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 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.

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 $1.2 billion and $1.1 billion at September 30, 2024 and December 31, 2023, respectively. As of September 30, 2024, SBNA serviced approximately $8.7 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 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.

Current wording

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

Previous wording

At its June 2024 meeting, the FOMC maintained the federal funds rate target range of 5.25% - 5.50%. The FOMC continues to focus its policy making on maximum employment and achieving a 2.0% inflation target rate.

Current wording

At its September 2024 meeting, the FOMC lowered the federal funds rate target range of 4.75% - 5.00%. The FOMC continues to focus its policy making on maximum employment and achieving a 2.0% inflation target rate.

Previous wording

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

Current wording

The ten-year Treasury bond rate at September 30, 2024 was 3.80%, down 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 196.1 at June 30, 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 203 at September 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 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.

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 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 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 this 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

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. The Company is regulated on a consolidated basis by the Federal Reserve, including the FRB of Boston, and the CFPB. The Company's subsidiaries are further supervised by the OCC, the FRB of Atlanta, and the New York Department of Financial Services.

Current wording

The activities of the Company and its subsidiaries 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. The Company is regulated on a consolidated basis by the Federal Reserve, including the FRB of Boston, and the CFPB. The Company's subsidiaries are further supervised by the OCC, the FRB of Atlanta, and the New York Department of Financial Services.

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 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.

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 September 30, 2024, SHUSA's SCB CET1 minimum requirement was 7.0%. SHUSA’s SCB CET1 minimum requirement increased to 8.0% as of October 1, 2024.

Previous 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.

Current wording

The total RWA calculation used in the expanded risk-based approach would be phased in over a three-year period. The requirement to reflect AOCI in regulatory capital would also be phased in over a three-year period. All other elements of the calculation of regulatory capital would apply on the effective date of the final rule. 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

On June 20, 2024, the FDIC issued a final rule, that will take effect on October 1, 2024, which revises the IDI resolution planning requirements. The final rule requires IDIs with assets of $100 billion or more, including SBNA, to submit a full resolution plan every three years, with interim supplements filed in the off-years.

Current wording

On June 20, 2024, the FDIC issued a final rule that took effect on October 1, 2024, which revises the IDI resolution planning requirements. The final rule requires IDIs with assets of $100 billion or more, including SBNA, to submit a full resolution plan every three years, with interim supplements filed in the off-years.

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. 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.

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 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

SBNA is subject to the requirements of the CRA, which requires the appropriate federal financial supervisory agency to assess an institution's record of helping to meet the credit needs of the local communities in which it is located. SBNA’s current CRA rating is "Outstanding." The OCC takes into account SBNA’s CRA rating in considering certain regulatory applications SBNA makes, including applications related to establishing and relocating branches, and the Federal Reserve does the same with respect to certain regulatory applications the Company makes.

Current wording

SBNA is subject to the requirements of the CRA, which requires the appropriate federal financial supervisory agency to assess an institution's record of helping to meet the credit needs of the local communities in which it is located. SBNA's current rating is Outstanding, the second consecutive examination period for which SBNA has received the highest rating possible. The OCC takes into account SBNA’s CRA rating in considering certain regulatory applications SBNA makes, including applications related to establishing and relocating branches, and the Federal Reserve does the same with respect to certain regulatory applications the Company makes.

Previous 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:

Current wording

Net interest income decreased $87.7 million and decreased $308.6 million for the three months and nine months ended September 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 loans increased $109.4 million and increased $243.1 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 an decrease in average loan volume of $94.1 million and an increase in average rates of $203.5 million. The six-month period change is attributable to an decrease in average loan volume of $137.8 million and an increase in average rates of $380.8 million. Refer to the discussion of changes in loan balances in the "Loan Portfolio" section of this MD&A. The increases are also attributable to interest rate increases.

Current wording

•Interest income on loans increased $51.0 million and increased $294.0 million for the three months and nine months ended September 30, 2024, respectively, compared to the corresponding periods in 2023. The three-month period change is attributable to a decrease in average loan volume of $50.2 million and an increase in average rates of $101.2 million. The nine-month period change is attributable to a decrease in average loan volume of $236.9 million and an increase in average rates of $530.9 million. Refer to the discussion of changes in loan balances in the "Loan Portfolio" section of this MD&A. The increases are also attributable to interest rate increases.

Previous 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.

Current wording

•Interest income on interest-earning deposits increased $3.6 million and increased $76.6 million for the three months and nine months ended September 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 $15.4 million and a decrease in average rates of $11.8 million. The nine-month period change is attributable to an increase in average interest-bearing deposits volume of $94.6 million and a decrease in average rates of $18.1 million.

Previous 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.

