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SOV+B Santander Holdings USA

Filed: 4 May 21, 12:00pm
0000811830sov:RetailInstallmentContractsHeldForSaleMemberus-gaap:FairValueInputsLevel3Member2020-12-31


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 March 31, 2021
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 (617) 346-7200
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 classTrading SymbolsName of each exchange on which registered
Not ApplicableNot ApplicableNot 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 April 30, 2021: 530,391,043 shares


INDEX
 Page
Condensed Consolidated Balance Sheets at March 31, 2021 and December 31, 2020
Condensed Consolidated Statements of Operations for the three-month periods ended March 31, 2021 and 2020
Condensed Consolidated Statements of Cash Flows for the three-month periods ended March 31, 2021 and 2020
 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



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,” “looking forward,” “will,” “would,” “believes,” “expects,” “hope,” “anticipates,” “estimate,” “intends,” “plans,” “assume," "goal," "seek," "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 adverse impact of COVID-19 on our business, financial condition, liquidity and results of operations;
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, actions related to COVID-19, as well as the impact of changes in and interpretations of GAAP, including adoption of the FASB's CECL credit reserving framework, 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;
SHUSA’s ability to manage credit risk may increase to the extent our loans are concentrated by loan type, industry segment, borrower type or location of the borrower or collateral;
adverse economic conditions in the United States and worldwide, including the extent of recessionary conditions in the U.S. related to COVID-19 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;
acts of God, including pandemics and other significant public health emergencies, and other natural or man-made disasters and SHUSA’s ability to deal with disruptions caused by such acts, emergencies and disasters;
inflation, interest rate, market and monetary fluctuations, including effects from the pending discontinuation of LIBOR as an interest rate benchmark, 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 protectionist trade or other related policies, including tariffs by the U.S., its global trading partners, and/or other countries, and/or trade disputes generally;
the ability of certain European member countries to continue to service their debt and the risk that a weakened European economy could negatively affect U.S.-based financial institutions, counterparties with which SHUSA does business, as well as the stability of global financial markets, including economic instability and recessionary conditions in Europe and negative economic effects related to the exit of the United Kingdom from the European Union;
adverse movements and volatility in debt and equity capital markets and adverse changes in the securities markets, including those related to the financial condition of significant issuers in SHUSA’s investment portfolio;
risks SHUSA faces implementing its growth strategy, including SHUSA's ability to grow revenue, manage expenses, attract and retain highly-skilled people and raise capital necessary to achieve its business goals and comply with regulatory requirements;
SHUSA’s ability to effectively manage its capital and liquidity, including approval of 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;
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 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;
SC's agreement with Stellantis N.V. may not result in currently anticipated levels of growth and is subject to certain conditions that could result in termination of the agreement;
changes in customer spending, investment or savings behavior;
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 laws and regulations 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, and negative public opinion, whether specific to SHUSA or regarding other industry participants or industry-wide factors, or other reputational harm;
acts of terrorism or domestic or foreign military conflicts; and
the other factors that are described in Part I, Item IA - Risk Factors of our Annual Report on Form 10-K.

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.
1



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 Condensed Consolidated Financial Statements.
ABS: Asset-backed securities
CRE: Commercial Real Estate
ACL: Allowance for credit losses
CRE & VF: Commercial Real Estate and Vehicle Finance
AFS: Available-for-sale
DCF: Discounted cash flow
ALLL: Allowance for loan and lease losses
DFA: Dodd-Frank Wall Street Reform and Consumer Protection Act
AOCI: Accumulated other comprehensive income
DOJ: Department of Justice
ARRC: Alternative Reference Rate Committee
DPD: Days past due
ASC: Accounting Standards Codification
DRIVE: Drive Auto Receivables Trust, a securitization platform
ASU: Accounting Standards Update
DTI: Debt-to-income
ATM: Automated teller machine
EAD: Exposure at default
BHC: Bank holding company
Economic Growth Act: The Economic Growth, Regulatory Relief, and Consumer Protection Act
BHCA: Bank Holding Company Act of 1956, as amended
BOLI: Bank-owned life insurance
EIP: Economic impact payments
BSI: Banco Santander International
EIR: Effective interest rate
BSPR: Banco Santander Puerto Rico
EPS: Enhanced Prudential Standards
C&I: Commercial & industrial
ETR: Effective tax rate
CARES Act: Coronavirus Aid, Relief, and Economic Security Act
Evaluation Date: March 31, 2021
CBB: Consumer and Business Banking
Exchange Act: Securities Exchange Act of 1934, as amended
CBP: Citizens Bank of Pennsylvania
FASB: Financial Accounting Standards Board
CCAR: Comprehensive Capital Analysis and Review
FBO: Foreign banking organization
CD: Certificate of deposit
FDIC: Federal Deposit Insurance Corporation
CECL: Current expected credit losses as defined by ASU 2016-13, ASU 2019-04, and ASU 2019-11, Financial Instruments - Credit Losses
Federal Reserve: Board of Governors of the Federal Reserve System
FHLB: Federal Home Loan Bank
CEF: Closed-end fund
FHLMC: Federal Home Loan Mortgage Corporation
CEO: Chief Executive Officer
FICO®: Fair Isaac Corporation credit scoring model
CET1: Common Equity Tier 1
FINRA: Financial Industrial Regulatory Authority
CEVF: Commercial equipment vehicle financing
FNMA: Federal National Mortgage Association
CFPB: Consumer Financial Protection Bureau
FRB: Federal Reserve Bank
CFO: Chief Financial Officer
FVO: Fair value option
CCAP: Chrysler Capital; trade name used in providing services under the MPLFA
GAAP: Accounting principles generally accepted in the United States of America
CIB: Corporate and Investment Banking
GBP: British pound sterling
CID: Civil investigative demand
GDP: Gross domestic product
CLTV: Combined loan-to-value
GNMA: Government National Mortgage Association
CMO: Collateralized mortgage obligation
GSIB: Global systemically important bank
CODM: Chief Operating Decision Maker
HFI: Held for investment
Company: Santander Holdings USA, Inc.
HFS: Held for sale
Covered Fund: a hedge fund or private equity fund
HPI: Housing Price Index
COVID-19: a novel strain of coronavirus, declared a pandemic by the World Health Organization in March 2020
HTM: Held to maturity
IBOR: Inter-bank offered rate
CPR: Constant prepayment rate
IDI: Insured depository institution
CRA: Community Reinvestment Act
IHC: U.S. intermediate holding company
CRA Final Rule: the final rule relating to the CRA issued by the OCC on July 20, 2020
Interim Policy: Policy issued by the Federal Reserve for the third quarter of 2020 and extended through the first quarter of 2021 prohibiting share repurchases and limiting dividends by CCAR institutions
CRA NPR: The NPR related to the CRA issued by the OCC and FDIC on December 12, 2019
2



IPO: Initial public offering
RIC: Retail installment contract
IRS: Internal Revenue Service
ROU: Right-of-use
ISDA: International Swaps and Derivatives Association, Inc.
RV: Recreational vehicle
IT: Information technology
RWA: Risk-weighted asset
LCR: Liquidity coverage ratio
S&P: Standard & Poor's
LGD: Loss given default
SAF: Santander Auto Finance
LHFI: Loans held for investment
SAM: Santander Asset Management, LLC
LHFS: Loans held for sale
Santander: Banco Santander, S.A.
LIBOR: London Interbank Offered Rate
Santander UK: Santander UK plc
LIHTC: Low income housing tax credit
SBNA: Santander Bank, National Association
LTD: Long-term debt
SBC: Santander BanCorp and its subsidiaries
LTV: Loan-to-value
SC: Santander Consumer USA Holdings Inc. and its subsidiaries
MBS: Mortgage-backed securities
SCB: Stress capital buffer
MD&A: Management's Discussion and Analysis of Financial Condition and Results of Operations
SC Common Stock: Common shares of SC
SCART: Santander Consumer Auto Receivables Trust
Moody's: Moody's Investor Service, Inc.
SCF: Statement of cash flows
MPLFA: Ten-year master private-label financing agreement with Stellantis N.V. signed in May 2013
SCRA: Servicemembers' Civil Relief Act
SDART: Santander Drive Auto Receivables Trust
MSPA: Master Securities Purchase Agreement
SDGT: Specially Designated Global Terrorist
MSR: Mortgage servicing right
SEC: Securities and Exchange Commission
MVE: Market value of equity
Securities Act: Securities Act of 1933, as amended
NCI: Non-controlling interest
SFS: Santander Financial Services, Inc.
NMDs: Non-maturity deposits
SHUSA: Santander Holdings USA, Inc.
NMTC: New market tax credits
SIS: Santander Investment Securities Inc.
NPL: Non-performing loan
SOFR: Secured overnight financing rate
NPR: Notice of proposed rule-making
SPAIN: Santander Private Auto Issuing Note
NSFR: Net stable funding ratio
SPE: Special purpose entity
NYSE: New York Stock Exchange
SRT: Santander Retail Auto Lease Trust
OCC: Office of the Comptroller of the Currency
SSLLC: Santander Securities LLC
OCI: Other comprehensive income
Stellantis N.V.: Fiat Chrysler Automobiles US LLC parent Stellantis N.V. and/or any affiliates
OIS: Overnight indexed swap
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.
OREO: Other real estate owned
Parent Company: The parent holding company of SBNA and other consolidated subsidiaries
TALF: Term asset-backed securities loan facility
PCI: purchased credit-impaired
TDR: Troubled debt restructuring
PD: Probability of default
TLAC: Total loss-absorbing capacity
REIT: Real estate investment trust
TLAC Rule: The Federal Reserve's total loss-absorbing capacity rule
Trusts: Securitization trusts
UPB: Unpaid principal balance
USD: United States dollar
VIE: Variable interest entity
VOE: Voting rights entity
YTD: Year-to-date
3



