sov-20260630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☑						Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2026


☐						Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File Number: 001-16581

SANTANDER HOLDINGS USA, INC.

(Exact name of registrant as specified in its charter)


Virginia (State or other jurisdiction of incorporation or organization)						23-2453088 (I.R.S. Employer Identification No.)

75 State Street, Boston, Massachusetts (Address of principal executive offices)						02109 (Zip Code)

Registrant’s telephone number including area code (800) 493-8219

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbols

Name of each exchange on which registered

Not Applicable

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑. No ☐.

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation ST (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑. No ☐.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” "smaller reporting company," and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐

Accelerated filer ☐

Emerging growth company ☐

Non-accelerated Filer ☑

Smaller reporting company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ☐. No ☑.

Number of shares of common stock outstanding at July 31, 2026: 530,391,043 shares

Table of Contents

INDEX



			Page

PART I. FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

Condensed Consolidated Balance Sheets at June 30, 2026 and December 31, 2025			4

Condensed Consolidated Statements of Operations for the three months and six months ended June 30, 2026 and 2025			5

Condensed Consolidated Statements of Comprehensive Income for the three months and six months ended June 30, 2026 and 2025			6

Condensed Consolidated Statements of Stockholder's Equity for the three months and six months ended June 30, 2026 and 2025			7

Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2026 and 2025			8

Notes to Condensed Consolidated Financial Statements			9

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			71

Item 3. Quantitative and Qualitative Disclosures About Market Risk			100

Item 4. Controls and Procedures			100

PART II. OTHER INFORMATION			100

Item 1. Legal Proceedings			100

Item 1A. Risk Factors			100

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			102

Item 3. Defaults upon Senior Securities			103

Item 4. Mine Safety Disclosures			103

Item 5. Other Information			103

Item 6. Exhibits			104

SIGNATURES			105


Ex-31.1 Certification
Ex-31.2 Certification
Ex-32.1 Certification
Ex-32.2 Certification
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT
EX-101 DEFINITION LINKBASE DOCUMENT

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

SANTANDER HOLDINGS USA, INC., AND SUBSIDIARIES

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements about the Company’s expectations, beliefs, plans, predictions, forecasts, objectives, assumptions, or future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through the use of words and phrases such as “may,” “could,” “should,” “will,” “would,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “assumes," "goal," "seeks," "can," "predicts," "potential," "projects," "continuing," "ongoing," and similar expressions.

Although the Company believes that the expectations reflected in these forward-looking statements are reasonable as of the date on which the statements are made, these statements are not guarantees of future performance and involve risks and uncertainties which are subject to change based on various important factors and assumptions, some of which are beyond the Company's control. Among the factors that could cause the Company’s financial performance to differ materially from that suggested by forward-looking statements are:

•the effects of regulation, actions and/or policies of the Federal Reserve, the FDIC, the OCC and the CFPB, and other changes in monetary and fiscal policies and regulations, including policies that affect market interest rates and money supply, as well as the impact of changes in and interpretations of GAAP, the failure to adhere to which could subject SHUSA and/or its subsidiaries to formal or informal regulatory compliance and enforcement actions and result in fines, penalties, restitution and other costs and expenses, changes in our business practice, and reputational harm;

•increased credit risk exposure to the extent our loans are concentrated by loan type, industry segment, borrower type or location of the borrower or collateral, and changes in the credit quality of SHUSA's customers and counterparties;

•adverse economic conditions in the United States and worldwide, including the extent of recessionary conditions in the U.S. and the strength of the U.S. economy in general and regional and local economies in which SHUSA conducts operations in particular, which may affect, among other things, the level of non-performing assets, charge-offs, and credit loss expense;

•inflation, interest rate, market and monetary fluctuations may, among other things, reduce net interest margins and impact funding sources, revenue and expenses, the value of assets and obligations, and the ability to originate and distribute financial products in the primary and secondary markets;

•the pursuit of trade related policies, including reciprocal tariffs and sanctions among global trade partners and/or other countries, and/or trade disputes generally;

•bank failures and actual or perceived adverse developments at other banks, including financial or operational failures and concerns about creditworthiness or the ability of other banks to fulfill their obligations, may lead to decreased customer and investor sentiment regarding the stability and liquidity of banks in general, reduced interest by customers and investors to use banking services and enter into transactions with banks, disruption in the financial markets, increased expenses for banks such as higher FDIC insurance premiums, and increased regulation of banks by supervisory authorities as they seek to manage or mitigate such adverse developments;

•risks SHUSA faces implementing its growth strategy, including SHUSA's ability to grow revenue, manage expenses, attract and retain highly-skilled people, successfully complete and integrate mergers and acquisitions, and raise capital necessary to achieve its business goals and comply with regulatory requirements; including, without limitation, the proposed acquisition of Webster by Santander and merger of Webster Bank into SBNA;

•SHUSA’s ability to effectively manage its capital and liquidity, including non-objection to its capital plans by its regulators and its subsidiaries' ability to continue to pay dividends to it;

•reduction in SHUSA's access to funding or increases in the cost of its funding, such as in connection with changes in credit ratings assigned to SHUSA or its subsidiaries, or a significant reduction in customer deposits;

•adverse movements and volatility in debt and equity capital markets and adverse changes in securities markets, including those related to the financial condition of significant issuers in SHUSA’s investment portfolio;

•the ability to manage risks inherent in our businesses, including through effective use of systems and controls, insurance, derivatives and capital management;

•SHUSA’s ability to timely develop competitive new products and services in a changing environment that are responsive to the needs of SHUSA's customers and are profitable to SHUSA, the success of our marketing efforts to customers, and the potential for new products and services to impose additional unexpected costs, losses, or other liabilities not anticipated at their initiation, and expose SHUSA to increased operational risk;

•competitors of SHUSA who may have greater financial resources or lower costs, or be subject to different regulatory requirements than SHUSA, may innovate more effectively, or may develop products and technology that enable those

competitors to compete more successfully than SHUSA and cause SHUSA to lose business or market share and impact our net income adversely;

•Investments SHUSA makes in non-publicly traded securities of startup and small companies that we may not be able to reduce or exit quickly and that may as a result reduce compensation we receive for such investments in such an event;

•changes in customer spending, investment or savings behavior;

•changing demographic preferences for vehicle type, ownership and use that could affect markets for new and used vehicles

•the ability of SHUSA and its third-party vendors to convert, maintain and upgrade, as necessary, SHUSA’s data processing and other IT infrastructure on a timely and acceptable basis, within projected cost estimates and without significant disruption to our business;

•SHUSA's ability to control operational risks, data security breach risks and outsourcing risks, and the possibility of errors in quantitative models and software SHUSA uses in its business, including as a result of cyberattacks, technological failure, human error, fraud or malice by internal or external parties, and the possibility that SHUSA's controls will prove insufficient, fail or be circumvented;

•changing federal, state, and local tax laws and regulations, which may include tax rates changes, that could materially adversely affect our business, including changes to tax laws and regulations and the outcome of ongoing tax audits by federal, state and local income tax authorities that may require SHUSA to pay additional taxes or recover fewer overpayments compared to what has been accrued or paid as of period-end;

•the costs and effects of regulatory or judicial actions or proceedings, including possible business restrictions resulting from such actions or proceedings;

•adverse publicity or negative public opinion, whether specific to SHUSA or regarding other industry participants or industry-wide factors, or other reputational harm;

•SHUSA’s ability to address social, environmental and sustainability matters that may arise from its activities;

•natural or man-made disasters including pandemics and other significant public health emergencies, effects of climate change, and SHUSA's ability to deal with disruptions caused by such disasters and emergencies;

•local, regional or global geopolitical tensions and hostilities, including acts of terrorism or domestic or foreign military conflicts and escalations of hostilities; and

•the other factors that are described in Part I, Item IA - Risk Factors of the Company's Annual Report on Form 10-K for 2025.

If one or more of the factors affecting the Company’s forward-looking information and statements renders forward-looking information or statements incorrect, the Company’s actual results, performance or achievements could differ materially from those expressed in, or implied by, the forward-looking information and statements. Therefore, the Company cautions the reader not to place undue reliance on any forward-looking information or statements herein. The effect of these factors is difficult to predict. Factors other than these also could adversely affect the Company’s results, and the reader should not consider these factors to be a complete set of all potential risks or uncertainties as new factors emerge from time to time. Management cannot assess the impact of any such factor on the Company’s business or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statement. Any forward-looking statements reflect the current beliefs and expectations of the Company's management and only speak as of the date of this document, and the Company undertakes no obligation to update any forward-looking information or statements, whether written or oral, to reflect any change, except as required by law. All forward-looking statements attributable to the Company are expressly qualified by these cautionary statements.

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SHUSA provides the following list of abbreviations and acronyms as a tool for the readers that are used in Management’s Discussion and Analysis of Financial Condition and Results of Operations, the Condensed Consolidated Financial Statements and the Notes to the Condensed Consolidated Financial Statements.


ABS: Asset-backed securities						FHLMC: Federal Home Loan Mortgage Corporation
ACL: Allowance for credit losses						FICO®: Fair Isaac Corporation credit scoring model
AFS: Available-for-sale						FNMA: Federal National Mortgage Association
ALLL: Allowance for loan and lease losses						FRB: Federal Reserve Bank
AOCI: Accumulated other comprehensive income						FVO: Fair value option
ASC: Accounting Standards Codification						GAAP: Accounting principles generally accepted in the United States of America
ASU: Accounting Standards Update						GDP: Gross domestic product
BHC: Bank holding company						GNMA: Government National Mortgage Association
BOLI: Bank-owned life insurance						HFI: Held-for-investment
BSI: Banco Santander International						HFS: Held-for-sale
C&I: Commercial and Industrial Banking						HPI: Housing Price Index
CBB: Consumer and Business Banking						HTM: Held-to-maturity
CD: Certificate of deposit						ISDA: International Swaps and Derivatives Association, Inc.
CECL: Current expected credit losses as defined by FASB ASC Topic 326						IT: Information technology
CEO: Chief Executive Officer						LGD: Loss given default
CET1: Common equity Tier 1						LHFI: Loans held for investment
CEVF: Commercial equipment vehicle financing						LHFS: Loans held for sale
CFPB: Consumer Financial Protection Bureau						LIHTC: Low income housing tax credit
CFO: Chief Financial Officer						LTV: Loan-to-value
CFTC: Commodity Futures Trading Commission						MBS: Mortgage-backed securities
CIB: Corporate and Investment Banking						MD&A: Management's Discussion and Analysis of Financial Condition and Results of Operations
CLN: Credit-linked note						Moody’s: Moody's Investors Service, Inc.
CLTV: Combined loan-to-value						MSR: Mortgage servicing right
Company: Santander Holdings USA, Inc.						MVE: Market value of equity
CPR: Constant prepayment rate						NCO: Net charge-off
CRA: Community Reinvestment Act						NMDs: Non-maturity deposits
CRE: Commercial real estate						NPL: Non-performing loan
DCF: Discounted cash flow						OBBBA - One Big Beautiful Bill Act
DOJ: Department of Justice						OCC: Office of the Comptroller of the Currency
DPD: Days past due						OCI: Other comprehensive income
DTI: Debt-to-income						OIS: Overnight indexed swap
EAD: Exposure at default						OREO: Other real estate owned
Early stage delinquency: loans that are greater than 30 DPD, but less than 90 DPD						Parent Company: The parent holding company of SBNA and other consolidated subsidiaries
EFG: Enterprise Financial Group						PCD: Purchased credit deteriorated; loans obtained more than 90 days after origination date for which the Company was not involved in the origination and as of the acquisition date have experienced a more-than-insignificant credit deterioration in credit quality since origination
EIR: Effective interest rate						PD: Probability of default
ETR: Effective tax rate						PSL: Purchased seasoned loans: loans either purchased or initially recognized through the consolidation of a variable interest entity
Evaluation Date: June 30, 2026						RIC: Retail installment contract
Exchange Act: Securities Exchange Act of 1934, as amended						ROU: Right-of-use
FASB: Financial Accounting Standards Board						RV: Recreational vehicle
FDIA: Federal Deposit Insurance Corporation Improvement Act						S&P: Standard & Poor's
FDIC: Federal Deposit Insurance Corporation						SanCap: Santander US Capital Markets LLC
Federal Reserve: Board of Governors of the Federal Reserve System						Santander: Banco Santander, S.A.
FHLB: Federal Home Loan Bank

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SBALT: SBNA Auto Lease Trust						SSLLC: Santander Securities LLC
SBNA or the Bank: Santander Bank, National Association						Structured LLC: Structured limited liability company established by the FDIC to hold and service a portfolio primarily consisting of New York-based rent-controlled and rent-stabilized multifamily loans retained by the FDIC following a recent bank failure
SC: Santander Consumer USA Holdings Inc. and its subsidiaries						Subvention: Reimbursement of the finance provider by a manufacturer for the difference between a market loan or lease rate and the below-market rate given to a customer.
SCF: Statement of cash flows						TLAC: Total loss-absorbing capacity
SDART: Santander Drive Auto Receivables Trust						Transaction Agreement: Transaction Agreement dated as of February 3, 2026 among Webster, Santander and Webster Virginia
SDGT: Specially Designated Global Terrorist						Trusts: Securitization trusts
SEC: Securities and Exchange Commission						UK Limited Partnership: SHUSA's investment in a United Kingdom limited partnership formed to invest in early-stage financial technology companies.
Securities Act: Securities Act of 1933, as amended						UPB: Unpaid principal balance
Securities Financing Activities: Resale, repurchase securities borrowed and securities lending agreements						VIE: Variable interest entity
SHUSA: Santander Holdings USA, Inc.						VOE: Voting interest entity
SOFR: Secured overnight financing rate						Webster: Webster Financial Corporation, parent of Webster Bank
SPE: Special purpose entity						Webster Bank: A retail and commercial bank headquartered in Stamford, Connecticut
						Webster Virginia: Webster Virginia Corporation, a direct, wholly-owned subsidiary of Webster
						YTD: Year-to-date

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PART I. FINANCIAL INFORMATION

ITEM 1 - CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SANTANDER HOLDINGS USA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

Unaudited (In thousands)


	June 30, 2026		December 31, 2025

ASSETS
Cash and cash equivalents	$	11,381,591	$	14,373,816
Federal funds sold and securities purchased under resale agreements or similar arrangements	9,440,137		8,639,667
Investment securities:
AFS at fair value (amortized cost of $7,426,314 and $7,956,281 as of June 30, 2026 and December 31, 2025, respectively)	6,797,351		7,327,735
Trading securities	17,902,688		15,608,767
HTM (fair value of $11,548,907 and $11,871,362 as of June 30, 2026 and December 31, 2025, respectively)	12,960,360		13,211,794
Other investments	2,525,793		2,567,434
LHFI (1)	82,710,074		82,891,309
ALLL	(5,818,621)		(5,999,656)
Net LHFI(4)	76,891,453		76,891,653
LHFS (2)	1,735,790		1,586,204
Premises and equipment, net	908,188		936,291
Operating lease assets, net (4)	6,605,992		8,357,063


Goodwill	2,766,665		2,766,665
Intangible assets, net	197,784		214,027
BOLI	2,052,765		2,056,456
Restricted cash (4)	7,240,924		5,322,087

Other assets (3) (4)	5,130,968		4,712,462
TOTAL ASSETS	$	164,538,449	$	164,572,121
LIABILITIES
Accounts payables and accrued expenses	$	6,909,217	$	6,042,405
Deposits and other customer accounts	79,564,561		78,977,702
Federal funds purchased and securities loaned or sold under repurchase agreements	22,135,117		19,460,394
Trading liabilities	3,475,945		4,002,351
Borrowings and other debt obligations (4)	32,744,295		37,102,112
Advance payments by borrowers for taxes and insurance	179,521		146,853

Other liabilities (4)	1,030,122		895,597
TOTAL LIABILITIES	146,038,778		146,627,414
Commitments and contingencies (Note 14)

MEZZANINE EQUITY
Preferred stock (no par value; 7,500,000 shares authorized; 2,000,000 shares outstanding at June 30, 2026 and December 31, 2025, respectively)	2,000,000		2,000,000

STOCKHOLDER'S EQUITY

Common stock and paid-in capital (no par value; 800,000,000 shares authorized; 530,391,043 shares outstanding at both June 30, 2026 and December 31, 2025, respectively)	17,275,965		17,307,470
Accumulated other comprehensive loss, net of tax	(607,614)		(533,559)
Accumulated deficit	(168,680)		(829,204)


TOTAL STOCKHOLDER'S EQUITY	16,499,671		15,944,707
TOTAL LIABILITIES, MEZZANINE AND STOCKHOLDER'S EQUITY	$	164,538,449	$	164,572,121

(1) Includes $3.2 million and $4.9 million of loans recorded at fair value at June 30, 2026 and December 31, 2025, respectively.

(2) Includes $1.4 billion and $1.5 billion of loans recorded at the FVO at June 30, 2026 and December 31, 2025, respectively.

(3) Includes MSRs of $78.7 million and $79.5 million at June 30, 2026 and December 31, 2025, respectively, for which the Company has elected the FVO.

(4) The Company has interests in certain Trusts that are considered VIEs for accounting purposes. At June 30, 2026 and December 31, 2025, net LHFI included $16.7 billion and $21.6 billion, Operating leases assets, net included $6.6 billion and $8.4 billion, restricted cash included $1.7 billion and $668.2 million, Other assets included $620.3 million and $710.7 million, Borrowings and other debt obligations included $17.6 billion and $23.6 billion, and Other liabilities included $117.7 million and $96.1 million of assets or liabilities, respectively, that were included within VIEs. See Note 5 to these Condensed Consolidated Financial Statements for additional information.

See accompanying notes to the Unaudited Condensed Consolidated Financial Statements

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SANTANDER HOLDINGS USA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Unaudited (In thousands)


	Three months ended June 30,				Six months ended June 30,
	2026		2025		2026		2025

INTEREST INCOME:
Loans	$	1,990,296	$	2,096,464	$	3,984,083	$	4,216,697
Interest-earning deposits	153,782		269,676		316,542		514,482
Interest and fees on federal funds sold and securities purchased under resale agreements or similar arrangements	293,079		458,092		603,132		898,967

Investment securities:
AFS	94,020		97,768		181,354		191,138
HTM	98,452		59,259		195,763		118,993
Trading securities	242,503		189,745		471,668		356,920
Other investments	10,278		11,148		20,411		21,853
TOTAL INTEREST INCOME	2,882,410		3,182,152		5,772,953		6,319,050
INTEREST EXPENSE:
Deposits and other customer accounts	442,907		488,721		884,184		977,303
Interest expense on federal funds purchased and securities loaned or sold under repurchase agreements	421,252		589,783		850,748		1,151,625
Interest expense on trading liabilities	46,184		33,552		89,661		73,201

Borrowings and other debt obligations	451,217		588,675		932,242		1,177,476
TOTAL INTEREST EXPENSE	1,361,560		1,700,731		2,756,835		3,379,605
NET INTEREST INCOME	1,520,850		1,481,421		3,016,118		2,939,445
Credit loss expense	247,636		372,867		678,978		798,810
NET INTEREST INCOME AFTER CREDIT LOSS EXPENSE	1,273,214		1,108,554		2,337,140		2,140,635

NON-INTEREST INCOME:
Consumer and commercial fees	109,584		127,382		233,293		235,798



Capital markets and foreign exchange income	250,907		132,982		421,488		228,711
Lease income	284,748		418,981		605,969		884,709
Miscellaneous income, net (1)	139,061		169,741		300,883		337,675
TOTAL FEES AND OTHER INCOME	784,300		849,086		1,561,633		1,686,893


Securities gains, net	22,120		21,663		48,600		61,922

TOTAL NON-INTEREST INCOME	806,420		870,749		1,610,233		1,748,815
GENERAL, ADMINISTRATIVE AND OTHER EXPENSES:
Compensation and benefits	541,568		508,991		1,085,891		1,073,147
Occupancy and equipment expenses	161,437		172,371		323,235		357,651
Technology, outside service, and marketing expense	189,762		213,022		405,374		417,402


Loan expense	74,531		85,854		158,253		161,410
Lease expense	215,848		339,620		503,328		695,019

Other expenses	137,529		123,740		229,531		266,319
TOTAL GENERAL, ADMINISTRATIVE AND OTHER EXPENSES	1,320,675		1,443,598		2,705,612		2,970,948







INCOME BEFORE INCOME TAX	758,959		535,705		1,241,761		918,502
Income tax provision	174,256		37,961		242,887		54,884


NET INCOME	$	584,703	$	497,744	$	998,874	$	863,618

(1) Includes equity investment income/(expense), net.

See accompanying notes to the Unaudited Condensed Consolidated Financial Statements

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SANTANDER HOLDINGS USA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Unaudited (In thousands)


	Three months ended June 30,				Six months ended June 30,
	2026		2025		2026		2025

NET INCOME	$	584,703	$	497,744	$	998,874	$	863,618
OTHER COMPREHENSIVE INCOME / (LOSS), NET OF TAX
Net unrealized changes in cash flow hedge derivative financial instruments, net of tax	(39,629)		26,734		(77,254)		69,370
Net unrealized (losses) / gains on investment in debt securities, net of tax	8,512		(27,477)		3,219		(25,452)

Other	51		(39)		(20)		15,066
TOTAL OTHER COMPREHENSIVE (LOSS) / INCOME, NET OF TAX	(31,066)		(782)		(74,055)		58,984
COMPREHENSIVE INCOME	$	553,637	$	496,962	$	924,819	$	922,602

See accompanying notes to the Unaudited Condensed Consolidated Financial Statements

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SANTANDER HOLDINGS USA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY

Unaudited (In thousands)



	Common Shares Outstanding	Common Stock and Paid-in Capital		Accumulated Other Comprehensive Loss, Net of Tax		Accumulated Deficit		Total Stockholder's Equity		Preferred Stock Mezzanine
Balance, April 1, 2026	530,391	$	17,289,649	$	(576,548)	$	(459,208)	$	16,253,893	$	2,000,000

Comprehensive (loss) / income	—	—		(31,066)		584,703		553,637		—








Dividends paid on common stock	—	—		—		(250,000)		(250,000)		—


Dividends paid on preferred stock	—	—		—		(44,175)		(44,175)		—



Stock compensation	—	(13,684)		—		—		(13,684)		—
Balance, June 30, 2026	530,391	$	17,275,965	$	(607,614)	$	(168,680)	$	16,499,671	$	2,000,000

	Common Shares Outstanding	Common Stock and Paid-in Capital		Accumulated Other Comprehensive Loss, Net of Tax		Accumulated Deficit		Total Stockholder's Equity		Preferred Stock Mezzanine
Balance, April 1, 2025	530,391	$	17,335,889	$	(657,934)	$	(620,963)	$	16,056,992	$	2,000,000

Comprehensive (loss) / income	—	—		(782)		497,744		496,962		—









Dividends paid on preferred stock	—	—		—		(44,175)		(44,175)		—
Stock compensation	—	(21,527)		—		—		(21,527)		—


Balance, June 30, 2025	530,391	$	17,314,362	$	(658,716)	$	(167,394)	$	16,488,252	$	2,000,000



	Common Shares Outstanding	Common Stock and Paid-in Capital		Accumulated Other Comprehensive Loss, Net of Tax		Accumulated Deficit		Total Stockholder's Equity		Preferred Stock Mezzanine

































Balance, January 1, 2026	530,391	$	17,307,470	$	(533,559)	$	(829,204)	$	15,944,707	$	2,000,000

Comprehensive (loss) / income	—	—		(74,055)		998,874		924,819		—








Dividends paid on common stock	—	—		—		(250,000)		(250,000)		—


Dividends paid on preferred stock	—	—		—		(88,350)		(88,350)		—




Stock compensation	—	(31,505)		—		—		(31,505)		—
Balance, June 30, 2026	530,391	$	17,275,965	$	(607,614)	$	(168,680)	$	16,499,671	$	2,000,000

	Common Shares Outstanding	Common Stock and Paid-in Capital		Accumulated Other Comprehensive Loss, Net of Tax		Accumulated Deficit		Total Stockholder's Equity		Preferred Stock Mezzanine
Balance, January 1, 2025	530,391	$	17,335,889	$	(717,700)	$	(942,662)	$	15,675,527	$	2,000,000

Comprehensive income	—	—		58,984		863,618		922,602		—





Dividends paid on preferred stock	—	—		—		(88,350)		(88,350)		—




Stock compensation	—	(21,527)		—		—		(21,527)		—

Balance, June 30, 2025	530,391	$	17,314,362	$	(658,716)	$	(167,394)	$	16,488,252	$	2,000,000

See accompanying notes to the Unaudited Condensed Consolidated Financial Statements

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SANTANDER HOLDINGS USA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Unaudited (in thousands)


	Six months ended June 30,
	2026		2025

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	998,874	$	863,618
Adjustments to reconcile net income to net cash provided by operating activities:

Credit loss expense	678,978		798,810
Deferred tax expense / (benefit)	(820)		(171,482)
Depreciation, amortization and accretion	1,093,630		1,292,366
Net gain on sale or disposal of loans, investment securities, and other assets	(40,834)		(78,888)









Originations and purchases of LHFS	(3,810,038)		(3,376,731)

Proceeds from sales of and collections on LHFS	3,918,591		2,751,581


Net change in:
Trading securities and trading liabilities, net	(2,801,366)		(5,276,569)

Other assets and BOLI	(367,968)		108,747
Other liabilities	1,095,646		1,148,628

Other operating activities, net	(2,296)		(3,370)
NET CASH PROVIDED BY / (USED IN) OPERATING ACTIVITIES	762,397		(1,943,290)

CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of AFS investment securities	503,234		300,354
Proceeds from prepayments and maturities of AFS investment securities	385,160		367,895
Purchases of AFS investment securities	(387,623)		(812,884)
Proceeds from prepayments and maturities of HTM investment securities	1,090,016		453,409
Purchases of HTM investment securities	(963,284)		(319,623)
Proceeds from sales and maturities of equity method and other investments	139,236		94,102

Purchases of and contributions to equity method and other investments	(389,704)		(292,020)

Net change in federal funds sold and securities purchased under resale agreements	(800,470)		191,077

Proceeds from sales of LHFI	136,255		199,303



Purchases of LHFI	(208,234)		—


Net change in loans other than purchases and sales	(1,031,160)		19,163
Purchases and originations of operating leases	(586,771)		(1,612,134)
Proceeds from the sale and termination of operating leases	1,720,942		2,031,689



Purchases and sales of premises, equipment, and real estate owned, net	(68,052)		(72,776)
Proceeds from sale of residual interest in VIE	—		96,449






Other investing activities, net	85,746		9,028
NET CASH (USED IN) / PROVIDED BY INVESTING ACTIVITIES	(374,709)		653,032

CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in deposits and other customer accounts	586,859		2,170,684
Net change in short-term borrowings	406,068		(1,096,537)
Net proceeds from long-term borrowings	6,490,494		15,827,565
Repayments of long-term borrowings	(11,282,033)		(16,508,798)


Net change in federal funds purchased and securities loaned or sold under repurchase agreements	2,674,723		4,225,534


Dividends paid on common stock and preferred stock	(338,350)		(88,350)








Other financing activities, net	1,163		16,204
NET CASH (USED IN) / PROVIDED BY FINANCING ACTIVITIES	(1,461,076)		4,546,302

NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH	(1,073,388)		3,256,044
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD	19,695,903		23,576,006
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD (1)	$	18,622,515	$	26,832,050

(1) The six months ended June 30, 2026 and 2025 include cash and cash equivalents balances of $11.4 billion and $21.2 billion, respectively, and restricted cash balances of $7.2 billion and $5.7 billion, respectively.

See accompanying notes to the Unaudited Condensed Consolidated Financial Statements

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NOTE 1. DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND ACCOUNTING POLICIES

SHUSA is the parent holding company of SBNA, a national banking association; SC, a consumer finance company headquartered in Dallas, Texas; BSI, a wholly-owned subsidiary of SBNA, a financial services company headquartered in Miami, Florida that offers a full range of banking services to foreign individuals and corporations based primarily in Latin America; SanCap, an institutional broker-dealer headquartered in New York which has significant capabilities in market-making via an experienced fixed-income sales and trading team and a focus on structuring and advisory services for asset originators in the real estate and specialty finance markets; SSLLC, a broker-dealer headquartered in Boston, Massachusetts; and several other subsidiaries. SHUSA is headquartered in Boston and SBNA's home office is in Wilmington, Delaware. SSLLC is a registered investment adviser with the SEC. SHUSA's two largest subsidiaries by asset size and revenue are SBNA and SC. SHUSA is a wholly-owned subsidiary of Santander. On December 30, 2025, SBNA filed applications with the FDIC and OCC for approval to merge Santander Consumer USA Holdings Inc., a consumer finance company headquartered in Dallas, Texas and a wholly-owned subsidiary of SHUSA, into SBNA, with SBNA to be the surviving entity.

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

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 regions. 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.

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NOTE 1. DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND ACCOUNTING POLICIES (continued)

Agreement to Acquire Webster Financial Corporation

On February 3, 2026, Santander and Webster entered into the Transaction Agreement. Among other things, the Transaction Agreement provides for the merger of Webster with and into Webster Virginia, with Webster Virginia continuing as the surviving corporation in such merger transaction, and, immediately afterwards, the acquisition by Santander of all outstanding shares of Webster Virginia common stock through a statutory share exchange, all subject to the terms and conditions of the Transaction Agreement. The Transaction Agreement is subject to standard governance procedures, including obtaining the approval of Santander's and Webster's shareholders. Following completion of these transactions, Santander and Webster intend for the following transactions to occur:

i.SHUSA and Santander intend to enter into an agreement which, among other things, provides for the contribution of all outstanding shares of Webster Virginia common stock to SHUSA.

ii.SHUSA and Webster Virginia intend to enter into an agreement which among other things, provides for the merger of Webster Virginia with and into SHUSA following the Webster Virginia contribution.

iii.SHUSA, SBNA and Webster Bank intend for (a) the contribution by SHUSA of all of the outstanding shares of capital stock of Webster Bank to SBNA for no considerations; and (b) the merger of Webster Bank with and into SBNA immediately following the Webster Bank contribution, with SBNA being the surviving bank of such merger.

On March 30, 2026, SHUSA, SBNA and Webster Bank entered into an Agreement and Plan of Merger to provide for the Webster Bank contribution to SBNA and subsequent merger into SBNA. Also on March 30, 2026, SBNA submitted a Bank Merger Act application to request approval from the OCC for the bank merger and has received that approval. Regulatory applications have also been submitted to the Federal Reserve and the European Central Bank in connection with the transaction. Approval of Santander's and Webster's shareholders and the European Central Bank has been obtained.

Completion of the merger of Webster Bank into SBNA remains contingent upon the fulfillment of certain conditions at or prior to the event, including that all prior transactions related to the acquisition of Webster by Santander and subsequent contribution of Webster Bank to SBNA have closed and become effective. The transaction is expected to close in the second half of 2026.

Basis of Presentation

These Condensed Consolidated Financial Statements include the accounts of the Company and its consolidated subsidiaries, including certain Trusts that are considered VIEs. The Company generally consolidates VIEs for which it is deemed to be the primary beneficiary and VOEs in which the Company has a controlling financial interest. All significant intercompany balances and transactions have been eliminated in consolidation.

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NOTE 1. DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND ACCOUNTING POLICIES (continued)

These Condensed Consolidated Financial Statements have been prepared in accordance with GAAP and pursuant to SEC regulations. In the opinion of management, the accompanying Condensed Consolidated Financial Statements reflect all adjustments of a normal and recurring nature necessary for a fair statement of the Consolidated Balance Sheets, Statements of Operations, Statements of Comprehensive Income, Statements of Stockholder's Equity and Statement of Cash Flows for the periods indicated, and contain adequate disclosure to make the information presented not misleading.

Certain prior-period amounts have been reclassified to conform to the current period presentation. These reclassifications did not have a material impact on the Company's consolidated financial condition or results of operations.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Actual results could differ from those estimates, and those differences may be material. The most significant estimates include the ACL, expected end-of-term lease residual values, and goodwill. These estimates, although based on actual historical trends and modeling, may potentially show significant variances over time.

Recently Adopted Accounting Standards

During the fourth quarter of 2025, the Company adopted ASU 2025-08 Financial Instruments - Credit Losses (Topic 326): Purchased Loans. This ASU expands the population of acquired financial assets subject to the gross-up approach currently applied to PCD assets, under which the initial ACL is recorded through an adjustment to the initial amortized cost basis. This update requires certain non-PCD loans (excluding credit cards) acquired in a business combination or purchased at least 90 days after origination (provided the acquirer was not involved in the origination of the loan) to be deemed PSL and accounted for using the gross-up approach at acquisition. The non-credit adjustment to the loans’ basis is amortized to interest income over the remaining term.

Recently Issued Accounting Standards Not Yet Adopted

On November 26, 2024, the FASB issued ASU 2024-03 Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures: Disaggregation of Income Statement Expenses, which requires a breakout of expenses in specific areas including employee compensation, depreciation, and intangible asset amortization. The new disclosure requirements are effective for annual reporting periods beginning in 2027 and interim periods thereafter, with early adoption permitted. The new guidance can be applied either prospectively to reporting periods after the effective date, or retrospectively to any or all prior periods presented. The Company continues to evaluate the disclosure-only impact of this guidance.

On September 18, 2025, the FASB issued ASU 2025-06 Targeted Improvements to the Accounting for Internal-Use Software. This update is intended to modernize the accounting for internal-use software development costs. This update is effective beginning January 1, 2028, with early adoption permitted. The adoption of this ASU will not materially impact the Company’s financial position or results of operations.

On November 25, 2025, the FASB issued ASU 2025-09 Derivatives and Hedging (Topic 815): Hedge Accounting Improvements to enable entities to further align hedge accounting with their risk management strategies by applying hedge accounting to a greater number of highly effective economic hedges. The new guidance is effective for annual reporting periods beginning in 2027 and interim periods thereafter, with early adoption permitted. The amendments are applied prospectively with certain optional transition provisions for existing hedging relationships. The Company is currently evaluating the impact of this update on its consolidated financial statements and related disclosures.