Current wording

•Interest and fees on federal funds sold and securities purchased under resale agreements or similar arrangements increased $148.0 million and increased $413.2 million for the three months and nine months ended September 30, 2024, respectively, compared to the corresponding periods in 2023. The three-month period change is attributable to an increase in average federal funds sold and securities purchased under resale agreements or similar arrangements volume of $77.9 million and an increase in average rates of $70.1 million. The nine-month period change is attributable to an increase in average federal funds sold and securities purchased under resale agreements or similar arrangements volume of $118.2 million and an increase in average rates of $295.0 million.

Previous 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.

Current wording

•Interest income on investment securities increased $76.7 million and increased $230.3 million for the three months and nine months ended September 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 $51.4 million and an increase in average rates of $25.3 million. The nine-month period change is attributable to an increase in average investment securities volume of $125.5 million and an increase in average rates of $104.8 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 $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.

Current wording

•Interest expense on deposits and related customer accounts increased $87.3 million and increased $459.0 million for the three months and nine months ended September 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 $22.1 million and an increase in average rates of $65.2 million. The nine-month period change is attributable to an increase in average interest-bearing deposit volume of $108.1 million and an increase in average rates of $350.9 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 $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.

Current wording

•Interest expense on Securities Financing Activities and borrowed funds increased $279.5 million and increased $863.6 million for the three months and nine months ended September 30, 2024, respectively, compared to the corresponding periods in 2023. The three-month period change is attributable to an increase in average Securities Financing Activities and borrowed funds volume of $178.1 million and an increase in average rates of $101.4 million. The nine-month period change is attributable to an increase in average Securities Financing Activities and borrowed funds volume of $335.7 million and an increase in average rates of $527.9 million. Both changes were mostly attributable to an increase in Securities Financing Activities.

Previous 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.

Current wording

The Company had credit loss expense of $431.3 million and $1.3 billion for the three months and nine months ended September 30, 2024, respectively, compared to a credit loss expense of $856.3 million and $1.6 billion for the corresponding periods in 2023. The credit loss expense during the three months and nine months ended September 30, 2024 was mainly due to RICs and personal unsecured loan 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 personal unsecured loans and off-balance sheet securitizations of RICs and auto loans.

Previous 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.

Current wording

Credit loss expense on commercial loans decreased $37.5 million and decreased $76.7 million for the three months and nine months ended September 30, 2024, respectively, compared to the corresponding periods in 2023, primarily driven by improved macroeconomic outlook for certain micro variables and lower exposure, partially offset by rating downgrades in the Multifamily portfolio and the Dealer Floor Plan portfolio.

Previous 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.

Current wording

Credit loss expense on consumer loans decreased $393.7 million and decreased $211.6 million for the three months and nine months ended September 30, 2024, respectively, compared to the corresponding periods in 2023, primarily driven by release in reserves due to the sale of certain personal unsecured loans and off-balance sheet securitizations of RICs and auto loans. Net charge-offs on the consumer loan portfolios decreased $21.4 million and increased $225.5 million for the three months and nine months ended September 30, 2024, respectively, 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 and six months ended June 30, 2024 decreased $4.1 million and decreased $7.8 million compared to the corresponding periods in 2023.

Current wording

The credit loss expense on unfunded credit losses for the three months and nine months ended September 30, 2024 increased $6.2 million and decreased $1.6 million compared to the corresponding periods in 2023.

Previous 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.

Current wording

•Lease income decreased $82.1 million and $178.4 million for the three months and nine months ended September 30, 2024 compared to the corresponding periods in 2023, primarily due to less active leased vehicle units.

Previous 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.

Current wording

•Miscellaneous income, net decreased $76.2 million and $19.3 million for the three months and nine months ended September 30, 2024 compared to the corresponding periods in 2023, discussed further below.

Previous 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.

Current wording

•Net gains recognized in earnings increased $18.1 million and $75.7 million for the three months and nine months ended September 30, 2024, respectively, compared to the corresponding periods in 2023, primarily due to an increase from trading securities gains during 2024.

Previous wording

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

Current wording

•A decrease in Other miscellaneous income / (loss), net driven by the loss on sale of certain loan portfolios, as discussed in Note 3.

Previous wording

Total general, administrative and other expenses decreased $4.1 million and increased $12.0 million for the three months and six months ended June 30, 2024, respectively, compared to the corresponding periods in 2023. The most significant contributing factors to these changes were as follows:

Current wording

Total general, administrative and other expenses increased $31.9 million and $43.9 million for the three months and nine months ended September 30, 2024, respectively, compared to the corresponding periods in 2023. The most significant factors contributing to these changes were as follows:

Previous 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.

Current wording

•Technology, outside services, and marketing expense increased $12.2 million and $52.1 million for the three months and nine months ended September 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 $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.

Current wording

•Lease expense decreased $37.0 million and $121.4 million for the three months and nine months ended September 30, 2024, respectively, compared to the corresponding periods in 2023, due to lower auto lease volumes resulting in lower depreciation expense.