PART I. FINANCIAL INFORMATION

ITEM 1 - CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SANTANDER HOLDINGS USA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
unaudited (In thousands)
March 31, 2021December 31, 2020
ASSETS  
Cash and cash equivalents$11,467,415 $12,621,281 
Investment securities:  
AFS at fair value11,465,868 11,313,489 
HTM (fair value of $5,838,987 and $5,677,929 as of March 31, 2021 and December 31, 2020, respectively)5,781,875 5,504,685 
Other investments (includes trading securities of $37,194 and $40,435 as of March 31, 2021 and December 31, 2020, respectively)1,778,275 1,553,862 
LHFI(1) (5)
91,059,356 92,133,182 
ALLL (5)
(7,160,155)(7,338,493)
Net LHFI83,899,201 84,794,689 
LHFS (2)
568,693 2,226,196 
Premises and equipment, net (3)
798,986 787,341 
Operating lease assets, net (5)(6)
16,499,067 16,412,929 
Goodwill2,596,161 2,596,161 
Intangible assets, net346,261 357,547 
BOLI1,916,961 1,908,806 
Restricted cash (5)
5,833,213 5,303,460 
Other assets (4) (5)
3,638,364 4,052,230 
TOTAL ASSETS$146,590,340 $149,432,676 
LIABILITIES  
Accounts payables and Accrued expenses$4,965,291 $4,700,349 
Deposits and other customer accounts74,448,699 75,303,707 
Borrowings and other debt obligations (5)
43,446,033 46,359,467 
Advance payments by borrowers for taxes and insurance175,061 144,214 
Deferred tax liabilities, net357,827 182,353 
Other liabilities (5)
1,256,763 1,479,874 
TOTAL LIABILITIES124,649,674 128,169,964 
Commitments and contingencies (Note 15)00
STOCKHOLDER'S EQUITY  
Common stock and paid-in capital (no par value; 800,000,000 shares authorized; 530,391,043 shares outstanding at both March 31, 2021 and December 31, 2020)17,875,938 17,876,818 
AOCI/(loss), net of taxes(17,599)166,295 
Retained earnings2,590,812 1,843,765 
TOTAL SHUSA STOCKHOLDER'S EQUITY20,449,151 19,886,878 
NCI1,491,515 1,375,834 
TOTAL STOCKHOLDER'S EQUITY21,940,666 21,262,712 
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY$146,590,340 $149,432,676 
(1) LHFI includes $44.6 million and $50.4 million of loans recorded at fair value at March 31, 2021 and December 31, 2020, respectively.
(2) Includes $250.3 million and $265.4 million of loans recorded at the FVO at March 31, 2021 and December 31, 2020, respectively.
(3) Net of accumulated depreciation of $1.7 billion and $1.6 billion at March 31, 2021 and December 31, 2020, respectively.
(4) Includes MSRs of $86.7 million and $77.5 million at March 31, 2021 and December 31, 2020, respectively, for which the Company has elected the FVO. See Note 12 to these Condensed Consolidated Financial Statements for additional information.
(5) The Company has interests in certain Trusts that are considered VIEs for accounting purposes. At March 31, 2021 and December 31, 2020, LHFI included $22.3 billion and $22.6 billion, Operating leases assets, net included $16.5 billion and $16.4 billion, restricted cash included $2.0 billion and $1.7 billion, Other assets included $842.1 million and $791.3 million, Borrowings and other debt obligations included $29.7 billion and $31.7 billion, and Other liabilities included $55.7 million and $84.9 million of assets or liabilities that were included within VIEs, respectively. See Note 7 to these Condensed Consolidated Financial Statements for additional information.
(6) Net of accumulated depreciation of $4.6 billion and $4.8 billion at March 31, 2021 and December 31, 2020, respectively.
See accompanying unaudited notes to Condensed Consolidated Financial Statements.
4



SANTANDER HOLDINGS USA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
unaudited (In thousands)
Three-Month Period Ended March 31,
 20212020
INTEREST INCOME:
Loans$1,865,711 $1,977,748 
Interest-earning deposits5,183 32,149 
Investment securities: 
AFS26,054 70,023 
HTM25,435 23,645 
Other investments2,524 6,410 
TOTAL INTEREST INCOME1,924,907 2,109,975 
INTEREST EXPENSE:
Deposits and other customer accounts29,786 128,613 
Borrowings and other debt obligations275,789 395,386 
TOTAL INTEREST EXPENSE305,575 523,999 
NET INTEREST INCOME1,619,332 1,585,976 
Credit loss expense76,067 1,185,610 
NET INTEREST INCOME AFTER CREDIT LOSS EXPENSE1,543,265 400,366 
NON-INTEREST INCOME:
Consumer and commercial fees119,220 124,247 
Lease income772,892 771,661 
Miscellaneous income, net(1) (2)
282,510 121,972 
TOTAL FEES AND OTHER INCOME1,174,622 1,017,880 
Net gain(loss) on sale of investment securities9,874 9,279 
TOTAL NON-INTEREST INCOME1,184,496 1,027,159 
GENERAL, ADMINISTRATIVE AND OTHER EXPENSES:
Compensation and benefits465,258 489,273 
Occupancy and equipment expenses172,076 146,911 
Technology, outside service, and marketing expense134,752 134,990 
Loan expense111,580 93,921 
Lease expense560,340 590,360 
Other expenses104,423 128,347 
TOTAL GENERAL, ADMINISTRATIVE AND OTHER EXPENSES1,548,429 1,583,802 
INCOME / (LOSS) BEFORE INCOME TAX (BENEFIT)/PROVISION1,179,332 (156,277)
Income tax (benefit)/provision286,829 (33,362)
NET INCOME / (LOSS) INCLUDING NCI892,503 (122,915)
LESS: NET INCOME ATTRIBUTABLE TO NCI145,456 3,763 
NET INCOME / (LOSS) ATTRIBUTABLE TO SHUSA$747,047 $(126,678)
(1) Netted down by impact of lower of cost or market adjustments on a portion of the Company's LHFS portfolio of 0 and $62.9 million, for the three-month periods ended March 31, 2021, and 2020, respectively.
(2) Includes equity investment income/(expense), net.

See accompanying unaudited notes to Condensed Consolidated Financial Statements.
5



SANTANDER HOLDINGS USA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)
unaudited (In thousands)
Three-Month Period Ended March 31,
20212020
NET INCOME / (LOSS) INCLUDING NCI$892,503 $(122,915)
OCI, NET OF TAX
Net unrealized changes in cash flow hedge derivative financial instruments, net of tax (1)
(62,676)148,306 
Net unrealized (losses) / gains on AFS investment securities, net of tax(1)
(122,156)206,322 
Pension and post-retirement actuarial gains, net of tax938 560 
TOTAL OCI / (LOSS), NET OF TAX(183,894)355,188 
COMPREHENSIVE INCOME708,609 232,273 
NET INCOME ATTRIBUTABLE TO NCI145,456 3,763 
COMPREHENSIVE INCOME ATTRIBUTABLE TO SHUSA$563,153 $228,510 

(1) Excludes $1.8 million, and $(10.1) million of OCI/(loss) attributable to NCI for the three-month periods ended March 31, 2021, and 2020, respectively.




See accompanying unaudited notes to Condensed Consolidated Financial Statements.

6



SANTANDER HOLDINGS USA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDER’S EQUITY
unaudited (In thousands)

Common Shares OutstandingPreferred StockCommon Stock and Paid-in CapitalAccumulated Other Comprehensive (Loss)/IncomeRetained EarningsNoncontrolling InterestTotal Stockholder's Equity
Balance, January 1, 2020530,391 17,954,441 (88,207)4,155,226 2,377,370 24,398,830 
Cumulative-effect adjustment upon adoption of new accounting standards (Note 1)— — — — (1,346,246)(439,084)(1,785,330)
Comprehensive income/(loss) attributable to SHUSA— — — 355,188 (126,678)— 228,510 
Other comprehensive income/(loss) attributable to NCI— — — — — (10,133)(10,133)
Net income attributable to NCI— — — — — 3,763 3,763 
Impact of SC stock option activity— — — — — 2,393 2,393 
Dividends declared and paid on common stock— — — — (125,000)— (125,000)
Dividends paid to NCI— — — — — (20,594)(20,594)
Stock repurchase attributable to NCI— — (83,999)— — (384,467)(468,466)
Balance, March 31, 2020530,391 $$17,870,442 $266,981 $2,557,302 $1,529,248 $22,223,973 
Balance, January 1, 2021530,391 17,876,818 166,295 1,843,765 1,375,834 21,262,712 
Comprehensive income/(loss) attributable to SHUSA— — — (183,894)747,047 — 563,153 
Other comprehensive income/(loss) attributable to NCI— — — — — 1,792 1,792 
Net income attributable to NCI— — — — — 145,456 145,456 
Impact of SC stock option activity— — — — — 3,621 3,621 
Dividends paid to NCI— — — — — (26,594)(26,594)
Stock repurchase attributable to NCI— — (880)— — (8,594)(9,474)
Balance, March 31, 2021530,391 $$17,875,938 $(17,599)$2,590,812 $1,491,515 $21,940,666 
See accompanying unaudited notes to Condensed Consolidated Financial Statements.
7



SANTANDER HOLDINGS USA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) (in thousands)




Three-Month Period Ended March 31,
 20212020
CASH FLOWS FROM OPERATING ACTIVITIES:  
Net income/(loss) including NCI$892,503 $(122,915)
Adjustments to reconcile net income to net cash provided by operating activities: 
Credit loss expense76,067 1,185,610 
Deferred tax expense/(benefit)253,814 (72,957)
Depreciation, amortization and accretion643,477 699,060 
Net (gain)/loss on sale of loans(4,626)59,527 
Net gain on sale of investment securities(9,874)(9,279)
Loss on debt extinguishment0 136 
Net (gain)/loss on real estate owned, premises and equipment, and other(470)1,533 
Stock-based compensation0 13 
Equity loss on equity method investments15,419 2,776 
Originations of LHFS(1,584,472)(270,882)
Proceeds from sales of and collections on LHFS (1)
1,835,448 441,054 
Net change in: 
Revolving personal loans34,246 19,012 
Other assets, BOLI and trading securities478,807 (1,071,554)
Other liabilities(218,207)1,581,586 
NET CASH PROVIDED BY OPERATING ACTIVITIES2,412,132 2,442,720 
CASH FLOWS FROM INVESTING ACTIVITIES: 
Proceeds from sales of AFS investment securities507,090 922,101 
Proceeds from prepayments and maturities of AFS investment securities1,408,899 2,937,260 
Purchases of AFS investment securities(2,216,074)(1,539,266)
Proceeds from prepayments and maturities of HTM investment securities553,091 126,127 
Purchases of HTM investment securities(677,416)(348,375)
Proceeds from sales of other investments32,360 47,435 
Proceeds from maturities of other investments0 45 
Purchases of other investments(254,697)(115,738)
Proceeds from sales of LHFI (2)
1,886,907 37,981 
Distributions from equity method investments1,058 2,254 
Contributions to equity method and other investments(29,976)(33,071)
Proceeds from settlements of BOLI policies7,390 4,388 
Purchases of LHFI(254,722)(77,136)
Net change in loans other than purchases and sales531,276 (890,567)
Purchases and originations of operating leases(2,172,167)(2,030,936)
Proceeds from the sale and termination of operating leases1,498,000 948,585 
Manufacturer incentives(2,542)176,051 
Proceeds from sales of real estate owned and premises and equipment6,828 11,805 
Purchases of premises and equipment(76,240)(44,314)
NET CASH PROVIDED BY INVESTING ACTIVITIES749,065 134,629 
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in deposits and other customer accounts(855,008)1,344,797 
Net change in short-term borrowings(195,593)907,851 
Net proceeds from long-term borrowings6,881,403 11,874,959 
Repayments of long-term borrowings(9,311,341)(11,357,598)
Proceeds from FHLB advances (with terms greater than 3 months)0 2,500,000 
Repayments of FHLB advances (with terms greater than 3 months)(300,000)(1,600,000)
Net change in advance payments by borrowers for taxes and insurance30,847 40,251 
Dividends paid on common stock0 (125,000)
Dividends paid to NCI(26,594)(20,594)
Stock repurchase attributable to NCI(9,474)(468,466)
Proceeds from the issuance of common stock450 396 
NET CASH (USED IN)/PROVIDED BY FINANCING ACTIVITIES(3,785,310)3,096,596 
NET (DECREASE)/INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH(624,113)5,673,945 
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD17,924,741 11,526,252 
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD (3)
$17,300,628 $17,200,197 
NON-CASH TRANSACTIONS
Loans transferred from/(to) LHFI (from)/to LHFS, net27,184 (47,414)
Unsettled purchases of investment securities239,531 235,272 

(1) Included in this balance is sales proceeds from Bluestem portfolio sale of $608 million for loans originated as held for sale for the three-month period ended March 31, 2021.
(2) Included in this balance is sales proceeds from Bluestem portfolio sale of $188 million for loans originated as held for investment for the three-month period ended March 31, 2021.
(3) The three-month periods ended March 31, 2021, and 2020 include cash and cash equivalents balances of $11.5 billion, and $11.9 billion, respectively, and restricted cash balances of $5.8 billion, and $5.3 billion, respectively.

