Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

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Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


			Page
Report of Management on Internal Control Over Financial Reporting			80
Report of Independent Registered Public Accounting Firm on the Consolidated Financial Statements (PCAOB ID No. 34)			81
Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting			84
Consolidated Balance Sheets			85
Consolidated Statements of Operations			86
Consolidated Statements of Comprehensive Income			87
Consolidated Statements of Changes in Stockholders’ Equity			88
Consolidated Statements of Cash Flows			89
Notes to Consolidated Financial Statements			90
Note 1 - Significant Accounting Policies			90
Note 2 - Securities			91
Note 3 - Loans and Leases			95
Note 4 - Credit Quality and the Allowance for Credit Losses			97
Note 5 - Premises, Equipment and Software			111
Note 6 - Mortgage Banking and Other Serviced Loans			112
Note 7 - Leases			114
Note 8 - Goodwill and Intangible Assets			115
Note 9 - Variable Interest Entities			117
Note 10 - Deposits			120
Note 1 1 - Borrowed Funds			121
Note 12 - Derivatives			123
Note 13 - Employee Benefit Plans			126
Note 14 - Accumulated Other Comprehensive Income (Loss)			128
Note 15 - Stockholders’ Equity			129
Note 16 - Share-Based Compensation			131
Note 17 - Commitments and Contingencies			132
Note 18 - Fair Value Measurements			134
Note 19 - Noninterest Income			140
Note 20 - Other Operating Expense			143
Note 21 - Income Taxes			143
Note 22 - Earnings Per Share			146
Note 23 - Regulatory Matters			146
Note 24 - Business Segments			148
Note 25 - Parent Company Financials			151


						Citizens Financial Group, Inc. \| 79

REPORT OF MANAGEMENT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Management is responsible for establishing and maintaining an adequate system of internal control over financial reporting as defined in Rule 13a-15(f) of the Securities Exchange Act of 1934. The Company’s system of internal control over financial reporting is designed, under the supervision of the Chief Executive Officer and the Chief Financial Officer, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect all misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of the Company’s system of internal control over financial reporting as of December 31, 2025 based on the framework set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control – Integrated Framework (2013). Based on that assessment, management concluded that, as of December 31, 2025, the Company’s internal control over financial reporting is effective.

The Company’s internal control over financial reporting as of December 31, 2025 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their accompanying report appearing on page 84, which expresses an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.


						Citizens Financial Group, Inc. \| 80

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of

Citizens Financial Group, Inc.

Providence, Rhode Island

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Citizens Financial Group, Inc. and its subsidiaries (the "Company") as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income, changes in stockholders' equity, and cash flows, for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 12, 2026, expressed an unqualified opinion on the Company's internal control over financial reporting.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.


						Citizens Financial Group, Inc. \| 81

Allowance for Credit Losses - Refer to Note 4 to the consolidated financial statements

Critical Audit Matter Description

The Company’s estimate of expected credit losses in its loan and lease portfolios is recorded in the Allowance for Credit Losses (“ACL”) and considers extensive historical loss experience, including the impact of loss mitigation and restructuring programs that the Company offers to borrowers experiencing financial difficulty, as well as projected loss severity as a result of loan default. 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. The determination of the ACL is based on the periodic evaluation of loan and lease portfolios and unfunded lending commitments that are not unconditionally cancellable. A number of relevant underlying factors, including key assumptions and the evaluation of quantitative and qualitative information, are considered.

Key assumptions used in the ACL measurement process include the use of a two-year reasonable and supportable economic forecast period followed by a one-year reversion period to historical credit loss information. The evaluation of quantitative and qualitative information is performed by assessing groups of assets that share similar risk characteristics and 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. This data is accumulated to estimate expected credit losses over the contractual life of the loans and leases, adjusted for expected prepayments. 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.

The ACL may also be affected by a variety of qualitative factors that the Company considers that are not measured in the statistical procedures including uncertainty related to economic forecasts, loan growth, backtesting results, regional geographic concentrations, credit underwriting policy exceptions, regulatory and audit findings, and peer comparisons.

Given the size of the loan and lease portfolios and unfunded commitments and the subjective nature of estimating the ACL, including the estimated impact of the factors noted above and related economic forecasting uncertainty, auditing the ACL involved a high degree of auditor judgment and an increased extent of effort.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the ACL for the loan and lease portfolios and unfunded commitments included the following, among others:

We tested the design and effectiveness of controls over the (i) selection of the economic forecasts, (ii) development, execution, and monitoring of the econometric models, (iii) estimation of management’s adjustments to the economic forecast assumptions and used to model reserves for industry sectors facing challenges in the current macroeconomic environment, (iv) determination of the qualitative allowance, (v) transfer of data, and (vi) overall calculation and disclosure of the ACL.
With the assistance of credit specialists, we (i) evaluated the reasonableness of the econometric models and related assumptions, (ii) assessed the reasonableness of design, theory, and logic of the econometric models for estimating expected credit losses, (iii) tested the accuracy of the data input into the econometric models, and (iv) tested the arithmetic accuracy of the models’ calculations of the expected credit losses.


						Citizens Financial Group, Inc. \| 82

We evaluated the appropriateness and relevance of management’s (i) judgments used to determine economic forecasts, (ii) selection of economic forecasts, and (iii) consideration of economic forecasting uncertainty and adjustments to the economic forecasts for industry sectors facing challenges in the current macroeconomic environment.
We (i) evaluated the appropriateness and relevance of the qualitative factors, (ii) tested the accuracy and evaluated the relevance of the historical loss data used in determining the qualitative allowance, (iii) evaluated the reasonableness of the Company’s assessment and determination of the qualitative factors and related impact on the estimation of the qualitative allowance and (iv) tested the arithmetic accuracy of the calculation of the qualitative allowance.
We tested the arithmetic accuracy of the calculation of the overall ACL and assessed the reasonableness of the related disclosures.

/s/ Deloitte & Touche LLP

Boston, Massachusetts

February 12, 2026

We have served as the Company's auditor since 2000.


						Citizens Financial Group, Inc. \| 83

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of

Citizens Financial Group, Inc.

Providence, Rhode Island

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of Citizens Financial Group, Inc. and its subsidiaries (the “Company”) as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2025, of the Company and our report dated February 12, 2026, expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Report of Management on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the consolidated financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Deloitte & Touche LLP

Boston, Massachusetts

February 12, 2026


						Citizens Financial Group, Inc. \| 84

CONSOLIDATED BALANCE SHEETS


	December 31,
(dollars in millions, except par value)	2025	2024
ASSETS:
Cash and due from banks	$1,464	$1,409
Interest-bearing cash and due from banks	11,263	9,192
Interest-bearing deposits in banks(1)	961	635
Debt securities available for sale, at fair value (including $108 and $152 pledged to creditors, respectively)(2)	35,697	32,765
Debt securities held to maturity (fair value of $7,150 and $7,540, respectively, and including $67 and $83 pledged to creditors, respectively)(2)	7,933	8,599
Loans held for sale (includes $1,065 and $825, respectively, measured at fair value)	1,198	858
Loans and leases	142,692	139,203
Less: Allowance for loan and lease losses	(1,943)	(2,061)
Net loans and leases(1)	140,749	137,142
Premises and equipment, net	915	875
Bank-owned life insurance	3,441	3,364
Goodwill	8,187	8,187
Other intangible assets(3)	115	146
Other assets(1)(4)	14,428	14,349
TOTAL ASSETS	$226,351	$217,521
LIABILITIES AND STOCKHOLDERS’ EQUITY:
LIABILITIES:
Deposits:
Noninterest-bearing	$40,417	$36,920
Interest-bearing	142,896	137,856
Total deposits	183,313	174,776
Short-term borrowed funds	58	—
Long-term borrowed funds(1)	11,224	12,401
Other liabilities(1)(4)	5,439	6,090
TOTAL LIABILITIES	200,034	193,267
Commitments and Contingencies (refer to Note 17)
STOCKHOLDERS’ EQUITY:
Preferred Stock:
$25.00 par value,100,000,000 shares authorized; 2,150,000 shares issued and outstanding at December 31, 2025 and 2024	2,111	2,113
Common stock:
$0.01 par value, 1,000,000,000 shares authorized; 652,238,745 shares issued and 429,242,174 shares outstanding at December 31, 2025 and 650,068,324 shares issued and 440,543,381 shares outstanding at December 31, 2024	7	7
Additional paid-in capital	22,476	22,364
Retained earnings	11,345	10,412
Treasury stock, at cost, 222,996,571 and 209,524,943 shares at December 31, 2025 and 2024, respectively	(7,652)	(7,047)
Accumulated other comprehensive income (loss)	(1,970)	(3,595)
TOTAL STOCKHOLDERS’ EQUITY	26,317	24,254
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$226,351	$217,521

(1) Includes amounts in consolidated VIEs. See Note 9 for additional information.

(2) Includes only collateral pledged by the Company where counterparties have the right to sell or pledge the collateral.

(3) Excludes MSRs, which are reported in Other assets.

(4) See Note 1 for information regarding updates to the Consolidated Balance Sheets during 2025.

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.


						Citizens Financial Group, Inc. \| 85

CONSOLIDATED STATEMENTS OF OPERATIONS


	Year Ended December 31,
(dollars in millions, except per share data)	2025	2024	2023
INTEREST INCOME:
Interest and fees on loans and leases	$7,478	$7,948	$8,489
Interest and fees on loans held for sale	105	77	102
Investment securities	1,713	1,658	1,162
Interest-bearing deposits in banks	367	503	451
Total interest income	9,663	10,186	10,204
INTEREST EXPENSE:
Deposits	3,194	3,825	3,145
Short-term borrowed funds	22	15	43
Long-term borrowed funds	594	713	775
Total interest expense	3,810	4,553	3,963
Net interest income	5,853	5,633	6,241
Provision (benefit) for credit losses	608	687	687
Net interest income after provision (benefit) for credit losses	5,245	4,946	5,554
NONINTEREST INCOME:
Service charges and fees	444	420	410
Capital markets fees	511	467	319
Wealth fees	360	294	259
Card fees	346	368	296
Mortgage banking fees	233	209	242
Foreign exchange and derivative products	156	146	183
Letter of credit and loan fees	186	175	168
Securities gains, net	22	18	28
Other income	136	79	78
Total noninterest income	2,394	2,176	1,983
NONINTEREST EXPENSE:
Salaries and employee benefits	2,798	2,657	2,599
Equipment and software	783	769	756
Outside services	633	639	687
Occupancy	435	447	492
Other operating expense	662	722	973
Total noninterest expense	5,311	5,234	5,507
Income before income tax expense	2,328	1,888	2,030
Income tax expense	497	379	422
NET INCOME	$1,831	$1,509	$1,608
Net income available to common stockholders	$1,688	$1,372	$1,491
Weighted-average common shares outstanding:
Basic	433,173,162	450,678,038	475,089,384
Diluted	436,890,731	453,510,245	476,693,148
Per common share information:
Basic earnings	$3.90	$3.05	$3.14
Diluted earnings	3.86	3.03	3.13

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.


						Citizens Financial Group, Inc. \| 86

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME


	Year Ended December 31,
(dollars in millions)	2025	2024	2023
Net income	$1,831	$1,509	$1,608
Other comprehensive income (loss), net of tax:
Cash flow hedges:
Net unrealized gains (losses) arising during the period	250	(531)	(106)
Reclassification of net (gains) losses to earnings	557	693	435
Investment securities:
Net unrealized gains (losses) on AFS securities arising during the period	703	(90)	350
Reclassification of net (gains) losses to earnings	63	59	83
Defined benefit plans:
Net actuarial gain (loss) arising during the period	45	19	28
Amortization of actuarial (gain) loss to earnings	7	13	12

Total other comprehensive income (loss), net of tax	1,625	163	802
Total comprehensive income (loss)	$3,456	$1,672	$2,410

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.


						Citizens Financial Group, Inc. \| 87

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY


	Preferred Stock		Common Stock		Additional Paid-in Capital	Retained Earnings	Treasury Stock, at Cost	Accumulated Other Comprehensive Income (Loss)	Total
(dollars and shares in millions)	Shares	Amount	Shares	Amount
Balance at January 1, 2023	2	$2,014	492	$6	$22,142	$9,159	($5,071)	($4,560)	$23,690
Dividends declared - common stock	—	—	—	—	—	(808)	—	—	(808)
Dividends declared - preferred stock	—	—	—	—	—	(117)	—	—	(117)



Treasury stock purchased	—	—	(29)	—	—	—	(906)	—	(906)
Share repurchase excise tax	—	—	—	—	—	—	(9)	—	(9)
Share-based compensation plans	—	—	2	—	81	—	—	—	81
Employee stock purchase plan	—	—	1	—	27	—	—	—	27
Cumulative effect of change in accounting principle	—	—	—	—	—	(26)	—	—	(26)
Total comprehensive income (loss):
Net income	—	—	—	—	—	1,608	—	—	1,608
Other comprehensive income (loss)	—	—	—	—	—	—	—	802	802
Total comprehensive income (loss)	—	—	—	—	—	1,608	—	802	2,410
Balance at December 31, 2023	2	$2,014	466	$6	$22,250	$9,816	($5,986)	($3,758)	$24,342
Dividends declared - common stock	—	—	—	—	—	(769)	—	—	(769)
Dividends declared - preferred stock	—	—	—	—	—	(137)	—	—	(137)

Preferred stock issued	—	392	—	—	—	—	—	—	392
Preferred stock redemption	—	(293)	—	—	—	(7)	—	—	(300)
Treasury stock purchased	—	—	(28)	—	—	—	(1,050)	—	(1,050)
Share repurchase excise tax	—	—	—	—	—	—	(11)	—	(11)
Share-based compensation plans	—	—	2	1	89	—	—	—	90
Employee stock purchase plan	—	—	1	—	25	—	—	—	25

Total comprehensive income (loss):
Net income	—	—	—	—	—	1,509	—	—	1,509
Other comprehensive income (loss)	—	—	—	—	—	—	—	163	163
Total comprehensive income (loss)	—	—	—	—	—	1,509	—	163	1,672
Balance at December 31, 2024	2	$2,113	441	$7	$22,364	$10,412	($7,047)	($3,595)	$24,254
Dividends declared - common stock	—	—	—	—	—	(755)	—	—	(755)
Dividends declared - preferred stock	—	—	—	—	—	(138)	—	—	(138)

Preferred stock issued	—	393	—	—	—	—	—	—	393
Preferred stock redemption	—	(395)	—	—	—	(5)	—	—	(400)
Treasury stock purchased	—	—	(14)	—	—	—	(600)	—	(600)
Share repurchase excise tax	—	—	—	—	—	—	(5)	—	(5)
Share-based compensation plans	—	—	2	—	84	—	—	—	84
Employee stock purchase plan	—	—	—	—	28	—	—	—	28

Total comprehensive income (loss):
Net income	—	—	—	—	—	1,831	—	—	1,831
Other comprehensive income (loss)	—	—	—	—	—	—	—	1,625	1,625
Total comprehensive income (loss)	—	—	—	—	—	1,831	—	1,625	3,456
Balance at December 31, 2025	2	$2,111	429	$7	$22,476	$11,345	($7,652)	($1,970)	$26,317

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.


						Citizens Financial Group, Inc. \| 88

CONSOLIDATED STATEMENTS OF CASH FLOWS


	Year Ended December 31,
(dollars in millions)	2025	2024	2023
OPERATING ACTIVITIES
Net income	$1,831	$1,509	$1,608
Adjustments to reconcile net income to net change due to operating activities:
Provision (benefit) for credit losses	608	687	687
Net change in Loans held for sale	(414)	(24)	98
Depreciation, amortization, and accretion	478	498	478
Deferred income tax expense (benefit)	(82)	(177)	(242)
Share-based compensation	120	97	87
Net gain on sale of assets	(24)	(18)	(28)
Net (increase) decrease in Other assets	89	(261)	612
Net increase (decrease) in Other liabilities	(395)	(310)	(339)
Net change due to operating activities	2,211	2,001	2,961
INVESTING ACTIVITIES
Investment securities:
Purchases of debt securities available for sale	(9,463)	(9,755)	(10,087)
Proceeds from maturities and paydowns of debt securities available for sale	4,018	3,304	2,001
Proceeds from sales of debt securities available for sale	3,797	3,619	2,941

Proceeds from maturities and paydowns of debt securities held to maturity	750	662	761

Net (increase) decrease in Interest-bearing deposits in banks	(326)	(230)	(102)


Purchases of loans	(680)	(655)	—
Sales of loans	1,891	207	2,793
Net (increase) decrease in Loans and leases	(5,433)	6,050	7,174
Capital expenditures, net	(174)	(122)	(172)

Other	(347)	(93)	(61)
Net change due to investing activities	(5,967)	2,987	5,248
FINANCING ACTIVITIES
Net increase (decrease) in Deposits	8,537	(2,566)	(3,382)
Net increase (decrease) in Short-term borrowed funds	58	(505)	502
Proceeds from issuance of long-term borrowed funds	8,534	13,185	25,983
Repayments of long-term borrowed funds	(9,744)	(14,286)	(28,418)
Treasury stock purchased	(600)	(1,050)	(906)
Net proceeds from issuance of preferred stock	393	392	—
Redemption of preferred stock	(400)	(300)	—
Dividends paid to common stockholders	(755)	(769)	(808)
Dividends paid to preferred stockholders	(133)	(134)	(120)

Other	(8)	18	21
Net change due to financing activities	5,882	(6,015)	(7,128)
Net change in cash and cash equivalents(1)	2,126	(1,027)	1,081
Cash and cash equivalents at beginning of period(1)	10,601	11,628	10,547
Cash and cash equivalents at end of period(1)	$12,727	$10,601	$11,628

Supplemental disclosures:(2)
Interest paid	$4,040	$4,375	$3,640

Non-cash items:
Transfer of loans from loans held for investment to LHFS	$1,944	$299	$2,617


Loans securitized and transferred to AFS securities	112	329	103

(1) Cash and cash equivalents include Cash and due from banks and Interest-bearing cash and due from banks as reflected on the Consolidated Balance Sheets.

(2) See Note 21 for information regarding income taxes paid.

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.


						Citizens Financial Group, Inc. \| 89

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

The Company is a regional bank holding company organized under Delaware law and headquartered in Providence, Rhode Island. The Company provides a broad range of retail and commercial banking products and services and wealth management solutions to individuals, small businesses, middle-market companies, large corporations, and institutions. The Company’s retail branch footprint is predominantly in the New England, Mid-Atlantic, and Midwest regions, and its Private Bank footprint includes offices in California, Florida, New York, and Massachusetts. Certain lines of our business also serve national markets.

Basis of Presentation

The Consolidated Financial Statements include the accounts of the Parent Company and its consolidated subsidiaries, including VIEs in which the Company is a primary beneficiary, and are prepared in accordance with GAAP. Investments in VIEs in which the Company does not have the ability to exercise significant influence are not consolidated. All intercompany transactions and balances have been eliminated in consolidation.

During the fourth quarter of 2025, the Company’s Non-Core operating segment no longer met the criteria to be considered a reportable segment and, therefore, it is now reported as part of the Company’s Other non-segment operations. As a result of this change the Company now has two reportable segments: Consumer Banking and Commercial Banking. In addition, certain activities within Other non-segment operations were transferred to the Consumer and Commercial Banking segments due to organizational changes. Prior period results were recast to conform to the new segment presentation. See Note 24 for additional information.

During the fourth quarter of 2025, the Company also modified the presentation of its year-end Consolidated Balance Sheet to include Derivative assets and Derivative liabilities in Other assets and Other liabilities, respectively. Prior period results have been revised to conform to the new presentation.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change include the determination of the ACL, fair value measurements, and the evaluation and measurement of goodwill impairment.

Cash and Cash Equivalents

For the purpose of reporting cash flows, cash and cash equivalents have original maturities of three months or less and include Cash and due from banks and Interest-bearing cash and due from banks. The Company had no material restrictions on the use or availability of its cash as of December 31, 2025 or 2024.


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Significant Accounting Policies

The following table identifies the Company’s significant accounting policies and the Note and Page where a detailed description of each policy can be found:


	Note	Page
Securities	2	91
Loans and Leases	3	95
Allowance for Credit Losses and FDMs	4	97
Premises, Equipment and Software	5	111
Mortgage Servicing Rights	6	112
Leases	7	114
Goodwill and Intangible Assets	8	115
Variable Interest Entities	9	117
Derivative Instruments	12	123
Employee Benefits	13	126
Treasury Stock	15	129
Employee Share-Based Compensation	16	131
Fair Value Measurement	18	134
Revenue Recognition	19	140
Income Taxes	21	143
Earnings Per Share	22	146
Business Segments	24	148

Accounting Pronouncements Adopted in 2025


Pronouncement			Summary of Guidance			Effects on Financial Statements
Improvements to Income Tax Disclosures Issued December 2023			•Requires a tabular income tax rate reconciliation that includes specific categories and other significant categories, disaggregated by nature, that exceed 5% of income tax expense at the statutory tax rate •Requires disclosure of income taxes paid, net of refunds received, disaggregated by federal, state, and foreign taxes, and further disaggregated by individual jurisdictions that exceed 5% of total income taxes paid, net of refunds received •Requires disclosure of pre-tax income disaggregated between domestic and foreign, and income tax expense disaggregated by federal, state, and foreign			•The Company adopted the new ASU on January 1, 2025 on a retrospective basis, effective for annual financial statements for the year ended December 31, 2025 •Required disclosures for income taxes are included in Note 21

NOTE 2 - SECURITIES

Investments include debt, equity, and other securities. The Company classifies debt securities as AFS, HTM, or trading based on management’s intent to hold to maturity at the time of purchase. Management reserves the right to change the initial classification of a security based on its intent to hold to maturity or as permitted by periodic changes in accounting guidance. Equity securities are recorded at fair value or at cost if there is not a readily determinable fair value.

Debt securities that will be held for indefinite periods of time and may be sold in response to changes in liquidity, interest rates, or prepayment risk, among other factors, are classified as AFS and reported at fair value, with unrealized gains and losses, net of taxes, reported in AOCI. Gains and losses on the sale of AFS securities are recognized in Noninterest income in the Consolidated Statements of Operations and are computed using the specific identification method.


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Debt securities that the Company has the ability and intent to hold to maturity are classified as HTM and reported at amortized cost. Transfers of debt securities to the HTM classification are recognized at fair value at the date of transfer.

Interest income for AFS and HTM debt securities is recorded on the accrual basis, including the amortization of premiums and the accretion of discounts, utilizing the effective interest method over the estimated lives of the individual securities. The Company uses actual prepayment experience and future prepayment estimates to determine the constant effective yield necessary to apply the effective interest method of income recognition. Future prepayment estimates are based on the underlying collateral characteristics of each security and are derived from market sources. Judgment is involved to determine prepayment expectations, as well as to change those expectations in response to changes in interest rates and macroeconomic conditions.

