Santander USA's Assets Climb on Trading Gains, Equity Rises

TL;DR

**Santander USA is making a smart pivot to trading and investments, boosting equity and signaling a stronger financial position despite a dip in traditional lending.**

AI Summary

Santander Holdings USA, Inc. reported a significant increase in total assets to $168.11 billion as of September 30, 2025, up from $165.25 billion at December 31, 2024. This growth was primarily driven by a substantial rise in trading securities to $16.55 billion from $10.32 billion, and an increase in HTM investment securities to $11.80 billion from $9.91 billion. However, loans held for investment (LHFI) decreased to $84.55 billion from $87.30 billion, and operating lease assets, net, fell to $9.54 billion from $11.67 billion. The company's total liabilities also increased to $149.15 billion from $147.57 billion, with federal funds purchased and securities loaned or sold under repurchase agreements rising to $21.30 billion from $16.30 billion. Deposits and other customer accounts slightly decreased to $76.36 billion from $78.11 billion. Stockholder's equity saw a healthy increase to $16.96 billion from $15.68 billion, largely due to a positive shift in retained earnings to $244.80 million from an accumulated deficit of $942.66 million. The allowance for credit losses (ALLL) decreased to $6.15 billion from $6.56 billion, indicating an improved credit outlook.

Why It Matters

This 10-Q reveals Santander USA's strategic shift towards higher-yielding trading securities and HTM investments, while de-emphasizing traditional loan portfolios and operating leases. For investors, the increase in stockholder's equity and the positive swing in retained earnings are strong indicators of improved financial health and potential future profitability. Employees might see this as a sign of stability, while customers could experience changes in lending product availability. In the competitive landscape, this move suggests Santander is adapting to market conditions, potentially outmaneuvering competitors focused solely on traditional lending, by leveraging capital markets activities to drive growth and improve its balance sheet.

Risk Assessment

Risk Level: medium — While overall assets and equity increased, the significant rise in trading securities to $16.55 billion from $10.32 billion introduces increased market risk and volatility. The decrease in the Allowance for Credit Losses (ALLL) to $6.15 billion from $6.56 billion, while positive, could be a concern if economic conditions deteriorate unexpectedly, potentially exposing the company to higher future credit losses.

Analyst Insight

Investors should closely monitor Santander USA's capital markets performance and the quality of its trading portfolio, given the substantial increase in trading securities. Evaluate the sustainability of the positive retained earnings trend and its impact on future dividend capacity or share buybacks, as the company appears to be strengthening its balance sheet.

Financial Highlights

total Assets

$168.11B

cash Position

$15.71B

Key Numbers

• $168.11B — Total Assets (Increased from $165.25B at Dec 31, 2024, indicating overall growth.)
• $16.55B — Trading Securities (Significantly up from $10.32B, showing a shift in asset allocation.)
• $11.80B — HTM Investment Securities (Increased from $9.91B, reflecting strategic long-term investments.)
• $84.55B — Loans Held For Investment (LHFI) (Decreased from $87.30B, suggesting a reduction in traditional lending.)
• $9.54B — Operating Lease Assets, Net (Down from $11.67B, indicating a reduction in lease portfolio.)
• $149.15B — Total Liabilities (Increased from $147.57B, primarily due to funding activities.)
• $21.30B — Federal Funds Purchased & Securities Loaned (Rose from $16.30B, indicating increased short-term funding.)
• $76.36B — Deposits and Other Customer Accounts (Slightly decreased from $78.11B, a minor shift in funding mix.)
• $16.96B — Total Stockholder's Equity (Increased from $15.68B, reflecting improved financial strength.)
• $244.80M — Retained Earnings (Positive swing from a $942.66M deficit, a key indicator of profitability.)

Key Players & Entities

• Santander Holdings USA, Inc. (company) — registrant of the 10-Q filing
• $168.11 billion (dollar_amount) — Total assets as of September 30, 2025
• $165.25 billion (dollar_amount) — Total assets as of December 31, 2024
• $16.55 billion (dollar_amount) — Trading securities as of September 30, 2025
• $10.32 billion (dollar_amount) — Trading securities as of December 31, 2024
• $11.80 billion (dollar_amount) — HTM investment securities as of September 30, 2025
• $9.91 billion (dollar_amount) — HTM investment securities as of December 31, 2024
• $16.96 billion (dollar_amount) — Total stockholder's equity as of September 30, 2025
• $15.68 billion (dollar_amount) — Total stockholder's equity as of December 31, 2024
• $244.80 million (dollar_amount) — Retained earnings as of September 30, 2025

FAQ

Risk Factors

• Interest Rate Sensitivity [high — financial]: The company's financial condition and results of operations are subject to interest rate risk. Changes in interest rates can affect net interest income, the fair value of financial instruments, and the overall profitability. For example, a significant increase in interest rates could negatively impact the value of investment securities and increase funding costs.
• Regulatory Compliance [high — regulatory]: As a financial institution, Santander Holdings USA, Inc. is subject to extensive regulation by federal and state authorities. Non-compliance with these regulations, such as those related to capital requirements, consumer protection, or anti-money laundering, could result in significant fines, penalties, and reputational damage.
• Economic Downturn Impact [medium — market]: A prolonged economic downturn or recession could lead to increased credit losses, reduced demand for lending and other financial services, and decreased investment values. This could negatively impact the company's asset quality, profitability, and overall financial stability.
• Cybersecurity and Data Breaches [medium — operational]: The company relies on technology to conduct its business, making it vulnerable to cyberattacks and data breaches. A successful cyberattack could compromise sensitive customer information, disrupt operations, and lead to significant financial and reputational damage.
• Liquidity Risk [medium — financial]: The company must maintain adequate liquidity to meet its obligations, including deposit withdrawals and funding needs. Disruptions in funding markets or unexpected increases in liquidity demands could impair the company's ability to fund its operations and meet its commitments.

Industry Context

The banking industry is characterized by intense competition, evolving regulatory landscapes, and sensitivity to macroeconomic conditions. Key trends include digital transformation, increasing demand for personalized financial services, and a focus on risk management. Banks are navigating a complex environment with fluctuating interest rates and ongoing technological advancements.

Regulatory Implications

Santander Holdings USA, Inc. operates within a highly regulated environment. Changes in capital requirements, liquidity rules, and consumer protection laws can significantly impact its operations and profitability. Compliance with these regulations is paramount to avoid penalties and maintain market confidence.

What Investors Should Do

1. Monitor the growth in trading and HTM securities.
2. Analyze the decrease in Loans Held For Investment (LHFI).
3. Evaluate the improvement in retained earnings.
4. Assess the increased reliance on short-term funding.

Glossary

AFS

Available-for-Sale securities are investment securities that are not classified as held-to-maturity or trading securities. They are reported at fair value, with unrealized gains and losses included in other comprehensive income. (AFS securities represent a portion of Santander's investment portfolio, and their fair value fluctuations impact comprehensive income.)

HTM

Held-to-Maturity securities are debt securities that the company has the intent and ability to hold until their maturity date. They are reported at amortized cost. (HTM investment securities increased to $11.80 billion, indicating a strategic shift towards longer-term, fixed-income investments.)

LHFI

Loans Held For Investment are loans that the company intends to hold on its balance sheet until maturity or repayment. These are typically measured at amortized cost, net of an allowance for credit losses. (The decrease in LHFI to $84.55 billion suggests a potential reduction in the company's traditional lending activities.)

ALLL

Allowance for Credit Losses is a contra-asset account that represents the estimated amount of uncollectible loans. It is used to reduce the carrying amount of loans to their net realizable value. (The decrease in ALLL to $6.15 billion from $6.56 billion suggests an improved credit outlook and potentially lower expected loan losses.)

Federal funds purchased and securities loaned or sold under repurchase agreements

These represent short-term borrowing activities where the company either borrows funds overnight from other financial institutions (federal funds purchased) or obtains cash by selling securities with an agreement to repurchase them later (repurchase agreements). (The increase in these liabilities to $21.30 billion indicates increased reliance on short-term wholesale funding.)

Accumulated deficit

This represents the cumulative net losses of a company that have not been offset by net income. A negative retained earnings balance. (The positive swing to retained earnings of $244.80 million from an accumulated deficit of $942.66 million is a significant indicator of improved profitability.)

Year-Over-Year Comparison

Compared to the previous filing, Santander Holdings USA, Inc. has experienced a notable increase in total assets, driven by substantial growth in trading securities and HTM investment securities. Conversely, Loans Held For Investment and operating lease assets have decreased. Liabilities have also risen, primarily due to increased short-term funding activities. A significant positive development is the turnaround in retained earnings, moving from a deficit to a surplus, indicating improved profitability and financial strength.

