Santander Holdings USA, Inc.

Previous wording

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.

Current wording

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. The Company also acquires deposits nationally through SBNA's online Openbank platform. 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.

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 $1.2 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.

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 $1.2 billion at March 31, 2025 and December 31, 2024, respectively. As of March 31, 2025, SBNA serviced approximately $8.5 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 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.

Current wording

The unemployment rate at March 31, 2025 was 4.2% compared to 3.8% one year ago. According to the U.S. Bureau of Labor Statistics, employment trended up in government, health care, and social assistance.

Previous 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.

Current wording

At its March 2025 meeting, the FOMC maintained the federal funds rate target range at 4.25% - 4.50%. 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 September 30, 2024 was 3.80%, down from 3.87% at December 31, 2023.

Current wording

The ten-year Treasury bond rate at March 31, 2025 was 4.25%, down from 4.57% at December 31, 2024.

Previous wording

As described in Note 1 to the Condensed Consolidated Financial Statements, on January 1, 2020, we adopted the CECL standard, which upon adoption resulted in a reduction to our opening retained earnings balance, net of income tax, and an increase to the allowance for loan losses of approximately $2.5 billion. The U.S. banking agencies in December 2018 approved a final rule to address the impact of CECL on regulatory capital by allowing banking organizations, including the Company, the option to phase in the day-one impact of CECL until the first quarter of 2023. On March 26, 2020, the U.S. banking agencies issued an interim final rule that provides banking organizations with an alternative option to delay for two years an estimate of CECL’s effect on regulatory capital relative to the incurred loss methodology’s effect on regulatory capital, followed by a three-year transition period. SHUSA remains in the three-year transition period. This interim rule was subsequently updated with technical amendments in a final rule dated September 30, 2020, which was elected by the Company.

Current wording

On January 1, 2020, we adopted the FASB ASC Topic 326 - Financial Instruments - Credit Losses, which upon adoption resulted in a reduction to our opening retained earnings balance, net of income tax, and an increase to the allowance for loan losses of approximately $2.5 billion. The U.S. banking agencies in December 2018 approved a final rule to address the impact of CECL on regulatory capital by allowing banking organizations, including the Company, the option to phase in the day-one impact of CECL until the first quarter of 2023. On March 26, 2020, the U.S. banking agencies issued an interim final rule that provides banking organizations with an alternative option to delay for two years an estimate of CECL’s effect on regulatory capital relative to the incurred loss methodology’s effect on regulatory capital, followed by a three-year transition period. This interim rule was subsequently updated with technical amendments in a final rule dated September 30, 2020, which was elected by the Company. As of January 1, 2025, the Company has completed its transition period and the impact of CECL adoption is now fully recognized within regulatory capital.

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 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.

Current wording

The Federal Reserve has 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, 2025, SHUSA's SCB CET1 minimum requirement was 8.0%.

Previous 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.

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.

Previous wording

On July 28, 2023, the Federal Reserve and FDIC issued an NPR that would require banks with total assets of $100 billion or more to maintain a layer of long-term debt from the holding company to improve financial stability by increasing the resolvability and resiliency of such institutions. By requiring each such large bank to maintain a minimum amount of long-term debt to absorb losses, the proposal would increase the options available to resolve such banks in case of failure. Additionally, by reducing the risk that uninsured depositors would face losses, long-term debt can reduce the speed and severity of bank runs and limit the risk of contagion when a bank is under stress. The proposal would provide a three-year phase-in period and would also allow certain outstanding long-term debt to count toward the minimum requirements to provide banks with a reasonable period to transition to the required characteristics of eligible long-term debt instruments. Comments on the proposal were due on November 30, 2023. SHUSA remains subject to the TLAC requirements outlined below.

