CITIZENS FINANCIAL GROUP INC/RI (CFG)

CIK: 0000759944. SIC: 6022 State Commercial Banks. Latest 10-K as of: 2026-02-12.

SIC breadcrumb: Finance, Insurance, And Real Estate > Depository Institutions > SIC 6022 State Commercial Banks

SEC company page: https://www.sec.gov/edgar/browse/?CIK=759944. Latest filing source: 0000759944-26-000028.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-12. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000759944.json. Derived margins are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Missing metrics are omitted rather than fabricated.

Financial Charts

Macro Cross-References

• CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
• UNRATE - Unemployment Rate
• FEDFUNDS - Federal Funds Effective Rate
• CES0500000003 - Average Hourly Earnings of All Employees, Total Private
• DFEDTARU - Federal Funds Target Range - Upper Limit
• DFEDTARL - Federal Funds Target Range - Lower Limit
• DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
• DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
• DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
• DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
• T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
• CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
• CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
• CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
• CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
• PCEPI - Personal Consumption Expenditures: Chain-type Price Index
• PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
• PPIACO - Producer Price Index by Commodity: All Commodities
• T10YIE - 10-Year Breakeven Inflation Rate
• U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
• PAYEMS - All Employees, Total Nonfarm
• CIVPART - Labor Force Participation Rate
• EMRATIO - Employment-Population Ratio
• UNEMPLOY - Unemployed
• CE16OV - Employment Level
• ICSA - Initial Claims
• JTSJOL - Job Openings: Total Nonfarm
• JTSQUR - Quits: Total Nonfarm
• GDPC1 - Real Gross Domestic Product
• A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
• INDPRO - Industrial Production: Total Index
• TCU - Capacity Utilization: Total Index
• HOUST - New Privately-Owned Housing Units Started: Total Units
• PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
• RSAFS - Advance Retail Sales: Retail Trade
• PCE - Personal Consumption Expenditures
• DSPIC96 - Real Disposable Personal Income
• PSAVERT - Personal Saving Rate
• M2SL - M2
• BOPGSTB - U.S. International Trade in Goods and Services: Balance

Latest 10-K MD&A

Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization. Confidence: high. Filing date: 2026-02-12. Report date: 2025-12-31.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Page

Introduction

38

Executive Summary

38

Consolidated Statement of Operations Analysis - 2025 compared with 2024

40

Consolidated Statement of Operations Analysis - 2024 compared with 2023

44

Consolidated Balance Sheet Analysis

45

Business Segments

48

Risk Management

50

Credit Risk

51

Market Risk

61

Liquidity Risk

67

Operational Risk

70

Compliance Risk

70

Capital

70

Critical Accounting Estimates

73

Accounting and Reporting Developments

76

Non-GAAP Financial Measures

77

Citizens Financial Group, Inc. | 37

INTRODUCTION

Citizens Financial Group, Inc. is one of the nation’s oldest and largest financial institutions, with $226.4 billion in assets as of December 31, 2025. Headquartered in Providence, Rhode Island, we offer a broad range of retail, private banking, wealth management, and commercial banking products and services to individuals, small businesses, middle-market companies, large corporations, and institutions. We help our customers reach their potential by listening to them and by understanding their needs in order to offer tailored advice, ideas, and solutions. In Consumer Banking, we provide an integrated experience that includes mobile and online banking, a full-service customer contact center, and the convenience of approximately 3,100 ATMs and approximately 1,000 branches in 14 states and the District of Columbia. Consumer Banking products and services include a full range of banking, lending, savings, wealth management, and small business offerings. Consumer Banking includes Citizens Private Bank and Private Wealth, which integrates banking services and wealth management solutions to serve high- and ultra-high-net-worth individuals and families, as well as investors, entrepreneurs, and businesses. In Commercial Banking, we offer a broad complement of financial products and solutions, including lending and leasing, deposit and treasury management services, foreign exchange, interest rate and commodity risk management solutions, as well as loan syndication, corporate finance, merger and acquisition, and debt and equity capital markets capabilities.

The following MD&A is intended to assist readers in their analysis of the accompanying Consolidated Financial Statements and supplemental financial information. It should be read in conjunction with the Consolidated Financial Statements and Notes to Consolidated Financial Statements in Item 8, as well as other information contained in this document.

EXECUTIVE SUMMARY

This summary highlights select financial information of the Company as well as information regarding certain significant events and transactions occurring during the year ended December 31, 2025. This summary should be read in conjunction with this entire document for a more complete understanding of trends, events, commitments, uncertainties, liquidity, capital resources, and critical accounting policies and estimates. Each of these items, taken individually or collectively, could have an impact on the Company’s financial condition, results of operations, and cash flows. For additional information regarding our financial performance and condition, see “Consolidated Statement of Operations Analysis – 2025 compared with 2024” and “Consolidated Balance Sheet Analysis.”

Key Financial Highlights

•Net income of $1.8 billion increased $322 million, with earnings per diluted common share up $0.83 to $3.86 compared to 2024.

•Net interest income of $5.9 billion increased $220 million and net interest margin of 2.97% increased 13 basis points compared to 2024. The increase in net interest income is driven by higher net interest margin which reflects lower funding costs, including the reduction of higher-cost funding given the auto loan portfolio runoff and education loan sale, lower terminated swap impacts, and fixed-rate asset repricing benefits, partially offset by lower asset yields.

•Noninterest income of $2.4 billion increased $218 million compared to 2024, reflecting growth across a number of fee categories, primarily wealth and capital markets fees.

•Noninterest expense of $5.3 billion increased $77 million compared to 2024, driven by salaries and employee benefits reflecting hiring related to the Private Bank and Private Wealth build-out, strong capital markets fee performance, and increased medical benefit costs, partially offset by a decline in other operating expense primarily driven by lower FDIC deposit insurance costs.

•Provision expense of $608 million decreased $79 million compared to 2024, reflecting improving loan mix and reduced CRE.

•The efficiency ratio of 64.40% compared to 67.03% in 2024.

•ROTCE of 11.20% compared to 9.81% in 2024.

Citizens Financial Group, Inc. | 38

•Tangible book value per common share of $38.07 increased 18% from 2024, driven by a decrease in common shares outstanding of eleven million and a net increase in tangible common equity of $2.1 billion. The increase in tangible common equity is primarily attributable to increases in AOCI of $1.6 billion and retained earnings of $933 million, including net income of $1.8 billion for the year ended December 31, 2025.

See “Non-GAAP Financial Measures” for more information regarding the ROTCE and tangible book value per common share non-GAAP financial measures presented herein.

Sale of Education Loans

During the first quarter of 2025, we entered into an agreement to sell $1.9 billion of education loans and subsequently reclassified these loans to LHFS. Upon reclassification to LHFS, a charge-off of $25 million was recognized, which was covered by existing reserves. This transaction settled ratably each quarter throughout 2025.

Share Repurchases

On June 13, 2025, we announced that our Board of Directors increased the capacity of our common share repurchase program to $1.5 billion, an increase of $1.2 billion above the $300 million of capacity remaining under the prior June 2024 authorization. During 2025, the Parent Company repurchased $600 million of its outstanding common stock, with remaining capacity of $1.3 billion as of December 31, 2025. See Note 15 and Item 5 for additional information on share repurchase activity.

Preferred Stock

On July 31, 2025, we issued $400 million, or 400,000 shares, of 6.500% fixed-rate reset non-cumulative perpetual Series I Preferred Stock, par value of $25 per share with a liquidation preference of $1,000 per share. Holders of Series I Preferred Stock will be entitled to receive dividend payments only when, as, and if declared by our Board of Directors. Dividends are payable quarterly in arrears on January 6, April 6, July 6, and October 6 of each year.

The net proceeds from the issuance of the Series I Preferred Stock were used to redeem all of the outstanding shares of our 5.650% fixed-rate reset non-cumulative perpetual Series F Preferred Stock on October 6, 2025.

For more information regarding our Series I Preferred Stock issuance and Series F Preferred Stock redemption, see Note 15.

Common Stock Dividend

On October 15, 2025, we announced that our Board of Directors declared a quarterly common stock dividend of $0.46 per share, a $0.04, or 9.5%, increase compared to the prior quarter. The dividend was paid on November 12, 2025 to shareholders of record at the close of business on October 29, 2025.

Other Developments

On July 4, 2025, H.R. 1, entitled the One Big Beautiful Bill Act, was signed into law. This bill includes a broad range of tax reform provisions affecting individuals and businesses, including extending and modifying certain key Tax Cuts & Jobs Act provisions, extending certain Inflation Reduction Act energy incentives while accelerating the phase-out of others, and implementing various other tax cuts and spending measures. We have completed our evaluation of the bill and do not expect it to have a material impact on our Consolidated Financial Statements.

See “Regulation and Supervision” in Item 1 for 2025 developments related to regulations to which we are subject.

Citizens Financial Group, Inc. | 39

CONSOLIDATED STATEMENT OF OPERATIONS ANALYSIS – 2025 compared with 2024

Net Interest Income

Net interest income is our largest source of revenue and is the difference between the interest earned on interest-earning assets (generally loans and investment securities) and the interest expense incurred in connection with interest-bearing liabilities (generally deposits and borrowed funds). The level of net interest income is primarily a function of the difference between the effective yield on our average interest-earning assets and the effective cost of our interest-bearing liabilities. Factors that influence our net interest income include, but are not limited to, the pricing and mix of interest-earning assets and interest-bearing liabilities which, in turn, are impacted by external factors such as economic conditions, competition for loans and deposits, the monetary policy of the FRB, and market interest rates. For further discussion, refer to the “Market Risk” section of this report.

Citizens Financial Group, Inc. | 40

The following table presents the major components of our net interest income. Average balance represents amortized cost, excluding the unamortized basis adjustments related to the transfer of certain HTM securities from AFS. The yield/rate is based on annualized interest income or expense for the periods presented and includes the impact of hedging activities associated with the respective asset and liability categories.

Table 1: Major Components of Net Interest Income

Year Ended December 31,

2025

2024

Change

(dollars in millions)

Average

Balance

Income/

Expense

Yield/

Rate

Average

Balance

Income/

Expense

Yield/

Rate

Average

Balance

Yield/

Rate (bps)

Assets

Interest-bearing cash and due from banks and deposits in banks

$8,624 

$367 

4.20 

%

$9,566 

$503 

5.17 

%

($942)

(97) bps

Taxable investment securities

46,449 

1,713 

3.69 

44,627 

1,658 

3.71 

1,822 

(2)

Non-taxable investment securities

1 

— 

2.60 

1 

— 

2.60 

— 

—

Total investment securities

46,450 

1,713 

3.69 

44,628 

1,658 

3.71 

1,822 

(2)

Commercial and industrial

45,763 

2,250 

4.85 

44,174 

2,333 

5.20 

1,589 

(35)

Commercial real estate

26,079 

1,509 

5.71 

28,430 

1,795 

6.21 

(2,351)

(50)

Total commercial

71,842 

3,759 

5.16 

72,604 

4,128 

5.60 

(762)

(44)

Residential mortgages

33,800 

1,334 

3.95 

31,916 

1,184 

3.71 

1,884 

24

Home equity

17,695 

1,246 

7.04 

15,603 

1,231 

7.89 

2,092 

(85)

Automobile

3,432 

153 

4.44 

6,404 

274 

4.27 

(2,972)

17

Education

9,075 

533 

5.87 

11,340 

613 

5.41 

(2,265)

46

Other retail

4,233 

453 

10.71 

4,837 

518 

10.72 

(604)

(1)

Total retail

68,235 

3,719 

5.45 

70,100 

3,820 

5.45 

(1,865)

—

Total loans and leases

140,077 

7,478 

5.30 

142,704 

7,948 

5.52 

(2,627)

(22)

Loans held for sale

1,897 

105 

5.55 

1,174 

77 

6.51 

723 

(96)

Interest-earning assets

197,048 

9,663 

4.88 

198,072 

10,186 

5.10 

(1,024)

(22)

Noninterest-earning assets

21,549 

20,952 

597 

Total assets

$218,597 

$219,024 

($427)

Liabilities and Stockholders’ Equity

Checking with interest

$34,397 

$502 

1.46 

%

$32,943 

$491 

1.49 

%

$1,454 

(3)

Savings

25,189 

337 

1.34 

27,100 

476 

1.76 

(1,911)

(42)

Money market

56,475 

1,521 

2.69 

53,053 

1,705 

3.21 

3,422 

(52)

Time

21,875 

834 

3.81 

24,967 

1,153 

4.62 

(3,092)

(81)

Total interest-bearing deposits

137,936 

3,194 

2.32 

138,063 

3,825 

2.77 

(127)

(45)

Short-term borrowed funds

601 

22 

3.62 

252 

15 

5.73 

349 

(211)

Long-term borrowed funds

11,656 

594 

5.09 

13,831 

713 

5.15 

(2,175)

(6)

Total borrowed funds

12,257 

616 

5.02 

14,083 

728 

5.16 

(1,826)

(14)

Total interest-bearing liabilities

150,193 

3,810 

2.54 

152,146 

4,553 

2.99 

(1,953)

(45)

Noninterest-bearing demand deposits

37,746 

36,457 

1,289 

Other noninterest-bearing liabilities

5,557 

6,466 

(909)

Total liabilities

193,496 

195,069 

(1,573)

Stockholders’ equity

25,101 

23,955 

1,146 

Total liabilities and stockholders’ equity

$218,597 

$219,024 

($427)

Interest rate spread

2.34 

%

2.11 

%

23

Net interest income and net interest margin

$5,853 

2.97 

%

$5,633 

2.84 

%

13

Net interest income and net interest margin, FTE(1)

$5,869 

2.98 

%

$5,650 

2.85 

%

13

Memo: Total deposits (interest-bearing and noninterest-bearing demand)

$175,682 

$3,194 

1.82 

%

$174,520 

$3,825 

2.19 

%

$1,162 

(37) bps

(1) Net interest income and net interest margin on an FTE basis are non-GAAP financial measures. See “Non-GAAP Financial Measures” for more information.

Net interest income increased $220 million, or 4%, and net interest margin increased 13 basis points compared to 2024. The increase in net interest income is driven by higher net interest margin which reflects lower funding costs, including the reduction of higher-cost funding given the auto loan portfolio runoff and education loan sale, lower terminated swap impacts, and fixed-rate asset repricing benefits, partially offset by lower asset yields.

Average interest-earning assets decreased $1.0 billion compared to 2024, driven by a decline in total loans and leases and cash held in interest-bearing deposits, partially offset by an increase in investment securities and loans held for sale.

Citizens Financial Group, Inc. | 41

Average deposits increased $1.2 billion compared to 2024, driven primarily by growth in the Private Bank, partially offset by a reduction in higher-cost brokered deposits.