See accompanying unaudited notes to Condensed Consolidated Financial Statements.
8




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; SSLLC, a broker-dealer headquartered in Boston, Massachusetts; BSI, 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; SIS, a registered broker-dealer headquartered in New York providing services in investment banking, institutional sales, and trading and offering research reports of Latin American and European equity and fixed income securities; SFS, a consumer credit institution headquartered in Puerto Rico; and several other subsidiaries. SHUSA is headquartered in Boston and SBNA's home office is in Wilmington, Delaware. SSLLC, SIS, and another SHUSA subsidiary, SAM, are registered investment advisers 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.

As of March 31, 2021, SC was owned approximately 80.3% by SHUSA and 19.7% by other shareholders. SC Common Stock is listed on the NYSE under the trading symbol "SC."

Acquisitions and Divestitures

On September 1, 2020 the Company sold its investment in SBC, a financial holding company headquartered in Puerto Rico that offered a full range of financial services through its wholly-owned banking subsidiary, BSPR.

Subsequent to March 31, 2021, the Company sold the majority of SFS' commercial and consumer loan and REO portfolios to third parties at their approximate fair values. At March 31, 2021, the loan portfolios were classified as HFS with a carrying amount of $160 million and the REO portfolio had a carrying amount of $19.9 million.

Acquisition of Credit Agricole Miami Wealth Management Business

In March 2021, BSI announced that it has reached an agreement with Crédit Agricole Corporate and Investment Bank, S.A.to take over management of up to $4.3 billion in global wealth management client assets and liabilities. The transaction is subject to satisfaction of customary closing conditions and is expected to close by mid-2021. The Company will record assets acquired (including intangibles) and liabilities assumed at fair value. Intangible assets will be amortized over the estimated useful life.

Core Business

SBNA’s primary business consists of attracting deposits and providing other retail banking services through its network of retail branches, and originating small business loans, middle market, large and global commercial loans, multifamily loans, residential mortgage loans, home equity lines of credit, and auto and other consumer loans throughout the Mid-Atlantic and Northeastern areas of the United States, principally located in Massachusetts, New Hampshire, Connecticut, Rhode Island, New York, New Jersey, Pennsylvania, and Delaware. SBNA uses its deposits, as well as other financing sources, to fund its loan and investment portfolios.

SC is a specialized consumer finance company focused on vehicle finance and third-party servicing and delivering service to dealers and customers across the full credit spectrum. SC's primary business is the indirect origination and servicing of RICs and leases, principally through manufacturer-franchised dealers in connection with their sale of new and used vehicles to retail consumers. Additionally, SC sells consumer RICs through flow agreements and, when market conditions are favorable, it accesses the ABS market through securitizations of consumer RICs. SAF is SC’s primary vehicle financing brand, and is available as a finance option for automotive dealers across the United States.

Since May 2013, under the MPLFA with Stellantis N.V., SC has operated as Stellantis N.V.'s preferred provider for consumer loans, leases, and dealer loans and provides services to Stellantis N.V. customers and dealers under the CCAP brand. 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. In 2019, SC entered into an amendment to the MPLFA which modified that agreement to, among other things, adjust certain performance metrics, exclusivity commitments and payment provisions.

9



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

SC also originates vehicle loans through a web-based direct lending program, purchases vehicle RICs from other lenders, and services automobile and recreational and marine vehicle portfolios for other lenders. Additionally, SC has other relationships through which it provides other consumer finance products.

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.

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 Flow for the periods indicated, and contain adequate disclosure to make the information presented not misleading. Results of operations for the periods presented herein are not necessarily indicative of results of operations for the entire year. These financial statements should be read in conjunction with the Annual Report on Form 10-K for the year ended December 31, 2020.

Certain prior-year amounts have been reclassified to conform to the current year 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, fair value measurements, expected end-of-term lease residual values, goodwill, and income taxes. These estimates, although based on actual historical trends and modeling, may potentially show significant variances over time.

Accounting Policies

There have been no changes in the Company's accounting policies from those disclosed in the 2020 Annual Report on Form 10-K.

Subsequent Events

The Company evaluated events from the date of these Condensed Consolidated Financial Statements on March 31, 2021 through the issuance of these Condensed Consolidated Financial Statements, and has determined that there have been no material events that would require recognition in its Condensed Consolidated Financial Statements or disclosure in the Notes to the Condensed Consolidated Financial Statements for the three-month period ended March 31, 2021 except as noted above.

10



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:
 March 31, 2021December 31, 2020
(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$148,533 $2,155 $0 $150,688 $168,075 $2,578 $$170,653 
Corporate debt securities225,319 257 (1)225,575 155,610 114 (9)155,715 
ABS158,661 373 (1,236)157,798 109,888 686 (1,236)109,338 
MBS:        
GNMA - Residential3,505,094 56,939 (5,287)3,556,746 3,467,611 69,864 (1,350)3,536,125 
GNMA - Commercial1,910,367 4,646 (31,043)1,883,970 1,706,648 26,949 (235)1,733,362 
FHLMC and FNMA - Residential5,444,693 41,560 (62,168)5,424,085 5,464,821 77,813 (4,351)5,538,283 
FHLMC and FNMA - Commercial62,751 4,256 (1)67,006 63,732 6,283 (2)70,013 
Total investments in debt securities AFS$11,455,418 $110,186 $(99,736)$11,465,868 $11,136,385 $184,287 $(7,183)$11,313,489 

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:
 March 31, 2021December 31, 2020
(in thousands)Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Loss
Fair
Value
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Loss
Fair
Value
ABS$129,484 $697 $0 $130,181 $44,841 $765 $$45,606 
MBS:   
GNMA - Residential2,075,342 32,953 (11,670)2,096,625 1,966,247 51,417 (1,819)2,015,845 
GNMA - Commercial3,577,049 64,604 (29,472)3,612,181 3,493,597 124,429 (1,548)3,616,478 
Total investments in debt securities HTM$5,781,875 $98,254 $(41,142)$5,838,987 $5,504,685 $176,611 $(3,367)$5,677,929 

As of March 31, 2021 and December 31, 2020, the Company had investment securities with an estimated carrying value of $3.7 billion and $3.5 billion, respectively, pledged as collateral, which were comprised of the following: $710.2 million and $754.1 million, respectively, were pledged as collateral for the Company's borrowing capacity with the FRB; $2.5 billion and $2.2 billion, respectively, were pledged to secure public fund deposits; $97.3 million and $103.4 million, respectively, were pledged to various independent parties to secure repurchase agreements, support hedging relationships, and for recourse on loan sales; and $388.2 million and $388.0 million, respectively, were pledged to secure the Company's customer overnight sweep product.

At March 31, 2021 and December 31, 2020, the Company had $32.2 million and $34.6 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 March 31, 2021 or December 31, 2020.

There were no transfers of securities between AFS and HTM during the periods ended March 31, 2021 or December 31, 2020.

11



NOTE 2. INVESTMENT SECURITIES (continued)

Contractual Maturity of Investments in Debt Securities

Contractual maturities of the Company’s investments in debt securities AFS at March 31, 2021 were as follows:
(in thousands)Amortized CostFair Value
Due within one year$270,161 $271,125 
Due after 1 year but within 5 years205,363 209,504 
Due after 5 years but within 10 years275,554 286,885 
Due after 10 years10,704,340 10,698,354 
Total$11,455,418 $11,465,868 

Contractual maturities of the Company’s investments in debt securities HTM at March 31, 2021 were as follows:
(in thousands)Amortized CostFair Value
Due within one year$3,134 $3,134 
Due after 1 year but within 5 years53,703 53,967 
Due after 5 years but within 10 years72,647 73,080 
Due after 10 years5,652,391 5,708,806 
Total$5,781,875 $5,838,987 
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 as of March 31, 2021 and December 31, 2020 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:
 March 31, 2021December 31, 2020
 Less than 12 months12 months or longerLess than 12 months12 months or longer
(in thousands)Fair ValueUnrealized
Losses
Fair ValueUnrealized
Losses
Fair ValueUnrealized
Losses
Fair ValueUnrealized
Losses
Corporate debt securities$37,438 $(1)$0 $0 $98,800 $(9)$$
ABS54,465 (61)47,786 (1,175)49,033 (1,236)
MBS:        
GNMA - Residential769,379 (5,287)0 0 347,821 (1,334)8,875 (16)
GNMA - Commercial1,734,714 (31,043)0 0 103,891 (235)
FHLMC and FNMA - Residential3,408,385 (61,983)21,532 (185)1,040,474 (4,165)22,749 (186)
FHLMC and FNMA - Commercial0 0 417 (1)420 (2)
Total investments in debt securities AFS$6,004,381 $(98,375)$69,735 $(1,361)$1,590,986 $(5,743)$81,077 $(1,440)


12



NOTE 2. INVESTMENT SECURITIES (continued)

The following table presents the aggregate amount of unrealized losses as of March 31, 2021 and December 31, 2020 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:
March 31, 2021December 31, 2020
Less than 12 months12 months or longerLess than 12 months12 months or longer
(in thousands)Fair ValueUnrealized
Losses
Fair ValueUnrealized
Losses
Fair ValueUnrealized
Losses
Fair ValueUnrealized
Losses
MBS:
GNMA - Residential$979,040 $(11,670)$0 $0 $212,471 $(1,819)$$
GNMA - Commercial1,653,806 (29,472)0 0 155,263 (1,548)
Total investments in debt securities HTM$2,632,846 $(41,142)$0 $0 $367,734 $(3,367)$$

Allowance for credit-related losses on AFS securities

The Company did 0t record an allowance for credit-related losses on AFS and HTM securities at March 31, 2021 or December 31, 2020. As discussed in Note 1 of the Company's 2020 Annual Report on Form 10-K, securities for which management has an expectation that nonpayment of the amortized cost basis is zero do not have a reserve.

For securities that do not qualify for the zero credit loss expectation exception, management has concluded that the unrealized losses are not credit-related since (1) they are not related to the underlying credit quality of the issuers, (2) the entire contractual principal and interest due on these securities is currently expected to be recoverable, (3) the Company does not intend to sell these investments at a loss and (4) it is more likely than not that the Company will not be required to sell the investments before recovery of the amortized cost basis, which for the Company's debt securities may be at maturity.

Gains (Losses) and Proceeds on Sales of Investments in Debt Securities

Proceeds from sales of investments in debt securities and the realized gross gains and losses from those sales were as follows:
Three-Month Period Ended March 31,
(in thousands)20212020
Proceeds from the sales of AFS securities$507,090 $922,101 
Gross realized gains$10,072 $10,755 
Gross realized losses(198)(1,476)
    Net realized gains/(losses) (1)
$9,874 $9,279 
(1)    Includes net realized gain/(losses) on trading securities of $(0.2) million, and $(1.4) million for the three-month periods ended March 31, 2021, and 2020, respectively.

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

Other Investments

Other investments consisted of the following as of:
(in thousands)March 31, 2021December 31, 2020
FHLB of Pittsburgh and FRB stock$423,049 $435,330 
LIHTC investments301,295 313,603 
Equity securities not held for trading (1)
16,737 14,494 
Interest-bearing deposits with an affiliate bank1,000,000 750,000 
Trading securities37,194 40,435 
Total$1,778,275 $1,553,862 
(1)    Includes $3.7 million and $1.4 million of equity certificates related to an off-balance sheet securitization as of March 31, 2021 and December 31, 2020, respectively.