Securities classified as trading are held principally for sale in the near-term and carried at fair value, with changes in fair value recognized in earnings. Realized and unrealized gains and losses on such securities are reported in Noninterest income in the Consolidated Statements of Operations.

Equity securities primarily consist of FHLB and FRB stock carried at cost and money market mutual fund investments held by the Company’s broker-dealers carried at fair value, with changes in fair value recognized in Noninterest income. Equity securities are recorded in Other assets in the Consolidated Balance Sheets, with those carried at cost reviewed annually for impairment, at a minimum. Valuation adjustments, to the extent necessary, are reported in Noninterest income in the Consolidated Statements of Operations.

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


	December 31, 2025				December 31, 2024
(dollars in millions)	Amortized Cost(1)	Gross Unrealized Gains	Gross Unrealized Losses	Fair Value	Amortized Cost(1)	Gross Unrealized Gains	Gross Unrealized Losses	Fair Value
U.S. Treasury and other	$3,163	$10	($50)	$3,123	$3,631	$3	($109)	$3,525
State and political subdivisions	1	—	—	1	1	—	—	1
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities	33,379	215	(1,374)	32,220	30,897	33	(2,135)	28,795
Other/non-agency	268	—	(4)	264	273	—	(13)	260
Total mortgage-backed securities	33,647	215	(1,378)	32,484	31,170	33	(2,148)	29,055
Collateralized loan obligations	89	—	—	89	184	—	—	184
Total debt securities available for sale, at fair value	$36,900	$225	($1,428)	$35,697	$34,986	$36	($2,257)	$32,765
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities	$7,595	$2	($785)	$6,812	$8,187	$—	($1,051)	$7,136

Total mortgage-backed securities	7,595	2	(785)	6,812	8,187	—	(1,051)	7,136
Asset-backed securities	338	—	—	338	412	1	(9)	404
Total debt securities held to maturity	$7,933	$2	($785)	$7,150	$8,599	$1	($1,060)	$7,540
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.

Accrued interest receivable on debt securities totaled $139 million and $125 million as of December 31, 2025 and 2024, respectively, and is included in Other assets in the Consolidated Balance Sheets.


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The following table presents the amortized cost and fair value of debt securities by contractual maturity as of December 31, 2025. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without incurring penalties.


	Distribution of Maturities
(dollars in millions)	1 Year or Less	After 1 Year through 5 Years	After 5 Years through 10 Years	After 10 Years	Total
Amortized cost:
U.S. Treasury and other	$—	$2,359	$804	$—	$3,163
State and political subdivisions	—	—	—	1	1
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities	110	2,305	1,018	29,946	33,379
Other/non-agency	—	—	—	268	268
Collateralized loan obligations	—	—	89	—	89
Total debt securities available for sale	110	4,664	1,911	30,215	36,900
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities	—	—	—	7,595	7,595

Asset-backed securities	—	338	—	—	338
Total debt securities held to maturity	—	338	—	7,595	7,933
Total amortized cost of debt securities	$110	$5,002	$1,911	$37,810	$44,833

Fair value:
U.S. Treasury and other	$—	$2,311	$812	$—	$3,123
State and political subdivisions	—	—	—	1	1
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities	109	2,275	972	28,864	32,220
Other/non-agency	—	—	—	264	264
Collateralized loan obligations	—	—	89	—	89
Total debt securities available for sale	109	4,586	1,873	29,129	35,697
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities	—	—	—	6,812	6,812

Asset-backed securities	—	338	—	—	338
Total debt securities held to maturity	—	338	—	6,812	7,150
Total fair value of debt securities	$109	$4,924	$1,873	$35,941	$42,847

Taxable interest income from investment securities as presented in the Consolidated Statements of Operations was $1.7 billion for each of the years ended December 31, 2025 and 2024, and $1.2 billion for the year ended December 31, 2023.

The following table presents realized gains and losses on the sale of securities:


	Year Ended December 31,
(dollars in millions)	2025	2024	2023
Gains	$33	$32	$36
Losses	(11)	(14)	(8)
Securities gains, net	$22	$18	$28

At December 31, 2025 and 2024, debt securities with a carrying value of $3.4 billion and $4.0 billion, respectively, were pledged to secure public deposits, trust funds, FHLB borrowing capacity, repurchase agreements, and derivative contracts, and for other purposes as required or permitted by law.


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Impairment

Upon purchase, and at each subsequent measurement date, the Company is required to evaluate HTM securities for risk of loss over their life and establish an associated reserve, if necessary. Recognition of a reserve for expected credit losses is not required if the Company does not expect to realize a loss (commonly referred to as “zero expected credit losses”). The Company evaluated its existing HTM portfolio as of December 31, 2025 and concluded that 96% of HTM securities met the zero expected credit loss criteria and, therefore, no ACL was recognized. Lifetime expected credit losses on the remainder of the HTM portfolio were determined to be insignificant based on the modeling of the Company’s credit loss position in the securities. The Company monitors the credit exposure through the use of credit quality indicators. For these securities, the Company uses external credit ratings or an internally derived credit rating when an external rating is not available. All securities were determined to be investment grade at December 31, 2025.

AFS debt securities are reviewed for impairment at the individual security level on a quarterly basis, or more frequently if a potential loss triggering event occurs. The initial indicator of impairment for an AFS debt security is a decline in fair value below its amortized cost basis, at which point an impairment loss would be recognized if management has the intent to sell the security or if it is more likely than not it will be required to sell the security before recovery of its amortized cost basis.

Estimating the recovery of the amortized cost basis of a debt security is based on an assessment of the present value of the cash flows expected to be collected, discounted at the security’s original effective yield. If the present value of the cash flows is less than the amortized cost basis, then impairment equal to the shortfall in cash flows has occurred, and the Company must evaluate whether the impairment is attributable to credit-related factors. If credit-related factors exist, a credit-related impairment has occurred regardless of the Company’s intent to hold the security until it recovers.

The credit-related portion of impairment is recognized as provision expense through the establishment of an allowance for AFS securities, to the extent the allowance does not reduce the carrying value of the AFS security below its current fair value. The remaining non-credit related portion of impairment is recognized in OCI. Improvement in credit losses in subsequent periods results in a reversal of the allowance for AFS securities and a corresponding decrease to provision expense, to the extent the allowance does not become negative. Accrued interest receivable on AFS debt securities is excluded from the balances used to calculate the allowance for AFS securities and is immediately reversed against interest income when it is deemed uncollectible.

The following tables present AFS debt securities with fair values below their respective carrying values, disclosed by the length of time the individual securities have been in a continuous unrealized loss position:


	December 31, 2025
	Less than 12 Months		12 Months or Longer		Total
(dollars in millions)	Fair Value	Gross Unrealized Losses	Fair Value	Gross Unrealized Losses	Fair Value	Gross Unrealized Losses
U.S. Treasury and other	$—	$—	$1,990	($50)	$1,990	($50)
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities	3,415	(164)	13,098	(1,210)	16,513	(1,374)
Other/non-agency	—	—	263	(4)	263	(4)
Total mortgage-backed securities	3,415	(164)	13,361	(1,214)	16,776	(1,378)

Total	$3,415	($164)	$15,351	($1,264)	$18,766	($1,428)


	December 31, 2024
	Less than 12 Months		12 Months or Longer		Total
(dollars in millions)	Fair Value	Gross Unrealized Losses	Fair Value	Gross Unrealized Losses	Fair Value	Gross Unrealized Losses
U.S. Treasury and other	$—	$—	$2,544	($109)	$2,544	($109)
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities	9,560	(265)	14,304	(1,870)	23,864	(2,135)
Other/non-agency	—	—	260	(13)	260	(13)
Total mortgage-backed securities	9,560	(265)	14,564	(1,883)	24,124	(2,148)

Total	$9,560	($265)	$17,108	($1,992)	$26,668	($2,257)


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The Company does not currently have the intent to sell these AFS debt securities, and it is not more likely than not that the Company will be required to sell them prior to recovery of their amortized cost bases. The Company determined that credit losses are not expected to be incurred on the AFS debt securities identified with unrealized losses as of December 31, 2025. The unrealized losses on these AFS debt securities reflect non-credit-related factors driven by changes in interest rates. Therefore, the Company determined that these AFS debt securities are not impaired.

NOTE 3 - LOANS AND LEASES

Loans are classified as held for investment when management has the intent and ability to hold the loan for the foreseeable future, or until maturity or payoff. Loans held for investment are reported at the amount of their outstanding principal, net of charge-offs, unearned income, deferred loan origination fees and costs, and unamortized premiums or discounts on purchased loans. Deferred loan origination fees and costs and premiums and discounts on purchased loans are amortized as an adjustment of yield over the life of the loan using the effective interest method. Unamortized amounts are recorded as interest income or gain (loss) on sale, respectively, when a loan is prepaid or sold. Credit card receivables include billed and uncollected interest and fees.

Interest income on loans is determined using the effective interest method, which calculates periodic interest income at a constant effective yield on the net investment in the loan, providing a constant rate of return over the loan term. Loans accounted for using the fair value option are measured at fair value with corresponding changes reported in Mortgage banking fees and Capital markets fees, respectively, in the Consolidated Statements of Operations for residential mortgage LHFS and commercial LHFS.

Commitment fees for loans that are likely to be drawn down, along with other credit-related fees, are deferred and recognized as an adjustment to the effective interest rate over the loan term. Commitment fees are recognized over the commitment period on a straight-line basis if it is unlikely that a loan will be drawn down and are reported in Letter of credit and loan fees in the Consolidated Statements of Operations.

Loans and leases are disclosed in portfolio segments and classes. The Company’s loan and lease portfolio segments are commercial and retail with the following classes: commercial and industrial, commercial real estate, residential mortgages, home equity, automobile, education, and other retail.

The following table presents loans and leases, excluding LHFS:


	December 31,
(dollars in millions)	2025	2024
Commercial and industrial	$49,232	$42,551
Commercial real estate	24,580	27,225
Total commercial	73,812	69,776
Residential mortgages	35,024	32,726
Home equity	19,069	16,495
Automobile	2,310	4,744
Education	8,416	10,812
Other retail	4,061	4,650
Total retail	68,880	69,427
Total loans and leases	$142,692	$139,203

Accrued interest receivable on loans and leases held for investment totaled $825 million and $816 million as of December 31, 2025 and 2024, respectively, and is included in Other assets in the Consolidated Balance Sheets.

Loans pledged as collateral for FHLB borrowing capacity, primarily residential mortgages and home equity products, totaled $40.8 billion and $37.5 billion at December 31, 2025 and 2024, respectively. Loans pledged as collateral to support the contingent ability to borrow at the FRB discount window, if necessary, were primarily comprised of education, commercial and industrial, and commercial real estate loans, and totaled $19.0 billion and $22.9 billion at December 31, 2025 and 2024, respectively.


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Loans are classified as held for sale when management does not have the intent and ability to hold the loan for the foreseeable future. LHFS for which the fair value option is not elected are carried at the lower of amortized cost or fair value less costs to sell, with any write-downs or subsequent recoveries recognized in Other income in the Consolidated Statements of Operations. The Company has elected to account for residential mortgage LHFS and certain commercial LHFS at fair value. See Note 18 for additional information.

The following table presents the composition of LHFS:


	December 31, 2025			December 31, 2024
(dollars in millions)	Residential Mortgages(1)	Commercial(2)	Total	Residential Mortgages(1)	Commercial(2)	Total
Loans held for sale at fair value	$895	$170	$1,065	$633	$192	$825
Other loans held for sale	—	133	133	—	33	33
Total loans held for sale	$895	$303	$1,198	$633	$225	$858

(1) Residential mortgage LHFS at fair value are originated for sale.

(2) Commercial LHFS at fair value consist of loans managed by the Company’s commercial secondary loan desk. Other commercial LHFS primarily consist of loans associated with the Company’s syndication business.

The Company leases equipment for commercial use with a primary focus on middle-market and mid-corporate clients for large capital equipment acquisitions including railcars, trucks and trailers, and other equipment. The determination of whether an arrangement is a lease and the related lease classification are made at lease inception. Lease terms predominantly range from three to ten years and may include options to purchase the leased property prior to the end of the lease term. The Company does not have lease agreements that contain both lease and non-lease components.

A lessee is evaluated from a credit perspective using the same underwriting standards and procedures for a loan borrower. A lessee is expected to make rental payments based on its cash flows and the viability of its operations. Leases are not typically evaluated as collateral-based transactions and, therefore, the lessee’s overall financial strength is the most important credit evaluation factor.

The components of the net investment in direct financing and sales-type leases, before ALLL, are presented below:


	December 31,
(dollars in millions)	2025	2024
Total future minimum lease rentals	$1,005	$916
Estimated residual value of leased equipment (non-guaranteed)	225	231
Initial direct costs	4	4
Unearned income	(154)	(124)
Total leases	$1,080	$1,027

Interest income on direct financing and sales-type leases for the years ended December 31, 2025, 2024, and 2023 was $45 million, $41 million, and $46 million, respectively, and is reported within Interest and fees on loans and leases in the Consolidated Statements of Operations.

A maturity analysis of direct financing and sales-type lease receivables at December 31, 2025 is presented below:


Year			(dollars in millions)
2026			$237
2027			231
2028			180
2029			120
2030			107
Thereafter			130
Total undiscounted future minimum lease rentals			$1,005


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NOTE 4 - CREDIT QUALITY AND THE ALLOWANCE FOR CREDIT LOSSES

Allowance for Credit Losses

The Company’s estimate of expected credit losses in its loan and lease portfolios is recorded in the ACL and considers extensive historical loss experience, including the impact of loss mitigation and restructuring programs that the Company offers to borrowers experiencing financial difficulty, as well as projected loss severity as a result of loan default. 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. The determination of the ACL is based on the periodic evaluation of loan and lease portfolios and unfunded lending commitments that are not unconditionally cancellable. A number of relevant underlying factors, including key assumptions and the evaluation of quantitative and qualitative information, are considered.

The measurement process results in specific or pooled allowances for loans, leases, and unfunded lending commitments, and qualitative allowances that are determined and applied across the portfolio.

An econometric model to calculate expected credit losses is not required for certain loan portfolios, with less data-intensive and non-modeled approaches utilized for these portfolios. These approaches are considered more efficient and practical for portfolios that have outstanding balances that are not material (e.g., runoff or closed portfolios, and products that are not significant to the Company’s overall credit risk exposure).

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.

A loan is considered to be collateral dependent when repayment of the loan is expected to be provided substantially through the operation or sale of the underlying collateral, rather than by cash flows from the borrower’s operations, income, or other resources. This generally occurs when cash flows to repay the loan from all other available sources, including guarantors, are expected to be no more than nominal. Loans that are deemed to be collateral dependent are written down to fair value, less costs to sell, as of the evaluation date and are reassessed each subsequent period, which may result in an increase or decrease to the ACL based on the corresponding change in the fair value of the collateral during the period. Any decrease to the ACL would be limited to the amount previously written off for a given loan or lease.


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Collateral values for residential mortgage and home equity loans are based on appraisals, updated every 90 days at a minimum, less estimated costs to sell. At December 31, 2025 and 2024, the Company had collateral-dependent residential mortgage and home equity loans totaling $437 million and $372 million, respectively. The amortized cost basis of mortgage loans collateralized by residential real estate for which formal foreclosure proceedings were in-process was $307 million and $295 million as of December 31, 2025 and 2024, respectively.

Commercial loans are secured by various types of collateral, including real estate, inventory, equipment, accounts receivable, securities, and cash, among others. Collateral values are generally based on appraisals for commercial real estate loans, which are updated on a case-by-case basis based on management judgment. At December 31, 2025 and 2024, the Company had collateral-dependent commercial loans totaling $251 million and $607 million, respectively.

Expected recoveries are considered in management’s estimate of the ACL and may result in a reduction to the ACL balance. A negative ACL for a collateral-dependent loan exists if the fair value of the collateral increases in a subsequent reporting period and cannot exceed the total amount previously charged off. Accrued interest receivable on loans and leases is excluded from asset balances used to calculate the ACL.

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).

The ALLL and the allowance for unfunded lending commitments are reported in the Allowance for loan and lease losses and Other liabilities, respectively, in the Consolidated Balance Sheets. The provision for credit losses related to loan and lease portfolios and unfunded lending commitments is reported in Provision (benefit) for credit losses in the Consolidated Statements of Operations.

Loan Charge-Offs

Commercial loans are charged off when available information indicates that a loan, or portion thereof, is determined to be uncollectible. The determination of whether to recognize a charge-off involves many factors, including the past due status of the loan, prioritization of the Company’s claim in bankruptcy, workout/restructuring expectations for the loan, and valuation of the borrower’s equity or loan collateral.

Retail loans are generally charged off or written down to the net realizable value of the underlying collateral, with an offset to the ALLL, upon reaching specified stages of delinquency in accordance with standards established by the Federal Financial Institutions Examination Council. Residential real estate, credit card, and unsecured open-end loans are generally charged off in the month when the account becomes 180 days past due. Auto, education, and unsecured closed-end loans are generally charged off in the month when the account becomes 120 days past due. Certain retail loans will be charged off or written down to their net realizable value earlier in the following circumstances:

FDMs that are determined to be collateral dependent;
Auto loans are written down to fair value less costs to sell upon repossession of the collateral; and
Loans to borrowers who have experienced an event (e.g., bankruptcy) that suggests a loss is either known or highly certain.

◦Residential real estate and auto loans are written down to fair value less costs to sell within 60 days of receiving notification of the bankruptcy filing, unless repayment is likely to occur, or when the loan subsequently becomes 60 days past due;

◦Credit card loans are fully charged off within 60 days of receiving notification of the bankruptcy filing or other event; and

◦Education loans are generally charged off when the loan becomes 60 days past due after receiving notification of a bankruptcy.


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The following table presents a summary of changes in the ACL for the year ended December 31, 2025:


	Year Ended December 31, 2025
(dollars in millions)	Commercial	Retail	Total
Allowance for loan and lease losses, beginning of period	$1,140	$921	$2,061

Charge-offs	(351)	(466)	(817)
Recoveries	18	115	133
Net charge-offs	(333)	(351)	(684)
Provision expense (benefit) for loans and leases	251	315	566
Allowance for loan and lease losses, end of period	1,058	885	1,943
Allowance for unfunded lending commitments, beginning of period	155	43	198
Provision expense (benefit) for unfunded lending commitments	39	3	42

Allowance for unfunded lending commitments, end of period	194	46	240
Total allowance for credit losses, end of period	$1,252	$931	$2,183

During the year ended December 31, 2025, net charge-offs of $684 million and a provision for expected credit losses of $608 million resulted in a decrease of $76 million to the ACL.

During the first quarter of 2025, the Company 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. This transaction settled ratably each quarter throughout 2025.

As of December 31, 2025, the Company’s 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.


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The following tables present a summary of changes in the ACL for the years ended December 31, 2024 and 2023:


	Year Ended December 31, 2024
(dollars in millions)	Commercial	Retail	Total
Allowance for loan and lease losses, beginning of period	$1,250	$848	$2,098



Charge-offs	(419)	(504)	(923)
Recoveries	43	134	177
Net charge-offs	(376)	(370)	(746)
Provision expense (benefit) for loans and leases	266	443	709
Allowance for loan and lease losses, end of period	1,140	921	2,061
Allowance for unfunded lending commitments, beginning of period	175	45	220


Provision expense (benefit) for unfunded lending commitments	(20)	(2)	(22)

Allowance for unfunded lending commitments, end of period	155	43	198
Total allowance for credit losses, end of period	$1,295	$964	$2,259


	Year Ended December 31, 2023
(dollars in millions)	Commercial	Retail	Total
Allowance for loan and lease losses, beginning of period	$1,060	$923	$1,983



Charge-offs	(285)	(472)	(757)
Recoveries	18	130	148
Net charge-offs	(267)	(342)	(609)
Provision expense (benefit) for loans and leases	457	267	724
Allowance for loan and lease losses, end of period	1,250	848	2,098
Allowance for unfunded lending commitments, beginning of period	207	50	257


Provision expense (benefit) for unfunded lending commitments	(32)	(5)	(37)

Allowance for unfunded lending commitments, end of period	175	45	220
Total allowance for credit losses, end of period	$1,425	$893	$2,318

Credit Quality Indicators

The Company presents loan and lease portfolio segments and classes by credit quality indicator and vintage year, with the vintage date defined as the date of the most recent credit decision for the purpose of this disclosure. Renewals are categorized as new credit decisions and reflect the renewal date as the vintage date, except for renewals of loans modified for borrowers experiencing financial difficulty, or FDMs, which are presented in the original vintage.

The Company utilizes internal risk ratings to monitor credit quality for commercial loans and leases, with ratings assigned at loan origination considering both quantitative and qualitative factors. 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. The following internal risk ratings are utilized to develop the ACL:

Pass - includes obligations where the probability of default is considered low and repayment in full is expected in accordance with the contractual loan terms;
Special Mention - includes obligations that have potential weakness that, if left uncorrected, may result in deterioration of the Company’s credit position at some future date;
Substandard Accrual - includes obligations that have well-defined weaknesses that could hinder normal repayment or collection of the debt, but are currently performing; and
Nonaccrual - includes obligations where management has determined that full payment of principal and interest is in doubt. For more information on nonaccrual loans and leases see “Nonaccrual and Past Due Assets” below.


						Citizens Financial Group, Inc. \| 100

For commercial and industrial loans, the performance of the borrower is monitored in a disciplined and regular manner based on the level of credit risk inherent in the loan. An internal risk rating is assigned reflecting the borrower’s PD and LGD to evaluate the level of credit risk. This two-dimensional credit risk rating methodology provides granularity in the risk monitoring process. These ratings are generally reviewed at least annually. The combination of the PD and LGD assigned ratings, which reflect credit quality characteristics as of the reporting date and are used as inputs into the loss forecasting process, capture both the expectation of default and loss severity in the event of default. Each loan is periodically reviewed by management based on the amount of the lending arrangement and risk rating assessment, with priority given to those loans which are perceived to be of higher risk, or loans for which credit quality is weakening (e.g., payment delinquency). Loans are proactively managed by utilizing various procedures that are customized to the risk of a given loan, including ongoing outreach to the borrower, assessment of the borrower’s financial condition, and appraisal of the collateral.

Credit risk associated with CRE loans is managed similar to commercial and industrial loans by evaluating PD and LGD. Risks associated with CRE activities are typically correlated to the loan structure, collateral location, project progress, and business environment. As a result, these attributes are monitored and utilized in assessing credit risk. Periodic reviews are also performed to assess market/geographic risk and business unit/industry risk, which may result in increased scrutiny on loans that are perceived to be of higher risk or had adverse changes in risk ratings, and on areas that concern management. These reviews are designed to assess risk and facilitate actions to mitigate such risks.