Average total borrowed funds decreased $1.8 billion compared to 2024, driven by a decline in auto collateralized borrowings, given runoff of the auto loan portfolio, and FHLB advances.

The following table presents changes in net interest income attributable to volume and rate changes for each major interest-earning asset and interest-bearing liability category:

Table 2: Changes in Net Interest Income Due to Average Volume and Average Rate

Year Ended December 31,

 2025 Versus 2024

(dollars in millions)

Average Volume(1)

Average Rate(1)

Net Change

Interest Income

Interest-bearing cash and due from banks and deposits in banks

($49)

($87)

($136)

Taxable investment securities

68 

(13)

55 

  Total investment securities

68 

(13)

55 

Commercial and industrial

84 

(167)

(83)

Commercial real estate

(146)

(140)

(286)

     Total commercial

(62)

(307)

(369)

Residential mortgages

69 

81 

150 

Home equity

165 

(150)

15 

Automobile

(127)

6 

(121)

Education

(122)

42 

(80)

Other retail

(65)

— 

(65)

      Total retail

(80)

(21)

(101)

      Total loans and leases

(142)

(328)

(470)

Loans held for sale

46 

(18)

28 

Total interest income

($77)

($446)

($523)

Interest Expense

Checking with interest

$22 

($11)

$11 

Savings

(34)

(105)

(139)

Money market

111 

(295)

(184)

Time

(143)

(176)

(319)

Total interest-bearing deposits

(44)

(587)

(631)

Short-term borrowed funds

20 

(13)

7 

Long-term borrowed funds

(119)

— 

(119)

      Total borrowed funds

(99)

(13)

(112)

Total interest expense

(143)

(600)

(743)

Net interest income

$66 

$154 

$220 

(1) Volume and rate changes are allocated on a consistent basis using the respective percentage changes in average balances and average rates.

Citizens Financial Group, Inc. | 42

Noninterest Income

The following table presents the components of noninterest income:

Table 3: Noninterest Income

Year Ended December 31,

(dollars in millions)

2025

2024

Change

Percent

Service charges and fees

$444 

$420 

$24 

6 

%

Capital markets fees

511 

467 

44 

9

Wealth fees

360 

294 

66 

22 

Card fees

346 

368 

(22)

(6)

Mortgage banking fees

233 

209 

24 

11 

Foreign exchange and derivative products

156 

146 

10 

7 

Letter of credit and loan fees

186 

175 

11 

6 

Securities gains, net

22 

18 

4 

22 

Other income(1)

136 

79 

57 

72 

Noninterest income

$2,394 

$2,176 

$218 

10 

%

(1) Includes bank-owned life insurance income and other income for all periods presented.

The primary drivers for the change in noninterest income for the year ended December 31, 2025, compared to 2024, are described below:

•Wealth fees increased reflecting growth in assets under management, primarily driven by net inflows as well as market appreciation;

•Capital markets fees increased driven by higher loan syndication and equity underwriting fees, partially offset by lower M&A fees;

•Mortgage banking fees increased driven by higher MSR valuation results, net of hedging; and

•Service charges and fees increased driven primarily by higher overdraft and cash management fees.

Noninterest Expense

The following table presents the components of noninterest expense:

Table 4: Noninterest Expense

Year Ended December 31,

(dollars in millions)

2025

2024

Change

Percent

Salaries and employee benefits

$2,798 

$2,657 

$141 

5 

%

Equipment and software

783 

769 

14 

2 

Outside services

633 

639 

(6)

(1)

Occupancy

435 

447 

(12)

(3)

Other operating expense

662 

722 

(60)

(8)

Noninterest expense

$5,311 

$5,234 

$77 

1 

%

The primary drivers for the change in noninterest expense for the year ended December 31, 2025, compared to 2024, are described below:

•Salaries and employee benefits increased reflecting hiring related to the Private Bank and Private Wealth build-out, strong capital markets fee performance, and increased medical benefit costs; and

•Other operating expense declined driven primarily by lower FDIC deposit insurance costs, partially offset by higher operating costs.

For more information regarding CBNA’s special assessment, see “Regulation and Supervision - Deposit Insurance” in Item 1.

Citizens Financial Group, Inc. | 43

Provision for Credit Losses

The provision for credit losses is the result of a detailed analysis performed to estimate our ACL. The total provision for credit losses includes the provision for loan and lease losses and the provision for unfunded commitments. Refer to “Risk Management – Credit Risk” for more information.

Provision expense of $608 million compared with a provision of $687 million for 2024, reflecting improving loan mix and reduced CRE.

Income Tax Expense

Income tax expense of $497 million increased $118 million, and our effective income tax rate of 21.3% increased from 20.1% compared to 2024. These increases were driven by a reduced benefit from tax-advantaged investments on higher pre-tax income.

CONSOLIDATED STATEMENT OF OPERATIONS ANALYSIS – 2024 compared with 2023

For a description of our results of operations for 2024, see the “Results of Operations – 2024 compared with 2023” section of Item 7 in our 2024 Form 10-K.

Citizens Financial Group, Inc. | 44

CONSOLIDATED BALANCE SHEET ANALYSIS

Securities

The following table presents the major components of securities at amortized cost and fair value:

Table 5: Amortized Cost and Fair Value of Securities

December 31,

2025

2024

(dollars in millions)

Amortized

Cost(1)

Fair Value

Amortized

Cost(1)

Fair Value

U.S. Treasury and other

$3,163 

$3,123 

$3,631 

$3,525 

State and political subdivisions

1 

1 

1 

1 

Mortgage-backed securities:

Federal agencies and U.S. government sponsored entities

33,379 

32,220 

30,897 

28,795 

Other/non-agency

268 

264 

273 

260 

Total mortgage-backed securities

33,647 

32,484 

31,170 

29,055 

Collateralized loan obligations

89 

89 

184 

184 

Total debt securities available for sale

$36,900 

$35,697 

$34,986 

$32,765 

Mortgage-backed securities:

Federal agencies and U.S. government sponsored entities

$7,595 

$6,812 

$8,187 

$7,136 

Total mortgage-backed securities

7,595 

6,812 

8,187 

7,136 

Asset-backed securities

338 

338 

412 

404 

Total debt securities held to maturity

$7,933 

$7,150 

$8,599 

$7,540 

Total debt securities available for sale and held to maturity

$44,833 

$42,847 

$43,585 

$40,305 

Equity securities, at cost(2)

$807 

$807 

$710 

$710 

Equity securities, at fair value(2)

317 

317 

220 

220 

(1) Excludes portfolio level basis adjustments of $17 million and $(75) million, respectively, for securities designated in active fair value hedge relationships under the portfolio layer method at December 31, 2025 and 2024.

(2) Included in Other assets in the Consolidated Balance Sheets.

The primary objective of our securities portfolio is to provide a readily available source of liquidity. The portfolio primarily includes high-quality and highly liquid investments that reflect our ongoing commitment to maintain strong contingent liquidity levels and pledging capacity.

As of December 31, 2025, U.S. Treasuries and mortgage-backed securities issued by GNMA and GSEs represented 98% of the fair value of our debt securities portfolio, with approximately $39.1 billion of unencumbered high-quality liquid securities serving as potential collateral for borrowings from the FHLB, FRB discount window, and the Fixed Income Clearing Corporation bilateral repurchase agreement market.

For further discussion of the use of our securities as liquidity collateral and liquidity requirements, see the “Liquidity Risk” and “Regulation and Supervision – Liquidity Requirements” sections in this document.

We manage our securities portfolio duration and convexity risk through asset selection and securities structure, and maintain duration levels within our risk appetite in the context of our broader interest rate risk framework and limits. As of December 31, 2025, the portfolio’s average effective duration, including hedging actions to reduce duration, was 3.8 years compared with 3.7 years as of December 31, 2024.

Citizens Financial Group, Inc. | 45

The following table presents the amortized cost and weighted-average yield of our securities portfolio by contractual maturity:

Table 6: Amortized Cost and Weighted-Average Yield of AFS and HTM Securities by Contractual Maturity

As of December 31, 2025

Distribution of Maturities(1)

1 Year or Less

After 1 Year Through 5 Years

After 5 Years Through 10 Years

After 10 Years

Total

(dollars in millions)

Amount

Yield(2)

Amount

Yield(2)

Amount

Yield(2)

Amount

Yield(2)

Amount

Yield(2)

Amortized cost:

U.S. Treasury and other

$— 

— 

%

$2,359 

2.76 

%

$804 

4.14 

%

$— 

— 

%

$3,163 

3.11 

%

State and political subdivisions

— 

— 

— 

— 

— 

— 

1 

2.60 

1 

2.60 

Mortgage-backed securities:

Federal agencies and U.S. government sponsored entities

110 

2.98 

2,305 

3.21 

1,018 

2.80 

29,946 

4.21 

33,379 

4.10 

Other/non-agency

— 

— 

— 

— 

— 

— 

268 

2.67 

268 

2.67 

Collateralized loan obligations

— 

— 

— 

— 

89 

5.44 

— 

— 

89 

5.44 

Total debt securities available for sale

110 

2.98 

4,664 

2.99 

1,911 

3.49 

30,215 

4.20 

36,900 

4.01 

Mortgage-backed securities:

Federal agencies and U.S. government sponsored entities

— 

— 

— 

— 

— 

— 

7,595 

2.29 

7,595 

2.29 

Asset-backed securities

— 

— 

338 

5.67 

— 

— 

— 

— 

338 

5.67 

Total debt securities held to maturity

— 

— 

338 

5.67 

— 

— 

7,595 

2.29 

7,933 

2.43 

Total debt securities

$110 

2.98 

%

$5,002 

3.17 

%

$1,911 

3.49 

%

$37,810 

3.82 

%

$44,833 

3.73 

%

(1) Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without incurring penalties.

(2) The weighted-average yield is computed based on a constant effective interest rate over the contractual life of each security and considers the contractual

coupon, amortization of premiums, and accretion of discounts. Yields exclude the impact of related hedging derivatives.

Loans and Leases

The following table presents loans and leases, excluding LHFS:

Table 7: Composition of Loans and Leases, Excluding LHFS

December 31,

(dollars in millions)

2025

2024

Change

Percent

Commercial and industrial

$49,232 

$42,551 

$6,681 

16 

%

Commercial real estate

24,580 

27,225 

(2,645)

(10)

Total commercial

73,812 

69,776 

4,036 

6 

Residential mortgages

35,024 

32,726 

2,298 

7 

Home equity

19,069 

16,495 

2,574 

16 

Automobile

2,310 

4,744 

(2,434)

(51)

Education

8,416 

10,812 

(2,396)

(22)

Other retail

4,061 

4,650 

(589)

(13)

Total retail

68,880 

69,427 

(547)

(1)

Total loans and leases

$142,692 

$139,203 

$3,489 

3 

%

The increase in total loans and leases as of December 31, 2025 compared to December 31, 2024 reflects a $4.0 billion increase in commercial driven by net new money originations in corporate banking and higher line of credit utilization, partially offset by CRE paydowns. Retail reflects a $547 million decrease driven by an agreement entered into during the first quarter to sell $1.9 billion of education loans, as well as runoff of the auto loan portfolio, largely offset by growth in home equity and mortgage, including the Private Bank.

Citizens Financial Group, Inc. | 46

The following table presents the maturity of our loans and leases portfolio by fixed and variable rate:

Table 8: Fixed and Variable Rate Loans and Leases by Maturity

December 31, 2025

(dollars in millions)

1 Year or Less(1)

After 1 Year Through 5 Years(1)

After 5 Years Through 15 Years(1)

After 15 Years(1)

Total Loans and Leases

Fixed rate:

Commercial and industrial

$1,106 

$2,256 

$464 

$14 

$3,840 

Commercial real estate

1,706 

3,591 

2,742 

27 

8,066 

Total commercial fixed rate

2,812 

5,847 

3,206 

41 

11,906 

Variable rate:

Commercial and industrial

10,627 

32,109 

2,557 

99 

45,392 

Commercial real estate

9,141 

6,555 

805 

13 

16,514 

Total commercial variable rate(2)

19,768 

38,664 

3,362 

112 

61,906 

Total commercial

22,580 

44,511 

6,568 

153 

73,812 

Fixed rate:

Residential mortgages

551 

2,331 

7,224 

8,460 

18,566 

Home equity

164 

107 

103 

6 

380 

Automobile

1,096 

1,214 

— 

— 

2,310 

Education

524 

2,445 

4,817 

— 

7,786 

Other retail

684 

629 

94 

56 

1,463 

Total retail fixed rate

3,019 

6,726 

12,238 

8,522 

30,505 

Variable rate:

Residential mortgages

207 

858 

4,102 

11,291 

16,458 

Home equity

584 

3,193 

14,372 

540 

18,689 

Automobile

— 

— 

— 

— 

— 

Education

73 

268 

279 

10 

630 

Other retail

2,558 

40 

— 

— 

2,598 

Total retail variable rate

3,422 

4,359 

18,753 

11,841 

38,375 

Total retail

6,441 

11,085 

30,991 

20,363 

68,880 

Total loans and leases

$29,021 

$55,596 

$37,559 

$20,516 

$142,692 

(1) Maturity is based on scheduled principal repayment date.

(2) Includes floating-rate commercial loans hedged to fixed rate to manage our exposure to the variability in interest cash flows. See “Market Risk” for additional information regarding our use of interest rate derivatives to hedge our loan portfolio.

Deposits

The following table presents the composition of deposits:

Table 9: Composition of Deposits

(dollars in millions)

December 31, 2025

% of Total Deposits

December 31, 2024

% of Total Deposits

Noninterest-bearing demand

$40,417 

22 

%

$36,920 

21 

%

Checking with interest

37,428 

20

33,246 

19

Savings

24,353 

13

25,976 

15

Money market

60,062 

33

55,321 

32

Time

21,053 

12

23,313 

13

Total deposits

$183,313 

100 

%

$174,776 

100 

%

    Total deposits as of December 31, 2025 increased compared to December 31, 2024, reflecting growth in the Private Bank and commercial, partially offset by a reduction in higher-cost Treasury brokered deposits.

Citizens Financial Group, Inc. | 47

The following table presents an analysis of estimated insured/secured deposits as a percentage of total deposits:

Table 10: Uninsured and Insured/Secured Deposits

December 31,

(dollars in millions)

2025

2024

Estimated uninsured deposits(1)

$86,877 

$76,764 

Less: Uninsured affiliate deposits eliminated in consolidation

11,555 

12,705 

Less: Preferred deposits(1)(2)

6,923 

6,902 

CFG adjusted estimated uninsured deposits, excluding preferred deposits

68,399 

57,157 

Total estimated insured/secured deposits

$114,914 

$117,619 

Insured/secured deposits to total deposits

63 

%

67 

%

(1) As reported on CBNA’s Call Report.

