Santander Holdings USA, Inc.

Previous wording

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

Current wording

From May 2013 to July 2025, under the MPLFA with Stellantis, the Company operated as Stellantis' preferred provider for consumer loans, leases and dealer loans and provides services to Stellantis customers and dealers under the CCAP brand. In the second quarter of 2022, the Company announced it had reached an agreement with Stellantis to amend and extend the MPLFA. On July 28, 2025, the MPLFA was terminated effective September 15, 2025, except for certain trailing obligations for revenue- and risk-sharing on originations up to the termination's effective date.

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. 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.

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, construction loans and other consumer loans and leases throughout the United States, with a focus on the Mid-Atlantic and Northeastern region. 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 $1.1 billion and $1.2 billion at June 30, 2025 and December 31, 2024, respectively. As of June 30, 2025, SBNA serviced approximately $8.4 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 $1.2 billion at September 30, 2025 and December 31, 2024, respectively. As of September 30, 2025, SBNA serviced approximately $8.2 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, 2025 was 4.1% compared to 4.2% at March 31, 2025 and 4.1% one year ago. According to the U.S. Bureau of Labor Statistics, employment trended up in government, health care, and social assistance.

Current wording

The unemployment rate at August 31, 2025 was 4.3% compared to 4.1% at June 30, 2025 and 4.1% one year ago. According to the U.S. Bureau of Labor Statistics, job gains in health care were partially offset by losses in government.

Previous wording

At its June 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.

Current wording

At its September 2025 meeting, the FOMC lowered the federal funds rate target range to 4.00% - 4.25%. 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, 2025 was 4.23%, down from 4.57% at December 31, 2024.

Current wording

The ten-year Treasury bond rate at September 30, 2025 was 4.15%, down from 4.57% at December 31, 2024.

Previous wording

(1) Senior preferred debt / senior non-preferred rating

Current wording

(1) Senior preferred debt / senior non-preferred debt rating.

Previous 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. Refer to the Company’s Annual Report on Form 10-K as of December 31, 2024 for more information on regulatory and supervisory matters affecting the Company and its subsidiaries.

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. The Company's subsidiaries are further supervised by the OCC, the FRB of Atlanta, and the CFPB. Refer to the Company’s Annual Report on Form 10-K as of December 31, 2024 for more information on regulatory and supervisory matters affecting the Company and its subsidiaries.

Previous wording

Net interest income increased $78.2 million and increased $158.7 million for the three months and six months ended June 30, 2025, respectively, compared to the corresponding periods in 2024. The most significant factors contributing to these changes were as follows:

Current wording

Net interest income increased $136.1 million and increased $294.9 million for the three months and nine months ended September 30, 2025, respectively, compared to the corresponding periods in 2024. The most significant factors contributing to these changes were as follows:

Previous wording

•Interest income on loans decreased $65.8 million and decreased $60.6 million for the three months and six months ended June 30, 2025, respectively, compared to the corresponding periods in 2024. The three-month period change is attributable to a decrease in average loan volume of $91.2 million and an increase in average rates of $25.4 million. The six-month period change is attributable to a decrease in average loan volume of $202.2 million and an increase in average rates of $141.6 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 decreased $73.3 million and decreased $133.9 million for the three months and nine months ended September 30, 2025, respectively, compared to the corresponding periods in 2024. The three-month period change is attributable to a decrease in average loan volume of $247.9 million and an increase in average rates of $174.6 million. The nine-month period change is attributable to a decrease in average loan volume of $351.2 million and an increase in average rates of $217.3 million. Refer to the discussion of changes in loan balances in the "Loan Portfolio" section of this MD&A.

Previous wording

•Interest income on interest-earning deposits increased $60.6 million and increased $88.3 million for the three months and six months ended June 30, 2025, respectively, compared to the corresponding periods in 2024. The three-month period change is attributable to an increase in average interest-bearing deposits volume of $92.1 million and a decrease in average rates of $31.5 million. The six-month period change is attributable to an increase in average interest-bearing deposits volume of $149.4 million and a decrease in average rates of $61.1 million.