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NOTE 2. INVESTMENT SECURITIES

Summary of Investments in Debt Securities - AFS and HTM

The following table presents the amortized cost, gross unrealized gains and losses and approximate fair values of investments in debt securities AFS at the dates indicated:


	June 30, 2026								December 31, 2025
(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Loss		Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Loss		Fair Value
U.S. Treasury securities	$	214,432	$	767	$	—	$	215,199	$	700,294	$	6,109	$	—	$	706,403

ABS	1,191,159		754		(4,502)		1,187,411		947,660		368		(2,731)		945,297
Beneficial interest in Structured LLC (1)	1,043,067		12,763		—		1,055,830		1,070,348		26,441		—		1,096,789
MBS:
GNMA - Residential	2,510,073		212		(255,253)		2,255,032		2,636,121		11		(253,651)		2,382,481
GNMA - Commercial	609,746		3		(144,663)		465,086		622,086		3		(143,412)		478,677
FHLMC and FNMA - Residential	1,837,557		168		(295,193)		1,542,532		1,924,705		255		(288,059)		1,636,901
FHLMC and FNMA - Commercial	77,682		—		(1,421)		76,261		82,388		—		(1,201)		81,187
Unallocated fair value hedge basis adjustment (2)	(57,402)		—		57,402		—		(27,321)		—		27,321		—
Total investments in debt securities AFS	$	7,426,314	$	14,667	$	(643,630)	$	6,797,351	$	7,956,281	$	33,187	$	(661,733)	$	7,327,735

(1) Represents a 20 percent interest in the Structured LLC to hold and service a pool of multi-family loans.

(2) The Company has entered into fair value hedges of portions of a closed portfolio of AFS debt securities, using the portfolio layer method. Refer to Note 10 for additional information.

The following table presents the amortized cost, gross unrealized gains and losses and approximate fair values of investments in debt securities HTM at the dates indicated:


	June 30, 2026								December 31, 2025
(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Loss		Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Loss		Fair Value
U.S. Treasury securities	$	1,784,726	$	855	$	(9,261)	$	1,776,320	$	2,080,033	$	7,581	$	(194)	$	2,087,420

ABS and other interests in structured securities	1,986,497		2,085		(9,069)		1,979,513		2,020,398		13,029		(1,855)		2,031,572

MBS:
GNMA - Residential	3,297,128		4,090		(414,880)		2,886,338		3,105,976		4,484		(402,208)		2,708,252
GNMA - Commercial	4,415,869		98		(899,297)		3,516,670		4,524,381		399		(887,818)		3,636,962
FHLMC and FNMA - Residential	1,325,969		420		(86,088)		1,240,301		1,433,747		2,583		(76,337)		1,359,993
FHLMC and FNMA - Commercial debt securities	150,171		—		(406)		149,765		47,259		—		(96)		47,163
Total investments in debt securities HTM	$	12,960,360	$	7,548	$	(1,419,001)	$	11,548,907	$	13,211,794	$	28,076	$	(1,368,508)	$	11,871,362

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NOTE 2. INVESTMENT SECURITIES (continued)

The following table presents the carrying value of the Company's investment securities pledged as collateral:


(in thousands)	June 30, 2026		December 31, 2025
Pledged against public fund deposits	$	2,002,427	$	2,266,746
Pledged against borrowing capacity with the FRB	5,325,126		4,270,467
Pledged against repurchase agreements and supported hedging relationships, recourse on loans	87,003		21,966
Pledged against customer overnight sweeps	287,317		313,752
Pledged against borrowing capacity with the FHLB	4,278,198		4,428,489

Total collateral pledged	$	11,980,071	$	11,301,420

At June 30, 2026 and December 31, 2025, the Company had $182.2 million and $157.5 million, respectively, of accrued interest related to investment securities which is included in the Other assets line of the Company's Condensed Consolidated Balance Sheets. No accrued interest related to investment securities was written off during the periods ended June 30, 2026 or December 31, 2025.

Contractual Maturity of Investments in Debt Securities

Contractual maturities of the Company’s investments in debt securities AFS at June 30, 2026 were as follows:



(in thousands)	Amortized Cost(1)		Fair Value
Due within one year	$	15,139	$	15,138
Due after 1 year but within 5 years	312,979		310,255
Due after 5 years but within 10 years	814,051		803,300
Due after 10 years	6,341,547		5,668,658
Total	$	7,483,716	$	6,797,351
(1) Does not include unallocated fair value hedge basis adjustment.

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NOTE 2. INVESTMENT SECURITIES (continued)

Contractual maturities(1) of the Company’s investments in debt securities HTM at June 30, 2026 were as follows:



(in thousands)	Amortized Cost		Fair Value
Due within one year	$	916,734	$	917,290
Due after 1 year but within 5 years	1,043,988		1,034,608
Due after 5 years but within 10 years	903,189		897,288
Due after 10 years	10,096,449		8,699,721
Total	$	12,960,360	$	11,548,907

(1) Actual maturities may differ from contractual maturities when there is a right to call or prepay obligations with or without call or prepayment penalties.

Gross Unrealized Loss and Fair Value of Investments in Debt Securities AFS and HTM

The following table presents the aggregate amount of unrealized losses on debt securities in the Company’s AFS investment portfolios classified according to the amount of time those securities have been in a continuous loss position as of the dates indicated:


	June 30, 2026								December 31, 2025
	Less than 12 months				12 months or longer				Less than 12 months				12 months or longer
(in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Treasury securities	$	14,988	$	—	$	—	$	—	$	—	$	—	$	—	$	—

ABS	600,543		(3,903)		90,604		(599)		434,698		(1,230)		189,601		(1,501)

MBS:
GNMA - Residential	825		(1)		2,196,012		(255,252)		24,646		(3)		2,346,590		(253,648)
GNMA - Commercial	422		—		464,662		(144,663)		—		—		478,674		(143,412)
FHLMC and FNMA - Residential	—		—		1,530,280		(295,193)		—		—		1,622,952		(288,059)
FHLMC and FNMA - Commercial	149,764		—		76,261		(1,421)		—		—		81,187		(1,201)

Total investments in debt securities AFS (1)	$	766,542	$	(3,904)	$	4,357,819	$	(697,128)	$	459,344	$	(1,233)	$	4,719,004	$	(687,821)

(1) Does not include unallocated fair value hedge basis adjustment.

The following table presents the aggregate amount of unrealized losses on debt securities in the Company’s HTM investment portfolios classified according to the amount of time those securities have been in a continuous loss position as of the dates indicated:


	June 30, 2026								December 31, 2025
	Less than 12 months				12 months or longer				Less than 12 months					12 months or longer
(in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
U.S. Treasury securities	$	1,181,580	$	(9,261)	$	—	$	—		$	304,680	$	(194)		$	—	$	—

ABS and other interests in structured securities	928,392		(9,069)		—		—			261,227		(1,855)			5,390		—

MBS:
GNMA - Residential	478,571		(2,939)		1,759,635		(411,941)			74,417		(71)			1,857,758		(402,137)
GNMA - Commercial	25,787		(295)		3,466,362		(899,002)			21,409		(522)			3,587,702		(887,296)
FHLMC and FNMA - Residential	130,182		(304)		976,855		(85,784)			21,926		(22)			1,043,428		(76,315)
FHLMC and FNMA - Commercial	149,764		(406)		—		—			47,162		(96)			—		—
Total investments in debt securities HTM	$	2,894,276	$	(22,274)	$	6,202,852	$	(1,396,727)		$	730,821	$	(2,760)		$	6,494,278	$	(1,365,748)

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NOTE 2. INVESTMENT SECURITIES (continued)

Allowance for credit-related losses on AFS and HTM securities

As discussed in Note 1 to the Company's Annual Report on Form 10-K for 2025, securities for which management expects risk of nonpayment of the amortized cost basis is zero do not have a reserve. Management has performed a review of securities that do not qualify for the zero credit loss expectation exception and concluded that the unrealized losses are not credit-related. As a result, the Company did not record an allowance for credit-related losses on AFS or HTM securities at June 30, 2026 or December 31, 2025.

Gains (Losses) on Investment and Trading Securities

The realized gains and losses from investment and trading securities were as follows for the periods indicated:


	Three months ended June 30,				Six months ended June 30,
(in thousands)	2026		2025		2026		2025


AFS debt and other securities:
Gross realized gains	$	—	$	105	$	2,219	$	104
Gross realized losses			—		—		(169)

Net realized gains/(losses) on AFS and other securities	$	—	$	105	$	2,219	$	(65)
Total trading securities gains /(losses)	(6,035)		21,558		18,226		61,987
Total equity securities gains	28,155		—		28,155		—
Securities gains, net	$	22,120	$	21,663	$	48,600	$	61,922

The Company uses the specific identification method to determine the cost of the securities sold and the gain or loss recognized.

Trading Securities

At June 30, 2026 and December 31, 2025, the Company held $17.9 billion and $15.6 billion, respectively, of trading securities. Gains and losses on trading securities are recorded within Securities gains, net on the Company's Condensed Consolidated Statements of Operations. At June 30, 2026 and December 31, 2025, the Company had $16.7 billion and $15.3 billion, respectively, of assets classified as trading securities pledged as collateral to counterparties that have the right to repledge these securities.

Other Investments

Other investments consisted of the following as of the dates indicated:


(in thousands)	June 30, 2026		December 31, 2025
FHLB of Pittsburgh and FRB stock	$	469,896	$	508,375
LIHTC investments	1,094,704		1,034,197

Equity securities (1)	956,193		1,019,862
Interest-bearing deposits with an affiliate bank (2)	5,000		5,000

Total	$	2,525,793	$	2,567,434

(1) Includes $4.8 million and $4.4 million of retained interests in structured entities related to off-balance sheet securitizations as of June 30, 2026 and December 31, 2025, respectively, and $23.0 million and $23.0 million of equity securities accounted for at cost less impairment.

(2) Interest-bearing deposits include deposits maturing in more than 90 days with Santander affiliates that are not consolidated.

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NOTE 2. INVESTMENT SECURITIES (continued)

The Company's FHLB and FRB stock purchases and redemptions were as follows for the period indicated below. There were no gains or losses associated with these redemptions.


(in thousands)	Three months ended June 30, 2026		Six months ended June 30, 2026
FLHB stock purchased at par	$	32,335	$	32,388
FHLB stock redeemed at par	21,319		82,097
FRB stock purchased at par	—		16,046
FRB stock redeemed at par	4,816		4,816

The Company's LIHTC investments are accounted for using the proportional amortization method. Equity securities and retained interests in structured entities are generally measured at fair value with changes in fair value recognized in net income. Certain privately held equity investments without a readily determinable fair value are accounted for at cost less impairment under the measurement alternative in ASC 321.

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NOTE 3. LOANS AND ALLOWANCE FOR CREDIT LOSSES

Loan and Lease Portfolio Composition

The Company's LHFI are generally reported at their outstanding principal balances net of any cumulative charge-offs, unamortized deferred fees and costs and unamortized premiums or discounts. Certain LHFI are accounted for at fair value under the FVO. Certain loans are pledged as collateral for borrowings, securitizations, or SPEs. These pledged loans totaled $43.2 billion at June 30, 2026 and $50.1 billion at December 31, 2025.

LHFS includes loans the Company has the intent to sell or securitize in an off-balance sheet securitization and loans that the Company no longer intends to hold to maturity or for the foreseeable future. For a discussion on the composition and valuation of LHFS at fair value, see Note 11 to these Condensed Consolidated Financial Statements.

At June 30, 2026 and December 31, 2025, accrued interest receivable on the Company's loans was $546.5 million and $587.7 million, respectively.

The following presents the composition of loans and leases HFI by portfolio and by rate type as of the dates indicated:


	June 30, 2026		December 31, 2025

(dollars in thousands)	Amount			Amount
Commercial LHFI:
CRE loans	$	7,704,553		$	8,135,821
C&I loans	7,612,915			7,820,988
Multifamily loans	9,374,705			9,601,558
Other commercial	8,501,793			8,249,571
Total commercial LHFI	$	33,193,966		$	33,807,938
Consumer loans secured by real estate:
Residential mortgages	3,865,983			4,039,103
Home equity loans and lines of credit	1,662,588			1,797,387
Total consumer loans secured by real estate	$	5,528,571		$	5,836,490
Consumer loans not secured by real estate:
RICs and auto loans	43,513,398			42,736,050
Personal unsecured loans	460,152			492,525
Other consumer	13,987			18,306
Total consumer loans	$	49,516,108		$	49,083,371
Total LHFI (1)	$	82,710,074		$	82,891,309

Fixed rate	$	59,145,943		$	59,079,072
Variable rate	23,564,131			23,812,237
Total LHFI (1)	$	82,710,074		$	82,891,309

(1) Total LHFI includes unamortized deferred loan fees, net of deferred origination costs; unamortized purchase premiums, net of discounts; unamortized

participation fees; accretable Subvention; as well as purchase accounting adjustments. These items resulted in a net positive adjustment to the loan balances of $530.5 million and $607.1 million as of June 30, 2026 and December 31, 2025, respectively.

During the six-month period ended June 30, 2026, the Company completed a clean-up call of an existing off-balance sheet securitization, which resulted in the repurchase of approximately $205.0 million of gross RICs for which a total reserve of $38.7 million was recorded at the acquisition date. The clean-up call included the purchase of approximately $23.3 million in PCD loans for which a reserve of $9.8 million was recorded at the acquisition date.

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NOTE 3. LOANS AND ALLOWANCE FOR CREDIT LOSSES (continued)

Portfolio segments and classes

The Company discloses information about the credit quality of its loans and leases at disaggregated levels, specifically defined as “portfolio segments” and “classes,” based on management’s systematic methodology for determining the ACL. The Company utilizes similar categorization compared to the financial statement categorization of loans to model and calculate the ACL and track the credit quality, delinquency and impairment status of the underlying loan populations. In disaggregating its financing receivables portfolio, the Company’s methodology begins with the commercial and consumer portfolio segments.

The commercial portfolio segmentation reflects line of business distinctions. The CRE line of business includes C&I owner-occupied real estate and specialized lending for investment real estate. C&I includes non-real estate-related commercial loans. "Multifamily" represents loans for multifamily residential housing units. “Other commercial” includes loans to global customer relationships in Latin America which are not defined as commercial or consumer for regulatory purposes as well as the Company's CEVF portfolio.

The Company's portfolio classes are substantially the same as its financial statement categorization of loans for consumer loan populations. “Residential mortgages” includes mortgages on residential property, including single family and 1-4 family units. "Home equity loans and lines of credit" include all organic home equity contracts and purchased home equity portfolios. "RICs and auto loans" includes the Company's direct automobile loan portfolios but excludes RV and marine RICs. "Personal unsecured loans" includes personal revolving loans and credit cards. “Other consumer” includes an acquired portfolio of marine RICs and RV contracts.

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NOTE 3. LOANS AND ALLOWANCE FOR CREDIT LOSSES (continued)

ACL Rollforward by Portfolio Segment

The ACL is comprised of the ALLL and the reserve for unfunded lending commitments. The activity in the ACL by portfolio segment was as follows for the periods indicated:


	Three months ended June 30, 2026				Three months ended June 30, 2025
(in thousands)	Commercial		Consumer		Total		Commercial		Consumer		Total
ALLL, beginning of period	$	466,146	$	5,488,175	$	5,954,321	$	527,408	$	5,906,497	$	6,433,905

Credit loss expense/(benefit)	3,790		256,952		260,742		11,598		362,603		374,201
Charge-offs	(17,954)		(1,023,014)		(1,040,968)		(30,452)		(1,052,279)		(1,082,731)
Recoveries	7,251		637,275		644,526		14,210		617,115		631,325
Charge-offs, net of recoveries	$	(10,703)	$	(385,739)	$	(396,442)	$	(16,242)	$	(435,164)	$	(451,406)
ALLL, end of period	$	459,233	$	5,359,388	$	5,818,621	$	522,764	$	5,833,936	$	6,356,700

Reserve for unfunded lending commitments, beginning of period	$	37,683	$	9,506	$	47,189	$	44,358	$	10,935	$	55,293
Credit loss (benefit) on unfunded lending commitments	(12,948)		(158)		(13,106)		(1,410)		76		(1,334)
Loss on unfunded lending commitments	—		—		—		59		—		59
Reserve for unfunded lending commitments, end of period	$	24,735	$	9,348	$	34,083	$	43,007	$	11,011	$	54,018
Total ACL, end of period	$	483,968	$	5,368,736	$	5,852,704	$	565,771	$	5,844,947	$	6,410,718



	Six months ended June 30, 2026						Six months ended June 30, 2025
(in thousands)	Commercial		Consumer		Total		Commercial		Consumer		Total
ALLL, beginning of period	$	471,728	$	5,527,928	$	5,999,656	$	565,685	$	5,996,327	$	6,562,012

Day 1 allowance on purchased loans at acquisition (1)	—		38,720		38,720		—		—		—
Credit loss expense / (benefit)	19,793		677,617		697,410		9,496		783,239		792,735
Charge-offs	(48,473)		(2,188,972)		(2,237,445)		(80,863)		(2,196,826)		(2,277,689)
Recoveries	16,185		1,304,095		1,320,280		28,446		1,251,196		1,279,642
Charge-offs, net of recoveries	$	(32,288)	$	(884,877)	$	(917,165)	$	(52,417)	$	(945,630)	$	(998,047)
ALLL, end of period	$	459,233	$	5,359,388	$	5,818,621	$	522,764	$	5,833,936	$	6,356,700

Reserve for unfunded lending commitments, beginning of period	$	42,638	$	9,877	$	52,515	$	46,026	$	1,917	$	47,943
Credit loss expense/ (benefit) on unfunded lending commitments	(17,903)		(529)		(18,432)		(3,019)		9,094		6,075

Reserve for unfunded lending commitments, end of period	$	24,735	$	9,348	$	34,083	$	43,007	$	11,011	$	54,018
Total ACL, end of period	$	483,968	$	5,368,736	$	5,852,704	$	565,771	$	5,844,947	$	6,410,718
(1) Purchased loans comprise PSL and PCD loans.

The credit risk in the Company’s loan portfolios is driven by credit and collateral quality and is affected by borrower-specific and economy-wide factors. In general, there is an inverse relationship between the credit quality of loans and projections of impairment losses, so that loans with better credit quality require a lower expected loss reserve. The Company manages this risk through its underwriting, pricing strategies, credit policy standards, and servicing guidelines and practices, as well as the application of geographic and other concentration limits.

The Company estimates CECL based on prospective information as well as account-level models based on historical data. Unemployment, HPI, CRE price index and used vehicle index growth rates, along with loan level characteristics, are the key inputs used in the models for prediction of the likelihood that the borrower will default in the forecasted period (the PD) and the loss in the event of default (the LGD). GDP is also a key input used in the models for the prediction of the likelihood that a borrower will default. The Company has determined the reasonable and supportable period to be three years, at which time the economic forecasts generally tend to revert to historical averages. The Company also utilizes qualitative adjustments to capture any additional risks that may not be captured in either the economic forecasts or in the historical data, including consideration of several factors such as the interpretation of economic trends and uncertainties, changes in the nature and volume of loan portfolios, trends in delinquency and collateral values, and concentration risk.

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NOTE 3. LOANS AND ALLOWANCE FOR CREDIT LOSSES (continued)

The Company generally uses a third-party vendor's consensus baseline macroeconomic scenario for the quantitative estimate and additional positive and negative macroeconomic scenarios to make qualitative adjustments for macroeconomic uncertainty and considers adjustments to macroeconomic inputs and outputs based on market volatility. The baseline scenario was based on the latest consensus forecasts available, which assume an increasing unemployment rate (which is a key driver of losses) and other macroeconomic uncertainties due to tariffs and other trade policies of the U.S. and its global trading partners. Additional downward risks continue to exist due to uncertainties related to increasing consumer indebtedness, restricted job growth undermining consumer spending and growth, broader global trade dynamics and inflationary challenges. Using the weighted average of a range of economic forecast scenarios, we estimated at June 30, 2026 that the unemployment rate is expected to be approximately 5.3% at the end of 2026. In comparison, at December 31, 2025, management estimated the unemployment rate to be 5.5% at the end of 2025. Additionally, the weighted used vehicle index, where a higher number corresponds to a higher used car price at auction, was estimated at June 30, 2026 to be approximately 211 at the end of 2026, compared to our estimate at December 31, 2025 to be approximately 215 at the end of 2025. The scenarios used by the Company are periodically reassessed over a reasonable and supportable time horizon, with weightings assigned by management and approved through the established governance process.

The Company's ACL was $5.9 billion at June 30, 2026, a decrease of $199.5 million from December 31, 2025. The decrease in the ACL was primarily attributable to changes in portfolio composition in RIC and auto loans and lower exposure in the personal unsecured portfolio. The ACL for the consumer portfolio segment decreased by $169.1 million and the ACL for the commercial portfolio segment decreased by $30.4 million at June 30, 2026 compared to December 31, 2025.

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NOTE 3. LOANS AND ALLOWANCE FOR CREDIT LOSSES (continued)

Non-accrual loans by Class of Financing Receivable

The amortized cost basis of financing receivables that are non-accrual and other non-performing assets disaggregated by class of financing receivables (as well as the amount of non-accrual loans for which no related allowance is recorded) are as follows at the dates indicated:


	Non-accrual loans and other non-performing assets as of:(1)				Non-accrual loans with no related allowance
(in thousands)	June 30, 2026		December 31, 2025		June 30, 2026		December 31, 2025

Non-accrual loans:
Commercial:
CRE	$	157,297	$	187,657	$	94,884	$	79,107
C&I	109,300		47,813		35,134		25,817
Multifamily	392,332		309,994		143,797		89,352
Other commercial	4,404		4,518		—		—
Total commercial loans	$	663,333	$	549,982	$	273,815	$	194,276
Consumer:
Residential mortgages	48,091		59,089		1,331		1,411
Home equity loans and lines of credit	49,320		57,109		10,580		10,604
RICs and auto loans	2,419,807		2,683,202		172,306		167,766
Personal unsecured loans	51		93		—		—
Other consumer	12,842		18,413		1		15
Total consumer loans	$	2,530,111	$	2,817,906	$	184,218	$	179,796
Total non-accrual loans	$	3,193,444	$	3,367,888	$	458,033	$	374,072

OREO	21,812		41,978		—		—
Repossessed vehicles	242,278		249,913		—		—
Foreclosed and other repossessed assets	1,646		1,297		—		—
Total OREO and other repossessed assets	$	265,736	$	293,188	$	—	$	—
Total non-performing assets	$	3,459,180	$	3,661,076	$	458,033	$	374,072

(1) Interest income recognized on a cash basis on nonaccrual loans was $78.6 million and $166.3 million for the three months and six months ended June 30, 2026, respectively, and $66.0 million and $134.7 million for the three months and six months ended June 30, 2025, respectively.

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NOTE 3. LOANS AND ALLOWANCE FOR CREDIT LOSSES (continued)

Age Analysis of Past Due Loans

The Company generally considers an account delinquent when an obligor fails to pay substantially all (defined as 90%) of the scheduled payment by the due date. When an account is deferred, the loan is returned to accrual status during the deferral period and accrued interest related to the loan is evaluated for collectability.

The amortized cost of past due loans and accruing loans 90 days or greater past due disaggregated by class of financing receivables is summarized as follows at the dates indicated:


As of:	June 30, 2026
(in thousands)	30-89 Days Past Due		90 Days or Greater		Total Past Due		Current		Total Financing Receivables		Amortized Cost > 90 Days and Accruing
Commercial:
CRE (1)	$	23,355	$	73,163	$	96,518	$	7,830,619	$	7,927,137	$	—
C&I (2)	52,561		10,159		62,720		7,759,810		7,822,530		—
Multifamily	49,265		182,995		232,260		9,142,445		9,374,705		—
Other commercial	53,538		3,044		56,582		8,445,211		8,501,793		—
Consumer:
Residential mortgages (3)	81,218		45,738		126,956		4,942,439		5,069,395		—
Home equity loans and lines of credit	22,131		39,850		61,981		1,600,607		1,662,588		—
RICs and auto loans(4)	5,774,443		532,725		6,307,168		37,306,409		43,613,577		—
Personal unsecured loans	9,863		9,305		19,168		440,984		460,152		7,946
Other consumer	480		15		495		13,492		13,987		—
Total	$	6,066,854	$	896,994	$	6,963,848	$	77,482,016	$	84,445,864	$	7,946

(1) CRE loans include $222.6 million of LHFS at June 30, 2026.

(2) C&I loans include $209.6 million of LHFS at June 30, 2026.

(3) Residential mortgages include $1.2 billion of LHFS at June 30, 2026.

(4) RICs and auto loans include $100.2 million of LHFS at June 30, 2026.


As of:	December 31, 2025
(in thousands)	30-89 Days Past Due		90 Days or Greater		Total Past Due		Current		Total Financing Receivables		Recorded Investment > 90 Days and Accruing
Commercial:
CRE(1)	$	53,752	$	106,685	$	160,437	$	8,207,814	$	8,368,251	$	—
C&I (2)	63,648		13,039		76,687		7,885,134		7,961,821		—
Multifamily	73,986		159,064		233,050		9,368,508		9,601,558		—
Other commercial	66,114		3,366		69,480		8,180,091		8,249,571		1
Consumer:
Residential mortgages (3)	77,611		59,167		136,778		5,115,266		5,252,044		—
Home equity loans and lines of credit	27,930		46,348		74,278		1,723,109		1,797,387		—
RICs and auto loans	6,072,147		673,386		6,745,533		35,990,517		42,736,050		—
Personal unsecured loans	21,996		18,049		40,045		452,480		492,525		8,699
Other consumer	863		205		1,068		17,238		18,306		—
Total	$	6,458,047	$	1,079,309	$	7,537,356	$	76,940,157	$	84,477,513	$	8,700

(1)CRE loans include $232.4 million of LHFS at December 31, 2025.

(2)C&I loans included $140.8 million of LHFS at December 31, 2025.

(3) Residential mortgages included $1.2 billion of LHFS at December 31, 2025.

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NOTE 3. LOANS AND ALLOWANCE FOR CREDIT LOSSES (continued)

Commercial Lending Asset Quality Indicators

The Company's Risk Department performs a credit analysis and classifies certain loans over an internal threshold based on the commercial lending classifications described below:

PASS. Asset is well-protected by the current net worth and paying capacity of the obligor or guarantors, if any, or by the fair value less costs to acquire and sell any underlying collateral in a timely manner.

SPECIAL MENTION. Asset has potential weaknesses that deserve management’s close attention, which, if left uncorrected, may result in deterioration of the repayment prospects for an asset at some future date. Special mention assets are not adversely classified.

SUBSTANDARD. Asset is inadequately protected by the current net worth and paying capacity of the obligor or by the collateral pledged, if any. A well-defined weakness or weaknesses exist that jeopardize the liquidation of the debt. The loans are characterized by the distinct possibility that the Company will sustain some loss if deficiencies are not corrected.

DOUBTFUL. Exhibits the inherent weaknesses of a substandard credit. Additional characteristics exist that make collection or liquidation in full highly questionable and improbable, on the basis of currently known facts, conditions and values. Possibility of loss is extremely high, but because of certain important and reasonable specific pending factors which may work to the advantage and strengthening of the credit, an estimated loss cannot yet be determined.

LOSS. Credit is considered uncollectible and of such little value that it does not warrant consideration as an active asset. There may be some recovery or salvage value, but there is doubt as to whether, how much or when the recovery would occur.

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NOTE 3. LOANS AND ALLOWANCE FOR CREDIT LOSSES (continued)

Each commercial loan is evaluated to determine its risk rating at least annually. The indicators represent the rating for loans as of the date presented based on the most recent assessment performed. Amortized cost basis of loans in the commercial portfolio segment by credit quality indicator, class of financing receivable, and year of origination are summarized as follows:


June 30, 2026	Commercial Loan Portfolio (2)
(dollars in thousands)	Amortized Cost by Origination Year
Regulatory Rating:	2026(1)		2025		2024		2023		2022		Prior		Total (3)
CRE
Pass	$	215,392	$	591,794	$	1,218,120	$	1,134,568	$	1,140,150	$	1,535,660	$	5,835,684
Special mention	—		—		93,851		150,680		628,644		66,352		939,527
Substandard	—		9,522		117		61,764		465,559		614,964		1,151,926


Total CRE	$	215,392	$	601,316	$	1,312,088	$	1,347,012	$	2,234,353	$	2,216,976	$	7,927,137
Current period gross write-offs - CRE	$	—	$	—	$	—	$	—	$	—	$	2,838	$	2,838
C&I
Pass	$	743,656	$	510,008	$	757,739	$	374,909	$	753,461	$	2,725,260	$	5,865,033
Special mention	—		66,434		11,395		107,003		39,108		307,593		531,533
Substandard	—		28,243		87,135		68,913		142,299		313,855		640,445

N/A(4)	103,779		301,951		211,447		90,530		59,633		18,179		785,519
Total C&I	$	847,435	$	906,636	$	1,067,716	$	641,355	$	994,501	$	3,364,887	$	7,822,530
Current period gross write-offs - C&I	$	105	$	5,238	$	6,646	$	5,757	$	4,225	$	2,529	$	24,500
Multifamily
Pass	$	466,086	$	799,482	$	56,137	$	455,666	$	2,579,284	$	3,410,337	$	7,766,992
Special mention	—		31,794		—		110,193		155,370		18,227		315,584
Substandard	—		—		—		176,716		487,455		627,958		1,292,129


Total multifamily	$	466,086	$	831,276	$	56,137	$	742,575	$	3,222,109	$	4,056,522	$	9,374,705
Current period gross write-offs - Multifamily	$	—	$	—	$	—	$	—	$	—	$	15,994	$	15,994
Remaining commercial
Pass	$	2,908,659	$	2,280,779	$	1,165,899	$	583,928	$	546,511	$	1,011,612	$	8,497,388

Substandard	—		116		1,247		886		956		1,200		4,405


Total remaining commercial	$	2,908,659	$	2,280,895	$	1,167,146	$	584,814	$	547,467	$	1,012,812	$	8,501,793
Current period gross write-offs - Remaining commercial	$	37	$	—	$	—	$	—	$	—	$	5,104	$	5,141
Total commercial loans
Pass	$	4,333,793	$	4,182,063	$	3,197,895	$	2,549,071	$	5,019,406	$	8,682,869	$	27,965,097
Special mention	—		98,228		105,246		367,876		823,122		392,172		1,786,644
Substandard	—		37,881		88,499		308,279		1,096,269		1,557,977		3,088,905

N/A(4)	103,779		301,951		211,447		90,530		59,633		18,179		785,519
Total commercial loans	$	4,437,572	$	4,620,123	$	3,603,087	$	3,315,756	$	6,998,430	$	10,651,197	$	33,626,165
Current period gross write-offs - Total commercial	$	142	$	5,238	$	6,646	$	5,757	$	4,225	$	26,465	$	48,473

(1)Loans originated during the six months ended June 30, 2026.

(2)Includes $432.2 million of LHFS at June 30, 2026.

(3)Includes $1.9 million of revolving loans converted to term loans.

(4)Not subject to internal risk rating process.

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NOTE 3. LOANS AND ALLOWANCE FOR CREDIT LOSSES (continued)


December 31, 2025	Commercial Loan Portfolio (2)
(dollars in thousands)	Amortized Cost by Origination Year
Regulatory Rating:	2025(1)		2024		2023		2022		2021		Prior		Total (3)
CRE
Pass	$	593,052	$	1,033,158	$	1,291,871	$	1,602,467	$	513,182	$	1,167,704	$	6,201,434
Special mention	9,720		—		156,521		770,466		192,505		199,083		1,328,295
Substandard	—		137		27,886		386,822		102,459		288,730		806,034
Doubtful	—		—		—		—		—		32,488		32,488

Total CRE	$	602,772	$	1,033,295	$	1,476,278	$	2,759,755	$	808,146	$	1,688,005	$	8,368,251
Current period gross write-offs - CRE	$	—	$	—	$	—	$	—	$	8,650	$	48,802	$	57,452
C&I
Pass	$	777,229	$	902,846	$	465,249	$	1,030,736	$	555,840	$	2,334,869	$	6,066,769
Special mention	63,594		20,419		90,361		42,008		98,873		167,823		483,078
Substandard	35		45,343		67,662		108,544		77,000		255,250		553,834

N/A(4)	352,229		261,666		119,486		89,734		29,795		5,230		858,140
Total C&I	$	1,193,087	$	1,230,274	$	742,758	$	1,271,022	$	761,508	$	2,763,172	$	7,961,821
Current period gross write-offs - C&I	$	3,265	$	14,301	$	13,411	$	14,052	$	4,864	$	14,711	$	64,604
Multifamily
Pass	$	831,626	$	62,702	$	488,387	$	2,943,747	$	1,385,731	$	2,298,668	$	8,010,861
Special mention	—		—		139,090		126,189		60,505		126,876		452,660
Substandard	—		—		120,054		411,352		222,928		383,703		1,138,037


Total multifamily	$	831,626	$	62,702	$	747,531	$	3,481,288	$	1,669,164	$	2,809,247	$	9,601,558
Current period gross write-offs - Multifamily	$	—	$	—	$	—	$	2,545	$	1,247	$	10,543	$	14,335
Remaining commercial
Pass	$	4,277,683	$	1,340,972	$	788,195	$	625,067	$	341,222	$	872,814	$	8,245,953

Substandard	—		1,200		259		607		738		814		3,618


Total remaining commercial	$	4,277,683	$	1,342,172	$	788,454	$	625,674	$	341,960	$	873,628	$	8,249,571
Current period gross write-offs - Remaining commercial	$	—	$	—	$	—	$	—	$	—	$	7,222	$	7,222
Total commercial loans
Pass	$	6,479,590	$	3,339,678	$	3,033,702	$	6,202,017	$	2,795,975	$	6,674,055	$	28,525,017
Special mention	73,314		20,419		385,972		938,663		351,883		493,782		2,264,033
Substandard	35		46,680		215,861		907,325		403,125		928,497		2,501,523
Doubtful	—		—		—		—		—		32,488		32,488
N/A(4)	352,229		261,666		119,486		89,734		29,795		5,230		858,140
Total commercial loans	$	6,905,168	$	3,668,443	$	3,755,021	$	8,137,739	$	3,580,778	$	8,134,052	$	34,181,201
Current period gross write-offs - Total commercial	$	3,265	$	14,301	$	13,411	$	16,597	$	14,761	$	81,278	$	143,613

(1)Loans originated during the year ended December 31, 2025.

(2)Includes $373.3 million of LHFS at December 31, 2025.

(3)Includes $3.8 million of revolving loans converted to term loans.

(4)Not subject to internal risk rating process.