(2) Represents uninsured deposits of states and political subdivisions that are secured or collateralized as required under state law.

Insured/secured deposit balances continue to be broadly stable as of December 31, 2025. The decrease in the insured/secured deposits percentage during 2025 reflects growth in the private bank business, primarily corporate operating accounts which are generally more stable, and a decrease in insured Treasury brokered deposits as we continued to optimize our deposit mix.

The following table presents time deposits in excess of the FDIC insurance limit by remaining maturity:

Table 11: Time Deposits in Excess of the FDIC Insurance Limit by Remaining Maturity

(dollars in millions)

December 31, 2025

Three months or less

$1,859 

After three months through six months

795 

After six months through twelve months

508 

After twelve months

20 

Total time deposits(1)

$3,182 

(1) Includes time deposits per account in excess of $250,000.

Borrowed Funds

Total borrowed funds of $11.3 billion as of December 31, 2025 decreased $1.1 billion compared to December 31, 2024, driven by a decline in secured borrowings collateralized by loans and senior debt, partially offset by an increase in FHLB advances. For more information regarding our borrowed funds, see “Liquidity Risk” and Note 11.

BUSINESS SEGMENTS

We have two reportable business segments: Consumer Banking and Commercial Banking. The business segments are determined based on the products and services provided, or the type of customer served. Each business segment has a segment head that reports directly to the Chief Executive Officer, who has final authority over resource allocation decisions and performance assessment. The business segments reflect this management structure and the manner in which financial information is currently evaluated by the Chief Executive Officer.

See Note 1 for information regarding segment changes made during the fourth quarter of 2025 and Note 24 for more information regarding our business segments.

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The following table presents certain financial data of our reportable business segments. Total business segment financial results differ from total consolidated financial results. These differences are reflected in Other non-segment operations, consisting primarily of treasury and community development, and include assets, liabilities, capital, revenues, provision (benefit) for credit losses, expenses, and income tax expense (benefit) not attributed to the Company’s reportable business segments.

Table 12: Selected Financial Data for Business Segments

Consumer Banking

Commercial Banking

Year Ended December 31,

Year Ended December 31,

(dollars in millions)

2025

2024

2025

2024

Net interest income

$4,972 

$4,564 

$1,778 

$1,950 

Noninterest income

1,252 

1,131 

995 

908 

Total revenue

6,224 

5,695 

2,773 

2,858 

Noninterest expense

3,880 

3,677 

1,334 

1,241 

Profit (loss) before credit losses

2,344 

2,018 

1,439 

1,617 

Net charge-offs

328 

331 

309 

353 

Income (loss) before income tax expense (benefit)

2,016 

1,687 

1,130 

1,264 

Income tax expense (benefit)

510 

434 

265 

291 

Net income (loss)

$1,506 

$1,253 

$865 

$973 

Average Balances:

Total assets

$79,925 

$75,064 

$66,137 

$68,478 

Total loans and leases(1)

73,443 

68,681 

62,941 

65,481 

Deposits

128,275 

121,745 

43,657 

44,472 

Interest-earning assets

74,035 

69,272 

63,677 

65,982 

(1) Includes LHFS.

Consumer Banking

Net interest income increased $408 million compared to 2024, driven by higher net interest margin and growth in average interest-earning assets.

Noninterest income increased $121 million compared to 2024, driven by wealth fees, mortgage banking fees, and service charges and fees, reflecting growth in assets under management, primarily driven by net inflows as well as market appreciation, higher MSR valuation results, net of hedging, and higher overdraft and cash management fees.

Noninterest expense increased $203 million compared to 2024, driven primarily by salaries and benefits reflecting hiring related to the Private Bank and Private Wealth build-out, as well as an increase in medical benefit costs, and outside services given investments across the enterprise.

Net charge-offs were stable compared to 2024.

Commercial Banking

Net interest income decreased $172 million compared to 2024, driven by lower net interest margin and a decline in average interest-earning assets.

Noninterest income increased $87 million compared to 2024, driven by capital markets fees reflecting higher loan syndication and equity underwriting fees, partially offset by lower M&A fees.

Noninterest expense increased $93 million compared to 2024, driven primarily by salaries and benefits given strong capital markets fee performance and increased medical benefit costs, and outside services given investments across the enterprise.

Net charge-offs decreased $44 million compared to 2024, driven by CRE, partially offset by an increase in commercial and industrial.

Citizens Financial Group, Inc. | 49

RISK MANAGEMENT

We are committed to maintaining a strong, integrated, and proactive approach to the management of all risks to which we are exposed in pursuit of our business objectives. A key aspect of our Board’s responsibility as the main decision-making body is setting our risk appetite to ensure that the level of risk that we are willing to accept in the attainment of our strategic business and financial objectives is clearly understood.

To enable our Board to carry out its objectives, it has delegated authority for risk management activities, as well as governance and oversight of those activities, to a number of Board and executive management level risk committees. The Executive Risk Committee, chaired by the Chief Risk Officer, is responsible for oversight of risk across the enterprise and actively considers our inherent material risks, analyzes our overall risk profile, and seeks confirmation that the risks are being appropriately identified, assessed, and mitigated. Reporting to the Executive Risk Committee are the following committees covering specific areas of risk: Compliance and Operational Risk, Model Risk, Credit Policy, Asset Liability, Business Initiatives Review, and Conduct and Ethics.

Risk Framework

Our risk management framework is embedded in our business through a “Three Lines of Defense” model that defines responsibilities for risk management activities.

First Line of Defense

The business lines, including their associated support functions, are the first line of defense and are responsible for identifying, assessing, managing, and controlling the risks associated with the products and services they provide. The business lines are responsible for performing regular risk assessments to identify and assess the material risks that arise in their area of responsibility, complying with relevant risk policies, testing and certifying the adequacy and effectiveness of operational and financial reporting controls on a regular basis, establishing and documenting operating procedures, and establishing a governance structure for identifying and managing risk.

Second Line of Defense

The second line of defense includes independent monitoring and control functions responsible for the development and implementation of risk and control frameworks, along with related policies. This centralized risk function is independent from the business and is responsible for overseeing and challenging our business lines on the effective management of their risks including, but not limited to, credit, market, operational, regulatory, reputational, interest rate, liquidity, legal, and strategic risks.

Third Line of Defense

Our Internal Audit function is the third line of defense and provides independent assurance of the effectiveness of our internal controls and governance practices so that risk is managed appropriately for the size, complexity, and risk profile of the organization. Internal Audit has complete and unrestricted access to all of our records, physical properties and personnel. Internal Audit issues a report following each internal review and provides an audit opinion to the Board’s Audit Committee on a quarterly basis.

Credit Review reports to the Chief Risk Officer and provides the Board, senior management, and other stakeholders with independent assurance on the quality of credit portfolios and adherence to agreed Credit Risk Appetite and Credit Policies and processes. In line with its procedures and regulatory expectations, the Credit Review function undertakes a program of portfolio testing, assessing and reporting through four Risk Pillars of Asset Quality, Rating and Data Integrity, Risk Management, and Credit Risk Appetite.

Risk Appetite

Risk appetite is a strategic business and risk management tool that we define as the maximum limit of acceptable risk beyond which we could be unable to achieve our strategic objectives and capital adequacy obligations.

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Our principal non-market risks include credit, operational, regulatory, reputational, liquidity, and strategic risks. We are also subject to certain market risks which include potential losses arising from changes in interest rates, foreign exchange rates, equity prices, commodity prices, and/or other relevant market rates or prices. Market risk in our business arises from trading activities that serve customer needs, including interest rate hedging, foreign exchange risk, and non-trading activities within capital markets. We have established enterprise-wide policies and methodologies to identify, measure, monitor, and report on market risk, actively managing both trading and non-trading market risks. See “Market Risk” for further information. Our risk appetite is reviewed and approved annually by the Board Risk Committee.

Credit Risk

Credit risk represents the potential for loss arising from the failure of a customer, counterparty, or issuer to perform in accordance with the contractual terms of an obligation. While the majority of our credit risk is associated with lending activities, we do engage with other financial counterparties for a variety of purposes including investing, asset and liability management, and trading activities. Given the financial impact of credit risk on our earnings and balance sheet, the assessment, approval, and management of credit risk represents a significant part of our overall risk-management responsibility.

Our independent Credit Risk Function is responsible for reviewing and approving the credit risk appetite across all lines of business and credit products, approving larger and higher-risk credit transactions, monitoring portfolio performance, identifying problem credit exposures, and ensuring remedial management. Credit Risk actively monitors and manages concentrations of loan limits, loan types, industries, and geographies to ensure that our risk appetite is well balanced to achieve our goals.

Management and oversight of credit risk is the responsibility of each respective business line and the second line of defense. Our second line of defense, the independent Credit Risk Function, is led by the Chief Credit Officer who oversees all credit risk and reports to the Chief Risk Officer. The Chief Credit Officer, acting in a manner consistent with Board policies, has responsibility for, among other things, the governance process around policies, procedures, risk acceptance criteria, credit risk appetite, limits and authority delegation. The Chief Credit Officer and team also have responsibility for credit approvals for larger and higher-risk transactions and oversight of line of business credit risk activities. Reporting to the Chief Credit Officer are the heads of the second line of defense credit functions specializing in: Consumer Banking, Commercial Banking, Private Banking, Citizens Restructuring Management, Portfolio and Corporate Reporting, ACL Analytics, Current Expected Credit Loss, and Credit Policy and Administration. Each team under these leaders is composed of experienced credit professionals.

The primary mechanisms that govern our risk management include, but are not limited to, credit assessments, models, scorecards, credit limits, exposure management, concentration limits, balance sheet diversification, portfolio management, collateral requirements and individual credit policies tailored for Consumer and Commercial lending. Our policies outline the minimum acceptable lending standards and their alignment with our desired risk appetite. Material changes in our business model and strategies that identify a need to change our risk appetite or highlight a risk not previously contemplated are identified by the individual committees and presented to the Credit Policy Committee, Executive Risk Committee and the Board Risk Committee for approval, as appropriate.

We employ a comprehensive and integrated risk control program to proactively identify, measure, monitor, and mitigate existing and emerging credit risks across the credit life cycle including origination, account/portfolio management, and loss mitigation and recovery.

Consumer

We utilize several distinct business processes and channels to originate consumer credit, including traditional branch lending and mobile and online banking. Each distinct underwriting and origination activity includes unique credit risk characteristics, with loan pricing commensurate with the differing risk profiles. Consumer credit approvals are typically based on the financial strength and payment history of the borrower, type of exposure, and transaction structure, among other factors.

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Lending authority is granted to each first line approver by the second line of defense credit risk function to ensure proper oversight of the underwriting teams. We periodically evaluate the performance of each first line approver and annually reauthorize their delegated authority. Only senior members of the second line of defense credit risk function are authorized to approve significant exceptions to credit policies, which are not uncommon when compensating factors are present. Established exception limits, when reached or exceeded, trigger a comprehensive analysis.

For Consumer Banking, our teams use models to evaluate consumer loans across their life cycle. Credit scoring models are used to forecast the probability of default of an applicant prior to origination. When approving customers for a new loan or extension of an existing credit line, credit scores are used in conjunction with other credit risk variables such as affordability, length of term, collateral value, collateral type, and lien subordination.

Our consumer banking portfolio is comprised of five retail categories of loans: residential mortgages, home equity, education, automobile, and other retail.

Residential Mortgages and Home Equity

Residential mortgages are loans to consumers to purchase or refinance 1-4 family residential properties and are generally structured with repayment terms ranging from 15 to 30 years. We originate both fixed- and adjustable-rate (traditional and interest-only) residential mortgages, with the properties securing such mortgages primarily located within our geographic footprint. We do not originate residential mortgages that allow negative amortization or multiple payment options. Residential mortgage applications are underwritten using consistent credit policies and processes, with a focus on higher-quality borrowers.

Residential mortgages are originated based on an appraisal completed during the credit underwriting process, with borrower performance tracked monthly by segmenting the mortgage portfolio into pools based on product type. The portfolio is also segmented based upon delinquency, nonperforming status, modification and bankruptcy status, FICO scores, LTV, and geographic concentrations as part of our overall risk management analysis and monitoring.

Home equity loans primarily include lines of credit secured by a first- or second-lien on the borrower’s residence, which enable the customer to borrow against the equity in their home or refinance existing mortgage debt. The product is a variable-rate, interest-only line of credit that allows the borrower to draw against the available line with no required principal payments during an initial 10-year revolving period. At the end of the revolving period, the home equity line of credit converts into a 15-year amortizing structure.

Home equity applications are underwritten using full income and credit standards with underwriting criteria based on minimum credit scores, debt-to-income ratios, and combined LTV ratios utilizing current collateral valuations. The underwriting for variable-rate lines of credit also incorporates a stress analysis for rising interest rates. We actively manage lines of credit and adjust their lending limit when we believe it is necessary based on a borrower’s FICO score and any associated credit deterioration.

Borrower performance of the home equity portfolio is tracked on a monthly basis for internal reporting and risk management purposes by segmenting the portfolio into pools, which are typically based on origination vintage tranches. For home equity loans where we hold a subordinated lien position the performance of any related mortgage loans is also tracked regardless of whether we hold a lien on such loans. A third-party service provider is utilized to obtain updated loan information, including lien and collateral data that is aggregated from both public and private sources.

LTV information on our outstanding residential mortgages and home equity portfolios is updated quarterly based on a combination of automated valuation model updates and relevant home price indices. LTV is the ratio of the loan’s outstanding principal balance to the current property value estimate. For home equity and second mortgages, CLTV is the ratio of the first mortgage original principal balance and the second lien outstanding principal balance combined to the current property value estimate.

Property values for both residential mortgages and home equity loans are refreshed quarterly after an account is established to allow for proactive identification of changing levels of credit risk and to facilitate our portfolio management, including workout and loss mitigation functions. Our approach to managing credit risk is highly analytical and, where appropriate, is automated to ensure consistency and efficiency.

Citizens Financial Group, Inc. | 52

Education

The education portfolio is primarily comprised of two products, in-school loans and education refinance loans. An in-school loan is generally financed over a 5, 10, or 15-year term and provides for fixed or variable rate financing to students while enrolled in school, with the option to pay while in school or to defer payment until after graduation. An education refinance loan provides a refinancing option on an existing education loan for students and parents, with 5 to 20-year terms and fixed or variable rates.

The performance of the education portfolio is measured monthly, including updated FICO, or equivalent, scores. We analyze the portfolio by product channel and type, and regularly evaluate default and delinquency experience for internal reporting and risk management purposes.

Automobile

The automobile portfolio consists of loans originated primarily through independent franchised dealers, including some located in select states outside of our primary geographic footprint. This portfolio is in runoff as we discontinued the origination of automobile loans in 2023.

