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, residential mortgage 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 and offers healthcare financial services products through HSA Bank and Ametros. 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.

On August 20, 2026, Santander completed the previously announced acquisition of Webster. Pursuant to the Transaction Agreement, Webster merged with and into Webster Virginia, with Webster Virginia continuing as the surviving corporation in such merger transaction, and, immediately afterwards, Santander acquired all outstanding shares of Webster Virginia common stock through a statutory share exchange.

Immediately after completing the acquisition of Webster, Santander contributed all outstanding shares of Webster Virginia common stock to SHUSA and Webster Virginia merged with and into SHUSA with SHUSA surviving the merger. Webster Bank also merged with and into SBNA, with SBNA surviving the merger.

In connection with the IHC Merger, the outstanding Webster Virginia Series F and Series G preferred shares were converted into preferred shares issued by SHUSA. Accordingly, following the IHC Merger, such preferred shares represent preferred equity issued directly by SHUSA.

As described above, Santander was the acquirer of Webster for accounting purposes. Immediately following the acquisition, Santander contributed its investment in Webster to SHUSA, a transaction between entities under common control. Accordingly, SHUSA recognized the assets and liabilities of Webster based on Santander’s carrying amounts immediately prior to the contribution, which reflect the acquisition date basis established by Santander under ASC Topic 805 Business Combinations. The fair value concepts applied are consistent with ASC Topic 820, Fair Value Measurement. Santander's acquisition date measurements remain preliminary and are subject to adjustment during the measurement period under ASC Topic 805, Business Combinations. Any measurement period adjustments recorded by Santander that affect the carrying basis of the assets and liabilities contributed to SHUSA will be reflected by SHUSA as appropriate.

The following table presents Santander's acquisition date accounting that established the carrying basis of assets and liabilities subsequently contributed to SHUSA. The excess of Santander’s purchase price and noncontrolling interest obtained over the estimated fair value of net assets acquired and contributed to the Company has been recorded as goodwill.


(in millions)
Consideration:
Common stock issued (329,846,439 shares)			$	4,674
Common stock awards converted			10
Cash paid			7,826



Fair value of Santander's consideration			$	12,510
Fair value of assets:
Cash and cash equivalents	$	3,193
Investment securities	17,842
Loans held for investment, net	55,731
Other intangible assets	2,264
All other assets (includes $158 of deferred taxes on purchase accounting fair value adjustments)	3,471
Total assets acquired	$	82,501
Fair value of liabilities:
Deposits and other customer accounts	$	70,718
Federal funds purchased and securities loaned or sold under repurchase agreements	94
Borrowings and other debt obligations	4,285
Accounts payable, accrued expenses, and other liabilities	1,120
Total liabilities acquired	$	76,217

Less: Fair value of net assets acquired			$	6,284
Plus: Preferred stock acquired (1)			$	252

Goodwill resulting from Santander's acquisition			$	6,478
(1) Represents fair value of non-controlling interest preferred stock for Santander recorded as equity for SHUSA.

As part of the common control contribution, SHUSA recognized Santander's $6.5 billion preliminary carrying amount of goodwill, none of which is anticipated to be deductible for tax purposes. The goodwill recognized is primarily attributable to expanded market presence, expected synergies, operational efficiencies, revenue opportunities, and other strategic benefits, none of which qualify for separate recognition as identifiable intangible assets. Refer to Note 5 to this Quarterly Report on Form 10-Q for information regarding the allocation of goodwill to the Company’s reportable segments as a result of the acquisition, as well as the carrying amounts and amortization of core deposit and other intangible assets.

•Investment securities – The fair value of investment securities was estimated based on quoted market prices, where available. If quoted market prices were not available, fair value estimates were based on observable inputs including quoted market prices for similar instruments, quoted market prices that are not in an active market or other inputs that are observable in the market. In the absence of observable inputs, fair value was estimated based on pricing models and/or DCF methodologies utilizing a current market rate of interest for similar types of securities.

•Loans held for investment, net – Fair values for acquired loans and leases were estimated using DCF methodologies that considered factors including the type of loan or lease and related collateral, classification status, fixed or variable interest rate characteristics, remaining contractual term, amortization status, credit quality indicators, and current market discount rates. Loans and leases with similar risk and cash flow characteristics were grouped into pools when determining certain assumptions and applying valuation techniques.

