to 4.5% of CET1 plus the SCB, any GSIB surcharge, and any countercyclical capital buffer. The GSIB buffer is applicable only to the largest and most complex firms and does not apply to SHUSA. In the event a firm falls below its new minimums, the rule imposes restrictions on capital distributions and discretionary bonuses. Firms continue to submit a capital plan annually. Supervisory expectations for capital planning processes do not change under the final rule. As of June 30, 2024, SHUSA's SCB CET1 minimum requirement was 7.0%. SHUSA’s SCB CET1 minimum requirement is expected to increase to 8.0% as of October 1, 2024.

Previous wording

On July 27, 2023, the federal banking agencies issued a capital proposal that would make significant changes to the regulatory capital rules applicable to large banking organizations (including SHUSA and SBNA) and banking organizations with significant trading activity. This proposal would implement the final elements of the Basel III capital framework and make other changes to the regulatory capital rules in response to recent bank failures. The capital proposal would establish the expanded risk-based approach for calculating RWA that would apply to large banking organizations. The expanded risk-based approach would include a new more risk-sensitive standardized approach for measuring credit risk and operational risk. It would also include new standardized approaches for measuring market risk and credit valuation adjustment risk but would allow the use of internal models for market risk in certain circumstances with regulatory approval. Under the capital proposal, a large banking organization would be required to calculate its risk-based capital ratios under both the expanded risk-based approach and the current standardized approach and would use the lower of the two. All capital buffer requirements, including the SCB requirement, would apply regardless of whether the expanded risk-based approach or the existing standardized approach produces the lower ratio.

Current wording

On July 27, 2023, the federal banking agencies issued a capital proposal that would make significant changes to the regulatory capital rules applicable to large banking organizations (including SHUSA and SBNA) and banking organizations with significant trading activity. This proposal would implement the final elements of the Basel III capital framework and make other changes to the regulatory capital rules in response to recent bank failures. The capital proposal would establish the expanded risk-based approach for calculating RWAs that would apply to large banking organizations. The expanded risk-based approach would include a new more risk-sensitive standardized approach for measuring credit risk and operational risk. It would also include new standardized approaches for measuring market risk and credit valuation adjustment risk but would allow the use of internal models for market risk in certain circumstances with regulatory approval. Under the capital proposal, a large banking organization would be required to calculate its risk-based capital ratios under both the expanded risk-based approach and the current standardized approach and would use the lower of the two. All capital buffer requirements, including the SCB requirement, would apply regardless of whether the expanded risk-based approach or the existing standardized approach produces the lower ratio.

Previous wording

The expanded total RWA calculation used in the expanded risk-based approach would be phased in over a three-year period starting on July 1, 2025. The requirement to reflect AOCI in regulatory capital would also be phased in over a three-year period starting on July 1, 2025. All other elements of the calculation of regulatory capital would apply on the effective date of the final rule, which is expected to be on or about July 1, 2025. On October 20, 2023, the federal banking agencies announced that they extended the comment period on the capital proposal from November 30, 2023 until January 16, 2024. In addition to pushing back the comment deadline, the Federal Reserve indicated it would begin collecting data to gather more information from the banks affected by the proposal. That data collection also ended on January 16, 2024. The proposed rules and their impact on SHUSA are under review.

Current wording

The total RWA calculation used in the expanded risk-based approach would be phased in over a three-year period starting on July 1, 2025. The requirement to reflect AOCI in regulatory capital would also be phased in over a three-year period starting on July 1, 2025. All other elements of the calculation of regulatory capital would apply on the effective date of the final rule, which is expected to be on or about July 1, 2025. On October 20, 2023, the federal banking agencies announced that they extended the comment period on the capital proposal from November 30, 2023 until January 16, 2024. In addition to pushing back the comment deadline, the Federal Reserve indicated it would begin collecting data to gather more information from the banks affected by the proposal. That data collection also ended on January 16, 2024. The proposed rules and their impact on SHUSA are under review.