The performance of the automobile loan portfolio is measured monthly, including updated collateral values and FICO, or equivalent, scores. We analyze the portfolio by product channel and type and regularly evaluate default and delinquency experience for internal reporting and risk management purposes.

Other Retail

Other retail loans primarily consist of unsecured consumer lending products, including credit cards and point-of-sale loans originated through partnerships with third-party companies. These loans are underwritten in accordance with our established credit policies and guidelines. Certain point-of-sale loans originated with third-party companies include credit loss protection agreements provided by those companies, which mitigate our risk of loss. Given the variable nature of the credit card portfolio, we actively monitor interest rate impacts and portfolio performance to ensure alignment with our risk tolerance.

The following table presents certain asset quality metrics for our retail loan portfolio:

Table 13: Retail Asset Quality Metrics

December 31,

2025

2024

Average refreshed FICO for total portfolio

777 

775 

CLTV ratio for secured real estate(1)

50 

%

50 

%

(1) The real estate secured portfolio CLTV is calculated as the mortgage and second lien loan balance divided by the most recently available value of the property.

Commercial

Our commercial banking portfolio consists of traditional commercial and industrial loans, commercial leases, and commercial real estate loans.

For Commercial Banking, risk management includes defined credit products and policies and is separated into commercial and industrial loans, CRE, and leases. Separate verticals are established within commercial and industrial loans and leases for certain specialty products. Substantially all activity that falls under a defined industry or product is managed through a specialty vertical and a stand-alone team of industry, product, and credit risk specialists. CRE also operates as a specialty vertical.

Commercial transactions are subject to individual analysis and approval before origination and, with few exceptions, are subject to a formal annual review requirement. The underwriting process includes the establishment and approval of credit grades that establish the probability of default and loss given default. Material transactions require both a business line approver and an independent credit approver with the requisite level of delegated authority as determined by the size of the credit relationship as well as the probability of default. Checks and balances in the credit process and the independence of the credit approver function are designed to appropriately assess and sanction the level of credit risk being accepted, actively monitor the portfolio to facilitate the early recognition of credit problems, and provide for effective problem asset management and resolution. Authority to grant credit is delegated through the independent Credit Risk Function and is closely monitored and updated annually, at a minimum.

Citizens Financial Group, Inc. | 53

The primary factors considered in commercial credit approvals are the financial strength of the borrower, assessment of the borrower’s management capabilities, cash flows from operations, industry sector trends, type and sufficiency of collateral, type of exposure, geography, transaction structure including loan covenants, and the general economic outlook. While these are the primary factors considered, there are a number of other factors that may be considered in the decision process. In addition to the credit analysis conducted during the approval process before origination and during an annual review, our Credit Review group performs testing to provide an independent review and assessment of the quality of the portfolio and new originations. This group conducts portfolio reviews on a risk-based cycle to evaluate individual loans and validate risk ratings, as well as tests the consistency of the credit processes and the effectiveness of credit risk management.

Credit exposure to individual borrowers is managed by policy guidelines based on the perceived risk of each borrower, or related group of borrowers, with concentration risk managed through limits on industry sectors, asset classes, and loan quality factors.

We utilize internal risk ratings to monitor credit quality for commercial loans and leases, with ratings assigned at loan origination considering both quantitative and qualitative factors that directly correlate to loan quality and likelihood of repayment. These ratings are reevaluated utilizing a risk-based approach annually, at a minimum, or when management becomes aware of information affecting a borrower’s ability to fulfill their obligations.

Substantially all loans with an internal risk rating of Substandard Accrual or Nonaccrual, or loans categorized as Classified, are managed by Citizens Restructuring Management, a specialized group of credit professionals that handle the day-to-day management of loan workouts, commercial recoveries, and problem loan sales to reduce losses and maximize recoveries. Their responsibilities include developing and implementing action plans, assessing risk ratings, and determining the adequacy of the ACL, accrual status, and ultimate collectability of the Classified loan portfolio.

Criticized balances include loans with an internal risk rating of Special Mention, Substandard Accrual, or Nonaccrual. Total commercial criticized balances of $6.3 billion compared to $7.1 billion at December 31, 2024. For more information on internal risk ratings and the distribution of commercial loans and leases by vintage date and internal risk rating, see Note 4. In addition, see discussion of criticized balances below for our commercial and industrial and CRE portfolios.

Commercial and Industrial

The commercial and industrial portfolio includes both loans and leases made to commercial customers for use in normal business operations to finance working capital needs, equipment purchases, capital call facilities, or other projects/acquisitions. The loans and leases are generally underwritten individually to assess the quality of multiple sources of repayment including cash flow for debt service, collateral, and any guarantees from the business owner. Although real estate exists as collateral for these loans, the operation, sale, rental, or refinancing of the real estate is not considered the primary repayment source.

The risks inherent in the commercial and industrial portfolio are managed through origination policies, a defined loan concentration policy with established limits, ongoing loan- and portfolio-level reviews, recourse requirements, and continuous portfolio risk management activities. Our origination policies for the commercial and industrial portfolio include policies specific to loan product type, such as LTV and debt service coverage ratios, as applicable.

Commercial and industrial criticized balances of $2.6 billion at December 31, 2025 remained stable compared to December 31, 2024.

Citizens Financial Group, Inc. | 54

The following table presents our commercial and industrial loan portfolio by industry sector:

Table 14: Commercial and Industrial Loans by Industry Sector

December 31,

2025

2024

(dollars in millions)

Balance

% of

Total Loans and Leases

Balance

% of

Total Loans and Leases

Industry sector

Finance and insurance

Capital call facilities

$8,579 

6 

%

$6,070 

4 

%

Secured private credit finance

3,963 

3 

2,908 

2 

Other finance and insurance

4,633 

3 

3,538 

3 

Other manufacturing

3,604 

3 

3,491 

3 

Technology

3,203 

2 

2,818 

2 

Accommodation and food services

2,044 

1 

2,599 

2 

Health, pharma, and social assistance

2,368 

2 

2,322 

2 

Professional, scientific, and technical services

2,407 

2 

2,313 

2 

Energy and related

1,816 

1 

2,085 

1 

Other services

2,419 

2 

2,061 

1 

Wholesale trade

2,604 

2 

2,010 

1 

Retail trade

1,744 

1 

2,000 

1 

Arts, entertainment, and recreation

1,683 

1 

1,509 

1 

Administrative and waste management

1,486 

1 

1,352 

1 

Automotive

1,245 

1 

1,026 

1 

Rental and leasing

1,257 

1 

923 

1 

Consumer products manufacturing

717 

1 

710 

1 

Other

3,460 

2 

2,816 

2 

Total commercial and industrial

$49,232 

35 

%

$42,551 

31 

%

Commercial Real Estate

The CRE portfolio consists of both commercial property and construction loans that support a wide range of property development and investment activities including, but not limited to, multifamily, office spaces, industrial facilities, and retail shopping centers. These loans are typically repaid through cash flows generated from the operation, sale, or refinancing of the property. Risk on these loans is mitigated by requiring collateral values that exceed the loan amount and underwriting the loan with projected cash flow in excess of the debt service requirement.

Our CRE construction portfolio primarily consists of multifamily, warehouse, office, and data center property types. Loans in this portfolio are generally for construction projects that have been pre-sold or pre-leased, have secured permanent financing, or are made to real estate companies with significant equity invested in the project. Portfolio Management, CRE Loan Operations, and Collateral Risk Services are responsible for this portfolio and actively monitor the construction phase and manage the loan disbursements according to the predetermined construction schedule. Construction loans, which are generally short term in nature, are utilized to fund the development or renovation of real estate, with repayment often tied to the successful completion and stabilization of the property.

Risks inherent in this portfolio are managed by focusing on the financial strength and experience of the developer, market conditions, and other specific attributes associated with each project. We limit our loan amounts based on appraised values, minimum equity investments by our borrowers, and adequate cash flows to support the debt.

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Both macro- and loan-level stress-test scenarios based on existing and forecasted market conditions are part of the ongoing portfolio management process for the CRE portfolio. Ongoing portfolio-level reviews are performed that generate action plans based on occupancy levels or leasing revenues associated with the projects being reviewed. This highly individualized process requires working closely with all of our borrowers, as well as an in-depth knowledge of CRE project lending and the current market environment.

Property-type concentrations and both geographic and property-type performance metrics are actively monitored for all CRE loan types, with a focus on loans identified as higher risk based on our risk rating methodology. The portfolio is diversified by property type and loan size, representing a significant portion of the credit risk management strategies employed for this portfolio. Subsequent to origination, the Credit Review group provides an independent review and assessment of the quality of the underwriting and risk from new loan originations.

Appraisal values are obtained in conjunction with all originations and renewals, and on an as-needed basis, to comply with regulatory requirements and to ensure appropriate decisions regarding the ongoing management of the portfolio with respect to changing market conditions. Appraisals are obtained from approved vendors and are reviewed by an internal appraisal review group, which is composed of certified appraisers to ensure the quality of the valuation used in the underwriting process.

Commercial real estate criticized balances of $3.7 billion at December 31, 2025 decreased from $4.5 billion at December 31, 2024, attributable to office, multifamily, and industrial loan upgrades driven by improved leasing and operating performance, credit-enhanced extensions, sales, and refinancing activity, along with net charge-offs in the general office portfolio. Approximately 96% of commercial real estate loans remain current on payments as of December 31, 2025.

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The following table presents our commercial real estate loan portfolio by property type and state:

Table 15: Commercial Real Estate by Property Type and State

December 31,

2025

2024

(dollars in millions)

Balance

% of

Total Loans and Leases

Balance

% of

Total Loans and Leases

Property type

Multifamily

$9,196 

6 

%

$9,791 

7 

%

Office

Credit tenant lease and life sciences(1)

2,043 

1 

2,135 

2 

Other general office

2,416 

2 

2,930 

2 

Industrial

2,369 

2 

3,575 

3 

Retail

2,714 

2 

2,940 

2 

Co-op

1,771 

1 

1,802 

1 

Data center

736 

1 

1,024 

1 

Hospitality

331 

— 

418 

— 

Other

3,004 

2 

2,610 

2 

Total commercial real estate

$24,580 

17 

%

$27,225 

20 

%

State

New York

$6,238 

4 

%

$6,643 

5 

%

New Jersey

2,899 

2 

3,370 

2 

Pennsylvania

2,166 

2 

2,594 

2 

California

2,775 

2 

2,398 

2 

Massachusetts

1,638 

1 

1,682 

1 

Texas

1,244 

1 

1,571 

1 

Florida

960 

1 

1,123 

1 

Other Southeast(2)

2,265 

1 

2,789 

2 

Other

4,395 

3 

5,055 

4 

Total commercial real estate

$24,580 

17 

%

$27,225 

20 

%

(1) Credit tenant lease includes loans to nationally recognized tenants with high credit ratings and life sciences includes loans to provide lab and office space for tenants involved in the study and development of scientific discoveries.

(2) Includes Georgia, Maryland, North Carolina, South Carolina and Virginia.

Citizens Financial Group, Inc. | 57

Loan Asset Quality

Delinquency

We utilize credit scores provided by FICO and payment and delinquency status, among other data points, to monitor credit quality for retail loans. FICO credit scores represent current and historical national industry-wide consumer level credit performance data, which management believes are the strongest indicator of potential credit losses over the contractual life of the loan and a good predictor of a borrower’s future payment performance. A loan’s past due status is determined based on its contractual repayment terms or, if modified, based on its restructured terms.

The following table presents an aging analysis of accruing and nonaccrual loans for our retail loan portfolio:

Table 16: Retail Loan Portfolio Analysis

December 31, 2025

December 31, 2024

Days Past Due and Accruing

Days Past Due and Accruing

Current

30-59

60-89

 90+

Nonaccrual

Current

30-59

60-89

 90+

Nonaccrual

Residential mortgages

98.64 

%

0.27 

%

0.13 

%

0.40 

%

0.56 

%

97.81 

%

0.77 

%

0.28 

%

0.55 

%

0.59 

%

Home equity

97.67 

0.50 

0.15 

0.01 

1.67 

97.59 

0.53 

0.16 

— 

1.72 

Automobile

95.37 

2.55 

0.87 

— 

1.21 

96.18 

2.11 

0.70 

— 

1.01 

Education

99.12 

0.43 

0.19 

0.02 

0.24 

98.83 

0.42 

0.21 

0.02 

0.52 

Other retail

97.44 

0.86 

0.57 

— 

1.13 

96.86 

0.99 

0.67 

0.02 

1.46 

Total retail

98.26 

%

0.46 

%

0.19 

%

0.21 

%

0.88 

%

97.75 

%

0.76 

%

0.30 

%

0.26 

%

0.93 

%

Loans that are 90 days or more past due and accruing are not placed on nonaccrual status and continue to accrue interest if they are (i) adequately secured by collateral, in the process of collection, and reasonably expected to be restored to current status, (ii) managed in homogeneous portfolios with specified charge-off timeframes adhering to regulatory guidelines, or (iii) insured or guaranteed by a U.S. government agency.

For more information on the aging of accruing and nonaccrual retail loans and the distribution of retail loans by vintage date and FICO score, see Note 4.

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Nonaccrual Loans and Leases

Nonaccrual loans and leases are those on which the accrual of interest is suspended and excludes LHFS, loans insured or guaranteed by a U.S. government agency, and loans accounted for at fair value. For more information on nonaccrual loans and leases, see Note 4.

The following table presents nonaccrual loans and leases:

Table 17: Nonaccrual Loans and Leases

December 31,

(dollars in millions)

2025

2024

Change

Percent

Commercial and industrial

$277 

$241 

$36 

15 

%

Commercial real estate

618 

776 

(158)

(20)

Total commercial

895 

1,017 

(122)

(12)

Residential mortgages

196 

192 

4 

2

Home equity

319 

283 

36 

13

Automobile

28 

48 

(20)

(42)

Education

20 

56 

(36)

(64)

Other retail

46 

68 

(22)

(32)

Total retail

609 

647 

(38)

(6)

Nonaccrual loans and leases

$1,504 

$1,664 

($160)

(10 

%)

Nonaccrual loans and leases to total loans and leases

1.05 

%

1.20 

%

(15

 bps)

Allowance for loan and lease losses to nonaccrual loans and leases

129 

124 

5 

%

Allowance for credit losses to nonaccrual loans and leases

145 

136 

9 

%

The decline in nonaccrual loans and leases as of December 31, 2025 compared to December 31, 2024 reflects a decrease in commercial primarily driven by the general office segment of CRE, and a decrease in retail driven by the sale of education loans and continued runoff of the auto portfolio. See “ Executive Summary” for more information regarding the sale of education loans.

Other real estate owned represents property acquired through foreclosure or other proceedings and totaled $19 million and $11 million as of December 31, 2025 and 2024, respectively.