Table of Contents

NOTE 3. LOANS AND ALLOWANCE FOR CREDIT LOSSES (continued)

Consumer Lending Asset Quality Indicators-Credit Score

Consumer financing receivables for which either an internal or external credit score is a core component of the allowance model are summarized by credit score determined at origination as follows:

RICs and Auto Loans


As of June 30, 2026	RICs and auto loans
(dollars in thousands)	Amortized Cost by Origination Year (3)
Credit Score Range	2026(1)		2025		2024		2023		2022		Prior		Total		Percent
No FICO (2)	$	656,263	$	987,094	$	581,200	$	250,946	$	166,678	$	74,807	$	2,716,988	6.2	%
<600	3,889,265		5,479,459		3,380,935		1,817,216		1,065,708		576,992		16,209,575		37.3	%
600-639	1,585,603		2,657,289		1,909,576		1,045,104		642,723		266,446		8,106,741		18.6	%
640-679	892,435		1,533,288		1,351,014		658,745		408,914		151,387		4,995,783		11.5	%
680-719	632,613		923,555		909,044		490,912		281,282		154,752		3,392,158		7.8	%
720-759	416,829		510,325		590,490		320,471		205,765		143,566		2,187,446		5.0	%
>=760	2,090,414		1,169,862		1,391,118		501,279		414,778		337,256		5,904,707		13.6	%
Total	$	10,163,422	$	13,260,872	$	10,113,377	$	5,084,673	$	3,185,848	$	1,705,206	$	43,513,398	100.0	%
Current period gross write-offs - RICs and auto loans	$	28,426	$	713,852	$	653,023	$	398,030	$	233,569	$	123,057	$	2,149,957

(1) Loans originated during the six months ended June 30, 2026.

(2) Consists primarily of loans for which credit scores are not available or are not considered in the ALLL model.

(3) Excludes LHFS.


As of December 31, 2025	RICs and auto loans
(dollars in thousands)	Amortized Cost by Origination Year (3)
Credit Score Range	2025(1)		2024		2023		2022		2021		Prior		Total		Percent
No FICO (2)	$	1,294,566	$	788,100	$	339,108	$	237,769	$	87,563	$	44,104	$	2,791,210	6.5	%
<600	6,494,985		4,230,757		2,371,792		1,493,463		614,334		347,510		15,552,841		36.4	%
600-639	3,189,116		2,411,141		1,373,836		899,892		303,397		126,349		8,303,731		19.4	%
640-679	1,866,741		1,710,794		863,575		570,745		176,130		69,687		5,257,672		12.3	%
680-719	1,129,610		1,147,530		645,207		395,185		172,087		85,125		3,574,744		8.4	%
720-759	616,200		739,322		417,983		292,715		166,497		75,288		2,308,005		5.4	%
>=760	1,364,434		1,706,565		665,758		615,893		435,586		159,611		4,947,847		11.6	%
Total	$	15,955,652	$	12,734,209	$	6,677,259	$	4,505,662	$	1,955,594	$	907,674	$	42,736,050	100.0	%
Current period gross write-offs - RICs and auto loans	$	436,061	$	1,605,890	$	1,142,920	$	776,382	$	270,646	$	164,568	$	4,396,467

(1) Loans originated during the year ended December 31, 2025.

(2) Consists primarily of loans for which credit scores are not available or are not considered in the ALLL model.

(3) Excludes LHFS.

Table of Contents

NOTE 3. LOANS AND ALLOWANCE FOR CREDIT LOSSES (continued)

Personal Unsecured Loans



As of June 30, 2026	Personal Unsecured loans
(dollars in thousands)	Amortized Cost by Origination Year(3)
Credit Score Range	2026(1)		2025		2024		2023		2022		Prior		Total		Percent
No FICO (2)	$	12,145	$	—	$	—	$	—	$	—	$	140	$	12,285	2.7	%
<600	—		1		13		15		8		2,891		2,928		0.6	%
600-639	276		644		732		703		681		4,946		7,982		1.7	%
640-679	1,446		3,615		4,148		5,064		5,185		28,264		47,722		10.4	%
680-719	3,418		10,646		11,918		14,772		13,224		58,908		112,886		24.5	%
720-759	5,388		15,711		13,790		16,052		17,424		59,869		128,234		27.9	%
>=760	10,377		23,742		16,810		16,160		16,982		64,044		148,115		32.2	%
Total	$	33,050	$	54,359	$	47,411	$	52,766	$	53,504	$	219,062	$	460,152	100.0	%
Current period gross write-offs - personal unsecured loans	$	32	$	4,628	$	9,435	$	11,029	$	5,583	$	7,192	$	37,899

(1) Loans originated during the six months ended June 30, 2026.

(2) Consists primarily of loans for which credit scores are not available or are not considered in the ALLL model.

(3) Excludes LHFS.



As of December 31, 2025	Personal Unsecured loans
(dollars in thousands)	Amortized Cost by Origination Year(3)
Credit Score Range	2025(1)		2024		2023		2022		2021		Prior		Total		Percent
No FICO (2)	$	12,933	$	—	$	—	$	—	$	—	$	132	$	13,065	2.7	%
<600	10		33		43		63		22		2,856		3,027		0.6	%
600-639	618		775		1,100		937		223		5,034		8,687		1.8	%
640-679	3,259		5,096		7,163		6,490		2,108		27,466		51,582		10.5	%
680-719	10,976		15,836		19,759		16,262		5,302		56,950		125,085		25.4	%
720-759	16,040		17,657		20,567		22,089		6,682		57,349		140,384		28.5	%
>=760	25,948		19,823		17,241		19,149		6,854		61,680		150,695		30.5	%
Total	$	69,784	$	59,220	$	65,873	$	64,990	$	21,191	$	211,467	$	492,525	100.0	%
Current period gross write-offs - personal unsecured loans	$	6,757	$	37,790	$	67,922	$	31,225	$	5,572	$	15,812	$	165,078

(1) Loans originated during the year ended December 31, 2025.

(2) Consists primarily of loans for which credit scores are not available or are not considered in the ALLL model.

(3) Excludes LHFS.

Table of Contents

NOTE 3. LOANS AND ALLOWANCE FOR CREDIT LOSSES (continued)

Consumer Lending Asset Quality Indicators-FICO and LTV Ratio

For both residential and home equity loans, loss severity assumptions are incorporated in the loan and lease loss reserve models to estimate loan balances that will ultimately charge off. These assumptions are based on recent loss experience within various current LTV bands within these portfolios. LTVs are refreshed quarterly by applying Federal Housing Finance Agency Home price index changes at a state-by-state level to the last known appraised value of the property to estimate the current LTV. The Company's CECL loss calculation incorporates the refreshed LTV information to update the distribution of defaulted loans by LTV as well as the associated LGD for each LTV band. Reappraisals on a recurring basis at the individual property level are not considered cost-effective or necessary; however, reappraisals are performed on certain higher risk accounts to support line management activities, default servicing decisions, or when other situations arise for which, the Company believes the additional expense is warranted.

FICO scores are refreshed quarterly, where possible. The indicators disclosed represent the credit scores for loans as of the date presented based on the most recent assessment performed.

Residential mortgage and home equity financing receivables by LTV and FICO range are summarized as follows:


As of June 30, 2026	Amortized Cost by Origination Year (4)
(dollars in thousands)
Residential mortgages	2026(1)		2025(1)		2024(1)		2023		2022		Prior		Grand Total		Revolving Loans
LTV ratios (3)
No LTV available (2)	$	—	$	—	$	—	$	—	$	—	$	1,779	$	1,779	$	—
<= 70%	—		—		—		—		216,339		3,628,871		3,845,210		—
70.01% - 110%	—		—		—		—		16,791		1,863		18,654		—
Greater than 110%	—		—		—		—		—		340		340		—
Total residential mortgages	$	—	$	—	$	—	$	—	$	233,130	$	3,632,853	$	3,865,983	$	—

FICO scores
No FICO score available	$	—	$	—	$	—	$	—	$	—	$	2,292	$	2,292	$	—
<600	—		—		—		—		10,985		166,194		177,179		—
600-679	—		—		—		—		17,763		242,624		260,387		—
680-759	—		—		—		—		58,435		840,919		899,354		—
>=760	—		—		—		—		145,947		2,380,824		2,526,771		—
Total residential mortgages	$	—	$	—	$	—	$	—	$	233,130	$	3,632,853	$	3,865,983	$	—
Current period gross write-offs - residential mortgages	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Home equity
LTV ratios
No LTV available (2)	$	—	$	—	$	—	$	—	$	631	$	42,317	$	42,948	$	29,532
<= 70%	—		—		—		—		36,139		1,578,337		1,614,476		1,556,743
70.01% - 110%	—		—		—		—		1,914		2,624		4,538		3,499
Greater than 110%	—		—		—		—		389		237		626		625
Total home equity	$	—	$	—	$	—	$	—	$	39,073	$	1,623,515	$	1,662,588	$	1,590,399

FICO scores
No FICO score available	$	—	$	—	$	—	$	—	$	574	$	41,368	$	41,942	$	28,528
<600	—		—		—		—		1,063		108,636		109,699		95,179
600-679	—		—		—		—		2,825		190,187		193,012		179,507
680-759	—		—		—		—		12,554		498,607		511,161		495,921
>=760	—		—		—		—		22,057		784,717		806,774		791,264
Total home equity	$	—	$	—	$	—	$	—	$	39,073	$	1,623,515	$	1,662,588	$	1,590,399
Current period gross write-offs - home equity	$	—	$	—	$	—	$	—	$	—	$	607	$	607

(1) The Company ceased origination of new residential mortgage and home equity loans in 2022.

(2) Balances in the "No LTV available" or "No FICO score available" ranges primarily represent loans serviced by others, in run-off portfolios or for which a current LTV or FICO score is unavailable.

(3) The ALLL model considers LTV for financing receivables in first lien position and CLTV for financing receivables in second lien position for the Company.

(4) Excludes LHFS.

Table of Contents

NOTE 3. LOANS AND ALLOWANCE FOR CREDIT LOSSES (continued)


As of December 31, 2025	Amortized Cost by Origination Year (4)
(dollars in thousands)
Residential mortgages	2025(1)		2024(1)		2023(1)		2022		2021		Prior		Grand Total		Revolving Loans
LTV ratios (3)
No LTV available (2)	$	—	$	—	$	—	$	—	$	—	$	1,575	$	1,575	$	—
<= 70%	—		—		—		213,683		970,129		2,824,077		4,007,889		—
70.01% - 110%	—		—		—		27,564		—		1,728		29,292		—
Greater than 110%	—		—		—		—		—		347		347		—
Total residential mortgages	$	—	$	—	$	—	$	241,247	$	970,129	$	2,827,727	$	4,039,103	$	—

FICO scores
No FICO score available	$	—	$	—	$	—	$	—	$	—	$	2,128	$	2,128	$	—
<600	—		—		—		12,154		23,111		152,269		187,534		—
600-679	—		—		—		21,836		47,536		217,424		286,796		—
680-759	—		—		—		58,146		197,808		689,329		945,283		—
>=760	—		—		—		149,111		701,674		1,766,577		2,617,362		—
Total residential mortgages	$	—	$	—	$	—	$	241,247	$	970,129	$	2,827,727	$	4,039,103	$	—
Current period gross write-offs - residential mortgages	$	—	$	—	$	—	$	24	$	—	$	14	$	38

Home equity
LTV ratios
No LTV available (2)	$	—	$	—	$	—	$	853	$	3,291	$	44,206	$	48,350	$	30,498
<= 70%	—		—		—		36,924		143,788		1,561,212		1,741,924		1,680,721
70.01% - 110%	—		—		—		2,944		625		2,305		5,874		4,818
Greater than 110%	—		—		—		399		456		384		1,239		1,239
Total home equity	$	—	$	—	$	—	$	41,120	$	148,160	$	1,608,107	$	1,797,387	$	1,717,276

FICO scores
No FICO score available	$	—	$	—	$	—	$	593	$	2,135	$	41,918	$	44,646	$	26,795
<600	—		—		—		1,125		6,616		123,210		130,951		113,923
600-679	—		—		—		2,746		11,917		188,186		202,849		188,793
680-759	—		—		—		12,778		47,192		491,880		551,850		538,674
>=760	—		—		—		23,878		80,300		762,913		867,091		849,091
Total home equity	$	—	$	—	$	—	$	41,120	$	148,160	$	1,608,107	$	1,797,387	$	1,717,276
Current period gross write-offs - home equity	$	—	$	—	$	—	$	—	$	—	$	2,237	$	2,237

(1) The Company ceased origination of new residential mortgage and home equity loans in 2022.

(2) Balances in the "No LTV available" or "No FICO score available" ranges primarily represent loans serviced by others, in run-off portfolios or for which a current LTV or FICO score is unavailable.

(3) The ALLL model considers LTV for financing receivables in first lien position and CLTV for financing receivables in second lien position for the Company.

(4) Excludes LHFS.

During the six months ended June 30, 2026, the Company reported $0.5 million in gross charge-offs related to other consumer portfolios.

Table of Contents

NOTE 3. LOANS AND ALLOWANCE FOR CREDIT LOSSES (continued)

Loan Modifications

Occasionally the Company modifies loans to customers in financial difficulty by providing term extensions, payment deferrals, and interest rate reductions. When a loan is modified, the related unamortized net fees and costs and any prepayment penalties are carried forward and any fees received, and direct loan origination costs associated with the refinancing or restructuring, are deferred. Additionally, the EIR is recalculated based upon the amortized cost basis of the modified loan and its revised contractual cash flows.

All of the Company’s commercial loan modifications are based on the circumstances of the individual customer, including specific customers' complete relationship with the Company. Loan terms are modified to meet each borrower’s specific circumstances at a point in time and may allow for modifications such as term extensions, covenant waivers, payment holidays and interest rate reductions. Commercial loan modifications are generally restructured to allow for an upgraded risk rating and return to accrual status after a sustained period of payment performance has been achieved (typically 12 months for monthly payment schedules). The financial effect of modifications made to commercial loan borrowers through our deferral program is the addition of deferred amounts to the end of the original loan term.

The primary modification program for the Company’s residential mortgage and home equity portfolios is a proprietary program designed to keep customers in their homes and, when appropriate, prevent them from entering into foreclosure. The program is available to all customers facing a financial hardship regardless of their delinquency status. The main goal of the modification program is to review the customer’s entire financial condition to ensure that the proposed modified payment solution is affordable according to a specific DTI ratio range. The main modification benefits of the program allow for term extensions, interest rate reductions, and/or deferment of principal. The Company reviews each customer on a case-by-case basis to determine which benefit or combination of benefits will be offered to achieve the target DTI range.

For RICs and auto loans, the Company at times offers deferrals under which the consumer is allowed to defer a maximum of three payments per event to the end of the loan. We limit the frequency of each new deferral that may be granted to one deferral after completion of at least eight payments from origination and eight payments between each extension. The maximum number of months extended for the life of the loan for all automobile RICs is eight for non-natural disaster extensions and twelve for natural disaster extensions. Some marine and RV contracts also have a maximum of twelve months' extension to reflect their longer terms. Additionally, we generally limit the granting of deferrals on new accounts until a requisite number of payments has been received. During the deferral period, we continue to accrue and collect interest on the loan in accordance with the terms of the deferral agreement. Some auto loan modifications include a reduction of the interest rate and may include an extension of term to eligible borrowers at risk of default and repossession of the financed vehicle. The financial effect of RIC and auto loan modifications made through our deferral program is that it allows customers to defer payments for up to eight months over the life of the loan and the deferred payments are added to the end of the original loan term. All other modification types, which may include interest rate reductions and maturity date extensions of up to 36 months beyond the current maturity date, result in a reduction of the monthly payment.

When estimating the ACL, the Company uses a statistical methodology based on an expected credit loss approach that focuses on forecasting the expected credit loss components (i.e., PD, payoff, LGD and EAD) on a loan level basis to estimate the expected future lifetime losses. This methodology generally does not change when loans are modified. However, the Company monitors credit quality indicators and delinquency, and adjusts the allowance as those factors change. The Company generally uses a DCF approach for large impaired commercial loans. For all collateral-dependent loans, the Company measures the ACL as the difference between the asset’s amortized cost basis and the fair value of the underlying collateral as of the reporting date, adjusted for expected costs to sell. Refer to Note 1 to the Company's Annual Report on Form 10-K for 2025 for more information on the ACL.

Table of Contents

NOTE 3. LOANS AND ALLOWANCE FOR CREDIT LOSSES (continued)

The following table shows the amortized cost basis at the end of the reporting period for loans modified during the reporting period to borrowers experiencing financial difficulty, disaggregated by class of financing receivable and type of modification granted.


	Amortized Cost
	Three months ended								Three months ended
	June 30, 2026								June 30, 2025
(dollars in thousands):	Payment Deferral Only		All Other Modifications		Total		% of Total Class of Financing Receivable		Payment Deferral Only		All Other Modifications		Total		% of Total Class of Financing Receivable
Commercial:
CRE	$	359,743	$	24,736	$	384,479	4.85	%	$	386,416	$	87,609	$	474,025	5.15	%
C&I	587		42,032		42,619		0.54	%	6,438		8,444		14,882		0.18	%
Multifamily	71,042		26,822		97,864		1.04	%	13,897		76,615		90,512		0.95	%
Other commercial	—		—		—		—	%	—		104		104		—	%
Consumer:
Residential mortgages	—		2,011		2,011		0.04	%	—		—		—		—	%
Home equity loans and lines of credit	—		2,179		2,179		0.13	%	—		952		952		0.05	%
RICs and auto loans	362,507		37,654		400,161		0.92	%	297,441		35,060		332,501		0.78	%


Total	$	793,879	$	135,434	$	929,313	1.10	%	$	704,192	$	208,784	$	912,976	1.05	%

	Amortized Cost
	Six months ended								Six months ended
	June 30, 2026								June 30, 2025
(dollars in thousands):	Payment Deferral Only		All Other Modifications		Total		% of Total Class of Financing Receivable		Payment Deferral Only		All Other Modifications		Total		% of Total Class of Financing Receivable
Commercial:
CRE	$	711,576	$	203,738	$	915,314	11.55	%	$	582,559	$	140,643	$	723,202	7.85	%
C&I	14,822		61,040		75,862		0.97	%	11,987		29,192		41,179		0.51	%
Multifamily	226,415		52,147		278,562		2.97	%	17,347		82,759		100,106		1.05	%
Other commercial	—		—		—		—	%	—		104		104		—	%
Consumer:
Residential mortgages	—		6,432		6,432		0.13	%	—		311		311		0.01	%
Home equity loans and lines of credit	—		2,627		2,627		0.16	%	—		1,310		1,310		0.07	%
RICs and auto loans	712,435		66,117		778,552		1.79	%	563,555		59,031		622,586		1.45	%


Total	$	1,665,248	$	392,101	$	2,057,349	2.44	%	$	1,175,448	$	313,350	$	1,488,798	1.72	%

Table of Contents

NOTE 3. LOANS AND ALLOWANCE FOR CREDIT LOSSES (continued)

Performance of Modified Loans

The Company monitors the performance of modified loans to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table depicts the performance of loans that have been modified in the 12- month period prior to period-end:


	Amortized Cost						Amortized Cost
	As of June 30, 2026						As of June 30, 2025
(in thousands)	Current		30-89 DPD		90+ DPD		Current		30-89 DPD		90+ DPD

Commercial:
CRE	$	1,231,114	$	13,865	$	34,211	$	869,862	$	9,395	$	1,304
C&I	86,716		1,685		460		213,967		2,139		15,277
Multifamily	446,996		—		26,150		196,536		14,786		8,769
Other commercial	—		—		—		176		—		—
Consumer:
Residential mortgages	7,354		2,945		185		2,455		304		—
Home equity loans and lines of credit	2,713		80		1,271		2,757		49		357
RICs and auto loans	905,239		508,634		52,948		838,984		419,763		42,570


Total	$	2,680,132	$	527,209	$	115,225	$	2,124,737	$	446,436	$	68,277

Payment Defaults Which Have Had a Prior Modification

A modified loan is generally considered to have subsequently defaulted if, after modification, the loan becomes 90 DPD. For RICs, a modified loan is considered to have subsequently defaulted after modification at the earlier of the date of repossession or 120 DPD. Upon the Company’s determination that a modified loan (or portion of a loan) has subsequently been deemed uncollectible, the loan (or a portion of the loan) is written off. See Note 1 to the Consolidated Financial Statements in the Company's Annual Report on Form 10-K for 2025 for more information on the Company's charge-off policy. The following table provides the amortized cost basis of financing receivables that had a payment default during the period and were modified in the 12-month period prior to default due to the borrower's financial difficulty:


	Amortized Cost								Amortized Cost
	Three months ended								Six months ended
	June 30, 2026				June 30, 2025				June 30, 2026				June 30, 2025
	Payment deferral		All other modification types		Payment deferral		All other modification types		Payment deferral		All other modification types		Payment deferral		All other modification types
(in thousands)
Commercial:

C&I	$	261	$	—	$	443	$	5	657		3		8,038		42
Multi-family	18,830		—		—		—		21,193		—		—		—
Other commercial	—		—		—		—		53		—		—		—
Consumer:
Residential mortgages	—		899		—		—		—		1,514		—		196
Home equity loans and lines of credit	—		653		—		153		—		1,130		—		153
RICs and auto loans	71,405		861		62,109		888		140,781		2,145		121,618		1,770


Total	$	90,496	$	2,413	$	62,552	$	1,046	$	162,684	$	4,792	$	129,656	$	2,161

Table of Contents

NOTE 4. OPERATING LEASE ASSETS, NET

The Company has operating leases, including leased vehicles, which are included in the Company's Condensed Consolidated Balance Sheets as Operating lease assets, net.

Operating lease assets, net consisted of the following as of the periods indicated:


(in thousands)	June 30, 2026		December 31, 2025











Basis in leased vehicles (1)	$	9,062,173	$	11,155,043
Less: accumulated depreciation	(2,456,181)		(2,797,980)
Leased vehicles, net	$	6,605,992	$	8,357,063
(1) Represents the basis in leased vehicles where the Company is the lessor. Unaccreted manufacturers subvention payments and unamortized origination and other costs are treated as a reduction to this basis.

The following summarizes the future minimum rental payments due to the Company as lessor under operating leases as of June 30, 2026:


	(in thousands)
2026	$	578,328
2027	549,046
2028	155,347
2029	25,046
2030	14

Total	$	1,307,781

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NOTE 5. VIEs

The Company transfers RICs and vehicle leases into newly-formed Trusts that then issue one or more classes of notes payable backed by the collateral. The Company’s continuing involvement with these Trusts is in the form of servicing the assets and, generally, through holding residual interests in the Trusts. The Trusts are considered VIEs under GAAP, and the Company may or may not consolidate these VIEs on its Condensed Consolidated Balance Sheets.

The collateral and borrowings under credit facilities and securitization notes payable of the Company’s consolidated VIEs remain on the Condensed Consolidated Balance Sheets. The Company recognizes finance charges, fee income, and provisions for credit losses on the RICs, and leased vehicles and interest expense on the debt. Revolving credit facilities generally also utilize entities that are considered VIEs which are included on the Condensed Consolidated Balance Sheets.

The Company also uses a titling trust to originate and hold its leased vehicles and the associated leases, for administrative efficiency and also to facilitate the pledging of leases to financing facilities or the sale of leases to other parties without incurring the costs and administrative burden of retitling the leased vehicles. In this process, the leases may be transferred to separate legal units within the titling trust to segregate them for ownership purposes, including for securitizations. This does not result in any changes to the accounting for the leases. This titling trust is considered a VIE. Refer to Note 4 to these Condensed Consolidated Financial Statements for further information on the Company's leased vehicles.

On-balance sheet VIEs

The assets and liabilities of consolidated VIEs are presented below. Certain of these assets can be used only to settle obligations of the consolidated VIEs and the liabilities of those entities for which creditors (or beneficial interest holders) do not have recourse to the Company's general credit.

The assets and liabilities of consolidated VIEs included the following at the dates indicated:


(in thousands)	June 30, 2026		December 31, 2025
Assets
Restricted cash	$	1,675,613	$	668,215
LHFS	41,180		—
Net LHFI	16,685,189		21,607,557
Operating lease assets, net (1)	6,605,992		8,357,063
Various other assets	620,333		710,745
Total Assets	$	25,628,307	$	31,343,580
Liabilities
Notes payable	$	17,602,866	$	23,597,483
Various other liabilities	117,735		96,054
Total Liabilities	$	17,720,601	$	23,693,537

(1) As noted above, all leased vehicles are originated through a titling trust. At June 30, 2026 and December 31, 2025, $4.1 billion and $3.7 billion, respectively, of leased vehicle assets included in this amount were in a titling trust, but not in a securitization trust.

The Company services receivables transferred to the Trusts and receives a monthly servicing fee on the outstanding principal balance. Supplemental fees, such as late charges, for servicing the receivables are reflected in Miscellaneous income, net.

As of June 30, 2026 and December 31, 2025, the Company was servicing $19.4 billion and $25.1 billion, respectively, of gross RICs that have been transferred to consolidated Trusts. Certain amounts shown above are greater than the amounts shown in the corresponding line items in the accompanying Condensed Consolidated Balance Sheets due to intercompany eliminations between the VIEs and other entities consolidated by the Company. For example, for most of its securitizations, the Company retains one or more of the lowest tranches of bonds. Rather than showing investment in bonds as an asset and the associated debt as a liability, these amounts are eliminated in consolidation as required by GAAP.

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NOTE 5. VIEs (continued)

A summary of the cash flows received from the consolidated Trusts for the respective periods is as follows for the periods indicated:


	Three months ended June 30,				Six months ended June 30,
(in thousands)	2026		2025		2026		2025
Assets securitized	$	—	$	2,156,106	$	1,902,612	$	7,389,734

Net proceeds from new securitizations (1)	$	—	$	1,792,711	$	1,585,140	$	6,068,971
Net proceeds on retained bonds from new securitizations	—		146,000		308,430		846,420
Cash received for servicing fees (2)	232,120		255,006		484,776		463,669

Net distributions from Trusts (2)	1,415,631		1,704,561		2,671,192		3,177,439
Total cash received from Trusts	$	1,647,751	$	3,898,278	$	5,049,538	$	10,556,499

(1) Includes additional advances on existing securitizations.

(2) These amounts are not reflected in the SCF because the cash flows are between the VIEs and other entities included in the consolidation.

Off-balance sheet VIEs

At June 30, 2026 and December 31, 2025, the Company was servicing RICs of $1.3 billion and $2.0 billion, respectively, that have been sold in off-balance sheet securitizations and were subject to an optional clean-up call.

A summary of cash flows received from Trusts for the respective periods were as follows for the periods indicated:


	Three months ended June 30,				Six months ended June 30,
(in thousands)	2026		2025		2026		2025
Receivables securitized (1)(2)	—		1,307,339		$	—	$	1,307,339

Net proceeds from new securitizations	—		174,863		$	—	$	174,863
Cash received for servicing fees	$	7,732	$	12,465	16,978		24,597
Total cash received from Trusts	$	7,732	$	187,328	$	16,978	$	199,460
(1) Represents the UPB at the time of original securitization. (2) Table excludes impacts of non-cash deconsolidation transaction referred to above.

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NOTE 5. VIEs (continued)

Other than repurchases of sold assets due to claims against standard representations and warranties, the Company's exposure to loss as a result of its involvement with these VIEs is limited to its retained interests in the VIE. The carrying value of this exposure at June 30, 2026 was $789.2 million and $2.9 million of debt and equity investments, respectively, compared to $1.0 billion and $3.9 million at December 31, 2025. These amounts are reported in debt securities HTM and other investments, respectively, in Note 2 to these Condensed Consolidated Financial Statements.

During the six months ended June 30, 2026, the Company securitized $1.9 billion of mortgage LHFS in off-balance transactions. The Company has retained $78.2 million of variable interests in the new securitizations for risk retention purposes.

As of June 30, 2026, SBNA serviced approximately $7.7 billion in multi-family loans for the Structured LLC in which the Company has a beneficial interest and received a market rate servicing fee. For the three months and six months ended June 30, 2026 and June 30, 2025, SBNA recognized $13.1 million and $26.2 million, and $28.3 million and $42.4 million, respectively, in servicing fee income from the servicing of these assets which is recorded in Miscellaneous income, net, in the accompanying Condensed Consolidated Statements of Operations.

NOTE 6. DEPOSITS AND OTHER CUSTOMER ACCOUNTS

Deposits and other customer accounts are summarized as follows at the dates indicated:


	June 30, 2026				December 31, 2025
(dollars in thousands)	Balance		Percent of total deposits		Balance		Percent of total deposits
Interest-bearing demand deposits	$	11,618,834	14.6	%	$	11,815,661	15.0	%
Non-interest-bearing demand deposits	13,425,519		16.9	%	13,789,313		17.5	%
Savings	14,889,697		18.7	%	11,288,787		14.3	%
Customer repurchase accounts	246,976		0.3	%	234,940		0.3	%
Money market	25,534,713		32.1	%	26,772,150		33.8	%
CDs	13,848,822		17.4	%	15,076,851		19.1	%
Total deposits (1)	$	79,564,561	100.0	%	$	78,977,702	100.0	%

(1) Includes foreign deposits, as defined by the FRB, of $5.1 billion and $5.6 billion at June 30, 2026 and December 31, 2025, respectively.

Demand deposit overdrafts that have been reclassified as loan balances were $290.8 million and $394.7 million at June 30, 2026 and December 31, 2025, respectively.

At June 30, 2026 and December 31, 2025, the Company had $5.7 billion and $6.4 billion, respectively, of CDs greater than $250 thousand.

The Company's subsidiaries had outstanding irrevocable letters of credit totaling $120.0 million and $100.0 million from the FHLB of Pittsburgh at June 30, 2026 and December 31, 2025, respectively, used to secure uninsured deposits placed with the Bank by state and local governments and their political subdivisions.

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NOTE 7. BORROWINGS

Total borrowings and other debt obligations at June 30, 2026 were $32.7 billion, compared to $37.1 billion at December 31, 2025. The Company's debt agreements impose certain limitations on dividend payments and other transactions. The Company is currently in compliance with these limitations.

During the six months ended June 30, 2026, the Company issued the following debt:

•$325.1 million of variable rate CLNs due January 2039. These notes contain a financial guarantee on a reference pool of $1.5 billion in commercial loans owned by the Company. These notes bear an interest at a rate equal to the SOFR index plus 5.25% and re-sets monthly.

•$279.7 million of fixed-rate CLNs due July 2034. These notes contain a financial guarantee on a reference pool of $2.6 billion in auto loans owned by the Company. These notes bear a weighted average interest rate of 6.03%.

•$1.9 billion of secured structured financings in its SDART platform, of which it retained approximately $308.4 million in interests in the VIE.

•$1.0 billion in aggregate principal amount of its 5.04% fixed-to-floating rate senior notes due June 2030.

•$750 million in aggregate principal amount of its 5.22% fixed-to-floating rate senior notes due June 2032.

•$750 million in aggregate principal amount of its 5.70% fixed-to-floating rate senior notes due June 2037.

The Company continues to consolidate these VIEs on its Condensed Consolidated Balance Sheets.

Parent Company and other Subsidiary Borrowings and Debt Obligations

The following table presents the Parent Company and its subsidiaries' borrowings and other debt obligations at the dates indicated:


	June 30, 2026				December 31, 2025
(dollars in thousands)	Balance		Effective Rate		Balance		Effective Rate
Parent Company Borrowings
Senior notes, due various dates through June 2037	13,070,852		2.57% - 7.73%		11,823,457		2.57% - 7.73%
Subordinated notes, due various dates through December 2032	1,000,000		2.88% - 7.18%		1,000,000		2.88% - 7.18%
Subsidiary Borrowings
Short-term borrowing due within one year, maturing through September 2026	148,326		3.18	%	692,258		3.61	%
FHLB advances, maturing through April 2027	1,084,640		3.95	%	707,835		4.16	%
CLNs due various dates through February 2052	1,303,710		6.03% - 18.08%		913,331		6.37% - 16.29%
Warehouse lines with third parties maturing through April 2028	—		—%		215,000		4.67	%
Warehouse lines with Santander, maturing through October 2027	427,900		4.41	%	1,999,900		4.44	%
Secured structured financings maturing through May 2034	15,708,867		0.59% -7.69%		19,750,331		0.58% - 7.69%
Total Parent Company and subsidiaries' borrowings and other debt obligations	$	32,744,295			$	37,102,112

Warehouse Lines

The following tables present information regarding the Company's warehouse lines at the dates indicated:


	June 30, 2026
(dollars in thousands)	Balance		Committed Amount		Effective Rate		Assets Pledged		Restricted Cash Pledged
















Warehouse line with Santander due October 2027	$	427,900	$	2,000,000	4.41	%	$	615,232	$	42,695



Total credit facilities	$	427,900	$	2,000,000	4.41	%	$	615,232	$	42,695

The warehouse lines and repurchase facilities are fully collateralized by a designated portion of the Company's RICs, leased vehicles, securitization notes payable, and residuals retained by the Company.

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NOTE 7. BORROWINGS (continued)

Secured Structured Financings

The following tables present information regarding the Company's secured structured financings at the dates indicated:


	June 30, 2026
(dollars in thousands)	Balance		Initial Note Amounts Issued (3)		Initial Weighted Average Interest Rate Range	Collateral (2)		Restricted Cash
Public securitizations maturing on various dates through May 2034(1)	$	14,950,087	$	42,138,465	0.59% - 7.69%	$	20,047,403	$	1,547,953
Privately issued amortizing notes maturing on various dates through August 2030 (3)	758,780		7,232,571		3.13% - 6.73%	1,423,228		84,965
Total secured structured financings	$	15,708,867	$	49,371,036	0.59% - 7.69%	$	21,470,631	$	1,632,918

(1) Securitizations executed under Rule 144A of the Securities Act are included within this balance.

(2) Secured structured financings may be collateralized by collateral overages of other issuances.

(3) Excludes securitizations which no longer have outstanding debt and excludes any incremental borrowings.

Most of the Company's secured structured financings are in the form of public, SEC-registered securitizations. The Company also executes private securitizations under Rule 144A of the Securities Act, and periodically issues private term amortizing notes, which are structured similarly to securitizations but are acquired by banks and conduits. The Company's securitizations and private issuances are collateralized by vehicle RICs and loans or leases.

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NOTE 8. ACCUMULATED OTHER COMPREHENSIVE INCOME / (LOSS)

The following table presents the components of AOCI / (loss), net of related tax, for the periods indicated.


		Total Other Comprehensive Income/(Loss)									Total Accumulated Other Comprehensive Loss
		Three months ended June 30, 2026									March 31, 2026						June 30, 2026
(in thousands)	Pre-tax Activity			Tax Effect			Net Activity			Beginning Balance			Net Activity			Ending Balance
Change in AOCI on cash flow hedge derivative financial instruments		$	(56,189)		$	18,538		$	(37,651)
Reclassification adjustment for net losses/(gains) on cash flow hedge derivative financial instruments (1)		(2,661)			683			(1,978)
Net unrealized (losses)/gains on cash flow hedge derivative financial instruments		(58,850)			19,221			(39,629)			$	(1,135)		$	(39,629)		$	(40,764)







Net unrealized (losses)/gains on investments in debt securities		12,592			(4,080)			8,512			(575,000)			8,512			(566,488)



Other(2)		55			(4)			51			(413)			51			(362)


As of June 30, 2026		$	(46,203)		$	15,137		$	(31,066)		$	(576,548)		$	(31,066)		$	(607,614)

(1) Net gains/(losses) reclassified into Interest on borrowings and other debt obligations in the Condensed Consolidated Statements of Operations for settlements of interest rate swap contracts designated as cash flow hedges.