13



NOTE 2. INVESTMENT SECURITIES (continued)

Other investments primarily include the Company's investment in the stock of the FHLB of Pittsburgh and the FRB. These stocks do not have readily determinable fair values because their ownership is restricted and there is no market for their sale. The stocks can be sold back only at their par value of $100 per share, and FHLB stock can be sold back only to the FHLB or to another member institution. Accordingly, these stocks are carried at cost. During the three-month period ended March 31, 2021, the Company purchased $2.3 million of FHLB stock at par, and redeemed $13.9 million of FHLB stock at par. The Company redeemed $0.7 million of FRB stock at par during the three-month period ended March 31, 2021. The Company did 0t purchase any FRB stock during the three-month period ended March 31, 2021. There was 0 gain or loss associated with these redemptions.

The Company's LIHTC investments are accounted for using the proportional amortization method. Equity securities are measured at fair value as of March 31, 2021, with changes in fair value recognized in net income, and consist primarily of CRA mutual fund investments.

Interest-bearing deposits include deposits maturing in more than 90 days with Santander.

With the exception of equity and trading securities, which are measured at fair value, the Company evaluates these other investments for impairment based on the ultimate recoverability of the carrying value, rather than by recognizing temporary declines in value. The Company held an immaterial amount of equity securities without readily determinable fair values at the reporting date.


NOTE 3. LOANS AND ALLOWANCE FOR CREDIT LOSSES

Overall

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 loans totaled $49.8 billion at March 31, 2021 and $52.0 billion at December 31, 2020.

Loans that the Company intends to sell are classified as LHFS. The LHFS portfolio balance at March 31, 2021 was $568.7 million, compared to $2.2 billion at December 31, 2020. For a discussion on the valuation of LHFS at fair value, see Note 12 to these Condensed Consolidated Financial Statements. LHFS in the residential mortgage portfolio that were originated with the intent to sell were $250.3 million as of March 31, 2021 and are reported at either estimated fair value (if the FVO is elected) or the lower of cost or fair value.

Interest on loans is credited to income as it is earned. Loan origination fees and certain direct loan origination costs are deferred and recognized as adjustments to interest income in the Condensed Consolidated Statements of Operations over the contractual life of the loan utilizing the interest method. Loan origination costs and fees and premiums and discounts on RICs are deferred and recognized in interest income over their estimated lives using estimated prepayment speeds, which are updated on a monthly basis. At March 31, 2021 and December 31, 2020, accrued interest receivable on the Company's loans was $512.4 million and $589.2 million, respectively.

During the first quarter of 2021, SBNA approved and executed purchases of performing personal unsecured loans with a UPB of approximately $200.0 million.

Also during the first quarter of 2021, SC sold RICs with a UPB of approximately $2.4 billion to third-parties in three separate transactions. Two of these transactions were accounted for as off-balance sheet securitizations.

Sale of the Personal Lending Portfolio

During the first quarter, SC completed the sale of $1.3 billion in UPB of its Bluestem personal lending portfolio to a third party. In addition, SC executed a forward flow sale agreement with a third party to purchase all personal lending receivables that SC purchases from Bluestem through the term of the agreement with Bluestem. Prior to the sale, these loans were classified as LHFS.
14



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

Loan and Lease Portfolio Composition

The following presents the composition of gross loans and leases HFI by portfolio and by rate type:
 March 31, 2021December 31, 2020
(dollars in thousands)AmountPercentAmountPercent
Commercial LHFI:    
CRE loans$7,439,574 8.2 %$7,327,853 8.0 %
C&I loans16,264,348 17.9 %16,537,899 17.9 %
Multifamily loans8,133,449 8.9 %8,367,147 9.1 %
Other commercial(2)
7,465,082 8.2 %7,455,504 8.1 %
Total commercial LHFI39,302,453 43.2 %39,688,403 43.1 %
Consumer loans secured by real estate:    
Residential mortgages6,162,035 6.8 %6,590,168 7.2 %
Home equity loans and lines of credit3,912,029 4.3 %4,108,505 4.5 %
Total consumer loans secured by real estate10,074,064 11.1 %10,698,673 11.7 %
Consumer loans not secured by real estate:    
RICs and auto loans40,516,010 44.4 %40,698,642 44.1 %
Personal unsecured loans965,651 1.1 %824,430 0.9 %
Other consumer(3)
201,178 0.2 %223,034 0.2 %
Total consumer loans51,756,903 56.8 %52,444,779 56.9 %
Total LHFI(1)
$91,059,356 100.0 %$92,133,182 100.0 %
Total LHFI:    
Fixed rate$63,578,039 69.8 %$64,036,154 69.5 %
Variable rate27,481,317 30.2 %28,097,028 30.5 %
Total LHFI(1)
$91,059,356 100.0 %$92,133,182 100.0 %
(1)Total LHFI includes deferred loan fees, net of deferred origination costs and unamortized purchase premiums, net of discounts as well as purchase accounting adjustments. These items resulted in a net increase in the loan balances of $3.1 billion and $3.1 billion as of March 31, 2021 and December 31, 2020, respectively.
(2)Other commercial includes CEVF leveraged leases and loans.
(3)Other consumer primarily includes RV and marine loans.

Portfolio segments and classes

The Company discloses information about the credit quality of its financing receivables 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 segments.

The commercial 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. The remainder of the portfolio primarily represents the 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 as well as indirect auto loans.

During the three-month periods ended March 31, 2021 and 2020, SC originated $3.7 billion and $2.6 billion, respectively, in CCAP loans (including through the SBNA originations program), which represented 57% and 53%, respectively, of the UPB of SC's total RIC originations (including the SBNA originations program).
15



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 for the three-month periods ended March 31, 2021 and 2020 was as follows:
Three-Month Period Ended March 31, 2021
(in thousands)CommercialConsumerTotal
ALLL, beginning of period$752,196 $6,586,297 $7,338,493 
Credit loss expense / (release of) credit loss expense) on loans(21,846)119,979 98,133 
Charge-offs(39,632)(827,386)(867,018)
Recoveries25,629 564,918 590,547 
Charge-offs, net of recoveries(14,003)(262,468)(276,471)
ALLL, end of period$716,347 $6,443,808 $7,160,155 
Reserve for unfunded lending commitments, beginning of period$119,129 $27,326 $146,455 
Credit loss expense on unfunded lending commitments(18,812)(3,254)(22,066)
Reserve for unfunded lending commitments, end of period100,317 24,072 124,389 
Total ACL, end of period$816,664 $6,467,880 $7,284,544 

Three-Month Period Ended March 31, 2020
(in thousands)CommercialConsumerUnallocatedTotal
ALLL, beginning of period$399,829 $3,199,612 $46,748 $3,646,189 
Day 1: Adjustment to allowance for adoption of ASU 2016-13198,920 2,383,710 (46,748)2,535,882 
Credit loss expense on loans (1)
122,743 995,164 1,117,907 
Charge-offs(53,463)(1,244,712)(1,298,175)
Recoveries10,676 611,256 621,932 
Charge-offs, net of recoveries(42,787)(633,456)(676,243)
ALLL, end of period$678,705 $5,945,030 $$6,623,735 
Reserve for unfunded lending commitments, beginning of period$85,934 $5,892 $$91,826 
Day 1: Adjustment to allowance for adoption of ASU 2016-1310,081 330 10,411 
Credit loss expense on unfunded lending commitments (1)
33,725 33,978 67,703 
Reserve for unfunded lending commitments, end of period129,740 40,200 169,940 
Total ACL, end of period$808,445 $5,985,230 $$6,793,675 
(1) Includes a correction for the classification of ACL balances and certain activity between Commercial and Consumer from January 1, 2020 through March 31,
2020. This resulted in a cumulative $243.6 million reclassification required at March 31, 2020 increasing the Consumer and decreasing the Commercial ACL.
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.


16



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

The Company estimates CECL based on prospective information as well as account-level models based on historical data. Unemployment, HPI, GDP, 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). To estimate the loss in the event of a default (the LGD), the models use unemployment, HPI, CRE and used vehicle indices, along with loan level characteristics as key inputs.

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 utilizes qualitative factors to capture any additional risks that may not be captured in either the economic forecasts or in the historical data, including consideration of the portfolio metrics and collateral value.

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 Company's allowance for loan losses decreased by $178.3 million for the quarter ended March 31, 2021, primarily due to volume and an improved macroeconomic outlook.

Non-accrual loans by Class of Financing Receivable

The amortized cost basis of financial instruments that are either non-accrual with related expected credit loss or nonaccrual without related expected credit loss disaggregated by class of financing receivables and other non-performing assets is as follows:
Non-accrual loans as of:Non-accrual loans with no allowanceInterest Income recognized on nonaccrual loans
(in thousands)March 31, 2021December 31, 2020March 31, 2021March 31, 2021
Non-accrual loans:  
Commercial:  
CRE$109,405 $106,751 $75,521 $0 
C&I106,968 107,053 50,145 199 
Multifamily72,511 72,392 63,660 0 
Other commercial25,299 20,019 279 0 
Total commercial loans314,183 306,215 189,605 199 
Consumer:  
Residential mortgages175,072 160,172 88,118 0 
Home equity loans and lines of credit88,047 91,606 32,186 0 
RICs and auto loans844,998 1,174,317 175,064 25,973 
Personal unsecured loans0 0 0 
Other consumer5,592 6,325 51 0 
Total consumer loans1,113,709 1,432,420 295,419 25,973 
Total non-accrual loans1,427,892 1,738,635 485,024 26,172 
OREO24,909 29,799   
Repossessed vehicles233,207 204,653   
Foreclosed and other repossessed assets5,824 3,247   
Total OREO and other repossessed assets263,940 237,699   
Total non-performing assets$1,691,832 $1,976,334 $485,024 $26,172 

17



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 age of amortized cost in past due loans and accruing loans 90 days or greater past due disaggregated by class of financing receivables is summarized as follows:
As of:
March 31, 2021
(in thousands)30-89
Days Past
Due
90
Days or Greater
Total
Past Due
CurrentTotal
Financing
Receivables
Amortized Cost
> 90 Days and
Accruing
Commercial:      
CRE(4)
$15,720 $43,896 $59,616 $7,405,039 $7,464,655 $
C&I(1)
31,804 36,137 67,941 16,355,142 16,423,083 
Multifamily19,074 39,802 58,876 8,074,573 8,133,449 
Other commercial(3)
73,793 5,254 79,047 7,386,097 7,465,144 48 
Consumer:      
Residential mortgages(2)
91,490 120,569 212,059 6,334,791 6,546,850 
Home equity loans and lines of credit21,611 66,556 88,167 3,823,862 3,912,029 
RICs and auto loans2,117,013 188,734 2,305,747 38,210,263 40,516,010 
Personal unsecured loans8,779 6,205 14,984 950,667 965,651 2,525 
Other consumer4,756 984 5,740 195,438 201,178 
Total$2,384,040 $508,137 $2,892,177 $88,735,872 $91,628,049 $2,573 
(1) C&I loans includes $158.7 million of LHFS at March 31, 2021.
(2) Residential mortgages includes $384.8 million of LHFS at March 31, 2021.
(3) Other Commercial loans includes $0.1 million of LHFS at March 31, 2021.
(4) CRE loans include $25.1 million of LHFS at March 31, 2021.
As of
December 31, 2020
(in thousands)30-89
Days Past
Due
90
Days or Greater
Total
Past Due
CurrentTotal
Financing
Receivables
Recorded
Investment
> 90 Days and Accruing
Commercial:      
CRE$41,320 $70,304 $111,624 $7,244,247 $7,355,871 $
C&I (1)
59,759 45,883 105,642 16,654,606 16,760,248 
Multifamily47,116 66,664 113,780 8,257,122 8,370,902 
Other commercial80,993 9,214 90,207 7,365,629 7,455,836 56 
Consumer:  
Residential mortgages(2)
209,274 111,698 320,972 6,673,411 6,994,383 
Home equity loans and lines of credit31,488 72,197 103,685 4,004,820 4,108,505 
RICs and auto loans2,944,376 284,985 3,229,361 38,143,329 41,372,690 
Personal unsecured loans(3)
56,041 56,582 112,623 1,605,286 1,717,909 52,807 
Other consumer5,358 1,688 7,046 215,988 223,034 
Total$3,475,725 $719,215 $4,194,940 $90,164,438 $94,359,378 $52,863 
(1)C&I loans included $222.3 million of LHFS at December 31, 2020.
(2) Residential mortgages included $404.2 million of LHFS at December 31, 2020.
(3) Personal unsecured loans included $893.5 million of LHFS at December 31, 2020.
(4) RICs and auto loans includes $674.0 million of LHFS at December 31, 2020.
(5) Multifamily loans includes $3.8 million of LHFS at December 31, 2020.
(6) Other Commercial loans includes $0.3 million of LHFS at December 31, 2020.
(7) CRE loans include $28.0 million of LHFS at December 31, 2020.