Credit risk associated with leases is managed similar to commercial and industrial loans by evaluating PD and LGD. Reviews are generally performed annually based upon the dollar amount of the lease and the level of credit risk, and may be more frequent if circumstances warrant. The review process includes analysis of the following factors: equipment value/residual value, exposure levels, jurisdiction risk, industry risk, guarantor requirements, and regulatory compliance as applicable.

Commercial loans with renewal terms in the original contract are recognized as current year originations upon renewal unless the loan automatically renewed without a new credit decision. The Company generally reserves the right to not renew the loan or lease until current underwriting is completed and approved.

The following table presents the amortized cost basis of commercial loans and leases by vintage date and internal risk rating as of December 31, 2025:


	Term Loans and Leases by Origination Year						Revolving Loans
(dollars in millions)	2025	2024	2023	2022	2021	Prior to 2021	Within the Revolving Period	Converted to Term	Total
Commercial and industrial
Pass	$8,889	$3,985	$1,196	$2,415	$1,174	$1,966	$26,951	$77	$46,653
Special Mention	13	5	42	141	174	124	359	4	862
Substandard Accrual	13	16	104	132	145	258	752	20	1,440
Nonaccrual	—	4	15	57	17	72	107	5	277
Total commercial and industrial	8,915	4,010	1,357	2,745	1,510	2,420	28,169	106	49,232
Commercial real estate
Pass	4,769	1,827	722	3,712	3,680	4,805	1,346	4	20,865
Special Mention	—	2	7	729	294	166	73	—	1,271
Substandard Accrual	—	—	34	577	167	915	27	106	1,826
Nonaccrual	—	—	3	127	41	442	1	4	618
Total commercial real estate	4,769	1,829	766	5,145	4,182	6,328	1,447	114	24,580
Total commercial
Pass	13,658	5,812	1,918	6,127	4,854	6,771	28,297	81	67,518
Special Mention	13	7	49	870	468	290	432	4	2,133
Substandard Accrual	13	16	138	709	312	1,173	779	126	3,266
Nonaccrual	—	4	18	184	58	514	108	9	895
Total commercial	$13,684	$5,839	$2,123	$7,890	$5,692	$8,748	$29,616	$220	$73,812


						Citizens Financial Group, Inc. \| 101

The following table presents the amortized cost basis of commercial loans and leases by vintage date and internal risk rating as of December 31, 2024:


	Term Loans and Leases by Origination Year						Revolving Loans
(dollars in millions)	2024	2023	2022	2021	2020	Prior to 2020	Within the Revolving Period	Converted to Term	Total
Commercial and industrial
Pass	$5,945	$2,525	$4,194	$2,923	$895	$2,066	$21,323	$66	$39,937
Special Mention	2	79	98	236	48	48	211	—	722
Substandard Accrual	9	64	207	269	139	253	697	13	1,651
Nonaccrual	—	11	68	62	5	55	34	6	241
Total commercial and industrial	5,956	2,679	4,567	3,490	1,087	2,422	22,265	85	42,551
Commercial real estate
Pass	2,720	1,305	5,748	5,412	1,919	4,199	1,434	4	22,741
Special Mention	1	—	911	362	175	257	80	6	1,792
Substandard Accrual	3	22	359	253	275	875	9	120	1,916
Nonaccrual	—	67	89	58	90	470	2	—	776
Total commercial real estate	2,724	1,394	7,107	6,085	2,459	5,801	1,525	130	27,225
Total commercial
Pass	8,665	3,830	9,942	8,335	2,814	6,265	22,757	70	62,678
Special Mention	3	79	1,009	598	223	305	291	6	2,514
Substandard Accrual	12	86	566	522	414	1,128	706	133	3,567
Nonaccrual	—	78	157	120	95	525	36	6	1,017
Total commercial	$8,680	$4,073	$11,674	$9,575	$3,546	$8,223	$23,790	$215	$69,776

For retail loans, the Company utilizes FICO credit scores and the loan’s payment and delinquency status to monitor credit quality. Management believes FICO scores are the strongest indicator of credit losses over the contractual life of the loan and assist management in predicting the borrower’s future payment performance. Scores are based on current and historical national industry-wide consumer level credit performance data.


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The following table presents the amortized cost basis of retail loans by vintage date and current FICO score as of December 31, 2025:


	Term Loans by Origination Year						Revolving Loans
(dollars in millions)	2025	2024	2023	2022	2021	Prior to 2021	Within the Revolving Period	Converted to Term	Total
Residential mortgages
800+	$2,075	$1,664	$1,290	$3,276	$4,919	$6,099	$—	$—	$19,323
740-799	2,377	960	656	1,375	2,004	2,759	—	—	10,131
680-739	621	324	239	483	646	1,136	—	—	3,449
620-679	74	74	80	141	169	491	—	—	1,029
<620	6	18	135	130	184	605	—	—	1,078
No FICO available(1)	—	—	—	3	1	10	—	—	14
Total residential mortgages	5,153	3,040	2,400	5,408	7,923	11,100	—	—	35,024
Home equity
800+	—	2	3	5	6	66	6,686	193	6,961
740-799	—	4	3	4	3	49	6,148	217	6,428
680-739	—	3	3	4	3	36	3,453	193	3,695
620-679	—	—	2	2	2	16	900	162	1,084
<620	—	—	4	2	2	14	554	321	897
No FICO available(1)	—	1	—	—	—	2	1	—	4
Total home equity	—	10	15	17	16	183	17,742	1,086	19,069
Automobile
800+	—	—	47	224	316	63	—	—	650
740-799	—	—	58	233	266	61	—	—	618
680-739	—	—	53	180	175	41	—	—	449
620-679	—	—	30	107	98	25	—	—	260
<620	—	—	39	133	127	34	—	—	333
No FICO available(1)	—	—	—	—	—	—	—	—	—
Total automobile	—	—	227	877	982	224	—	—	2,310
Education
800+	287	271	311	517	1,002	1,817	—	—	4,205
740-799	393	268	268	385	459	886	—	—	2,659
680-739	160	125	120	161	160	335	—	—	1,061
620-679	23	40	42	48	46	119	—	—	318
<620	5	13	17	25	23	61	—	—	144
No FICO available(1)	2	—	—	—	—	27	—	—	29
Total education	870	717	758	1,136	1,690	3,245	—	—	8,416
Other retail
800+	127	60	31	31	9	9	508	—	775
740-799	132	82	43	33	9	19	793	—	1,111
680-739	93	62	36	30	8	20	733	1	983
620-679	54	30	20	22	6	11	271	—	414
<620	16	21	17	29	8	10	190	—	291
No FICO available(1)	4	—	—	—	—	2	481	—	487
Total other retail	426	255	147	145	40	71	2,976	1	4,061
Total retail
800+	2,489	1,997	1,682	4,053	6,252	8,054	7,194	193	31,914
740-799	2,902	1,314	1,028	2,030	2,741	3,774	6,941	217	20,947
680-739	874	514	451	858	992	1,568	4,186	194	9,637
620-679	151	144	174	320	321	662	1,171	162	3,105
<620	27	52	212	319	344	724	744	321	2,743
No FICO available(1)	6	1	—	3	1	41	482	—	534
Total retail	$6,449	$4,022	$3,547	$7,583	$10,651	$14,823	$20,718	$1,087	$68,880

(1) Represents loans for which an updated FICO score was unavailable (e.g., due to recent profile changes).


						Citizens Financial Group, Inc. \| 103

The following table presents the amortized cost basis of retail loans by vintage date and current FICO score as of December 31, 2024:


	Term Loans by Origination Year						Revolving Loans
(dollars in millions)	2024	2023	2022	2021	2020	Prior to 2020	Within the Revolving Period	Converted to Term	Total
Residential mortgages
800+	$1,230	$1,302	$3,299	$5,109	$2,919	$3,869	$—	$—	$17,728
740-799	1,757	873	1,568	2,213	1,338	1,923	—	—	9,672
680-739	425	281	552	697	385	938	—	—	3,278
620-679	31	61	126	151	101	494	—	—	964
<620	15	37	76	147	89	703	—	—	1,067
No FICO available(1)	1	—	—	1	1	14	—	—	17
Total residential mortgages	3,459	2,554	5,621	8,318	4,833	7,941	—	—	32,726
Home equity
800+	1	—	3	4	1	76	5,634	200	5,919
740-799	—	—	1	2	1	65	5,275	224	5,568
680-739	—	—	1	—	1	76	2,995	183	3,256
620-679	—	1	4	3	2	60	752	141	963
<620	—	2	6	3	1	59	459	259	789
No FICO available(1)	—	—	—	—	—	—	—	—	—
Total home equity	1	3	15	12	6	336	15,115	1,007	16,495
Automobile
800+	—	65	380	665	183	58	—	—	1,351
740-799	—	92	430	581	176	61	—	—	1,340
680-739	—	91	338	385	115	45	—	—	974
620-679	—	51	189	194	56	29	—	—	519
<620	—	47	197	216	62	38	—	—	560
No FICO available(1)	—	—	—	—	—	—	—	—	—
Total automobile	—	346	1,534	2,041	592	231	—	—	4,744
Education
800+	227	373	657	1,517	1,256	1,475	—	—	5,505
740-799	290	359	571	804	637	811	—	—	3,472
680-739	110	150	229	261	211	337	—	—	1,298
620-679	27	48	55	58	51	111	—	—	350
<620	5	12	21	28	25	60	—	—	151
No FICO available(1)	5	—	—	—	—	31	—	—	36
Total education	664	942	1,533	2,668	2,180	2,825	—	—	10,812
Other retail
800+	186	65	36	15	11	10	512	—	835
740-799	259	96	46	18	13	11	895	1	1,339
680-739	201	87	39	15	11	7	845	1	1,206
620-679	97	47	27	10	6	3	335	1	526
<620	32	31	34	15	7	3	234	1	357
No FICO available(1)	5	—	—	—	—	—	382	—	387
Total other retail	780	326	182	73	48	34	3,203	4	4,650
Total retail
800+	1,644	1,805	4,375	7,310	4,370	5,488	6,146	200	31,338
740-799	2,306	1,420	2,616	3,618	2,165	2,871	6,170	225	21,391
680-739	736	609	1,159	1,358	723	1,403	3,840	184	10,012
620-679	155	208	401	416	216	697	1,087	142	3,322
<620	52	129	334	409	184	863	693	260	2,924
No FICO available(1)	11	—	—	1	1	45	382	—	440
Total retail	$4,904	$4,171	$8,885	$13,112	$7,659	$11,367	$18,318	$1,011	$69,427

(1) Represents loans for which an updated FICO score was unavailable (e.g., due to recent profile changes).


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The following tables present gross charge-offs by vintage date for the Company’s loan and lease portfolios:


	Year Ended December 31, 2025
	Term Loans and Leases by Origination Year						Revolving Loans
(dollars in millions)	2025	2024	2023	2022	2021	Prior to 2021	Within the Revolving Period	Converted to Term	Total
Commercial and industrial	$—	$—	$2	$57	$31	$5	$51	$—	$146
Commercial real estate	—	—	3	21	27	147	7	—	205
Total commercial	—	—	5	78	58	152	58	—	351
Residential mortgages	—	—	—	—	—	7	—	—	7
Home equity	—	—	—	1	—	4	12	—	17
Automobile	—	—	5	25	20	9	—	—	59
Education	—	4	9	19	27	74	—	—	133
Other retail	44	30	18	11	5	8	134	—	250
Total retail	44	34	32	56	52	102	146	—	466
Total loans and leases	$44	$34	$37	$134	$110	$254	$204	$—	$817


	Year Ended December 31, 2024
	Term Loans and Leases by Origination Year						Revolving Loans
(dollars in millions)	2024	2023	2022	2021	2020	Prior to 2020	Within the Revolving Period	Converted to Term	Total
Commercial and industrial	$—	$—	$15	$31	$1	$22	$38	$—	$107
Commercial real estate	—	—	1	23	145	143	—	—	312
Total commercial	—	—	16	54	146	165	38	—	419
Residential mortgages	—	—	—	—	—	4	—	—	4
Home equity	—	—	—	—	—	5	11	2	18
Automobile	—	6	34	34	10	10	—	—	94
Education	1	5	12	24	25	59	—	—	126
Other retail	42	24	10	6	3	10	167	—	262
Total retail	43	35	56	64	38	88	178	2	504
Total loans and leases	$43	$35	$72	$118	$184	$253	$216	$2	$923

Nonaccrual and Past Due Assets

Nonaccrual loans and leases are those on which the accrual of interest is suspended. Loans, other than certain retail loans guaranteed or insured by U.S. government agencies, are placed on nonaccrual status when full payment of principal and interest is in doubt, unless the loan is both well-secured and in the process of collection.

Commercial and industrial loans and commercial real estate loans are generally placed on nonaccrual status when contractually past due 90 days or more, or earlier when collateral values are less than the value of the loan and, based on management’s assessment, the borrower is unable to continue repayment of the loan. Some of these loans may remain on accrual status when contractually past due 90 days or more if management considers the loan collectible.

Residential mortgages are generally placed on nonaccrual status when past due 120 days, or sooner if determined to be collateral dependent, unless repayment of the loan is fully or partially guaranteed or insured by the FHA, VA, or USDA. Residential mortgages where the Company holds a second lien position are placed on nonaccrual status if the first lien position is 90 days or more past due. Credit card balances are placed on nonaccrual status when past due 90 days or more and are restored to accrual status if they subsequently become less than 90 days past due. All other retail loans are generally placed on nonaccrual status when past due 90 days or more, or earlier if management believes that the probability of collection is insufficient to warrant further accrual. Loans less than 90 days past due may be placed on nonaccrual status due to the death of the borrower, fraud, or bankruptcy.


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When a loan is placed on nonaccrual status the accrued interest receivable is reversed against interest income and the amortization of any net deferred fees is suspended. Interest collected on nonaccrual loans and leases for which the ultimate collectability of principal is uncertain is generally applied to reduce the carrying value of the asset first. Otherwise, interest income may be recognized to the extent of the cash received if the loan is deemed fully collectible.

A loan or lease may be returned to accrual status if:

no principal and interest payments are due and unpaid, and repayment of the remaining contractual principal and interest is expected;
the loan or lease has otherwise become well-secured and in the process of collection; or
the borrower has made regularly scheduled payments in full for the prior six months and it is reasonably assured that the loan or lease will be brought current within a reasonable period.

Upon return to accrual status, interest payments received and applied to the carrying value of a loan or lease while on nonaccrual status are accreted into interest income over the remaining life of the loan or lease using the effective interest method.

The following tables present an aging analysis of accruing and nonaccrual loans and leases:


	December 31, 2025
		Days Past Due and Accruing
(dollars in millions)	Current	30-59	60-89	90+	Nonaccrual	Total	Nonaccrual with no related ACL
Commercial and industrial	$48,873	$63	$14	$5	$277	$49,232	$34
Commercial real estate	23,700	184	58	20	618	24,580	85
Total commercial	72,573	247	72	25	895	73,812	119
Residential mortgages	34,547	93	47	141	196	35,024	155
Home equity	18,626	95	28	1	319	19,069	215
Automobile	2,203	59	20	—	28	2,310	4
Education	8,342	36	16	2	20	8,416	2
Other retail	3,957	35	23	—	46	4,061	1
Total retail	67,675	318	134	144	609	68,880	377
Total	$140,248	$565	$206	$169	$1,504	$142,692	$496
Guaranteed residential mortgages(1)	$743	$53	$27	$141	$—	$964	$—


	December 31, 2024
		Days Past Due and Accruing
(dollars in millions)	Current	30-59	60-89	90+	Nonaccrual	Total	Nonaccrual with no related ACL
Commercial and industrial	$42,247	$35	$20	$8	$241	$42,551	$31
Commercial real estate	26,212	204	27	6	776	27,225	32
Total commercial	68,459	239	47	14	1,017	69,776	63
Residential mortgages	32,011	251	93	179	192	32,726	142
Home equity	16,097	88	27	—	283	16,495	182
Automobile	4,563	100	33	—	48	4,744	6
Education	10,686	45	23	2	56	10,812	4
Other retail	4,504	46	31	1	68	4,650	1
Total retail	67,861	530	207	182	647	69,427	335
Total	$136,320	$769	$254	$196	$1,664	$139,203	$398
Guaranteed residential mortgages(1)	$696	$119	$55	$172	$—	$1,042	$—

(1) Guaranteed residential mortgages represent loans fully or partially guaranteed or insured by the FHA, VA, and USDA, and are included in the amounts presented for Residential mortgages.


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Loan Modifications to Borrowers Experiencing Financial Difficulty

The Company modifies the contractual terms of loans to borrowers experiencing financial difficulty as a way to mitigate loss, proactively work with borrowers in financial difficulty, or to comply with the terms of certain bankruptcy filings. A borrower is considered to be experiencing financial difficulty when there is significant doubt about their ability to make required loan payments or to obtain a loan from another source at the current market interest rate for a similar loan. Significant doubt may also exist when a borrower has declared, or is in the process of declaring, bankruptcy.

Loan modifications to borrowers experiencing financial difficulty, or FDMs, are evaluated to determine whether the modification should be accounted for as a new loan or a continuation of the existing loan. The existing loan is derecognized and the restructured loan is accounted for as a new loan if the effective yield on the restructured loan is at least equal to the effective yield for comparable loans with similar collection risk and the modification to the original loan is more than minor. Any unamortized fees and costs from the original loan are recognized in interest income when the new loan is granted. If a loan restructuring does not meet these conditions, the existing loan’s amortized cost basis is carried forward and the modified loan is accounted for as a continuation of the existing loan. FDMs are generally accounted for as a continuation of the existing loan given the terms are typically not at market rates.

Loan modifications, characterized as FDMs, offered by the Company to retail and commercial borrowers experiencing financial difficulty as a result of its loss mitigation activities may result in a payment delay, interest rate reduction, term extension, principal forgiveness, or combination thereof. Payment delays consist of modifications that result in a delay of contractual amounts due greater than three months over a rolling 12-month period. Term extensions consist of modifications that result in an extension of the contractual maturity date greater than three months or a significant deferral of principal payments relative to the total outstanding principal balance of the loan.

Commercial loan modifications are offered on a case-by-case basis and generally include a payment delay, term extension, and/or interest rate reduction. The Company does not typically offer principal forgiveness for commercial loans. Retail loan modifications are offered through structured loan modification programs, which are summarized below:

Forbearance programs provide borrowers experiencing some form of hardship a period of time during which their contractual payment obligations are suspended, resulting in a payment delay and/or term extension;
Other repayment plans are offered due to hardship and include an interest rate reduction and/or term extension designed to enable the borrower to return the loan to current status in an expeditious manner;
Settlement agreements may be executed with borrowers experiencing a long-term hardship or who are delinquent, resulting in principal forgiveness. Upon fulfillment of the terms of the settlement agreement, the unpaid principal amount is forgiven resulting in a charge-off of the outstanding principal balance; and
Certain reorganization bankruptcy judgments may result in any one of the four modification types or some combination thereof.

Loan modifications are considered to be collateral dependent when repayment of the loan is expected to be provided substantially through the operation or sale of the underlying collateral, or when the borrower is experiencing financial difficulty, and the Company elected to measure the loan at the fair value of the collateral, less costs to sell if sale or foreclosure of the property is expected. In addition, certain loans discharged in bankruptcy and not reaffirmed by the borrower are placed on nonaccrual status and considered collateral dependent at the time of discharge, unless there is a co-borrower responsible for repayment that is likely to occur.

Retail and commercial loans whose contractual terms have been modified in a FDM and are current at the time of the modification may remain on accrual status if there is demonstrated performance prior to the modification and payment in full is expected under the modified terms. Cash receipts on nonaccrual impaired loans, including nonaccrual loans involved in FDMs, are generally applied to reduce the unpaid principal balance. Certain FDMs that are current in payment status are classified as nonaccrual in accordance with regulatory guidance. Nonaccrual FDMs that meet the guidelines above for accrual status can be returned to accruing if supported by a well-documented evaluation of the borrowers’ financial condition and the borrower has been current for at least six months.


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The following tables present the period-end amortized cost of loans to borrowers experiencing financial difficulty that were modified during the years ended December 31, 2025, 2024, and 2023, disaggregated by class of financing receivable and modification type. The modification type reflects the cumulative effect of all FDMs received during the indicated period.


	Year Ended December 31, 2025
(dollars in millions)	Interest Rate Reduction	Term Extension	Payment Delay	Interest Rate Reduction and Term Extension	Term Extension and Payment Delay	Interest Rate Reduction, Term Extension, and Payment Delay	Total	Total as a % of Loan Class(1)
Commercial and industrial	$16	$314	$2	$5	$1	$4	$342	0.69	%
Commercial real estate	31	932	95	43	161	25	1,287	5.24
Total commercial	47	1,246	97	48	162	29	1,629	2.21
Residential mortgages	3	67	17	15	3	3	108	0.31
Home equity	8	3	13	9	—	—	33	0.17

Education	11	—	—	—	—	—	11	0.13
Other retail	18	—	—	—	—	—	18	0.44
Total retail	40	70	30	24	3	3	170	0.25
Total	$87	$1,316	$127	$72	$165	$32	$1,799	1.26	%


	Year Ended December 31, 2024
(dollars in millions)	Interest Rate Reduction	Term Extension	Payment Delay	Interest Rate Reduction and Term Extension	Term Extension and Payment Delay	Interest Rate Reduction, Term Extension, and Payment Delay	Total	Total as a % of Loan Class(1)
Commercial and industrial	$—	$235	$99	$1	$21	$1	$357	0.84	%
Commercial real estate	—	650	113	130	134	—	1,027	3.77
Total commercial	—	885	212	131	155	1	1,384	1.98
Residential mortgages	6	74	12	16	5	1	114	0.35
Home equity	6	3	1	13	—	—	23	0.14

Education	11	3	34	—	10	—	58	0.54
Other retail	16	—	—	—	—	—	16	0.34
Total retail	39	80	47	29	15	1	211	0.30
Total	$39	$965	$259	$160	$170	$2	$1,595	1.15	%


	Year Ended December 31, 2023
(dollars in millions)	Interest Rate Reduction	Term Extension	Payment Delay	Interest Rate Reduction and Term Extension	Term Extension and Payment Delay	Total	Total as a % of Loan Class(1)
Commercial and industrial	$1	$252	$69	$1	$2	$325	0.74	%
Commercial real estate	—	522	—	70	1	593	2.01
Total commercial	1	774	69	71	3	918	1.23
Residential mortgages	8	77	3	20	1	109	0.35
Home equity	2	5	—	8	—	15	0.10

Education	9	—	31	—	—	40	0.34
Other retail	11	—	—	—	—	11	0.22
Total retail	30	82	34	28	1	175	0.24
Total	$31	$856	$103	$99	$4	$1,093	0.75	%

(1) Represents the total amortized cost as of period-end divided by the period-end amortized cost of the corresponding loan class. Accrued interest receivable is excluded from amortized cost and is immaterial.