Current wording

•Interest income on interest-earning deposits increased $8.7 million and increased $97.1 million for the three months and nine months ended September 30, 2025, respectively, compared to the corresponding periods in 2024. The three-month period change is attributable to an increase in average interest-bearing deposits volume of $26.8 million and a decrease in average rates of $18.1 million. The nine-month period change is attributable to an increase in average interest-bearing deposits volume of $181.7 million and a decrease in average rates of $84.6 million.

Previous wording

•Interest and fees on federal funds sold and securities purchased under resale agreements or similar arrangements decreased $386.0 million and decreased $582.9 million for the three months and six months ended June 30, 2025, respectively, compared to the corresponding periods in 2024. The three-month period change is attributable to a decrease in average federal funds sold and securities purchased under resale agreements or similar arrangements volume of $248.8 million and a decrease in average rates of $137.2 million. The six-month period change is attributable to a decrease in average federal funds sold and securities purchased under resale agreements or similar arrangements volume of $341.5 million and a decrease in average rates of $241.4 million.

Current wording

•Interest and fees on federal funds sold and securities purchased under resale agreements or similar arrangements decreased $314.2 million and decreased $897.1 million for the three months and nine months ended September 30, 2025, respectively, compared to the corresponding periods in 2024. The three-month period change is attributable to a decrease in average federal funds sold and securities purchased under resale agreements or similar arrangements volume of $185.9 million and a decrease in average rates of $128.3 million. The nine-month period change is attributable to a decrease in average federal funds sold and securities purchased under resale agreements or similar arrangements volume of $527.4 million and a decrease in average rates of $369.7 million.

Previous wording

•Interest income on investment securities increased $68.4 million and increased $115.2 million for the three months and six months ended June 30, 2025, respectively, compared to the corresponding periods in 2024. The three-month period change is attributable to an increase in average investment securities volume of $53.9 million and an increase in average rates of $14.5 million. The six-month period change is attributable to an increase in average investment securities volume of $101.2 million and an increase in average rates of $14.0 million. These changes are primarily driven by an increase in interest rates during the year.

Current wording

•Interest income on investment securities increased $85.8 million and increased $201.0 million for the three months and nine months ended September 30, 2025, respectively, compared to the corresponding periods in 2024. The three-month period change is attributable to an increase in average investment securities volume of $78.3 million and an increase in average rates of $7.5 million. The nine-month period change is attributable to an increase in average investment securities volume of $175.3 million and an increase in average rates of $25.7 million.

Previous wording

•Interest expense on deposits and related customer accounts decreased $30.3 million and decreased $40.6 million for the three months and six months ended June 30, 2025, respectively, compared to the corresponding periods in 2024. The three-month period change is attributed to a decrease in average rates of $32.4 million offset by an increase in average interest-bearing deposit volume of $2.1 million. The six-month period change is attributable to an increase in average interest-bearing deposit volume of $6.3 million and a decrease in average rates of $46.9 million. The decrease in average rates is primarily attributable to money market and CD products.

Current wording

•Interest expense on deposits and related customer accounts decreased $66.7 million and decreased $107.4 million for the three months and nine months ended September 30, 2025, respectively, compared to the corresponding periods in 2024. The three-month period change is attributable to a decrease in average interest-bearing deposit volume of $34.1 million and a decrease in average rates of $32.6 million. The nine-month period change is attributable to a decrease in average interest-bearing deposit volume of $31.0 million and a decrease in average rates of $76.4 million. The decrease in average rates is primarily attributable to money market and CD products.

Previous wording

•Interest expense on Securities Financing Activities and borrowed funds decreased $370.8 million and decreased $558.0 million for the three months and six months ended June 30, 2025, respectively, compared to the corresponding periods in 2024. The three-month period change is attributable to a decrease in average Securities Financing Activities and borrowed funds volume of $212.2 million and a decrease in average rates of $158.6 million. The six-month period change is attributable to a decrease in average Securities Financing Activities and borrowed funds volume of $281.8 million and a decrease in average rates of $276.2 million. Both changes were mostly attributable to a decrease in Securities Financing Activities.