18



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.
19



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:
March 31, 2021
Commercial Loan Portfolio (1)
(dollars in thousands)Amortized Cost by Origination Year
Regulatory Rating:
2021(3)
2020201920182017PriorTotal
CRE
Pass$103,522 $806,065 $1,479,764 $1,516,046 $692,812 $2,005,757 $6,603,966 
Special mention30,361 68,072 78,087 149,729 99,131 425,380 
Substandard11,282 34,473 107,217 33,962 248,375 435,309 
Doubtful
N/A
Total CRE$103,522 $847,708 $1,582,309 $1,701,350 $876,503 $2,353,263 $7,464,655 
C&I
Pass$1,313,051 $4,282,186 $3,075,735 $2,038,193 $811,732 $2,770,312 $14,291,209 
Special mention8,787 15,517 164,262 154,776 33,270 301,234 677,846 
Substandard13,504 52,311 15,722 158,401 56,482 249,089 545,509 
Doubtful1,535 2,387 1,367 5,289 
N/A(2)
145,332 383,326 274,674 67,527 13,081 19,290 903,230 
Total C&I$1,482,209 $4,735,727 $3,530,393 $2,418,897 $915,932 $3,339,925 $16,423,083 
Multifamily
Pass$244,242 $807,657 $1,874,793 $1,123,727 $1,008,606 $1,684,412 $6,743,437 
Special mention46,000 25,105 136,006 164,125 76,812 448,048 
Substandard26,355 207,070 271,100 222,205 215,234 941,964 
Doubtful
N/A
Total Multifamily$244,242 $880,012 $2,106,968 $1,530,833 $1,394,936 $1,976,458 $8,133,449 
Remaining commercial
Pass$1,168,060 $2,808,636 $1,241,906 $679,578 $379,362 $1,141,550 $7,419,092 
Special mention50 1,999 4,332 87 6,900 13,368 
Substandard2,633 6,714 6,480 3,776 12,733 32,336 
Doubtful261 87 348 
N/A
Total Remaining commercial$1,168,321 $2,811,319 $1,250,619 $690,477 $383,225 $1,161,183 $7,465,144 
Total Commercial loans
Pass$2,828,875 $8,704,544 $7,672,198 $5,357,544 $2,892,512 $7,602,031 $35,057,704 
Special mention8,787 91,928 259,438 373,201 347,211 484,077 1,564,642 
Substandard13,504 92,581 263,979 543,198 316,425 725,431 1,955,118 
Doubtful1,796 2,387 0 87 1,367 0 5,637 
N/A(2)
145,332 383,326 274,674 67,527 13,081 19,290 903,230 
Total commercial loans$2,998,294 $9,274,766 $8,470,289 $6,341,557 $3,570,596 $8,830,829 $39,486,331 
(1)Includes $183.9 million of LHFS at March 31, 2021.
(2)Consists of loans that have not been assigned a regulatory rating.
(3)Loans originated during the year-to-date ended March 31, 2021.




20



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

December 31, 2020
Commercial Loan Portfolio (1)
(dollars in thousands)Amortized Cost by Origination Year
Regulatory Rating:
2020(3)
2019201820172016PriorTotal
CRE
Pass$722,210 $1,424,392 $1,656,560 $816,607 $542,979 $1,536,812 $6,699,560 
Special mention28,876 15,480 81,167 43,368 79,555 83,751 332,197 
Substandard8,259 16,609 29,761 33,833 45,936 189,716 324,114 
Doubtful
N/A
Total CRE$759,345 $1,456,481 $1,767,488 $893,808 $668,470 $1,810,279 $7,355,871 
C&I
Pass$4,661,409 $3,365,828 $2,798,209 $868,373 $585,083 $2,305,305 $14,584,207 
Special mention11,000 136,413 134,388 49,601 99,042 254,102 684,546 
Substandard60,034 15,309 173,900 59,814 84,642 213,908 607,607 
Doubtful3,153 145 80 1,616 1,282 11,226 17,502 
N/A(2)411,319 294,652 75,091 15,101 15,388 54,835 866,386 
Total C&I$5,146,915 $3,812,347 $3,181,668 $994,505 $785,437 $2,839,376 $16,760,248 
Multifamily
Pass$880,199 $1,938,271 $1,361,178 $1,198,819 $503,267 $1,365,066 $7,246,800 
Special mention39,433 147,872 110,906 31,348 59,072 388,631 
Substandard5,355 104,945 203,437 148,251 49,445 224,038 735,471 
Doubtful
N/A
Total Multifamily$885,554 $2,082,649 $1,712,487 $1,457,976 $584,060 $1,648,176 $8,370,902 
Remaining commercial
Pass$3,530,625 $1,416,704 $766,454 $443,244 $199,297 $1,038,584 $7,394,908 
Special mention53 11,096 11,271 105 83 8,102 30,710 
Substandard2,115 3,974 4,181 4,246 5,983 9,160 29,659 
Doubtful351 99 101 559 
N/A
Total Remaining commercial$3,533,144 $1,431,774 $782,005 $447,595 $205,464 $1,055,854 $7,455,836 
Total Commercial loans
Pass$9,794,443 $8,145,195 $6,582,401 $3,327,043 $1,830,626 $6,245,767 $35,925,475 
Special mention39,929 202,422 374,698 203,980 210,028 405,027 1,436,084 
Substandard75,763 140,837 411,279 246,144 186,006 636,822 1,696,851 
Doubtful3,504 145 179 1,616 1,383 11,234 18,061 
N/A(2)411,319 294,652 75,091 15,101 15,388 54,835 866,386 
Total commercial loans$10,324,958 $8,783,251 $7,443,648 $3,793,884 $2,243,431 $7,353,685 $39,942,857 
(1)Includes $254.5 million of LHFS at December 31, 2020.
(2)Consists of loans that have not been assigned a regulatory rating.
(3)Loans originated during the year ended December 31, 2020.

21



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:
As of March 31, 2021RICs and auto loans
(dollars in thousands)
Amortized Cost by Origination Year(3)
Credit Score Range
2021(2)
2020201920182017PriorTotalPercent
No FICO(1)
$421,665 $1,177,775 $720,807 $389,629 $397,597 $278,547 $3,386,020 8.4 %
<6001,906,288 5,571,043 3,909,143 2,332,641 969,295 1,054,874 15,743,284 38.8 %
600-639913,689 2,445,588 1,656,253 863,647 282,896 309,232 6,471,305 16.0 %
>=6402,758,390 6,234,481 4,243,550 1,201,264 222,718 254,998 14,915,401 36.8 %
Total$6,000,032 $15,428,887 $10,529,753 $4,787,181 $1,872,506 $1,897,651 $40,516,010 100.0 %
(1)    Consists primarily of loans for which credit scores are not available or are not considered in the ALLL model.
(2)     Loans originated during the year-to-date ended March 31, 2021.
(3)    Excludes LHFS.

As of December 31, 2020RICs and auto loans
(dollars in thousands)
Amortized Cost by Origination Year(3)
Credit Score Range
2020(2)
2019201820172016PriorTotalPercent
No FICO(1)
$1,326,026 $839,412 $450,539 $484,975 $230,382 $142,746 $3,474,080 8.5 %
<6006,056,260 4,373,991 2,648,215 1,126,742 685,830 634,480 15,525,518 38.2 %
600-6392,782,566 1,912,731 1,001,985 335,111 229,690 173,501 6,435,584 15.8 %
>=6408,427,478 4,832,173 1,382,133 264,635 200,430 156,611 15,263,460 37.5 %
Total$18,592,330 $11,958,307 $5,482,872 $2,211,463 $1,346,332 $1,107,338 $40,698,642 100.0 %
(1)    Consists primarily of loans for which credit scores are not available or are not considered in the ALLL model.
(2)     Loans originated during the year ended December 31, 2020.
(3)    Excludes LHFS.

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.
22



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

Residential mortgage and home equity financing receivables by LTV and FICO range are summarized as follows:
As of March 31, 2021
Residential Mortgages(1)(3)
(dollars in thousands)Amortized Cost by Origination Year
FICO Score
2021(4)
2020201920182017PriorGrand Total
N/A(2)
LTV <= 70%$$744 $$518 $497 $3,110 $4,869 
70.01-80%
80.01-90%
90.01-100%
100.01-110%
LTV>110%
LTV - N/A(2)
37,071 2,914 2,515 1,382 1,797 6,923 52,602 
<600
LTV <= 70%$$1,185 $6,274 $9,679 $12,297 $115,123 $144,558 
70.01-80%1,569 5,241 7,130 7,199 4,239 25,378 
80.01-90%1,090 9,759 5,717 414 624 17,604 
90.01-100%231 122 540 893 
100.01-110%109 109 
LTV>110%1,294 1,294 
LTV - N/A(2)58 58 
600-639
LTV <= 70%$70 $2,158 $5,122 $6,220 $8,739 $83,708 $106,017 
70.01-80%114 4,441 5,400 2,293 6,364 4,743 23,355 
80.01-90%2,137 7,927 3,136 328 516 14,044 
90.01-100%1,811 522 2,333 
100.01-110%588 588 
LTV>110%30 30 
LTV - N/A(2)
30 30 
640-679
LTV <= 70%$364 $13,521 $18,014 $19,350 $27,351 $146,119 $224,719 
70.01-80%12,550 12,814 6,717 6,190 5,061 43,332 
80.01-90%276 4,614 20,201 8,902 488 1,638 36,119 
90.01-100%2,130 8,881 304 519 11,834 
100.01-110%186 186 
LTV>110%205 205 
LTV - N/A(2)
680-719
LTV <= 70%$8,075 $36,981 $53,762 $41,202 $56,384 $226,857 $423,261 
70.01-80%7,232 24,255 30,992 14,872 11,216 6,184 94,751 
80.01-90%139 11,481 37,592 14,042 342 887 64,483 
90.01-100%8,221 18,874 317 27,412 
100.01-110%241 241 
LTV>110%699 699 
LTV - N/A(2)69 69 
720-759
LTV <= 70%$47,926 $115,245 $89,795 $83,558 $128,900 $371,639 $837,063 
70.01-80%23,345 81,305 53,647 23,528 21,989 10,535 214,349 
80.01-90%938 21,755 64,492 20,687 364 1,965 110,201 
90.01-100%6,612 28,628 455 280 35,975 
100.01-110%529 529 
LTV>110%314 314 
LTV - N/A(2)
113 113 
>=760
LTV <= 70%$95,639 $451,895 $299,613 $205,110 $375,279 $1,395,556 $2,823,092 
70.01-80%63,426 225,510 161,885 45,390 49,518 14,255 559,984 
80.01-90%4,505 56,989 117,564 32,160 739 3,989 215,946 
90.01-100%6,963 32,122 69 568 804 40,526 
100.01-110%942 942 
LTV>110%1,592 1,592 
LTV - N/A(2)
336 336 
Total - All FICO Bands
LTV <= 70%$152,074 $621,729 $472,580 $365,637 $609,447 $2,342,112 $4,563,579 
70.01-80%94,117 349,630 269,979 99,930 102,476 45,017 961,149 
80.01-90%5,858 98,066 257,535 84,644 2,675 9,619 458,397 
90.01-100%23,926 90,547 950 0 568 2,982 118,973 
100.01-110%0 0 0 0 0 2,595 2,595 
LTV>110%0 0 0 0 0 4,134 4,134 
LTV - N/A(2)
37,071 2,914 2,515 1,382 1,797 7,529 53,208 
Grand Total$313,046 $1,162,886 $1,003,559 $551,593 $716,963 $2,413,988 $6,162,035 
(1) Excludes LHFS.
(2) Balances in the "N/A" range for LTV or FICO score 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) Loans originated during the year-to-date ended March 31, 2021.
23