						Citizens Financial Group, Inc. \| 108

The following tables present the financial effect of loans to borrowers experiencing financial difficulty that were modified during the years ended December 31, 2025, 2024, and 2023, disaggregated by class of financing receivable.


	Year Ended December 31, 2025
(dollars in millions)	Weighted-Average Interest Rate Reduction(1)		Weighted-Average Term Extension (in Months)(1)	Weighted-Average Payment Deferral(1)	Amount of Principal Forgiven(2)
Commercial and industrial	1.65	%	18	$—	$—
Commercial real estate	1.00		14	3	—
Residential mortgages	1.04		111	—	—
Home equity	3.19		144	—	—

Education	4.83		—	—	—
Other retail	19.90		—	—	16


	Year Ended December 31, 2024
(dollars in millions)	Weighted-Average Interest Rate Reduction(1)		Weighted-Average Term Extension (in Months)(1)	Weighted-Average Payment Deferral(1)	Amount of Principal Forgiven(2)
Commercial and industrial	3.78	%	15	$4	$—
Commercial real estate	2.83		17	1	—
Residential mortgages	1.83		94	—	—
Home equity	4.01		71	—	—

Education	4.41		12	—	—
Other retail	20.18		—	—	6


	Year Ended December 31, 2023
(dollars in millions)	Weighted-Average Interest Rate Reduction(1)		Weighted-Average Term Extension (in Months)(1)	Weighted-Average Payment Deferral(1)	Amount of Principal Forgiven(2)
Commercial and industrial	2.02	%	15	$1	$—
Commercial real estate	0.59		11	—	—
Residential mortgages	1.58		50	—	—
Home equity	2.64		120	—	—
Automobile	3.60		18	—	—
Education	4.76		—	—	—
Other retail	18.68		—	—	5

(1) Weighted based on period-end amortized cost.

(2) Amounts are recorded as charge-offs.

The following tables present an aging analysis of the period-end amortized cost of loans to borrowers experiencing financial difficulty that were modified during the years ended December 31, 2025, 2024, and 2023, disaggregated by class of financing receivable. A loan in a forbearance or repayment plan is reported as past due according to its contractual terms until contractually modified. Subsequent to modification, it is reported as past due based on its restructured terms.


	December 31, 2025
		Days Past Due and Accruing
(dollars in millions)	Current	30-59	60-89	90+	Nonaccrual	Total
Commercial and industrial	$309	$—	$2	$—	$31	$342
Commercial real estate	953	11	5	2	316	1,287
Total commercial	1,262	11	7	2	347	1,629
Residential mortgages	43	12	6	26	21	108
Home equity	6	—	—	—	27	33

Education	9	—	—	—	2	11
Other retail	14	2	1	—	1	18
Total retail	72	14	7	26	51	170
Total	$1,334	$25	$14	$28	$398	$1,799


						Citizens Financial Group, Inc. \| 109


	December 31, 2024
		Days Past Due and Accruing
(dollars in millions)	Current	30-59	60-89	90+	Nonaccrual	Total
Commercial and industrial	$290	$3	$—	$—	$64	$357
Commercial real estate	546	92	—	4	385	1,027
Total commercial	836	95	—	4	449	1,384
Residential mortgages	49	13	7	22	23	114
Home equity	10	—	—	—	13	23

Education	26	—	—	—	32	58
Other retail	12	2	1	—	1	16
Total retail	97	15	8	22	69	211
Total	$933	$110	$8	$26	$518	$1,595


	December 31, 2023
		Days Past Due and Accruing
(dollars in millions)	Current	30-59	60-89	90+	Nonaccrual	Total
Commercial and industrial	$211	$—	$—	$—	$114	$325
Commercial real estate	402	7	—	26	158	593
Total commercial	613	7	—	26	272	918
Residential mortgages	61	11	7	17	13	109
Home equity	5	—	—	—	10	15

Education	37	1	—	—	2	40
Other retail	8	1	1	—	1	11
Total retail	111	13	8	17	26	175
Total	$724	$20	$8	$43	$298	$1,093

The following tables present the period-end amortized cost of loans to borrowers experiencing financial difficulty that defaulted during the period presented and were modified within the previous 12 months preceding the default, disaggregated by class of financing receivable and modification type. The modification type reflects the cumulative effect of all FDMs at the time of default. A loan is considered to be in default if, subsequent to modification, it becomes 90 or more days past due or is placed on nonaccrual status.


	Year Ended December 31, 2025
(dollars in millions)	Interest Rate Reduction	Term Extension	Payment Delay	Interest Rate Reduction and Term Extension	Term Extension and Payment Delay	Total
Commercial and industrial	$—	$47	$—	$—	$—	$47
Commercial real estate	—	59	2	—	14	75
Total commercial	—	106	2	—	14	122
Residential mortgages	2	32	9	10	1	54
Home equity	2	—	1	2	—	5

Education	2	—	—	—	—	2
Other retail	1	—	—	—	—	1
Total retail	7	32	10	12	1	62
Total	$7	$138	$12	$12	$15	$184


						Citizens Financial Group, Inc. \| 110


	Year Ended December 31, 2024
(dollars in millions)	Interest Rate Reduction	Term Extension	Payment Delay	Interest Rate Reduction and Term Extension	Total
Commercial and industrial	$1	$18	$—	$—	$19
Commercial real estate	—	134	20	—	154
Total commercial	1	152	20	—	173
Residential mortgages	—	26	3	3	32
Home equity	—	1	—	1	2

Education	4	—	11	—	15
Other retail	1	—	—	—	1
Total retail	5	27	14	4	50
Total	$6	$179	$34	$4	$223


	Year Ended December 31, 2023
(dollars in millions)	Interest Rate Reduction	Term Extension	Payment Delay	Interest Rate Reduction and Term Extension	Total
Commercial and industrial	$—	$—	$43	$—	$43
Commercial real estate	—	102	—	—	102
Total commercial	—	102	43	—	145
Residential mortgages	1	9	—	5	15
Home equity	—	1	—	2	3

Education	—	—	1	—	1
Other retail	—	—	—	—	—
Total retail	1	10	1	7	19
Total	$1	$112	$44	$7	$164

Unfunded commitments related to loans modified during the year ended December 31, 2025 were $465 million at December 31, 2025. Unfunded commitments related to loans modified during the year ended December 31, 2024 were $206 million at December 31, 2024.

NOTE 5 - PREMISES, EQUIPMENT AND SOFTWARE

Premises and Equipment

Premises and equipment are stated at cost, less accumulated depreciation and amortization, computed using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized over the life of the lease, including renewal options if exercise of those options is reasonably assured, or their estimated useful life, whichever is shorter.

The cost of major additions and improvements to premises and equipment is capitalized. Repairs and maintenance and other costs that do not improve the property, extend the useful life, or otherwise do not meet capitalization criteria are charged to expense as incurred. The Company evaluates premises and equipment for impairment when events or circumstances indicate that the carrying value of such assets may not be recoverable.

A summary of the carrying value of premises and equipment is presented below:


		December 31,
(dollars in millions)	Useful Lives (years)	2025	2024
Land and land improvements	10 - 75	$143	$144
Buildings and leasehold improvements	5 - 60	901	887
Furniture, fixtures and equipment	4 - 20	581	601
Construction in progress		110	53
Total premises and equipment, gross		1,736	1,685
Accumulated depreciation and amortization		(821)	(810)
Total premises and equipment, net		$915	$875


						Citizens Financial Group, Inc. \| 111

Depreciation charged to noninterest expense totaled $130 million, $132 million, and $115 million for the years ended December 31, 2025, 2024, and 2023, respectively, and is presented in the Consolidated Statements of Operations in either Occupancy or Equipment and software, as applicable.

Software

Costs related to computer software developed or obtained for internal use are capitalized if the projects improve functionality and provide long-term future operational benefits. Capitalized costs are amortized using the straight-line method over the asset’s expected useful life, which is based on the basic pattern of consumption and economic benefits provided by the asset. The amortization of software commences when the asset, or identifiable component of the asset, is substantially complete and ready for its intended use. All other costs incurred in connection with an internal-use software project are expensed as incurred. Capitalized software is included in Other assets in the Consolidated Balance Sheets.

The Company had capitalized software assets of $2.7 billion and $2.5 billion, and related accumulated amortization of $1.8 billion and $1.7 billion as of December 31, 2025 and 2024, respectively. Amortization expense was $271 million, $268 million, and $254 million for the years ended December 31, 2025, 2024, and 2023, respectively.

The estimated future amortization expense for capitalized software assets is presented below:


Year			(dollars in millions)
2026			$232
2027			176
2028			119
2029			63
2030			20
Thereafter			—
Total(1)			$610

(1) Excludes $275 million of in-process software at December 31, 2025.

NOTE 6 - MORTGAGE BANKING AND OTHER SERVICED LOANS

Mortgage Banking

The Company sells residential mortgages in the secondary market and does not retain a beneficial interest in these sales but may retain the servicing rights for the loans sold. The Company may exercise its option to repurchase eligible government guaranteed residential mortgages or may be obligated to subsequently repurchase a loan if the purchaser discovers a representation or warranty violation, such as noncompliance with eligibility or servicing requirements or customer fraud that should have been identified in a loan file review.

Mortgage LHFS are accounted for at fair value, with changes in fair value and realized gains and losses on the sale of mortgage loans reported in Mortgage banking fees in the Consolidated Statements of Operations.

The following table summarizes activity related to residential mortgage loans sold with servicing rights retained:


	Year Ended December 31,
(dollars in millions)	2025	2024	2023
Cash proceeds from residential mortgage loans sold with servicing retained	$9,400	$7,306	$9,124

Gain on sales(1)	77	63	72
Contractually specified servicing, late, and other ancillary fees(1)	279	309	309

(1) Reported in Mortgage banking fees in the Consolidated Statements of Operations.

The Company recognizes MSRs when purchased or when servicing is contractually separated from the underlying mortgage loans sold with servicing rights retained. MSRs are reported in Other assets in the Consolidated Balance Sheets and are measured using the fair value method, with changes in fair value recorded in Mortgage banking fees in the Consolidated Statements of Operations. The unpaid principal balance of residential mortgage loans related to our MSRs was $94.9 billion and $95.6 billion at December 31, 2025 and 2024, respectively. The Company manages the risk associated with changes in the value of the MSRs with an active economic hedging strategy, which includes the purchase of freestanding derivatives.


						Citizens Financial Group, Inc. \| 112

The following table summarizes changes in MSRs recorded using the fair value method:


	As of and for the Year Ended December 31,
(dollars in millions)	2025	2024
Fair value as of beginning of the period	$1,491	$1,552



Amounts capitalized	159	106

Sales(1)	(72)	(99)
Changes in unpaid principal balance(2)	(168)	(176)
Changes in fair value(3)	45	108
Fair value at end of the period	$1,455	$1,491

(1) For the years ended December 31, 2025 and 2024, represents the sale of the excess servicing yield on MSRs related to certain FNMA and FHLMC mortgages with a total unpaid principal balance of $10.5 billion and $17.8 billion, respectively, at the time of sale.

(2) Represents changes in value of the MSRs due to i) the passage of time including the impact from both regularly scheduled loan principal payments and partial paydowns, and ii) loans that paid off during the period.

(3) Represents changes in fair value primarily driven by market conditions. These changes are recorded in Mortgage banking fees in the Consolidated Statements of Operations.

The fair value of MSRs is estimated by using the present value of estimated future net servicing cash flows, taking into consideration actual and expected mortgage loan prepayment rates, discount rates, contractual servicing fee income, servicing costs, default rates, ancillary income, and other economic factors determined based on current market interest rates. The valuation does not attempt to forecast or predict the future direction of interest rates.

The sensitivity analysis below presents the impact of an immediate 10% and 20% adverse change in key economic assumptions to the current fair value of MSRs. These sensitivities are hypothetical, with the effect of a variation in a particular assumption on the fair value of the MSRs calculated independently without changing any other assumption. Changes in one factor may result in changes in another (e.g., changes in interest rates that drive changes in prepayment rates could result in changes in discount rates) and may amplify or counteract the sensitivities. The primary risk inherent in the Company’s MSRs is an increase in prepayments of the underlying mortgage loans serviced, which is largely dependent upon movements in market interest rates.


	December 31,
(dollars in millions)	2025	2024
Fair value	$1,455	$1,491
Weighted average life (years)	8.0	8.7
Weighted average constant prepayment rate	7.0%	6.7%
Decline in fair value from 10% adverse change	$38	$35
Decline in fair value from 20% adverse change	$73	$67
Weighted average option adjusted spread	588 bps	632 bps
Decline in fair value from 10% adverse change	$40	$42
Decline in fair value from 20% adverse change	$80	$84

The Company has mortgage banking derivatives that include commitments to originate mortgages held for sale, certain loan sale agreements, and other financial instruments that meet the definition of a derivative. Refer to Note 12 for additional information.

Other Serviced Loans

The Company engages in other servicing relationships from time to time. The following table presents the unpaid principal balance of other serviced loans:


	December 31,
(dollars in millions)	2025	2024
Education	$341	$420
Commercial and industrial(1)	84	92

(1) Represents the government guaranteed portion of SBA loans sold to outside investors.


						Citizens Financial Group, Inc. \| 113

NOTE 7 - LEASES

Citizens as Lessee

The Company determines if an arrangement is a lease at inception and records a right-of-use asset and a corresponding lease liability. A right-of-use asset represents the value of the Company’s contractual right to use an underlying leased asset and a lease liability represents the Company’s contractual obligation to make payments on the same asset. Operating and finance lease right-of-use assets and liabilities are recognized at the commencement date based on the present value of the lease payments over the non-cancelable lease term. In instances where the lease does not specify an implicit rate, the Company utilizes an incremental borrowing rate based on information available at the lease commencement date to determine the present value of the lease payments. The Company evaluates right-of-use assets for impairment when events or changes in circumstances indicate that the carrying value of the asset may not be recoverable.

The Company leases both equipment and real estate, including office and branch space, in the normal course of business. Lease terms predominantly range from one year to fifteen years and may include options to extend the lease, terminate the lease, or purchase the underlying asset at the end of the lease. Certain lease agreements include rental payments based on an index or are adjusted periodically for inflation. Lease components are accounted for as a single lease component when lease agreements contain lease and non-lease components and for certain real estate leases.

Leases with an initial term of 12 months or less are not recorded in the Company’s Consolidated Balance Sheets and are recognized in Occupancy expense in the Company’s Consolidated Statements of Operations on a straight-line basis over the lease term. The Company may also enter into subleases with third parties for certain leased real estate properties that are no longer occupied.

The components of operating lease cost are presented below:


	Year Ended December 31,
(dollars in millions)	2025	2024	2023
Operating lease cost	$224	$220	$221
Short-term lease cost	3	3	2
Variable lease cost	5	5	5
Sublease income	(5)	(5)	(1)
Total	$227	$223	$227

Operating lease cost is recognized on a straight-line basis over the lease term and is recorded in Occupancy and Equipment and software in the Consolidated Statements of Operations.

Supplemental information related to the Company’s operating lease arrangements is presented in the tables below:


	December 31,
(dollars in millions)	2025		2024		Affected Line Item in Consolidated Balance Sheets
Operating lease right-of-use assets	$958		$869		Other assets
Operating lease liabilities	1,042		956		Other liabilities
Weighted average remaining lease term (years)	7		7		—
Weighted average discount rate	3.89	%	3.51	%	—


	Year Ended December 31,
(dollars in millions)	2025	2024	2023
Cash paid for amounts included in measurement of liabilities:
Operating cash flows from operating leases	$231	$233	$232
Supplemental non-cash information on lease liabilities arising from obtaining right-of-use assets:
Right-of-use assets in exchange for new operating lease liabilities	144	84	64


						Citizens Financial Group, Inc. \| 114

Lease liabilities maturing under noncancellable operating leases are presented below as of December 31, 2025:


Year			(dollars in millions)
2026			$203
2027			210
2028			179
2029			147
2030			117
Thereafter			358
Total lease payments			1,214
Less: Interest			172
Present value of lease liabilities			$1,042

Citizens as Lessor

Operating lease assets where Citizens was the lessor totaled $125 million and $165 million as of December 31, 2025 and 2024, respectively. Operating lease rental income associated with these assets was $16 million, $21 million, and $22 million for the years ended December 31, 2025, 2024, and 2023, respectively, and is recognized in Other income in the Consolidated Statements of Operations on a straight-line basis over the lease term.

Depreciation expense associated with operating lease assets is recorded on a straight-line basis over their estimated useful life and is included in Other operating expense in the Consolidated Statements of Operations. Depreciation expense related to operating lease assets totaled $12 million for the year ended December 31, 2025, and $16 million for each of the years ended December 31, 2024 and 2023.

Operating lease assets are reviewed for impairment on a periodic basis, with an impairment loss recognized in Other operating expense if the carrying amount of the leased asset exceeds its fair value and is not recoverable. The carrying amount of a leased asset is not recoverable if its carrying value exceeds the sum of the undiscounted cash flows expected to result from the lease payments and the estimated residual value of the asset.

Minimum future lease payments to be received from operating leases over the next five years and thereafter totaled $23 million as of December 31, 2025.

For information on direct finance and sales-type leases where Citizens is the lessor, see Note 3.

NOTE 8 - GOODWILL AND INTANGIBLE ASSETS

Goodwill is the purchase premium associated with the acquisition of a business and is assigned to the Company’s reporting units at the acquisition date. A reporting unit is a business operating segment or a component of a business operating segment. The Company has identified and assigned goodwill to two reporting units, Consumer Banking and Commercial Banking, based upon reviews of the structure of the Company’s executive team and supporting functions, resource allocations, and financial reporting processes. Goodwill no longer retains its association with a particular acquisition once assigned to a reporting unit, and all of the activities within a reporting unit, whether acquired or organically grown, are available to support the value of the goodwill.

Goodwill is subject to an annual impairment test and not amortized. Goodwill is reviewed for impairment annually as of October 1st and in interim periods when events or changes indicate the carrying value of one or more reporting units may not be recoverable. The Company has the option to perform a qualitative assessment of goodwill to determine whether it is more likely than not that the fair value of each reporting unit is less than the carrying value. If it is more likely than not that the fair value exceeds the carrying value, then no further testing is necessary; otherwise, a quantitative assessment of goodwill must be performed.


						Citizens Financial Group, Inc. \| 115

The Company may elect to bypass the qualitative assessment and perform a quantitative assessment, which is used to identify potential impairment and involves comparing each reporting unit’s fair value to its carrying value, including goodwill. If the fair value of a reporting unit exceeds its carrying value inclusive of goodwill, applicable goodwill is deemed not to be impaired. If the carrying value of the reporting unit inclusive of goodwill exceeds fair value, an impairment loss is recognized for the excess, establishing a new basis in the goodwill, and cannot exceed the amount of goodwill assigned to the reporting unit. Subsequent reversal of goodwill impairment losses is not permitted.

The fair value of the Company’s reporting units is determined using a combination of income and market-based approaches. The Company relies on several assumptions to estimate the fair value of its reporting units under the income-based approach including discount rate, projected loan losses, income tax, and capital retention rates.

The Company performed a quantitative goodwill impairment assessment during the year ended December 31, 2025 as part of its annual impairment assessment. Based on this quantitative assessment, the Company concluded that the estimated fair value of the Consumer Banking and Commercial Banking reporting units exceeded their carrying value; therefore, the Company determined that there was no impairment to the carrying value of its goodwill as of December 31, 2025.

Changes in the carrying value of goodwill for the years ended December 31, 2025 and 2024 are presented below:


(dollars in millions)	Consumer Banking	Commercial Banking	Total
Balance at December 31, 2023	$2,678	$5,510	$8,188


Divestitures	—	(1)	(1)
Balance at December 31, 2024	$2,678	$5,509	$8,187
Business acquisitions	—	—	—


Balance at December 31, 2025	$2,678	$5,509	$8,187

Accumulated impairment losses related to the Consumer Banking and Commercial Banking reporting units totaled $5.9 billion and $50 million, respectively, at December 31, 2025 and 2024. No impairment was recorded for the years ended December 31, 2025, 2024, or 2023.

Other Intangibles

Other intangible assets are recognized separately from goodwill if the asset arises as a result of contractual rights or if the asset is capable of being separated and sold, transferred, or exchanged. These assets are amortized on a straight-line basis with the exception of core deposits, which are amortized using an accelerated methodology, and are subject to an annual impairment evaluation. Amortization expense is recorded in Other operating expense in the Consolidated Statements of Operations.

A summary of the carrying value of intangible assets is presented below:


		December 31, 2025			December 31, 2024
(dollars in millions)	Amortizable Lives (years)	Gross	Accumulated Amortization	Net	Gross	Accumulated Amortization	Net
Core deposits	10	$144	$85	$59	$144	$66	$78
Acquired technology	3 - 7	24	23	1	23	22	1
Acquired relationships	2 - 15	52	37	15	52	31	21
Naming Rights	5 - 10	33	21	12	33	16	17
Other	2 - 10	45	17	28	42	13	29
Total		$298	$183	$115	$294	$148	$146

As of December 31, 2025, all of the Company’s intangible assets are subject to amortization. Amortization expense recognized on intangible assets was $33 million, $35 million, and $42 million for the years ended December 31, 2025, 2024, and 2023, respectively. The Company’s projection of amortization expense is based on balances as of December 31, 2025. Future amortization expense may vary from these projections.


						Citizens Financial Group, Inc. \| 116

Estimated intangible asset amortization expense for the next five years is as follows:


Year			(dollars in millions)
2026			$30
2027			26
2028			18
2029			9
2030			7

NOTE 9 - VARIABLE INTEREST ENTITIES

The Company, in the normal course of business, engages in a variety of activities with entities that are considered VIEs, as defined by GAAP, with its variable interest arising from contractual, ownership, or other monetary interests in the entity. A VIE typically does not have sufficient equity at risk to finance its activities without additional subordinated financial support from other parties. The Company is the primary beneficiary of a VIE, and must consolidate it, if its variable interest provides it with the power to direct the activities that significantly impact the VIE and it has the right to receive benefits, or the obligation to absorb losses, that could potentially be significant to the VIE. Both qualitative and quantitative factors are considered regarding the nature, size, and form of involvement with the VIE to determine whether or not a variable interest held is significant to the VIE. The Company assesses whether or not it is the primary beneficiary of a VIE on an ongoing basis.

The Company routinely sells residential mortgage loans and may, from time to time, sell other types of loans through securitization transactions. In these transactions the loans are transferred into a securitization trust, also referred to as a SPE, to legally isolate the loans from creditors. The SPE then issues beneficial interests collateralized by the transferred assets, with the Company generally retaining a portion of such interests in the form of asset-backed securities. If consolidation of the SPE is not required and certain sale accounting criteria are met, the sold loans are derecognized from the balance sheet. To achieve sale accounting, control of the loans, or other financial assets, must be surrendered upon transfer to the SPE. Retained interests, if any, are recognized as Debt securities in the Consolidated Balance Sheets.