(2) Including the computation of net periodic pension costs.


	Total Other Comprehensive Income/(Loss)						Total Accumulated Other Comprehensive Loss
	Three months ended June 30, 2025						March 31, 2025				June 30, 2025
(in thousands)	Pre-tax Activity		Tax Effect		Net Activity		Beginning Balance		Net Activity		Ending Balance
Change in AOCI on cash flow hedge derivative financial instruments	$	38,832	$	(9,486)	$	29,346
Reclassification adjustment for net (gains)/losses on cash flow hedge derivative financial instruments (1)	(3,501)		889		(2,612)
Net unrealized gains/(losses) on cash flow hedge derivative financial instruments	35,331		(8,597)		26,734		$	(29,534)	$	26,734	$	(2,800)

Change in unrealized (losses)/gains on investments in debt securities	(41,093)		13,694		(27,399)
Reclassification adjustment for net (gains)/losses included in net income/(expense) on debt securities AFS (2)	(105)		27		(78)


Net unrealized gains/(losses) on investments in debt securities	(41,198)		13,721		(27,477)		(628,321)		(27,477)		(655,798)


Other(3)	(50)		11		(39)		(79)		(39)		(118)


As of June 30, 2025	$	(5,917)	$	5,135	$	(782)	$	(657,934)	$	(782)	$	(658,716)

(2) Net (gains)/losses reclassified into Securities gains, net in the Condensed Consolidated Statements of Operations for the sale of debt securities.

(3) Including the computation of net periodic pension costs.

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NOTE 8. ACCUMULATED OTHER COMPREHENSIVE INCOME / (LOSS) (continued)


		Total Other Comprehensive Income/(Loss)									Total Accumulated Other Comprehensive Income/(Loss)
		Six months ended June 30, 2026									December 31, 2025						June 30, 2026
(in thousands)	Pre-tax Activity			Tax Effect			Net Activity			Beginning Balance			Net Activity			Ending Balance
Change in AOCI on cash flow hedge derivative financial instruments		$	(104,489)		$	31,572		$	(72,917)
Reclassification adjustment for net losses/(gains) on cash flow hedge derivative financial instruments (1)		(5,833)			1,496			(4,337)
Net unrealized (losses)/gains on cash flow hedge derivative financial instruments		(110,322)			33,068			(77,254)			$	36,490		$	(77,254)		$	(40,764)



Change in unrealized (losses)/gains on investments in debt securities		7,880			(3,011)			4,869
Reclassification adjustment for net losses/(gains) included in net income/(expense) on debt securities AFS (2)		(2,219)			569			(1,650)


Net unrealized (losses)/gains on investments in debt securities		5,661			(2,442)			3,219			(569,707)			3,219			(566,488)



Other(3)		(33)			13			(20)			(342)			(20)			(362)


As of June 30, 2026		$	(104,694)		$	30,639		$	(74,055)		$	(533,559)		$	(74,055)		$	(607,614)

(2) Net (gains)/losses reclassified into Securities gains, net in the Condensed Consolidated Statements of Operations for the sale of debt securities.

(3) Including the computation of net periodic pension costs.


	Total Other Comprehensive Income/(Loss)						Total Accumulated Other Comprehensive Income/(Loss)
	Six months ended June 30, 2025						December 31, 2024				June 30, 2025
(in thousands)	Pre-tax Activity		Tax Effect		Net Activity		Beginning Balance		Net Activity		Ending Balance
Change in AOCI on cash flow hedge derivative financial instruments	$	97,413	$	(23,031)	$	74,382
Reclassification adjustment for net (gains)/losses on cash flow hedge derivative financial instruments (1)	(6,719)		1,707		(5,012)
Net unrealized gains/(losses) on cash flow hedge derivative financial instruments	90,694		(21,324)		69,370		$	(72,170)	$	69,370	$	(2,800)

Change in unrealized (losses)/gains on investments in debt securities	(30,447)		4,947		(25,500)
Reclassification adjustment for net (gains)/losses included in net income/(expense) on debt securities AFS (2)	65		(17)		48


Net unrealized gains/(losses) on investments in debt securities	(30,382)		4,930		(25,452)		(630,346)		(25,452)		(655,798)


Other(3)	20,309		(5,243)		15,066		(15,184)		15,066		(118)


As of June 30, 2025	$	80,621	$	(21,637)	$	58,984	$	(717,700)	$	58,984	$	(658,716)

(2) Net (gains)/losses reclassified into Securities gains, net in the Condensed Consolidated Statements of Operations for the sale of debt securities.

(3) Including the computation of net periodic pension costs.

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NOTE 9. SECURITIES FINANCING ACTIVITIES

The Company may enter into Securities Financing Activities primarily to deploy the Company’s excess cash and investment positions. Securities Financing Activities are treated as collateralized financings and are included in "Federal funds sold and securities purchased under resale agreements or similar arrangements" and "Federal funds purchased and securities loaned or sold under repurchase agreements" on the Company’s Condensed Consolidated Balance Sheets. Refer to Note 1 to the Consolidated Financial Statements in the Company's Annual Report on Form 10-K for 2025 for further discussion of accounting for and the offsetting of securities financing assets and liabilities.

Securities borrowed and purchased under agreements to resell, at their respective carrying values, consisted of the following at the dates indicated:


(in thousands)	June 30, 2026		December 31, 2025
Securities purchased under agreements to resell	$	8,193,447	$	7,233,107
Securities borrowed	1,246,690		1,406,560
Total	$	9,440,137	$	8,639,667

Securities loaned or sold under agreements to repurchase, at their respective carrying values, consisted of the following at the dates indicated:


(in thousands)	June 30, 2026		December 31, 2025
Securities sold under agreements to repurchase	$	22,102,528	$	19,459,083
Securities lending	32,589		1,311
Total	$	22,135,117	$	19,460,394

Securities Financing Activities are generally executed under standard industry agreements, including master agreements that create a single contract under which all transactions between two counterparties are executed, allowing for trade aggregation of receivables and payables into a single net payment or settlement. The amounts of securities financing assets or liabilities qualified for offset in the Condensed Consolidated Balance Sheets were as follows for the dates indicated.



	June 30, 2026
(in thousands)	Gross amounts of recognized assets		Gross amounts offset on the Condensed Consolidated Balance Sheets (1)		Net amounts of assets included on the Condensed Consolidated Balance Sheets

Securities purchased under agreements to resell	$	31,288,675	$	(23,095,228)	$	8,193,447
Securities borrowed	1,246,690		—		1,246,690
Total	$	32,535,365	$	(23,095,228)	$	9,440,137

	June 30, 2026
(in thousands)	Gross amounts of recognized liabilities		Gross amounts offset on the Condensed Consolidated Balance Sheets (1)		Net amounts of liabilities included on the Condensed Consolidated Balance Sheets

Securities sold under agreements to repurchase	$	45,197,756	$	(23,095,228)	$	22,102,528
Securities lending	32,589		—		32,589
Total	$	45,230,345	$	(23,095,228)	$	22,135,117
(1) Includes financial instruments subject to enforceable master netting agreements that are permitted to be offset under ASC 210-20-45.

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NOTE 9. SECURITIES FINANCING ACTIVITIES (continued)



	December 31, 2025
(in thousands)	Gross amounts of recognized assets		Gross amounts offset on the Consolidated Balance Sheets (1)		Net amounts of assets included on the Consolidated Balance Sheets

Securities purchased under agreements to resell	$	27,629,073	$	(20,395,965)	$	7,233,108
Securities borrowed	1,406,559		—		1,406,559
Total	$	29,035,632	$	(20,395,965)	$	8,639,667

	December 31, 2025
(in thousands)	Gross amounts of recognized liabilities		Gross amounts offset on the Consolidated Balance Sheets (1)		Net amounts of liabilities included on the Consolidated Balance Sheets

Securities sold under agreements to repurchase	$	39,855,048	$	(20,395,965)	$	19,459,083
Securities lending	1,311		—		1,311
Total	$	39,856,359	$	(20,395,965)	$	19,460,394
(1) Includes financial instruments subject to enforceable master netting agreements that are permitted to be offset under ASC 210-20-45.

The following table presents the gross amounts of liabilities associated with Securities Financing Activities by remaining contractual maturity as of the date indicated:


	June 30, 2026
(in thousands)	Open and overnight		Up to 30 days		31-90 days		Greater than 90 days		Total
Securities sold under agreements to repurchase	$	29,454,177	$	6,702,674	$	1,952,750	$	7,088,155	$	45,197,756
Securities lending	32,589		—		—		—		32,589
Total	$	29,486,766	$	6,702,674	$	1,952,750	$	7,088,155	$	45,230,345

The following table presents the gross amounts of liabilities associated with Securities Financing Activities by class of underlying collateral as of the dates indicated:


	June 30, 2026						December 31, 2025
(in thousands)	Repurchase agreements		Securities lending		Total		Repurchase agreements		Securities lending		Total

U.S. Treasury	$	26,104,327	$	—	$	26,104,327	$	20,706,654	$	—	$	20,706,654
Residential agency MBS	17,460,963		—		17,460,963		17,670,968		—		17,670,968
Corporate and other securities	1,632,466		32,589		1,665,055		1,477,426		1,311		1,478,737
Total	$	45,197,756	$	32,589	$	45,230,345	$	39,855,048	$	1,311	$	39,856,359

The Company enters into securities lending transactions in which it borrows securities from clients and lends those securities to third parties in exchange for collateral and a lending fee. These transactions are accounted for as secured borrowings under ASC 860. Collateral received in these transactions consists primarily of securities and is associated to the nominee account related to client securities held. In certain arrangements, the Company is not permitted to sell or repledge the collateral received. Accordingly, such collateral is not recognized on the balance sheet. Collateral is recognized only when received in the form of cash or securities that the Company is permitted to sell or repledge. As of June 30, 2026, the Company had securities borrowed and lent of $661.8 million and received collateral of $693.6 million under these arrangements. These amounts are not reflected on the consolidated balance sheet. The Company retains exposure to counterparty credit risk in the event that a borrower fails to return the securities. This risk is mitigated through the receipt of collateral and ongoing monitoring of collateral values. Fees earned from borrowers are recorded in non-interest income, while amounts paid to clients are recorded as expense.

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NOTE 10. DERIVATIVES

General

Derivatives represent contracts between parties that usually require little or no initial net investment and result in one or both parties delivering cash or another type of asset to the other party based on a notional amount and an underlying asset, index, interest rate or future purchase commitment or option as specified in the contract. Derivative transactions are often measured in terms of notional amount, but this amount is generally not exchanged, is not recorded on the balance sheet and does not represent the Company`s exposure to credit loss. The notional amount is the basis on which the financial obligation of each party to the derivative contract is calculated to determine required payments under the contract. The Company controls the credit risk of its derivative contracts through credit approvals, limits and monitoring procedures. The underlying variable is typically a referenced interest rate (commonly the OIS rate or a SOFR-based rate), security, credit spread or index.

The Company’s capital markets and mortgage banking activities are subject to price risk. The Company employs various tools to measure and manage price risk in its portfolios. In addition, the Board of Directors has established certain limits relative to positions and activities. The level of price risk exposure at any given time depends on the market environment and expectations of future price and market movements and will vary from period to period.

See Note 11 to these Condensed Consolidated Financial Statements for discussion of the valuation methodology for derivative instruments.

Credit Risk Contingent Features

The Company has entered into certain derivative contracts that require the posting of collateral to counterparties when those contracts are in a net liability position. The amount of collateral to be posted is based on the amount of the net liability and thresholds generally related to the Company's long-term senior unsecured credit ratings. In a limited number of instances, counterparties also have the right to terminate their ISDA Master Agreements if the Company's ratings fall below a specified level, typically investment grade. As of June 30, 2026, derivatives in this category had a fair value of zero. The credit ratings of the Company and SBNA are currently considered investment grade. As of June 30, 2026, no additional collateral would be required if there were a further 1- or 2- notch downgrade by either S&P or Moody's.

As of June 30, 2026 and December 31, 2025, the aggregate fair value of all derivative contracts with credit risk contingent features (i.e., those containing collateral posting or termination provisions based on the Company's ratings) that were in a net liability position totaled $6.0 million and $6.6 million, respectively. The Company had $5.8 million and $6.6 million in cash and securities collateral posted to cover those positions as of June 30, 2026 and December 31, 2025, respectively.

Hedge Accounting

Management uses derivative instruments designated as hedges to mitigate the impact of interest rate and foreign exchange rate movements on the fair value of certain assets and liabilities and on highly probable forecasted cash flows. These instruments primarily include interest rate swaps that have underlying interest rates based on key benchmark indices. The nature and volume of the derivative instruments used to manage interest rate risk depend on the level and type of assets and liabilities on the balance sheet and the risk management strategies for the current and anticipated interest rate environment.

Interest rate swaps are generally used to convert fixed-rate assets and liabilities to variable rate assets and liabilities and vice versa. The Company utilizes interest rate swaps that have a high degree of correlation to the related financial instrument.

Fair Value Hedges

The Company enters into derivatives to hedge the risk of changes in fair value of a portion of its AFS debt securities portfolio and borrowings. These derivatives are designated as fair value hedges at inception. The gains/(losses) from changes in the fair value of the hedging derivative and the offsetting gains/(losses) from changes in the fair value of the related underlying hedged items due to the hedged risk are reported in the same line item in the Condensed Consolidated Statements of Operations as earnings from the hedged items. The cumulative fair value hedge basis adjustments included in the carrying amount of hedged assets is reversed through earnings in future periods as an adjustment to yield. The Company includes gains/(losses) on the hedging derivatives and the related hedged items in the assessment of hedge effectiveness. All of these swaps have been deemed highly effective fair value hedges. The last of the hedges is scheduled to expire in June 2036. The Company has entered into fair value hedges of portions of a closed portfolio of approximately $2.3 billion of AFS debt securities, using the portfolio layer method.

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NOTE 10. DERIVATIVES (continued)

The carrying amount and fair value hedge adjustment of hedged assets at the dates indicated was:


	Carrying Amount of Hedged Assets				Amount of Fair Value Hedge Adjustment Included in the Carrying Amount
	June 30, 2026		December 31, 2025		June 30, 2026		December 31, 2025
Debt securities AFS (Note 2)	$	1,192,598	$	1,472,679	$	57,402	$	27,321
Borrowings (Note 7)	$	2,490,624	$	—	$	872	$	—

Cash Flow Hedges

The Company has outstanding interest rate swap agreements designed to hedge a portion of the Company’s floating-rate assets and liabilities and forecasted issuances of borrowed funds. The Company also has foreign exchange contracts designed to hedge certain contractual payments in foreign currencies.

Except as noted below, all of these derivatives have been deemed highly effective cash flow hedges. The gain or loss on the derivative instrument is reported as a component of AOCI and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings and is presented in the same Condensed Consolidated Statements of Operations line item as the earnings effect of the hedged item.

The last of the hedges is scheduled to expire in January 2029. The Company includes all components of each derivative's gain or loss in the assessment of hedge effectiveness. As of June 30, 2026, the Company estimated that approximately $4.0 million of unrealized losses included in AOCI would be reclassified to earnings during the subsequent twelve months as the future cash flows occur.

Derivatives Designated in Hedge Relationships – Notional and Fair Values

Derivatives designated as accounting hedges included the following as of the dates indicated:


(in thousands)	Notional Amount		Asset		Liability		Weighted Average Receive Rate		Weighted Average Pay Rate		Weighted Average Life (Years)
June 30, 2026
Fair value hedges:

Interest rate swaps	$	6,250,000	$	46,955	$	4,127	2.83	%	1.94	%	3.65

Cash flow hedges:
Pay fixed - receive variable interest rate swaps	72,900		83		—		3.68	%	3.50	%	3.81
Pay variable - receive fixed interest rate swaps	19,250,000		9,192		79,313		3.67	%	1.19	%	1.36


Total	$	25,572,900	$	56,230	$	83,440	3.47	%	1.38	%	1.93

December 31, 2025
Fair value hedges:

Interest rate swaps	$	3,750,000	$	17,229	$	3,666	1.60	%	3.01	%	2.36
Cash flow hedges:
Pay fixed — receive variable interest rate swaps	618,400		158		32		3.87	%	3.49	%	3.30
Pay variable - receive fixed interest rate swaps	14,300,000		62,704		22,903		3.41	%	0.90	%	1.22

Total	$	18,668,400	$	80,091	$	26,601	3.06	%	1.41	%	1.52

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NOTE 10. DERIVATIVES (continued)

Other Derivative Activities

The Company also enters into derivatives that are not designated as accounting hedges under GAAP. Although these derivatives are used to hedge risk and are considered economic hedges, they are not designated as accounting hedges because the contracts they are hedging are often carried at fair value on the balance sheet, resulting in generally symmetrical accounting treatment for the hedging instrument and the hedged item.

Customer-related derivatives

The Company offers derivatives to its customers in connection with their risk management requirements related to foreign exchange and lending arrangements. These derivatives primarily consist of interest rate swaps, caps, floors, and foreign exchange contracts. Risk exposure from customer positions is managed through offsetting transactions with other dealers, including Santander. Refer to Note 21 in the Company's Annual Report on Form 10-K for 2025 for related party transactions.

Broker dealer activities

The Company uses exchange-traded options and futures, credit default swaps, and forward-settling securities trades as part of its trading business, as well as to actively manage risk exposures that arise from its trading in cash instruments.

Structured financing activities

In certain circumstances, the Company is required to hedge its interest rate risk on revolving credit and term borrowings related to its secured structured financings. The Company uses interest rate caps to satisfy these requirements and enters into offsetting option contracts.

Foreign exchange activities

The Company uses foreign exchange contracts to manage the foreign exchange risk associated with certain foreign currency-denominated assets and liabilities. Foreign exchange contracts, which include spot and forward contracts as well as cross-currency swaps, represent agreements to exchange the currency of one country for the currency of another country at an agreed-upon price on an agreed-upon settlement date and may or may not be physically settled depending on the Company’s needs. Exposure to gains and losses on these contracts increase or decrease over their respective lives as currency exchange and interest rates fluctuate.

Mortgage Banking Derivatives

The Company retains the servicing rights related to certain residential mortgage loans that have been sold. Most of the Company`s residential MSRs are accounted for at fair value. As deemed appropriate, the Company economically hedges MSRs using interest rate swaps and forward contracts to purchase MBS.

Other derivative activities

Other derivative instruments primarily include forward contracts related to certain investment securities sales, loan sales, an OIS, and a total return swap on Visa, Inc. Class B common shares.

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NOTE 10. DERIVATIVES (continued)

Derivatives Not Designated in Hedge Relationships – Notional and Fair Values

Other derivative activities included the following as of the dates indicated:


	Notional				Asset derivatives Fair value				Liability derivatives Fair value
(in thousands)	June 30, 2026		December 31, 2025		June 30, 2026		December 31, 2025		June 30, 2026		December 31, 2025
Mortgage banking derivatives:



Total mortgage banking risk management	$	642,000	$	626,000	$	2,269	$	3,685	$	15,091	$	14,454

Customer-related derivatives:
Swaps receive fixed	10,300,369		12,310,274		5,661		41,553		344,815		335,711
Swaps pay fixed	11,957,257		12,490,883		362,203		341,204		7,761		41,643

Other	10,658,565		10,006,193		140,566		136,413		139,004		134,512
Total customer-related derivatives	32,916,191		34,807,350		508,430		519,170		491,580		511,866

Other derivative activities:

Foreign exchange contracts	10,339,383		8,106,872		103,013		50,101		70,567		49,066
Interest rate swap agreements	100		100		1		5		—		—
Interest rate cap agreements	377,800		741,400		174		23		—		—
Options for interest rate cap agreements	377,800		741,400		—		—		174		23
TBA MBS forwards	34,990,025		23,256,301		15,425		17,543		49,372		1,504

Other	38,231,835		32,305,734		2,861		955		10,146		45,804

Total	$	117,875,134	$	100,585,157	$	632,173	$	591,482	$	636,930	$	622,717

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NOTE 10. DERIVATIVES (continued)

Gains (Losses) on all Derivatives

The following Condensed Consolidated Statements of Operations line items were impacted by the Company’s derivative activities for the periods indicated:


(in thousands)		Three months ended June 30,				Six months ended June 30,
	Line Item	2026		2025		2026		2025

Fair value hedges:
Cross-currency swaps	Net interest income	$	—	$	(327)	$	—	$	(741)


Interest rate swaps	Net interest income	4,276		5,601		6,934		11,787


Derivative Activity (1)
Cash flow hedges:
Pay fixed-receive variable interest rate swaps	Interest expense on borrowings	2,687		6,232		6,015		12,338
Pay variable receive-fixed interest rate swap	Interest income on loans	(2,599)		(35,930)		(14,096)		(71,332)


Other derivative activities:



Mortgage banking derivatives	Non Interest income	(2,051)		986		(3,298)		3,388
Customer-related derivatives	Non interest income	3,577		68,253		6,701		83,659

Foreign exchange	Non interest income	19,146		(73,275)		52,015		(89,682)
Interest rate swaps, caps, and options	Non interest income	(1)		(1)		—		(2)
	Net interest income	(3)		(242)		(7)		(500)

Other	Non interest income	(2,501)		(29,418)		71,396		(198,603)

(1) Gains are disclosed as positive numbers while losses are shown as a negative number regardless of the line item being affected.

The net amount of change recognized in OCI for cash flow hedge derivatives were losses of $37.7 million and $72.9 million, and gains of $29.3 million and $74.4 million, net of tax, for the three months and six months ended June 30, 2026 and 2025, respectively.

The net amount of changes reclassified from OCI into earnings for cash flow hedge derivatives were gains of $2.0 million and $4.3 million, and $2.6 million and $5.0 million, net of tax, for the three months and six months ended June 30, 2026 and 2025, respectively.

Disclosures about Offsetting Assets and Liabilities

The Company enters into legally enforceable master netting agreements which reduce risk by permitting netting of transactions with the same counterparty on the occurrence of certain events. A master netting agreement allows two counterparties the ability to net-settle amounts under all contracts, including any related collateral posted, through a single payment and in a single currency. The right to offset and certain terms regarding the collateral process, such as valuation, credit events and settlement, are contained in the applicable master agreement. The Company's financial instruments, including resell and repurchase agreements, securities lending arrangements, derivatives, and cash collateral, may be eligible for offset on its Condensed Consolidated Balance Sheets.

The Company has elected to present derivative balances on a gross basis even if the derivative is subject to a legally enforceable nettable ISDA Master Agreement for all trades executed after April 1, 2013. Collateral that is received or pledged for these transactions is disclosed within the “Gross Amounts Not Offset in the Condensed Consolidated Balance Sheets” section of the tables below.

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NOTE 10. DERIVATIVES (continued)

Information about financial assets and liabilities that are eligible for offset on the Condensed Consolidated Balance Sheets was as follows for the dates indicated:


	Offsetting of Financial Assets
							Gross Amounts Not Offset in the Condensed Consolidated Balance Sheets
(in thousands)	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Condensed Consolidated Balance Sheets		Net Amounts of Assets Presented in the Condensed Consolidated Balance Sheets		Collateral Received (2)		Net Amount
June 30, 2026
Fair value hedges	$	46,955	$	—	$	46,955	$	(12,667)	$	34,288
Cash flow hedges	9,275		—		9,275		(2,024)		7,251
Other derivative activities (1)	632,173		—		632,173		(78,663)		553,510


Total Derivative Assets	$	688,403	$	—	$	688,403	$	(93,354)	$	595,049




December 31, 2025
Fair value hedges	$	17,229	$	—	$	17,229	$	(6,601)	$	10,628
Cash flow hedges	62,862		—		62,862		(30,847)		32,015
Other derivative activities (1)	591,482		—		591,482		(40,844)		550,638


Total Derivative Assets	$	671,573	$	—	$	671,573	$	(78,292)	$	593,281

(1)Includes customer-related and other derivatives.

(2)Collateral received includes cash, cash equivalents, and other financial instruments. Cash collateral received is reported in Other liabilities, as applicable, in the Condensed Consolidated Balance Sheets. Financial instruments that are pledged to the Company are not reflected in the accompanying Condensed Consolidated Balance Sheets since the Company does not control or have the ability to re-hypothecate these instruments.


	Offsetting of Financial Liabilities
							Gross Amounts Not Offset in the Condensed Consolidated Balance Sheets
(in thousands)	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Condensed Consolidated Balance Sheets		Net Amounts of Liabilities Presented in the Condensed Consolidated Balance Sheets		Collateral Pledged (2)		Net Amount
June 30, 2026
Fair value hedges	$	4,127	$	—	$	4,127	$	—	$	4,127
Cash flow hedges	79,313		—		79,313		(22,209)		57,104
Other derivative activities (1)	636,930		—		636,930		(63,123)		573,807


Total Derivative Liabilities	$	720,370	$	—	$	720,370	$	(85,332)	$	635,038




December 31, 2025
Fair value hedges	$	3,666	$	—	$	3,666	$	—	$	3,666
Cash flow hedges	22,935		—		22,935		(11,334)		11,601
Other derivative activities (1)	622,717		—		622,717		(18,475)		604,242


Total Derivative Liabilities	$	649,318	$	—	$	649,318	$	(29,809)	$	619,509

(1)Includes customer-related and other derivatives.

(2)Cash collateral pledged and financial instruments pledged is reported in Other assets in the Condensed Consolidated Balance Sheets. In certain instances, the Company is over-collateralized since the actual amount of collateral pledged exceeds the associated financial liability. As a result, the actual amount of collateral pledged that is reported in Other assets may be greater than the amount shown in the table above.

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NOTE 11. FAIR VALUE

The Company estimates the fair value of certain assets and liabilities for both measurement and disclosure purposes. The fair value hierarchy categorizes the underlying assumptions and inputs to valuation techniques that are used to measure fair value into three levels as follows:

•Level 1 inputs are quoted prices in active markets for identical assets or liabilities that can be accessed as of the measurement date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis.

•Level 2 inputs are those other than quoted prices included in Level 1 that are observable for the assets or liabilities, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

•Level 3 inputs are those that are unobservable or not readily observable for the asset or liability and are used to measure fair value to the extent relevant observable inputs are not available.

Assets and liabilities measured at fair value, by their nature, result in a higher degree of financial statement volatility. See Note 1 to the Consolidated Financial Statements in the Company's Annual Report on Form 10-K for 2025 for a broad discussion of fair value measurement techniques. When available, the Company uses quoted market prices or matrix pricing in active markets to determine fair value and classifies such items as Level 1 or Level 2 assets or liabilities. If quoted market prices in active markets are not available, fair value is determined using third-party broker quotes and/or DCF models incorporating various assumptions including interest rates, prepayment speeds and credit losses. Assets and liabilities valued using broker quotes and/or DCF models are classified as either Level 2 or Level 3, depending on the lowest level classification of an input that is considered significant to the overall valuation.

The Company values assets and liabilities based on the principal market in which each would be sold (in the case of assets) or transferred (in the case of liabilities). The principal market is the forum with the greatest volume and level of activity. In the absence of a principal market, the valuation is based on the most advantageous market. In the absence of observable market transactions, the Company considers liquidity valuation adjustments to reflect the uncertainty in pricing the instruments.

The fair value of a financial asset is measured on a stand-alone basis and cannot be measured as a group, with the exception of certain financial instruments held and managed on a net portfolio basis. In measuring the fair value of a nonfinancial asset, the Company assumes the highest and best use of the asset by a market participant, not just the intended use, to maximize the value of the asset. The Company also considers whether any credit valuation adjustments are necessary based on the counterparty's credit quality. Any models used to determine fair values or validate dealer quotes based on the descriptions below are subject to review and testing as part of the Company's model validation and internal control testing processes.

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NOTE 11. FAIR VALUE (continued)

The Company's Market Risk Department approves the methodologies used in the estimations of fair value, including the Company's Level 3 assets and liabilities. Price validation procedures are performed, and the results are reviewed for Level 3 assets and liabilities by the Market Risk Department. Price validation procedures performed for these assets and liabilities can include comparing current prices to historical pricing trends by collateral type and vintage, comparing prices by product type to indicative pricing grids published by market makers, and obtaining corroborating dealer prices for significant securities.

The Company reviews the assumptions utilized to determine fair value on a quarterly basis. Any changes in methodologies or significant inputs used in determining fair values are further reviewed to determine if a change in fair value level hierarchy has occurred.

Assets and Liabilities Measured at Fair Value on a Recurring and Nonrecurring Basis

The following tables present the assets and liabilities that are measured at fair value on a recurring and nonrecurring basis by major product category and fair value hierarchy as of the dates indicated:


(in thousands)	Level 1		Level 2		Level 3		Balance at June 30, 2026		Level 1		Level 2		Level 3		Balance at December 31, 2025
Recurring:
Financial assets:
U.S. Treasury securities	$	215,199	$	—	$	—	$	215,199	$	706,403	$	—	$	—	$	706,403

ABS	—		1,187,411		—		1,187,411		—		945,297		—		945,297
Beneficial interest in Structured LLC	—		—		1,055,830		1,055,830		—		—		1,096,789		1,096,789
MBS	—		4,338,911		—		4,338,911		—		4,579,246		—		4,579,246
Investment in debt securities AFS (2)	$	215,199	$	5,526,322	$	1,055,830	$	6,797,351	$	706,403	$	5,524,543	$	1,096,789	$	7,327,735
Trading securities	2,546,443		15,245,259		110,986		17,902,688		3,538,749		11,896,614		173,404		15,608,767
Equity securities	—		—		928,112		928,112		—		—		992,138		992,138

RICs HFI (3)	—		—		3,244		3,244		—		—		4,870		4,870
LHFS (1)(4)	—		1,424,926		—		1,424,926		—		1,531,369		—		1,531,369
MSRs	—		—		78,669		78,669		—		—		79,526		79,526
Other assets - derivatives (2)	530		687,854		19		688,403		653		670,892		28		671,573
Total financial assets (5)	$	2,762,172	$	22,884,361	$	2,176,860	$	27,823,393	$	4,245,805	$	19,623,418	$	2,346,755	$	26,215,978
Financial liabilities:

Trading liabilities	3,274,702		201,243		—		3,475,945		3,727,918		274,433		—		4,002,351
Other liabilities - derivatives (2)	117		719,732		521		720,370		36		648,567		715		649,318
Total financial liabilities	$	3,274,819	$	920,975	$	521	$	4,196,315	$	3,727,954	$	923,000	$	715	$	4,651,669
Nonrecurring:
Financial assets:
Impaired commercial LHFI	$	—	$	214,581	$	334,872	$	549,453	$	—	$	213,159	$	3,473	$	216,632
Foreclosed assets	$	—	$	26,411	$	—	$	26,411	$	—	$	31,536	$	—	$	31,536
Vehicle inventory	$	—	$	378,179	$	—	$	378,179	$	—	$	378,882	$	—	$	378,882
LHFS	$	—	$	—	$	310,864	$	310,864	$	—	$	—	$	54,835	$	54,835
Auto loans impaired due to bankruptcy	$	—	$	172,849	$	—	$	172,849	$	—	$	168,371	$	—	$	168,371

Total financial assets	$	—	$	792,020	$	645,736	$	1,437,756	$	—	$	791,948	$	58,308	$	850,256

(1) LHFS disclosed on the Condensed Consolidated Balance Sheets also includes LHFS that are held at the lower of cost or fair value and are not presented within this table.

(2) Refer to Note 2 for the fair value of investment securities and to Note 10 for the fair values of derivative assets and liabilities on a further disaggregated basis.

(3) Certain RICs collateralized by vehicle titles and RV/marine loans.

(4) Residential mortgage loans and commercial mortgage loans.

(5) Approximately $2.2 billion of these financial assets were measured using model-based techniques, or Level 3 inputs, and represented approximately 7.8% of total assets measured at fair value on a recurring basis and approximately 1.3% of total consolidated assets.

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NOTE 11. FAIR VALUE (continued)

Valuation Processes and Techniques - Recurring Fair Value Assets and Liabilities

The following is a description of the valuation techniques used for instruments measured at fair value on a recurring basis:

Investments in debt securities AFS

Investments in debt securities AFS are accounted for at fair value. The Company utilizes a third-party pricing service to value its investment securities portfolios on a global basis. Its primary pricing service has consistently proved to be a high quality third-party pricing provider. For those investments not valued by pricing vendors, other trusted market sources are utilized. The Company monitors and validates the reliability of vendor pricing on an ongoing basis, which can include pricing methodology reviews, performing detailed reviews of the assumptions and inputs used by the vendor to price individual securities, and price validation testing. Price validation testing is performed independently of the risk-taking function and can include corroborating the prices received from third-party vendors with prices from another third-party source, reviewing valuations of comparable instruments, comparison to internal valuations, or by reference to recent sales of similar securities.

The classification of securities within the fair value hierarchy is based upon the activity level in the market for the security type and the observability of the inputs used to determine their fair values. Actively traded quoted market prices for debt securities AFS, such as government agency securities, corporate debt, state and municipal securities, and MBS, are not readily available. The Company's principal markets for its investment securities are the secondary institutional markets with an exit price that is predominantly reflective of bid-level pricing in these markets. These investment securities are priced by third-party pricing vendors. The third-party vendors use a variety of methods when pricing these securities that incorporate relevant observable market data to arrive at an estimate of what a buyer in the marketplace would pay for a security under current market conditions. These investment securities are, therefore, considered Level 2.

Certain ABS are valued using DCF models. The DCF models are obtained from a third-party pricing vendor which uses observable market data and therefore are classified as Level 2.

The Company's beneficial interest in the Structured LLC was acquired in December 2023, and is valued using an internally-developed DCF model and is classified as Level 3 at June 30, 2026. Significant assumptions used in evaluation include, discount spread, loss estimates, and extension of loans. Significant changes in any of these inputs could result in a higher or lower fair value measurement.

LHFI

For certain RICs reported in LHFI, net, the Company has elected the FVO. The estimated fair value of all RICs HFI is estimated using a DCF model and is classified as Level 3.

LHFS

For certain LHFS portfolios, the Company has elected the FVO and the portfolios are measured at fair value on a recurring basis. These loans consisted primarily of loans attributed to CIB whole loan aggregation and bridge lending programs. The fair value of these loans was based on estimated market rates for similar loans and certain forward sale agreements and the loans are considered Level 2. See further discussion below in the section captioned "FVO for Financial Assets and Financial Liabilities."