Allowance for Credit Losses

The ACL is comprised of the ALLL and the allowance for unfunded lending commitments. As described in Note 4, the ACL is maintained at a level the Company believes to be appropriate to absorb expected lifetime credit losses over the contractual life of a loan or lease and on unfunded lending commitments, inclusive of recoveries. We consider extensive historical loss experience, including the impact of loss mitigation and restructuring programs that we offer to borrowers experiencing financial difficulty, as well as projected loss severity as a result of loan default.

Management evaluates the appropriateness of the ACL on a quarterly basis. The evaluation of both quantitative and qualitative information is performed by assessing groups of assets that share similar risk characteristics as well as certain individual loans and leases that do not share similar risk characteristics with the collective group. Loans are generally grouped by product type and are assessed for credit losses using econometric models.

The quantitative ACL utilizes economic forecasts primarily based on econometric models that use known or estimated data as of the balance sheet date and forecasted data over the reasonable and supportable period. Known and estimated data include current PD, LGD, and EAD for commercial loans, timing and amount of expected draws for unfunded lending commitments, and FICO, LTV, and term for retail loans. The mix and level of loan balances, delinquency levels, assigned risk ratings, previous loss experience, current business conditions, amount and timing of expected future cash flows, and factors specific to commercial credits such as competition, business, and management performance are also considered. Forward-looking economic assumptions include real GDP, unemployment rate, interest rate curve, and changes in collateral values. Historical information, such as financial statements for commercial customers or consumer credit ratings, may not be as relevant in estimating future expected credit losses as forecasted inputs to the models during volatile economic time periods.

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Qualitative factors are also considered by management in determining the adequacy of the ACL, with qualitative adjustments utilized to capture characteristics in the loans and leases portfolio that impact expected credit losses but are not fully reflected within our expected credit loss models. These factors include, but are not limited to: model imprecision, uncertainty in economic scenario assumptions, and emerging risks related to either changes in the economic environment that are affecting specific portfolios, or changes in portfolio concentrations over time that may affect model performance, credit underwriting policy exceptions, and results of internal audit and quality control reviews. The consideration of these qualitative items results in adjustments to amounts included in our ACL for each loan portfolio. The qualitative component of the ACL as of December 31, 2025 did not change significantly from December 31, 2024.

Loans and leases that do not share similar risk characteristics are individually assessed for expected credit losses. Nonaccrual commercial and industrial and commercial real estate loans with an outstanding balance of $5 million or greater are assessed on an individual basis. Generally, measurement of the ACL on an individual loan or lease is based on the present value of its future cash flows or the fair value of its underlying collateral, if the loan or lease is collateral dependent.

The Company estimates expected credit losses associated with off-balance sheet financial instruments such as standby letters of credit, financial guarantees, and unfunded loan commitments that are not unconditionally cancellable. Off-balance sheet financial instruments are subject to individual reviews and are analyzed and segregated by risk according to the Company’s internal risk rating scale. These risk classifications, in conjunction with historical loss experience, current and future economic conditions, timing and amount of expected draws, and performance trends within specific portfolio segments, are considered to estimate the allowance for unfunded lending commitments. The Company does not recognize a reserve for future draws from credit lines that are unconditionally cancellable (e.g., credit cards).

For additional information regarding the ACL, see “Critical Accounting Estimates – Allowance for Credit Losses” and Note 4.

The following table presents the ACL and associated coverage ratio for our loan and lease portfolios:

Table 18: Allocation of the ACL and Related Coverage Ratios by Portfolio

December 31,

2025

2024

(dollars in millions)

Loans and Leases

Allowance

Coverage Ratio

% of Total Loans and Leases(1)

Loans and Leases

Allowance

Coverage Ratio

% of Total Loans and Leases(1)

Allowance for Loan and Lease Losses

Commercial and industrial

$49,232 

$508 

1.03 

%

35 

%

$42,551 

$480 

1.13 

%

31 

%

Commercial real estate

24,580 

550 

2.24 

17 

27,225 

660 

2.42 

19 

Total commercial

73,812 

1,058 

1.43 

52 

69,776 

1,140 

1.63 

50 

Residential mortgages

35,024 

225 

0.64 

25 

32,726 

194 

0.59 

24 

Home equity

19,069 

126 

0.66 

13 

16,495 

112 

0.68 

12 

Automobile

2,310 

10 

0.42 

2 

4,744 

24 

0.51 

3 

Education

8,416 

261 

3.10 

6 

10,812 

292 

2.70 

8 

Other retail

4,061 

263 

6.48 

3 

4,650 

299 

6.44 

3 

Total retail

68,880 

885 

1.28 

48 

69,427 

921 

1.33 

50 

Total loans and leases

$142,692 

$1,943 

1.36 

%

100 

%

$139,203 

$2,061 

1.48 

%

100 

%

Allowance for Unfunded Lending Commitments

Commercial(2)

$194 

1.70 

%

$155 

1.86 

%

Retail(3)

46 

1.35 

43 

1.39 

Total allowance for unfunded lending commitments

240 

198 

Allowance for credit losses

$142,692 

$2,183 

1.53 

%

$139,203 

$2,259 

1.62 

%

(1)    Represents the percentage of each loan category to total loans and leases.

(2)    Coverage ratio includes total commercial allowance for unfunded lending commitments and total commercial allowance for loan and lease losses in the numerator and total commercial loans and leases in the denominator.

(3) Coverage ratio includes total retail allowance for unfunded lending commitments and total retail allowance for loan losses in the numerator and total retail loans in the denominator.

Citizens Financial Group, Inc. | 60

The ACL as of December 31, 2025 compared to December 31, 2024 decreased $76 million, driven by a $33 million decrease in retail, given the benefit of auto loan portfolio runoff and improving loan mix, and a $43 million decrease in commercial.

The following table presents the net charge-off ratio for our loan and lease portfolios:

Table 19: Ratio of Net Charge-Offs to Average Loans and Leases

Year Ended December 31,

2025

2024

(dollars in millions)

Net Charge-Offs

Average Balance

Ratio

Net Charge-Offs

Average Balance

Ratio

Commercial and industrial

$133 

$45,763 

0.29 

%

$76 

$44,174 

0.17 

%

Commercial real estate

200 

26,079 

0.77 

300 

28,430 

1.05 

Total commercial

333 

71,842 

0.46 

376 

72,604 

0.52 

Residential mortgages

5 

33,800 

0.01 

— 

31,916 

— 

Home equity

(5)

17,695 

(0.03)

(7)

15,603 

(0.04)

Automobile

18 

3,432 

0.54 

41 

6,404 

0.65 

Education

109 

9,075 

1.20 

105 

11,340 

0.93 

Other retail

224 

4,233 

5.29 

231 

4,837 

4.75 

Total retail

351 

68,235 

0.51 

370 

70,100 

0.53 

Total loans and leases

$684 

$140,077 

0.49 

%

$746 

$142,704 

0.52 

%

For the year ended December 31, 2025, net charge-offs decreased $62 million and the net charge-off ratio decreased 3 basis points compared to 2024. The year-ended period December 31, 2025 includes a $25 million charge-off resulting from the sale of education loans. See “ Executive Summary” for more information regarding the sale of education loans.

Market Risk

Market risk refers to potential losses arising from changes in interest rates, foreign exchange rates, equity prices, commodity prices, and/or other relevant market rates or prices. Modest market risk arises from trading activities that serve customer needs, including the hedging of interest rate and foreign exchange risks. As described below, the market risk arising from our non-trading banking activities, such as the origination of loans and deposit gathering, is more significant. We have established enterprise-wide policies and methodologies to identify, measure, monitor, and report market risk. We actively manage market risk for both non-trading and trading activities.

Non-Trading Risk

Our non-trading banking activities expose us to market risk. This market risk is composed of interest rate risk, as we have no commodity risk and de minimis direct currency and equity risk. We also have market risk related to capital markets loan originations, as well as the valuation of our MSRs.

Interest Rate Risk

Interest rate risk emerges from the balance sheet after the aggregation of our assets, liabilities, and equity. We refer to this non-trading risk embedded in the balance sheet as “structural interest rate risk” or “interest rate risk in the banking book.”

A major source of structural interest rate risk is a difference in the repricing of assets relative to liabilities and equity. There are differences in the timing and drivers of rate changes reflecting the maturity and/or repricing of assets and liabilities. There may also be differences in the drivers of rate changes, as loans may be tied to a specific index rate such as SOFR or Prime, while deposits may not be as correlated with such rates and more dependent upon competitive demand. Due to these basis differences, net interest income is sensitive to changes in spreads between certain indices or repricing rates.

A primary source of our structural interest rate risk relates to faster repricing of floating-rate loans relative to core deposit funding. This source of asset sensitivity is more biased toward the short end of the yield curve. The secondary source of our interest rate risk is driven by longer term rates comprising the rollover or reinvestment risk on fixed-rate loans, as well as prepayment risk on mortgage-related loans and securities funded by non-rate sensitive deposits and equity.

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Another important source of structural interest rate risk relates to the potential exercise of explicit or embedded options. For example, most consumer loans can be prepaid without penalty and most consumer deposits can be withdrawn without penalty. The exercise of such options by customers can exacerbate the timing differences discussed above.

The primary goal of interest rate risk management is to control exposure to interest rate risk within policy limits approved by our Board. These limits and guidelines reflect our tolerance for interest rate risk over both short- and long-term horizons. To ensure that exposure to interest rate risk is managed within our risk appetite, we measure the exposure and hedge it, as necessary. The Treasury Asset and Liability Management team is responsible for measuring, monitoring, and reporting on our structural interest rate risk position. These exposures are reported on a monthly basis to the Asset Liability Committee and at Board meetings.

We measure structural interest rate risk through a variety of metrics intended to quantify both short- and long-term exposures. The primary method we use to quantify interest rate risk is simulation analysis in which we model net interest income from assets, liabilities, and hedge derivative positions under various interest rate scenarios over a three-year horizon. Exposure to interest rate risk is reflected in the variation of forecasted net interest income across these scenarios.

Key assumptions in this simulation analysis relate to the behavior of interest rates and spreads, changes in product balances, and the behavior of our loan and deposit customers in different rate environments. Repricing characteristics and balance fluctuations of deposits with indeterminate (i.e., non-contractual) maturities, as well as the pace of mortgage prepayments are the most significant behavioral assumptions. We utilize product level models that consider specific product characteristics and composition of the deposit portfolio, along with current and forward-looking market dynamics, to project deposit rates. Similarly, we employ dynamic prepayment and mortgage rate models to project prepayment behaviors specific to each of our product offerings. These models are developed based on internal performance data over prior interest rate cycles and calibrated to our experience and outlook for rates across a diverse set of market environments. We assess our models and assumptions periodically by running sensitivity analyses to determine the impact of changes to inputs or assumptions on our risk results, which are reported to the Asset Liability Committee.

Since we cannot predict the future path of interest rates, we use simulation analysis to project net interest income under various interest rate scenarios including a “most likely” (implied forward) scenario, as well as a variety of extreme and unlikely scenarios. These scenarios may assume gradual ramping of the overall level of interest rates, immediate shocks to the level of rates, and various yield curve twists in which movements in short- or long-term rates predominate. Generally, projected net interest income in any interest rate scenario is compared to net interest income in a base case where market-forward rates are realized.

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The table below presents the sensitivity of net interest income to various parallel yield curve shifts from the market implied forward yield curve. Our policies involve measuring exposures as a percentage change in net interest income over the next year due to either instantaneous or gradual parallel changes in rates relative to the market implied forward yield curve. As the following table illustrates, our balance sheet is slightly asset sensitive; net interest income would benefit from an increase in interest rates, while exposure to a decline in interest rates is within limits established and monitored by senior management. While an instantaneous and severe shift in interest rates is included in this analysis, we believe that any actual shift in interest rates would be more gradual and, therefore, have a more modest impact.

Table 20: Sensitivity of Net Interest Income

Estimated % Change in

Net Interest Income over 12 Months

December 31,

Basis points

2025

2024

Gradual Change in Interest Rates

+200

2.0 

%

2.2 

%

+100

1.0 

1.0 

-100

(1.1)

(0.9)

-200

(2.4)

(1.8)

Instantaneous Change in Interest Rates

+200

1.8 

%

1.8 

%

+100

1.1 

1.1 

-100

(1.9)

(1.3)

-200

(4.8)

(3.3)

We continue to manage asset sensitivity within the scope of our policy, changing market conditions, and changes in our balance sheet. The Company’s base case net interest income assumes the forward-rate path implied by the period-end yield curve is realized. The rate risk exposure is then measured based on assumed changes from that base case rate path.

Our risk position is slightly asset sensitive to a gradual change in rates as of December 31, 2025, consistent with our position as of December 31, 2024. Our interest rate sensitivity incorporates the impact of changes in our balance sheet mix, including securities, loans, deposits, borrowed funds, and hedge activity. Receive-fixed swaps that offset our naturally asset-sensitive balance sheet represent the primary hedging tool utilized to manage overall asset sensitivity. Pay-fixed swaps against our securities portfolio are also utilized to protect capital by reducing AOCI volatility.

We use a valuation measure of exposure to structural interest rate risk, EVE, as a supplement to net interest income simulations. EVE complements net interest income simulation analysis as it estimates risk exposure over a long-term horizon. EVE measures the extent to which the economic value of assets, liabilities, and off-balance sheet instruments may change in response to fluctuations in interest rates. This analysis is highly dependent upon assumptions applied to assets and liabilities with non-contractual maturities. We employ sophisticated models for prepayments and deposit pricing and attrition, which provide a granular view of cash flows based on the unique characteristics of the underlying products and customer segments. The change in value is expressed as a percentage of regulatory capital.

We use interest rate derivative contracts as part of our ALM strategy to manage exposure to the variability in the interest cash flows on our floating-rate assets and wholesale funding, the variability in the fair value of AFS securities, and to hedge market risk on fixed-rate capital markets debt issuances.