Expected cash flows were developed using assumptions that reflected the contractual terms of the instruments and management's estimates of prepayments, default rates, loss severity, and other factors a market participant would consider in estimating future cash flows. Discount rates were based on current market rates for comparable loan and lease originations and a market participant's required rate of return for similar assets, including adjustments for liquidity and other market factors. Credit-related assumptions were reflected in the estimated cash flows as a separate component of the discount rate.

▪Other intangible assets- Intangible assets primarily consist of CDI which represents the value of relationships with deposit customers and the low cost of funding that acquired deposits provide relative to the Company’s marginal cost of funds. The fair value was estimated based on a DCF methodology that considered customer attrition rates, net maintenance cost of the deposit base, the alternative cost of funds and the interest costs associated with customer deposits. The core deposit intangible and other intangible assets are being amortized on an accelerated basis over its estimated useful life as follows:


(dollars in millions)	Amount		Selected Useful Life
Identified intangible assets:
Core deposit intangibles - consumer and commercial	$	1,441	7-11 years
Core deposit intangibles - health savings accounts	517		8 years
Core deposit intangibles - workers comp administration funds	234		16 years
Customer relationships and other intangibles(1)	72		10 years
	$	2,264
(1) Includes $10 million of trade names which are indefinite-lived.

•Deposits - The fair values for time deposits were estimated using a DCF methodology whereby the contractual remaining cash flows were discounted using market rates currently being offered for time deposits of similar maturities. For all other deposits, carrying amounts approximate fair value.

•Borrowings and other debt obligations - The fair values of long-term debt instruments were estimated based on quoted market prices for identical or similar instruments, if available, or by using DCF analyses based on current incremental borrowing rates for similar types of instruments.

The pro forma condensed combined financial information includes adjustments primarily due to loan accretion and amortization of CDI directly attributable to the contribution of Webster to SHUSA, is presented for illustrative purposes only and is not necessarily indicative of the financial position or results of operations that would have been achieved had the transaction been completed on the dates indicated, nor is it indicative of future results or financial position of the Company following the transaction.

Due to the ongoing integration and streamlining of Webster's operations into those of the Company since August 20, 2026, historical reporting for revenue and earnings attributable to Webster after August 20, 2026, is impracticable, and thus disclosures of Webster's revenue and earnings that are included in the accompanying Condensed Consolidated Income Statements for the three months and nine months ended September 30, 2026 are impracticable.

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.

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 Statements 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. In the third quarter of 2026, the Company changed its presentation of dollar amounts to the nearest whole number in millions, except as otherwise designated. The change has been applied to all prior-period amounts presented. Certain previously reported amounts were adjusted due to rounding differences which were not significant to the overall presentation.

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.

In conjunction with the December 31, 2025 adoption of ASU 2025-08 Financial Instruments – Credit Losses (Topic 326): Purchased Loans, and the acquisition of Webster on August 20, 2026, the Company has updated its accounting policy for loans and leases as described below. Refer to Note 1 of the Notes to Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, for discussion of the accounting and reporting policies related to purchased loans for periods prior to January 1, 2026.

Loans and leases acquired through a business combination or purchase are initially evaluated for classification as PCDs. Acquired loans and leases are classified as PCDs when there is evidence of more than insignificant deterioration in credit quality since origination. Purchased loans that do not meet the criteria to be classified as PCDs are evaluated to determine whether they qualify as PSLs. Loans are considered PSLs if they are acquired at least 90 days after origination and the Company was not involved in the origination of the loan. Loans acquired in a business combination are automatically deemed PSLs. Excluded from the scope of PSLs are credit cards, debt securities, contract assets, trade receivables and leases.

At acquisition, PCDs and PSLs are accounted for under the gross-up approach, which includes recognizing an allowance and an offsetting entry as an addition to the fair value of loans, resulting in an initial amortized cost basis in an amount equal to the sum of the purchase price plus the ACL. The difference, if any, between the amortized cost basis (as adjusted for expected credit losses) and the unpaid principal balance is recognized as a noncredit discount or premium and accreted or amortized into interest income over the life of the loan as an adjustment to yield.

For acquired loans and finance leases that do not qualify as PCDs or PSLs, the Company will record an ACL and provision for credit losses at acquisition reflective of credit losses expected to be incurred over the remaining contractual life of the acquired loans.

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.