Santander Holdings USA, Inc. — Second Quarter 2026 Earnings Summary

Financial Performance

• Net Interest Income (NII) reached $1.521 billion, an increase of 1.7% quarter-over-quarter and 2.7% year-over-year.
• Net Income was $585 million, up 41.2% quarter-over-quarter and 17.5% year-over-year.
• Net Interest Margin (NIM) stood at 4.0%, up 9 basis points quarter-over-quarter and 16 basis points year-over-year.
• Total non-interest income was $806 million, while non-interest income excluding lease expense was $591 million.
• General, Administrative, and Other (G&A) expenses excluding lease expense were $1.105 billion, flat quarter-over-quarter and year-over-year.
• Credit loss expense was $247 million, down significantly from $431 million in Q1 2026 and $373 million in Q2 2025.
• Net Charge-Off (NCO) rate was 0.5%, down 15 basis points quarter-over-quarter and flat year-over-year.
• Allowance for Credit Losses (ACL) ratio was 6.9%, down 14 basis points quarter-over-quarter and 47 basis points year-over-year.
• Total deposits were $79.6 billion, down 2.0% quarter-over-quarter and 0.9% year-over-year.
• CET1 capital ratio was 13.7%, up 68 basis points quarter-over-quarter and 84 basis points year-over-year.
• Total Loss Absorbing Capacity (TLAC) ratio was 27.5%, up 280 basis points quarter-over-quarter and 110 basis points year-over-year.

Guidance and Future Outlook

• The presentation notes 8 consecutive quarters of year-over-year net income growth.
• Management highlighted continued earnings momentum driven by CIB performance, funding optimization, cost discipline, and credit strength.
• The sunset of electric vehicle tax credits is noted as a factor offsetting some earnings growth.
• Forward-looking statements regarding financial condition and future performance are included with standard risk disclaimers.

Business Segments and Product Lines

• Consumer & Business Banking (CBB): Total assets of $56 billion; consumer loans totaled $49.5 billion (down 2.2% YoY), while consumer deposits grew 9.3% YoY to $57.8 billion. Auto loan originations transitioned to SBNA beginning March 2026.
• Commercial Banking: Total assets of $4 billion; total commercial loans were $33.2 billion (down 3.5% YoY), with multifamily loans at $9.4 billion and CRE loans at $7.7 billion. Commercial deposits were $13.3 billion.
• Corporate & Investment Banking (CIB): Total assets of $36 billion (up 11.1% YoY); income before taxes was $118 million, a 3,833.3% increase year-over-year.
• Wealth Management: Total assets of $9 billion (up 9.0% YoY); income before taxes was $57 million, down 28.2% year-over-year.
• Multifamily: Represents 55% of the CRE portfolio, with $9.37 billion in total multifamily assets.
• Auto: Consumer auto delinquencies (30-89 days) were 13.2%, up 95 basis points quarter-over-quarter and 62 basis points year-over-year.

Market and Competitive Landscape

• SHUSA is a market-leading full-spectrum auto lender and a leading multifamily bank lender.
• CIB serves as a global hub for capital markets and investment banking.
• Wealth Management is a leading brand in Latin America for ultra-high-net-worth and high-net-worth clients.
• The company benefits from Openbank expansion for funding cost optimization and digital banking platform growth.
• Auto loan and lease originations are now virtually all funded with deposits, reducing reliance on wholesale funding.

Risks and Challenges

• Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially.
• Auto seasonality impacts net charge-offs and delinquency rates.
• The sunset of electric vehicle tax credits negatively impacts earnings.
• Normalizing delinquencies are present, though offset by resilient consumer behavior and strong recoveries.
• Lower loan and securities financing income due to moderated volumes and rates partially offset NII growth.

Management Commentary and Tone

• Management described credit loss expense improvement as underpinned by auto seasonality, resilient consumer performance, and strong recoveries.
• Cost management is characterized as disciplined, supported by transformation initiatives resulting in lower technology, occupancy, equipment, and loan servicing expenses.
• Non-interest income growth is attributed to strong capital market revenue and fee income from auto servicing, multifamily servicing, and wealth management.
• The tone reflects confidence in funding optimization, asset-liability management discipline, and capital strength.

Analyst Questions and Answers

• No specific analyst questions and answers are detailed in the provided presentation text.

Other Key Points

• Webster Transaction: Federal Reserve approval for the acquisition of Webster Financial Corporation was received on August 4, 2026, with a closing expected on August 20, 2026. Combined total assets are projected at $251 billion.
• Capital Markets Activity: In June 2026, SHUSA issued $2.5 billion of senior unsecured notes across three tranches: $1 billion at 5.04% (4nc3yr), $750 million at 5.22% (6nc5yr), and $750 million at 5.70% (11nc10yr).
• Credit Ratings: In May 2026, Fitch upgraded SBNA's senior unsecured debt to 'A' and affirmed SHUSA at 'A-'. Moody's and S&P have affirmed SHUSA ratings with stable outlooks.
• Debt Maturity: SHUSA has a TLAC ratio of 27.5% and eligible LTD of 10.9%, meeting Federal Reserve requirements.
• Portfolio Sales: The reduction in loan balances was partially driven by off-balance sheet securitizations and portfolio sales, including a reduction in personal unsecured exposure following Q4 loan sales.
• FDIC Joint Venture: SBNA holds a 20% interest in a Structured LLC established by the FDIC to service a $9 billion portfolio of New York-based rent-controlled and rent-stabilized multifamily loans.