Transfers of financial assets in which the Company has not surrendered control over the transferred assets are accounted for as a secured borrowing with a pledge of collateral. Control is generally considered surrendered when 1) the transferred assets are legally isolated from the Company and its creditors, even in bankruptcy, 2) the transferee has the right to pledge or exchange the transferred assets it received, with no condition that constrains the transferee from taking advantage of this right or that provides more than a trivial benefit to the Company, and 3) the Company does not maintain effective control over the transferred financial assets. Judgment is required to assess whether the Company maintains effective control over transferred financial assets.

Consolidated VIEs

The Company has consolidated VIEs related to secured borrowings collateralized by auto loans. The following table summarizes the carrying amount of assets and liabilities for the Company’s consolidated VIEs:


	December 31,
(dollars in millions)	2025	2024
Assets:

Interest-bearing deposits in banks	$157	$209
Net loans and leases	1,929	3,843
Other assets	11	21
Total assets	$2,097	$4,073
Liabilities:
Long-term borrowed funds	$1,598	$3,375
Other liabilities	4	8
Total liabilities	$1,602	$3,383


						Citizens Financial Group, Inc. \| 117

Secured Borrowings

The Company utilizes a portion of its auto loan portfolio to support certain secured borrowing arrangements, which provides a source of funding for the Company and involves the transfer of auto loans to bankruptcy remote SPEs. These SPEs then issue asset-backed notes to third parties collateralized by the transferred loans. The Company holds certain residual interests in the loans and, therefore, has a right to receive benefits or the obligation to absorb losses that could potentially be significant to the SPEs. In addition, the Company retains servicing for the transferred loans and, therefore, holds the power to direct significant activities that impact the economic performance of the SPEs. As a result, the Company concluded that it is the primary beneficiary of these SPEs and, accordingly, consolidates these VIEs.

The assets of a particular VIE are the primary source of funds to settle its obligations. Creditors of these VIEs do not have recourse to the general credit of the Company. The performance of the loans transferred is the most significant driver impacting the economic performance of the VIEs.

Unconsolidated VIEs

The Company is involved with various VIEs that are not consolidated including lending to SPEs, investments in asset-backed securities, and investments in entities that sponsor affordable housing and renewable energy projects. The Company’s maximum exposure to loss resulting from its involvement with these entities is limited to the balance sheet carrying amount of its investments, unfunded commitments, and the outstanding principal balance of loans to SPEs.

The following table provides a summary of the assets and liabilities included in the Consolidated Balance Sheets related to unconsolidated VIEs that the Company holds an interest in, but is not the primary beneficiary of:


	December 31,
(dollars in millions)	2025	2024
Lending to SPEs included in Loans and leases	$5,631	$4,215
Tax-advantaged investments included in Other assets(1)	2,967	2,902
Unfunded commitments for tax-advantaged investments included in Other liabilities	1,066	1,109
Asset-backed investments included in Debt securities	338	412

(1) Includes LIHTC and renewable energy investments.

Lending to Special Purpose Entities

The Company provides lending facilities to third-party sponsored SPEs within it Capital Markets business. The SPEs are primarily funded through these lending facilities or a syndication in which the Company participates. The principal risk of these lending facilities is the credit risk related to the underlying assets in the SPE, in which the Company generally holds a priority position.

The sponsor for each respective SPE has the power to direct how proceeds from the Company are utilized and maintains responsibility for any associated servicing commitments. Therefore, the Company is not the primary beneficiary of these SPEs and, accordingly, does not consolidate these VIEs. As of December 31, 2025 and 2024, the lending facilities had undrawn commitments to extend credit of $4.0 billion and $2.8 billion, respectively. For more information on commitments to extend credit see Note 17.

Tax-Advantaged Investments

The Company applies the proportional amortization method to account for its tax-advantaged investments including LIHTC and renewable energy. Under the proportional amortization method, the Company applies a practical expedient for its LIHTC investments and amortizes the initial cost of qualifying investments in proportion to the income tax credits received in the current period as compared to the total income tax credits expected to be received over the life of the investment. For renewable energy investments, the Company amortizes the initial cost of qualifying investments in proportion to the income tax credits and other income tax benefits received in the current period as compared to the total income tax credits and other income tax benefits expected to be received over the life of the investment. The net amortization, along with the income tax credits and other income tax benefits received, are included as a component of income tax expense (benefit).


						Citizens Financial Group, Inc. \| 118

Low Income Housing Tax Credit Partnerships

The Company makes certain equity investments in various limited partnerships that sponsor affordable housing projects utilizing federal tax incentives pursuant to Section 42 of the Internal Revenue Code. The objective of these investments is to generate a satisfactory return on capital, encourage investment in projects that serve affordable housing product offerings, and further the goals of the CRA. The principal activities of the limited partnerships include the identification, development, and operation of multifamily housing properties leased to qualifying residential tenants. Funding for these investments is generally provided through a combination of debt and equity.

LIHTC partnerships in which the Company invests are managed by unrelated general partners that have the power to direct the activities which most significantly affect the performance of the partnerships. Therefore, the Company is not the primary beneficiary of these partnerships and, accordingly, does not consolidate these VIEs. The Company’s investments in LIHTC partnerships totaled $2.8 billion and $2.6 billion, respectively, as of December 31, 2025 and 2024. Unfunded commitments related to these investments, included in Other liabilities in the Consolidated Balance Sheets, totaled $1.1 billion as of December 31, 2025 and 2024.

Renewable Energy Entities

The Company’s investments in certain renewable energy entities provide benefits from government incentives and other tax attributes (e.g., tax depreciation). The Company does not have the power to direct the activities which most significantly affect the performance of these entities as a tax equity investor. Therefore, the Company is not the primary beneficiary of these entities and, accordingly, does not consolidate these VIEs. The Company’s investments in renewable energy entities totaled $201 million and $269 million, respectively, as of December 31, 2025 and 2024.

Contingent commitments related to the Company’s renewable energy investments were $6 million at December 31, 2025, and are expected to be paid in varying amounts through 2028. These payments are contingent upon the level of electricity production attained by the renewable energy entity relative to its targeted threshold, changes in the production tax credit rates set by the Internal Revenue Service, and the achievement of commercial operation for a certain renewable energy project under its power purchase agreement.

Asset-backed securities

The Company’s investments in asset-backed securities are collateralized by education and residential mortgage loans sold to third-party sponsored VIEs. The Company acts as the primary servicer for the sold education loans and receives a servicing fee, with a third-party servicer responsible for all loans that become significantly delinquent. With respect to sold residential mortgage loans, the Company initially purchases these loans from third parties as part of its mortgage banking activities and then subsequently sells them to FNMA or FHLMC in exchange for mortgage-backed securities issued by securitization SPEs that they sponsor. The securitizations are structured without recourse to the Company except for standard representations and warranties and with no restrictions on the retained interests. The Company does not retain servicing for the sold residential mortgage loans.

The Company’s investments in the asset-backed securities, as well as the primary servicing fee on the sold education loans, are considered variable interests in the VIEs since some of the losses of the VIEs could be absorbed by the Company’s interest in the asset-backed securities or the primary servicing fee. However, the Company does not control the servicing activities on significantly delinquent loans, nor does it retain any servicing activities related to the residential mortgage loans. Since these activities significantly impact the economic performance of the VIEs, the Company has concluded that it is not the primary beneficiary of the VIEs and, accordingly, does not consolidate the VIEs.

Retained interests from the sale and securitization of originated residential mortgage loans totaled $112 million and $329 million, respectively during the years ended December 31, 2025 and 2024. The mortgage-backed securities received from the issuers, FNMA and FHLMC, include a substantive guarantee and are classified as Debt securities available for sale in the Consolidated Balance Sheets. The carrying amount of these mortgage-backed securities totaled $780 million and $708 million, respectively, as of December 31, 2025 and 2024.


						Citizens Financial Group, Inc. \| 119

Other Investments

The Company makes certain equity investments in various tax credit limited partnerships or limited liability companies in order to achieve a satisfactory return on capital and to assist the Company in achieving goals associated with the CRA. The Company does not have the power to direct the activities which most significantly affect the performance of these entities as an equity investor. Therefore, the Company is not the primary beneficiary of these entities and, accordingly, does not consolidate these VIEs.

The carrying amount of these investments, included in Other assets in the Consolidated Balance Sheets, totaled $17 million and $23 million, respectively, as of December 31, 2025 and 2024. Unfunded commitments related to these investments, included in Other liabilities in the Consolidated Balance Sheets, totaled $2 million and $4 million, respectively, as of December 31, 2025 and 2024.

The following table summarizes the impact to the Consolidated Statements of Operations relative to the Company’s tax credit programs for which it has elected to apply the proportional amortization method of accounting:


	Year Ended December 31,
(dollars in millions)	2025	2024	2023
Tax credits recognized	$410	$379	$334
Other tax benefits recognized	98	93	71
Amortization	(406)	(363)	(320)
Net benefit (expense) included in Income tax expense	102	109	85
Other income	6	4	5
Allocated income (loss) on investments	(12)	(12)	(10)
Net benefit (expense) included in Noninterest income	(6)	(8)	(5)
Net benefit (expense) included in the Consolidated Statements of Operations(1)	$96	$101	$80

(1) Includes the impact of tax-advantaged investments when the election to apply the proportional amortization method was in effect during the periods presented.

The Company did not recognize impairment losses resulting from the forfeiture or ineligibility of income tax credits or other circumstances during the years ended December 31, 2025, 2024, and 2023.

NOTE 10 - DEPOSITS

The following table presents the major components of deposits:


	December 31,
(dollars in millions)	2025	2024
Noninterest-bearing demand	$40,417	$36,920
Checking with interest	37,428	33,246
Savings	24,353	25,976
Money market	60,062	55,321
Time	21,053	23,313
Total deposits	$183,313	$174,776

The following table presents the maturity distribution of time deposits by year as of December 31, 2025:


Year			(dollars in millions)
2026			$20,746
2027			204
2028			49
2029			36
2030			15
2031 and thereafter			3
Total			$21,053


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The following table presents the remaining maturities of time deposits with a denomination of $250,000 or more as of December 31, 2025:


(dollars in millions)
Three months or less			$3,433
After three months through six months			2,008
After six months through twelve months			1,174
After twelve months			45
Total time deposits			$6,660

NOTE 11 - BORROWED FUNDS

Short-term borrowed funds

Borrowings with original maturities of one year or less are classified as short-term and were comprised of the following:


	December 31,
(dollars in millions)	2025	2024


Other short-term borrowed funds(1)	$58	$—
Total short-term borrowed funds	$58	$—

(1) Consists primarily of short positions held by the Company’s commercial broker dealer. See Note 12 for additional information regarding forward purchase contracts entered into to economically hedge these short positions.


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Long-term borrowed funds

The following table presents a summary of the carrying amount of the Company’s long-term borrowed funds:


	December 31,
(dollars in millions)	2025	2024
Parent Company:
4.350% fixed-rate subordinated debt, due August 2025	$—	$133
4.300% fixed-rate subordinated debt, due December 2025	—	336
2.850% fixed-rate senior unsecured notes, due July 2026	500	499
5.841% fixed/floating-rate senior unsecured notes, due January 2030	1,246	1,245
2.500% fixed-rate senior unsecured notes, due February 2030	299	299
3.250% fixed-rate senior unsecured notes, due April 2030	747	747
3.750% fixed-rate reset subordinated debt, due February 2031	69	69
4.300% fixed-rate reset subordinated debt, due February 2031	135	135
4.350% fixed-rate reset subordinated debt, due February 2031	60	60
5.253% fixed/floating-rate senior unsecured notes, due March 2031	747	—
5.718% fixed/floating-rate senior unsecured notes, due July 2032	1,244	1,243
2.638% fixed-rate subordinated debt, due September 2032	577	570
6.645% fixed/floating-rate senior unsecured notes, due April 2035	746	745
5.641% fixed-rate reset subordinated debt, due May 2037	398	398
CBNA’s Global Note Program:
2.250% senior unsecured notes, due April 2025	—	750
5.284% fixed/floating-rate senior unsecured notes, due January 2026(1)	—	350
3.750% senior unsecured notes, due February 2026(2)	—	492
4.575% fixed/floating-rate senior unsecured notes, due August 2028	799	798
Additional Borrowings by CBNA and Other Subsidiaries:
Federal Home Loan Bank advances, 3.918% weighted average rate, due through 2045(3)	2,013	53
Secured borrowings, 5.539% weighted average rate, due through 2031(3)(4)	1,625	3,461
Other	19	18
Total long-term borrowed funds	$11,224	$12,401

(1) Notes were redeemed in January 2025.

(2) Notes were redeemed in November 2025.

(3) Rate disclosed reflects the weighted average rate as of December 31, 2025.

(4) Collateralized by loans. See Note 9 for additional information.

At December 31, 2025, the Company’s long-term borrowed funds include principal balances of $11.3 billion and unamortized debt issuance costs and discounts of $71 million. At December 31, 2024, the Company’s long-term borrowed funds include principal balances of $12.5 billion, unamortized debt issuance costs and discounts of $85 million, and hedging basis adjustments of ($8) million. See Note 12 for further information about the Company’s hedging of certain long-term borrowed funds.

Advances, lines of credit, and letters of credit from the FHLB are collateralized primarily by residential mortgages and home equity products sufficient to satisfy the collateral maintenance level established by the FHLB. The utilized FHLB borrowing capacity, primarily for advances and letters of credit, was $7.1 billion and $4.6 billion at December 31, 2025 and 2024, respectively. The Company’s available FHLB borrowing capacity was $22.1 billion and $21.1 billion at December 31, 2025 and 2024, respectively. The Company can also borrow from the FRB discount window to meet short-term liquidity requirements. Collateral, including certain loans, is pledged to support this borrowing capacity. At December 31, 2025, the Company’s unused secured borrowing capacity was approximately $75.2 billion, which includes unencumbered securities, FHLB borrowing capacity, and FRB discount window capacity.


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The following table presents a summary of maturities for the Company’s long-term borrowed funds at December 31, 2025:


(dollars in millions)	Parent Company	CBNA and Other Subsidiaries	Consolidated
Year
2026	$500	$—	$500
2027	—	2,030	2,030
2028	—	1,982	1,982
2029	—	6	6
2030	2,292	298	2,590
2031 and thereafter	3,976	140	4,116
Total	$6,768	$4,456	$11,224

NOTE 12 - DERIVATIVES

In the normal course of business, the Company enters into derivative transactions to meet the financing and hedging needs of its customers and reduce its own exposure to fluctuations in interest rates and foreign currency exchange rates. These transactions include interest rate swap contracts, interest rate options, foreign exchange contracts, residential loan commitment rate locks, interest rate future contracts, swaptions, certain commodities, forward commitments to sell TBAs, forward purchase and sale contracts, and purchase options. The Company does not use derivatives for speculative purposes.

The Company’s derivative assets and liabilities are reported at fair value and are included in Other assets and Other liabilities, respectively, in the Consolidated Balance Sheets. Certain derivatives are cleared through central clearing houses and represent contracts executed bilaterally with counterparties in the OTC market that are novated to central clearing houses that become our counterparty. OTC-cleared derivative instruments are typically settled in cash each day based on their value from the previous day. Information regarding the valuation methodology and inputs used to estimate the fair value of the Company’s derivative instruments is described in Note 18.

Derivative assets and liabilities are netted by counterparty in the Consolidated Balance Sheets if a “right of setoff” is established in a master netting agreement between the Company and the counterparty. This netted derivative asset or liability position is also netted against the fair value of any cash collateral that is pledged or received in accordance with a master netting agreement.

The following table presents derivative assets and liabilities included in the Consolidated Balance Sheets:


	December 31, 2025			December 31, 2024
(dollars in millions)	Notional Amount	Derivative Assets	Derivative Liabilities	Notional Amount	Derivative Assets	Derivative Liabilities
Derivatives designated as hedging instruments:
Interest rate contracts	$67,358	$366	$25	$69,077	$402	$5
Derivatives not designated as hedging instruments:
Interest rate contracts	180,977	187	446	171,193	160	905
Foreign exchange contracts	40,401	510	373	34,749	472	411
Commodities contracts	10,974	458	405	1,136	429	379
TBA contracts	3,043	2	6	2,714	10	8
Other contracts	968	9	3	615	3	2
Total derivatives not designated as hedging instruments	236,363	1,166	1,233	210,407	1,074	1,705
Total gross derivatives	303,721	1,532	1,258	279,484	1,476	1,710
Less: Gross amounts offset in the Consolidated Balance Sheets(1)		(342)	(342)		(391)	(391)
Less: Cash collateral applied(1)		(494)	(137)		(677)	(99)
Total net derivatives included in the Consolidated Balance Sheets		$696	$779		$408	$1,220

(1) Amounts represent the impact of enforceable master netting agreements that allow the Company to net settle positive and negative positions, as well as collateral paid and received.


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The Company’s derivative transactions are internally divided into three sub-groups: institutional, customer facilitation, and residential loan. Certain derivative transactions within these sub-groups are designated as fair value or cash flow hedges, as described below:

Derivatives Designated As Hedging Instruments

The Company’s institutional derivatives qualify for hedge accounting treatment. The net interest accruals on interest rate swaps designated in a fair value or cash flow hedge relationship are treated as an adjustment to interest income or interest expense of the item being hedged. All hedging relationships are formally documented at inception, as well as risk management objectives and strategies for undertaking various accounting hedges. In addition, the effectiveness of hedge relationships is monitored during the duration of the hedge period. The methods utilized to assess hedge effectiveness vary based on the hedge relationship, with each relationship monitored to ensure that management’s initial intent continues to be satisfied. Hedge accounting treatment is discontinued when the derivative is terminated or when it is determined that a derivative is not expected to be, or has ceased to be, an effective hedge. Changes in the fair value of a derivative are reflected in earnings after termination of the hedge relationship.

Fair Value Hedges

In a fair value hedge, changes in the fair value of both the derivative instrument and the hedged asset or liability attributable to the risk being hedged are recognized in the same income statement line item in the Consolidated Statements of Operations when the changes in fair value occur. At December 31, 2025 and 2024, the Company has designated $3.8 billion and $4.7 billion, respectively, of interest rate swaps as fair value hedges of its fixed-rate prepayable AFS securities using the portfolio layer method. This approach allows the Company to designate as the hedged item a stated amount of the assets that are not expected to be affected by prepayments, defaults, and other factors affecting the timing and amount of cash flows. At December 31, 2025 and 2024, the Company has also designated $2.8 billion and $3.1 billion, respectively, of interest rate swaps as fair value hedges to manage interest rate risk within its nonprepayable fixed-rate AFS securities portfolio.

The following table presents the effect of fair value hedges on the Consolidated Statements of Operations and the respective line items affected for each hedged item:


	Location and Amount of Gains (Losses) Recognized
	Interest Income	Interest Expense
(dollars in millions)	Investment Securities	Long-Term Borrowed Funds
Year Ended December 31, 2025
Gains (losses) on fair value hedges recognized on:
Hedged items	$161	($8)
Derivatives	(163)	8
Amounts related to interest settlements on derivatives	45	(9)
Total net interest income recognized on fair value hedges	$43	($9)
Year Ended December 31, 2024
Gains (losses) on fair value hedges recognized on:
Hedged items	($142)	($8)
Derivatives	147	8
Amounts related to interest settlements on derivatives	107	(14)
Total net interest income recognized on fair value hedges	$112	($14)
Year Ended December 31, 2023
Gains (losses) on fair value hedges recognized on:
Hedged items	$50	($10)
Derivatives	(48)	10
Amounts related to interest settlements on derivatives	10	(16)
Total net interest income recognized on fair value hedges	$12	($16)


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The following table reflects amounts recorded in the Consolidated Balance Sheets related to cumulative basis adjustments for fair value hedges:


	December 31, 2025		December 31, 2024
(dollars in millions)	Debt securities available for sale(1)	Long-term borrowed funds		Debt securities available for sale(1)	Long-term borrowed funds
Carrying amount of hedged assets(2)	$8,009	$—		$9,557	$—
Carrying amount of hedged liabilities	—	—		—	491
Cumulative amount of fair value hedging adjustments included in the carrying amount of the hedged items	48	—		(97)	(8)

(1) Includes the amortized cost basis of closed portfolios used to designate hedging relationships under the portfolio layer method. The hedged item is a layer of the closed portfolio which is expected to be remaining at the end of the hedging relationship. As of December 31, 2025 and 2024, the amortized cost basis of the closed portfolios used in these hedging relationships was $5.1 billion and $6.4 billion, respectively, including associated cumulative basis adjustments of $17 million and $(75) million, respectively. The amount of the designated hedging instruments was $3.8 billion and $4.7 billion at December 31, 2025 and 2024, respectively.

(2) Carrying amount represents amortized cost.

Cash Flow Hedges

In a cash flow hedge the entire change in the fair value of the interest rate swap included in the assessment of hedge effectiveness is initially recorded in OCI and is subsequently reclassified from AOCI into earnings in the period during which the hedged item affects earnings.

The Company enters into interest rate swap agreements designed primarily to hedge a portion of its floating-rate assets and liabilities. All of these swaps are deemed highly effective cash flow hedges. From time to time, the Company may also enter into certain interest rate option agreements that utilize interest rate floors and/or caps. Option premiums paid and received are excluded from the assessment of hedge effectiveness and are amortized over the life of the instruments.

During the first quarter of 2025, the Company entered into a cash flow hedge with a notional amount of $1.5 billion to manage the variability in cash flows related to the sale of education loans, which settled ratably each quarter throughout 2025. The Company terminated this cash flow hedge throughout the year in conjunction with the quarterly settlement of the education loan sale, with the hedge fully terminated in the fourth quarter of 2025.

The following table presents the pre-tax net gains (losses) recorded in the Consolidated Statements of Operations and in the Consolidated Statements of Comprehensive Income related to derivative instruments designated as cash flow hedges:


	Year Ended December 31,
(dollars in millions)	2025	2024	2023
Pre-tax net gains (losses) recognized in OCI	$341	($725)	($145)
Pre-tax net gains (losses) reclassified from AOCI into interest income	(751)	(945)	(596)
Pre-tax net gains (losses) reclassified from AOCI into noninterest income	(9)	—	—
Pre-tax net gains (losses) reclassified from AOCI into interest expense	(1)	(1)	—

Using the December 31, 2025 interest rate curve, the Company estimates that $230 million in pre-tax net losses related to cash flow hedge strategies will be reclassified from AOCI to earnings over the next 12 months. These losses could differ from amounts recognized due to changes in interest rates, hedge de-designations, or the addition of other hedges after December 31, 2025.