NOTE 3. LOANS AND ALLOWANCE FOR CREDIT LOSSES (continued)
As of March 31, 2021
Home Equity Loans and Lines of Credit(2)
(in thousands)Amortized Cost by Origination Year
FICO Score
2021(4)
2020201920182017PriorTotalRevolving
N/A(2)
LTV <= 70%$$80 $$246 $147 $853 $1,326 $1,326 
70.01-90%30 30 30 
90.01-110%30 30 30 
LTV>110%
LTV - N/A(2)
649 3,837 4,957 6,099 5,821 84,661 106,024 52,289 
<600
LTV <= 70%$$526 $2,735 $9,700 $11,394 $129,911 $154,266 $135,697 
70.01-90%413 1,295 2,206 1,262 11,051 16,227 14,302 
90.01-110%1,405 1,405 1,141 
LTV>110%1,270 1,270 1,255 
LTV - N/A(2)
15 541 556 535 
600-639
LTV <= 70%$$1,518 $3,225 $9,354 $11,965 $109,133 $135,195 $127,298 
70.01-90%368 3,747 4,030 2,061 7,484 17,690 16,694 
90.01-110%1,902 1,902 1,806 
LTV>110%2,871 2,871 2,645 
LTV - N/A(2)
13 13 13 
640-679
LTV <= 70%$132 $5,856 $14,174 $21,457 $26,246 $158,816 $226,681 $216,693 
70.01-90%1,564 6,201 6,432 1,801 15,252 31,250 30,474 
90.01-110%56 5,416 5,472 4,943 
LTV>110%47 2,140 2,187 1,828 
LTV - N/A(2)
100 82 182 162 
680-719
LTV <= 70%$4,580 $25,733 $31,926 $49,428 $53,745 $281,152 $446,564 $433,170 
70.01-90%153 5,964 13,978 14,180 5,518 22,178 61,971 61,234 
90.01-110%5,592 5,592 5,179 
LTV>110%4,933 4,933 4,773 
LTV - N/A(2)
60 85 117 262 262 
720-759
LTV <= 70%$7,177 $39,711 $53,423 $69,503 $83,499 $396,208 $649,521 $636,513 
70.01-90%200 14,659 21,770 22,507 7,628 32,473 99,237 97,946 
90.01-110%69 5,698 5,767 5,000 
LTV>110%6,354 6,354 6,299 
LTV - N/A(2)
86 65 65 121 337 325 
>=760
LTV <= 70%$16,902 $122,855 $150,638 $185,603 $193,382 $1,013,251 $1,682,631 $1,648,185 
70.01-90%88 26,905 50,397 41,323 15,887 78,916 213,516 209,872 
90.01-110%421 18,338 18,766 17,678 
LTV>110%26 699 54 9,822 10,601 10,098 
LTV - N/A(2)
10 227 550 126 67 420 1,400 1,400 
Total - All FICO Bands
LTV <= 70%$28,791 $196,279 $256,121 $345,291 $380,378 $2,089,324 $3,296,184 $3,198,882 
LTV 70.01 - 90%441 49,873 97,418 90,678 34,157 167,354 439,921 430,552 
LTV 90.01 - 110%0 421 162 0 0 38,351 38,934 35,777 
LTV>110%26 746 54 0 0 27,390 28,216 26,898 
LTV - N/A(2)
659 4,210 5,657 6,225 6,068 85,955 108,774 54,986 
Grand Total$29,917 $251,529 $359,412 $442,194 $420,603 $2,408,374 $3,912,029 $3,747,095 
(1) - (4) Refer to corresponding notes above.

24



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

As of December 31, 2020
Residential Mortgages(1)(3)
(dollars in thousands)Amortized Cost by Origination Year
FICO Score
2020(4)
2019201820172016PriorGrand Total
N/A(2)
LTV <= 70%$750 $$521 $500 $$3,148 $4,919 
70.01-80%
80.01-90%
90.01-100%
100.01-110%
LTV>110%
LTV - N/A(2)109,388 2,170 1,200 1,547 1,485 4,410 120,200 
<600
LTV <= 70%$876 $3,988 $6,255 $13,646 $13,775 $109,076 $147,616 
70.01-80%1,053 5,235 4,603 7,707 3,406 2,832 24,836 
80.01-90%221 8,801 8,442 1,577 1,102 20,143 
90.01-100%292 2,792 219 690 3,993 
100.01-110%353 353 
LTV>110%1,445 1,445 
LTV - N/A(2)92 92 
600-639
LTV <= 70%$3,058 $3,923 $4,275 $11,593 $10,710 $81,496 $115,055 
70.01-80%1,585 4,839 3,901 5,300 2,040 2,935 20,600 
80.01-90%1,233 6,910 5,693 1,870 249 581 16,536 
90.01-100%2,321 2,364 193 4,878 
100.01-110%707 707 
LTV>110%333 333 
LTV - N/A(2)
640-679
LTV <= 70%$11,264 $21,946 $17,039 $24,447 $26,992 $124,559 $226,247 
70.01-80%12,585 18,756 8,079 7,117 1,377 2,426 50,340 
80.01-90%2,385 18,975 12,715 1,265 1,108 36,448 
90.01-100%7,256 4,501 573 12,330 
100.01-110%240 240 
LTV>110%432 432 
LTV - N/A(2)
680-719
LTV <= 70%$34,802 $49,625 $41,447 $56,362 $54,836 $196,173 $433,245 
70.01-80%38,582 37,546 20,202 18,615 5,047 4,556 124,548 
80.01-90%7,616 39,239 22,510 2,195 3,025 74,585 
90.01-100%29,050 8,147 526 37,723 
100.01-110%101 475 576 
LTV>110%802 802 
LTV - N/A(2)73 73 
720-759
LTV <= 70%$105,769 $89,140 $88,485 $145,301 $132,720 $285,308 $846,723 
70.01-80%81,595 62,488 29,767 25,421 8,163 5,334 212,768 
80.01-90%16,714 57,807 30,850 2,754 355 1,566 110,046 
90.01-100%37,846 12,066 563 50,475 
100.01-110%68 68 
LTV>110%206 206 
LTV - N/A(2)227 227 
>=760
LTV <= 70%$381,713 $335,559 $224,505 $456,792 $527,624 $1,066,295 $2,992,488 
70.01-80%221,896 227,139 71,681 48,411 17,893 8,473 595,493 
80.01-90%42,464 134,309 50,128 7,977 3,886 238,764 
90.01-100%37,279 21,057 74 1,419 59,829 
100.01-110%571 1,008 1,579 
LTV>110%92 1,734 1,826 
LTV - N/A(2)381 381 
Total - All FICO Bands
LTV <= 70%$538,232 $504,181 $382,527 $708,641 $766,657 $1,866,055 $4,766,293 
70.01-80%357,296 356,003 138,233 112,571 37,926 26,556 1,028,585 
80.01-90%70,633 266,041 130,338 17,638 604 11,268 496,522 
90.01-100%114,044 50,927 0 0 293 3,964 169,228 
100.01-110%101 0 0 571 0 2,851 3,523 
LTV>110%0 0 0 0 92 4,952 5,044 
LTV - N/A(2)
109,388 2,170 1,200 1,547 1,485 5,183 120,973 
Grand Total$1,189,694 $1,179,322 $652,298 $840,968 $807,057 $1,920,829 $6,590,168 
(1) Excludes LHFS.
(2) Balances in the "N/A" range for LTV or FICO score 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) Loans originated during the year ended December 31, 2020.

25



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

As of December 31, 2020
Home Equity Loans and Lines of Credit(2)
(in thousands)Amortized Cost by Origination Year
FICO Score
2020(4)
2019201820172016PriorTotalRevolving
N/A(2)
LTV <= 70%$$$$$77 $531 $608 $608 
70.01-90%
90.01-110%
LTV>110%
LTV - N/A(2)2,840 4,407 5,504 5,514 4,083 83,060 105,408 53,654 
<600
LTV <= 70%$727 $3,389 $7,255 $10,780 $15,566 $121,240 $158,957 $137,921 
70.01-90%238 1,901 4,029 2,727 1,698 13,383 23,976 21,484 
90.01-110%2,389 2,389 2,017 
LTV>110%2,391 2,391 2,369 
LTV - N/A(2)15 562 577 555 
600-639
LTV <= 70%$1,265 $2,589 $8,921 $13,240 $11,873 $100,148 $138,036 $128,515 
70.01-90%728 3,149 5,618 2,491 433 8,812 21,231 19,784 
90.01-110%— 1,803 1,803 1,706 
LTV>110%3,235 3,235 2,858 
LTV - N/A(2)51 51 29 
640-679
LTV <= 70%$4,983 $15,432 $23,718 $26,211 $19,167 $152,823 $242,334 $231,152 
70.01-90%2,166 8,599 10,455 5,391 1,377 17,425 45,413 44,187 
90.01-110%53 6,279 6,332 5,784 
LTV>110%48 723 771 533 
LTV - N/A(2)95 100 70 265 265 
680-719
LTV <= 70%$26,177 $31,112 $49,618 $53,778 $49,893 $249,565 $460,143 $444,254 
70.01-90%8,483 17,515 19,442 11,250 2,996 24,541 84,227 82,534 
90.01-110%90 7,810 7,900 7,128 
LTV>110%5,756 5,756 5,477 
LTV - N/A(2)144 63 149 356 351 
720-759
LTV <= 70%$39,927 $49,716 $62,795 $79,821 $68,503 $348,679 $649,441 $634,206 
70.01-90%14,064 28,552 30,553 15,094 5,386 35,066 128,715 126,755 
90.01-110%69 8,270 8,339 7,128 
LTV>110%7,611 7,611 7,313 
LTV - N/A(2)35 56 253 122 466 466 
>=760
LTV <= 70%$112,532 $149,381 $178,602 $188,693 $156,633 $896,901 $1,682,742 $1,646,127 
70.01-90%30,306 61,647 60,023 34,640 11,120 86,265 284,001 280,811 
90.01-110%396 21 22,839 23,256 22,252 
LTV>110%710 62 9,700 10,472 9,899 
LTV - N/A(2)185 554 129 68 359 1,295 1,284 
Total - All FICO Bands
LTV <= 70%$185,611 $251,619 $330,909 $372,523 $321,712 $1,869,887 $3,332,261 $3,222,783 
LTV 70.01 - 90%55,993 121,363 130,120 71,593 23,010 185,492 587,571 575,563 
LTV 90.01 - 110%486 143 0 0 0 49,390 50,019 46,015 
LTV>110%758 62 0 0 0 29,416 30,236 28,449 
LTV - N/A(2)
3,155 5,161 5,633 6,013 4,083 84,373 108,418 56,604 
Grand Total$246,003 $378,348 $466,662 $450,129 $348,805 $2,218,558 $4,108,505 $3,929,414 
(1) - (4) Refer to corresponding notes above
26



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

TDR Loans

The following table summarizes the Company’s performing and non-performing TDRs at the dates indicated:
(in thousands)March 31, 2021December 31, 2020
Performing$4,352,785 $3,850,622 
Non-performing451,192 473,507 
Total (1)
$4,803,977 $4,324,129 
(1) Excludes LHFS.