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NOTE 11. FAIR VALUE (continued)

MSRs

The Company maintains an MSR asset related to residential real estate loans serviced for others. At June 30, 2026 and December 31, 2025, the balance of these loans serviced for others was $6.3 billion and $6.6 billion, respectively. The Company has elected to measure its residential MSRs at fair value to align with its risk management strategy to hedge changes in the fair value of these assets using interest rate swaps and forward contracts. See Note 11 to these Condensed Consolidated Statements of Operations for additional information regarding these derivative instruments. Changes in fair value of the MSR are recorded through Miscellaneous income, net on the Condensed Consolidated Statements of Operations.

Residential MSRs are classified as Level 3 within the fair value hierarchy due to the use of significant unobservable inputs in the valuation process.

The fair value of MSRs is determined using a DCF model that estimates the present value of expected future net servicing cash flows. Significant unobservable inputs used in the valuation include mortgage loan CPRs and discount rates. The assumptions utilized represent management’s best estimates of the assumptions that a market participant would use in valuing the MSRs at the measurement date. In general, increases in prepayment speeds and discount rates, in isolation, would result in a decrease in the fair value of MSRs. Prepayment speeds generally increase when market interest rates decline and decrease when market interest rates rise. Discount rates typically increase when market interest rates increase or when credit and liquidity risks increase, and decrease when market interest rates decline or credit and liquidity conditions improve.

The significant unobservable inputs used in the valuation of MSRs are inherently uncertain, and changes in these inputs may result in materially different fair value estimates. In addition, certain inputs used in the valuation model may be interrelated. Changes in one assumption may result in changes in another assumption, which may either magnify or mitigate the overall impact on the fair value measurement.

The following sensitivity analysis summarizes the estimated impact on the fair value of the residential MSR asset resulting from adverse changes in certain key assumptions as of June 30, 2026:

•A 10% and 20% increase in the CPR speed would decrease the fair value of the residential servicing asset by $2.1 million and $4.2 million, respectively.

•A 10% and 20% increase in the discount rate would decrease the fair value of the residential servicing asset by $2.9 million and $5.5 million.

These sensitivity calculations are hypothetical and should not be considered to be predictive of future performance.

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NOTE 11. FAIR VALUE (continued)

Derivatives

The valuation of these instruments is determined using commonly accepted valuation techniques, including DCF analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable and unobservable market-based inputs. The fair value represents the estimated amount the Company would receive or pay to terminate the contract or agreement, taking into account current interest rates, foreign exchange rates, equity prices and, when appropriate, the current creditworthiness of the counterparties.

The Company incorporates credit valuation adjustments in the fair value measurement of its derivatives to reflect the counterparty's nonperformance risk, except for those derivative contracts with associated credit support annexes which provide credit enhancements, such as collateral postings and guarantees. The Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy. Certain of the Company's derivatives utilize Level 3 inputs, which are primarily related to total return settlement derivative contracts.

The DCF model is utilized to determine the fair value of the total return settlement derivative contracts. The significant unobservable inputs for total return settlement derivative contracts used in the fair value measurement of the Company's liabilities are discount percentages, which are based on comparable financial instruments. See Note 10 to these Condensed Consolidated Financial Statements for a discussion of derivatives activity.

Trading securities and trading liabilities

Trading securities consist of various debt securities, including U.S. treasuries, agency and non-agency MBS, and corporate debt securities. Trading securities are recognized on the trade date and measured at fair value. Trading liabilities consist of securities sold, not yet purchased, and are measured at fair value.

The fair value of Trading securities and trading liabilities is estimated using techniques that are consistent with AFS debt securities discussed above. Debt securities whose fair value measurements incorporate significant unobservable inputs are classified as Level 3.

Equity securities

The Company holds interests in nonmarketable equity investments through the U.K. Limited Partnership formed to invest in early-stage financial technology companies. The valuation of direct and indirect private equity investments requires significant management judgment due to the absence of quoted market prices, inherent lack of liquidity and the long-term nature of such investments. In accordance with ASC 820, Fair Value Measurement, management uses all available information in making fair value estimates of these investments. Various valuation techniques are used for direct investments as appropriate for the nature of the security, including multiples of revenues of the entity, independent appraisals, and recent and anticipated financing and sale transactions with third parties. A multiple of revenue calculation is the valuation technique utilized most frequently and is the most significant unobservable input used in such calculation. In addition, the Company applies a liquidity discount factor to adjust for the inherent inability to convert the underlying investments in early-stage financial technology companies to cash quickly and at a minimal cost.

Management evaluates the reasonableness of these assumptions each reporting period in light of current market conditions, the investee’s financial performance, and other factors that could affect the estimated fair value. The use of different assumptions or methodologies could result in materially different fair value estimates. Significant decreases (increases) in the multiple of earnings could result in a significantly lower (higher) fair value measurement. Generally, direct equity investments are classified as Level 3.

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NOTE 11. FAIR VALUE (continued)

Valuation Processes and Techniques - Nonrecurring Fair Value Assets and Liabilities

The Company may be required to measure certain assets and liabilities at fair value on a nonrecurring basis in accordance with GAAP from time to time. These adjustments to fair value usually result from application of lower-of-cost-or-fair value accounting or certain impairment measures.

Impaired commercial LHFI

Impaired commercial LHFI in the table above represents the recorded investment of impaired commercial loans for which the Company measures impairment during the period based on the fair value of the underlying collateral supporting the loan. Written offers to purchase a specific impaired loan are considered observable market inputs, which are considered Level 1 inputs. Appraisals are obtained to support the fair value of the collateral and incorporate measures such as recent sales prices for comparable properties and are considered Level 2 inputs. Loans for which the value of the underlying collateral is determined using a combination of real estate appraisals, field examinations and internal calculations are classified as Level 3. The inputs in the internal calculations may include the loan balance, estimation of the collectability of the underlying receivables held by the customer used as collateral, sale and liquidation value of the inventory held by the customer used as collateral and historical loss-given-default parameters. In cases in which the carrying value exceeds the fair value of the collateral less cost to sell, an impairment charge is recognized.

Foreclosed assets and vehicle inventory

Foreclosed assets represent the recorded investment in assets taken during the period presented in foreclosure of defaulted loans and are primarily comprised of commercial and residential real properties and generally measured at fair value less costs to sell. The fair value of the real property is generally determined using appraisals or other indications of market value based on recent comparable sales of similar properties or assumptions generally observable in the marketplace.

The Company estimates the fair value of its vehicles, which are obtained either through repossession or lease termination, using historical auction rates and current market values of used cars.

LHFS

The Company has LHFS portfolios that are measured at fair value on a nonrecurring basis primarily consisting of commercial loans. The estimated fair value of these LHFS is calculated based on a combination of estimated market rates for similar loans with similar credit risks and a DCF analysis in which the Company uses significant unobservable inputs on key assumptions, including historical default rates and adjustments to reflect voluntary prepayments, prepayment rates, discount rates reflective of the cost of funding, and credit loss expectations. These are classified Level 3.

Auto loans impaired due to bankruptcy

For loans that are considered collateral-dependent, such as certain bankruptcy loans, impairment is measured based on the fair value of the collateral less its estimated cost to sell. For the underlying collateral, the estimated fair value is obtained using historical auction rates and current market levels of the collateral securing the loans.

Goodwill

The estimated fair value of goodwill is calculated using unobservable inputs and is classified as Level 3. Goodwill is written down to fair value when, as a result of an annual or interim goodwill impairment test, an impairment is identified and recognized. Fair value is calculated using widely-accepted valuation techniques, such as the guideline public company market approach (earnings and price-to-tangible book value multiples of comparable public companies) and the income approach (the DCF method). The Company uses a combination of these accepted methodologies to determine the fair valuation of reporting units. Several factors are taken into account, including actual operating results, future business plans, economic projections, and market data. On a quarterly basis, the Company assesses whether or not impairment indicators are present. For information on the Company's goodwill impairment test and the results of the most recent goodwill impairment test, see Note 6 to the Consolidated Financial Statements in the Company's Annual Report on Form 10-K for 2025 for a further description of the Company's goodwill valuation methodology.

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NOTE 11. FAIR VALUE (continued)

Level 3 Rollforward for Assets and Liabilities Measured at Fair Value on a Recurring Basis

The tables below present the changes in Level 3 balances for those assets and liabilities measured at fair value on a recurring basis for the periods indicated.



	Three months ended June 30, 2026														Three months ended June 30, 2025
(in thousands)	Beneficial Interest in Structured LLC		RICs HFI		MSRs		Derivatives, net		Equity Securities		Trading Securities		Total		Beneficial interest in Structured LLC		RICs HFI		MSRs		Derivatives, net		Equity Securities		Trading Securities		Total
Balances, beginning of period	$	1,068,348	$	4,025	$	78,273	$	26	$	986,311	$	143,250	$	2,280,233	$	1,153,676	$	7,921	$	85,481	$	(9)	$	—	$	6,810	$	1,253,879
Gains / (losses) in OCI	(2,980)		—		—		—		—		—		(2,980)		(25,105)		—		—		—		—		—		(25,105)
Gains/(losses) in earnings	—		—		2,596		(528)		(10,942)		(1,076)		(9,950)		—		—		(1,738)		(11)		—		36		(1,713)
Additions/Issuances	—		—		—		—		—		205		205		—		—		—		—		—		—		—
Transfer from Level 2	—		—		—		—		—		13,566		13,566		—		—		—		—		—		151,391		151,391
Settlements(1)	(9,538)		(781)		(2,200)		—		(47,257)		(44,959)		(104,735)		(10,693)		(1,031)		(1,901)		—		—		(1,690)		(15,315)
Balances, end of period	$	1,055,830	$	3,244	$	78,669	$	(502)	$	928,112	$	110,986	$	2,176,339	$	1,117,878	$	6,890	$	81,842	$	(20)	$	—	$	156,547	$	1,363,137
Changes in unrealized gains (losses) included in earnings related to balances still held at end of period	$	—	$	—	$	2,596	$	(528)	$	(30,728)	$	(1,076)	$	(29,736)	$	—	$	—	$	(1,738)	$	(11)	$	—	$	36	$	(1,713)


	Six months ended June 30, 2026														Six months ended June 30, 2025
(in thousands)	Beneficial Interest in Structured, LLC		RICs HFI		MSRs		Derivatives, net		Equity Securities		Trading Securities		Total		Beneficial interest in Structured, LLC		RICs HFI		MSRs		Derivatives, net		Equity Securities		Trading Securities		Total
Balances, beginning of period	$	1,096,789	$	4,870	$	79,526	$	(687)	$	992,138	$	173,404	$	2,346,040	$	1,198,985	$	9,039	$	90,958	$	(29)	$	—	$	6,267	$	1,305,220
Gain / (losses) in OCI	(13,678)		—		—		—		—		—		(13,678)		(70,414)		—		—		—		—		—		(70,414)
Gains/(losses) in earnings	—		—		3,556		185		(16,769)		(984)		(14,012)		—		—		(4,806)		9		—		133		(4,664)
Additions/Issuances	—		—		—		—		—		4,762		4,762		—		—		—		—		—		50		50
Transfers from Level 2	—		—		—		—		—		13,566		13,566		—		—		—		—		—		152,403		152,403
Settlements (1)	(27,281)		(1,626)		(4,413)		—		(47,257)		(79,762)		(160,339)		(10,693)		(2,149)		(4,310)		—		—		(2,306)		(19,458)
Balances, end of period	$	1,055,830	$	3,244	$	78,669	$	(502)	$	928,112	$	110,986	$	2,176,339	$	1,117,878	$	6,890	$	81,842	$	(20)	$	—	$	156,547	$	1,363,137
Changes in unrealized gains (losses) included in earnings related to balances still held at end of period	$	—	$	—	$	3,556	$	185	$	(34,980)	$	(984)	$	(32,223)	$	—	$	—	$	(4,806)	$	9	$	—	$	133	$	(4,664)

(1)Settlements include charge-offs, prepayments, paydowns, sales, and maturities.

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NOTE 11. FAIR VALUE (continued)

Fair Value Adjustments

The following table presents the increases and decreases in value of certain assets that are measured at fair value on a nonrecurring basis for which a fair value adjustment has been included in the Condensed Consolidated Statements of Operations relating to assets held at period-end:


		Three months ended June 30,				Six months ended June 30,
(in thousands)	Statement of Operations Location	2026		2025		2026		2025
Impaired LHFI	Credit loss expense / (benefit)	$	(4,122)	$	3,309	$	15,178	$	(645)
Foreclosed assets	Miscellaneous income, net (1)	7,863		(10,590)		4,173		(10,602)
LHFS	Credit loss expense / (benefit)	(35,044)		7,741		(35,044)		8,582
LHFS	Miscellaneous income, net (1)	(27,720)		—		(28,008)		49
Auto loans impaired due to bankruptcy	Credit loss expense / (benefit)	(7,305)		(1,425)		299		3,620

(1) Gains are disclosed as positive numbers while losses are shown as a negative number regardless of the line item being affected.

Level 3 Inputs - Significant Recurring and Nonrecurring Fair Value Assets and Liabilities

The following table presents quantitative information about the significant unobservable inputs within significant Level 3 recurring and nonrecurring assets and liabilities at the dates indicated:

(dollars in thousands)

Fair Value at

June 30, 2026 (4)

Valuation Technique

Unobservable Inputs

Range
(Weighted Average)

Financial Assets:

Beneficial interest in Structured LLC

1,055,830

DCF

Discount spread

2.75% - 25.00% (14.21%)

Loss estimate

0.00% - 78.30% (6.76%)

Extension of loan(1)

48 months or 60 months

Equity securities

928,112

Market comparable pricing

Liquidity discount

0.00% - 25.00% (24.00%)

Multiples of revenue

0.8x - 17.9x (6.8x)

MSRs

78,669

DCF

CPR (2)

6.55% - 41.16% (6.98%)

Discount rate (3)

9.22

(1) Includes extensions related to workouts and contractual extensions.

(2) Average CPR projected from collateral stratified by loan type and note rate. Weighted average amount was developed by weighting the associated relative UPB.

(3) Average discount rate from collateral stratified by loan type and note rate. Weighted average amount was developed by weighting the associated relative UPB.

(4) Excluded insignificant Level 3 assets and liabilities.

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NOTE 11. FAIR VALUE (continued)

(dollars in thousands)

Fair Value at December 31, 2025 (4)

Valuation Technique

Unobservable Inputs

Range
(Weighted Average)

Financial Assets:

Beneficial interest in Structured LLC

1,096,789

DCF

Discount spread

2.75% - 25.00% (13.78%)

Loss estimate

0.00% - 81.33% (6.85%)

Extension of loan (1)

48 or 60 months

Equity securities

992,138

Market comparable pricing

Liquidity discount

0.00% - 25.00% (24.00%)

Multiples of revenue

0.8x - 17.9x (3.8x)

MSRs

79,526

DCF

CPR (2)

6.48% - 39.82% (7.07%)

Discount rate (3)

9.22

(1), (2), (3), (4) - See corresponding footnotes to the June 30, 2026 Level 3 significant inputs table above.

Fair Value of Financial Instruments

The carrying amounts and estimated fair values, as well as the level within the fair value hierarchy, of the Company's financial instruments which have not previously been disclosed above are as follows as of the dates indicated:


	June 30, 2026										December 31, 2025
(dollars in thousands)	Carrying Value		Fair Value		Level 1		Level 2		Level 3		Carrying Value		Fair Value		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	11,381,591	$	11,381,591	$	11,381,591	$	—	$	—	$	14,373,816	$	14,373,816	$	14,373,816	$	—	$	—
Federal funds sold and securities purchased under resale agreements or similar arrangements	9,440,137		9,426,659		—		9,426,659		—		8,639,667		8,641,215		—		8,641,215		—
Investments in debt securities HTM	12,960,360		11,548,907		1,776,320		9,772,587		—		13,211,794		11,871,362		2,087,420		9,783,942		—
Equity and other investments (2)	933,112		933,112		—		5,000		928,112		997,138		997,138		—		5,000		992,138
LHFI, net (3)	76,891,453		77,029,257		—		387,430		76,641,827		76,891,653		77,027,910		—		381,530		76,646,380

Restricted cash	7,240,924		7,240,924		7,240,924		—		—		5,322,087		5,322,087		5,322,087		—		—

Financial liabilities:
Deposits (1)	13,848,822		13,842,872		—		13,842,872		—		15,076,851		15,095,284		—		15,095,284		—
Federal funds purchased and securities loaned or sold under repurchase agreements	22,135,117		22,121,360		—		22,121,360		—		19,460,394		19,462,596		—		19,462,596		—
Borrowings and other debt obligations	32,744,295		32,995,761		—		31,807,742		1,188,019		37,102,112		37,746,509		—		34,363,936		3,382,573

(1) This line item excludes deposit liabilities with no defined or contractual maturities.

(2) This line item includes CDs with a maturity greater than 90 days and equity securities.

(3) This line item includes nonrecurring LHFI.

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NOTE 11. FAIR VALUE (continued)

Valuation Processes and Techniques - Financial Instruments

The preceding tables present disclosures about the fair value of the Company's financial instruments. Those fair values for certain instruments are presented based upon subjective estimates of relevant market conditions at a specific point in time and information about each financial instrument. In cases in which quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. These techniques involve uncertainties resulting in variability in estimates affected by changes in assumptions and risks of the financial instruments at a certain point in time. Therefore, the derived fair value estimates presented above for certain instruments cannot be substantiated by comparison to independent markets. In addition, the fair values do not reflect any premium or discount that could result from offering for sale at one time an entity’s entire holding of a particular financial instrument, nor do they reflect potential taxes and the expenses that would be incurred in an actual sale or settlement. Accordingly, the aggregate fair value amounts presented above do not represent the underlying value of the Company.

The following methods and assumptions were used to estimate the fair value of each class of financial instruments not measured at fair value on the Condensed Consolidated Balance Sheets:

Cash, cash equivalents and restricted cash

Cash and cash equivalents include cash and due from depository institutions, interest-bearing deposits in other banks, federal funds sold, and securities purchased under agreements to resell. The related fair value measurements have been classified as Level 1, since their carrying value approximates fair value due to the short-term nature of the asset.

Restricted cash is related to cash restricted for investment purposes, cash posted for collateral purposes, cash advanced for loan purchases, and lockbox collections. Cash and cash equivalents, including restricted cash, have maturities of three months or less and, accordingly, the carrying amount of these instruments is deemed to be a reasonable estimate of fair value.

Securities Financing Activities

No quoted prices exist for Securities Financing Activities, so fair value is determined using a DCF technique. Cash flows are estimated based on the terms of the contract. These cash flows are discounted using interest rates appropriate to the maturity of the instrument as well as the nature of the underlying collateral. Securities Financing Activities are classified as Level 2. At June 30, 2026, the fair value of the underlying collateral was $45.3 billion before netting of $23.1 billion, all of which was sold or re-pledged.

Investments in debt securities HTM

Investments in debt securities HTM are recorded at amortized cost and are priced by third-party pricing vendors. The third-party vendors use a variety of methods when pricing these securities that incorporate relevant observable market data to arrive at an estimate of what a buyer in the marketplace would pay for a security under current market conditions. These investment securities are, therefore, considered Level 2.

LHFI, net

The fair values of loans are estimated based on groupings of similar loans, including but not limited to stratification by type, interest rate, maturity, and borrower creditworthiness. Discounted future cash flow analyses are performed for these loans incorporating assumptions of current and projected voluntary prepayment speeds. Discount rates are determined using the Company's current origination rates on similar loans, adjusted for changes in current liquidity and credit spreads (if necessary). Because the current liquidity spreads are generally not observable in the market and the expected loss assumptions are based on the Company's experience, these are Level 3 valuations. Impaired loans are valued at fair value on a nonrecurring basis. See further discussion under the section captioned "Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis" above.

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NOTE 11. FAIR VALUE (continued)

Deposits

For deposits with no stated maturity, such as non-interest-bearing and interest-bearing demand deposit accounts, savings accounts, and certain money market accounts, the carrying value approximates fair values. The fair value of fixed-maturity deposits is estimated by discounting cash flows using currently offered rates for deposits of similar remaining maturities and have been classified as Level 2.

Borrowings and other debt obligations

Fair value is estimated by discounting cash flows using rates currently available to the Company for other borrowings with similar terms and remaining maturities. Certain other debt obligation instruments are valued using available market quotes for similar instruments, which contemplates issuer default risk. The related fair value measurements have generally been classified as Level 2. A certain portion of debt relating to revolving credit facilities is classified as Level 3. Management believes that the terms of these credit agreements approximate market terms for similar credit agreements and, therefore, they are considered to be Level 3.

FVO for Financial Assets and Financial Liabilities

RICs HFI

To reduce accounting and operational complexity, the Company elected the FVO for certain of its RICs HFI. These loans consisted primarily of NPLs acquired by the Company under optional clean-up calls from its non-consolidated Trusts.

LHFS

At June 30, 2026 and December 31, 2025, the Company had LHFS for which the FVO has been elected, primarily related to loans that are attributed to CIB whole loan aggregation and bridge lending programs. Electing the FVO allows the Company to record loans in these programs at fair value. The Company may enter into hedges on these LHFS portfolios, These hedges are reported at fair value; as a result, the loans and associated hedges are carried at fair value, reducing earnings volatility.

The following table summarizes the differences between the fair value and the principal balance of financial instruments measured at fair value on a recurring basis as of the dates indicated:


	June 30, 2026						December 31, 2025
(in thousands)	Fair Value		Principal Balance		Difference		Fair Value		Principal Balance		Difference
LHFS(1)	$	1,424,926	$	1,384,506	$	40,420	$	1,531,369	$	1,483,909	$	47,460

RICs HFI	3,244		3,244		—		4,870		4,870		—
Nonaccrual loans	1		1		—		13		13		—

(1) LHFS disclosed on the Condensed Consolidated Balance Sheets also includes $310.9 million and $54.8 million of LHFS valued on a non-recurring basis at June 30, 2026 and December 31, 2025, respectively, that are held at the lower of cost or fair value that are not presented within this table. There were no nonaccrual loans related to the LHFS measured using the FVO.

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NOTE 12. NON-INTEREST INCOME

The following table presents the details of the Company's non-interest income for the following periods:


	Three months ended June 30,				Six months ended June 30,
(in thousands)	2026		2025		2026		2025
Non-interest income:
Consumer and commercial fees	$	109,584	$	127,382	$	233,293	$	235,798
Lease income	284,748		418,981		605,969		884,709
Capital markets and foreign exchange income	250,907		132,982		421,488		228,711
Miscellaneous income, net
Mortgage banking income and multifamily servicing fees, net	12,959		21,674		21,642		38,976

BOLI	13,142		15,840		26,506		31,135
Net (loss) / gain on operating leases	29,367		19,239		25,079		11,059
Asset and wealth management fees	89,054		86,097		199,435		171,195

Gain / (Loss) on non-mortgage loans, net	(26,565)		1,017		(25,982)		2,921
Other miscellaneous income /(loss), net	21,104		25,874		54,203		82,389
Securities gains, net	22,120		21,663		48,600		61,922
Total non-interest income	$	806,420	$	870,749	$	1,610,233	$	1,748,815

Disaggregation of Revenue from Contracts with Customers

The following table presents the Company's non-interest income disaggregated by revenue source:


	Three months ended June 30,				Six months ended June 30,
(in thousands)	2026		2025		2026		2025
Non-interest income:
In-scope of revenue from contracts with customers:
Depository services (1)	$	33,091	$	31,813	$	64,988	$	63,236
Commission and trailer fees (2)	83,964		88,202		191,061		168,927
Interchange income, net (2)	20,395		19,555		39,518		38,076
Underwriting service fees (2)	137,341		65,880		230,134		144,193
Asset and wealth management fees (2)	153,479		97,210		253,304		173,041
Other revenue from contracts with customers (2)	(65)		3,240		1,007		6,633
Total in-scope of revenue from contracts with customers	428,205		305,900		780,012		594,106
Out-of-scope of revenue from contracts with customers:
Consumer and commercial fees (3)	54,800		75,710		124,284		134,099
Lease income	284,748		418,981		605,969		884,709
Other miscellaneous income/(loss), net (3)	16,547		48,495		51,368		73,979
Securities gains, net	22,120		21,663		48,600		61,922
Total out-of-scope of revenue from contracts with customers	378,215		564,849		830,221		1,154,709
Total non-interest income	$	806,420	$	870,749	$	1,610,233	$	1,748,815

(1) Primarily recorded in the Company's Condensed Consolidated Statements of Operations within Consumer and commercial fees.

(2) Primarily recorded in the Company's Condensed Consolidated Statements of Operations within Miscellaneous income, net.

(3) The balance presented excludes certain revenue streams that are considered in-scope and presented above.

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NOTE 13. INCOME TAXES

An income tax provision of $174.3 million and $242.9 million was recorded for the three months and six months ended June 30, 2026, compared to an income tax provision of $38.0 million and $54.9 million for the corresponding periods in 2025. This resulted in an ETR of 23.0% and 19.6% for the three months and six months ended June 30, 2026, compared to 7.1% and 6.0% for the corresponding periods in 2025. The increase in ETR for the three months and six months ended June 30, 2026, when compared to the same periods in 2025, was directly impacted by (i) an increase in forecasted pre-tax income in 2026 and (ii) no electric vehicle tax credits in 2026, offset by $44 million of tax benefit resulted from closed audit years recorded in the first quarter of 2026.

The Company is subject to the income tax laws of the U.S., its states and municipalities and certain foreign countries. These tax laws are complex and are potentially subject to different interpretations by the taxpayer and the relevant governmental taxing authorities. In establishing a provision for income tax expense, the Company must make judgments and interpretations about the application of these inherently complex tax laws.

Actual income taxes paid may vary from estimates depending upon changes in income tax laws, actual results of operations, and the final audit of tax returns by taxing authorities. Tax assessments may arise several years after tax returns have been filed. The Company reviews its tax balances quarterly and, as new information becomes available, the balances are adjusted as appropriate. The Company is subject to ongoing tax examinations and assessments in various jurisdictions.

With few exceptions, the Company is no longer subject to federal and non-U.S. income tax examinations by tax authorities for years prior to 2015 and state income tax examinations for years prior to 2010.

The Company applies an aggregate portfolio approach whereby income tax effects from AOCI are released only when an entire portfolio (i.e., all related units of account) of a particular type is liquidated, sold or extinguished.

The Company had a net deferred tax asset balance of $408.4 million at June 30, 2026 (consisting of a federal deferred tax asset balance of $299.7 million and a state deferred tax asset balance of $108.7 million with respect to jurisdictional netting), compared to a net deferred tax asset balance of $379.8 million at December 31, 2025 (consisting of a federal deferred tax asset balance of $285.1 million and a state deferred tax asset balance of $94.7 million). The $28.6 million change in the net deferred tax asset for the period ended June 30, 2026 was primarily due to a decrease in the deferred tax liability related to leasing transactions.

On July 4, 2025, the OBBBA was enacted into law, which the Company has fully incorporated effective for the fiscal year ending 2025. The Company is monitoring the impact of the OBBBA to state and local income tax legislative proposals.

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NOTE 14. COMMITMENTS, CONTINGENCIES, AND GUARANTEES

Off-Balance Sheet Risk - Financial Instruments

In the normal course of business, the Company utilizes a variety of financial instruments with off-balance sheet risk to meet the financing needs of its customers and manage its exposure to fluctuations in interest rates. These financial instruments include commitments to extend credit, letters of credit, loans sold with recourse, forward contracts, and interest rate and cross currency swaps, caps, and floors. These financial instruments may involve, to varying degrees, elements of credit, liquidity, and interest rate risk in excess of the amount recognized on the Condensed Consolidated Balance Sheets. The contractual or notional amounts of these financial instruments reflect the extent of involvement the Company has in particular classes of financial instruments.

The Company’s exposure to credit loss in the event of non-performance by the other party to the financial instrument for commitments to extend credit, letters of credit and loans sold with recourse is represented by the contractual amount of those instruments. The Company uses the same credit policies in making commitments and meeting conditional obligations as it does for on-balance sheet instruments. For forward contracts and interest rate swaps, caps and floors, the contract or notional amounts do not represent exposure to credit loss. The Company controls the credit risk of its forward contracts and interest rate swaps, caps and floors through credit approvals, limits, and monitoring procedures. See Note 10 to these Condensed Consolidated Financial Statements for discussion of all derivative contract commitments.

The following table details the amount of commitments at the dates indicated:


Other Commitments	June 30, 2026		December 31, 2025
	(in thousands)
Commitments to extend credit	$	20,738,249	$	21,828,886
Letters of credit	1,338,860		1,375,826


Recourse exposure on sold loans	3,986		4,320
Total commitments	$	22,081,095	$	23,209,032

Commitments to Extend Credit

Commitments to extend credit generally have fixed expiration dates, are variable rate, and contain provisions that permit the Company to terminate or otherwise renegotiate the contracts in the event of a significant deterioration in the customer’s credit quality. These arrangements normally require payment of a fee by the customer, the pricing of which is based on prevailing market conditions, credit quality, probability of funding, and other relevant factors. Since many of these commitments are expected to expire without being drawn upon, the contract amounts are not necessarily indicative of future cash requirements.

Included within the reported balances for commitments to extend credit at June 30, 2026 and December 31, 2025 were $3.4 billion and $3.7 billion, respectively, of commitments that can be canceled by the Company without notice.

Commitments to extend credit also include amounts committed by the Company to fund its investments in CRA, LIHTC, and other equity method investments in which it is a limited partner.

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NOTE 14. COMMITMENTS, CONTINGENCIES, AND GUARANTEES (continued)

Letters of Credit

The Company’s letters of credit meet the definition of a guaranty. Letters of credit commit the Company to make payments on behalf of its customers if specified future events occur. The guarantees are primarily issued to support public and private borrowing arrangements. The weighted average term of these commitments at June 30, 2026 was 8 months. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. In the event of a requested draw by the beneficiary that complies with the terms of the letter of credit, the Company would be required to honor the commitment. The Company has various forms of collateral for these letters of credit, including real estate assets and other customer business assets. The maximum undiscounted exposure related to these commitments at June 30, 2026 was $1.3 billion. The fees related to letters of credit are deferred and amortized over the lives of the respective commitments and were immaterial to the Company’s financial statements at June 30, 2026. Management believes that the utilization rate of these letters of credit will continue to be substantially less than the amount of the commitments, as has been the Company’s experience to date. The credit risk associated with letters of credit is monitored using the same risk rating system utilized within the loan and financing lease portfolio. As of June 30, 2026 and December 31, 2025, the liability related to unfunded lending commitments was $34.1 million and $52.5 million, respectively.

Unsecured Revolving Lines of Credit

Such commitments arise primarily from agreements with customers for unused lines of credit on unsecured revolving accounts and credit cards, provided there is no violation of conditions in the underlying agreement. These commitments, substantially all of which the Company can terminate at any time, and which do not necessarily represent future cash requirements, are reviewed periodically based on account usage, customer creditworthiness and loan qualifications.

Loans Sold with Recourse

The Company has loans sold with recourse that meet the definition of a guaranty. For loans sold with recourse under the terms of its multifamily sales program with the FNMA, the Company retained a portion of the associated credit risk.

Agreements

The Company sells production and investment tax credits to third parties. The Company is obligated to indemnify the purchasers for losses incurred as a result of recapture or reductions of the tax credits. The indemnification expires at the later of the end of the recapture periods or when the purchaser's tax returns are no longer subject to audit. At, June 30, 2026, the Company has approximately $34.2 million of previously sold investment tax credits that it remains obligated to indemnify.

In connection with the sale of RICs through securitizations and other sales, SC and SBNA have made standard representations and warranties customary in the consumer finance industry. Violations of these representations and warranties may require SC or SBNA to repurchase loans previously sold to on or off-balance sheet Trusts or other third parties. As of June 30, 2026, there were no loans that were the subject of a demand to repurchase or replace for breach of representations and warranties for SC's or SBNA's ABS or other sales. In the opinion of management, the potential exposure of other recourse obligations related to RIC sale agreements is not expected to have a material adverse effect on the Company's business, consolidated financial position, results of operations, or cash flows.

Santander has provided guarantees on the covenants, agreements, and obligations of SC under the governing documents of its warehouse facilities and privately issued amortizing notes. These guarantees are limited to the obligations of SC as servicer.

SC is party to a forward flow asset sale agreement with a third party under the terms of which SC is committed to sell $350.0 million in charged-off loan receivables in bankruptcy status on a quarterly basis. However, any sale of more than $275.0 million is subject to a market price check. The remaining aggregate commitment as of June 30, 2026 and December 31, 2025 not subject to a market price check was zero.

Other Off-Balance Sheet Risk

Other off-balance sheet risk stems from financial instruments that do not meet the definition of guarantees under applicable accounting guidance and from other relationships that include items such as indemnifications provided in the ordinary course of business and intercompany guarantees.

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NOTE 14. COMMITMENTS, CONTINGENCIES, AND GUARANTEES (continued)

Legal and Regulatory Proceedings

The Company, including its subsidiaries, are and in the future periodically expects to be party to, or otherwise involved in, various claims, disputes, lawsuits, investigations, regulatory matters and other legal matters and proceedings that arise in the ordinary course of business. In view of the inherent difficulty of predicting the outcome of any such claim, dispute, lawsuit, investigation, regulatory matter and/or legal proceeding, particularly where the claimants seek very large or indeterminate damages or where the matters present novel legal theories or involve a large number of parties, the Company generally cannot predict the eventual outcome of the pending matters, the timing of the ultimate resolution of the matters, or the eventual loss, fines or penalties related to the matters, if any. Accordingly, except as provided below, the Company is unable to reasonably estimate a range of its potential exposure, if any, to these claims, disputes, lawsuits, investigations, regulatory matters and other legal proceedings at this time. It is reasonably possible that actual outcomes or losses may differ materially from the Company's current assessments and estimates, and any adverse resolution of any of these matters against it could materially and adversely affect the Company's business, financial position, liquidity, and results of operations.

The Company establishes an accrued liability for legal and regulatory proceedings when those matters present material loss contingencies that are both probable and estimable. In such cases, there may be an exposure to loss in excess of any amounts accrued that are reasonably possible.

As of June 30, 2026 and December 31, 2025, the Company accrued aggregate legal and regulatory liabilities of approximately $15.7 million and $16.0 million, respectively. Further, the Company estimates the aggregate range of reasonably possible losses for legal and regulatory proceedings in excess of reserves established of up to approximately $30.2 million and $37.6 million as of June 30, 2026 and December 31, 2025, respectively. Set forth below are descriptions of the significant lawsuits, regulatory matters, and other legal proceedings to which the Company is subject.