Current wording

On July 28, 2023, the Federal Reserve and FDIC issued an NPR that would require banks with total assets of $100 billion or more to maintain a layer of LTD from the holding company to improve financial stability by increasing the resolvability and resiliency of such institutions. By requiring each such large bank to maintain a minimum amount of LTD to absorb losses, the proposal would increase the options available to resolve such banks in case of failure. Additionally, by reducing the risk that uninsured depositors would face losses, LTD can reduce the speed and severity of bank runs and limit the risk of contagion when a bank is under stress. The proposal would provide a three-year phase-in period and would also allow certain outstanding LTD to count toward the minimum requirements to provide banks with a reasonable period to transition to the required characteristics of eligible LTD instruments. Comments on the proposal were due on November 30, 2023. SHUSA remains subject to the TLAC requirements discussed below.

Previous wording

Depository institutions must remain in compliance with Sections 23A and 23B of the Federal Reserve Act and the Federal Reserve's Regulation W, which governs transactions between SBNA and affiliated companies and individuals. Section 23A imposes limits on certain specified “covered transactions,” which include loans, lines and letters of credit to affiliated companies or individuals, and investments in affiliated companies, as well as certain other transactions with affiliated companies and individuals.

Current wording

Depository institutions must remain in compliance with Sections 23A and 23B of the Federal Reserve Act and the Federal Reserve's Regulation W, which govern transactions between SBNA and affiliated companies and individuals. Section 23A imposes limits on certain specified “covered transactions,” which include loans, lines and letters of credit to affiliated companies or individuals, and investments in affiliated companies, as well as certain other transactions with affiliated companies and individuals.

Previous wording

Regulation AB II, among other things, expanded disclosure requirements and modified the offering and shelf registration process for ABS. SC must comply with these rules, which impact all offerings of publicly registered ABS and all reports under the Exchange Act, for outstanding publicly-registered ABS, and affect SC's public securitization platform.

Current wording

Regulation AB II, among other things, expanded disclosure requirements and modified the offering and shelf registration process for ABS. SC and SBNA must comply with these rules, which impact all offerings of publicly registered ABS and all reports under the Exchange Act for outstanding publicly-registered ABS, and affect the Company's public securitization platform.

Previous wording

In March 2024, a preliminary injunction was granted to pause implementation of the new rule while the Federal District Court for the Northern District of Texas decides the merits of a lawsuit brought by the American Bankers Association against the regulatory agencies for exceeding their statutory authority in adopting the rule.

Current wording

In March 2024, a preliminary injunction was granted to pause implementation of the new rule while the Federal District Court for the Northern District of Texas decides the merits of a lawsuit brought by the American Bankers Association against the regulatory agencies for exceeding their statutory authority in adopting the rule. In March 2025, the federal banking regulatory agencies announced, in light of pending litigation, their intent to issue a proposal to rescind a final rule issued in October 2023 intended to modernize the CRA framework. The agencies stated they will continue to work together to promote a consistent regulatory approach to implement CRA.

Previous wording

(5)Includes allowance for loan losses and Other assets including leases, goodwill and intangibles, premise and equipment, net deferred tax assets, equity method investments, BOLI, accrued interest receivable, derivative assets, miscellaneous receivables, prepaid expenses and MSRs. Refer to Note 6 to the Condensed Consolidated Financial Statements for further discussion.

Current wording

(5)Includes allowance for loan losses and Other assets including leases, goodwill and intangibles, premises and equipment, net deferred tax assets, equity method investments, BOLI, accrued interest receivable, derivative assets, miscellaneous receivables, prepaid expenses and MSRs. Refer to Note 6 to the Condensed Consolidated Financial Statements for further discussion.

Previous 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:

Current wording

Net interest income increased $80.5 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The most significant factors contributing to this change were as follows:

Previous 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.

Current wording

•Interest income on interest-earning deposits increased $27.8 million for the three months ended March 31, 2025 compared to the corresponding period in 2024. This change is attributable to an increase in average interest-bearing deposits volume of $54.9 million and a decrease in average rates of $27.1 million. This change is primarily driven by the changing interest rate environment.

Previous 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.