Derivatives Not Designated as Hedging Instruments

The Company offers derivatives to customers in connection with their risk management needs consisting primarily of interest rate, foreign exchange, and commodity contracts. Market risk exposure from customer transactions is primarily managed by entering into a variety of hedging transactions with third-party dealers. Gains and losses on customer-related derivatives are reported in Foreign exchange and derivatives products in the Consolidated Statements of Operations.


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During the second quarter of 2025, the Company entered into at-the-market equity offering programs to facilitate capital market activities for customers. These programs involve the concurrent short sale of an equity security and the execution of a forward purchase contract for the same equity security. The forward purchase contract economically hedges the Company’s short sale position and will be closed against such position when a program concludes. Changes in fair value related to the forward purchase contracts are reported in Capital markets fees in the Consolidated Statements of Operations.

Residential mortgage loans that will be sold in the secondary market and the related loan commitments, which are considered derivatives, are accounted for at fair value. Forward contracts to sell mortgage-backed securities are utilized to hedge the fair value of the loans and related commitments. Gains and losses on the loans and related commitments, and the derivatives used to economically hedge them, are reported in Mortgage banking fees in the Consolidated Statements of Operations.

Residential MSRs are accounted for at fair value. Derivatives utilized to hedge the fair value of residential MSRs include interest rate futures, swaps, options, and forward contracts to purchase mortgage-backed securities. Gains and losses on residential MSRs and the related derivatives are reported in Mortgage banking fees in the Consolidated Statements of Operations.

The following table presents the effect of economic hedges on noninterest income:


	Amounts Recognized in Noninterest Income for the Year Ended December 31,			Affected Line Item in the Consolidated Statements of Operations
(dollars in millions)	2025	2024	2023
Economic hedge type:
Customer interest rate contracts	$168	($773)	($505)	Foreign exchange and derivative products
Derivatives hedging interest rate risk	(134)	805	551	Foreign exchange and derivative products
Customer foreign exchange contracts	322	(223)	94	Foreign exchange and derivative products
Derivatives hedging foreign exchange risk	(386)	334	14	Foreign exchange and derivative products
Customer commodity contracts	(243)	23	(900)	Foreign exchange and derivative products
Derivatives hedging commodity price risk	260	(7)	941	Foreign exchange and derivative products
Residential loan commitments	19	(16)	(34)	Mortgage banking fees
Derivatives hedging residential loan commitments and mortgage loans held for sale, at fair value	(37)	19	25	Mortgage banking fees
Derivative contracts used to hedge residential MSRs	7	(91)	(33)	Mortgage banking fees
Derivative contracts used to hedge equity price risk	13	—	—	Capital markets fees
Total	($11)	$71	$153

NOTE 13 - EMPLOYEE BENEFIT PLANS

Pension and Other Postretirement Plans

The Company maintains a non-contributory pension plan (the “Citizens Qualified Plan”) that was closed to new hires and re-hires effective January 1, 2009, and frozen to all participants effective December 31, 2012. Benefits under the Citizens Qualified Plan are based on employees’ years of service and highest 5-year average of eligible compensation. The Citizens Qualified Plan is funded on a current basis, in compliance with the requirements of the Employee Retirement Income Security Act of 1974.

In connection with the Company’s acquisition of Investors in 2022 it withdrew from a multi-employer plan, effective June 30, 2022, and transferred the plan assets into a newly established defined benefit pension plan sponsored by the Company (the “Investors Qualified Plan”). The Investors Qualified Plan was closed to new hires and re-hires effective December 1, 2015, and future benefit accruals were frozen to all participants effective December 31, 2016.

The Citizens Qualified Plan and the Investors Qualified Plan are collectively referred to as the Company’s “Qualified Plans.”

The Company also provides an unfunded, non-qualified supplemental retirement plan which was closed and frozen effective December 31, 2012, as well as postretirement benefit plans. As part of the Investors acquisition in 2022, the Company also obtained other frozen, non-qualified supplemental retirement and postretirement benefit plans. These plans are collectively referred to as the Company’s “Non-Qualified Plans.”


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The Company’s Qualified Plans and Non-Qualified Plans are collectively referred to as the Company’s “Pension Plans.” Pension Plan investments include equity-oriented and fixed income-oriented investments including, but not limited to, government obligations, corporate bonds, and common and collective equity and fixed income funds.

The following table presents changes in the fair value of the Company’s Pension Plan assets, projected benefit obligation, funded status, and accumulated benefit obligation:


	Year Ended December 31,
	Qualified Plans		Non-Qualified Plans
(dollars in millions)	2025	2024	2025	2024
Fair value of plan assets as of January 1	$1,300	$1,281	$—	$—
Return on plan assets	178	86	—	—
Employer contributions	—	—	10	20
Settlements	(18)	—	—	(11)

Benefits and administrative expenses paid	(64)	(67)	(10)	(9)

Fair value of plan assets as of December 31	1,396	1,300	—	—
Projected benefit obligation	808	828	82	84
Pension asset (obligation)	$588	$472	($82)	($84)
Accumulated benefit obligation	$808	$828	$82	$84

Actuarial losses related to the Pension Plans recognized in AOCI at December 31, 2025 and 2024 were $329 million and $403 million, respectively.

In 2026, the Company does not plan to contribute to the Qualified Plans and expects to contribute $10 million to the Non-Qualified Plans.

The following table presents the components of net periodic benefit cost (income) and other changes in plan assets and benefit obligations recognized in OCI for the Company’s Pension Plans:


	Year Ended December 31,
	Qualified Plans			Non-Qualified Plans			Total
(dollars in millions)	2025	2024	2023	2025	2024	2023	2025	2024	2023
Service cost	$4	$3	$4	$—	$—	$—	$4	$3	$4
Interest cost	45	45	46	5	5	5	50	50	51
Expected return on plan assets	(98)	(97)	(92)	—	—	—	(98)	(97)	(92)
Amortization of actuarial loss	12	13	15	1	1	2	13	14	17

Settlement	(3)	—	—	—	3	—	(3)	3	—
Net periodic benefit cost (income)(1)	(40)	(36)	(27)	6	9	7	(34)	(27)	(20)
Net actuarial loss (gain)	(66)	(23)	(44)	3	(3)	1	(63)	(26)	(43)

Amortization of actuarial loss	(12)	(13)	(15)	(1)	(1)	(2)	(13)	(14)	(17)
Settlement	3	—	—	—	(3)	—	3	(3)	—

Total recognized in OCI	(75)	(36)	(59)	2	(7)	(1)	(73)	(43)	(60)
Total recognized in net periodic benefit cost (income) and OCI	($115)	($72)	($86)	$8	$2	$6	($107)	($70)	($80)

(1) In the Consolidated Statements of Operations, service cost is presented in Salaries and employee benefits and all other components of net periodic benefit cost (income) are presented in Other operating expense.

Costs under the Company’s Pension Plans are actuarially computed and include current service costs and amortization of prior service costs over the participants’ average future working lifetime. The actuarial cost method used in determining the net periodic benefit cost is the projected unit method. During 2025 and 2024, lump sum payments made under the Company’s Pension Plans triggered settlement accounting. In accordance with the applicable accounting guidance for defined benefit plans, the Company performed a remeasurement of the impacted plans and recognized a settlement gain or loss, as applicable.


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The following table presents the expected future benefit payments for the Company’s Pension Plans:


			(dollars in millions)
Expected benefit payments by fiscal year ending:
December 31, 2026			$75
December 31, 2027			74
December 31, 2028			73
December 31, 2029			73
December 31, 2030			72
December 31, 2031 - 2035			341

401(k) Plan

The Company sponsors a 401(k) Plan under which employee contributions are matched by the Company dollar for dollar up to 4% after the employee completes of one year of service. In addition, substantially all employees will receive an additional 1.5% of their eligible earnings after completion of one year of service, subject to limits set by the Internal Revenue Service. Amounts expensed by the Company were $90 million in 2025 compared to $84 million in 2024 and $78 million in 2023.

NOTE 14 - ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following table summarizes the components of the Company’s OCI:


(dollars in millions)	Pre-tax	Tax Effect	After-tax
Year Ended December 31, 2025
Net unrealized gains (losses) on cash flow hedges arising during the period	$341	($91)	$250
Reclassification of net (gains) losses on cash flow hedges to earnings	761	(204)	557
Net unrealized gains (losses) on cash flow hedges	1,102	(295)	807
Net unrealized gains (losses) on AFS securities arising during the period	946	(243)	703
Reclassification of net (gains) losses on investment securities to earnings	83	(20)	63
Net unrealized gains (losses) on investment securities	1,029	(263)	766
Net actuarial gain (loss) arising during the period	63	(18)	45
Amortization of actuarial (gain) loss to earnings	10	(3)	7
Defined benefit plans	73	(21)	52
Total other comprehensive income (loss)	$2,204	($579)	$1,625
Year Ended December 31, 2024
Net unrealized gains (losses) on cash flow hedges arising during the period	($725)	$194	($531)
Reclassification of net (gains) losses on cash flow hedges to earnings	946	(253)	693
Net unrealized gains (losses) on cash flow hedges	221	(59)	162
Net unrealized gains (losses) on AFS securities arising during the period	(117)	27	(90)
Reclassification of net (gains) losses on investment securities to earnings	78	(19)	59
Net unrealized gains (losses) on investment securities	(39)	8	(31)
Net actuarial gain (loss) arising during the period	26	(7)	19
Amortization of actuarial (gain) loss to earnings	17	(4)	13
Defined benefit plans	43	(11)	32
Total other comprehensive income (loss)	$225	($62)	$163
Year Ended December 31, 2023
Net unrealized gains (losses) on cash flow hedges arising during the period	($145)	$39	($106)
Reclassification of net (gains) losses on cash flow hedges to earnings	596	(161)	435
Net unrealized gains (losses) on cash flow hedges	451	(122)	329
Net unrealized gains (losses) on AFS securities arising during the period	469	(119)	350
Reclassification of net (gains) losses on investment securities to earnings	111	(28)	83
Net unrealized gains (losses) on investment securities	580	(147)	433
Net actuarial gain (loss) arising during the period	43	(15)	28
Amortization of actuarial (gain) loss to earnings	17	(5)	12
Defined benefit plans	60	(20)	40
Total other comprehensive income (loss)	$1,091	($289)	$802


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The following table summarizes the activity in each component of AOCI, net of income taxes:


(dollars in millions)	Net Unrealized Gains (Losses) on Cash Flow Hedges	Net Unrealized Gains (Losses) on Investment Securities	Defined Benefit Plans	Total AOCI
Balance at January 1, 2023	($1,416)	($2,771)	($373)	($4,560)
Other comprehensive income (loss) before reclassifications	(106)	350	28	272

Amounts reclassified from AOCI to earnings	435	83	12	530
Total other comprehensive income (loss)	329	433	40	802

Balance at December 31, 2023	($1,087)	($2,338)	($333)	($3,758)
Other comprehensive income (loss) before reclassifications	(531)	(90)	19	(602)

Amounts reclassified from AOCI to earnings	693	59	13	765
Total other comprehensive income (loss)	162	(31)	32	163

Balance at December 31, 2024	($925)	($2,369)	($301)	($3,595)
Other comprehensive income (loss) before reclassifications	250	703	45	998
Amounts reclassified from AOCI to earnings	557	63	7	627
Total other comprehensive income (loss)	807	766	52	1,625

Balance at December 31, 2025	($118)	($1,603)	($249)	($1,970)
Primary location in the Consolidated Statements of Operations of amounts reclassified from AOCI	Net interest income	Securities gains, net and Net interest income	Other operating expense

NOTE 15 - STOCKHOLDERS’ EQUITY

Preferred Stock

The following table summarizes the Company’s preferred stock:


			December 31,
			2025			2024
(dollars in millions, except per share data)	Liquidation value per share		Preferred Shares		Carrying Amount	Preferred Shares	Carrying Amount
Authorized ($25 par value per share)			100,000,000			100,000,000
Issued and outstanding:
Series B	$1,000		300,000		$296	300,000	$296
Series C	1,000		300,000		297	300,000	297
Series E	1,000	(1)	450,000	(2)	437	450,000	437
Series F	1,000		—		—	400,000	395
Series G	1,000		300,000		296	300,000	296
Series H	1,000	(1)	400,000	(3)	392	400,000	392
Series I	1,000	(1)	400,000	(4)	393	—	—
Total			2,150,000		$2,111	2,150,000	$2,113

(1) Equivalent to $25 per depositary share.

(2) Represented by 18,000,000 depositary shares each representing a 1/40th interest in the Series E Preferred Stock.

(3) Represented by 16,000,000 depositary shares each representing a 1/40th interest in the Series H Preferred Stock.

(4) Represented by 16,000,000 depositary shares each representing a 1/40th interest in the Series I Preferred Stock.


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On July 31, 2025, the Company 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 (the “Series I Preferred Stock”). As a result of this issuance, the Company received net proceeds of $393 million after underwriting fees and other expenses. The Series I Preferred Stock has no stated maturity and will not be subject to any sinking fund or other obligation of the Company. The Series I Preferred Stock is redeemable at the Company’s option, in whole or in part, on any dividend payment date on or after October 6, 2030 or, in whole but not in part, at any time within the 90 days following a regulatory capital treatment event at a redemption price equal to $1,000 per share, plus any declared and unpaid dividends. The Company may not redeem shares of the Series I Preferred Stock without the prior approval of the FRB or other appropriate federal banking agency as required under applicable capital rules. Except in limited circumstances or otherwise required by law, holders of the Series I Preferred Stock do not have any voting rights.

On October 6, 2025, the Company redeemed all outstanding shares of the 5.650% fixed-rate reset non-cumulative perpetual Series F Preferred Stock.

The following table provides information related to the Company’s preferred stock outstanding as of December 31, 2025:


Preferred Stock(1)	Issue Date	Number of Shares Issued	Dividend Payment Date(2)	Annual Per Share Dividend Rate	Optional Redemption Date(3)
Series B	May 24, 2018	300,000	Semi-annually beginning January 6, 2019 until July 6, 2023	6.000% until July 6, 2023	July 6, 2023
			Quarterly beginning October 6, 2023	3 Mo. CME Term SOFR plus 3.265% beginning July 6, 2023
Series C	October 25, 2018	300,000	Quarterly beginning January 6, 2019 until April 6, 2024	6.375% until April 6, 2024	April 6, 2024
			Quarterly beginning July 6, 2024	3 Mo. CME Term SOFR plus 3.419% beginning April 6, 2024
Series E	October 28, 2019	450,000(4)	Quarterly beginning January 6, 2020	5.000%	January 6, 2025
Series G	June 11, 2021	300,000	Quarterly beginning October 6, 2021 until October 6, 2026	4.000% until October 6, 2026	October 6, 2026
			Quarterly beginning January 6, 2027	5 Yr. US Treasury rate plus 3.215% beginning October 6, 2026
Series H	May 23, 2024	400,000(5)	Quarterly beginning October 6, 2024	7.375%	July 6, 2029
Series I	July 31, 2025	400,000(6)	Quarterly beginning January 6, 2026 until October 6, 2030	6.500% until October 6, 2030	October 6, 2030
			Quarterly beginning January 6, 2031	5 Yr. US Treasury rate plus 2.629% beginning October 6, 2030

(1) Series B and C are non-cumulative fixed-to-floating rate perpetual preferred stock, Series E and H are non-cumulative fixed-rate perpetual preferred stock, and Series G and I are non-cumulative fixed-rate reset perpetual preferred stock. Except in limited circumstances, each series of preferred stock does not have voting rights.

(2) Dividends are payable when declared by the Company’s Board of Directors or an authorized committee thereof.

(3) Redeemable at the Company’s option, in whole or in part, on any dividend payment date on or after the date stated, or in whole but not in part, at any time within 90 days following a regulatory capital treatment event as defined in the applicable certificate of designations, in each case at a redemption price equal to $1,000 per share plus any declared and unpaid dividends, without accumulation of any undeclared dividends. Under current rules, any redemption is subject to approval by the FRB.

(4) Represented by 18,000,000 depositary shares each representing a 1/40th interest in the Series E Preferred Stock.

(5) Represented by 16,000,000 depositary shares each representing a 1/40th interest in the Series H Preferred Stock.

(6) Represented by 16,000,000 depositary shares each representing a 1/40th interest in the Series I Preferred Stock.


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Dividends

The following table summarizes the Company’s common and preferred stock dividend activity:


	Year Ended December 31,
	2025			2024			2023
(dollars in millions, except per share data)	Dividends Declared per Share	Dividends Declared	Dividends Paid	Dividends Declared per Share	Dividends Declared	Dividends Paid	Dividends Declared per Share	Dividends Declared	Dividends Paid
Common stock	$1.72	$755	$755	$1.68	$769	$769	$1.68	$808	$808
Preferred stock
Series B	$75.66	$23	$23	$84.92	$25	$26	$74.49	$22	$25
Series C	77.22	23	24	80.78	24	23	63.75	19	19
Series D	—	—	—	39.66	12	17	63.50	19	19
Series E	50.00	23	23	50.00	23	23	50.00	22	22
Series F	42.38	17	22	56.50	23	23	56.50	23	23
Series G	40.00	12	12	40.00	12	12	40.00	12	12
Series H	73.75	29	29	45.68	18	10	—	—	—
Series I	28.17	11	—	—	—	—	—	—	—
Total preferred stock		$138	$133		$137	$134		$117	$120

Treasury Stock

The purchase of the Company’s common stock is recorded at cost. Upon retirement, or if subsequently reissued, treasury stock is reduced by the cost of such stock on a first-in, first-out basis with differences recorded in additional paid-in capital or retained earnings, as applicable.

During the years ended December 31, 2025 and 2024, the Company repurchased $600 million, or 13,471,628 shares, and $1.1 billion, or 28,113,278 shares, respectively, of its outstanding common stock, which are held in treasury stock.

NOTE 16 - SHARE-BASED COMPENSATION

The Company has share-based employee compensation plans as outlined below, pursuant to which awards are granted to employees and non-employee directors. The Company grants time-based and performance-based restricted stock units, which represent the right to receive shares of stock on a future date subject to applicable vesting conditions.

Amended & Restated Citizens Financial Group, Inc. 2014 Omnibus Incentive Plan. The Company grants select employees time-based and performance-based restricted stock units under this plan. Time-based restricted stock units generally vest ratably over a 3-year period and performance-based restricted stock units generally vest in a single installment at the end of a 3-year performance period, depending on the level of performance achieved during such period relative to established targets. If a dividend is paid on shares underlying the awards prior to the date such shares are distributed, those dividends will be distributed following vesting in the same form as the dividend that was paid to common stockholders generally.

Amended & Restated Citizens Financial Group, Inc. 2014 Non-Employee Directors Compensation Plan. The Company grants time-based restricted stock units to non-employee directors as compensation for their services under this plan. Restricted stock units granted to directors are fully vested on the grant date, with settlement of the awards deferred until a director’s cessation of service. If a dividend is paid on the shares underlying the awards prior to the date such shares are distributed, they are reinvested into additional restricted stock units.

Amended & Restated Citizens Financial Group, Inc. 2014 Employee Stock Purchase Plan. This plan provides eligible employees an opportunity to purchase CFG common stock at a 10% discount. Participants may contribute up to 10% of eligible compensation to the ESPP and may purchase up to $25,000 worth of stock in any calendar year. Offering periods under the ESPP are quarterly, with shares of CFG common stock purchased on the last day of each quarter at a 10% discount from the fair market value, defined as the closing price on the day of purchase. Prior to the date the shares are purchased, participants have no rights or privileges as a stockholder with respect to shares purchased at the end of the offering period.


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Restricted Stock Unit Activity

The following table presents the activity related to the Company’s restricted stock units:


	Year Ended December 31,
	2025		2024		2023
	Units	Weighted-Average Grant-Date Fair Value	Units	Weighted-Average Grant-Date Fair Value	Units	Weighted-Average Grant-Date Fair Value
Outstanding, January 1	6,678,168	$36.86	4,573,657	$42.23	3,876,601	$43.06

Granted	3,071,203	45.87	4,080,812	33.62	2,575,234	39.88
Vested & Distributed	(2,241,066)	39.95	(1,791,746)	43.12	(1,729,136)	40.84
Forfeited	(709,818)	37.95	(184,555)	37.56	(149,042)	42.92
Outstanding, December 31	6,798,487	$39.80	6,678,168	$36.86	4,573,657	$42.23

The total fair value of restricted stock units that vested during the years ended December 31, 2025, 2024, and 2023 was $90 million, $77 million, and $71 million, respectively.

There are 10,447,182 shares of common stock available for awards to be granted under the Omnibus Plan and Directors Plan. In addition, there are 7,125,729 shares available for issuance under the ESPP. Upon settlement of share-based awards, the Company generally issues new shares, but may also issue shares from treasury stock.

Compensation Expense

The Company measures compensation expense related to stock awards based upon the fair value of the awards on the grant date, with adjustments made for forfeitures as they occur. The expense is charged to earnings on a straight-line basis over the requisite service period (i.e., vesting period) of the award. Compensation expense for performance-based stock awards is adjusted upward or downward based upon the probability that performance targets will be achieved. Awards that continue to vest after retirement are expensed over the period of time from the grant date to the final vesting date or from the grant date to the date when an employee is retirement eligible, whichever is shorter. Awards granted to employees who are retirement eligible at the grant date are generally expensed immediately.

Share-based compensation expense was $120 million, $97 million, and $87 million for the years ended December 31, 2025, 2024, and 2023, respectively. At December 31, 2025, the total unrecognized compensation expense for unvested awards granted was $105 million. This expense is expected to be recognized over a weighted-average period of approximately two years.

The Company recognized income tax benefits related to share-based compensation arrangements of $29 million for the year ended December 31, 2025, and $16 million for each of the years ended December 31, 2024 and 2023.

NOTE 17 - COMMITMENTS AND CONTINGENCIES

A summary of outstanding off-balance sheet arrangements is presented below:


	December 31,
(dollars in millions)	2025	2024
Commitments to extend credit	$105,880	$93,460
Letters of credit	1,902	1,845
Loans sold with recourse	85	93
Risk participation agreements	37	1
Other commitments	11	14
Total	$107,915	$95,413

Commitments to Extend Credit

Commitments to extend credit are agreements to lend to customers in accordance with conditions contractually agreed upon in advance. These commitments generally have fixed expiration dates or termination clauses and may require payment of a fee. Since many of these commitments are expected to expire without being drawn upon, the contract amounts are not necessarily indicative of future cash requirements.


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Letters of Credit

Letters of credit in the table above reflect commercial, standby financial, and standby performance letters of credit. Financial and performance standby letters of credit are issued by the Company for the benefit of its customers. They are used as conditional guarantees of payment to a third party in the event the customer either fails to make specific payments (financial) or fails to complete a specific project or activity (performance). The Company’s exposure to credit loss in the event of counterparty nonperformance in connection with the above instruments is represented by the contractual amount of those instruments. Letters of credit are generally secured according to the creditworthiness of the counterparty, with collateral including, but not limited to, cash, accounts receivable, inventory, or investment securities. Credit risk associated with letters of credit is considered in determining the appropriate amount of the allowance for unfunded commitments. Standby and commercial letters of credit are issued for terms of no more than two years and one year, respectively.