Consumer Lending Cases

The Company and its subsidiaries are party to various lawsuits pending in federal and state courts alleging violations of state and federal consumer lending laws, including, without limitation, the Equal Credit Opportunity Act, the Fair Debt Collection Practices Act, the Fair Credit Reporting Act, Section 5 of the Federal Trade Commission Act, the Telephone Consumer Protection Act, the Truth in Lending Act, wrongful repossession laws, usury laws and laws related to unfair and deceptive acts or practices. In general, these cases seek damages and equitable and/or other relief.

Enterprise Financial Group v. SC. EFG, a former service provider to SC that provided a guaranteed asset protection debt insurance program, sued SC for breach of contract, alleging that SC placed non-conforming loans in the program, resulting in EFG losses. The case is pending in Texas District Court, Dallas County, and is captioned Enterprise Financial Group v. SC, Case No. 18-08119. SC asserted a counterclaim against EFG seeking approximately $10.5 million in connection with EFG’s refusal to pay claims. A jury trial concluded on November 2, 2022 and the jury awarded EFG $5 million and SC $4.2 million. On May 9, 2023, the court issued a final judgment awarding EFG approximately $10.6 million, and eliminating the jury award of $4.2 million in favor of SC. On July 17, 2023, the court heard arguments on SC’s motion for judgment notwithstanding the verdict, a new trial and remittitur. The court denied SC's motions for judgment notwithstanding the verdict, new trial, or remittitur. On December 31, 2024, the Court of Appeals for the Fifth District of Texas at Dallas denied SC's appeal of the trial court judgment. SC filed a petition for rehearing with the appellate court on January 14, 2025. On January 31, 2025, the court denied rehearing before the panel that heard the appeal; SC's petition for rehearing en banc remains pending. On June 18, 2025, the court responded by issuing an opinion affirming the trial court's judgment, finding that SC's trial counsel did not properly preserve its objections to jury charges for appeal. SC filed an appeal with the Texas Supreme Court, which appeal is fully briefed and pending with the Court.

This matter is ongoing and could in the future result in the imposition of damages, fines, or other penalties. No assurance can be given that the ultimate outcome of this matter or any resulting proceedings would not materially and adversely affect the Company's business, financial condition, and results of operations.

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NOTE 14. COMMITMENTS, CONTINGENCIES, AND GUARANTEES (continued)

Regulatory Investigations and Proceedings

The Company is party to, or is periodically otherwise involved in, reviews, investigations, examinations, and proceedings (both formal and informal), and information-gathering requests, by government and self-regulatory agencies, including the FRB of Boston, the CFPB, the DOJ, the SEC, the CFTC, the Federal Trade Commission and various state regulatory and enforcement agencies.

NOTE 15. RELATED PARTY TRANSACTIONS

In the normal course of business, the Company conducts business with Santander and its subsidiaries. Santander policy requires that these transactions occur at prevailing market rates and terms, and, where applicable, these transactions are compliant with United States banking regulations. All extensions of credit by (and certain credit exposures of) the Bank to other Santander affiliates are legally required to be secured by eligible collateral. The following disclosures below are the more significant related party transactions entered into:

On February 3, 2026, Santander and Webster entered into the Transaction Agreement, pursuant to which Santander will acquire Webster. In connection with the acquisition, Santander is expected to contribute Webster Virginia a successor to Webster, to SHUSA and cause Webster Bank to merge with SBNA. Refer to Note 1 to these Condensed Consolidated Financial Statements.

Debt and derivative activities

The Company and its affiliates have various debt and derivative agreements with Santander. For further details of these agreements, see Note 7 and Note 10 to these Condensed Consolidated Financial Statements and Note 21 to the Consolidated Financial Statements of the Company's Annual Report on Form 10-K for 2025.

During the second quarter of 2026, the Company entered into a new fair value hedge with Santander to hedge the Company’s debt issuances.

Mezzanine and Stockholder's Equity

The Company has preferred stock outstanding as discussed in Note 12 to the Consolidated Financial Statements of the Company's Annual Report on Form 10-K for 2025. As of June 30, 2026, Santander was the sole holder of its Series E, F, and G preferred stock.

During the six months ended June 30, 2026, the Company declared and paid dividends to its common stock shareholder, Santander, in the amount of $250.0 million. In addition, during the six months ended June 30, 2026, the Company declared and paid dividends to its preferred stock shareholder, Santander, in the amount of $88.4 million.

During the six months ended June 30, 2026, the Company acquired shares of common stock from Santander to satisfy vested stock awards granted to SHUSA employees. The share price paid to Santander was in excess of the price at the grant date by approximately $31.5 million The excess is recorded as a return of capital to Santander.

Deposit and checking accounts

The Company holds deposits for affiliates that are not consolidated by SHUSA. Refer to Note 6 to these Condensed Consolidated Financial Statements and Note 9 to the Consolidated Financial Statements of the Company's Annual Report on Form 10-K for 2025.

Repurchase Agreements

The Company also enters into intercompany Securities Financing Activities with Santander and its affiliates as discussed in Note 9 to these Consolidated Financial Statements and Note 13 to the Consolidated Financial Statements of the Company's Annual Report on Form 10-K for 2025.

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NOTE 16. BUSINESS SEGMENT INFORMATION

Business Segment Products and Services

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

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

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

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

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

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

•The Wealth Management segment includes the Company's international private banking, financial operations services, and portfolio management. This includes the full range of banking and asset management services to foreign individuals and corporations based primarily in Latin America and the Company's investment in the U.K. Limited Partnership.

The Company also offers customer-related derivatives across segments to hedge interest rate risk. In the C&I, CRE, and CIB business segments and the dealer commercial lending division of the Auto business segment, the Company offers derivatives relating to foreign exchange and lending arrangements. See Note 10 to these Condensed Consolidated Financial Statements for additional details.

The Other category includes certain immaterial subsidiaries, the unallocated interest expense on the Company's borrowings and other debt obligations and certain unallocated corporate income and indirect expenses.

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NOTE 16. BUSINESS SEGMENT INFORMATION (continued)

The Chief Operating Decision Maker is the Company's CEO. The Company's segment results are derived from the Company’s business unit profitability reporting system by specifically attributing managed balance sheet assets, deposits and other liabilities and their related interest income or expense to each of the segments. Funds transfer pricing methodologies are utilized to allocate a cost for funds used or a credit for funds provided to business line deposits, loans and selected other assets using a matched funding concept. The methodology includes a liquidity premium adjustment, which considers an appropriate market participant spread for commercial loans and deposits based on the mix of borrowings available to the Company with comparable maturity periods.

Other income and expenses are managed directly by each reportable segment, including fees, service charges, salaries and benefits, and other direct expenses, as well as certain allocated corporate expenses. These are accounted for within each segment’s financial results. Accounting policies for the lines of business are the same as those used in preparation of these Condensed Consolidated Financial Statements with respect to activities specifically attributable to each business line. However, the preparation of business line results requires management to establish methodologies to allocate funding costs and benefits, expenses, and other financial elements to each line of business. Where practical, the results are adjusted to present consistent methodologies for the segments.

The application and development of management reporting methodologies are dynamic processes and are subject to periodic enhancements. The implementation of these enhancements to the internal management reporting methodology may materially affect the results disclosed for each segment with no impact on consolidated results. Whenever significant changes to management reporting methodologies take place, prior period information is reclassified wherever practical.

Results of Segments

The following tables outline the discrete financial information regularly provided to the CODM.



Three months ended	SHUSA Reportable Segments
	Consumer Activities				Commercial Activities
June 30, 2026	Auto		CBB		C&I		CRE		CIB		Wealth Management		Other(1)		Total
	(in thousands)
Interest income	$	1,573,689	$	747,536	$	185,545	$	338,853	$	616,434	$	75,761	$	(655,408)	$	2,882,410
Interest expense	605,774		392,321		117,046		217,416		529,059		37,334		(537,390)		1,361,560
Fees and other income	19,797		73,851		12,484		33,463		273,852		94,977		13,248		521,672
Lease income	284,748		—		—		—		—		—		—		284,748
Credit loss expense / (benefit)	277,624		2,978		(14,352)		(19,348)		1,053		(37)		(282)		247,636
Lease expense	215,757		—		—		—		91		—		—		215,848
General, administrative and other expenses	311,035		365,574		43,806		44,545		242,275		77,049		20,543		1,104,827
Income/(loss) before income taxes	468,044		60,514		51,529		129,703		117,808		56,392		(125,031)		758,959
Total assets	55,755,449		8,395,818		3,550,686		22,049,209		35,738,232		8,585,673		30,463,382		164,538,449
(1) Other includes the results of the immaterial entities, earnings from non-strategic assets, the investment portfolio, interest expense on SBNA’s and the Company's borrowings and other debt obligations, amortization of intangible assets and certain unallocated corporate income and indirect expenses.

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NOTE 16. BUSINESS SEGMENT INFORMATION (continued)



Three months ended	SHUSA Reportable Segments
	Consumer Activities				Commercial Activities
June 30, 2025	Auto		CBB		C&I		CRE		CIB		Wealth Management		Other(1)		Total
	(in thousands)
Interest income	$	1,607,477	$	747,781	$	219,520	$	366,217	$	766,517	$	86,487	$	(611,847)	$	3,182,152
Interest expense	682,547		376,056		135,530		241,255		691,866		35,096		(461,619)		1,700,731
Fees and other income	70,054		72,756		17,564		13,340		160,770		97,049		20,235		451,768
Lease income	418,981		—		—		—		—		—		—		418,981
Credit loss expense / (benefit)	342,465		26,977		(674)		5,501		(472)		—		(930)		372,867
Lease expense	339,447		—		—		—		173		—		—		339,620
General, administrative and other expenses	338,440		380,756		46,591		46,420		232,674		70,343		(11,246)		1,103,978
Income/(loss) before income taxes	393,613		36,748		55,637		86,381		3,046		78,097		(117,817)		535,705
Total assets	57,819,536		9,400,516		3,828,217		23,272,226		32,180,085		7,880,066		37,737,939		172,118,585
(1) Refer to corresponding notes above.



Six months ended	SHUSA Reportable Segments
	Consumer Activities				Commercial Activities
June 30, 2026	Auto		CBB		C&I		CRE		CIB		Wealth Management		Other (1)		Total
	(in thousands)
Interest income	$	3,159,202	$	1,469,538	$	374,698	$	671,278	$	1,250,950	$	154,109	$	(1,306,822)	$	5,772,953
Interest expense	1,224,264		771,091		231,421		433,229		1,061,138		75,989		(1,040,297)		2,756,835
Fees and other income	59,896		145,345		34,066		49,043		483,600		215,099		17,215		1,004,264
Lease income	605,969		—		—		—		—		—		—		605,969
Credit loss expense / (benefit)	697,856		2,081		(20,273)		(3,124)		3,085		—		(647)		678,978
Lease expense	503,085		—		—		—		243		—		—		503,328
General, administrative and other expenses	617,507		746,479		89,906		91,794		479,213		159,216		18,169		2,202,284
Income/(loss) before income taxes	782,355		95,232		107,710		198,422		190,871		134,003		(266,832)		1,241,761
Total assets	55,755,449		8,395,818		3,550,686		22,049,209		35,738,232		8,585,673		30,463,382		164,538,449

(1) Other includes the results of the immaterial entities, earnings from non-strategic assets, the investment portfolio, interest expense on the Company's borrowings and other debt obligations, amortization of intangible assets and certain unallocated corporate income and indirect expenses.

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NOTE 16. BUSINESS SEGMENT INFORMATION (continued)



Six months ended	SHUSA Reportable Segments
	Consumer Activities				Commercial Activities
June 30, 2025	Auto		CBB		C&I		CRE		CIB		Wealth Management		Other (1)		Total
	(in thousands)
Interest income	$	3,240,740	$	1,464,842	$	446,406	$	718,945	$	1,479,145	$	173,134	$	(1,204,162)	$	6,319,050
Interest expense	1,364,811		735,193		273,789		478,541		1,352,832		72,151		(897,712)		3,379,605
Fees and other income	89,735		134,510		35,178		33,023		352,871		191,543		27,246		864,106
Lease income	884,709		—		—		—		—		—		—		884,709
Credit loss expense / (benefit)	738,899		64,723		(6,693)		9,096		(5,787)		—		(1,428)		798,810
Lease expense	694,692		—		—		—		327		—		—		695,019
General, administrative and other expenses	688,026		776,017		95,904		94,852		463,021		145,409		12,700		2,275,929
Income/(loss) before income taxes	728,756		23,419		118,584		169,479		21,623		147,117		(290,476)		918,502
Total assets	57,819,536		9,400,516		3,828,217		23,272,226		32,180,085		7,880,066		37,737,939		172,118,585
(1) Refer to corresponding notes above.

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NOTE 17. SUPPLEMENTAL CASH FLOW INFORMATION

Supplemental cash flow information for the six months ended June 30, 2026 and 2025 was as follows:


	Six months ended June 30,
	2026		2025
	(in thousands)

















NON-CASH TRANSACTIONS
Loans transferred to/(from) OREO and other repossessed assets	$	11,128	$	2,576
Loans transferred from/(to) LHFI (from)/to LHFS, net	313,612		35,782
Transfer of financial interest in a VIE - Loans	—		244,693
Transfer of financial interest in a VIE - Borrowings	—		153,572
Unsettled purchases of investment securities	37,954		18,381










Non-cash transfer of financial assets in an off-balance sheet securitization transaction	—		1,149,278

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ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

EXECUTIVE SUMMARY

Agreement to Acquire Webster Financial Corporation

i.SHUSA and Santander intend to enter into an agreement which, among other things, provides for the contribution of all outstanding shares of Webster Virginia common stock to SHUSA.

ii.SHUSA and Webster Virginia intend to enter into an agreement which among other things, provides for the merger of Webster Virginia with and into SHUSA following the Webster Virginia contribution.

iii.SHUSA, SBNA and Webster Bank intend for (x) the contribution by SHUSA of all of the outstanding shares of capital stock of Webster Bank to SBNA for no considerations; and (y) the merger of Webster Bank with and into SBNA immediately following the Webster Bank contribution, with SBNA being the surviving bank of such merger.

On March 30, 2026, SHUSA SBNA and Webster Bank entered into an Agreement and Plan of Merger to provide for the Webster Bank contribution to SBNA and subsequent merger into SBNA. Also on March 30, 2026, SBNA submitted a Bank Merger Act application to request approval from the OCC for the bank merger and has received that approval. Regulatory applications have also been submitted to the Federal Reserve and the European Central Bank in connection with the transaction, and approval of Santander's and Webster's shareholders and the European Central Bank has been obtained.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

ECONOMIC AND BUSINESS ENVIRONMENT

Changing market conditions are considered a significant risk factor to the Company. The interest rate environment can present challenges in the growth of net interest income for the banking industry, which continues to rely on non-interest activities to support revenue growth. Changing market conditions and political uncertainty could have an overall impact on the Company's results of operations and financial condition. Such conditions could also impact the Company's credit risk and the associated credit loss expense and legal expense.

Credit Rating Actions

The following table presents Moody’s, S&P and Fitch credit ratings for SBNA, SHUSA, and Santander senior debt / long-term issuer:

SANTANDER (1)

SHUSA

SBNA (2) (3)

Overall Outlook

Fitch

A+ / A

A-

Stable

Moody's

A1 / Baa1

Baa2

Baa1

Stable

S&P

A+ / A-

BBB+

A-

Stable

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

(2) Moody's rating represents SBNA's long-term issuer rating.

(3) In May 2026, Fitch upgraded SBNA's senior unsecured debt ratings from 'A-' to 'A'.

SHUSA funds its operations independently of the other entities owned by Santander, and believes its business is not necessarily closely related to the business or outlook of other entities owned by Santander. Future changes in the credit ratings of its parent, Santander, or the Kingdom of Spain, however, could impact SHUSA's or its subsidiaries' credit ratings, and any other change in the condition of Santander could affect SHUSA.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

REGULATORY MATTERS

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, 2025 for more information on regulatory and supervisory matters affecting the Company and its subsidiaries.

The Federal Reserve tailors its supervisory programs and regulatory requirements by category based on firm-specific characteristics such as total assets, cross-jurisdictional activity, and nonbank asset or off-balance sheet exposure. As of June 30, 2026, SHUSA was designated a Category IV institution under the Federal Reserve's tailoring rule. Institutions that change to a higher category due to organic growth or acquisition would become subject to the requirements of the new category, as outlined by the Federal Reserve, generally within two quarters of the change in category.

Regulatory Capital Requirements

U.S. Basel III regulatory capital rules are applicable to both SHUSA and SBNA.

These rules include prompt corrective action thresholds that require banking organizations, including the Company and SBNA, to maintain a minimum CET1 capital ratio of 4.5%, a minimum Tier 1 capital ratio of 6.0%, a minimum total capital ratio of 8.0% and a minimum leverage ratio, calculated as the ratio of Tier 1 capital to average consolidated assets for the quarter, of 4.0%. A further capital conservation buffer of 2.5% above these minimum ratios is required for banking institutions to make capital distributions, including paying dividends.

See the "Bank Regulatory Capital" section of this MD&A for the Company's capital ratios under Basel III standards. The implementation of certain regulations and standards relating to regulatory capital could disproportionately affect the Company's regulatory capital position relative to that of its competitors, including those that may not be subject to the same regulatory requirements as the Company. On March 19, 2026, the federal bank regulatory agencies re-proposed capital rules which would have implemented the Basel III endgame reform package. The comment period was open until June 18, 2026. The re-proposal includes, but is not limited to, revisions to the current standardized approach to risk-based capital. SBNA is currently reviewing the proposal and assessing its impact. No effective date has been proposed while the agencies seek comment from the public on timing/transition.

Material restrictions can be imposed on SBNA, including restrictions on interest payable on accounts, dismissal of management and, in critically undercapitalized situations, appointment of a receiver or conservator. Critically undercapitalized banks generally may not make any payment of principal or interest on their subordinated debt, and all but well-capitalized banks are prohibited from accepting brokered deposits without prior regulatory approval. Pursuant to the FDIA and OCC regulations, institutions which are not categorized as well-capitalized or adequately-capitalized are restricted from making capital distributions, which include cash dividends, stock redemptions or repurchases, cash-out mergers, interest payments on certain convertible debt and other transactions charged to the capital account of the institution. At June 30, 2026, SBNA met the criteria to be classified as “well-capitalized.”

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

RESULTS OF OPERATIONS

CONSOLIDATED AVERAGE BALANCE SHEET / NET INTEREST MARGIN ANALYSIS



CONSOLIDATED AVERAGE BALANCE SHEET / NET INTEREST MARGIN ANALYSIS
	Three months ended June 30, 2026 and 2025
	2026 (1)						2025 (1)						Interest		Change due to
(dollars in thousands)	Average Balance		Interest		Yield/ Rate(2)		Average Balance		Interest		Yield/ Rate(2)		Increase/(Decrease)		Volume		Rate
Interest-earning deposits	$	12,556,415	$	153,782	4.90	%	$	19,735,954	$	269,676	5.47	%	$	(115,894)	$	(90,084)	$	(25,810)
Federal funds sold and securities purchased under resale or similar agreements, gross (3)	32,833,136		293,079		3.57	%	41,844,029		458,092		4.38	%	(165,013)		(88,777)		(76,236)
Federal funds sold and securities purchased under resale or similar agreements, netting	(21,703,622)						(31,273,322)
Federal funds sold and securities purchased under resale or similar agreements, net	11,129,514						10,570,707
AFS	6,883,391		94,020		5.46	%	7,247,822		97,768		5.40	%	(3,748)		(4,811)		1,063
HTM	13,103,198		98,452		3.01	%	9,787,766		59,259		2.42	%	39,193		22,791		16,402
Trading securities	19,197,534		242,503		5.05	%	15,218,235		189,745		4.99	%	52,758		50,437		2,321
Other investments	2,554,366		10,278		1.61	%	1,497,346		11,148		2.98	%	(870)		824		(1,694)
TOTAL SECURITIES FINANCING ACTIVITIES, INVESTMENTS AND INTEREST-EARNING DEPOSITS	$	65,424,418	$	892,114	5.45	%	$	64,057,830	$	1,085,688	6.78	%	$	(193,574)	$	(109,620)	$	(83,954)
LOANS (4):
C&I	8,042,383		111,687		5.55	%	8,432,900		94,983		4.51	%	16,704		(4,198)		20,902
CRE	8,095,221		133,147		6.58	%	8,971,513		156,199		6.96	%	(23,052)		(14,786)		(8,266)
Other commercial loans	8,547,591		99,084		4.64	%	7,992,083		101,413		5.08	%	(2,329)		9,463		(11,792)
Multifamily	9,518,370		106,301		4.47	%	9,680,216		112,058		4.63	%	(5,757)		(1,877)		(3,880)
Total commercial loans	34,203,565		450,219		5.27	%	35,076,712		464,653		5.30	%	(14,434)		(11,398)		(3,036)
Consumer loans:
Residential mortgages	5,065,877		48,500		3.83	%	5,503,501		56,525		4.11	%	(8,025)		(4,322)		(3,703)
Home equity loans and lines of credit	1,697,386		27,088		6.38	%	1,981,605		34,733		7.01	%	(7,645)		(4,700)		(2,945)
Total consumer loans secured by real estate	6,763,263		75,588		4.47	%	7,485,106		91,258		4.88	%	(15,670)		(9,022)		(6,648)
RICs and auto loans	43,758,676		1,449,433		13.25	%	44,528,839		1,490,184		13.39	%	(40,751)		(25,396)		(15,355)
Personal unsecured	457,474		14,905		13.03	%	1,643,478		53,310		12.97	%	(38,405)		(38,655)		250
Other consumer	14,779		151		4.09	%	28,144		(2,941)		(41.80)	%	3,092		(271)		3,363
Total consumer	50,994,192		1,540,077		12.08	%	53,685,567		1,631,811		12.16	%	(91,734)		(73,344)		(18,390)
Total loans	85,197,757		1,990,296		9.34	%	88,762,279		2,096,464		9.45	%	(106,168)		(84,742)		(21,426)

TOTAL EARNING ASSETS	150,622,175		2,882,410		7.65	%	152,820,109		3,182,152		8.33	%	(299,742)		(194,362)		(105,380)
Non-interest bearing assets (5)	20,929,046						22,156,320


TOTAL ASSETS	$	171,551,221					$	174,976,429
INTEREST BEARING FUNDING LIABILITIES
Deposits and other customer related accounts:
Interest-bearing demand deposits	$	12,149,885	$	32,556	1.07	%	$	12,190,071	$	39,822	1.31	%	$	(7,266)	$	(129)	$	(7,137)
Savings	14,997,014		114,417		3.05	%	8,054,670		49,133		2.44	%	65,284		50,608		14,676
Money market	26,029,323		174,514		2.68	%	26,232,206		204,333		3.12	%	(29,819)		(1,551)		(28,268)
CDs	13,858,595		121,420		3.50	%	18,935,121		195,433		4.13	%	(74,013)		(47,176)		(26,837)
TOTAL INTEREST-BEARING DEPOSITS	67,034,817		442,907		2.64	%	65,412,068		488,721		2.99	%	(45,814)		1,752		(47,566)
Federal funds purchased and securities sold under agreements to repurchase, gross (3)	46,787,538		421,252		3.60	%	53,916,030		589,783		4.38	%	(168,531)		(71,811)		(96,720)
Federal funds purchased and securities sold under agreements to repurchase, netting	(21,703,622)						(31,273,322)
Federal funds purchased and securities sold under agreements to repurchase, net	25,083,916						22,642,708
Trading liabilities	4,009,701		46,184		4.61	%	3,139,139		33,552		4.28	%	12,632		9,885		2,747
FHLB advances	630,163		6,394		4.06	%	2,795,378		33,394		4.78	%	(27,000)		(22,604)		(4,396)
Other borrowings	33,034,720		444,823		5.39	%	41,007,801		555,281		5.42	%	(110,458)		(107,398)		(3,060)
TOTAL SECURITIES FINANCING ACTIVITIES AND BORROWED FUNDS	62,758,500		918,653		5.86	%	69,585,026		1,212,010		6.97	%	(293,357)		(191,928)		(101,429)
TOTAL INTEREST-BEARING FUNDING LIABILITIES	129,793,317		1,361,560		4.20	%	134,997,094		1,700,731		5.04	%	(339,171)		(190,176)		(148,995)
Non-interest bearing liabilities (6)	22,866,315						21,420,290


TOTAL LIABILITIES	152,659,632						156,417,384
Mezzanine equity	2,000,000						2,000,000
STOCKHOLDER’S EQUITY	16,891,589						16,559,045
TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY	$	171,551,221					$	174,976,429
NET INTEREST SPREAD (7)					3.45	%					3.29	%
NET INTEREST MARGIN (8)					4.04	%					3.88	%
NET INTEREST INCOME			$	1,520,850					$	1,481,421

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations




	Six months ended June 30, 2026 and 2025
	2026 (1)						2025 (1)						Interest		Change due to
(dollars in thousands)	Average Balance		Interest		Yield/ Rate(2)		Average Balance		Interest		Yield/ Rate(2)		Increase/(Decrease)		Volume		Rate
Interest-earning deposits	$	13,183,652	$	316,542	4.80	%	$	19,065,188	$	514,482	5.40	%	$	(197,940)	$	(145,525)	$	(52,415)
Federal funds sold and securities purchased under resale or similar agreements, gross (3)	33,546,696		603,132		3.60	%	40,941,326		898,967		4.39	%	(295,835)		(148,184)		(147,651)
Federal funds sold and securities purchased under resale or similar agreements, netting	(22,125,309)						(30,302,212)
Federal funds sold and securities purchased under resale or similar agreements, net	11,421,387						10,639,114
AFS	6,914,931		181,354		5.25	%	7,207,674		191,138		5.30	%	(9,784)		(7,940)		(1,844)
HTM	13,122,230		195,763		2.98	%	9,824,054		118,993		2.42	%	76,770		45,448		31,322
Trading securities	18,674,033		471,668		5.05	%	14,726,875		356,920		4.85	%	114,748		99,452		15,296
Other investments	2,552,144		20,411		1.60	%	1,509,011		21,853		2.90	%	(1,442)		1,460		(2,902)
TOTAL SECURITIES FINANCING ACTIVITIES, INVESTMENTS AND INTEREST-EARNING DEPOSITS	$	65,868,377	$	1,788,870	5.43	%	$	62,971,916	$	2,102,353	6.68	%	$	(313,483)	$	(155,289)	$	(158,194)
LOANS (4):
C&I	8,171,341		211,448		5.18	%	8,440,349		192,320		4.56	%	19,128		(5,857)		24,985
CRE	8,141,208		265,719		6.53	%	8,915,353		303,930		6.82	%	(38,211)		(25,651)		(12,560)
Other commercial loans	8,496,883		197,301		4.64	%	8,059,089		206,617		5.13	%	(9,316)		12,285		(21,601)
Multifamily	9,510,752		210,747		4.43	%	9,722,314		221,188		4.55	%	(10,441)		(4,720)		(5,721)
Total commercial loans	34,320,184		885,215		5.16	%	35,137,105		924,055		5.26	%	(38,840)		(23,943)		(14,897)
Consumer loans:
Residential mortgages	5,175,843		100,218		3.87	%	5,433,097		111,247		4.10	%	(11,029)		(5,048)		(5,981)
Home equity loans and lines of credit	1,728,780		55,415		6.41	%	2,016,836		71,225		7.06	%	(15,810)		(9,612)		(6,198)
Total consumer loans secured by real estate	6,904,623		155,633		4.51	%	7,449,933		182,472		4.90	%	(26,839)		(14,660)		(12,179)
RICs and auto loans	43,443,270		2,913,572		13.41	%	44,649,345		3,005,358		13.46	%	(91,786)		(80,689)		(11,097)
Personal unsecured	463,197		29,319		12.66	%	1,670,657		107,179		12.83	%	(77,860)		(76,459)		(1,401)
Other consumer	15,795		344		4.36	%	30,401		(2,367)		(15.57)	%	2,711		(688)		3,399
Total consumer	50,826,885		3,098,868		12.19	%	53,800,336		3,292,642		12.24	%	(193,774)		(172,496)		(21,278)
Total loans	85,147,069		3,984,083		9.36	%	88,937,441		4,216,697		9.48	%	(232,614)		(196,439)		(36,175)

TOTAL EARNING ASSETS	151,015,446		5,772,953		7.65	%	151,909,357		6,319,050		8.32	%	(546,097)		(351,728)		(194,369)
Non-interest bearing assets (5)	20,741,885						22,437,277


TOTAL ASSETS	$	171,757,331					$	174,346,634
INTEREST BEARING FUNDING LIABILITIES
Deposits and other customer related accounts:
Interest-bearing demand deposits	$	12,138,924	$	64,091	1.06	%	$	12,225,428	$	79,313	1.30	%	$	(15,222)	$	(562)	$	(14,660)
Savings	14,069,559		213,815		3.04	%	7,155,772		80,553		2.25	%	133,262		97,748		35,514
Money market	26,165,692		352,452		2.69	%	26,016,271		402,327		3.09	%	(49,875)		2,314		(52,189)
CDs	14,254,541		253,826		3.56	%	19,589,812		415,110		4.24	%	(161,284)		(101,512)		(59,772)
TOTAL INTEREST-BEARING DEPOSITS	66,628,716		884,184		2.65	%	64,987,283		977,303		3.01	%	(93,119)		(2,012)		(91,107)
Federal funds purchased and securities sold under agreements to repurchase, gross (3)	47,080,595		850,748		3.61	%	52,593,348		1,151,625		4.38	%	(300,877)		(112,378)		(188,499)
Federal funds purchased and securities sold under agreements to repurchase, netting	(22,125,309)						(30,302,212)
Federal funds purchased and securities sold under agreements to repurchase, net	24,955,286						22,291,136
Trading liabilities	4,107,768		89,661		4.37	%	3,321,632		73,201		4.41	%	16,460		17,117		(657)
FHLB advances	659,606		13,548		4.11	%	3,284,109		78,278		4.77	%	(64,730)		(55,176)		(9,554)
Other borrowings	34,378,721		918,694		5.34	%	40,551,478		1,099,198		5.42	%	(180,504)		(164,547)		(15,957)
TOTAL SECURITIES FINANCING ACTIVITIES AND BORROWED FUNDS	64,101,381		1,872,651		5.84	%	69,448,355		2,402,302		6.92	%	(529,651)		(314,984)		(214,667)
TOTAL INTEREST-BEARING FUNDING LIABILITIES	130,730,097		2,756,835		4.22	%	134,435,638		3,379,605		5.03	%	(622,770)		(316,996)		(305,774)
Non-interest-bearing liabilities (6)	22,294,788						21,522,904


TOTAL LIABILITIES	153,024,885						155,958,542
Mezzanine equity	2,000,000						2,000,000
STOCKHOLDER’S EQUITY	16,732,446						16,388,092
TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY	$	171,757,331					$	174,346,634
NET INTEREST SPREAD (7)					3.43	%					3.29	%
NET INTEREST MARGIN (8)					3.99	%					3.87	%
NET INTEREST INCOME			$	3,016,118					$	2,939,445

(1)Average balances are based on daily averages when available. When daily averages are unavailable, mid-month averages are substituted.

(2)Yields calculated using taxable equivalent net interest income.

(3)Represents the average gross Securities Financing Activities balance, including activity that qualifies for balance sheet netting, as discussed further in Note 9 to these Condensed Consolidated Financial Statements.

(4)Interest on loans includes amortization of premiums and discounts on purchased loan portfolios and amortization of deferred loan fees, net of origination costs. Average loan balances include non-accrual loans and LHFS.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

(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 7 to the Consolidated Financial Statements in the Company's Annual Report on Form 10-K for 2025 for further discussion.

(6)Includes Non-interest-bearing deposits and Other liabilities, primarily including accounts payable and accrued expenses, derivative liabilities, net deferred tax liabilities and the unfunded lending commitments liability.

(7)Represents the difference between the yield on total earning assets and the cost of total funding liabilities on a managed basis.

(8)Represents annualized, taxable equivalent net interest income divided by average interest-earning assets.

NET INTEREST INCOME

Overall, the increase in net interest for the three months and six months ended June 30, 2026 compared to the same period in 2025 was primarily driven by higher yields on investment securities, coupled with reduced funding costs on Securities Financing Activities and Borrowings and Other Debt Obligations. These positive impacts were partially offset by lower loan and deposit-related income and declines in federal funds and resale agreement activity. The net result reflects the combined effect of balance sheet repositioning and higher market interest rates during the period

Net interest income increased $39.4 million and $76.7 million for the three months and six months ended June 30, 2026, respectively, compared to the corresponding periods in 2025. The primary drivers of these changes are summarized below:

•Loans – Interest income on loans decreased $106.2 million and decreased $232.6 million for three months and six months ended June 30, 2026 , compared to the same periods in 2025. The three-month change was primarily attributable to lower average loan volumes of $84.7 million and lower average loan rates of $21.4 million. The six month period change was similarly driven by lower volumes of $196.4 million and lower rates of $36.2 million. Refer to the “Loan Portfolio” section of this MD&A for further discussion of loan balances.

•Interest-earning deposits – Interest income on interest-earning deposits decreased $115.9 million and decreased $197.9 million for the three months and six months ended June 30, 2026, compared to the corresponding periods in 2025. The three-month change reflected lower average deposit volumes of $90.1 million and lower average rates of $25.8 million. The six month period change reflected lower volumes of $145.5 million and lower rates of $52.4 million.

•Federal funds sold and securities purchased under resale agreements – Interest and fees on federal funds sold and securities purchased under resale agreements decreased $165.0 million and decreased $295.8 million for the three months and six months ended June 30, 2026 , compared to the same periods in 2025. The three-month change was attributable to lower average volumes of $88.8 million and lower average rates of $76.2 million. The six-month change was attributable to lower volumes of $148.2 million and lower rates of $147.7 million. These declines primarily reflect reduced Securities Financing Activities.

•Investment securities – Interest income on investment securities increased $87.3 million and increased $180.3 million for the three months and six months ended June 30, 2026, compared to the corresponding periods in 2025. The three-month change was attributable to higher average securities volumes of $69.2 million and higher average rates of $18.1 million. The six-month change was attributable to higher volumes of $138.4 million and higher rates of $41.9 million. Both increases were primarily driven by higher market interest rates for HTM and trading securities.

•Deposits and related customer accounts – Interest expense on deposits and related customer accounts decreased $45.8 million and decreased $93.1 million for the three months and six months ended June 30, 2026, compared to the corresponding periods in 2025. The three-month change reflected higher average volumes of $1.8 million, partially offset by lower average deposit rates of $47.6 million. The six-month change reflected lower volumes of $2.0 million and lower deposit rates of $91.1 million. The rate declines were primarily related to money market and CD products.