Current wording

•Interest and fees on federal funds sold and securities purchased under resale agreements or similar arrangements decreased $196.8 million for the three months ended March 31, 2025 compared to the corresponding period in 2024. This change is attributable to a decrease in average investment securities volume of $92.2 million and a decrease in average rates of $104.6 million.

Previous 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.

Current wording

•Interest income on investment securities increased $46.9 million for the three months ended March 31, 2025 compared to the corresponding period in 2024. This change is attributable to an increase in average investment securities volume of $46.8 million and an increase in average rates of $39.0 thousand. This change is primarily driven by an increase in interest rates during the year.

Previous 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.

Current wording

•Interest expense on deposits and related customer accounts decreased $10.3 million for the three months ended March 31, 2025 compared to the corresponding period in 2024. This change is attributable to an increase in average interest-bearing deposits volume of $8.8 million and a decrease in average rates of $19.1 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 $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.

Current wording

•Interest expense on Securities Financing Activities and borrowed funds decreased $187.2 million for the three months ended March 31, 2025 compared to the corresponding period in 2024. This change is attributable to a decrease in average Securities Financing Activities and borrowed funds volume of $68.7 million and a decrease in average rates of $118.5 million.

Previous 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.

Current wording

The Company had credit loss expense of $425.9 million for the three months ended March 31, 2025, compared to a credit loss expense of $405.0 million for the corresponding period in 2024. The credit loss expense during the three months ended March 31, 2025 was mainly due to Charge-offs, net of recoveries in RICs and auto loans, partially offset by the decrease in ACL driven by seasonal improvement in the RICs and auto loans delinquencies and rating improvement in certain loans in the Commercial portfolio.

Previous 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.

Current wording

Credit loss expense on consumer loans decreased $3.8 million for the three months ended March 31, 2025 compared to the corresponding period in 2024.

Previous 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.

Current wording

The credit loss expense on unfunded credit losses for the three months ended March 31, 2025 increased $10.9 million compared to the corresponding period in 2024.

Previous wording

•Consumer fees increased $33.5 million and $57.3 million for the three months and nine months ended September 30, 2024 compared to the corresponding periods in 2023, primarily due to an increase in consumer loan fees, increase in consumer deposit fees, and an increase in insurance investment fees. .

Current wording

•Consumer fees increased $29.0 million for the three months ended March 31, 2025 compared to the corresponding period in 2024, primarily due to an increase in consumer loan fees.

Previous 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.

Current wording

•Lease income decreased $127.7 million for the three months ended March 31, 2025 compared to the corresponding period in 2024, primarily due to fewer active leased vehicle units.

Previous wording

•Capital market revenue decreased $1.6 million and increased $98.8 million for the three months and nine months ended September 30, 2024 compared to the corresponding periods in 2023, primarily due to an increase in underwriting fees.

Current wording

•Capital market revenue decreased $20.2 million for the three months ended March 31, 2025 compared to the corresponding period in 2024, primarily due to a decrease in investment banking income.

Previous 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.

Current wording

•Miscellaneous income, net increased $89.0 million for the three months ended March 31, 2025 compared to the corresponding period in 2024, discussed further below.

Previous 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.

Current wording

•Securities gains, net decreased $24.9 million for the three months ended March 31, 2025 compared to the corresponding period in 2024, primarily due to a decrease from trading securities gains.

Previous 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.

Current wording

•Lease expense decreased $106.1 million for the three months ended March 31, 2025 compared to the corresponding period in 2024, due to lower auto lease volumes resulting in lower depreciation expense.

Previous 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.

Current wording

The ETR for the three months ended March 31, 2025, when compared to the same period in 2024, was directly impacted by (i) an increase in forecasted pre-tax income in 2025 and (ii) a decrease in electric vehicle tax credits expected to be generated in 2025.

Previous wording

The Company manages its business activities by it six reportable segments, Auto, CBB, C&I, CRE, CIB, and Wealth Management. The tables below reflect certain information by reportable segment and includes additional supplementary information related to consumer activities and commercial activities. The supplementary information is deemed to be useful as it represents a view in how we manage the business and also aligns with how our parent, Santander, manages its business from a global perspective.