Citizens Financial Group, Inc. | 63

The following table presents interest rate derivative contracts that we have entered into as of December 31, 2025 and 2024:

Table 21: Interest Rate Hedges Used to Manage Non-Trading Interest Rate Exposure

December 31, 2025

December 31, 2024

Weighted Average

Weighted Average

(dollars in millions)

Notional Amount

Maturity (Years)

Fixed Rate

Reset Rate

Notional Amount

Maturity (Years)

Fixed Rate

Reset Rate

Fair value hedges:

Asset conversion swaps:

AFS securities:

Pay fixed/receive SOFR

$6,608 

3.8 

3.8 

%

3.9 

%

$7,827 

4.7 

3.8 

%

4.5 

%

Liability conversion swaps:

Long-term borrowed funds:

Receive fixed/pay SOFR

— 

— 

— 

— 

500 

0.9 

2.6 

4.8 

Total fair value hedges

$6,608 

$8,327 

Cash flow hedges:

Asset conversion swaps:

Loans:

Swaps

Receive fixed/pay SOFR

$30,750 

1.0 

3.4 

3.9 

$26,250 

1.7 

3.1 

4.5 

Receive fixed/pay SOFR - forward-starting

17,000 

3.3 

3.6 

3.3 

20,000 

3.5 

3.7 

4.0 

Basis swaps

Receive SOFR/pay 1-month term SOFR

12,000 

0.8 

— 

3.9/3.7

11,500 

1.6 

— 

4.5/4.3

Receive SOFR/pay 1-month term SOFR - forward-starting

1,000 

1.0 

— 

3.9/3.7

3,000 

2.4 

— 

4.0/4.0

Total cash flow hedges

$60,750 

$60,750 

Total hedges

$67,358 

$69,077 

Included in AOCI are net losses from terminated swaps of $273 million that will reduce net interest income by $230 million in 2026 and $43 million thereafter.

Capital Markets

A key component of our capital markets activities is the underwriting and distribution of corporate credit facilities to finance M&A transactions or other corporate purposes for our clients. We have a rigorous risk management process around these activities, including a limit structure capping our underwriting risk, potential loss, and sub-limits for specific asset classes. Further, the ability to approve underwriting exposure is delegated only to senior level individuals in the credit risk management and capital markets organizations with each transaction, at a minimum, requiring approval of one business approver and one credit approver. Such approvals are frequently handled in the context of a committee meeting forum known as the Loan Underwriting Approval Committee.

Mortgage Servicing Rights

We have market risk associated with the value of residential MSRs, which are impacted by various types of inherent risks, including duration, basis, convexity, volatility, and yield curve.

As part of our overall risk management strategy we enter into various freestanding derivatives, such as interest rate swaps, interest rate swaptions, interest rate futures, and forward contracts to purchase mortgage-backed securities to economically hedge the changes in fair value of our MSRs. For more information regarding the fair value of our MSRs and associated derivatives see Note 6 and Note 12.

As with our traded market risk-based activities, earnings at risk excludes the impact of MSRs. MSRs are captured under our single price risk management framework that is used for calculating a management VaR consistent with the definition used by banking regulators.

Citizens Financial Group, Inc. | 64

Trading Risk

We are exposed to market risk primarily through client facilitation activities from certain derivative and foreign exchange products as well as underwriting and market making activities. Market risk exposure arises from fluctuations in interest rates, basis spreads, volatility, foreign exchange rates, equity prices, and credit spreads across various financial instruments.

Client facilitation activities consist primarily of interest rate derivatives, financially settled commodity derivatives, and foreign exchange contracts where we enter into offsetting trades with a separate counterparty or exchange to manage our market risk exposure. In addition, we operate trading desks covering secondary loans, corporate bonds, and equity securities, with the objective of meeting secondary liquidity needs of our clients. We do not engage in any trading activities to benefit from short-term price differences.

Market Risk Governance

The process of setting our market risk limit is established in accordance with the formal enterprise risk appetite process and policy, which reflects the strategic and enterprise level articulation of opportunities for creating franchise value set to the boundaries of how much market risk to assume. Dealing authorities represent the key control tool in the management of market risk that allows the cascading of the risk appetite throughout the enterprise. A dealing authority sets the operational scope and tolerances within which a business and/or trading desk is permitted to operate, which is reviewed annually at a minimum. Dealing authorities are structured to accommodate client facing trades and hedges needed to manage the risk profile, with responsibility for remaining within established tolerances residing with the business. Key risk indicators, including VaR, open foreign currency positions, and single name risk are monitored daily and reported against tolerances consistent with our risk appetite and business strategy to the appropriate business line management and risk counterparts.

Market Risk Measurement

We use VaR as a statistical measure for estimating the potential exposure of our traded market risk in normal market conditions, with our VaR framework identical for both risk management and regulatory reporting purposes. Risk management VaR is based on a one-day holding period to a 99% confidence level and regulatory VaR is based on a ten-day holding period to the same confidence level. In addition to VaR, non-statistical measurements for measuring risk such as sensitivity analysis, market value, and stress testing are employed.

Our market risk platform and associated market risk and valuation models capture correlation effects across all our “covered positions” and allow for aggregation of market risk across products, risk types, business lines, and legal entities. We measure, monitor, and report market risk for management and regulatory capital purposes.

VaR Overview

The market risk measurement model is based on historical simulation. The VaR measure estimates the extent of any fair value losses on trading positions that may occur due to broad market movements (General VaR) such as changes in the level of interest rates, foreign exchange rates, equity prices, and commodity prices. It is calculated on the basis that current positions remain relatively unaltered over the course of a given holding period with the assumption that markets are sufficiently liquid to allow the business to close its positions, if required, within this holding period. Based on the composition of our “covered positions,” we also use a standardized add-on approach for the loan trading and high yield bond desks’ Specific Risk capital, which estimates the extent of any losses that may occur from factors other than broad market movements. The General VaR approach is expressed in terms of a confidence level over the past 500 trading days. The internal VaR measure, used as the basis of the main VaR trading limits, is a 99% confidence level with a one-day holding period, indicating that a loss greater than the VaR is expected to occur, on average, on only one day in 100 trading days (i.e., 1% of the time). Theoretically, there should be a loss event greater than VaR two to three times per year. The regulatory measure of VaR is a 99% confidence level with a ten-day holding period. The historical market data applied to calculate the VaR is updated on a two-business day lag. Refer to “Market Risk Regulatory Capital” below for details of our ten-day VaR metrics for the quarters ended December 31, 2025 and 2024.

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Market Risk Regulatory Capital

The U.S. banking regulators’ “Market Risk Rule” covers the calculation of market risk capital. Under this rule, all of our client facing trades and associated hedges maintain a low net risk and qualify as “covered positions.” The internal management VaR measure is calculated based on the same population of trades that is utilized for regulatory VaR.

Table 22: Results of Modeled and Non-Modeled Measures for Regulatory Capital Calculations

(dollars in millions)

For the Three Months Ended December 31, 2025

For the Three Months Ended December 31, 2024

Market Risk Category 

Period End

Average 

High

Low

Period End

Average 

High

Low

Interest Rate

$1 

$1 

$1 

$1 

$2 

$1 

$3 

$1 

Foreign Exchange Currency Rate

— 

— 

4 

— 

— 

— 

— 

— 

Credit Spread

1 

1 

1 

— 

2 

2 

2 

1 

Commodity

— 

— 

— 

— 

— 

— 

— 

— 

General VaR

1 

2 

4 

1 

3 

2 

3 

1 

Specific Risk VaR

— 

— 

— 

— 

— 

— 

— 

— 

Total VaR

$1 

$2 

$4 

$1 

$3 

$2 

$3 

$1 

Stressed General VaR

$9 

$5 

$9 

$4 

$7 

$7 

$12 

$4 

Stressed Specific Risk VaR

— 

— 

— 

— 

— 

— 

— 

— 

Total Stressed VaR

$9 

$5 

$9 

$4 

$7 

$7 

$12 

$4 

Market Risk Regulatory Capital

$21 

$28 

Specific Risk Not Modeled Add-on

27 

25 

de Minimis Exposure Add-on

2 

— 

Total Market Risk Regulatory Capital

$50 

$53 

Market Risk-Weighted Assets

$621 

$665 

Stressed VaR

SVaR is an extension of VaR and utilizes a longer historical look-back horizon, fixed from January 3, 2005, to identify headline risks from more volatile periods and to provide a counterbalance to VaR, which may be low during periods of low volatility. The holding period for profit and loss determination is ten days. In addition to its utilization for risk management purposes, SVaR is a component of market risk regulatory capital. We calculate SVaR daily under its own dynamic window regime whereby values of the ten-day, 99% VaR are calculated over all 260-day periods that can be obtained from the complete historical data set. Refer to “Market Risk Regulatory Capital” above for SVaR metrics.

Sensitivity Analysis

Sensitivity analysis is the measure of exposure to a single risk factor, such as a one basis point change in rates or credit spread. We conduct and monitor sensitivity on interest rates, basis spreads, foreign exchange exposures, option prices, and credit spreads. Since VaR is based on previous moves in market risk factors over recent periods, it may not be an accurate predictor of future market moves. Sensitivity analysis complements VaR as it provides an indication of risk relative to each factor irrespective of historical market moves and is an effective tool in evaluating the appropriateness of hedging strategies and concentrations.

Stress Testing

Conducting a stress test of a portfolio consists of running risk models with the inclusion of key variables that simulate various historical or hypothetical scenarios. For historical stress tests, profit and loss results are simulated for select time periods corresponding to the most volatile underlying returns, while hypothetical stress tests aim to consider concentration risk, illiquidity under stressed market conditions, and risk arising from our trading activities that may not be fully captured by our other risk-measurement methodologies. Hypothetical scenarios also assume that market moves occur simultaneously and no repositioning or hedging activity takes place to mitigate losses as market events unfold. Stress tests of our trading positions are generated daily.

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VaR Model Review and Validation

Our market risk measurement models are independently reviewed and subject to ongoing performance analysis by the model owners. This independent review and validation focuses on model methodology, market data, and performance and is the responsibility of Citizens’ Model Risk Management and Validation team. This team challenges the assumptions used and quantitative techniques employed, including the theoretical justification supporting them, and performs an assessment of the soundness of the required data over time. The quantitative impact of the major underlying modeling assumptions is estimated (e.g., through developing alternative models), if possible. The market risk models may be periodically enhanced due to changes in market price levels and price action regime behavior. The Market Risk Management and Validation team conducts internal validation before a new or changed model element is implemented and before a change is made to market data mapping.

VaR Backtesting

Backtesting is one form of validation of the VaR model and is run daily. The Market Risk Rule requires a comparison of our internal VaR measure to the actual, aggregated net trading revenue (excluding fees, commissions, reserves, intra-day trading, and net interest income) for each day over the preceding year (the most recent 250 business days). Any observed loss in excess of the combined portfolio’s VaR number is taken as an exception. The number of exceptions determines the multiplication factor used to derive the VaR and SVaR-based capital requirement for regulatory reporting purposes, when applicable. The multiplication factor, which increases from a minimum of three to a maximum of four, depending on the number of exceptions, did not change during 2025 based on the Company’s three observed exceptions during the year. Further, we perform sub-portfolio backtesting as required under the Market Risk Rule, using models approved by our banking regulators for interest rate, credit spread, commodity, and foreign exchange positions.

Liquidity Risk

We consider the effective and prudent management of liquidity, defined as our ability to meet our obligations when they come due, fundamental to our safety and soundness. As a financial institution, we must maintain operating liquidity to meet expected daily and forecasted cash flow requirements, as well as contingent liquidity to meet unexpected and stress-scenario funding requirements. Reflecting the importance of meeting all unexpected and stress-scenario funding requirements, we identify and manage contingent liquidity, consisting of cash balances at the FRB, unencumbered high-quality liquid securities, and unused FHLB borrowing capacity. Separately, we also identify and manage asset liquidity as a subset of contingent liquidity, consisting of cash balances at the FRB and unencumbered high-quality liquid securities. We maintain additional secured borrowing capacity at the FRB discount window, but do not view this as a primary means of funding, but rather a potential source in a stressed environment or during a market disruption. We manage liquidity at the consolidated enterprise level and at each material legal entity.

Liquidity risk is the risk arising from the inability to meet our obligations when they come due. We must maintain adequate funding to meet current and future obligations, including customer loan requests, deposit maturities and withdrawals, debt service, leases, and other cash commitments, under both normal operating conditions and periods of company-specific and/or market stress.

Liquidity risk is measured and managed by the Funding and Liquidity unit within our Treasury group in accordance with policy guidelines promulgated by our Board and the Asset Liability Committee. The Funding and Liquidity unit is responsible for maintaining a liquidity management framework that effectively manages liquidity risk. Processes within this framework include, but are not limited to, regular and comprehensive reporting, including current levels versus threshold limits for a broad set of liquidity metrics and early warning indicators, explanatory commentary relating to emerging risk trends and, as appropriate, recommended remedial strategies, liquidity stress testing, contingency funding plans, and collateral management.

Our Funding and Liquidity unit’s primary goals are to deliver and maintain prudent levels of operating liquidity to support expected and projected funding requirements; contingent liquidity to support unexpected funding requirements resulting from idiosyncratic, systemic, and combination stress events; and regulatory liquidity requirements in a timely manner from stable and cost-efficient funding sources. We seek to accomplish these goals by funding loans with stable deposits, by prudently controlling dependence on wholesale funding, particularly short-term unsecured funding, and by maintaining ample available liquidity, including a contingent liquidity buffer of unencumbered high-quality loans and securities.

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The Funding and Liquidity unit monitors a variety of liquidity and funding metrics and early warning indicators, including specific risk thresholds limits. These monitoring tools are broadly classified as follows:

•Current liquidity sources and capacities, including cash balances at the FRB, free and liquid securities, and secured borrowing capacity at the FHLB and FRB discount window;

•Liquidity stress sources, including idiosyncratic, systemic, and combined stresses, in addition to evolving regulatory requirements; and

•Current and prospective exposures, including secured and unsecured wholesale funding, and spot and cumulative cash-flow gaps across a variety of horizons.

Further, certain of these metrics are monitored individually for CBNA and for our consolidated enterprise on a daily basis, including cash position, unencumbered securities, asset liquidity, and available FHLB borrowing capacity. In order to identify emerging trends and risks and inform funding decisions, specific metrics are also forecasted over a one-year horizon.

We rely on customer deposits to be our primary stable and low-cost source of funding. Our other funding sources are dependent on our ability to securitize loans in secondary markets, raise funds in the debt and equity capital markets, pledge loans and/or securities for borrowing from the FHLB, pledge securities as collateral for borrowing under repurchase agreements, and sell AFS securities. In addition, we maintain a contingency funding plan designed to ensure that liquidity sources are sufficient to meet ongoing obligations and commitments, particularly in a stressed environment or during a market disruption. The plan identifies members of the liquidity contingency team and provides a framework for management to follow, including notification and escalation of potential liquidity stress events.

As of December 31, 2025:

•Organically generated deposits continue to be our primary source of funding, resulting in a consolidated period-end loan-to-deposit ratio, excluding LHFS, of 77.8%;

•Our total available liquidity, comprised of contingent liquidity and available discount window capacity, was approximately $86.3 billion;

◦Contingent liquidity was $72.3 billion, consisting of unencumbered high-quality liquid securities of $39.1 billion, unused FHLB capacity of $22.1 billion, and cash balances at the FRB of $11.1 billion; and

◦Available discount window capacity was $14.0 billion, defined as available total borrowing capacity from the FRB based on identified collateral, which is primarily secured by non-mortgage commercial and retail loans.