Previous wording

The recent failure of several large U.S. banking institutions has led to increased market uncertainty. Under the FDIA, the loss to the DIF arising from the use of the systemic risk exception must be recovered through one or more special assessments on IDIs, depository institution holding companies, or both, as the FDIC determines to be appropriate. On May 11, 2023, the FDIC issued for public comment a proposed rule to impose a special assessment on IDIs to recover the loss to the DIF resulting from the use of the systemic risk exception to protect the uninsured depositors of the failed U.S. banking institutions. The final rule was issued on November 16, 2023. Under the final rule, the FDIC would collect a special assessment from IDIs at a quarterly rate of approximately 3.36 basis points over eight quarterly assessment periods, starting with the first quarterly assessment period of 2024. The assessment base for the special assessment is equal to an IDI’s estimated uninsured deposits reported as of December 31, 2022, adjusted to exclude the first $5 billion in estimated uninsured deposits held by the IDI. The special assessment is a tax-deductible operating expense for IDIs, and the effect on income of the entire amount of the special assessment will occur in one quarter for the IDIs subject to the assessment.

Current wording

The recent failure of several large U.S. banking institutions has led to increased market uncertainty. Under the FDIA, the loss to the DIF arising from the use of the systemic risk exception must be recovered through one or more special assessments on IDIs, depository institution holding companies, or both, as the FDIC determines to be appropriate. On May 11, 2023, the FDIC issued for public comment a proposed rule to impose a special assessment on IDIs to recover the loss to the DIF resulting from the use of the systemic risk exception to protect the uninsured depositors of the failed U.S. banking institutions. The final rule was issued on November 16, 2023. Under the final rule, the FDIC would collect a special assessment from IDIs at a quarterly rate of approximately 3.36 basis points over eight quarterly assessment periods, starting with the first quarterly assessment period of 2024. In June of 2024 the FDIC added an additional assessment to be collected at a quarterly rate of approximately 2.34 basis points over an additional two quarters, resulting in an additional accrual of $10.7 million that was recorded during the second quarter of 2024. The assessment base for the special assessment is equal to an IDI’s estimated uninsured deposits reported as of December 31, 2022, adjusted to exclude the first $5 billion in estimated uninsured deposits held by the IDI. The special assessment is a tax-deductible operating expense for IDIs, and the effect on income of the entire amount of the special assessment will occur in one quarter for the IDIs subject to the assessment. The total impact of the special assessment is $72.1 million.

Previous wording

Net interest income decreased $132.9 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. The most significant factors contributing to this change were as follows:

Current wording

Net interest income decreased $88.0 million and decreased $220.9 million for the three months and six months ended June 30, 2024, respectively, compared to the corresponding periods in 2023. The most significant factors contributing to these changes were as follows:

Previous wording

•Interest income on interest-earning deposits increased $62.7 million for the three months ended March 31, 2024 compared to the corresponding period in 2023. This change is attributed to an increase in average interest-bearing deposits volume of $59.8 million and an increase in average rates of $2.9 million. This change is primarily driven by the changing interest rate environment.

Current wording

•Interest income on interest-earning deposits increased $10.3 million and increased $73.0 million for the three months and six months ended June 30, 2024, respectively, compared to the corresponding periods in 2023. The three-month period change is attributable to an increase in average interest-bearing deposits volume of $14.5 million and an decrease in average rates of $4.2 million. The six month period change is attributable to an increase in average interest-bearing deposits volume of $74.5 million and an decrease in average rates of $1.5 million.

Previous wording

•Interest and fees on federal funds sold and securities purchased under resale agreements or similar arrangements increased $115.3 million for the three months ended March 31, 2024, compared to the corresponding period in 2023. This change is attributed to an increase in average rates of $121.4 million.

Current wording

•Interest and fees on federal funds sold and securities purchased under resale agreements or similar arrangements increased $149.9 million and increased $265.2 million for the three months and six months ended June 30, 2024, respectively, compared to the corresponding periods in 2023. The three-month period change is attributable to a increase in average federal funds sold and securities purchased under resale agreements or similar arrangements volume of $44.7 million and an increase in average rates of $105.2 million. The six month period change is attributable to an increase in average rates of $222.9 million.

Previous wording

•Interest income on investment securities increased $90.1 million for the three months ended March 31, 2024 compared to the corresponding period in 2023. This change is attributed to an increase in average investment securities volume of $44.5 million and an increase in average rates of $45.6 million. The change is primarily driven by an increase in interest rates during the year.