Current wording

•Interest expense on Securities Financing Activities and borrowed funds decreased $362.4 million and decreased $920.4 million for the three months and nine months ended September 30, 2025, respectively, compared to the corresponding periods in 2024. The three-month period change is attributable to a decrease in average Securities Financing Activities and borrowed funds volume of $171.8 million and a decrease in average rates of $190.6 million. The nine-month period change is attributable to a decrease in average Securities Financing Activities and borrowed funds volume of $451.4 million and a decrease in average rates of $468.9 million.

Previous wording

The Company had credit loss expense of $372.9 million and $798.8 million for the three months and six months ended June 30, 2025, compared to a credit loss expense of $481.2 million and $886.2 million for the corresponding periods in 2024. The lower credit loss expense during the three months and six months ended June 30, 2025 was mainly due to lower charge-offs, net of recoveries in RICs and auto loans, partially offset by the decrease in the ACL driven by the sale of certain RICs and auto loans.

Current wording

The Company had credit loss expense of $368.1 million and $1.2 billion for the three months and nine months ended September 30, 2025, compared to a credit loss expense of $431.3 million and $1.3 billion for the corresponding periods in 2024. The lower credit loss expense during the three months and nine months ended September 30, 2025 was mainly due to lower net charge-offs in RICs and auto loans, partially offset by the decrease in the ACL driven by the sale of certain RICs and auto loans, improvement in used car prices, lower exposure in Personal unsecured loans and rating improvement in certain loans in Commercial.

Previous wording

Credit loss expense on commercial loans increased $6.0 million and increased $19.7 million for the three months and six months ended June 30, 2025 compared to the corresponding periods in 2024.

Current wording

Credit loss expense on commercial loans decreased $20.4 million and decreased $0.6 million for the three months and nine months ended September 30, 2025, respectively, compared to the corresponding periods in 2024.

Previous wording

Credit loss expense on consumer loans decreased $117.2 million and decreased $120.9 million for the three months and six months ended June 30, 2025 compared to the corresponding periods in 2024 driven by the sale of certain RICs and auto loans.

Current wording

Credit loss expense on consumer loans decreased $46.2 million and decreased $167.1 million for the three months and nine months ended September 30, 2025 compared to the corresponding periods in 2024 due to lower net charge-offs in RICs and auto loans, improvement in used car prices and lower exposure in Personal unsecured loans.

Previous wording

The credit loss expense on unfunded credit losses for the three months and six months ended June 30, 2025 increased $2.8 million and increased $13.7 million compared to the corresponding periods in 2024.

Current wording

The credit loss expense on unfunded credit losses for the three months and nine months ended September 30, 2025 increased $3.3 million and increased $17.1 million compared to the corresponding periods in 2024.

Previous wording

Total non-interest income decreased $125.1 million and $184.7 million for the three months and six months ended June 30, 2025, respectively, compared to the corresponding periods in 2024. These changes were primarily comprised of:

Current wording

Total non-interest income increased $68.6 million and decreased $116.1 million for the three months and nine months ended September 30, 2025, respectively, compared to the corresponding periods in 2024. These changes were primarily comprised of:

Previous wording

•Consumer fees increased $16.4 million and $45.4 million for the three months and six months ended June 30, 2025, respectively, compared to the corresponding periods in 2024, primarily due to an increase in consumer loan fees.

Current wording

•Consumer fees increased $25.0 million and $70.3 million for the three months and nine months ended September 30, 2025, respectively, compared to the corresponding periods in 2024, primarily due to an increase in consumer loan fees.

Previous wording

•Lease income decreased $140.3 million and $268.0 million for the three months and six months ended June 30, 2025, respectively, compared to the corresponding periods in 2024, primarily driven by a lower number of active leased vehicle units and lower purchase option fees.

Current wording

•Lease income decreased $141.1 million and $409.2 million for the three months and nine months ended September 30, 2025, respectively, compared to the corresponding periods in 2024, primarily driven by a lower number of active leased vehicle units and lower purchase option fees.