For a summary of our sources and uses of cash by type of activity for the years ended December 31, 2025, 2024, and 2023, see the Consolidated Statements of Cash Flows in Item 8.

Parent Company Liquidity

Our Parent Company’s primary sources of cash are dividends and interest received from CBNA resulting from investing in bank equity and subordinated debt as well as externally issued preferred stock, senior debt, and subordinated debt. Uses of cash include the routine cash flow requirements as a bank holding company, including periodic share repurchases and payments of dividends, interest, and expenses; the needs of subsidiaries, including CBNA for additional equity and, as required, its need for debt financing; and the support for extraordinary funding requirements when necessary. To the extent the Parent Company relies on wholesale borrowings, uses also include payments of related principal and interest.

During the year ended December 31, 2025, the Parent Company completed the following transactions:

•Issued $750 million of 5.253% fixed-to-floating rate senior notes due 2031;

•Issued 400,000 shares of 6.500% fixed-rate reset non-cumulative perpetual Series I Preferred Stock at an aggregate offering price of $400 million; and

•Redeemed all outstanding shares of the 5.650% fixed-rate reset non-cumulative perpetual Series F Preferred Stock on October 6, 2025.

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Our Parent Company’s cash and cash equivalents represent a source of liquidity that can be used to meet various needs and totaled $2.3 billion and $2.7 billion as of December 31, 2025 and 2024, respectively.

During the years ended December 31, 2025 and 2024, the Parent Company declared dividends on common stock of $755 million and $769 million, respectively, and declared dividends on preferred stock of $138 million and $137 million, respectively.

During the years ended December 31, 2025 and 2024, the Parent Company repurchased $600 million and $1.1 billion, respectively, of its outstanding common stock.

CBNA Liquidity

As CBNA’s primary business involves taking deposits and making loans, a key role of liquidity management is to ensure that customers have timely access to funds. Liquidity management also involves maintaining sufficient liquidity to repay wholesale borrowings, pay operating expenses, and support extraordinary funding requirements when necessary. In the ordinary course of business, the liquidity of CBNA is managed by matching sources and uses of cash. The primary sources of bank liquidity include deposits from our consumer and commercial customers; payments of principal and interest on loans and debt securities; and wholesale borrowings, as needed. The primary uses of bank liquidity include withdrawals and maturities of deposits; payment of interest on deposits; funding of loans and related commitments; and funding of securities purchases. To the extent that CBNA relies on wholesale borrowings, uses also include payments of related principal and interest.

During the year ended December 31, 2025, CBNA completed the following transactions:

•Redeemed $350 million of 5.284% fixed-to-floating rate senior notes due January 2026; and

•Redeemed $500 million of 3.750% senior notes due February 2026.

Credit ratings assigned by agencies such as Moody’s, Standard and Poor’s, and Fitch impact our access to unsecured wholesale market funds and to large uninsured customer deposits and are presented in the table below. We currently have a “stable” outlook at Standard & Poor’s, a “stable” outlook at Moody’s, and a “positive” outlook at Fitch. Changes in our public credit ratings could affect both the cost and availability of our wholesale funding.

Table 23: Credit Ratings

December 31, 2025

Moody’s  

Standard and

Poor’s

Fitch  

Citizens Financial Group, Inc.:

Long-term issuer

Baa1

BBB+

BBB+

Short-term issuer

NR

A-2

F1

Subordinated debt

Baa1

BBB

BBB

Preferred Stock

Baa3

BB+

BB

Citizens Bank, National Association:

Long-term issuer

A3

A-

BBB+

Short-term issuer

(P) P-2

A-2

F1

Long-term deposits

A1

NR

A-

Short-term deposits

P-1

NR

F1

NR = Not Rated

Regulatory liquidity requirements represent another key driver of systemic liquidity conditions and management practices, with the FRB and OCC regularly evaluating our liquidity as part of the overall supervisory process. For further discussion, see the “Liquidity Requirements” section under “Regulation and Supervision” in Item 1.

Contractual Obligations

In the ordinary course of business, we enter into contractual obligations that may require future cash payments, including customer deposit maturities and withdrawals, debt service, lease obligations and other cash commitments. For more information regarding these obligations, see Notes 7, 10 and 11.

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Off-Balance Sheet Arrangements

We engage in a variety of activities that are not reflected in our Consolidated Balance Sheets that are generally referred to as “off-balance sheet arrangements.” For more information on these types of activities, see Note 17.    

Operational Risk

Operational risk is the risk of loss due to human error, third-party performance failures, or inadequate or failed internal systems and controls and includes certain risks such as fraud, legal, and natural disasters. To mitigate these risks, we maintain a comprehensive system of internal controls designed to identify, assess, and monitor potential threats to our operations. Our risk management framework includes regular audits, employee training, cybersecurity measures, and business continuity planning. We continuously evaluate and enhance these controls to adapt to evolving risks and regulatory requirements, ensuring the integrity, reliability, and efficiency of our operations.

For more information regarding our cybersecurity risk management practices and governance, see Item 1C in this report.

Compliance Risk

Financial institutions are subject to many laws, rules, and regulations at both the federal and state levels. These broad-based laws, rules, and regulations include, but are not limited to, expectations relating to anti-money laundering, lending limits, client privacy, fair lending, prohibitions against unfair, deceptive, or abusive acts or practices, protections for military members as they enter active duty, and community reinvestment. Adherence to the increasing volume and complexity of regulatory changes can increase our overall compliance risk. As such, we utilize various resources to help ensure expectations are met, including a team of compliance experts dedicated to ensuring our conformance with all applicable laws, rules, and regulations. Our colleagues receive training for several broad-based laws and regulations including, but not limited to, anti-money laundering and customer privacy. Colleagues engaged in lending activities also receive training for laws and regulations related to flood disaster protection, equal credit opportunity, fair lending, and/or other courses related to the extension of credit. We hold ourselves to a high standard for adherence to compliance management and seek to continuously enhance our performance.

CAPITAL

As a BHC and FHC, we are subject to regulation and supervision by the FRB. Our banking subsidiary, CBNA, is a national banking association primarily regulated by the OCC. Our regulation and supervision continues to evolve as the legal and regulatory frameworks governing our operations continue to change. See the “Regulation and Supervision” section in Item 1 for more information.

Capital Adequacy Process

Our assessment of capital adequacy begins with our Board-approved risk appetite and risk management framework. This framework provides for the identification, measurement, and management of material risks. Capital requirements are determined for actual and forecasted risk portfolios using applicable regulatory capital methodologies. The assessment also considers the possible impacts of approved and proposed changes to regulatory capital requirements. Key analytical frameworks, including scenario analysis and stress testing, supplement our base line forecast to help inform a range of potential outcomes. A governance framework supports our capital planning process, including capital management policies and procedures that document capital adequacy metrics and limits, as well as our Capital Contingency Plan and the active engagement of both the Board and senior management in oversight and decision-making.

Forward-looking assessments of capital adequacy provide for the development of a single capital plan, which is periodically submitted to the FRB, that covers both us and our banking subsidiary. We prepare this plan in accordance with the Capital Plan Rule and we participate annually in the FRB’s horizontal capital review as part of their normal supervisory process, which includes an assessment of specific capital planning areas.

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The FRB regularly supervises and evaluates our capital adequacy and capital planning processes, including the submission of an annual capital plan approved by our Board of Directors or one of its committees. Under the FRB’s capital requirements, we must maintain capital ratios above the sum of the regulatory minimum and SCB requirement to avoid restrictions on capital distributions and discretionary bonus payments. The FRB utilizes the supervisory stress test to determine our SCB, which is re-calibrated with each biennial supervisory stress test and updated annually to reflect our planned common stock dividends. As an institution subject to Category IV standards, we are subject to biennial supervisory stress testing in even-numbered years. Our SCB associated with the 2024 supervisory stress test was 4.5%, effective through September 30, 2025. In August 2025, the FRB provided us with our updated SCB requirement, which remains at 4.5% and was initially effective from October 1, 2025 to September 30, 2026. However, in February 2026, the SCB effective date was moved from October 1, 2026 to October 1, 2027 because the FRB extended the notification deadlines while its enhanced transparency proposal and related stress test model changes remain under public comment and will not be finalized before the 2026 supervisory stress test, resulting in our SCB remaining in place until October 1, 2028, pending other regulatory actions.

Regulations relating to capital planning, regulatory reporting, stress testing, and capital buffer requirements applicable to firms like us are presently subject to rulemaking and potential further guidance and interpretation by the applicable federal regulators. We will continue to evaluate the impact of these and any other regulatory changes, including their potential resultant changes in our regulatory and compliance costs.

Regulatory Capital Ratios and Capital Composition

Under the current U.S. Basel III capital framework, we, and our banking subsidiary, CBNA, must meet the following specific minimum requirements: CET1 capital ratio of 4.5%, Tier 1 capital ratio of 6.0%, Total capital ratio of 8.0%, and Tier 1 leverage ratio of 4.0%. As a BHC, our SCB of 4.5% is imposed on top of the three minimum risk-based capital ratios listed above and a CCB of 2.5% is imposed on top of the three minimum risk-based capital ratios listed above for CBNA.

For additional discussion of the U.S. Basel III capital framework and its related application, see the “Regulation and Supervision” section in Item 1. The table below presents the regulatory capital ratios for CFG and CBNA under the U.S. Basel III Standardized rules:

Table 24: Regulatory Capital Ratios Under the U.S. Basel III Standardized Rules

December 31,

2025

2024

(dollars in millions)

Amount

Ratio

Amount

Ratio

Required Minimum Capital Ratio(1)

CET1 capital

CFG

$18,240 

10.6 

%

$17,900 

10.8 

%

9.0 

%

CBNA

20,946 

12.3 

20,250 

12.3 

7.0 

Tier 1 capital

CFG

20,351 

11.9 

20,013 

12.1 

10.5 

CBNA

20,946 

12.3 

20,250 

12.3 

8.5 

Total capital

CFG

23,654 

13.8 

23,232 

14.0 

12.5 

CBNA

24,135 

14.1 

23,362 

14.2 

10.5 

Tier 1 leverage

CFG

20,351 

9.5 

20,013 

9.4 

4.0 

CBNA

20,946 

9.8 

20,250 

9.6 

4.0 

Risk-weighted assets

CFG

171,493 

165,699 

CBNA

170,656 

164,986 

Quarterly adjusted average assets(2)

CFG

215,321 

212,555 

CBNA

214,310 

211,849 

(1) Represents minimum requirement under the current capital framework plus the SCB of 4.5% and CCB of 2.5% for CFG and CBNA, respectively. The SCB and CCB are not applicable to the Tier 1 leverage ratio.

(2) Represents total average assets less certain amounts deducted from Tier 1 capital.

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At December 31, 2025, CFG’s CET1, Tier 1, and Total capital ratios decreased compared to December 31, 2024. Dividends, common share repurchases, a $5.8 billion increase in RWA, and the full phase-in of the modified CECL transition amount was partially offset by net income. Higher commercial and industrial loans was the key driver for the increase in RWA.

At December 31, 2025, CBNA’s CET1 and Tier 1 capital ratios were stable and its Total capital ratio decreased slightly compared to December 31, 2024. Dividend payments to the Parent Company, a $5.7 billion increase in RWA, and the full phase-in of the modified CECL transition amount was partially offset by net income. Higher commercial and industrial loans was the key driver for the increase in RWA.

At December 31, 2025, CFG’s and CBNA’s Tier 1 leverage ratio increased compared to December 31, 2024, reflecting an increase in quarterly adjusted average assets and their respective changes in Tier 1 capital described above.

The following table presents the components of our regulatory capital under the U.S. Basel III capital framework:

Table 25: Capital Composition Under the U.S. Basel III Capital Framework

December 31,

(dollars in millions)

2025

2024

Total common stockholders’ equity

$24,206 

$22,141 

Adjustments:

Modified CECL transitional amount

— 

96 

Net unrealized (gains)/losses recorded in AOCI, net of tax:

Debt securities

1,603 

2,369 

Derivatives

118 

925 

Unamortized net periodic benefit costs

249 

301 

Deductions:

Goodwill, net of deferred tax liability

(7,763)

(7,768)

Other intangible assets, net of deferred tax liability

(104)

(128)

Deferred tax assets that arise from tax loss and credit carryforwards

(69)

(36)

Total CET1 capital

18,240 

17,900 

Qualifying preferred stock

2,111 

2,113 

Total Tier 1 capital

20,351 

20,013 

Qualifying subordinated debt(1)

1,239 

1,232 

Allowance for credit losses

2,183 

2,259 

Exclusions from Tier 2 capital:

  Modified adjusted allowance for credit losses transitional amount

— 

(125)

  Allowance on PCD assets

(119)

(147)

Adjusted allowance for credit losses

2,064 

1,987 

Total capital

$23,654 

$23,232 

(1) As of December 31, 2024, the amount of non-qualifying subordinated debt excluded from regulatory capital was $469 million. See Note 11 for more details on our outstanding subordinated debt.

Capital Transactions

We completed the following capital transactions during 2025:

•Repurchased $600 million of our outstanding common stock;

•Issued 400,000 shares of 6.500% fixed-rate reset non-cumulative perpetual Series I Preferred Stock at an aggregate offering price of $400 million;

•Redeemed all outstanding shares of the 5.650% fixed-rate reset non-cumulative perpetual Series F Preferred Stock on October 6, 2025;

•Declared quarterly common stock dividends of $0.42 per share in the first three quarters and $0.46 in the fourth quarter, aggregating to $755 million; and

•Declared preferred stock dividends aggregating to $138 million.

For additional detail regarding our common and preferred stock dividends see Note 15.

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On June 13, 2025, we announced that our Board of Directors increased the capacity of our common share repurchase program to $1.5 billion, an increase of $1.2 billion above the $300 million of capacity remaining under the prior June 2024 authorization. All future capital distributions are subject to consideration and approval by our Board of Directors prior to execution. The timing and amount of future dividends and share repurchases will depend on various factors, including our capital position, financial performance, balance sheet growth, market conditions, and regulatory considerations.

AOCI Impact on Regulatory Capital

Under the current applicable regulatory capital rules we have made the AOCI opt-out election, which enables us to exclude components of AOCI from regulatory capital. As noted in the “Capital and Stress Testing Requirements” section of “Regulation and Supervision” in Item 1, the regulatory agencies are considering the inclusion of AOCI components in regulatory capital for Category IV firms like us, notably the AOCI relative to securities and pension.

In light of this potential change, the Company considers capital ratios including the AOCI impact from securities and pension when evaluating capital utilization and adequacy, in addition to capital ratios defined by the regulatory agencies. These capital ratios are intended to complement our regulatory capital ratios and are viewed by management as useful measures reflective of the level of capital available to withstand unexpected market conditions. See “Non-GAAP Financial Measures” for more information.