Current wording

•Interest income on investment securities increased $63.5 million and increased $153.6 million for the three months and six months ended June 30, 2024, respectively, compared to the corresponding periods in 2023. The three-month period change is attributable to an increase in average investment securities volume of $28.9 million and an increase in average rates of $34.7 million. The six month period change is attributable to an increase in average investment securities volume of $73.4 million and an increase in average rates of $80.2 million. These changes are primarily driven by an increase in interest rates during the year.

Previous wording

•Interest expense on deposits and related customer accounts increased $210.1 million for the three months ended March 31, 2024, compared to the corresponding period in 2023. This change is attributed to an increase in average interest-bearing deposit volume of $45.8 million and an increase in average rates of $164.3 million. The increase in average rates is primarily attributed to money market and CD products.

Current wording

•Interest expense on deposits and related customer accounts increased $161.6 million and increased $371.7 million for the three months and six months ended June 30, 2024, respectively, compared to the corresponding periods in 2023. The three-month period change is attributed to an increase in average interest-bearing deposit volume of $39.3 million and an increase in average rates of $122.3 million. The six month period change is attributable to an increase in average interest-bearing deposit volume of $84.9 million and an increase in average rates of $286.8 million. The increase in average rates is primarily attributable to money market and CD products.

Previous wording

•Interest expense on Securities Financing Activities and borrowed funds increased $324.5 million for the three months ended March 31, 2024 compared to the corresponding period in 2023. This change is attributed to an increase in average Securities Financing Activities and borrowed funds volume of $69.0 million and an increase in average rates of $255.5 million.

Current wording

•Interest expense on Securities Financing Activities and borrowed funds increased $259.6 million and increased $584.1 million for the three months and six months ended June 30, 2024, respectively, compared to the corresponding periods in 2023. The three-month period change is attributable to a increase in average Securities Financing Activities and borrowed funds volume of $86.5 million and an increase in average rates of $173.1 million. The six month period change is attributable to an increase in average Securities Financing Activities and borrowed funds volume of $160.1 million and an increase in average rates of $424.0 million. Both changes were mostly attributable to an increase in Securities Financing Activities.

Previous wording

The Company had credit loss expense of $405.0 million for the three months ended March 31, 2024, compared to a credit loss expense of $542.4 million for the corresponding period in 2023. The credit loss expense during the three months ended March 31, 2024 was mainly due to RICs and personal unsecured loans charge-offs, partially offset by the decrease in ACL driven by improvement in the macroeconomic outlook for certain macro variables, seasonally expected lower delinquencies in RICs and auto loans, sale of certain RICs and auto loans and lower exposure in Personal unsecured loans.

Current wording

The Company had credit loss expense of $481.2 million and $886.2 million for the three months and six months ended June 30, 2024, compared to a credit loss expense of $208.9 million and $751.3 million for the corresponding periods in 2023. The credit loss expense during the three months and six months ended June 30, 2024 was mainly due to RICs and personal unsecured loans charge-offs, partially offset by the decrease in ACL driven by improvement in the macroeconomic outlook for certain macro variables, seasonally expected lower delinquencies in RICs and auto loans, sale of certain RICs and auto loans and lower exposure in personal unsecured loans.

Previous wording

Credit loss expense on commercial loans decreased $37.3 million for the three months ended March 31, 2024, compared to the corresponding period in 2023, primarily driven by improved macroeconomic scenarios during Q1 2024.

Current wording

Credit loss expense on commercial loans decreased $1.9 million and decreased $39.3 million for the three months and six months ended June 30, 2024, compared to the corresponding periods in 2023, primarily driven by improved macroeconomic scenarios, pay-offs and charge-offs, partially offset by rating downgrades in the Multifamily portfolio.

Previous wording

Credit loss expense on consumer loans decreased $96.4 million for the three months ended March 31, 2024, compared to the corresponding period in 2023, primarily driven by the release of approximately $96.0 million of reserves related to the sale of approximately $1.1 billion of gross RICs. Net charge-offs on the consumer loan portfolios increased $132.9 million for the three months ended March 31, 2024, compared to the corresponding period in 2023, as current year activity reflects normalization in credit performance post pandemic. In addition, there has been an increase in net charge-offs in the personal unsecured loan portfolio because of high borrowing costs and persistent inflation.

