INVESTMENT SECURITIES

9 Months Ended

Sep. 30, 2026

Investments, Debt and Equity Securities [Abstract]

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:


	September 30, 2026								December 31, 2025
(in millions)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Loss		Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Loss		Fair Value
U.S. Treasury securities	$	227	$	—	$	(1)	$	226	$	700	$	6	$	—	$	706
Corporate debt securities	9		—		—		9		—		—		—		—
ABS	2,040		1		(4)		2,037		948		—		(3)		945
Beneficial interest in Structured LLC (1)	1,043		—		(30)		1,013		1,070		27		—		1,097

MBS:
GNMA - Residential	4,251		—		(381)		3,870		2,636		—		(254)		2,382
GNMA - Commercial	600		—		(163)		437		622		—		(143)		479
FHLMC and FNMA - Residential	2,354		—		(358)		1,996		1,925		—		(288)		1,637
FHLMC and FNMA - Commercial	77		—		(2)		75		82		—		—		82
Unallocated fair value hedge basis adjustment (2)	(95)		—		95		—		(27)		—		27		—
Total investments in debt securities AFS	$	10,506	$	1	$	(844)	$	9,663	$	7,956	$	33	$	(661)	$	7,328

(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 13 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:


	September 30, 2026								December 31, 2025
(in millions)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Loss		Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Loss		Fair Value
U.S. Treasury securities	$	1,788	$	—	$	(17)	$	1,771	$	2,080	$	8	$	—	$	2,088

ABS and other interests in structured securities	1,942		2		(15)		1,929		2,020		13		(2)		2,031


MBS:
GNMA - Residential	4,544		—		(531)		4,013		3,106		4		(402)		2,708
GNMA - Commercial	9,551		135		(1,181)		8,505		4,525		—		(888)		3,637
FHLMC and FNMA - Residential	3,882		1		(215)		3,668		1,434		3		(77)		1,360
FHLMC and FNMA - Commercial debt securities	877		—		(31)		846		47		—		—		47
Total investments in debt securities HTM	$	22,584	$	138	$	(1,990)	$	20,732	$	13,212	$	28	$	(1,369)	$	11,871

Upon consummation of the Transaction Agreement, the Company evaluated the acquired investment securities and classified them in accordance with the Company's accounting policies and based on the Company's intent and ability to hold the securities.

NOTE 2. INVESTMENT SECURITIES (continued)

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


(in millions)	September 30, 2026		December 31, 2025
Pledged against public fund deposits	$	6,387	$	2,267
Pledged against borrowing capacity with the FRB	3,611		4,270
Pledged against repurchase agreements and supported hedging relationships, recourse on loans, and other agreements	551		336

Pledged against borrowing capacity with the FHLB	4,556		4,428

Total collateral pledged	$	15,105	$	11,301

At September 30, 2026 and December 31, 2025, the Company had $246 million and $158 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 September 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 September 30, 2026 were as follows:



(in millions)	Amortized Cost(1)		Fair Value
Due within one year	$	32	$	32
Due after 1 year but within 5 years	316		310
Due after 5 years but within 10 years	791		780
Due after 10 years	9,462		8,541
Total	$	10,601	$	9,663
(1) Does not include unallocated fair value hedge basis adjustment.

NOTE 2. INVESTMENT SECURITIES (continued)

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



(in millions)	Amortized Cost		Fair Value
Due within one year	$	916	$	915
Due after 1 year but within 5 years	1,292		1,270
Due after 5 years but within 10 years	1,147		1,123
Due after 10 years	19,229		17,424
Total	$	22,584	$	20,732

(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:


	September 30, 2026								December 31, 2025
	Less than 12 months				12 months or longer				Less than 12 months				12 months or longer
(in millions)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Treasury securities	$	226	$	(1)	$	—	$	—	$	—	$	—	$	—	$	—
Corporate debt securities	9		—		—		—		—		—		—		—
ABS	946		(2)		369		(2)		434		(1)		190		(2)
Beneficial Interest in Structured LLC (1)	977		(30)		—		—		—		—		—		—

MBS:
GNMA - Residential	1,262		(29)		2,035		(352)		25		—		2,346		(254)
GNMA - Commercial	—		—		437		(163)		—		—		479		(143)
FHLMC and FNMA - Residential	245		(6)		1,426		(352)		—		—		1,623		(288)
FHLMC and FNMA - Commercial	—		—		76		(2)		—		—		81		—

Total investments in debt securities AFS (2)	$	3,665	$	(68)	$	4,343	$	(871)	$	459	$	(1)	$	4,719	$	(687)

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

(2) 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:


	September 30, 2026								December 31, 2025
	Less than 12 months				12 months or longer				Less than 12 months					12 months or longer
(in millions)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
U.S. Treasury securities	$	1,771	$	(17)	$	—	$	—		$	305	$	—		$	—	$	—

ABS and other interests in structured securities	911		(14)		35		(1)			262		(2)			5		—

MBS:
GNMA - Residential	2,043		(41)		1,637		(490)			74		—			1,858		(402)
GNMA - Commercial	2,658		(128)		3,256		(1,053)			21		(1)			3,588		(887)
FHLMC and FNMA - Residential	2,442		(90)		907		(125)			22		—			1,043		(77)
FHLMC and FNMA - Commercial	846		(31)		—		—			47		—			—		—
Total investments in debt securities HTM	$	10,671	$	(321)	$	5,835	$	(1,669)		$	731	$	(3)		$	6,494	$	(1,366)

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 September 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 September 30,				Nine months ended September 30,
(in millions)	2026		2025		2026		2025


AFS debt and other securities:
Gross realized gains	$	3	$	—	$	5	$	—
Gross realized losses	(150)		—		(150)		—

Net realized losses on AFS and other securities	$	(147)	$	—	$	(145)	$	—
Total trading securities gains / (losses)	(17)		53		—		115
Total equity securities gains / (losses)	(12)		—		16		—
Securities gains / (losses), net	$	(176)	$	53	$	(129)	$	115

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

Trading Securities

At September 30, 2026 and December 31, 2025, the Company held $17.8 billion and $15.6 billion, respectively, of trading securities. Gains and losses on trading securities are recorded within Securities gains / (losses), net on the Company's Condensed Consolidated Statements of Operations. For the three months and nine months ended September 30, 2026, the Company recognized $249 million and $721 million, respectively, of interest income on trading accounts. For the three months and nine months ended September 30, 2025, the Company recognized $210 million and $567 million, respectively, of interest income on trading accounts. At September 30, 2026 and December 31, 2025, the Company had $17.0 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 millions)	September 30, 2026		December 31, 2025
FHLB and FRB stock	$	1,067	$	508
LIHTC investments	1,886		1,034

Equity securities (1)	1,034		1,020
Interest-bearing deposits with an affiliate bank (2)	5		5

Total	$	3,992	$	2,567

(1) Includes $6 million and $4 million of retained interests in structured entities related to off-balance sheet securitizations and $97 million and $23 million of equity securities accounted for at cost less impairment as of September 30, 2026 and December 31, 2025, respectively.

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

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 millions)	Three months ended September 30, 2026		Nine months ended September 30, 2026
FHLB stock purchased at par	$	392	$	424
FHLB stock redeemed at par	182		264
FRB stock purchased at par	238		254
FRB stock redeemed at par	—		5

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.