The increase in total TDRs was primarily due to the resumption of the pre-COVID-19 method of determining whether or not a modification qualifies as a TDR for RICs effective January 1, 2021.

TDR Activity by Class of Financing Receivable
The Company's modifications consist primarily of term extensions. The following tables detail the activity of TDRs for the three-month periods ended March 31, 2021 and 2020:
Three-Month Period Ended March 31, 2021
Number of
Contracts
Pre-TDR Amortized Cost(1)
Post-TDR Amortized Cost(2)
(dollars in thousands)
Commercial:
CRE$7,952 $7,952 
C&I311 15,512 15,568 
Other commercial164 13,635 13,635 
Consumer:
Residential mortgages(3)
93 20,109 19,990 
Home equity loans and lines of credit43 4,542 4,748 
RICs and auto loans45,665 953,819 959,309 
Personal unsecured loans25 248 244 
Other consumer408 408 
Total46,313 $1,016,225 $1,021,854 
(1) Pre-TDR modification amount is the month-end balance prior to the month in which the modification occurred.
(2) Post-TDR modification amount is the month-end balance for the month in which the modification occurred.
(3) The post-TDR modification amounts for residential mortgages exclude interest reserves.

Three-Month Period Ended March 31, 2020
Number of
Contracts
Pre-TDR Recorded
Investment
(1)
Post-TDR Recorded Investment(2)
(dollars in thousands)
Commercial:
CRE$2,287 $2,282 
C&I35 834 837 
Other commercial45 45 
Consumer:
Residential mortgages(3)
14 1,916 2,060 
Home equity loans and lines of credit28 2,074 2,095 
RICs and auto loans9,867 178,057 178,435 
Personal unsecured loans
Other consumer12 12 
Total9,951 $185,225 $185,766 
(1) Pre-TDR modification outstanding recorded investment amount is the month-end balance prior to the month in which the modification occurred.
(2)Post-TDR modification outstanding recorded investment amount is the month-end balance for the month in which the modification occurred.
(3)The post-TDR modification outstanding recorded investment amounts for residential mortgages exclude interest reserves.

27



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

TDRs Which Have Subsequently Defaulted

A TDR is generally considered to have subsequently defaulted if, after modification, the loan becomes 90 DPD. For RICs, a TDR is considered to have subsequently defaulted after modification at the earlier of the date of repossession or 120 DPD. The following table details period-end amortized cost balances of TDRs that became TDRs during the past twelve-month period and have subsequently defaulted during the three-month periods ended March 31, 2021 and 2020, respectively.

Three-Month Period Ended March 31,
20212020
Number of
Contracts
Recorded Investment(1)
Number of
Contracts
Recorded Investment(1)
(dollars in thousands)
Commercial
CRE0 $0 14 $2,909 
C&I30 1,172 12 7,390 
Multifamily0 0 
Other commercial1 17 45 
Consumer:
Residential mortgages0 0 22 3,347 
Home equity loans and lines of credit1 613 15 2,094 
RICs and auto loans5,656 110,780 4,086 69,239 
Personal unsecured loans0 0 10 101 
Other consumer0 0 
Total5,688 $112,582 4,160 $85,125 
(1)Represents the period-end balance. Does not include Chapter 7 bankruptcy TDRs.
28



NOTE 4. OPERATING LEASE ASSETS, NET

The Company has operating leases, including leased vehicles and commercial equipment vehicles and aircraft which are included in the Company's Condensed Consolidated Balance Sheets as Operating lease assets, net. The leased vehicle portfolio consists primarily of leases originated under the MPLFA.

Income continues to accrue during the extension period and remaining lease payments are recorded on a straight-line basis over the modified lease term.

Operating lease assets, net consisted of the following as of March 31, 2021 and December 31, 2020:
(in thousands)March 31, 2021December 31, 2020
Leased vehicles$21,907,106 $22,056,063 
Less: accumulated depreciation(4,633,289)(4,796,595)
Depreciated net capitalized cost17,273,817 17,259,468 
Manufacturer Subvention payments, net of accretion(867,231)(934,381)
Origination fees and other costs71,638 66,020 
Leased vehicles, net16,478,224 16,391,107 
Commercial equipment vehicles and aircraft, gross28,624 28,661 
Less: accumulated depreciation(7,781)(6,839)
Commercial equipment vehicles and aircraft, net
20,843 21,822 
Total operating lease assets, net$16,499,067 $16,412,929 

The following summarizes the future minimum rental payments due to the Company as lessor under operating leases as of March 31, 2021 (in thousands):
2021$2,166,282 
20221,680,876 
2023881,298 
202474,450 
20252,579 
Thereafter5,472 
Total$4,810,957 

During the three-month periods ended March 31, 2021, and 2020 the Company recognized $108.3 million, and $27.0 million, respectively, of net gains on the sale of operating lease assets that had been returned to the Company at the end of the lease term. These amounts are recorded within Miscellaneous income, net in the Company's Condensed Consolidated Statements of Operations.


NOTE 5. GOODWILL AND OTHER INTANGIBLES

Goodwill

Goodwill is assigned to reporting units, which are operating segments or one level below an operating segment, as of the acquisition date. The following table presents the Company's goodwill by its reporting units as of March 31, 2021:
(in thousands)CBBC&ICRE & VFCIBSCTotal
Goodwill at March 31, 2021$297,802 

$52,198 $1,095,071 

$131,130 

$1,019,960 

$2,596,161 

During the three-month periods ended March 31, 2021 and 2020, there were 0 disposals, additions, impairments or re-allocations of goodwill.

The Company evaluates goodwill for impairment at the reporting unit level. The Company completes its annual goodwill impairment test as of October 1 each year. The Company conducted its last annual goodwill impairment tests as of October 1, 2020 using generally accepted valuation methods. As a result of that impairment test, 0 goodwill impairment was identified.


29



NOTE 5. GOODWILL AND OTHER INTANGIBLES (continued)

During the second quarter of 2020, primarily due to the ongoing economic impacts of the COVID-19 pandemic, the Company determined that a goodwill triggering event occurred for the CBB, C&I, and CRE & VF reporting units. Based on its goodwill impairment analysis performed as of June 30, 2020, the Company concluded that a goodwill impairment charge of $1.6 billion and $0.3 billion was required for the CBB and C&I reporting units, respectively. The CRE & VF reporting unit’s estimated fair value exceeded its carrying value by less than 5%. The goodwill allocated to these reporting units has become more sensitive to impairment as the valuation is highly correlated with forecasted interest rates, credit costs, and other factors.

During the fourth quarter of 2020, the Company implemented organizational changes which resulted in the transfer of Upper Business Banking customers into the C&I segment from the CBB segment. Refer to Note 17 to these Consolidated Financial Statements for additional details on the Company's reportable segments. As a result of the re-organization, the Company re-allocated approximately $25.1 million of goodwill from the CBB reporting unit to the C&I reporting unit. Upon re-allocation, the Company performed a post evaluation for impairment on the CBB and C&I reporting units utilizing assumptions consistent with our October 1, 2020 impairment test and noted no impairment.

Other Intangible Assets

The following table details amounts related to the Company's intangible assets subject to amortization for the dates indicated.
 March 31, 2021December 31, 2020
(in thousands)Net Carrying
Amount
Accumulated
Amortization
Net Carrying
Amount
Accumulated
Amortization
Intangibles subject to amortization:
Dealer networks$301,583 $(278,417)$308,768 $(271,232)
Chrysler relationship31,250 (107,500)35,000 (103,750)
Trade name12,000 (6,000)12,300 (5,700)
Other intangibles1,428 (55,745)1,479 (55,694)
Total intangibles subject to amortization$346,261 $(447,662)$357,547 $(436,376)

At March 31, 2021 and December 31, 2020, the Company did 0t have any intangibles, other than goodwill, that were not subject to amortization.

Amortization expense on intangible assets was $11.3 million, and $14.7 million for the three-month periods ended March 31, 2021, and 2020, respectively.

30



NOTE 5. GOODWILL AND OTHER INTANGIBLES (continued)

The estimated aggregate amortization expense related to intangibles, excluding any impairment charges, for each of the five succeeding calendar years ending December 31 is:
YearCalendar Year AmountRecorded To DateRemaining Amount To Record
(in thousands)
2021$39,904 $11,286 $28,618 
202239,901 — 39,901 
202328,649 — 28,649 
202424,792 — 24,792 
202524,757 — 24,757 
Thereafter199,544 — 199,544 


NOTE 6. OTHER ASSETS

The following is a detail of items that comprised Other assets at March 31, 2021 and December 31, 2020:
(in thousands)March 31, 2021December 31, 2020
Operating lease ROU assets$530,360 $540,222 
Deferred tax assets0 11,114 
Accrued interest receivable554,748 634,509 
Derivative assets at fair value904,932 1,219,090 
Other repossessed assets239,031 207,900 
Equity method investments255,173 272,633 
MSRs86,653 77,545 
OREO24,909 29,799 
Income tax receivables186,211 225,736 
Prepaid expense253,491 225,251 
Miscellaneous assets and receivables
602,856 608,431 
Total Other assets$3,638,364 $4,052,230 

Operating lease ROU assets

We have operating leases for real estate and non-real estate assets. Real estate leases relate to office space and bank/lending retail branches. Non-real estate leases include data centers, ATMs, vehicles and certain equipment leases. Real estate leases may include one or more options to renew, with renewal terms that can extend the lease term generally from one to five years. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease.

For the three-month periods ended March 31, 2021 and 2020 operating lease expenses were $39.7 million and $35.1 million, respectively. Sublease income was $1.1 million and $1.5 million, respectively, for the three-month periods ended March 31, 2021 and 2020. These are reported within Occupancy and equipment expenses in the Company’s Condensed Consolidated Statements of Operations.

31



NOTE 6. OTHER ASSETS (continued)

Supplemental balance sheet information related to leases was as follows:
Maturity of Lease Liabilities at March 31, 2021Total Operating leases
(in thousands)
2021$103,242 
2022129,374 
2023112,349 
202497,056 
202571,950 
Thereafter142,678 
Total lease liabilities$656,649 
Less: Interest(56,763)
Present value of lease liabilities$599,886 

Supplemental Balance Sheet InformationMarch 31, 2021December 31, 2020
Operating lease ROU assets$530,360$540,222
Other liabilities599,886606,000
Weighted-average remaining lease term (years)6.36.5
Weighted-average discount rate2.9%2.9%

Three-Month Period Ended March 31,
Other Information20212020
(in thousands)
Operating cash flows from operating leases(1)
$(35,499)$(33,110)
Leased assets obtained in exchange for new operating lease liabilities$15,653 $4,372 
(1) Activity is included within the net change in other liabilities on the Consolidated SCF.

The Company made approximately $1.3 million and $1.0 million in payments during the three-month periods ended March 31, 2021 and 2020, respectively, to Santander for rental of certain office space. The related ROU assets and lease liabilities were approximately $8.0 million and $12.4 million at March 31, 2021 and 2020, respectively.