Current wording

Credit loss expense on consumer loans increased $278.4 million and increased $182.1 million for the three months and six months ended June 30, 2024, compared to the corresponding periods in 2023, primarily driven by reserves build up during the second quarter of 2024. The increase for the six months ended June 30, 2024 was offset by the release of approximately $96.0 million of reserves related to the sale of approximately $1.1 billion of gross RICs during the first quarter of 2024. Net charge-offs on the consumer loan portfolios increased $114.0 million and increased $246.9 million for the three months and six months ended June 30, 2024, compared to the corresponding periods in 2023, as current year activity reflects normalization in credit performance post pandemic. In addition, there has been an increase in net charge-offs in the personal unsecured loan portfolio because of high borrowing costs and persistent inflation.

Previous wording

The credit loss expense on unfunded credit losses for the three months ended March 31, 2024 increased $3.7 million compared to the corresponding period in 2023.

Current wording

The credit loss expense on unfunded credit losses for the three months and six months ended June 30, 2024 decreased $4.1 million and decreased $7.8 million compared to the corresponding periods in 2023.

Previous wording

•Lease income decreased $35.0 million for the three months ended March 31, 2024 compared to the corresponding period in 2023, primarily due to less active leased vehicle units.

Current wording

•Lease income decreased $61.3 million and $96.3 million for the three months and six months ended June 30, 2024 compared to the corresponding periods in 2023, primarily due to less active leased vehicle units.

Previous wording

•Capital market revenue increased $78.9 million for the three months ended March 31, 2024 compared to the corresponding period in 2023, primarily due to an increase in investment banking fee income and trading derivatives gains.

Current wording

•Capital market revenue increased $21.5 million and $100.4 million for the three months and six months ended June 30, 2024 compared to the corresponding periods in 2023, primarily due to an increase in investment banking fee income and trading derivatives gains.

Previous wording

•Miscellaneous income, net decreased $28.5 million for the three months ended March 31, 2024 compared to the corresponding period in 2023, discussed further below.

Current wording

•Miscellaneous income, net increased $85.4 million and $56.9 million for the three months and six months ended June 30, 2024 compared to the corresponding periods in 2023, discussed further below.

Previous wording

•Net gains recognized in earnings increased $28.2 million for three months ended March 31, 2024 compared to the corresponding period in 2023, primarily due to an increase from trading securities gains during 2024.

Current wording

•Net gains recognized in earnings increased $29.5 million and $57.7 million for the three months and six months ended June 30, 2024 compared to the corresponding periods in 2023, primarily due to an increase from trading securities gains during 2024.

Previous wording

•a decrease in Other miscellaneous income / (loss), net due to a decrease in gains on securitizations and a decrease in miscellaneous fee income.

Current wording

•An increase in Other miscellaneous income / (loss), net driven by management fees income.

Previous wording

•Technology, outside services, and marketing expense increased $15.0 million for the three months ended March 31, 2024 compared to the corresponding period in 2023 due to higher technology vendor expense, corporate function projects, and higher advertising costs.

Current wording

•Technology, outside services, and marketing expense increased $24.9 million and $39.9 million for the three months and six months ended June 30, 2024, respectively, compared to the corresponding periods in 2023, due to increasing technology costs related to continued banking system build outs.

Previous wording

•Lease expense decreased $25.4 million for the three months ended March 31, 2024, compared to the corresponding period in 2023, due to lower auto lease volumes resulting in lower depreciation expense.

Current wording

•Lease expense decreased $58.9 million and $84.4 million for the three months and six months and six months ended June 30, 2024, respectively, compared to the corresponding periods in 2023, due to lower auto lease volumes resulting in lower depreciation expense.

Previous wording

Income tax expense of $7.8 million and $28.2 million was recorded for the three months ended March 31, 2024 and 2023, respectively. This resulted in an ETR of 2.2% for the three months ended March 31, 2024 compared to 8.7% for the corresponding period in 2023.