Previous wording

•Capital market revenue increased $34.7 million and $14.4 million for the three months and six months ended June 30, 2025, respectively, compared to the corresponding periods in 2024, primarily due to an increase in investment banking income.

Current wording

•Capital market revenue increased $51.7 million and $66.1 million for the three months and nine months ended September 30, 2025, respectively, compared to the corresponding periods in 2024, primarily due to an increase in investment banking income.

Previous wording

•Miscellaneous income, net decreased $8.6 million and increased $80.4 million for the three months and six months ended June 30, 2025, respectively, compared to the corresponding periods in 2024, discussed further below.

Current wording

•Miscellaneous income, net increased $137.1 million and $217.5 million for the three months and nine months ended September 30, 2025, respectively, compared to the corresponding periods in 2024, discussed further below.

Previous wording

•Securities gains, net decreased $42.4 million and $67.3 million for the three months and six months ended June 30, 2025, respectively, compared to the corresponding periods in 2024, primarily due to a decrease in trading securities gains.

Current wording

•Securities gains, net decreased $1.9 million and $69.2 million for the three months and nine months ended September 30, 2025, respectively, compared to the corresponding periods in 2024, primarily due to a decrease in trading securities gains.

Previous wording

•A decrease in Net gain on operating leases, led by a shift in lease portfolio performance.

Current wording

•A decrease in Net gain on operating leases, led by a decrease in volume of leased vehicles liquidated.

Previous wording

•A decrease in Other miscellaneous income / (loss), net quarter to date compared to 2024, which includes less gains on real estate owned. The year to date increase in Other miscellaneous income / (loss), net, compared to 2024 is driven by higher gains on securitization transactions and higher foreign exchange gains.

Current wording

•An increase in Other miscellaneous income/(loss), net, primarily due to more favorable outcomes on securitization transactions.

Previous wording

Total general, administrative and other expenses decreased $109.4 million and $141.4 million for the three months and six months ended June 30, 2025, respectively, compared to the corresponding periods in 2024. The most significant factors contributing to these changes were as follows:

Current wording

Total general, administrative and other expenses decreased $116.8 million and $258.2 million for the three months and nine months ended September 30, 2025, respectively, compared to the corresponding periods in 2024. The most significant factors contributing to these changes were as follows:

Previous wording

•Lease expense decreased $90.3 million and $196.4 million for the three months and six months ended June 30, 2025, respectively, compared to the corresponding periods in 2024, due to lower auto lease volumes resulting in lower depreciation expense.

Current wording

•Lease expense decreased $107.4 million and $303.8 million for the three months and nine months ended September 30, 2025, respectively, compared to the corresponding periods in 2024, due to lower auto lease volumes resulting in lower depreciation expense.

Previous wording

An income tax provision of $38.0 million and $54.9 million was recorded for the three months and six months ended June 30, 2025, respectively, compared to a benefit of $49.8 million and $42.1 million for the corresponding periods in 2024. This resulted in an ETR of 7.1% and 6.0% for the three months and six months ended June 30, 2025, respectively, compared to (13.7)% and (5.9)% for the corresponding periods in 2024.

Current wording

An income tax provision of $89.6 million and $144.5 million was recorded for the three months and nine months ended September 30, 2025, respectively, compared to a benefit of $32.2 million and $74.3 million for the corresponding periods in 2024. This resulted in an ETR of 16.4% and 9.9% for the three months and nine months ended September 30, 2025, respectively, compared to (20.0)% and (8.5)% for the corresponding periods in 2024.

Previous wording

The ETR for the three months and six months ended June 30, 2025, when compared to the same periods in 2024, was directly impacted by (i) an increase in forecasted pretax income in 2025 and (ii) a decrease in electric vehicle tax credits expected to be generated in 2025.