The following table presents our regulatory capital ratios including the AOCI impact from securities and pension:

Table 26: AOCI Impact on Regulatory Capital

December 31, 2025

CFG

CBNA

(dollars in millions)

CET1

Tier 1

Total

CET1

Tier 1

Total

Regulatory capital, including AOCI impact:

Regulatory capital

$18,240 

$20,351 

$23,654 

$20,946 

$20,946 

$24,135 

Unrealized gains (losses) on securities and pension

(1,852)

(1,852)

(1,852)

(1,831)

(1,831)

(1,831)

Deferred tax assets - securities and pension AOCI

(37)

(37)

(37)

(39)

(39)

(39)

Regulatory capital, including AOCI impact (non-GAAP)

$16,351 

$18,462 

$21,765 

$19,076 

$19,076 

$22,265 

Risk-weighted assets, including AOCI impact:

Risk-weighted assets

$171,493 

$171,493 

$171,493 

$170,656 

$170,656 

$170,656 

Unrealized gains (losses) on securities and pension

(515)

(515)

(515)

(494)

(494)

(494)

Deferred tax assets - securities and pension AOCI

1,491 

1,491 

1,491 

1,469 

1,469 

1,469 

Risk-weighted assets, including AOCI impact (non-GAAP)

$172,469 

$172,469 

$172,469 

$171,631 

$171,631 

$171,631 

Ratio:

Regulatory capital ratio

10.6 

%

11.9 

%

13.8 

%

12.3 

%

12.3 

%

14.1 

%

Regulatory capital ratio, including AOCI impact (non-GAAP)

9.5 

%

10.7 

%

12.6 

%

11.1 

%

11.1 

%

13.0 

%

CRITICAL ACCOUNTING ESTIMATES

Our Consolidated Financial Statements included in this Report are prepared in accordance with GAAP, requiring us to establish accounting policies and make estimates and assumptions that affect reported amounts.

An accounting estimate requires assumptions and judgments about uncertain matters that could have a material effect on our Consolidated Financial Statements. Estimates are made using facts and circumstances known at a point in time. Changes in those facts and circumstances could produce results substantially different from those estimates. Our most significant accounting policies and estimates and their related application are discussed below. See Note 1 for further discussion of our significant accounting policies.

Allowance for Credit Losses

The ACL of $2.2 billion at December 31, 2025 decreased $76 million compared to December 31, 2024 given improving loan mix, reflecting the reduction of the auto and education portfolio, reduced CRE, and lower loss-content originations.

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As of December 31, 2025, our ACL economic forecast over a two-year reasonable and supportable period reflects the economy going into a shallow two-quarter contraction inclusive of uncertainties related to the implementation of tariffs and protectionist trade policies, inflationary pressures, and geopolitical tensions. This forecast is generally applied to the retail and commercial and industrial portfolios and projects peak unemployment of approximately 5.3% and a start-to-trough real GDP decline of approximately 0.5%, compared to peak unemployment of approximately 5.1% and a start-to-trough real GDP decline of approximately 0.4% at December 31, 2024. More severe economic scenarios are applied within the CRE portfolio, such as general office, with peak unemployment of approximately 9.4% and a start-to-trough real GDP decline of approximately 4.4%, compared to peak unemployment of approximately 9.3% and a start-to-trough real GDP decline of approximately 4.4% at December 31, 2024.

Our determination of the ACL is sensitive to changes in forecasted macroeconomic conditions during the reasonable and supportable forecast period. To illustrate the sensitivity, we applied a more pessimistic scenario than that described above which reflects deeper real GDP contraction across our two-year reasonable and supportable forecast period with peak unemployment of approximately 6.7% and start-to-trough real GDP decline of approximately 2.0%. Excluding consideration of qualitative adjustments, this scenario would result in a quantitative lifetime loss estimate of approximately 1.4x our modeled period-end ACL, or an increase of approximately $700 million. This analysis relates only to the modeled credit loss estimate and not to the overall period-end ACL, which includes qualitative adjustments.

Because several quantitative and qualitative factors are considered in determining the ACL, this sensitivity analysis does not necessarily reflect the nature and extent of future changes in the ACL or even what the ACL would be under these economic circumstances. The sensitivity analysis is intended to provide insights into the impact of adverse changes in the macroeconomic environment and the corresponding impact to modeled loss estimates. The hypothetical determination does not incorporate the impact of management judgment or other qualitative factors that could be applied in the actual estimation of the ACL and does not imply any expectation of future deterioration in our loss rates.

It remains difficult to estimate how changes in economic forecasts might affect our ACL because such forecasts consider a wide variety of variables and inputs, and changes in the variables and inputs may not occur at the same time or in the same direction, and such changes may have differing impacts by product type. The variables and inputs may be idiosyncratically affected by risks to the economy, including changing monetary and fiscal policies, impacts from the recent stress on the banking industry, and inflationary trends. Changes in one or multiple of the key macroeconomic variables may have a material impact on our estimation of expected credit losses.

For additional information regarding the ACL, see Note 4.

Goodwill

The acquisition method of accounting requires that assets acquired and liabilities assumed in business combinations are recorded at fair value. Business combinations typically result in goodwill, which is subject to ongoing periodic impairment tests based on the fair values of the reporting units to which the goodwill has been attributed. At December 31, 2025, goodwill totaled $8.2 billion and is assigned to our reporting units as follows: $5.5 billion to Commercial Banking and $2.7 billion to Consumer Banking.

The process of evaluating the fair value of a reporting unit is subjective, involving management assumptions, estimates and forecasts, and the use of external or internal valuations. Valuation techniques include discounted cash flow and market approach analysis. In the fourth quarter of 2025, the quantitative impairment test estimated the fair value of the reporting units using an equal weighting of an income approach (i.e., discounted cash flows method) and market-based approach (i.e., the guideline public company method). The guideline public company method utilizes comparable public company information and key valuation multiples, and considers a market control premium associated with cost synergies and other cash flow benefits that arise from obtaining control over a reporting unit, and guideline transactions, when applicable.

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Under the income approach, cash flow projections are based on multi-year financial forecasts developed for each reporting unit that consider key business drivers such as new business initiatives, customer retention standards, market share changes, anticipated loan and deposit growth, fees and expenses, forward interest rates, historical performance, credit performance, and industry and economic trends, among other considerations. The projection of net interest income and noninterest expense are the most significant inputs to the financial projections of the Commercial Banking and Consumer Banking reporting units. Discount rates are estimated based on the Capital Asset Pricing Model, which considers the risk-free interest rate, market risk premium, beta, and unsystematic risk adjustments specific to a particular reporting unit. The discount rates are also calibrated based on risks related to the projected cash flows of each reporting unit.

We performed a quantitative goodwill impairment assessment in the fourth quarter of 2025 as part of our annual impairment assessment. Based on this quantitative assessment, we concluded that the estimated fair value of the Consumer Banking and Commercial Banking reporting units exceeded their carrying value; therefore, goodwill is not impaired.

For additional information regarding Goodwill, see Note 8.

Fair Value

Certain of the Company’s assets and liabilities are carried at fair value on the Consolidated Balance Sheets, with changes in fair value recorded in earnings or AOCI, including, but not limited to, AFS debt securities, derivatives, MSRs, and commercial and residential mortgage LHFS.

We assess the fair value of assets and liabilities by applying various valuation methodologies which may involve a significant degree of judgment, particularly when active markets do not exist for the items being valued. Quoted market prices are used to estimate the fair value of certain assets such as trading assets, investment securities, and residential mortgage LHFS. Assumptions are used to estimate the fair value of items for which an observable active market does not exist and include discount rates, rates of return on assets, repayment rates, MSR prepayment rates, cash flows, default rates, costs of servicing, and liquidation values. The use of different assumptions could produce significantly different fair value estimates, which could have a material impact on our results of operations, financial condition, or fair value disclosures.

We also assess whether there are any declines in fair value below the carrying value of assets that require recognition of a loss in the Consolidated Statements of Operations, including certain investments, other LHFS, goodwill, and core deposit and other intangible assets.

For additional information regarding our fair value measurements, see Note 18.

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ACCOUNTING AND REPORTING DEVELOPMENTS

Accounting standards issued but not adopted as of December 31, 2025

Pronouncement

Summary of Guidance

Effects on Financial Statements

Disaggregation of Income Statement Expenses

Issued November 2024

•Requires tabular disclosure of certain expense types, including employee compensation, depreciation, intangible asset amortization, and selling expenses

•Requires a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively

•Allows for adoption on either a prospective or retrospective basis

•Required effective date: Annual financial statements for the year ending December 31, 2027, and interim reporting periods thereafter. Early adoption is permitted.

•We are currently evaluating the impact of this ASU on our required expense disclosures in the Consolidated Financial Statements

Targeted Improvements to the Accounting for Internal-Use Software

Issued September 2025

•Eliminates all references to software project development stages and, as a result, requires entities to start capitalizing software costs when both of the following occur: 1) Management has authorized and committed to funding the software project, and 2) It is probable the project will be completed and the software will be used to perform the function intended

•Requires software costs to be expensed as incurred prior to meeting the capitalization requirements noted above

•Allows for adoption on a prospective, modified transition, or retrospective basis

•Required effective date: January 1, 2028. Early adoption is permitted.

•We are currently evaluating the impact of this ASU on our Consolidated Financial Statements

Purchased Loans

Issued November 2025

•Expands the scope of acquired financial assets subject to the gross-up approach under ASC 326 to include purchased seasoned loans, which must meet certain criteria outlined in the ASU

•Purchased seasoned loans do not include credit cards, debt securities, and certain trade receivables

•Provides for an irrevocable accounting policy election to measure the ACL on purchased seasoned loans using the amortized cost basis, rather than unpaid principal balance, if a method other than a discounted cash flow method is utilized to estimate expected credit losses

•Requires adoption on a prospective basis

•Required effective date: January 1, 2027. Early adoption is permitted.

•Adoption of this ASU will impact our Consolidated Financial Statements on a prospective basis only when loans are acquired

Hedge Accounting Improvements

Issued November 2025

•Expands the hedged risks permitted to be aggregated in a group of individual forecasted transactions in a cash flow hedge by changing the requirement to designate a group of individual forecasted transactions from having a shared risk exposure to having a similar risk exposure

•Requires assessment of hedged risk similarity both at hedge inception and on an ongoing basis

•Requires dedesignation of the hedge relationship if one or more hedged risks related to the group of individual forecasted transactions are no longer similar

•The amendments in this ASU should be applied on a prospective basis for all hedging relationships. An entity may elect to apply the amendments to relationships that exist as of the date of adoption.

•Required effective date: January 1, 2027, with early adoption permitted. We are currently evaluating the ASU, including early adoption.

•Adoption of this ASU is not expected to have a material impact on our Consolidated Financial Statements

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NON-GAAP FINANCIAL MEASURES

This document contains non-GAAP financial measures that we believe provide useful information to investors to understand our results of operations or financial condition. We caution investors not to place undue reliance on such non-GAAP financial measures, but to consider them with the most directly comparable GAAP financial measures. Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as a substitute for our results reported under GAAP.

The following tables present the computation of non-GAAP financial measures used in the MD&A, as well as the reconciliation to the comparable GAAP financial measure, as applicable:

Table 27: Reconciliation of Tangible Book Value per Common Share (non-GAAP)

December 31,

(dollars in millions, except per share data)

2025

2024

Book value per common share(1)

$56.39 

$50.26 

Tangible book value per common share:

Common stockholders' equity

$24,206 

$22,141 

Less: Goodwill

8,187 

8,187 

Less: Other intangible assets

115 

146 

Add: Deferred tax liabilities related to goodwill and other intangible assets

437 

438 

Tangible common equity (non-GAAP)(2)

$16,341 

$14,246 

Common shares outstanding at period end

429,242,174 

440,543,381 

Tangible book value per common share (non-GAAP)(3)

$38.07 

$32.34 

(1) Represents the most directly comparable GAAP financial measure to tangible book value per common share and is calculated based on common stockholders’ equity divided by common shares outstanding at period end.

(2) Tangible common equity is a non-GAAP financial measure that excludes the impact of intangible assets, net of deferred taxes.

(3) Tangible book value per common share is a non-GAAP financial measure and is calculated based on tangible common equity divided by common shares outstanding at period end. We believe this non-GAAP financial measure serves as a useful tool to help evaluate the strength and discipline of a company’s capital management strategies and as a conservative measure of total company value.

Table 28: Reconciliation of Return on Average Tangible Common Equity (non-GAAP)

Year Ended December 31,

(dollars in millions)

2025

2024

Return on average common equity(1)

7.36 

%

6.27 

%

Net income available to common stockholders

$1,688 

$1,372 

Return on average tangible common equity:

Average common equity

$22,954 

$21,881 

Less: Average goodwill

8,187 

8,187 

Less: Average other intangibles

131 

143 

Add: Average deferred tax liabilities related to goodwill and other intangible assets

439 

433 

Average tangible common equity (non-GAAP)(2)

$15,075 

$13,984 

Return on average tangible common equity (non-GAAP)(3)

11.20 

%

9.81 

%

(1) Represents the most directly comparable GAAP financial measure to return on average tangible common equity and is calculated based on net income available to common stockholders divided by average common equity.

(2) Average tangible common equity is a non-GAAP financial measure that excludes the impact of intangible assets, net of deferred taxes.

(3) Return on average tangible common equity is a non-GAAP financial measure and is calculated based on net income available to common stockholders divided by average tangible common equity. We believe this non-GAAP financial measure serves as a useful tool to compare the profitability of financial institutions and assess the efficiency of their capital utilization without the impact of intangible assets, net of deferred taxes.

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Table 29: Reconciliation of Net Interest Income and Net Interest Margin on an FTE Basis (non-GAAP)

Year Ended December 31,

(dollars in millions)

2025

2024

Net interest income

$5,853 

$5,633 

Average interest-earning assets

197,048 

198,072 

Net interest margin(1)

2.97 

%

2.84 

%

Net interest income

$5,853 

$5,633 

FTE adjustment

16 

17 

Net interest income on an FTE basis (non-GAAP)(2)

$5,869 

$5,650 

Net interest margin on an FTE basis (non-GAAP)(2)(3)

2.98 

%

2.85 

%

(1) Represents the most directly comparable GAAP financial measure to net interest margin on an FTE basis and is calculated based on net interest income divided by average interest-earnings assets.

(2) FTE basis financial measures and ratios are adjusted for the tax-exempt status of income from certain assets held by the Company using the federal statutory tax rate of 21% and are considered non-GAAP financial measures. We believe this allows management to better assess the comparability of revenue from both taxable and tax-exempt sources.

(3) Calculated based on net interest income on an FTE basis divided by average interest-earnings assets.