Current wording

Income tax benefit of $49.8 million and $42.1 million was recorded for the three months and six months ended June 30, 2024, respectively, compared to expense of $64.6 million and $92.8 million for the corresponding periods in 2023. This resulted in an ETR of (13.7)% and (5.9)% for the three months and six months ended June 30, 2024, respectively, compared to 10.1% and 9.6% for the corresponding periods in 2023.

Previous wording

The income tax expense recorded (and related ETR) for the three months ended March 31, 2024 was directly impacted by an increase in forecasted electric vehicle tax credits expected to be generated in 2024 when compared to the first quarter of 2023.

Current wording

The ETR for the three months ended June 30, 2024 and six months ended June 30, 2024 periods when compared to the ETR of the same periods in 2023, was directly impacted by an increased level of forecasted electric vehicle tax credits expected to be generated in 2024.

Previous wording

The Company reported total income before income taxes related to its Consumer activities of $303.9 million for the three months ended March 31, 2024 compared to income before income taxes of $317.2 million for the corresponding period in 2023. The most significant drivers of this change were:

Current wording

The Company reported total income before income taxes related to its Consumer activities of $385.4 million and $689.4 million for the three months and six months ended June 30, 2024, respectively, compared to income before income taxes of $650.1 million and $967.3 million for the corresponding periods in 2023. The most significant drivers of these changes were:

Previous wording

Commercial activities consist of the Company's C&I reportable segment and CRE reportable segment.

Current wording

Commercial activities consists of the Company's C&I reportable segment and CRE reportable segment.

Previous wording

The Company reported total income before income taxes related to its Commercial activities of $160.9 million for the three months ended March 31, 2024 compared to income before income taxes of $80.7 million for the corresponding period in 2023. The most significant drivers of this change were:

Current wording

The Company reported total income before income taxes related to its Commercial activities of $160.0 million and $320.9 million, for the three months and six months ended June 30, 2024, respectively, compared to income before income taxes of $106.8 million and $187.5 million for the corresponding periods in 2023. The most significant drivers of these changes were:

Previous wording

CIB reported income before income taxes of $9.0 million for the three months ended March 31, 2024 compared to income before income taxes of $40.5 million for the corresponding period in 2023. Factors contributing to this change were:

Current wording

CIB reported an income before income taxes of $10.7 million and income before income taxes of $19.7 million for the three months and six months ended June 30, 2024, respectively, compared to an income before income taxes of $34.6 million and income before income taxes of $75.1 million for the corresponding periods in 2023. Factors contributing to these changes were:

Previous wording

•Total non-interest income increased $75.1 million for the three months ended March 31, 2024 compared to the corresponding period in 2023. This increase was due to fees generated from the CIB build out initiative and increased gains on trading activity.

Current wording

•Total non-interest income increased $96.5 million and increased $171.7 million for the three months and six months ended June 30, 2024, respectively, compared to the corresponding periods in 2023. These increases were due to increased fee income from the CIB build out strategy and gains on trading activity.

Previous wording

Wealth Management reported income before income taxes of $77.5 million for the three months ended March 31, 2024, compared to income before income taxes of $59.2 million for the corresponding period in 2023. The primary factors contributing to this change were:

Current wording

Wealth Management reported income before income taxes of $66.4 million and $143.9 million for the three months and six months ended June 30, 2024, respectively, compared to income before income taxes of $69.0 million and $128.1 million for the corresponding periods in 2023. The primary factor contributing to these changes was:

Previous wording

The Other category reported a loss before income taxes of $200.5 million for the three months ended March 31, 2024, compared to a loss before income taxes of $172.5 million for the corresponding period in 2023. The primary factors contributing to this change were:

Current wording

The Other category reported losses before income taxes of $257.6 million and $458.1 million for the three months and six months ended June 30, 2024, respectively, compared to losses before income taxes of $221.7 million and $394.3 million for the corresponding periods in 2023. The primary factors contributing to these changes were:

Previous wording

(1) As of March 31, 2024, the Company had $331.0 million of commercial loans that were denominated in a currency other than the U.S. dollar.