Previous wording

The ETR for the three months ended March 31, 2024 was 2.2%, compared to the ETR for the three months ended June 30, 2024 was (13.7)% and for the six months ended June 30, 2024 was (5.9)%. The quarter over quarter change is primarily the result of a decrease in the annual forecasted pre tax income during the second quarter of 2024.

Current wording

An Income tax benefit of $32.2 million and $74.3 million was recorded for the three months and nine months ended September 30, 2024 compared to a benefit of $147.8 million and $54.9 million for the corresponding periods in 2023. This resulted in an ETR of (20.0)% for the three months ended September 30, 2024 compared to (527.5%) for the corresponding period in 2023. The ETR for the three months ended June 30, 2024 was (13.7)%. The quarter over quarter change is primarily the result of a decrease in the annual forecasted pretax income during the third quarter of 2024.

Previous 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.

Current wording

The ETR for the three months ended September 30, 2024 when compared to the same period in 2023, was directly impacted by (i) increase in forecasted pretax income in 2024 and (ii) a significant increase in electric vehicle tax credits expected to be generated in the fourth quarter 2023.

Previous 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:

Current wording

The Company reported total income before income taxes related to its Consumer activities of $217.6 million and $907.0 million for the three months and nine months ended September 30, 2024, respectively, compared to income before income taxes of $25.6 million and $992.9 million for the corresponding periods in 2023. The most significant drivers of these changes were:

Previous wording

•Credit loss expense in Auto increased $352.1 million and increased $314.0 million for the three months and six months ended June 30, 2024, respectively, compared to the corresponding periods in 2023. These increases were driven by higher loan volume and the continued normalization of the net charge-off rate, which was still lower than pre-pandemic levels.

Current wording

•Credit loss expense in Auto decreased $262.7 million and increased $51.3 million for the three months and nine months ended September 30, 2024, respectively, compared to the corresponding periods in 2023. The increase was driven by higher loan volume and the continued normalization of the net charge-off rate, which was still lower than pre-pandemic levels. The decrease is due to provision releases related to two capital transactions in 2024; partially offset in loss on sale in non-interest income.

Previous wording

•Credit loss expense for CBB decreased $66.7 million and decreased $123.8 million for the three months and six months ended June 30, 2024, respectively, compared to the corresponding periods in 2023. These changes were primarily driven by lower balances across most consumer portfolios.

Current wording

•Credit loss expense for CBB decreased $114.5 million and decreased $238.2 million for the three months and nine months ended September 30, 2024, respectively, compared to the corresponding periods in 2023. These changes were primarily driven by lower balances across most consumer portfolios and provision release on the sale of a personal unsecured loan portfolio; partially offset in loss on sale in non-interest income.

Previous wording

•Total assets in C&I at June 30, 2024 decreased $1.5 billion compared to the corresponding date in 2023. The decreases were driven by strategic asset sales and lower loan originations.

Current wording

•Total assets in CBB at September 30, 2024 there was a decrease of $2.7 billion compared to the corresponding date in 2023. The decreases were driven by lower loan originations, strategic portfolio sale and home mortgage runoff.

Previous 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:

Current wording

The Company reported total income before income taxes related to its Commercial activities of $165.7 million and $486.6 million, for the three months and nine months ended September 30, 2024, respectively, compared to income before income taxes of $73.7 million and $261.2 million for the corresponding periods in 2023. The most significant drivers of these changes were:

Previous wording

•Net interest income in CRE increased $13.9 million and increased $33.0 million for the three months and six months ended June 30, 2024, respectively, compared to the corresponding periods of 2023. The increases were driven by the Beneficial Interest in Structured LLC investment with the FDIC.

Current wording

•Net interest income in CRE increased $6.4 million and increased $39.4 million for the three months and nine months ended September 30, 2024, respectively, compared to the corresponding periods of 2023. The increases were driven by the beneficial interest in the Structured LLC investment with the FDIC.

Previous wording

•Credit loss expense in C&I decreased $13.6 million and decreased $37.1 million for the three months and six months ended June 30, 2024, respectively, compared to the corresponding periods of 2023. These decreases were due reserve releases related to lower C&I loan balances.

Current wording

•Credit loss expense in C&I decreased $4.4 million and decreased $41.4 million for the three months and nine months ended September 30, 2024, respectively, compared to the corresponding periods of 2023. These decreases were due to reserve releases related to lower C&I loan balances.

Previous 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:

Current wording

CIB reported a loss before income taxes of $37.7 million and a loss before income taxes of $18.0 million for the three months and nine months ended September 30, 2024, respectively, compared to a loss before income taxes of $15.6 million and income before income taxes of $59.5 million for the corresponding periods in 2023. Factors contributing to these changes were: