Santander Bank Earns “Outstanding” Community Reinvestment Act Rating by the OCC

Rhea-AI Summary

Santander Bank, N.A. (NYSE: SAN) has earned an Outstanding Community Reinvestment Act (CRA) rating from the Office of the Comptroller of the Currency (OCC) for the 2020-2022 exam period. This is the highest possible rating, achieved for the second consecutive time. The bank excelled in lending, investment, and service tests, particularly in Boston, New York, and Philadelphia.

Key highlights include:

• Origination of over 20,000 loans totaling $1.8+ billion through the Paycheck Protection Program
• Leadership in community development lending for affordable housing
• Significant community investments and grants
• Introduction of accessible banking products like Santander® Safety Net

In 2023, Santander US announced a new $13.6 billion Community Plan for the next three years, focusing on small business lending, community development, sustainable finance, supplier diversity, and charitable giving.

Positive

• Earned 'Outstanding' CRA rating for the second consecutive exam period
• Received 'Outstanding' ratings in major metropolitan areas: Boston, New York, and Philadelphia
• Originated over 20,000 loans totaling more than $1.8 billion through the Paycheck Protection Program
• Leader in community development lending for affordable housing
• Announced a new $13.6 billion Community Plan for the next three years
• Introduced accessible banking products like Santander® Safety Net

Negative

• None.

Insights

Financial Analyst

Santander Bank's Outstanding CRA rating demonstrates strong community engagement and responsible banking practices. The $13.6 billion Community Plan, including $3 billion for community development and $9 billion for sustainable finance, shows a significant commitment to local economic growth. This approach likely enhances brand reputation and customer loyalty, potentially driving long-term revenue growth. The bank's focus on affordable housing and small business support, particularly during COVID-19, indicates resilience and adaptability. While these initiatives may impact short-term profitability, they position Santander for sustainable growth in an increasingly socially conscious market. Investors should view this as a positive indicator of the bank's long-term strategy and risk management.

Market Research Analyst

Santander's community-focused initiatives align with growing consumer demand for socially responsible banking. The Outstanding CRA rating and expanded community commitments could attract environmentally and socially conscious customers, potentially increasing market share. The $1.5 billion small business lending commitment is particularly noteworthy, as it targets a important segment often underserved by larger banks. This strategy may help Santander differentiate itself in a competitive banking landscape. The 100% increase in supplier diversity spending also aligns with broader market trends towards inclusivity. These factors combined suggest Santander is well-positioned to capture emerging market opportunities and mitigate reputational risks associated with social and environmental concerns.

Legal Expert

Santander's Outstanding CRA rating from the OCC significantly reduces regulatory risk and strengthens the bank's position with federal regulators. This rating, covering the 2020-2022 period, demonstrates consistent compliance with community reinvestment obligations. The detailed commitments in the $13.6 billion Community Plan show proactive engagement with regulatory expectations. Notably, the focus on affordable housing and small business support aligns with current regulatory priorities. The bank's flexibility during COVID-19, including PPP loan facilitation, likely contributed to the positive assessment. This strong regulatory standing could provide Santander with more operational freedom and potentially easier approval for future strategic initiatives, such as mergers or new product launches. Overall, this represents a significant legal and regulatory advantage for Santander in the competitive banking sector.

Santander Announced New, $13.6 Billion Community Plan in 2023 to Further its Commitment to Local Communities

BOSTON--(BUSINESS WIRE)-- Santander Bank, N.A. (“Santander” or “the Bank”) today announced that it has earned an overall “Outstanding” Community Reinvestment Act (CRA) rating from the Office of the Comptroller of the Currency (OCC) for the 2020-2022 exam period. Performance evaluations occur every three years. Santander also received “Outstanding” region-specific performance ratings in the major metropolitan areas of Boston, New York, and Philadelphia – three of the Bank’s core markets. Both represent the highest possible rating and is the result of achieving Outstanding ratings on each of the lending, investment and service tests.

“Achieving an Outstanding assessment for the second-consecutive exam period is a testament to Santander’s unwavering commitment to make a positive impact in the communities where we live and work,” said Tim Wennes, Santander US CEO. “Santander has a track record of working to build stronger communities, and we remain committed to supporting our customers at every stage in life. I’m particularly proud of our employees’ hard work to help consumers and businesses across all economic spectrums prosper.”

The full performance evaluation is available here. In its report, the OCC called out several areas where Santander excelled:

• Flexibility to borrowers and customers at the onset of the COVID-19 and through the evaluation period, including the origination of more than 20,000 loans totaling over $1.8 billion through the Small Business Administration’s Paycheck Protection Program to support small businesses across the Bank’s footprint impacted by the pandemic.
• Excellent responsiveness to community credit needs, including continuing to be a leader in community development lending for the purpose of maintaining, creating, or preserving affordable housing – a critical need within the communities where the Bank operates.
• Significant community investments and grants, including through the Santander US Cultivate Small Business program, which helps early-stage entrepreneurs build and sustain businesses in the food industry, with a focus on supporting woman-, immigrant-, and BIPOC-owned businesses in low-to-moderate income neighborhoods.
• Ensuring products and services are readily accessible to geographies and individuals of different income levels and offer customers a safe, affordable and useful banking offering to access and manage their money. This includes Santander^® Safety Net, the Bank’s industry-leading flexible overdraft policy, the introduction of Santander^® Essential Checking and continued enhancements to Simply Right^® Checking and Santander^® Savings accounts.

Santander US announced in 2023 its latest Community Plan, a three-year, $13.6 billion commitment on behalf of Santander’s businesses across the United States that includes:

• $1.5 billion in small business lending
• $3 billion in community development lending and investments, with more than $2.5 billion in affordable housing
• $9 billion in sustainable finance investment, with a focus on renewable energy
• 100% increase in direct supplier diversity spending
• $100 million in charitable giving to nonprofit organizations
• 100,000 employee volunteer hours in underserved communities

Santander Bank, N.A. is one of the country’s leading retail and commercial banks, with $102 billion in assets. With its corporate offices in Boston, the Bank’s more than 5,100 employees and more than 1.8 million customers are principally located in Massachusetts, New Hampshire, Connecticut, Rhode Island, New York, New Jersey, Pennsylvania and Delaware. The Bank is a wholly-owned subsidiary of Madrid-based Banco Santander, S.A. (NYSE: SAN), recognized as one of the world’s most admired companies by Fortune Magazine in 2024, with 168 million customers in the U.S., Europe, and Latin America. It is overseen by Santander Holdings USA, Inc., Banco Santander’s intermediate holding company in the U.S. For more information on Santander Bank, please visit www.santanderbank.com.

Santander Bank, N.A. is a Member FDIC and a wholly owned subsidiary of Banco Santander, S.A. © 2024 Santander Bank, N.A. All rights reserved. Santander, Santander Bank, the Flame Logo are trademarks of Banco Santander, S.A. or its subsidiaries in the United States or other countries. All other trademarks are the property of their respective owners.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240916451654/en/

Victoria Day

Victoria.day@santander.us

Source: Santander Bank, N.A.

FAQ

What CRA rating did Santander Bank (SAN) receive for the 2020-2022 exam period?

Santander Bank received an 'Outstanding' Community Reinvestment Act (CRA) rating from the Office of the Comptroller of the Currency (OCC) for the 2020-2022 exam period.

How much is Santander's (SAN) new Community Plan worth and when was it announced?

Santander announced a new $13.6 billion Community Plan in 2023, covering a three-year commitment across its U.S. businesses.

How many Paycheck Protection Program loans did Santander Bank (SAN) originate during the COVID-19 pandemic?

Santander Bank originated more than 20,000 loans totaling over $1.8 billion through the Small Business Administration's Paycheck Protection Program during the COVID-19 pandemic.

What is Santander Bank's (SAN) asset size as of 2024?

As of 2024, Santander Bank has $102 billion in assets.