Loans Sold with Recourse

The Company is an originator and servicer of residential mortgages and routinely sells such mortgage loans in the secondary market and to GSEs. In the context of such sales, the Company makes certain representations and warranties regarding the characteristics of the underlying loans and, as a result, may be contractually required to repurchase such loans or indemnify certain parties against losses for certain breaches of those representations and warranties. The Company also sells the government guaranteed portion of certain SBA loans to outside investors, for which it retains the servicing rights.

Risk Participation Agreements

RPAs are guarantees issued by the Company to other parties for a fee, whereby the Company agrees to participate in the credit risk of a derivative customer of the other party. The current amount of credit exposure is spread out over multiple counterparties. At December 31, 2025, the remaining terms on these RPAs ranged from less than one year to nine years.

Contingencies

The Company operates in a legal and regulatory environment that exposes it to potentially significant risks. A certain amount of litigation ordinarily results from the nature of the Company’s banking and other businesses. The Company is a party to legal proceedings, including class actions. The Company is also the subject of investigations, reviews, subpoenas, and regulatory matters arising out of its normal business operations which, in some instances, relate to concerns about fair lending, unfair and/or deceptive practices, and mortgage-related issues. In addition, the Company engages in discussions with relevant governmental and regulatory authorities on a regular and ongoing basis regarding various issues, and any issues discussed or identified may result in investigatory or other action being taken. Litigation and regulatory matters may result in settlements, damages, fines, penalties, public or private censure, increased costs, required remediation, restrictions on business activities, or other impacts on the Company.

In these disputes and proceedings, the Company contests liability and the amount of damages as appropriate. Given their complex nature, and based on the Company's experience, it may be years before some of these matters are resolved. Moreover, before liability can be reasonably estimated for a claim, numerous legal and factual issues may need to be examined, including through potentially lengthy discovery and determination of important factual matters, and by addressing novel or unsettled legal issues relevant to the proceedings in question. The Company cannot predict with certainty if, how, or when such claims will be resolved or what the eventual settlement, fine, penalty, or other relief, if any, may be, particularly for claims that are at an early stage in their development or where claimants seek substantial or indeterminate damages. The Company recognizes a provision for a claim when, in the opinion of management after seeking legal advice, it is probable that a liability exists and the amount of loss can be reasonably estimated. In many proceedings, however, it is not possible to determine whether any loss is probable or to estimate the amount of any loss.

Based on information currently available, the advice of legal counsel and other advisers, and established reserves, management believes that the aggregate liabilities, if any, potentially arising from these proceedings will not have a material adverse effect on the Company’s Consolidated Financial Statements.


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NOTE 18 - FAIR VALUE MEASUREMENTS

The Company measures or monitors many of its assets and liabilities on a fair value basis. Fair value is used on a recurring basis for assets and liabilities for which fair value is the required or elected measurement basis of accounting. Fair value is also used on a nonrecurring basis to evaluate assets for impairment or for disclosure purposes. Nonrecurring fair value adjustments typically involve the application of lower of cost or market accounting or write-downs of individual assets. Fair value measurement guidance is also applied to disclosures in this Note related to assets and liabilities that are not required to be reported at fair value in the financial statements.

Fair Value Option

The Company has elected to account for residential mortgage LHFS and certain commercial LHFS at fair value. The election of the fair value option for financial assets and liabilities is optional and irrevocable. Applying fair value accounting to residential mortgage LHFS better aligns the reported results of the economic changes in the value of these loans and their related economic hedge instruments. Certain commercial LHFS are managed by a commercial secondary loan desk that provides liquidity to banks, finance companies, and institutional investors. Fair value accounting is applied to these loans since the Company’s intent is to sell them in the near-term.

The following table presents the difference between the aggregate fair value and the aggregate unpaid principal balance of LHFS measured at fair value:


	December 31, 2025			December 31, 2024
(dollars in millions)	Aggregate Fair Value	Aggregate Unpaid Principal	Aggregate Fair Value Greater (Less) Than Aggregate Unpaid Principal	Aggregate Fair Value	Aggregate Unpaid Principal	Aggregate Fair Value Greater (Less) Than Aggregate Unpaid Principal
Residential mortgage loans held for sale	$895	$872	$23	$633	$625	$8
Commercial loans held for sale	170	185	(15)	192	199	(7)

Residential Mortgage Loans Held for Sale

The fair value of residential mortgage LHFS is derived from observable mortgage security prices and includes adjustments for loan servicing value, agency guarantee fees, and other loan level attributes which are observable in the marketplace. Credit risk does not have a significant impact on the valuation of these loans as they are sold shortly after origination. Residential mortgage LHFS are classified as Level 2 in the fair value hierarchy given the observable market inputs utilized to value these loans.

Residential mortgage loans accounted for under the fair value option are initially measured at fair value when the financial asset is originated or purchased. Subsequent changes in fair value are recognized in Mortgage banking fees in the Consolidated Statements of Operations.

Interest income on residential mortgage LHFS is calculated based on the contractual interest rate of the loan and is recorded in Interest income in the Consolidated Statements of Operations.

Commercial Loans Held for Sale

The fair value of commercial LHFS is estimated using observable prices of similar loans that transact in the marketplace. External pricing services that provide fair value estimates based on quotes from various dealers transacting in the market, sector curves, or benchmarking techniques are also utilized. Commercial loans managed by the commercial secondary loan desk are classified as Level 2 in the fair value hierarchy given the observable market inputs utilized to value these loans.

These commercial loans accounted for under the fair value option are initially measured at fair value when the financial asset is recognized. Subsequent changes in fair value are recognized in Capital markets fees in the Consolidated Statements of Operations. Interest income on commercial LHFS is calculated based on the contractual interest rate of the loan and is recorded in Interest income in the Consolidated Statements of Operations.


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Recurring Fair Value Measurements

Fair value is measured using the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is based upon quoted market prices in an active market, if available, otherwise observable market-based inputs or independently sourced parameters are utilized. Inputs may include prices for similar assets or liabilities, yield curves, interest rates, prepayment speeds, and foreign exchange rates.

The Company carries certain assets and liabilities at fair value and has elected to account for its residential mortgage LHFS and loans managed by the commercial secondary loan trading desk at fair value. Assets and liabilities carried at fair value are classified in accordance with the following three-level valuation hierarchy:

Level 1. Quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2. Observable inputs other than Level 1 prices, such as quoted prices for similar instruments, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by market data for substantially the full term of the asset or liability; and
Level 3. Unobservable inputs that are supported by little or no market information and are significant to the fair value measurement.

Classification in the hierarchy is based upon the lowest level input that is significant to the fair value measurement of the asset or liability. There is less judgment applied in arriving at the fair value for instruments classified in Levels 1 and 2 since the inputs are primarily based upon observable market data, whereas management judgment is more significant for instruments classified in Level 3 due to the lack of observable market data.

Fair value hierarchy classifications are reviewed and updated on a quarterly basis. Changes related to the observability of inputs in fair value measurements may result in a reclassification between the fair value hierarchy levels and are recognized based on period-end balances.

The Company utilizes a variety of valuation techniques to measure its assets and liabilities at fair value on a recurring basis, with those utilized for significant assets and liabilities presented below:

Debt Securities Available for Sale

AFS debt securities are classified as Level 1 in the fair value hierarchy if quoted prices in active markets are available and include debt securities issued by the U.S. Treasury. The fair value of a security is estimated under the market or income approach using pricing models if quoted market prices are not available. These securities are classified as Level 2 since they trade in active markets and the inputs to their valuations are observable. The pricing models used to value securities generally commence with market prices, or rates, for similar instruments, with adjustments made based on the characteristics of the instrument being valued. These adjustments reflect assumptions made regarding the sensitivity of each security’s value to changes in interest rates and prepayment speeds. Security classes that are valued using this market approach include mortgage-backed securities, collateralized loan obligations, and other debt securities issued by U.S. GSEs and state and political subdivisions. The pricing models used to value securities under the income approach generally commence with the contractual cash flows of each security, with adjustments made based on forecasted prepayment speeds, default rates, and other market-observable information. The adjusted cash flows are then discounted at a rate derived from observed rates of return for comparable assets or liabilities that are traded in the market. Security classes that are valued using this income approach include residential and commercial collateralized mortgage obligations.

A majority of the Company’s Level 1 and 2 debt securities are priced using an external pricing service. The pricing accuracy of this service is verified on a quarterly basis and involves the use of a secondary external vendor to provide valuations for the Company’s securities portfolio for comparison purposes. Any valuation discrepancies exceeding a certain threshold are researched and, if necessary, corroborated by an independent outside broker.

In certain cases where there is limited activity or less transparency around inputs to the valuation model, securities are classified as Level 3.


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Mortgage Servicing Rights

MSRs do not trade in an active market with readily observable prices and, therefore, are classified as Level 3 since their valuation utilizes significant unobservable inputs. The fair value is determined using a discounted cash flow model, which includes assumptions associated with weighted-average life, prepayment speed, and weighted-average option adjusted spread. The underlying assumptions and estimated values are corroborated by values received from independent third parties based on their review of the servicing portfolio and comparisons to market transactions. Refer to Note 6 for more information.

Derivatives

The Company’s interest rate derivatives are traded in OTC markets where quoted market prices are not readily available. Fair value is determined through models that primarily use market observable inputs, such as swap rates and yield curves. These pricing models determine the sum of each instrument’s fixed and variable cash flows, which are then discounted using an appropriate yield curve to arrive at the fair value of each derivative instrument. The pricing models do not contain a high level of subjectivity as the methodologies used do not require significant judgment. Certain adjustments that market participants would make to the modeled price when pricing each instrument are also considered, including a credit valuation adjustment that reflects the credit quality of the derivative counterparty. The effect of exposure to a particular counterparty’s credit is incorporated by netting their derivative contracts with the available collateral and calculating a credit valuation adjustment on the basis of the net position with the counterparty where permitted. This adjustment requires judgment on behalf of Company management but is not material to the total fair value of the interest rate derivative portfolio. Therefore, interest rate derivatives are classified as Level 2 in the fair value hierarchy.

The fair value of commodity derivatives uses the mid-point of market observable quoted prices as an input into the fair value model. These observed market prices, combined with other market observed inputs to derive the fair value of the instrument, classifies the commodity derivative as a Level 2 instrument.

The fair value of foreign exchange derivatives uses the mid-point of daily quoted currency spot prices. The valuation model estimates fair value based on these quoted prices along with interest rate yield curves and forward currency rates. Foreign exchange derivatives are classified as Level 2 in the fair value hierarchy since all of these inputs are observable in the market.

The fair value of TBA contracts is estimated using observable prices of similar loan pools that transact in the marketplace, as well as sector curves and benchmarking techniques. Therefore, TBA contracts are classified as Level 2 in the fair value hierarchy given the observable market inputs.

Other contracts consist primarily of interest rate lock commitments, which are valued utilizing loan closing rate assumptions that are internally generated. These assumptions are considered a significant unobservable input and, therefore, interest rate lock commitments are classified as Level 3 in the fair value hierarchy.

Equity Securities, at fair value

The fair value of money market mutual fund investments is determined based on unadjusted quoted market prices and is considered a Level 1 fair value measurement.

Short-Term Investments

Short-term investments include corporate bonds and U.S. Treasury securities managed by the Company’s trading desks. U.S. Treasury securities are classified as Level 1 in the fair value hierarchy as quoted prices in active markets are readily available. The fair value of corporate bonds is estimated using a combination of direct market quotes for a particular bond, or a comparable bond if recent market data is not available, and a discounted cash flow model that incorporates certain credit attributes of the bond issuer. External pricing services are utilized to corroborate the fair value of corporate bonds, which may result in an adjustment to the underlying bond’s valuation if price differences exceed certain thresholds. Corporate bonds are classified as Level 2 in the fair value hierarchy given the observable market inputs utilized to value these instruments. Short-term investments are included in Interest-bearing deposits in banks in the Consolidated Balance Sheets.


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Short-Term Borrowed Funds

Short-term borrowed funds include short positions in corporate bonds and equity securities held by the Company’s trading desks. Equity securities are classified as Level 1 in the fair value hierarchy as quoted prices in active markets are readily available. Corporate bonds are classified as Level 2 in the fair value hierarchy. See “Short-term investments” above for more information regarding the valuation techniques utilized to value corporate bonds.

Other Liabilities

Other liabilities include short positions in commercial LHFS managed by the Company’s commercial secondary loan desk and are classified as Level 2 in the fair value hierarchy. See “Commercial Loans Held for Sale” above for more information regarding the valuation techniques utilized to value commercial LHFS.

The following table presents assets and liabilities measured at fair value, including gross derivative assets and liabilities, on a recurring basis at December 31, 2025:


(dollars in millions)	Total	Level 1	Level 2	Level 3
Debt securities available for sale:
Mortgage-backed securities	$32,484	$—	$32,484	$—
Collateralized loan obligations	89	—	89	—
State and political subdivisions	1	—	1	—
U.S. Treasury and other	3,123	3,123	—	—
Total debt securities available for sale	35,697	3,123	32,574	—
Loans held for sale:
Residential loans held for sale	895	—	895	—
Commercial loans held for sale	170	—	170	—
Total loans held for sale, at fair value	1,065	—	1,065	—
Mortgage servicing rights	1,455	—	—	1,455
Derivative assets:
Interest rate contracts	553	—	553	—
Foreign exchange contracts	510	—	510	—
Commodities contracts	458	—	458	—
TBA contracts	2	—	2	—
Other contracts	9	—	1	8
Total derivative assets	1,532	—	1,524	8
Equity securities, at fair value(1)	251	251	—	—
Short-term investments	72	40	32	—
Total assets	$40,072	$3,414	$35,195	$1,463
Derivative liabilities:
Interest rate contracts	$471	$—	$471	$—
Foreign exchange contracts	373	—	373	—
Commodities contracts	405	—	405	—
TBA contracts	6	—	6	—
Other contracts	3	—	—	3
Total derivative liabilities	1,258	—	1,255	3
Short-term borrowed funds	52	40	12	—
Other liabilities	157	—	157	—
Total liabilities	$1,467	$40	$1,424	$3

(1) Excludes investments of $66 million included in Other assets in the Consolidated Balance Sheets that are measured at fair value using the net asset value per share (or its equivalent) practical expedient. These investments include capital contributions to private investment funds and have unfunded capital commitments of $14 million at December 31, 2025, which may be called at any time during prescribed time periods. The credit exposure is generally limited to the carrying amount of investments made and unfunded capital commitments.


						Citizens Financial Group, Inc. \| 137

The following table presents assets and liabilities measured at fair value, including gross derivative assets and liabilities, on a recurring basis at December 31, 2024:


(dollars in millions)	Total	Level 1	Level 2	Level 3
Debt securities available for sale:
Mortgage-backed securities	$29,055	$—	$29,055	$—
Collateralized loan obligations	184	—	184	—
State and political subdivisions	1	—	1	—
U.S. Treasury and other	3,525	3,525	—	—
Total debt securities available for sale	32,765	3,525	29,240	—
Loans held for sale:
Residential loans held for sale	633	—	633	—
Commercial loans held for sale	192	—	192	—
Total loans held for sale, at fair value	825	—	825	—
Mortgage servicing rights	1,491	—	—	1,491
Derivative assets:
Interest rate contracts	562	—	562	—
Foreign exchange contracts	472	—	472	—
Commodities contracts	429	—	429	—
TBA contracts	10	—	10	—
Other contracts	3	—	—	3
Total derivative assets	1,476	—	1,473	3
Equity securities, at fair value(1)	162	162	—	—
Short-term investments	53	40	13	—
Total assets	$36,772	$3,727	$31,551	$1,494
Derivative liabilities:
Interest rate contracts	$910	$—	$910	$—
Foreign exchange contracts	411	—	411	—
Commodities contracts	379	—	379	—
TBA contracts	8	—	8	—
Other contracts	2	—	—	2
Total derivative liabilities	1,710	—	1,708	2
Short-term borrowed funds	—	—	—	—
Other liabilities	101	—	101	—
Total liabilities	$1,811	$—	$1,809	$2

(1) Excludes investments of $58 million included in Other assets in the Consolidated Balance Sheets that are measured at fair value using the net asset value per share (or its equivalent) practical expedient. These investments include capital contributions to private investment funds and have unfunded capital commitments of $24 million at December 31, 2024, which may be called at any time during prescribed time periods. The credit exposure is generally limited to the carrying amount of investments made and unfunded capital commitments.

The following table presents a roll forward of assets and liabilities measured at fair value on a recurring basis and classified as Level 3:


	For the Year Ended December 31,
	2025		2024
(dollars in millions)	Mortgage Servicing Rights	Other Derivative Contracts	Mortgage Servicing Rights	Other Derivative Contracts
Beginning balance	$1,491	$1	$1,552	$7
Issuances	159	70	106	60

Sales(1)	(72)	—	(99)	—
Settlements(2)	(168)	(77)	(176)	(41)
Changes in fair value recognized in earnings(3)	45	11	108	(25)
Ending balance	$1,455	$5	$1,491	$1

(1) For MSRs, represents the sale of the excess servicing yield on MSRs.

(2) For MSRs, represents changes in value of the MSRs due to i) the passage of time including the impact from both regularly scheduled loan principal payments and partial paydowns, and ii) loans that paid off during the period. For other derivative contracts, represents the closeout of interest rate lock commitments and other cash payments.

(3) Represents changes in fair value primarily driven by market conditions. These changes are recorded in Mortgage banking fees and Other income in the Consolidated Statements of Operations.


						Citizens Financial Group, Inc. \| 138

The following table presents quantitative information about significant unobservable inputs utilized to measure the fair of Level 3 assets and liabilities:


			December 31, 2025	December 31, 2024
Financial Instrument(1)	Valuation Technique	Unobservable Input	Range (Weighted Average)	Range (Weighted Average)
Mortgage servicing rights	Discounted Cash Flow	Constant prepayment rate	5.51-14.62% CPR (7.00% CPR)	5.08-16.32% CPR (6.70% CPR)
Option adjusted spread	398-1,038 bps (588 bps)		398-1,058 bps (632 bps)
Other derivative contracts	Internal Model	Pull through rate	8.10-99.88% (84.71%)	5.09-99.90% (83.06%)
MSR value	24.53-177.00 bps (134.25 bps)		23.91-171.64 bps (121.23 bps)

(1) Disclosures related to the fair value measurement of financial instruments deemed immaterial are not included.

Nonrecurring Fair Value Measurements

Fair value is also used on a nonrecurring basis to evaluate certain assets for impairment or for disclosure purposes. The following valuation techniques are utilized to measure significant assets for which the Company utilizes fair value on a nonrecurring basis:

Collateral-Dependent Loans

The fair value of retail collateral-dependent loans is estimated using the appraised value of the collateral less costs to dispose. Retail collateral-dependent loans are classified as Level 2 in the fair value hierarchy given the observable market inputs utilized to value these loans. The fair value of commercial collateral-dependent loans is estimated using a variety of valuation techniques including appraisals, broker opinions, or other valuation techniques dependent on collateral type. Commercial collateral-dependent loans are classified as Level 3 in the fair value hierarchy since these valuation techniques utilize significant unobservable inputs. Any excess of the carrying amount of a collateral-dependent loan over its fair value is charged to the ALLL.

The following table presents losses recorded in earnings on assets measured at fair value on a nonrecurring basis, regardless of whether the asset is still held at period end:


	Year Ended December 31,
(dollars in millions)	2025	2024	2023
Collateral-dependent loans	($136)	($200)	($138)

The following table presents the carrying amount and fair value hierarchy of assets that were held as of period end and for which a nonrecurring fair value adjustment was recorded in earnings during the year. Carrying amount represents the fair value of the asset as of its measurement date, or date on which a nonrecurring fair value adjustment was recorded.


	December 31, 2025				December 31, 2024
(dollars in millions)	Total	Level 1	Level 2	Level 3	Total	Level 1	Level 2	Level 3
Collateral-dependent loans	$135	$—	$24	$111	$979	$—	$979	$—


						Citizens Financial Group, Inc. \| 139

Fair Value of Financial Instruments

The following tables present the estimated fair value for financial instruments not recorded at fair value in the Consolidated Financial Statements. The carrying amounts are recorded in the Consolidated Balance Sheets under the indicated captions.


	December 31, 2025
	Total		Level 1		Level 2		Level 3
(dollars in millions)	Carrying Value	Estimated Fair Value	Carrying Value	Estimated Fair Value	Carrying Value	Estimated Fair Value	Carrying Value	Estimated Fair Value
Financial assets(1):
Debt securities held to maturity	$7,933	$7,150	$—	$—	$7,595	$6,812	$338	$338
Loans held for sale	133	133	—	—	—	—	133	133
Net loans and leases	140,749	140,131	—	—	437	437	140,312	139,694
Other assets	807	807	—	—	768	768	39	39
Financial liabilities:
Deposits	183,313	183,277	—	—	183,313	183,277	—	—
Short-term borrowed funds	6	6	—	—	6	6	—	—
Long-term borrowed funds	11,224	11,472	—	—	11,224	11,472	—	—


	December 31, 2024
	Total		Level 1		Level 2		Level 3
(dollars in millions)	Carrying Value	Estimated Fair Value	Carrying Value	Estimated Fair Value	Carrying Value	Estimated Fair Value	Carrying Value	Estimated Fair Value
Financial assets(1):
Debt securities held to maturity	$8,599	$7,540	$—	$—	$8,187	$7,136	$412	$404
Loans held for sale	33	33	—	—	—	—	33	33
Net loans and leases	137,142	136,293	—	—	979	979	136,163	135,314
Other assets	710	710	—	—	689	689	21	21
Financial liabilities:
Deposits	174,776	174,651	—	—	174,776	174,651	—	—

Long-term borrowed funds	12,401	12,247	—	—	12,401	12,247	—	—

(1) Excludes cash-related financial instruments not recorded at fair value in the Consolidated Balance Sheets with a carrying value and estimated fair value of $13.6 billion and $11.2 billion at December 31, 2025 and 2024, respectively.

NOTE 19 - NONINTEREST INCOME

Revenues from Contracts with Customers

A portion of the Company’s noninterest income relates to certain fee-based revenue earned from contracts with customers based on the amount of consideration expected to be received upon the transfer of control of a good or service. The timing of recognition is dependent on whether a performance obligation is satisfied by transferring control of the product or service to a customer over time or at a point in time. Judgments include the timing of when performance obligations are satisfied and determination of the transaction price.


						Citizens Financial Group, Inc. \| 140

The following tables present noninterest income segregated by revenue from contracts with customers and revenue from other sources, disaggregated by business segment. Revenue from other sources primarily includes income from letter of credit and loan fees, foreign exchange and derivative products, and mortgage banking fees.