Key Financial Figures

• $100 billion — ge banking organizations with assets of $100 billion or more DIF: Deposit Insurance Fund LC

Filing Documents

• sov-20250930.htm (10-Q) — 6661KB
• a10-q_3q25exhibit311.htm (EX-31.1) — 10KB
• a10-q_3q25exhibit312.htm (EX-31.2) — 10KB
• a10-q_3q25exhibit321.htm (EX-32.1) — 4KB
• a10-q_3q25exhibit322.htm (EX-32.2) — 4KB
• 0000811830-25-000045.txt ( ) — 32453KB
• sov-20250930.xsd (EX-101.SCH) — 140KB
• sov-20250930_cal.xml (EX-101.CAL) — 242KB
• sov-20250930_def.xml (EX-101.DEF) — 807KB
• sov-20250930_lab.xml (EX-101.LAB) — 1439KB
• sov-20250930_pre.xml (EX-101.PRE) — 1176KB
• sov-20250930_htm.xml (XML) — 8652KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Condensed Consolidated Financial Statements

Item 1. Condensed Consolidated Financial Statements Condensed Consolidated Balance Sheets at September 30, 2025 and December 31, 2024 4 Condensed Consolidated Statements of Operations for the three months and nine months ended September 30, 2025 and 2024 5 Condensed Consolidated Statements of Comprehensive Income for the three months and nine months ended September 30, 2025 and 2024 6 Condensed Consolidated Statements of Stockholder's Equity for the three months and nine months ended September 30, 2025 and 2024 7 Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024 8 Notes to Condensed Consolidated Financial Statements 9

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 77

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 109

Controls and Procedures

Item 4. Controls and Procedures 109

OTHER INFORMATION

PART II. OTHER INFORMATION 109

Legal Proceedings

Item 1. Legal Proceedings 109

Risk Factors

Item 1A. Risk Factors 109

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 110

Defaults upon Senior Securities

Item 3. Defaults upon Senior Securities 110

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 110

Other Information

Item 5. Other Information 111

Exhibits

Item 6. Exhibits 112

SIGNATURES

SIGNATURES 113 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 Table of Contents CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS SANTANDER HOLDINGS USA, INC., AND SUBSIDIARIES This Quarterly Report on Form 10-Q contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements about the Company's expectations, beliefs, plans, predictions, forecasts, objectives, assumptions, or future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through the use of words and phrases such as "may," "could," "should," "will," "would," "believes," "expects," "anticipates," "estimates," "intends," "plans," "assumes," "goal," "seeks," "can," "predicts," "potential," "projects," "continuing," "ongoing," and similar expressions. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable as of the date on which the statements are made, these statements are not guarantees of future performance and involve risks and uncertainties which are subject to change based on various important factors and assumptions, some of which are beyond the Company's control. Among the factors that could cause the Company's financial performance to differ materially from that suggested by forward-looking statements are: the effects of regulation, actions and/or policies of the Federal Reserve, the FDIC, the OCC and the CFPB, and other changes in monetary and fiscal policies and regulations, including policies that affect market interest rates and money supply, as well as the impact of changes in and interpretations of GAAP, the failure to adhere to which could subject S

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

- CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

ITEM 1 - CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SANTANDER HOLDINGS USA, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS Unaudited (In thousands) September 30, 2025 December 31, 2024 ASSETS Cash and cash equivalents $ 15,708,891 $ 18,546,918 Federal funds sold and securities purchased under resale agreements or similar arrangements 8,515,777 8,132,230 Investment securities: AFS at fair value (amortized cost of $ 8,146,642 and $ 7,833,617 as of September 30, 2025 and December 31, 2024, respectively) 7,461,372 7,132,632 Trading securities 16,553,573 10,322,823 HTM (fair value of $ 10,404,901 and $ 8,306,417 as of September 30, 2025 and December 31, 2024, respectively) 11,797,677 9,914,288 Other investments 2,376,186 1,549,634 LHFI (1) 84,550,188 87,304,499 ALLL ( 6,148,617 ) ( 6,562,012 ) Net LHFI (5) 78,401,571 80,742,487 LHFS (2) 1,567,815 1,333,953 Premises and equipment, net (3) 963,047 986,953 Operating lease assets, net (5)(6) 9,543,028 11,667,951 Goodwill 2,766,665 2,766,665 Intangible assets, net 222,149 248,920 BOLI 2,046,290 2,013,692 Restricted cash (5) 5,338,444 5,029,088 Other assets (4) (5) 4,852,479 4,860,516 TOTAL ASSETS $ 168,114,964 $ 165,248,750 LIABILITIES Accounts payables and accrued expenses $ 6,039,643 $ 5,244,272 Deposits and other customer accounts (includes $ 580,460 and zero of deposits held for sale as of September 30, 2025 and December 31, 2024, respectively) 76,360,591 78,114,605 Federal funds purchased and securities loaned or sold under repurchase agreements 21,297,036 16,302,948 Trading liabilities 3,269,470 2,460,613 Borrowings and other debt obligations (5) 40,886,853 44,010,910 Advance payments by borrowers for taxes and insurance 188,448 150,777 Other liabilities (5) 1,110,587 1,289,098 TOTAL LIABILITIES 149,152,628 147,573,223 Commitments and contingencies (Note 16) MEZZANINE EQUITY Preferred stock (no par value; 7,500,000 shares authorized; 2,000,000 share

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