•Securities Financing Activities and borrowed funds – Interest expense on Securities Financing Activities and borrowed funds decreased $293.4 million and decreased $529.7 million for the three months and six months ended June 30, 2026, compared to the same periods in 2025. The three-month change was attributable to lower volumes of $191.9 million and lower rates of $101.4 million. The six-month change was attributable to lower volumes of $315.0 million and lower rates of $214.7 million.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

CREDIT LOSS EXPENSE (BENEFIT)

The Company had credit loss expense of $247.6 million and $679.0 million for the three months and six months ended June 30, 2026, compared to credit loss expense of $372.9 million and $798.8 million for the corresponding periods in 2025. The lower credit loss expense during the three months and six months ended June 30, 2026 was mainly due to lower net charge-offs and decrease in the ACL for RICs and auto loans.

Credit loss expense on commercial loans decreased $7.8 million and increased $10.3 million for the three months and six months ended June 30, 2026, respectively, compared to the corresponding periods in 2025.

Credit loss expense on consumer loans decreased $105.7 million and decreased $105.6 million for the three months and six months ended June 30, 2026 compared to the corresponding periods in 2025 due to lower net charge-offs of RICs and auto loans and decrease in the ACL for RICs and auto loans.

The credit loss expense on unfunded credit losses for the three months and six months ended June 30, 2026 decreased $11.8 million and decreased $24.5 million compared to the corresponding periods in 2025.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

NON-INTEREST INCOME


	Three months Ended June 30,				Six months ended June 30,				QTD Change				YTD Change
(dollars in thousands)	2026		2025		2026		2025		Dollar increase/(decrease)		Percentage		Dollar increase/(decrease)		Percentage
Consumer fees	$	72,860	$	94,927	$	175,507	$	178,385	$	(22,067)	(23.2)	%	$	(2,878)	(1.6)	%
Commercial fees	36,724		32,455		57,786		57,413		4,269		13.2	%	373		0.6	%
Lease income	284,748		418,981		605,969		884,709		(134,233)		(32.0)	%	(278,740)		(31.5)	%
Capital markets and foreign exchange income	250,907		132,982		421,488		228,711		117,925		88.7	%	192,777		84.3	%
Miscellaneous income, net	139,061		169,741		300,883		337,675		(30,680)		(18.1)	%	(36,792)		(10.9)	%
Securities gains, net	22,120		21,663		48,600		61,922		457		2.1	%	(13,322)		(21.5)	%
Total non-interest income	$	806,420	$	870,749	$	1,610,233	$	1,748,815	$	(64,329)	(7.4)	%	$	(138,582)	(7.9)	%

Total non-interest income decreased $64.3 million and decreased $138.6 million for the three months and six months ended June 30, 2026, respectively, compared to the corresponding periods in 2025. These changes were primarily comprised of:

•Consumer fees decreased $22.1 million and $2.9 million for the three months and six months ended June 30, 2026, respectively, compared to the corresponding periods in 2025, primarily due to a decrease in consumer loan fees.

•Lease income decreased $134.2 million and $278.7 million for the three months and six months ended June 30, 2026, respectively, compared to the corresponding periods in 2025, primarily driven by a lower number of active leased vehicle units and lower purchase option fees.

•Capital market revenue increased $117.9 million and $192.8 million for the three months and six months ended June 30, 2026, respectively, compared to the corresponding periods in 2025, primarily driven by higher investment banking income and derivative gains.

•Miscellaneous income, net decreased $30.7 million and $36.8 million for the three months and six months ended June 30, 2026, respectively, compared to the corresponding periods in 2025, primarily due to the loss on loan sale, lower unrealized gains on equity securities, lower gains on hedging activities, partially offset by an increase in net gain on sale of operating leases and an increase in asset and wealth management fees,

•Securities gains, net increased $0.5 million and decreased $13.3 million for the three months and six months ended June 30, 2026, respectively, compared to the corresponding periods in 2025, primarily due to a decrease in trading securities gains.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

GENERAL, ADMINISTRATIVE AND OTHER EXPENSES


	Three months Ended June 30,				Six months Ended June 30,				QTD Change				YTD Change
(dollars in thousands)	2026		2025		2026		2025		Dollar increase/(decrease)		Percentage		Dollar increase/(decrease)		Percentage
Compensation and benefits	$	541,568	$	508,991	$	1,085,891	$	1,073,147	$	32,577	6.4	%	$	12,744	1.2	%
Occupancy and equipment expenses	161,437		172,371		323,235		357,651		(10,934)		(6.3)	%	(34,416)		(9.6)	%
Technology, outside services, and marketing expense	189,762		213,022		405,374		417,402		(23,260)		(10.9)	%	(12,028)		(2.9)	%
Loan expense	74,531		85,854		158,253		161,410		(11,323)		(13.2)	%	(3,157)		(2.0)	%
Lease expense	215,848		339,620		503,328		695,019		(123,772)		(36.4)	%	(191,691)		(27.6)	%

Other expenses	137,529		123,740		229,531		266,319		13,789		11.1	%	(36,788)		(13.8)	%
Total general, administrative and other expenses	$	1,320,675	$	1,443,598	$	2,705,612	$	2,970,948	$	(122,923)	(8.5)	%	$	(265,336)	(8.9)	%

Total general, administrative and other expenses decreased $122.9 million and $265.3 million for the three months and six months ended June 30, 2026, respectively, compared to the corresponding periods in 2025. The most significant factors contributing to these changes were as follows:

•Lease expense decreased $123.8 million and $191.7 million for the three months and six months ended June 30, 2026, respectively, compared to the corresponding periods in 2025, due to lower auto lease volumes resulting in lower depreciation expense.

•Other expenses increased $13.8 million and decreased $36.8 million for the three months and six months ended June 30, 2026, respectively, compared to the corresponding periods in 2025. The increase is due to higher expense accruals and the decrease is due to lower FDIC insurance premiums

INCOME TAX PROVISION

An income tax provision of $174.3 million and $242.9 million was recorded for the three months and six months ended June 30, 2026, respectively, compared to a provision of $38.0 million and $54.9 million for the corresponding periods in 2025. This resulted in an ETR of 23.0% and 19.6% for the three months and six months ended June 30, 2026, respectively, compared to 7.1% and 6.0% for the corresponding periods in 2025.

The increase in ETR for the three months and six months ended June 30, 2026, when compared to the same periods in 2025, was directly impacted by (i) an increase in forecasted pre-tax income in 2026 and (ii) no electric vehicle tax credits in 2026, offset by $44 million of tax benefit resulted from closed audit years recorded in the first quarter of 2026.

The Company's ETR in future periods will be affected by the results of operations allocated to the various tax jurisdictions in which the Company operates, any change in income tax laws or regulations within those jurisdictions, and interpretations of income tax regulations that differ from the Company's interpretations by tax authorities that examine tax returns filed by the Company or any of its subsidiaries.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

LINE OF BUSINESS RESULTS

The Company manages its business activities by its six reportable segments, Auto, CBB, C&I, CRE, CIB, and Wealth Management. The tables below reflect certain information by reportable segment and include 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.

Consumer Activities

Consumer activities consist of the Company's Auto and CBB reportable segments.


Three months ended	June 30, 2026			June 30, 2025			Total Consumer Activities
	Auto	CBB	Total Consumer activities	Auto	CBB	Total Consumer Activities	Dollar increase/(decrease)	Percentage
Interest income	1,573,689	747,536	2,321,225	1,607,477	747,781	2,355,258	(34,033)	(1.4)	%
Interest expense	605,774	392,321	998,095	682,547	376,056	1,058,603	(60,508)	(5.7)	%
Fees and other income	19,797	73,851	93,648	70,054	72,756	142,810	(49,162)	(34.4)	%
Lease income	284,748	—	284,748	418,981	—	418,981	(134,233)	(32.0)	%
Credit loss expense	277,624	2,978	280,602	342,465	26,977	369,442	(88,840)	(24.0)	%
Lease expense	215,757	—	215,757	339,447	—	339,447	(123,690)	(36.4)	%
General, administrative and other expenses	311,035	365,574	676,609	338,440	380,756	719,196	(42,587)	(5.9)	%
Income before income taxes	468,044	60,514	528,558	393,613	36,748	430,361	98,197	22.8	%


Six months ended	June 30, 2026			June 30, 2025			Total Consumer Activities
	Auto	CBB	Total Consumer activities	Auto	CBB	Total Consumer Activities	Dollar increase/(decrease)	Percentage
Interest income	3,159,202	1,469,538	4,628,740	3,240,740	1,464,842	4,705,582	(76,842)	(1.6)	%
Interest expense	1,224,264	771,091	1,995,355	1,364,811	735,193	2,100,004	(104,649)	(5.0)	%
Fees and other income	59,896	145,345	205,241	89,735	134,510	224,245	(19,004)	(8.5)	%
Lease income	605,969	—	605,969	884,709	—	884,709	(278,740)	(31.5)	%
Credit loss expense	697,856	2,081	699,937	738,899	64,723	803,622	(103,685)	(12.9)	%
Lease expense	503,085	—	503,085	694,692	—	694,692	(191,607)	(27.6)	%
General, administrative and other expenses	617,507	746,479	1,363,986	688,026	776,017	1,464,043	(100,057)	(6.8)	%
Income before income taxes	782,355	95,232	877,587	728,756	23,419	752,175	125,412	16.7	%
Total assets	55,755,449	8,395,818	64,151,267	57,819,536	9,400,516	67,220,052	(3,068,785)	(4.6)	%

The Company reported total income before income taxes related to its Consumer activities of $528.6 million and $877.6 million for the three months and six months ended June 30, 2026, respectively, compared to income before income taxes of $430.4 million and $752.2 million for the corresponding periods in 2025. The most significant drivers of these changes were:

•Fees and other income for Auto decreased $50.3 million and $29.8 million for the three months and six months ended June 30, 2026, respectively, compared to the corresponding periods in 2025. These changes were primarily driven by lower auto servicing fees and lower gains on securitization of loan portfolios.

•Lease income decreased $134.2 million and $278.7 million for the three months and six months ended June 30, 2026, respectively, compared to the corresponding periods in 2025. These changes were primarily driven by lower average auto lease volumes.

•Credit loss expense in Auto decreased $64.8 million and $41.0 million for the three months and six months ended June 30, 2026, respectively, compared to the corresponding periods in 2025. These decreases were driven by lower loan volume and improved net charge-off rates.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

•Lease expense decreased $123.7 million and $191.6 million for the three months and six months ended June 30, 2026, respectively, compared to the corresponding periods in 2025. These changes were primarily driven by lower average auto lease balances which resulted in lower depreciation expense.

Commercial Activities

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


Three months ended	June 30, 2026						June 30, 2025						Total Commercial Activities
	C&I		CRE		Total Commercial Activities		C&I		CRE		Total Commercial Activities		Dollar increase/(decrease)		Percentage
Interest income	$	185,545	$	338,853	$	524,398	$	219,520	$	366,217	$	585,737	$	(61,339)	(10.5)	%
Interest expense	117,046		217,416		334,462		135,530		241,255		376,785		(42,323)		(11.2)	%
Fees and other income	12,484		33,463		45,947		17,564		13,340		30,904		15,043		48.7	%

Credit loss expense / (benefit)	(14,352)		(19,348)		(33,700)		(674)		5,501		4,827		(38,527)		(798.2)	%

General, administrative and other expenses	43,806		44,545		88,351		46,591		46,420		93,011		(4,660)		(5.0)	%
Income before income taxes	51,529		129,703		181,232		55,637		86,381		142,018		39,214		27.6	%


Six months ended	June 30, 2026						June 30, 2025						Total Commercial Activities
	C&I		CRE		Total Commercial Activities		C&I		CRE		Total Commercial Activities		Dollar increase/(decrease)		Percentage
Interest income	$	374,698	$	671,278	$	1,045,976	$	446,406	$	718,945	$	1,165,351	$	(119,375)	(10.2)	%
Interest expense	231,421		433,229		664,650		273,789		478,541		752,330		(87,680)		(11.7)	%
Fees and other income	34,066		49,043		83,109		35,178		33,023		68,201		14,908		21.9	%

Credit loss expense / (benefit)	(20,273)		(3,124)		(23,397)		(6,693)		9,096		2,403		(25,800)		(1,073.7)	%

General, administrative and other expenses	89,906		91,794		181,700		95,904		94,852		190,756		(9,056)		(4.7)	%
Income before income taxes	107,710		198,422		306,132		118,584		169,479		288,063		18,069		6.3	%
Total assets	3,550,686		22,049,209		25,599,895		3,828,217		23,272,226		27,100,443		(1,500,548)		(5.5)	%

The Company reported total income before income taxes related to its Commercial activities of $181.2 million and $306.1 million for the three months and six months ended June 30, 2026, respectively, compared to income before income taxes of $142.0 million and $288.1 million for the corresponding periods in 2025. The most significant drivers of these changes were:

•Interest income for C&I decreased $34.0 million and $71.7 million for the three months and six months ended June 30, 2026, respectively, compared to the corresponding periods of 2025. These decreases were due to lower prevailing interest rates reducing loan yields.

•Interest income for CRE decreased $27.4 million and $47.7 million for the three months and six months ended June 30, 2026, respectively, compared to the corresponding periods of 2025. These decreases were due to lower loan volumes and yields.

•Interest expense for C&I decreased $18.5 million and $42.4 million for the three months and six months ended June 30, 2026, respectively, compared to the corresponding periods of 2025. These decreases were due to lower deposit volumes and rates.

•Credit loss expense in CRE decreased $24.8 million and $12.2 million for the three months and six months ended June 30, 2026, respectively, compared to the corresponding periods of 2025. These decreases were due to improved portfolio performance and lower volume.

•Credit loss expense in C&I decreased $13.7 million and $13.6 million for the three months and six months ended June 30, 2026, respectively, compared to the corresponding periods of 2025. These decreases were primarily due to improved portfolio performance and lower volumes.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

CIB


	Three months ended June 30				Six months ended June 30				QTD Change				YTD Change
(dollars in thousands)	2026		2025		2026		2025		Dollar increase/(decrease)		Percentage		Dollar increase/(decrease)		Percentage
Interest income	$	616,434	$	766,517	$	1,250,950	$	1,479,145	$	(150,083)	(19.6)	%	$	(228,195)	(15.4)	%
Interest expense	529,059		691,866		1,061,138		1,352,832		(162,807)		(23.5)	%	(291,694)		(21.6)	%
Fees and other income	273,852		160,770		483,600		352,871		113,082		70.3	%	130,729		37.0	%
Lease income	—		—		—		—		—		—	%	—		—	%
Credit loss expense / (benefit)	1,053		(472)		3,085		(5,787)		1,525		323.1	%	8,872		153.3	%
Lease expense	91		173		243		327		(82)		(47.4)	%	(84)		(25.7)	%
General, administrative and other expenses	242,275		232,674		479,213		463,021		9,601		4.1	%	16,192		3.5	%
Income before income taxes	117,808		3,046		190,871		21,623		114,762		3,767.6	%	169,248		782.7	%
Total assets					35,738,232		32,180,085						3,558,147		11.1	%

CIB reported income before income taxes of $117.8 million and $190.9 million for the three months and six months ended June 30, 2026, respectively, compared to income before income taxes of $3.0 million and $21.6 million for the corresponding periods in 2025. Factors contributing to these changes were:

•Interest income decreased $150.1 million and $228.2 million for the three months and six months ended June 30, 2026, respectively, compared to the corresponding periods in 2025. The decreases were due to Securities Financing activities driven by lower prevailing interest rates.

•Interest expense decreased $162.8 million and $291.7 million for the three months and six months ended June 30, 2026, respectively, compared to the corresponding periods in 2025. These decreases were primarily due to interest expense associated with Securities Financing Activities driven by lower prevailing interest rates.

•Fees and other income increased $113.1 million and $130.7 million for the three months and six months ended June 30, 2026, respectively compared to the corresponding periods in 2025. These increases were primarily due to increased Global Banking fees.

•Total assets at June 30, 2026 increased $3.6 billion compared to the corresponding date in 2025. This increase was primarily due to an increase in trading inventory.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Wealth Management


	Three months ended June 30				Six months ended June 30				QTD Change				YTD Change
(dollars in thousands)	2026		2025		2026		2025		Dollar increase/(decrease)		Percentage		Dollar increase/(decrease)		Percentage
Interest income	$	75,761	$	86,487	$	154,109	$	173,134	$	(10,726)	(12.4)	%	$	(19,025)	(11.0)	%
Interest expense	37,334		35,096		75,989		72,151		2,238		6.4	%	3,838		5.3	%
Fees and other income	94,977		97,049		215,099		191,543		(2,072)		(2.1)	%	23,556		12.3	%

Credit loss expense / (benefit)	(37)		—		—		—		(37)		100%		—		—	%

General, administrative and other expenses	77,049		70,343		159,216		145,409		6,706		9.5	%	13,807		9.5	%
Income before income taxes	56,392		78,097		134,003		147,117		(21,705)		(27.8)	%	(13,114)		(8.9)	%
Total assets					8,585,673		7,880,066						705,607		9.0	%

Wealth Management reported income before income taxes of $56.4 million and $134.0 million for the three months and six months ended June 30, 2026, respectively, compared to income before income taxes of $78.1 million and $147.1 million for the corresponding periods in 2025. The components of net income remained relatively consistent over the corresponding periods in 2025.

•Total assets at June 30, 2026 increased $705.6 million compared to the corresponding date in 2025. This increase was primarily due to the acquisition of an interest in the U.K. Limited Partnership.

Other


	Three months ended June 30				Six months ended June 30				QTD Change				YTD Change
(dollars in thousands)	2026		2025		2026		2025		Dollar increase/(decrease)		Percentage		Dollar increase/(decrease)		Percentage
Interest income	$	(655,408)	$	(611,847)	$	(1,306,822)	$	(1,204,162)	$	(43,561)	(7.1)	%	$	(102,660)	(8.5)	%
Interest expense	(537,390)		(461,619)		(1,040,297)		(897,712)		(75,771)		(16.4)	%	(142,585)		(15.9)	%
Fees and other income	13,248		20,235		17,215		27,246		(6,987)		(34.5)	%	(10,031)		(36.8)	%

Credit loss expense / (benefit)	(282)		(930)		(647)		(1,428)		648		69.7	%	781		54.7	%

General, administrative and other expenses	20,543		(11,246)		18,169		12,700		31,789		282.7	%	5,469		43.1	%
Loss before income taxes	(125,031)		(117,817)		(266,832)		(290,476)		(7,214)		(6.1)	%	23,644		8.1	%
Total assets					30,463,382		37,737,939						(7,274,557)		(19.3)	%

The Other category reported losses before income taxes of $125.0 million and $266.8 million for the three months and six months ended June 30, 2026, respectively, compared to losses before income taxes of $117.8 million and $290.5 million for the corresponding periods in 2025. The primary factors contributing to these changes were:

•Interest expense decreased $75.8 million and $142.6 million for the three months and six months ended June 30, 2026, respectively, compared to the corresponding periods of 2025. These decreases were primarily due to changes in deposit mix, borrowings, and internal funding.

•General, administrative and other expenses increased $31.8 million and $5.5 million for the three months and six months ended June 30, 2026, respectively, compared to the corresponding periods of 2025. These changes were primarily the result of timing in strategic investment and restructuring charges.

•Total assets decreased $7.3 billion compared to the corresponding date in 2025. This decrease was primarily due to deposits at the Federal Reserve.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

FINANCIAL CONDITION

LOAN PORTFOLIO

The Company's LHFI portfolio consisted of the following at the dates indicated:


	June 30, 2026				December 31, 2025				Dollar Increase / (Decrease)		Percent Increase (Decrease)

(dollars in thousands)	Amount		Percent		Amount		Percent
Commercial LHFI:
CRE	$	7,704,553	9.3	%	$	8,135,821	9.8	%	$	(431,268)	(5.3)	%
C&I	7,612,915		9.2	%	7,820,988		9.4	%	(208,073)		(2.7)	%
Multifamily	9,374,705		11.3	%	9,601,558		11.6	%	(226,853)		(2.4)	%
Other commercial	8,501,793		10.3	%	8,249,571		10.0	%	252,222		3.1	%
Total commercial loans (1)	33,193,966		40.1	%	33,807,938		40.8	%	(613,972)		(1.8)	%

Consumer loans secured by real estate:
Residential mortgages	3,865,983		4.7	%	4,039,103		4.9	%	(173,120)		(4.3)	%
Home equity loans and lines of credit	1,662,588		2.0	%	1,797,387		2.2	%	(134,799)		(7.5)	%
Total consumer loans secured by real estate	5,528,571		6.7	%	5,836,490		7.1	%	(307,919)		(5.3)	%

Consumer loans not secured by real estate:
RICs and auto loans	43,513,398		52.5	%	42,736,050		51.4	%	777,348		1.8	%
Personal unsecured loans	460,152		0.6	%	492,525		0.6	%	(32,373)		(6.6)	%
Other consumer	13,987		0.1	%	18,306		0.1	%	(4,319)		(23.6)	%

Total consumer loans	49,516,108		59.9	%	49,083,371		59.2	%	432,737		0.9	%
Total LHFI	$	82,710,074	100.0	%	$	82,891,309	100.0	%	$	(181,235)	(0.2)	%

Total LHFI with:
Fixed	$	59,145,943	71.5	%	$	59,079,072	71.3	%	$	66,871	0.1	%
Variable	23,564,131		28.5	%	23,812,237		28.7	%	(248,106)		(1.0)	%
Total LHFI	$	82,710,074	100.0	%	$	82,891,309	100.0	%	$	(181,235)	(0.2)	%

(1) As of June 30, 2026, the Company had $235.9 million of commercial loans that were denominated in a currency other than the U.S. dollar.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Loans by Maturity and Interest Rate Sensitivity



	At June 30, 2026, Maturing
(in thousands)	In One Year Or Less		One to Five Years		Five to 15 Years		After 15 Years		Total
Fixed Rates:
CRE loans	$	195,896	$	215,759	$	26,555	$	26,330	$	464,540
C&I	177,488		836,600		109,781		8,188		1,132,057
Multifamily loans	1,537,590		4,456,895		1,221,339		612		7,216,436
Other commercial	634,594		1,645,517		1,149,234		—		3,429,345
Total Commercial	$	2,545,568	$	7,154,771	$	2,506,909	$	35,130	$	12,242,378
Residential mortgages	1,476		37,319		503,312		4,080,238		4,622,345
Home equity loans and lines of credit	14,327		7,088		27,731		23,042		72,188
RICs and auto loans	1,373,211		22,314,117		19,897,108		29,141		43,613,577
Personal unsecured loans	5,320		21,438		26,050		—		52,808
Other consumer	2,757		6,986		1,881		2,363		13,987
Total Fixed Rates	$	3,942,659	$	29,541,719	$	22,962,991	$	4,169,914	$	60,617,283
Variable Rates:
CRE loans	$	3,615,152	$	3,591,968	$	176,588	$	78,889	$	7,462,597
C&I	1,117,222		5,229,336		343,915		—		6,690,473
Multifamily loans	1,302,117		469,945		385,459		748		2,158,269
Other commercial	4,770,630		301,818		—		—		5,072,448
Total Commercial	$	10,805,121	$	9,593,067	$	905,962	$	79,637	$	21,383,787
Residential mortgages	179		91		85,400		361,380		447,050
Home equity loans and lines of credit	19,102		655,493		915,805		—		1,590,400

Personal unsecured loans	—		—		407,344		—		407,344

Total Variable Rates	$	10,824,402	$	10,248,651	$	2,314,511	$	441,017	$	23,828,581
Total	$	14,767,061	$	39,790,370	$	25,277,502	$	4,610,931	$	84,445,864

Commercial

Commercial loans decreased approximately $614.0 million, or 1.8%, from December 31, 2025 to June 30, 2026. This decrease was primarily attributable to a decrease in CRE loans of $431.3 million and a decrease in Multifamily of $226.9 million , partially offset by an increase in Other commercial loans of $252.2 million.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

At June 30, 2026, the CRE and multifamily portfolios included the following:


	As of June 30, 2026
(in thousands)	Balance		Percentage of Total CRE and Multifamily

CRE loans	$	7,704,553	45.1	%
Multifamily loans (1)	9,374,705		54.9	%
Total CRE and multifamily loans	$	17,079,258	100.0	%
CRE loans by type
Multifamily construction	$	4,092,129	24.0	%
Office	1,311,204		7.7	%
Retail	749,353		4.4	%
Industrial	720,436		4.2	%
Other	831,431		4.9	%
Total	$	7,704,553
(1) Occupied properties

Multifamily lending (occupied and construction) continues to be our focus. Overall, occupancy across the multifamily loan portfolio and our primary markets, such as New York City, continues to be stable. Our construction originations are concentrated to well-established and proven builders and sponsors. The Company's office exposure primarily consists of investment grade, single tenants with long leases.

The Company's CRE and Multifamily portfolios by state at the date indicated was:


	As of June 30, 2026
(dollars in thousands)	Balance		Percentage of Total CRE and Multifamily
State
New York	$	4,581,974	26.8	%
New Jersey	2,107,109		12.3	%
Florida	1,569,018		9.2	%
Texas	1,445,894		8.5	%
All other states	7,375,263		43.2	%
Total	$	17,079,258	100.0	%

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Consumer Loans Secured By Real Estate

Consumer loans secured by real estate decreased $307.9 million from December 31, 2025 to June 30, 2026 due to continued run-off in these portfolios.

Consumer Loans Not Secured By Real Estate

RICs and auto loans

RICs and auto loans HFI increased $777.3 million from December 31, 2025 to June 30, 2026. This increase represents primarily new origination activity 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 7 to the Condensed Consolidated Financial Statements.

As of June 30, 2026, 62.1% 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 6.2% 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.

The Company's automated originations process for these credits reflects a disciplined approach to credit risk management to mitigate the risks of nonprime customers. The Company's robust historical data on both organically originated and acquired loans provides it with the ability to perform advanced loss forecasting. Each applicant is automatically assigned a proprietary custom score using information such as FICO scores, DTI ratios, LTV ratios, and over 30 other predictive factors, placing the applicant in one of 100 pricing tiers. The pricing in each tier is continuously monitored and adjusted to reflect market and risk trends. In addition to the Company's automated process, it maintains a team of underwriters for manual review, consideration of exceptions, and review of deal structures with dealers.

Personal unsecured and other consumer loans

Personal unsecured and other consumer loans HFI decreased $36.7 million from December 31, 2025 to June 30, 2026. This decrease was primarily due to run-off in the portfolio.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

NON-PERFORMING ASSETS

The following table presents the composition of non-performing assets at the dates indicated:


	Period Ended						Change
(dollars in thousands)	June 30, 2026			December 31, 2025			Dollar		Percentage
Non-accrual loans:
Commercial:
CRE	$	157,297		$	187,657		$	(30,360)	(16.2)	%
C&I	109,300			47,813			61,487		128.6	%
Multifamily	392,332			309,994			82,338		26.6	%
Other commercial	4,404			4,518			(114)		(2.5)	%
Total commercial loans	663,333			549,982			113,351		20.6	%

Consumer loans secured by real estate:
Residential mortgages	48,091			59,089			(10,998)		(18.6)	%
Home equity loans and lines of credit	49,320			57,109			(7,789)		(13.6)	%
Consumer loans not secured by real estate:
RICs and auto loans	2,419,807			2,683,202			(263,395)		(9.8)	%
Personal unsecured loans	51			93			(42)		(45.2)	%
Other consumer	12,842			18,413			(5,571)		(30.3)	%
Total consumer loans	2,530,111			2,817,906			(287,795)		(10.2)	%
Total non-accrual loans	3,193,444			3,367,888			(174,444)		(5.2)	%

OREO	21,812			41,978			(20,166)		(48.0)	%
Repossessed vehicles	242,278			249,913			(7,635)		(3.1)	%
Foreclosed and other repossessed assets	1,646			1,297			349		26.9	%
Total OREO and other repossessed assets	265,736			293,188			(27,452)		(9.4)	%
Total non-performing assets	$	3,459,180		$	3,661,076		$	(201,896)	(5.5)	%

Past due 90 days or more as to interest or principal and accruing interest	$	7,946		$	8,700		$	(754)	(8.7)%

Non-performing assets as a percentage of total assets	2.1		%	2.2		%	n/a		n/a

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

CREDIT RATIOS


	As of and for the year ended
(dollars in thousands)	June 30, 2026	December 31, 2025	June 30, 2025
ACL to total loan outstanding	6.9%	7.2%	7.4%
ACL	$5,852,704	$6,052,171	$6,410,718
Total loans outstanding	84,445,864	84,477,513	86,630,053
NPL to total loans outstanding	3.8%	4.0%	3.6%
NPL	$3,193,444	$3,367,888	$3,115,526
Total loans outstanding	84,445,864	84,477,513	86,630,053
ACL to NPL	183.3%	179.7%	205.8%
ACL	$5,852,704	$6,052,171	$6,410,718
NPL	3,193,444	3,367,888	3,115,526
Net charge-offs during the period to average loans outstanding:
Commercial	0.1%	0.3%	0.1%
NCOs during the period	$32,288	$95,456	$52,417
Average amount outstanding	34,320,184	35,160,483	35,137,105
Consumer	1.7%	4.0%	1.8%
NCOs during the period	$884,877	$2,118,252	$945,630
Average amount outstanding	50,826,885	52,695,596	53,800,336

Commercial NCOs during the period to average loans decreased from June 30, 2025 to June 30, 2026. The decrease in NCOs was primarily in the CRE portfolio. Consumer NCOs during the period to average loans decreased from June 30, 2025 to June 30, 2026. This decrease was primarily due to the sale of loans in the Personal unsecured portfolio in 2025 and an increase in recoveries.

Commercial

Commercial NPLs increased $113.4 million from December 31, 2025 to June 30, 2026. Commercial NPLs accounted for 2.0% of commercial LHFI at June 30, 2026. The change in commercial NPLs was primarily comprised of an increase of $82.3 million in the Multifamily portfolio and an increase of $61.5 million in the C&I portfolio, partially offset by a decrease of $30.4 million in the CRE portfolio.

Consumer Loans Secured by Real Estate

NPLs in the consumer loans secured by real estate portfolio decreased year-over-year primarily resulting from the continued run-off of the portfolio. Non-performing consumer loans secured by real estate in foreclosure were $40.5 million, or 41.5%, of non-performing consumer loans secured by real estate at June 30, 2026, compared to $44.4 million, or 38.2%, at December 31, 2025.

Consumer Loans Not Secured by Real Estate

RICs

RICs are classified as non-performing when they are more than 60 DPD (i.e., 61 or more DPD) with respect to principal or interest. Except for loans accounted for using the FVO, at the time a loan is placed on non-performing status, previously accrued and uncollected interest is reversed against interest income. When an account is 60 days or less past due, it is returned to performing status and the Company returns to accruing interest on the loan. NPLs in the RIC and auto loan portfolio decreased by $263.4 million from December 31, 2025 to June 30, 2026. Non-performing RICs and auto loans accounted for 5.6% and 6.3% of total RICs and auto loans at June 30, 2026 and December 31, 2025, respectively.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Personal unsecured loans

The accrual of interest on revolving personal loans continues until the loan is charged off. Credit cards are charged off when they are 180 days delinquent or within 60 days after the receipt of notification of the cardholder’s death or bankruptcy. NPLs in the personal unsecured portfolio decreased by $42.0 thousand from December 31, 2025 to June 30, 2026. Non-performing personal unsecured loans accounted for 0.01% and 0.02% of total personal unsecured loans at June 30, 2026 and December 31, 2025, respectively.

Delinquencies

Early stage delinquency in commercial loans totaled approximately $178.7 million and $257.5 million at June 30, 2026 and December 31, 2025, respectively. Early stage delinquency consumer loans amounted to $5.9 billion and $6.2 billion at June 30, 2026 and December 31, 2025, respectively. Management has included these loans in its evaluation of the Company's ACL and reserved for them during the respective periods.

The Company generally considers an account delinquent when an obligor fails to pay substantially all (defined as 90%) of the scheduled payment by the due date. Overall, total delinquencies decreased by $573.5 million from December 31, 2025 to June 30, 2026. The main driver of this was the decrease in past due loans in the RIC and auto loan portfolio.

Loan Modifications

During the three months and six months ended June 30, 2026, the Company provided loan modifications to customers with an amortized cost basis at June 30, 2026 of $929.3 million and $2.1 billion, respectively, compared to $913.0 million and $1.5 billion for the corresponding periods in 2025. Loan modifications primarily consist of payment deferrals in the CRE, Multifamily and the RIC and auto loan portfolio. The increase in payment deferrals in the CRE, Multifamily and the RIC and auto loan portfolio during the three months and six months ended June 30, 2026 compared to the corresponding periods in 2025 was primarily driven by increased demand for payment deferrals, higher loan balances and the use of payment deferrals in place of other loan modification programs.

ACL

The Company's ACL is principally based on various models subject to the Company's Model Risk Management Framework. New models are approved by the Company's Model Risk Management Committee. Models, inputs and documentation are further reviewed and validated at least annually, and the Company completes a detailed variance analysis of historical model projections against actual observed results on a quarterly basis. Required actions resulting from the Company's analysis, if necessary, are governed by its ACL Committee.

Management uses the qualitative framework to exercise judgment about matters that are inherently uncertain and that are not considered by the quantitative framework. These adjustments are documented and reviewed through the Company’s risk management processes. Furthermore, management reviews, updates, and validates its process and loss assumptions on a periodic basis. This process involves an analysis of data integrity, review of loss and credit trends, a retrospective evaluation of actual loss information to loss forecasts, and other analyses.

ACL levels are collectively reviewed for adequacy and approved quarterly. Required actions resulting from the Company's analysis, if necessary, are governed by its ACL Committee. The ACL levels are approved by the Board-level committees quarterly.

The Company's ACL was $5.9 billion at June 30, 2026, a decrease of $199.5 million from December 31, 2025. The decrease in the ACL was primarily attributable to changes in portfolio composition in RIC and auto loans and lower exposure in the personal unsecured portfolio. The ACL for the consumer portfolio segment decreased by $169.1 million and the ACL for the commercial segment decreased $30.4 million for the period ended June 30, 2026 compared to the period ended December 31, 2025. Refer to the rollforward of the ACL in Note 3 to the Condensed Consolidated Financial Statements.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

INVESTMENT SECURITIES

The Company’s AFS investment strategy is to purchase liquid fixed-rate and floating-rate investments to manage the Company's liquidity position and interest rate risk adequately. The change in the AFS investment securities portfolio was primarily due to the sale of U.S. Treasury securities during the first quarter of 2026 for an immaterial gain.