The remainder of Other assets is comprised of:

Deferred tax asset, net - Refer to Note 14 of these Condensed Consolidated Financial Statements for more information on tax-related activities.
Derivative assets at fair value - Refer to the "Offsetting of Financial Assets" table in Note 11 to these Condensed Consolidated Financial Statements for the detail of these amounts.
Equity method investments - The Company makes certain equity investments in various limited partnerships, some of which are considered VIEs, that invest in and lend to qualified community development entities, such as renewable energy investments, through the NMTC and CRA programs. The Company acts only in a limited partner capacity in connection with these partnerships, so the Company has determined that it is not the primary beneficiary of the partnerships because it does not have the power to direct the activities of the partnerships that most significantly impact the partnerships' economic performance.
MSRs - See further discussion on the valuation of the MSRs in Note 12.
Income tax receivables - Refer to Note 14 of these Condensed Consolidated Financial Statements for more information on tax-related activities.
OREO and other repossessed assets includes property and vehicles recovered through foreclosure and repossession.
Miscellaneous assets and receivables includes Subvention receivables in connection with the agreement with CCAP, investment and capital market receivables, derivatives trading receivables, and unapplied payments.


32



NOTE 7. 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.

For further description of the Company’s securitization activities, involvement with VIEs and accounting policies regarding consolidation of VIEs, see Part II, Item 8 - Financial Statements and Supplementary Data (Note 8) in the 2020 Annual Report on Form 10-K.

On-balance sheet VIEs

The assets of consolidated VIEs presented based upon the legal transfer of the underlying assets in order to reflect legal ownership, that 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, were as follows:

(in thousands)March 31, 2021December 31, 2020
Assets
Restricted cash$2,040,255 $1,737,021 
LHFS0 581,938 
LHFI22,335,539 22,572,549 
Operating lease assets, net16,478,224 16,391,107 
Various other assets842,105 791,306 
Total Assets$41,696,123 $42,073,921 
Liabilities
Notes payable$29,670,906 $31,700,709 
Various other liabilities55,669 84,922 
Total Liabilities$29,726,575 $31,785,631 

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.

The Company retains servicing rights for 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 March 31, 2021 and December 31, 2020, the Company was servicing $27.3 billion and $27.7 billion, respectively, of gross RICs that have been transferred to consolidated Trusts. The remainder of the Company’s RICs remains unpledged.

33



NOTE 7. VIEs (continued)

A summary of the cash flows received from the consolidated Trusts for the three-month periods ended March 31, 2021, and 2020 is as follows:
Three-Month Period Ended March 31,
(in thousands)20212020
Assets securitized$4,123,051 $6,675,730 
Net proceeds from new securitizations (1)
$3,586,124 $3,876,529 
Net proceeds from sale of retained bonds63,781 54,467 
Cash received for servicing fees (2)
228,188 246,743 
Net distributions from Trusts (2)
1,140,377 866,936 
Total cash received from Trusts$5,018,470 $5,044,675 
(1) Includes additional advances on existing securitizations.
(2) These amounts are not reflected in the accompanying Condensed Consolidated SCF because the cash flows are between the VIEs and other entities included in the consolidation.

Off-balance sheet VIEs

During the three-month periods ended March 31, 2021, and 2020, SC sold $1.9 billion and 0, respectively, of gross RICs to third-party investors in off-balance sheet securitizations for a gain of $7.2 million and 0, respectively. The gains were recorded in Investment losses, net, in the accompanying Condensed Consolidated Statements of Income.

As of March 31, 2021 and December 31, 2020, the Company was servicing $3.7 billion and $2.2 billion, respectively, of gross RICs that have been sold in off-balance sheet securitizations and were subject to an optional clean-up call. The portfolio was comprised as follows:
(in thousands)March 31, 2021December 31, 2020
Related party SPAIN securitizations$1,021,099 $1,214,644 
Third party SCART serviced securitizations2,623,575 929,429 
Third party CCAP securitizations63,188 82,713 
Total serviced for other portfolio$3,707,862 $2,226,786 

Other than repurchases of sold assets due to standard representations and warranties, the Company has 0 exposure to loss as a result of its involvement with these VIEs.

A summary of cash flows received from Trusts for the three-month periods ended March 31, 2021 and 2020, respectively, were as follows:
Three-Month Period Ended March 31,
(in thousands)20212020
Receivables securitized (1)
$1,891,278 $
Net proceeds from new securitizations1,779,532 
Cash received for servicing fees6,726 6,179 
Total cash received from Trusts$1,786,258 $6,179 
(1) Represents the unpaid principal balance at the time of original securitization.
34



NOTE 8. DEPOSITS AND OTHER CUSTOMER ACCOUNTS

Deposits and other customer accounts are summarized as follows:
March 31, 2021December 31, 2020
(dollars in thousands)BalancePercent of total depositsBalancePercent of total deposits
Interest-bearing demand deposits$11,736,994 15.8 %$11,097,595 14.7 %
Non-interest-bearing demand deposits20,049,386 26.9 %21,800,278 28.9 %
Savings5,355,344 7.2 %4,827,065 6.4 %
Customer repurchase accounts316,490 0.4 %323,398 0.4 %
Money market33,690,892 45.3 %33,358,315 44.4 %
CDs3,299,593 4.4 %3,897,056 5.2 %
Total deposits (1)
$74,448,699 100.0 %$75,303,707 100.0 %
(1) Includes foreign deposits, as defined by the FRB, of $5.4 billion and $5.8 billion at March 31, 2021 and December 31, 2020, respectively.

Deposits collateralized by investment securities, loans, and other financial instruments totaled $2.5 billion and $2.2 billion at March 31, 2021 and December 31, 2020, respectively.

Demand deposit overdrafts that have been reclassified as loan balances were $158.5 million and $110.5 million at March 31, 2021 and December 31, 2020, respectively.

March 31, 2021 and December 31, 2020, the Company had $729.1 million and $768.2 million, respectively, of CDs greater than $250 thousand.


NOTE 9. BORROWINGS

Total borrowings and other debt obligations at March 31, 2021 were $43.4 billion, compared to $46.4 billion at December 31, 2020. The Company's debt agreements impose certain limitations on dividend payments and other transactions. The Company is currently in compliance with these limitations.

Periodically, as part of the Company's wholesale funding management, it opportunistically repurchases outstanding borrowings in the open market and subsequently retires the obligations.

SBNA

SBNA had no new securities issuance and did not repurchase any outstanding borrowings in the open market during the three-month periods ended March 31, 2021 and 2020.

SHUSA

SHUSA had no new securities issuance and did not repurchase any outstanding borrowings in the open market during the three-month period ended March 31, 2021.

During the three-month period ended March 31, 2020, the Company issued $500.0 million of debt, consisting of:
A $500.0 million 5.83% senior fixed rate note due March 2023 to Santander, an affiliate.

During the three-month period ended March 31, 2020, the Company repurchased the following borrowings and other debt obligations:
$1.0 billion of its 2.65% senior notes due April 2020.

35



NOTE 9. BORROWINGS (continued)

Parent Company and other Subsidiary Borrowings and Debt Obligations

The following table presents information regarding the Parent Company and its subsidiaries' borrowings and other debt obligations at the dates indicated:
 March 31, 2021December 31, 2020
(dollars in thousands)BalanceEffective
Rate
BalanceEffective
Rate
Parent Company
4.45% senior notes due December 2021$491,602 4.61 %$491,411 4.61 %
3.70% senior notes due March 2022707,697 3.67 %707,896 3.67 %
3.40% senior notes due January 2023997,619 3.54 %997,298 3.54 %
3.50% senior notes due June 2024996,915 3.60 %996,687 3.60 %
4.50% senior notes due July 20251,097,219 4.56 %1,097,074 4.56 %
4.40% senior notes due July 20271,049,540 4.40 %1,049,531 4.40 %
2.88% senior notes due January 2024 (3)
750,000 2.88 %750,000 2.88 %
5.83% senior notes due March 2023 (3)
500,000 5.83 %500,000 5.83 %
3.24% senior notes due November 2026914,622 3.97 %913,239 3.97 %
3.45% senior notes, due June 2025995,145 3.58 %994,871 3.58 %
3.50% senior notes, due April 2023447,056 3.52 %447,039 3.52 %
Senior notes due June 2022(1)
427,934 1.24 %427,925 1.84 %
Senior notes due January 2023 (2)
720,915 1.35 %720,904 2.06 %
Senior notes due July 2023 (2)
439,037 1.33 %439,022 2.04 %
Short-term borrowing due within one year, with an affiliate0 0 %123,453 2.00 %
Subsidiaries
2.00% subordinated debt maturing through 202111 2.00 %11 2.00 %
Short-term borrowing with an affiliate, maturing January 20210 0 %200,000 0.10 %
Short-term borrowing due within one year, maturing April 20216,750 0.05 %15,750 0.05 %
Total Parent Company and subsidiaries' borrowings and other debt obligations$10,542,062 3.56 %$10,872,111 3.57 %
(1) These notes bear interest at a rate equal to the three-month LIBOR plus 100 basis points per annum.
(2) This note will bear interest at a rate equal to the three-month LIBOR plus 110 basis points per annum.
(3) These notes are with SHUSA's parent company, Santander.

SBNA Borrowings and Debt Obligations

The following table presents information regarding SBNA's borrowings and other debt obligations at the dates indicated:
 March 31, 2021December 31, 2020
(dollars in thousands)BalanceEffective
Rate
BalanceEffective
Rate
FHLB advances, maturing through May 2022$860,000 0.65 %$1,150,000 0.64 %
Short-term borrowing due within one year, maturing April 20213,407 0.14 %%
     Total Bank borrowings and other debt obligations$863,407 0.65 %$1,150,000 0.64 %

SBNA had outstanding irrevocable letters of credit totaling $279.0 million from the FHLB of Pittsburgh at March 31, 2021 used to secure uninsured deposits placed with SBNA by state and local governments and their political subdivisions.

36



NOTE 9. BORROWINGS (continued)

Revolving Credit Facilities

The following tables present information regarding SC's credit facilities as of March 31, 2021 and December 31, 2020, respectively:
 March 31, 2021
(dollars in thousands)BalanceCommitted AmountEffective
Rate
Assets PledgedRestricted Cash Pledged
Warehouse line due August 2022$167,000 $500,000 1.95 %$592,553 $0 
Warehouse line due March 20221,072,345 1,250,000 0.63 %1,719,708 1 
Warehouse line due October 20220 1,500,000 2.59 %159,339 0 
Warehouse line due October 20220 3,500,000 3.22 %1,378,224 0 
Warehouse line due October 20220 500,000 3.96 %118,970 570 
Warehouse line due October 2022658,500 2,100,000 3.32 %968,850 103 
Warehouse line due January 2022450,700 1,000,000 1.16 %1,142,351 0 
Warehouse line due November 20220 500,000 0.92 %392,637 0 
Warehouse line due July 20220 900,000 0 %0 1,684 
     Total facilities with third parties$2,348,545 $11,750,000 1.58 %$6,472,632 $2,358 
Promissory note with Santander due June 2022$2,000,000 $2,000,000 1.34 %$0 $0 
Promissory note with Santander due September 20222,000,000 2,000,000 1.04 %0 0 
     Total facilities with related parties$4,000,000 $4,000,000 1.19 %$0 $0 
     Total SC revolving credit facilities$6,348,545 $15,750,000 1.33 %$6,472,632 $2,358 

 December 31, 2020
(dollars in thousands)BalanceCommitted AmountEffective
Rate
Assets PledgedRestricted Cash Pledged
Warehouse line due March 2022$942,845 $1,250,000