Current wording

The ETR for the three months and nine months ended September 30, 2025, when compared to the same periods 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 reported total income before income taxes related to its Consumer activities of $478.3 million and $862.7 million for the three months and six months ended June 30, 2025, respectively, compared to income before income taxes of $381.4 million and $684.4 million for the corresponding periods in 2024. The most significant drivers of these changes were:

Current wording

The Company reported total income before income taxes related to its Consumer activities of $450.8 million and $1.3 billion for the three months and nine months ended September 30, 2025, respectively, compared to income before income taxes of $214.8 million and $899.2 million for the corresponding periods in 2024. The most significant drivers of these changes were:

Previous wording

•Fees and other income for Auto increased $24.9 million and increased $66.9 million for the three months and six months ended June 30, 2025, respectively, compared to the corresponding periods in 2024. These changes were primarily driven higher auto servicing fees and gains on securitization of loan portfolios.

Current wording

•Fees and other income for Auto increased $40.3 million and increased $107.2 million for the three months and nine months ended September 30, 2025, respectively, compared to the corresponding periods in 2024. These changes were primarily driven by higher auto servicing fees and gains on securitization of loan portfolios.

Previous wording

•Lease income decreased $140.3 million and $268.0 million for the three months and six months ended June 30, 2025, respectively, compared to the corresponding periods in 2024. These changes where primarily driven by lower average auto lease volumes.

Current wording

•Lease income decreased $141.1 million and $409.2 million for the three months and nine months ended September 30, 2025, respectively, compared to the corresponding periods in 2024. These changes where primarily driven by lower average auto lease volumes.

Previous wording

•Credit loss expense in Auto decreased $105.5 million and decreased $88.7 million for the three months and six months ended June 30, 2025, respectively, compared to the corresponding periods in 2024. These decreases were driven by lower loan volume and improved net charge-off rates.

Current wording

•Credit loss expense in Auto decreased $137.3 million and decreased $226.0 million for the three months and nine months ended September 30, 2025, respectively, compared to the corresponding periods in 2024. These decreases were driven by lower loan volume and improved net charge-off rates.

Previous wording

•Lease expense decreased $90.3 million and $196.4 million three months and six months ended June 30, 2025, respectively, compared to the corresponding periods in 2024. These changes where primarily driven by lower average auto lease balances.

Current wording

•Lease expense decreased $107.4 million and $303.8 million three months and nine months ended September 30, 2025, respectively, compared to the corresponding periods in 2024. These changes where primarily driven by lower average auto lease balances.

Previous wording

•Total assets in Auto at June 30, 2025 decreased by $5.0 billion compared to the corresponding date in 2024. The decrease was driven by loan securitizations.

Current wording

•Total assets in Auto at September 30, 2025 decreased by $5.2 billion compared to the corresponding date in 2024. This decrease was driven by loan securitizations.

Previous wording

The Company reported total income before income taxes related to its Commercial activities of $147.0 million and $307.6 million for the three months and six months ended June 30, 2025, respectively, compared to income before income taxes of $165.3 million and $331.5 million for the corresponding periods in 2024. The most significant drivers of these changes were:

Current wording

The Company reported total income before income taxes related to its Commercial activities of $180.3 million and $487.9 million for the three months and nine months ended September 30, 2025, respectively, compared to income before income taxes of $170.4 million and $501.9 million for the corresponding periods in 2024. The most significant drivers of these changes were:

Previous wording

•Credit loss expense in CRE decreased $27.2 million and $32.3 million for the three months and six months ended June 30, 2025, respectively, compared to the corresponding periods of 2024. These decreases were due to improved portfolio performance.

Current wording

•Credit loss expense in CRE decreased $27.2 million and $59.6 million for the three months and nine months ended September 30, 2025, respectively, compared to the corresponding periods of 2024. These decreases were due to improved portfolio performance.

Previous wording

•Credit loss expense in C&I increased $20.0 million and increased $35.4 million for the three months and six months ended June 30, 2025, respectively, compared to the corresponding periods of 2024. These increases were primarily due to prior year credit loss releases related to loan payoffs.

Current wording

•Credit loss expense in C&I increased $8.3 million and increased $43.7 million for the three months and nine months ended September 30, 2025, respectively, compared to the corresponding periods of 2024. These increases were primarily due to prior year credit loss releases related to loan payoffs.