The average life of the AFS investment portfolio (excluding certain ABS) at June 30, 2026 was approximately 7.41 years. The average effective duration of the Company's AFS investment portfolio (excluding certain ABS) at June 30, 2026 was approximately 3.98 years. The actual maturities of MBS AFS will differ from contractual maturities because borrowers have the right to prepay obligations without prepayment penalties.

HTM securities are reported at cost and adjusted for amortization of premium and accretion of discount. The Company had 487 investment securities classified as HTM as of June 30, 2026. The following table presents the securities of single issuers (other than obligations of the United States and its political subdivisions, agencies, and corporations) having an aggregate book value in excess of 10% of the Company's stockholder's equity that were held by the Company at June 30, 2026:


	June 30, 2026
(in thousands)	Amortized Cost		Fair Value
FNMA	$	1,425,328	$	1,265,901
FHLMC	1,966,051		1,742,958
GNMA (1)	10,832,816		9,123,126

Total	$	14,224,195	$	12,131,985

(1) Includes U.S. government agency MBS.

GOODWILL

At June 30, 2026, goodwill totaled $2.8 billion and represented 1.7% of total assets and 16.8% of total stockholder's equity. The Company conducted its most recent annual goodwill impairment tests as of October 1, 2025 using generally accepted valuation methods and noted no impairment.

The Company completes a quarterly review for impairment indicators over each of its reporting units, which includes consideration of economic and organizational factors that could impact the fair value of the Company's reporting units. As of the most recent review completed at the end of the second quarter of 2026, the Company did not identify any indicators which resulted in the Company's conclusion that an interim impairment test would be required to be completed.

DEPOSITS

The Company reported deposits of $79.6 billion and $79.0 billion at June 30, 2026 and December 31, 2025, respectively. At June 30, 2026, SBNA had $78.9 billion of U.S.-based deposits, including $4.7 billion of deposits from SHUSA affiliates that eliminate in consolidation. Uninsured U.S.-based deposits were $26.9 billion and $27.3 billion at June 30, 2026 and December 31, 2025, respectively, and represented approximately 34% and 36% of all U.S. deposits at June 30, 2026 and December 31, 2025, respectively.

The following shows the Company's deposits by business as of June 30, 2026:


	Consumer (1)		Commercial (2)		CIB		Wealth Management		Other and eliminations (3)		Total
(dollars in thousands)	Balance
Interest-bearing demand deposits	$	50,036,977	$	9,952,676	$	1,524,660	$	3,114,861	$	1,509,868	$	66,139,042
Non-interest-bearing demand deposits	7,781,675		3,361,495		71,281		2,218,194		(7,126)		13,425,519
Total deposits (1)	$	57,818,652	$	13,314,171	$	1,595,941	$	5,333,055	$	1,502,742	$	79,564,561

(1) Consumer consists of deposits related to the Company's Auto and CBB reportable segments.

(2) Commercial consists of deposits related to the Company's C&I and CRE reportable segments.

(3) Other consists of deposits related to certain of the Company's immaterial subsidiaries and corporate treasury deposits.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

BANK REGULATORY CAPITAL

The Company’s capital priorities are to support client growth and business investment while maintaining appropriate capital for a range of macroeconomic outcomes.

The Company is subject to the regulations of certain federal, state, and foreign agencies and undergoes periodic examinations by those regulatory authorities. At June 30, 2026 and 2025, based on SBNA’s capital calculations, SBNA was considered well-capitalized under the applicable capital framework. In addition, the Company's capital levels as of June 30, 2026 and 2025, based on the Company’s capital calculations, exceeded the required capital ratios for BHCs.

Federal banking laws, regulations and policies also limit SBNA’s ability to pay dividends and make other distributions to the Company. SBNA must obtain prior OCC approval to declare a dividend or make any other capital distribution if, after such dividend or distribution: (1) the Bank's total distributions to SHUSA within that calendar year would exceed 100% of its net income during the year plus retained net income for the prior two years, (2) the Bank would not meet capital levels imposed by the OCC in connection with any order, (3) the Bank has negative retained earnings, or (4) the Bank is not adequately capitalized at the time. The OCC's prior approval would also be required if SBNA were notified by the OCC that it is a problem institution or in troubled condition. Any dividend declared and paid or return of capital has the effect of reducing capital ratios. Refer to the section captioned "Liquidity and Capital Resources" in this MD&A for discussion of the Company's dividends.

The following schedule summarizes the actual capital ratios of SHUSA and SBNA at June 30, 2026:


	SHUSA

	June 30, 2026		Well-capitalized Requirement		Minimum Requirement
CET1 capital ratio	13.68	%	6.50	%	4.50	%
Tier 1 capital ratio	15.61	%	8.00	%	6.00	%
Total capital ratio	17.76	%	10.00	%	8.00	%
Leverage ratio	9.54	%	5.00	%	4.00	%


	SBNA

	June 30, 2026		Well-capitalized Requirement		Minimum Requirement
CET1 capital ratio	20.26	%	6.50	%	4.50	%
Tier 1 capital ratio	20.26	%	8.00	%	6.00	%
Total capital ratio	21.53	%	10.00	%	8.00	%
Leverage ratio	12.48	%	5.00	%	4.00	%

The Company utilizes fair value hedging strategies to mitigate the risk of unrealized losses in its investments in debt securities AFS and borrowings. As of June 30, 2026, the Company had $6.3 billion of notional in fair value hedges, which increased from $3.8 billion at December 31, 2025. Refer to Note 10 to the Consolidated Financial Statements for information about the notional and fair value of these hedging instruments.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

LIQUIDITY AND CAPITAL RESOURCES

Overall

The Company continues to maintain strong liquidity. Liquidity represents the ability of the Company to obtain cost-effective funding to meet the needs of customers as well as the Company's financial obligations. Factors that impact the liquidity position of the Company include loan origination volumes, loan prepayment rates, the maturity structure of existing loans, core deposit growth levels, CD maturity structure and retention, the Company's credit ratings, investment portfolio cash flows, the maturity structure of the Company's wholesale funding, and other factors. These risks are monitored and managed centrally. The Company's Asset/Liability Committee reviews and approves the Company's liquidity policy and guidelines on a regular basis. This process includes reviewing all available wholesale liquidity sources. The Company also forecasts future liquidity needs and develops strategies to ensure adequate liquidity is available at all times. SHUSA conducts monthly liquidity stress test analyses to manage its liquidity under a variety of scenarios, all of which demonstrate that the Company has ample liquidity to meet its short-term and long-term cash requirements.

Enhanced Monitoring of Liquidity

In addition to its normal monitoring of liquidity, SBNA enhanced monitoring of its liquidity position since the financial system market disruption that began in March 2023 and the ensuing market volatility. Additionally, SBNA continues to optimize contingent sources of liquidity. Some of these actions include the pledge of additional loans to the FRB discount window, and the transfer of loans from the discount window to the FHLB in order to receive more favorable discounts. Overall, the available capacity from the FRB and FHLB remained stable throughout and since 2023.

Impact of Changes to Credit Rating on Liquidity and Capital Resources

Changes to the credit ratings of SHUSA, Santander and its affiliates or the Kingdom of Spain could have a material adverse effect on SHUSA's business, including its liquidity and capital resources. The credit ratings of SHUSA have changed in the past and may change in the future, which could impact its cost of and access to sources of financing and liquidity. Any reductions in the long-term or short-term credit ratings of SHUSA would increase its borrowing costs and require it to replace funding lost due to the downgrade, which may include the loss of customer deposits, limit its access to capital and money markets and trigger additional collateral requirements in derivatives contracts and other secured funding arrangements. See further discussion on the impacts of credit ratings actions in the "Economic and Business Environment" section of this MD&A.

Sources of Liquidity

The Company has several sources of funding to meet liquidity requirements, including the core deposit base, liquid investment securities portfolio, ability to acquire large deposits, FHLB borrowings, wholesale deposit purchases, and federal funds purchased, as well as through securitizations in the ABS market and committed credit lines from third-party banks and Santander. In addition, the Company has other sources of funding to meet its liquidity requirements such as dividends and returns of investments from its subsidiaries, short-term investments held by non-bank affiliates, and access to the capital markets.

The specialized consumer financing of RICs requires a significant amount of liquidity to originate and acquire loans and leases and to service debt. The Company funds these operations through its lending relationships with third-party banks, Santander and affiliates, and through securitizations in the ABS market. The Company seeks to issue debt that appropriately matches the cash flows of the assets that it originates. The Company uses liquidity for debt service and repayment of borrowings, as well as for funding loan commitments.

During the six months ended June 30, 2026, the Company's subsidiaries completed on-balance and off-balance sheet funding transactions of:

•securitizations on the SDART platform for approximately $1.9 billion

•issuance of CLNs for approximately $604.8 million

Santander provides a liquidity line to SHUSA for the purpose of supporting additional liquidity for SHUSA's and its subsidiaries' CIB business activities. At June 30, 2026, SHUSA had $4.0 billion in uncommitted available liquidity on the line, of which it had drawn zero.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Intercompany Borrowings with SHUSA Affiliates

SHUSA provides notes payable and revolving loans and lines to its subsidiaries as needed for the purpose of providing additional liquidity to support business operations at the subsidiary level.

Available Liquidity

As of the periods indicated, the Company and its subsidiaries had the following available liquidity:


(in thousands)	June 30, 2026				March 31, 2026
	Total Capacity	Used	Available		Total Capacity	Used	Available
Cash on deposit at FRB			$	9,233,231			$	13,554,125
Liquidity from released government deposit collateral (1)	2,002,427	—	2,002,427		2,065,891	—	2,065,891
Liquidity from unencumbered securities	4,775,301	—	4,775,301		4,887,783	—	4,887,783
FHLB	14,048,504	1,207,584	12,840,920		14,579,673	571,783	14,007,890
FRB:
Discount window	11,172,683	—	11,172,683		10,917,371	—	10,917,371


Total available liquidity			$	40,024,562			$	45,433,060

(1) Includes high quality liquid assets that are encumbered as collateral for uninsured government deposits.

At June 30, 2026, unencumbered highly liquid assets (cash and cash equivalents, investments in Level 1 through Level 2 qualifying debt securities AFS, and other liquid assets exclusive of securities encumbered pledged as collateral) totaled approximately $23.5 billion. This amount represented 29.5% of total deposits at June 30, 2026.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Cash, cash equivalents, and restricted cash


	Six months ended June 30,				YTD Change
(in thousands)	2026		2025			Increase/(Decrease)
Net cash flows from operating activities	$	762,397	$	(1,943,290)		$	2,705,687
Net cash flows from investing activities	(374,709)		653,032			(1,027,741)
Net cash flows from financing activities	(1,461,076)		4,546,302			(6,007,378)

Cash flows from operating activities

Net cash flow from operating activities increased by $2.7 billion from the six months ended June 30, 2025 to the six months ended June 30, 2026, primarily due to the change in net trading activity and an increase in proceeds from the sales of and collections on LHFS, offset by an increase in originations and purchases of LHFS during the six months ended June 30, 2026.

Cash flows from investing activities

Net cash flow from investing activities decreased by $1.0 billion from the six months ended June 30, 2025 to the six months ended June 30, 2026, primarily driven by the net change in loans other than purchases and sales and the net change in federal funds sold and securities purchased under resale agreements, offset by the net change in operating leases and purchases and sales of investment securities.

Cash flows from financing activities

Net cash flow from financing activities decreased by $6.0 billion from the six months ended June 30, 2025 to the six months ended June 30, 2026, primarily driven by the net change in net borrowings activity, the net change in deposits and other customer accounts, and the net change in Securities Financing Activities.

See the SCF for further details on the Company's sources and uses of cash.

Credit Facilities

Third-Party Revolving Credit Facilities

Warehouse Lines

The Company's subsidiaries have credit facilities with several banks providing an aggregate commitment of $2.0 billion for the exclusive use of providing short-term liquidity to support core and preferred auto lender financing. As of June 30, 2026, there was an outstanding balance of $427.9 million on these facilities in the aggregate. These facilities reduce advance rates in the event of delinquency or credit loss, as well as various other metrics exceeding specific thresholds.

Securities Financing Activities

The Company may enter into Securities Financing Activities primarily to deploy the Company’s excess cash and investment positions. Securities Financing Activities are treated as collateralized financings and are included in "Federal funds sold and securities purchased under resale agreements or similar arrangements" and "Federal funds purchased and securities loaned or sold under repurchase agreements" on the Company’s Condensed Consolidated Balance Sheets. Refer to Note 9 to the Condensed Consolidated Financial Statements for additional information about the Company's Securities Financing Activities.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Secured Structured Financings

The Company's subsidiaries' secured structured financings primarily consist of public, SEC-registered securitizations, as well as private securitizations under Rule 144A of the Securities Act, and privately issued amortizing notes. As of June 30, 2026, there were on-balance sheet securitizations outstanding in the market with a cumulative balance of approximately $16.0 billion.

Deficiency and Debt Forward Flow Agreement

In addition to SC's credit facilities and secured structured financings, SC has a flow agreement in place with a third party for charged-off assets. Loans and leases sold under these flow agreements are not on SC's balance sheet.

Uses of Liquidity

The Company uses liquidity for debt service and repayment of borrowings. In addition, our subsidiaries use liquidity for funding loan commitments, satisfying deposit withdrawal requests, supporting underwriting transactions and meeting customer liquidity requirements.

At June 30, 2026, the Company's liquidity to meet debt payments, debt service and debt maturities was in excess of 12 months.

Contractual Obligations and Other Commitments

The Company enters into contractual obligations in the normal course of business as a source of funds for its asset growth and asset/liability management and to meet required capital needs. These obligations require the Company to make cash payments over time.

As of June 30, 2026, the Company had total contractual cash obligations of $75.6 billion, which included FHLB advances, notes payable, other debt obligations, CDs, repurchase agreements, non-qualified pension and post-retirement benefits, and operating leases. The Company’s near-term cash obligations largely stem from maturing short-term liabilities (CDs, repurchase agreements, and short-term borrowings) and long-term debt. Our primary funding sources to meet these obligations include retail, commercial and brokered deposits of $79.6 billion, secured and other financing of $18.7 billion, short-term repurchase agreements of $22.1 billion and long-term unsecured debt of $14.1 billion, as well as cash flows from continuing operations. Additionally, on June 30, 2026, the Company had $40.0 billion of readily available liquidity to support near-term requirements and ensure it maintains the sufficiency of the liquidity portfolio over stressed horizons ranging from 30 days to 12 months. In addition, the Company had other commitments of $22.1 billion, which consisted of commitments to extend credit and letters of credit. Of this amount, approximately $7.7 billion of the other commitments have maturity dates within one year.

The Company is a party to financial instruments and other arrangements with off-balance sheet risk in the normal course of business to meet the financing needs of its customers and manage its exposure to fluctuations in interest rates. See further discussion on these risks in Note 14 to these Condensed Consolidated Financial Statements.

Dividends, Contributions and Stock Issuances

As of June 30, 2026, the Company had 530,391,043 shares of common stock outstanding.

During the six months ended June 30, 2026, the Company paid dividends of $250.0 million on its common stock and paid $88.4 million of dividends on its preferred stock.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

ASSET AND LIABILITY MANAGEMENT

Interest Rate Risk

Interest rate risk arises primarily through the Company’s traditional business activities of extending loans and accepting deposits. Many factors, including economic and financial conditions, movements in market interest rates, and consumer preferences, affect the spread between interest earned on assets and interest paid on liabilities. Interest rate risk is managed by the Company's Treasury group and measured by its Market Risk Department, with oversight by the Asset/Liability Committee. In managing interest rate risk, the Company seeks to minimize the variability of net interest income across various likely scenarios, while at the same time maximizing net interest income and the net interest margin. To achieve these objectives, the Treasury group works closely with each business line in the Company. The Treasury group also uses various other tools to manage interest rate risk, including wholesale funding maturity targeting, investment portfolio purchase strategies, asset securitizations/sales, and financial derivatives.

Interest rate risk focuses on managing four elements of risk associated with interest rates: basis risk, repricing risk, yield curve risk and option risk. Basis risk stems from rate index timing differences with rate changes, such as differences in the extent of changes in Federal funds rates compared with the three-month term SOFR. Repricing risk stems from the different timing of contractual repricing, such as one-month versus three-month reset dates, as well as the related maturities. Yield curve risk stems from the impact on earnings and market value resulting from different shapes and levels of yield curves. Option risk stems from prepayment or early withdrawal risk embedded in various products. These four elements of risk are analyzed through a combination of net interest income and balance sheet valuation simulations, shocks to those simulations, and scenario and market value analyses, and the subsequent results are reviewed by management. Several assumptions and models are used to produce these analyses, including assumptions about new business volumes, loan and investment prepayment rates, deposit flows, interest rate curves, economic conditions, and competitor pricing. Certain models use historical data analyses to estimate future customer behavior, such as deposit re-pricing and attrition. Estimates from these models can differ from actual behavior, depending on various factors such as macroeconomic conditions or competitor response.

Net Interest Income Simulation Analysis

The Company utilizes a variety of measurement techniques to evaluate the impact of interest rate risk, including simulating the impact of changing interest rates on expected future interest income and interest expense, to estimate the Company's net interest income sensitivity. This simulation is run monthly and includes various scenarios that help management understand the potential risks in the Company's net interest income sensitivity. These various scenarios include parallel, non-parallel, gradual parallel and gradual non-parallel rate shocks applied relative to the implied market-based forward curve, as well as other scenarios that are consistent with quantifying the four measures of risk described above. The shocks below are extended using the parallel scenario and are applied instantaneously to the implied forward curve as of the stated month-end. The 200 basis point-down shock has been added as market rates have increased. This set of shocks represents a range of plausible rate shocks, as an instantaneous shock 200 basis points down can be analogous to a gradual ramp-down of 400 basis points over one year. This information is used to develop proactive strategies to ensure that the Company’s risk position remains within SHUSA Board of Directors-approved limits so that future earnings are not significantly adversely affected by future interest rates.

The table below reflects the estimated sensitivity to the Company’s net interest income based on interest rate changes at June 30, 2026 and December 31, 2025:


	The following estimated percentage increase/(decrease) to net interest income would result
If interest rates changed in parallel by the amounts below	June 30, 2026		December 31, 2025
Down 200 basis points	(1.42)	%	(2.25)	%
Down 100 basis points	(0.54)	%	(0.88)	%
Up 100 basis points	0.25	%	0.65	%
Up 200 basis points	0.36	%	1.15	%

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

MVE Analysis

The Company also evaluates the impact of interest rate risk by utilizing MVE modeling. This analysis measures the present value of all estimated future cash flows of the Company over the estimated remaining life of the balance sheet. MVE is calculated as the difference between the market value of assets and liabilities. The MVE calculation utilizes only the current balance sheet and therefore does not factor in any future changes in balance sheet size, balance sheet mix, yield curve relationships or product spreads, which may mitigate the impact of any interest rate changes.

Management examines the effect of interest rate changes on MVE. The sensitivity of MVE to changes in interest rates is a measure of longer-term interest rate risk and highlights the potential capital at risk due to adverse changes in market interest rates. The following table discloses the estimated sensitivity to the Company’s MVE at June 30, 2026 and December 31, 2025.


	The following estimated percentage increase/(decrease) to MVE would result
If interest rates changed in parallel by the amounts below	June 30, 2026		December 31, 2025
Down 200 basis points	4.63	%	1.55	%
Down 100 basis points	4.12	%	2.46	%
Up 100 basis points	(5.70)	%	(4.44)	%
Up 200 basis points	(11.87)	%	(9.68)	%

As of June 30, 2026, the Company’s profile reflected an increase of MVE of 4.12% for downward parallel interest rate shocks of 100 basis points and a decrease of 5.70% for upward parallel interest rate shocks of 100 basis points. The asymmetrical sensitivity between a 100 basis point increase and a 100 basis point decrease is due to the negative convexity as a result of the prepayment option embedded in mortgage-related products, the impact of which is not fully offset by the behavior of the funding base (largely NMDs). While NMDs continue to provide a natural offset to asset sensitivity, changes in deposit duration and repricing characteristics only partially mitigate the impact of mortgage optionality, resulting in the observed asymmetry in the MVE profile.

In downward parallel interest rate shocks, mortgage-related products’ prepayments increase, their duration decreases, and their market value appreciation is therefore limited. At the same time, deposit rates remain constrained by pricing floors, limiting the ability to fully reprice NMDs as market rates decline. For upward parallel interest rate shocks, extension risk weighs on a sizable portion of the Company’s mortgage-related products, increasing effective duration and reducing market value. Although NMDs provide a partial offset through changes in deposit duration and repricing behavior, the offset is incomplete, particularly under larger rate shocks, resulting in greater MVE sensitivity under rising-rate scenarios.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Limitations of Interest Rate Risk Analyses

Since the assumptions used are inherently uncertain, the Company cannot predict precisely the effect of higher or lower interest rates on net interest income or MVE. Actual results will differ from simulated results due to the timing, magnitude and frequency of interest rate changes, the difference between actual experience and the assumed volume, characteristics of new business, behavior of existing positions, and changes in market conditions and management strategies, among other factors.

Uses of Derivatives to Manage Interest Rate and Other Risks

To mitigate interest rate risk and, to a lesser extent, foreign exchange, equity and credit risks, the Company uses derivative financial instruments to reduce the effects that changes in interest rates may have on net income, the fair value of assets and liabilities, and cash flows.

The Company is subject to price risk through its capital markets and mortgage banking activities. The Company employs various tools to measure and manage price risk in its portfolios. In addition, SHUSA's Board of Directors has established certain limits relative to positions and activities. The level of price risk exposure at any point in time depends on the market environment and expectations of future price and market movements and will vary from period to period.

Management uses derivative instruments to mitigate the impact of interest rate movements on the fair value of certain liabilities, assets and highly probable forecasted cash flows. These instruments primarily include interest rate swaps that have underlying interest rates based on key benchmark indices and forward sale or purchase commitments. The nature and volume of the derivative instruments used to manage interest rate risk depend on the level and type of assets and liabilities on the balance sheet and the risk management strategies for the current and anticipated interest rate environments.

The Company typically retains the servicing rights related to residential mortgage loans that are sold. The majority of the Company's residential MSRs are accounted for at fair value. As deemed appropriate, the Company economically hedges MSRs, using interest rate swaps and forward contracts to purchase MBS. For additional information on MSRs, see Note 11 to the Condensed Consolidated Financial Statements.

The Company uses foreign exchange contracts to manage the foreign exchange risk associated with certain foreign currency-denominated assets and liabilities. Foreign exchange contracts, which include spot and forward contracts, represent agreements to exchange the currency of one country for the currency of another country at an agreed-upon price on an agreed-upon settlement date. Exposure to gains and losses on these contracts increase or decrease over their respective lives as currency exchange and interest rates fluctuate. The Company also utilizes forward contracts to manage market risk associated with certain expected investment securities sales.

For additional information on foreign exchange contracts, derivatives and hedging activities, see Note 10 to the Condensed Consolidated Financial Statements.

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ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Incorporated by reference from Part I, Item 2, MD&A — "Asset and Liability Management" above.

ITEM 4 - CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As of the Evaluation Date, management of the Company, with the participation of our CEO and CFO, has evaluated the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act. Based on this evaluation, our CEO and CFO have concluded that, as of the Evaluation Date, the Company’s disclosure controls and procedures are effective to ensure that the information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There were no changes in the Company’s internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the quarter ended June 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS

Refer to Note 14 to the Condensed Consolidated Financial Statements for SHUSA’s litigation disclosures, which are incorporated herein by reference.

ITEM 1A - RISK FACTORS

We are subject to a number of risks potentially impacting our business, financial condition, results of operations, and cash flow that are set forth under Part I, Item 1A, Risk Factors, in our Annual Report on Form 10-K for the year ended December 31, 2025. In addition to the risk factors disclosed in our Form 10-K, we are subject to risks related to the proposed transaction with Webster, discussed further below.

Risks Relating to the Proposed Transaction with Webster

We Are Expected to Incur Significant Non-Recurring Costs Related to the Proposed Transaction with Webster and the Subsequent Integration of our Respective Businesses.

We have incurred and expect to incur a number of non-recurring costs associated with the proposed transaction with Webster. These costs include legal, accounting and financial advisory costs and severance/employee-benefit related costs in connection with the transaction. Some of these costs are payable by us regardless of whether or not the transaction is completed.

We also expected to incur significant costs in connection with the subsequent integration of our and Webster’s respective businesses. There are a number of processes, policies, procedures, operations, technologies and systems that may need to be integrated, including procurement, accounting and finance, legal, payroll, compliance, treasury management, branch operations, vendor management, risk management, lines of business, pricing and benefits. Many of such integration costs are, by their nature, difficult to estimate, and the timing of such costs is uncertain at present.

We May Fail to Realize All of the Anticipated Benefits of the Proposed Transaction with Webster, and Consolidating our Businesses May be More Difficult, Costly or Time Consuming Than Expected.

We may fail to realize the anticipated benefits from consolidating our business and Webster’s. To realize these anticipated benefits, we and Webster must successfully integrate our businesses. If we or Webster take longer to, or are not able to, achieve these objectives, the anticipated benefits of the transaction, including the cost synergies expected to be realized, may not be realized fully or at all, or may take longer to realize than expected.

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It is possible that the integration process could take longer or be more costly than anticipated, or could result in the loss of key employees, the disruption of each company’s ongoing businesses or inconsistencies in standards, controls, procedures and policies that adversely affect our ability to maintain relationships with clients, customers, depositors and employees or achieve the anticipated benefits of the transaction. Integration efforts between the two companies will also divert management attention and resources. These integration matters could have an adverse effect on our business following closing of the transaction.

The Proposed Transaction is Subject to Conditions, Some or All of Which May Not Be Satisfied, Satisfied on a Timely Basis, if at All, or Waived. Failure to Close the Transaction Could Have a Material Adverse Effect on Us.

Closing of the transaction is subject to a number of conditions, including, among other things, receipt of Webster’s stockholders’ approval and the requisite regulatory approvals, which make closing and timing of closing of the proposed transaction uncertain. The failure to satisfy all of such required conditions could delay closing of the transaction for a significant period of time or prevent it from occurring at all.

Any delay in closing the transaction could significantly reduce or delay the realization of the anticipated benefits we expect to achieve if we successfully close the transaction within the expected timeframe. There can be no assurance that the conditions to closing the transaction will be satisfied or waived or that the transaction will close. In addition, subject to limited exceptions, either Santander or Webster may terminate the Transaction Agreement if the transaction has not occurred on or before the end date.

In addition, delays in closing the transaction could, among other things, result in additional transaction costs, loss of revenue or other negative effects associated with uncertainty about closing the transaction, and could materially and adversely impact our ongoing business, financial condition or results of operations following closing of the transaction.

Regulatory Authorities May Impose Conditions on the Transaction that Could Have an Adverse Effect on Us.

To close the transaction, we need to obtain approvals, consents from, or make filings with, several U.S. and European regulatory authorities. These regulatory authorities may impose conditions on the closing of the transaction or require changes to the terms of the transaction. There can be no assurance that all of the requisite regulatory approvals will be obtained and, if obtained, there can be no assurance regarding the timing of such approvals, our ability to obtain such approvals on satisfactory terms or the absence of litigation challenging such approvals. In addition, there can be no assurance that such requisite regulatory approvals will not impose conditions or requirements that, individually or in the aggregate, would or could reasonably be expected to have an adverse effect on the assets or business acquired or our financial condition or results of operations following closing of the transaction. Santander is not obligated to close the transaction if any requisite regulatory approval would result in the imposition of a materially burdensome regulatory condition.

Upon Closing of the Transaction, Certain Change-of-Control Rights Under Agreements to Which Webster Is a Party Will or May Be Triggered, Which May Result in Third Parties Terminating or Altering Existing Contracts or Relationships with Webster or, Following Closing of the Transaction, Us.

Webster has contracts with third parties which will or may require Webster to obtain consents from such third parties in connection with the transaction. If these consents are not obtained, the counterparties to these contracts may have the ability to terminate, reduce the scope of or otherwise seek to vary the terms of their relationships or the terms of such contracts with Webster in anticipation of the transaction, or with us following closing of the transaction. The pursuit of such rights may result in Webster, or, following closing of the transaction, us, suffering a loss of potential future revenue, incurring liabilities in connection with breaches of agreements or losing rights that are material to Webster’s business and ours. Any such disruptions could limit our ability to achieve the anticipated benefits of the transaction.

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In Connection with the Closing of the Transaction, We Expect to Assume Webster’s Outstanding Debt Obligations and That Each Outstanding Share of Webster’s Preferred Stock Will Be Converted Into the Right to Receive One Share of Newly Created Series of Our Preferred Stock, which May Adversely Affect Our Financial Position and Operating Flexibility.

In connection with the proposed transaction, we expect to assume Webster’s outstanding indebtedness. Additionally, we expect that each outstanding share of Webster’s Series F and Series G preferred stock will be converted into the right to receive one share of newly created series of our preferred stock, which will have substantially the same terms as Webster’s outstanding Series F and Series G preferred stock, respectively. Our assumption of Webster’s existing debt, together with any future incurrence of additional indebtedness, and our issuance of newly created series of our preferred stock, could have important consequences. For example, they may have the effect of, among other things, reducing our flexibility to respond to changing business and economic conditions, increasing borrowing costs, making it difficult for us to satisfy our financial obligations, including making applicable scheduled principal and interest payments on our indebtedness, limiting our ability to obtain additional financing and require a substantial portion of cash flow to be dedicated to the payment of principal and interest on our indebtedness and dividends on the preferred stock, thereby reducing our ability to use cash flows to fund our operations, capital expenditures and future business opportunities. Any of these factors could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Additionally, unless Webster’s preferred stock is redeemed in full, we will become subject to certain reporting and corporate governance requirements not previously applicable to us, including the rules and regulations of the applicable listing standards of the New York Stock Exchange. We expect that compliance with these requirements would increase our legal, accounting, and financial compliance costs, make some activities more difficult, time consuming, and costly, and place increased burdens on our personnel, systems, and resources.

ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Not applicable.

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ITEM 3 - DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4 - MINE SAFETY DISCLOSURES

None.

ITEM 5 - OTHER INFORMATION

Disclosure Pursuant to Section 219 of the Iran Threat Reduction and Syria Human Rights Act

Pursuant to Section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012, which added Section 13(r) to the Exchange Act, an issuer is required to disclose in its annual or quarterly reports, as applicable, whether it or any of its affiliates knowingly engaged in certain activities, transactions or dealings relating to Iran or with individuals or entities designated pursuant to certain Executive Orders. Disclosure is generally required even where the activities, transactions or dealings were conducted in compliance with applicable law.

The following activities are disclosed in response to Section 13(r) with respect to Santander and its affiliates. During the period covered by this report:

•Frozen accounts and transactions: A limited number of accounts for certain customers subsequently designated over time by the U.S. under the SDGT sanctions programme, were or are maintained with certain non-U.S. affiliates of Santander. All such accounts have been frozen or cancelled to comply with applicable legal requirements.

•Legacy contractual obligations related to guarantees: Santander also has certain legacy performance guarantees for the benefit of an Iranian bank that is currently designated by the U.S. under the SDGT sanctions programme (stand-by letters of credit to guarantee the obligations - either under tender documents or under contractual agreements - of contractors who participated in public bids in Iran) that were in place prior to April 27, 2007. Santander is not contractually permitted to cancel these arrangements without paying the guaranteed amount. As such, Santander intends to continue to provide the guarantees in accordance with company policy and applicable laws.

In the aggregate, all the transactions described above resulted in gross revenues and net profits in the six months ended June 30, 2026 which were negligible relative to the overall revenues and profits of Santander. Santander has undertaken significant steps to withdraw from the Iranian market such as closing its representative office in Iran and ceasing all banking activities therein, including correspondent relationships, deposit-taking from Iranian entities and issuing export letters of credit, except for the legacy transactions described above.

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ITEM 6 - EXHIBITS

(2.1)

Agreement and Plan of Merger, dated as of March 30, 2026, by and among Santander Holdings USA, Inc., Santander Bank, National Association and Webster Bank, National Association (Incorporated by reference to Exhibit 2.1 to Santander Holdings USA, Inc.’s Current Report on Form 8-K filed March 31, 2026) (Commission File Number 001-16581)

(3.1)

Amended and Restated Articles of Incorporation of Santander Holdings USA, Inc. (Incorporated by reference to Exhibit 3.1 to Santander Holdings USA, Inc.’s Current Report on Form 8-K filed December 21, 2022) (Commission File Number 001-16581)

(3.2)

Articles of Amendment to the Amended and Restated Articles of Incorporation (Incorporated by reference to Exhibit 3.1 of Santander Holdings USA, Inc.’s Current Report on Form 8-K filed June 15, 2023) (Commission File Number 001-16581)

(3.3)

Articles of Amendment to the Amended and Restated Articles of Incorporation (incorporated by reference to Exhibit 3.1 to Santander Holdings USA, Inc.’s S-3ASR filed December 15, 2023) (Commission File Number 333-276089)

(3.4)

Bylaws of Santander Holdings USA, Inc. (incorporated by reference to Exhibit 3.4 of Santander Holdings USA, Inc.’s Quarterly Report on Form 10-Q filed July 30, 2025) (Commission File Number 001-16581)

(4.1)

Santander Holdings USA, Inc. has certain debt obligations outstanding. None of the instruments evidencing such debt authorizes an amount of securities in excess of 10% of the total assets of Santander Holdings USA, Inc. and its subsidiaries on a consolidated basis; therefore, copies of such instruments are not included as exhibits to this Quarterly Report on Form 10-Q. Santander Holdings USA, Inc. agrees to furnish copies to the SEC on request.

(31.1)

Chief Executive Officer certification pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Filed herewith)

(31.2)

Chief Financial Officer certification pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Filed herewith)

(32.1)

Chief Executive Officer certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Filed herewith)

(32.2)

Chief Financial Officer certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Filed herewith)

(101.INS)

Inline XBRL Instance Document (Filed herewith)

(101.SCH)

Inline XBRL Taxonomy Extension Schema (Filed herewith)

(101.CAL)

Inline XBRL Taxonomy Extension Calculation Linkbase (Filed herewith)

(101.DEF)

Inline XBRL Taxonomy Extension Definition Linkbase (Filed herewith)

(101.LAB)

Inline XBRL Taxonomy Extension Label Linkbase (Filed herewith)

(101.PRE)

Inline XBRL Taxonomy Extension Presentation Linkbase (Filed herewith)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		SANTANDER HOLDINGS USA, INC. (Registrant)

Date:	July 31, 2026	/s/ Juan Carlos Alvarez de Soto
		Juan Carlos Alvarez de Soto
		Chief Financial Officer and Senior Executive Vice President


Date:	July 31, 2026	/s/ David L. Cornish
		David L. Cornish
		Chief Accounting Officer, Corporate Controller and Executive Vice President

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