Current wording

The Company manages its business activities by it six reportable segments, Auto, CBB, C&I, CRE, CIB, and Wealth Management. The tables below reflect certain information by reportable segment and includes additional supplementary information related to consumer activities and commercial activities. The supplementary information is deemed to be useful as it represents a view in how we manage the business and also aligns with how our parent, Santander, manages its business from a global perspective. Information reported in this Form 10-Q in respect of the CIB segment includes only information within the Company’s consolidated financial statements, and does not include information in respect of Santander’s New York branch, which is reported within Santander’s consolidated financial statements.

Previous 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:

Current wording

The Company reported total income before income taxes related to its Consumer activities of $384.4 million for the three months ended March 31, 2025 compared to income before income taxes of $303.0 million for the corresponding period in 2024. The most significant drivers of this change were:

Previous wording

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

Current wording

Commercial activities consist 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 $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:

Current wording

The Company reported total income before income taxes related to its Commercial activities of $160.6 million for the three months ended March 31, 2025 compared to income before income taxes of $166.2 million for the corresponding period in 2024. The most significant drivers of this change were:

Previous wording

Wealth Management reported income before income taxes of $65.2 million and $209.1 million for the three months and nine months ended September 30, 2024, respectively, compared to income before income taxes of $60.3 million and $188.5 million for the corresponding periods in 2023. The primary factor contributing to these changes was:

Current wording

Wealth Management reported income before income taxes of $73.8 million for the three months ended March 31, 2025, compared to income before income taxes of $77.5 million for the corresponding period in 2024. The primary factors contributing to this change were:

Previous wording

The Other category reported losses before income taxes of $249.7 million and $707.8 million for the three months and nine months ended September 30, 2024, respectively, compared to losses before income taxes of $172.1 million and $566.3 million for the corresponding periods in 2023. The primary factors contributing to these changes were:

Current wording

The Other category reported a loss before income taxes of $280.6 million for the three months ended March 31, 2025, compared to a loss before income taxes of $206.7 million for the corresponding period in 2024. The primary factors contributing to this change were:

Previous wording

(1) As of September 30, 2024, the Company had $409.5 million of commercial loans that were denominated in a currency other than the U.S. dollar.

Current wording

(1) As of March 31, 2025, the Company had $398.2 million of commercial loans that were denominated in a currency other than the U.S. dollar.

Previous wording

Commercial loans decreased approximately $1.8 billion, or 4.8%, from December 31, 2023 to September 30, 2024. This decrease was primarily attributable to a decrease in C&I loans of $1.4 billion and a decrease in Multifamily loans of $566.2 million, partially offset by an increase in CRE loans of $78.5 million.

Current wording

Commercial loans decreased approximately $74.1 million, or 0.2%, from December 31, 2024 to March 31, 2025. This decrease was primarily attributable to a decrease in C&I loans of $307.8 million, a decrease in Multifamily loans of $35.6 million, and an increase in CRE loans of $234.4 million.

Previous wording

Consumer loans secured by real estate decreased $576.2 million from December 31, 2023 to September 30, 2024. The Company ceased origination of new residential mortgage and home equity loans in the first quarter of 2022.

Current wording

Consumer loans secured by real estate decreased $159.3 million from December 31, 2024 to March 31, 2025. The Company ceased origination of new residential mortgage and home equity loans in the first quarter of 2022.

Previous wording

RICs and auto loans HFI increased $1.2 billion from December 31, 2023 to September 30, 2024. This increase represents new origination activity, offset by collections and transfers out of HFI in connection with the Company's de-consolidation transactions resulting in off-balance sheet securitization. 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 HFI increased $42.6 million from December 31, 2024 to March 31, 2025. This increase represents new origination activity, offset by collections. 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 September 30, 2024, 58.1% 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 March 31, 2025, 59.8% 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 6.4% 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 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.