Current wording

(1) As of June 30, 2024, the Company had $365.0 million of commercial loans that were denominated in a currency other than the U.S. dollar.

Previous wording

Commercial loans decreased approximately $339.2 million, or 0.9% from December 31, 2023 to March 31, 2024. This decrease was primarily attributed to a decrease in C&I loans of $356.7 million, a decrease in Multifamily loans of $316.6 million, partially offset by an increase in CRE loans of $326.1 million.

Current wording

Commercial loans decreased approximately $848.9 million, or 2.2%, from December 31, 2023 to June 30, 2024. This decrease was primarily attributable to a decrease in C&I loans of $604.3 million and a decrease in Multifamily loans of $404.2 million, partially offset by an increase in CRE loans of $220.1 million.

Previous wording

Consumer loans secured by real estate decreased $203.0 million from December 31, 2023 to March 31, 2024. This decrease primarily resulted from the Company’s decision to stop the origination of new residential mortgage and home equity loans in the first quarter of 2022.

Current wording

Consumer loans secured by real estate decreased $378.5 million from December 31, 2023 to June 30, 2024. This decrease primarily resulted from the Company’s decision to stop the origination of new residential mortgage and home equity loans in the first quarter of 2022.

Previous wording

RICs are collateralized by vehicle titles, and the lender has the right to repossess the vehicle in the event the consumer defaults on the payment terms of the contract. A significant portion of the Company's RICs HFI are pledged against warehouse lines or securitization bonds. Refer to further discussion of these in Note 9 to the Condensed Consolidated Financial Statements.

Current wording

RICs and auto loans increased $1.2 billion from December 31, 2023 to June 30, 2024. RICs are collateralized by vehicle titles, and the lender has the right to repossess the vehicle in the event the consumer defaults on the payment terms of the contract. A significant portion of the Company's RICs HFI are pledged against warehouse lines or securitization bonds. Refer to further discussion of these in Note 9 to the Condensed Consolidated Financial Statements.

Previous wording

As of March 31, 2024, 59.7% of the Company's RIC and auto loan portfolio balance was comprised of nonprime loans (defined by the Company as customers with a FICO score of below 640) with customers who did not qualify for conventional consumer finance products as a result of, among other things, a lack of or adverse credit history, low income levels and/or the inability to provide adequate down payments. This also includes 6.1% of loans for which no FICO score was available. While underwriting guidelines are designed to establish that the customer would be a reasonable credit risk, nonprime loans will nonetheless experience higher default rates than a portfolio of obligations of prime customers. Additionally, higher unemployment rates, higher gasoline prices, unstable real estate values, re-sets of adjustable rate mortgages to higher interest rates, the general availability of consumer credit, and other factors that impact consumer confidence or disposable income could lead to an increase in delinquencies, defaults, and repossessions, as well as decreased consumer demand for used automobiles and other consumer products, weaken collateral values and increase losses in the event of default. Because of the historical focus for such credit has been predominantly on nonprime consumers, the actual rates of delinquencies, defaults, repossessions, and losses on these loans could be more dramatically affected by a general economic downturn.

Current wording

As of June 30, 2024, 59% of the Company's RIC and auto loan portfolio balance was comprised of nonprime loans (defined by the Company as customers with a FICO score of below 640) with customers who did not qualify for conventional consumer finance products as a result of, among other things, a lack of or adverse credit history, low income levels and/or the inability to provide adequate down payments. This also includes 6.1% of loans for which no FICO score was available. While underwriting guidelines are designed to establish that the customer would be a reasonable credit risk, nonprime loans will nonetheless experience higher default rates than a portfolio of obligations of prime customers. Additionally, higher unemployment rates, higher gasoline prices, unstable real estate values, re-sets of adjustable rate mortgages to higher interest rates, the general availability of consumer credit, and other factors that impact consumer confidence or disposable income could lead to an increase in delinquencies, defaults, and repossessions, as well as decreased consumer demand for used automobiles and other consumer products, weaken collateral values and increase losses in the event of default. Because of the historical focus for such credit has been predominantly on nonprime consumers, the actual rates of delinquencies, defaults, repossessions, and losses on these loans could be more dramatically affected by a general economic downturn.