See Note 1 for information regarding segment changes made during the fourth quarter of 2025.


	Year Ended December 31, 2025
(dollars in millions)	Consumer Banking	Commercial Banking	Other	Consolidated
Service charges and fees	$308	$134	$—	$442
Capital markets fees	—	485	—	485
Wealth fees	360	—	—	360
Card fees	284	51	—	335
Other banking fees	3	10	—	13
Total revenue from contracts with customers	$955	$680	$—	$1,635
Total revenue from other sources(1)	297	315	147	759
Total noninterest income	$1,252	$995	$147	$2,394


	Year Ended December 31, 2024
(dollars in millions)	Consumer Banking	Commercial Banking	Other	Consolidated
Service charges and fees	$288	$128	$1	$417
Capital markets fees	—	445	—	445
Wealth fees	294	—	—	294
Card fees	284	54	24	362
Other banking fees	3	12	—	15
Total revenue from contracts with customers	$869	$639	$25	$1,533
Total revenue from other sources(1)	262	269	112	643
Total noninterest income	$1,131	$908	$137	$2,176


	Year Ended December 31, 2023
(dollars in millions)	Consumer Banking	Commercial Banking	Other	Consolidated
Service charges and fees	$277	$132	$—	$409
Capital markets fees	—	293	—	293
Wealth fees	259	—	—	259
Card fees	244	47	—	291
Other banking fees	3	11	—	14
Total revenue from contracts with customers	$783	$483	$—	$1,266
Total revenue from other sources(1)	284	301	132	717
Total noninterest income	$1,067	$784	$132	$1,983

(1) Includes bank-owned life insurance income of $115 million, $108 million, and $93 million for the years ended December 31, 2025, 2024, and 2023, respectively.

The Company does not have any material contract assets, liabilities, or other receivables recorded on its Consolidated Balance Sheets related to revenues from contracts with customers as of December 31, 2025. The Company elected to exclude disclosure of unsatisfied performance obligations for contracts with an original expected length of one year or less and contracts under which the Company recognized revenue for services that it has the right to invoice for.

A description of the above components of revenue from contracts with customers is presented below:

Service Charges and Fees

Service charges and fees include fees earned from deposit products in lieu of compensating balances, service charges for deposit transactions performed by customers, and fees earned for cash management activities. Service charges on deposit products are recognized over the period in which the related service is provided and at a point in time upon completion of the requested service transaction. Fees on cash management products and servicing fees on loans sold without recognition of a servicing right are recognized over time as the services are provided.


						Citizens Financial Group, Inc. \| 141

Capital Markets Fees

Capital markets fees include fees received from leading or participating in loan syndications, bond and equity underwriting services, and advisory fees. Loan syndication and underwriting fees are recognized as revenue when the Company has rendered all services to, and is entitled to collect the fee from, the borrower or the issuer, and there are no significant contingencies associated with the fee. Underwriting expenses passed through from the lead underwriter are recognized within Other operating expense in the Consolidated Statements of Operations. Advisory fees for mergers and acquisitions are recognized over time, while valuation services and fairness opinions are recognized upon completion of the advisory service.

Wealth Fees

Wealth fees include fees from investment management and brokerage services. Fees from investment management services are based on asset market values and are recognized over the period in which the related service is provided. Brokerage services include custody fees, commission income, trailing commissions, and other investment services. Custody fees are recognized on a monthly basis and commission income is recognized on trade date. Trailing commissions, such as 12b-1 fees, insurance renewal income, and income based on asset or investment levels in future periods are recognized when the asset balance is known, or the renewal occurs and the income is no longer constrained. For each of the years ended December 31, 2025 and 2024, the Company recognized trailing commissions of $16 million related to previous investment sales and recognized $15 million for the year ended December 31, 2023. Fees from other investment services are recognized upon completion of the service.

Card Fees

Card fees include interchange income from credit and debit card transactions and are recognized upon settlement by the association network. Interchange rates are generally set by the association network based on purchase volume and other factors. Other card-related fees are recognized upon completion of the transaction. Costs related to card reward programs are recognized in current earnings as the rewards are earned by the customer and are recorded as a reduction to Card fees.

O**ther Banking Fees

Other banking fees include fees for various banking transactions such as letter of credit fees, foreign wire transfers, and other services. These fees are recognized in a manner that reflects the timing of when transactions occur and as services are provided.

Revenue from Other Sources

Letter of Credit and Loan Fees

Letter of credit and loan fees primarily include fees received from letter of credit agreements as well as loan fees received from lending activities that cannot be deferred. These fees are recognized upon execution of the contract.

Foreign Exchange and Derivative Products

Foreign exchange and derivative products primarily include fees received from foreign exchange and interest rate derivative contracts executed with customers to meet their hedging and financing needs. These fees are generally recognized upon execution of the contracts. Foreign exchange and derivative products also include mark-to-market gains and losses recognized on these customer contracts and offsetting derivative contracts executed with external counterparties to manage the market risk exposure associated with customer contracts.

Mortgage Banking Fees

Mortgage banking fees primarily include gains or losses on the sale of residential mortgages originated with the intent to sell and servicing fees on mortgages serviced by the Company. Mortgage banking fees also include valuation adjustments for mortgage LHFS that are measured at the lower of cost or fair value, as well as mortgage loans originated with the intent to sell that are measured at fair value under the fair value option. Changes in the value of MSRs are reported in Mortgage banking fees in the Consolidated Statements of Operations. For further discussion of MSRs, see Note 6.


						Citizens Financial Group, Inc. \| 142

Other Income

Bank-owned life insurance is stated at its cash surrender value. The Company is the beneficiary of life insurance policies on current and former officers of the Company. Net changes in the carrying amount of the cash surrender value represent an adjustment to premiums paid when determining the expense or income recognized under the life insurance policy for the period.

NOTE 20 - OTHER OPERATING EXPENSE

The following table presents the details of Other operating expense:


	Year Ended December 31,
(dollars in millions)	2025	2024	2023
Marketing	$170	$170	$187
Deposit insurance(1)	127	193	390
Other	365	359	396
Other operating expense	$662	$722	$973

(1) Includes an industry-wide FDIC special assessment of $(26) million, $31 million, and $225 million for the years ended December 31, 2025, 2024, and 2023, respectively.

NOTE 21 - INCOME TAXES

Income taxes are accounted for under the asset and liability method, resulting in two components of income tax expense: current and deferred. Current income tax expense approximates taxes to be paid or refunded for the current period while deferred income tax expense results from changes in deferred tax assets and liabilities between periods. Gross deferred tax assets and liabilities represent changes in taxes expected to be paid in the future due to the reversal of temporary differences between the financial statement carrying amount of existing assets and liabilities and their respective tax bases.

The Company assesses the probability that positions taken, or expected to be taken, in its income tax returns will be sustained by taxing authorities. A “more likely than not” (i.e., more than 50 percent) recognition threshold must be met before a tax benefit can be recognized. Tax positions that are more likely than not to be sustained are reflected in the Company’s Consolidated Financial Statements.

All of the Company’s Income before income tax expense as reported in the Consolidated Statements of Operations for the years ended December 31, 2025, 2024, and 2023 is attributable to domestic operations. Federal income tax expense is impacted by the amortization of certain tax-advantaged investments. See Note 9 for further details of these investments.

The following table presents the components of income tax expense:


(dollars in millions)	Current	Deferred	Total
Year Ended December 31, 2025
Federal	$472	($78)	$394
State and local	107	(4)	103

Total	$579	($82)	$497
Year Ended December 31, 2024
Federal	$447	($127)	$320
State and local	109	(50)	59

Total	$556	($177)	$379
Year Ended December 31, 2023
Federal	$497	($135)	$362
State and local	167	(107)	60

Total	$664	($242)	$422


						Citizens Financial Group, Inc. \| 143

The following table presents a reconciliation between the U.S. federal statutory tax rate and the Company’s effective tax rate:


	Year Ended December 31,
	2025			2024			2023
(dollars in millions)	Amount	Rate		Amount	Rate		Amount	Rate
U.S. federal statutory tax rate	$489	21.0	%	$396	21.0	%	$426	21.0	%
State and local income taxes, net of federal income tax effect(1)	82	3.5		46	2.5		58	2.9



Tax credits
Low income housing tax-advantaged investments(2)	(56)	(2.4)		(52)	(2.8)		(56)	(2.8)
Renewable energy tax-advantaged investments(2)	(19)	(0.8)		(30)	(1.6)		(21)	(1.0)
Other	(2)	(0.1)		(2)	(0.1)		(3)	(0.1)
Changes in valuation allowances	1	—		3	0.1		—	—
Nontaxable or nondeductible items
FDIC insurance premiums	32	1.3		34	1.8		35	1.7
Bank-owned life insurance	(24)	(1.0)		(22)	(1.2)		(20)	(1.0)
Other	(3)	(0.1)		(3)	(0.1)		(3)	(0.2)
Changes in unrecognized tax benefits	—	—		—	—		5	0.2
Other adjustments	(3)	(0.1)		9	0.5		1	0.1
Effective tax rate	$497	21.3	%	$379	20.1	%	$422	20.8	%

(1) States and local jurisdictions that make up the majority (greater than 50 percent) of the tax effect in this category include Massachusetts, New York, and New York City for 2025, 2024, and 2023.

(2) Includes tax credits, other tax benefits, and certain costs associated with tax-advantaged investments.

The following table presents income taxes paid by the Company:


	Year Ended December 31,
(dollars in millions)	2025	2024	2023
Federal	$25	$74	$173
State or jurisdiction(1)
California	11	12	—
Massachusetts	—	—	31
New Jersey	16	11	—
New York	17	19	37
New York City	24	23	23
Rhode Island	17	18	21
Other	41	51	90



Total income taxes paid	$151	$208	$375

(1) The amount of income taxes paid to a particular state or jurisdiction is disclosed only for those states and jurisdictions that meet the 5% disaggregation threshold in a given year. Taxes paid to states and jurisdictions that do not meet the 5% disaggregation threshold in a given year are included in Other.


						Citizens Financial Group, Inc. \| 144

The following table presents the significant components of the Company’s deferred tax assets and liabilities:


	December 31,
(dollars in millions)	2025	2024
Deferred tax assets:
Other comprehensive income	$669	$1,242
Allowance for credit losses	517	552
Federal and state net operating and capital loss carryforwards	58	69
Accrued expenses	1,193	1,198
Investment and other tax credit carryforwards	342	214
Partnerships	26	4
Other	10	10
Total deferred tax assets	2,815	3,289
Valuation allowance	(105)	(120)
Deferred tax assets, net of valuation allowance	2,710	3,169
Deferred tax liabilities:
Leasing transactions	207	208
Amortization of intangibles	424	425
Depreciation	521	570
Pension and other employee compensation plans	148	146
Partnerships	—	—
Deferred Income	62	24
MSRs	252	243
Total deferred tax liabilities	1,614	1,616
Net deferred tax asset (liability)	$1,096	$1,553

Deferred tax assets are recognized for net operating loss, capital loss, and tax credit carryforwards. Valuation allowances are recorded to reduce deferred tax assets to the amount that management concludes is more likely than not to be realized.

At December 31, 2025, the Company had federal and state tax net operating loss carryforwards of $505 million, capital loss carryforwards of $116 million, and federal and state tax credit carryforwards of $342 million. The majority of the federal and state tax net operating loss carryforwards, if not utilized, will expire in varying amounts through 2044, while the capital loss and tax credit carryforwards expire in varying amounts through 2026 and 2045, respectively. Limitations on the ability to realize these carryforwards are reflected in the associated valuation allowance. At December 31, 2025, the Company had a valuation allowance of $105 million against various deferred tax assets related to federal and state net operating losses, capital losses, and state tax credits, as the Company’s current assessment is that it is more likely than not that a portion of the deferred tax assets related to these items will not be realized.

At December 31, 2025, retained earnings included base year reserves of acquired thrift institutions for which no deferred income tax liability has been recognized. Under current tax law, these base year reserves may become taxable if certain distributions are made with respect to the stock of the Company, CBNA ceases to qualify as a bank for tax purposes, or the reserves are used for purposes other than to absorb bad debt losses. The amount of the unrecognized deferred tax liability related to the Company’s base year reserves was approximately $117 million at December 31, 2025. No actions are planned that would cause any portion of these reserves to become taxable.

The Company files income tax returns in the U.S. federal jurisdiction and in various state and local jurisdictions. The Company is no longer subject to U.S. federal tax examinations by major tax authorities for years before 2022 and, with few exceptions, before 2021 for state and local jurisdictions.


						Citizens Financial Group, Inc. \| 145

The following table presents a reconciliation of the beginning and ending amount of unrecognized tax benefits:


	December 31,
(dollars in millions)	2025	2024	2023
Balance at the beginning of the year	$5	$7	$6
Gross increase for tax positions related to current year	10	1	1
Gross increase for tax positions related to prior years	—	1	1

Decrease for tax positions as a result of the lapse of the statutes of limitations	(1)	(1)	—
Decrease for tax positions related to settlements with taxing authorities	(9)	(3)	(1)
Balance at end of year(1)	$5	$5	$7

(1) All amounts represent unrecognized tax benefits that, if recognized, would affect the Company’s effective tax rate.

Tax positions are measured as the largest amount of tax benefit that has a greater than 50 percent likelihood of being realized upon settlement with a taxing authority. The difference between the benefit recognized and the tax benefit claimed on a tax return is referred to as an unrecognized tax benefit. Any adjustment to unrecognized tax benefits is recorded in Income tax expense in the Consolidated Statements of Operations.

Interest and penalties related to unrecognized tax benefits are reported in Income tax expense in the Consolidated Statements of Operations. The Company’s liability for accrued interest and penalties related to unrecognized tax benefits was $4 million and $1 million as of December 31, 2025 and 2024, respectively. In addition, the income tax expense (benefit) recognized for interest and penalties related to unrecognized tax benefits was $3 million, $(1) million, and $3 million for the years ended December 31, 2025, 2024, and 2023, respectively.

NOTE 22 - EARNINGS PER SHARE

Basic EPS is the amount of earnings, adjusted for preferred stock dividends and the impact of issuance costs associated with preferred stock redemptions, available to each share of common stock outstanding during the reporting period. Diluted EPS is the amount of earnings available to each share of common stock outstanding during the reporting period adjusted to include the effect of potentially dilutive common shares, which include incremental shares issued for share-based payment awards. Potentially dilutive common shares are excluded from the computation of diluted EPS in periods in which the effect would be antidilutive.


	Year Ended December 31,
(dollars in millions, except per share data)	2025	2024	2023
Numerator (basic and diluted):
Net income	$1,831	$1,509	$1,608
Less: Preferred stock dividends	138	137	117
Less: Impact of preferred stock redemption	5	—	—
Net income available to common stockholders	$1,688	$1,372	$1,491
Denominator:
Weighted-average common shares outstanding - basic	433,173,162	450,678,038	475,089,384
Dilutive common shares: share-based awards	3,717,569	2,832,207	1,603,764
Weighted-average common shares outstanding - diluted	436,890,731	453,510,245	476,693,148
Earnings per common share:
Basic	$3.90	$3.05	$3.14
Diluted(1)	3.86	3.03	3.13

(1) Excluded from the computation of diluted EPS were weighted-average antidilutive shares totaling 24,574, 330,950, and 2,210,857 for the years ended December 31, 2025, 2024, and 2023, respectively.

NOTE 23 - REGULATORY MATTERS

As a BHC and FHC, the Company is subject to regulation and supervision by the FRB. Our banking subsidiary, CBNA, is a national banking association primarily regulated by the OCC.


						Citizens Financial Group, Inc. \| 146

Under the current U.S. Basel III capital framework, the Company and 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, the Company’s 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. The Company’s SCB is re-calibrated with each biennial supervisory stress test and updated annually to reflect the Company’s planned common stock dividends. In addition, the Company must not be subject to a written agreement, order, or capital directive with any of its regulators. Failure to meet minimum capital requirements can result in the initiation of certain actions that, if undertaken, could have a material effect on the Company’s Consolidated Financial Statements.

The following table presents the regulatory capital ratios for the Company and CBNA under the U.S. Basel III Standardized rules. The Company and CBNA have both declared as an “AOCI opt-out” institution, which means they are not required to recognize the AOCI impact of net unrealized gains and losses on debt securities and accumulated net gains and losses on cash flow hedges and certain defined benefit pension plan assets in regulatory capital. In addition, both entities elected to delay the estimated impact of CECL on regulatory capital for a two-year period ending December 31, 2021, followed by a three-year transition period ending December 31, 2024, to phase-in the aggregate amount of the capital benefit provided during the initial two-year delay.


	Actual			Required Minimum Capital
(dollars in millions)	Amount	Ratio		Amount	Ratio(1)
As of December 31, 2025
CET1 capital
CFG	$18,240	10.6	%	$15,434	9.0	%
CBNA	20,946	12.3		11,946	7.0
Tier 1 capital
CFG	20,351	11.9		18,007	10.5
CBNA	20,946	12.3		14,506	8.5
Total capital
CFG	23,654	13.8		21,437	12.5
CBNA	24,135	14.1		17,919	10.5
Tier 1 leverage
CFG	20,351	9.5		8,613	4.0
CBNA	20,946	9.8		8,572	4.0
As of December 31, 2024
CET1 capital
CFG	$17,900	10.8	%	$14,913	9.0	%
CBNA	20,250	12.3		11,549	7.0
Tier 1 capital
CFG	20,013	12.1		17,398	10.5
CBNA	20,250	12.3		14,024	8.5
Total capital
CFG	23,232	14.0		20,712	12.5
CBNA	23,362	14.2		17,324	10.5
Tier 1 leverage
CFG	20,013	9.4		8,502	4.0
CBNA	20,250	9.6		8,474	4.0

(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.


						Citizens Financial Group, Inc. \| 147

The Company’s capital distributions are subject to the oversight of the FRB. Under the FRB’s SCB framework, failure to maintain risk-based capital ratios above the respective minimum requirements, including the SCB, would result in graduated restrictions on the Company’s ability to make certain discretionary bonus payments and capital distributions, including common stock dividends and share repurchases. The timing and amount of future dividends and share repurchases will depend on various factors, including the Company’s capital position, financial performance, balance sheet growth, market conditions, and regulatory considerations. All future capital distributions are subject to consideration and approval by the Company’s Board of Directors prior to execution. See Note 15 for more information regarding the Company’s common stock dividends and share repurchases.

Also, there are statutory and regulatory limitations on the ability of CBNA, as a national bank subsidiary, to pay dividends or make other capital distributions to the Parent Company. Dividends are limited to the lesser of the amount calculated under a “recent earnings” test and an “undivided profits” test. Under the recent earnings test, a dividend may not be paid if the total of all dividends declared during any calendar year exceeds the sum of current year net income and retained net income of the two preceding years, less any required transfers to surplus, unless the national bank obtains the approval of the OCC. Under the undivided profits test, a dividend may not be paid in excess of the entity’s “undivided profits” (generally accumulated net profits that have not been paid out as dividends or transferred to surplus). Federal banking regulatory agencies have issued policy statements that provide that FDIC-insured depository institutions and their holding companies should generally pay dividends out of current operating earnings only.

NOTE 24 - BUSINESS SEGMENTS

The Company is managed by its CODM, the Chief Executive Officer, on a segment basis. The Company’s two reportable business segments are 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.

The CODM utilizes segment pretax profit or loss as the primary measure to allocate resources to the Company’s business segments during the annual budgeting and forecasting process. This measure is also used to assess the performance of each segment, with a focus on monitoring net interest income, noninterest income, and noninterest expense. To ensure effective oversight, the CODM participates in monthly business review meetings, where budget- and forecast-to-actual variances for pretax profit or loss and its components are analyzed. These evaluations inform the CODM’s decisions regarding the allocation of capital and resources across the business segments, ensuring alignment with the Company’s strategic objectives.

Developing and applying methodologies used to allocate items among the business segments is a dynamic process. Accordingly, financial results may be revised periodically as management systems are enhanced, methods of evaluating performance or product lines are updated, or organizational structure changes occur.

See Note 1 for information regarding segment changes made during the fourth quarter of 2025.

Reportable Business Segments

Segment results are determined based upon the Company’s organizational and management structure, with balance sheet and statement of operations items assigned to each of the business segments. The results are not necessarily comparable with similar information reported by other financial institutions. A description of each reportable business segment is presented below:

Consumer Banking

The Consumer Banking segment serves consumer customers and small businesses, offering traditional banking products and services including deposits, mortgage and home equity lending, credit cards, small business loans, education loans, point-of-sale finance loans, and wealth management solutions. Citizens Private Bank and Private Wealth integrate banking services and wealth management solutions to serve high- and ultra-high-net-worth individuals and families, as well as investors, entrepreneurs, and businesses.

The segment’s distribution channels include a branch network, ATMs, and a workforce of experienced specialists covering lending, savings, and investment needs as well as a broad range of small business products and services. The Company’s Consumer Banking value proposition is based on providing simple, easy to understand product offerings and a convenient banking experience with a more personalized approach.


						Citizens Financial Group, Inc. \| 148

Commercial Banking

The Commercial Banking segment primarily serves companies and institutions and strives to be a trusted advisor to its clients and preferred provider for their banking needs. A broad complement of financial products and solutions are offered, 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 segment focuses on middle-market companies, large corporations, and institutions and has dedicated teams with industry and product expertise in targeted industry sectors. While the segment’s business development efforts are predominantly focused in the Company’s footprint, some of its specialized industry businesses also operate on a national basis. A key component of Commercial Banking’s growth strategy is to present clients with ideas that help their businesses thrive and, in doing so, expand the breadth and depth of the Company’s banking relationship with them.

Non-segment Operations

Other

Non-segment operations are classified as Other and consist 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.

Management accounting practices utilized by the Company to measure the performance and produce the results of its segments include the following:

Funds Transfer Pricing

The Company’s FTP, a component of net interest income, ensures consistent business segment pricing behavior by removing interest rate risk from business performance. This risk is centrally managed within the Treasury function and reported in Other non-segment operations. The Company employs a matched maturity FTP methodology for its business segments with rates based on a product’s repricing frequency and interest sensitivity, as well as other factors. Business segments are provided an interest credit for funding it generates and an interest charge for assets it holds. The sum of interest income/expense and FTP credits/charges for each business segment is its designated net interest income. The offset to FTP credits and charges is recorded in Other non-segment operations.

Provision for credit losses

The provision for credit losses for each business segment is based on actual net charge-offs recognized by the business segment. The difference between the consolidated provision (benefit) for credit losses and total net charge-offs for all business segments is reflected in Other non-segment operations.

Income taxes

Income taxes are assessed to each business segment at a standard tax rate with the residual income tax expense (benefit) to arrive at the consolidated effective tax rate included in Other non-segment operations.

Expenses

Noninterest expenses incurred by centrally-managed operations or business lines that directly support the operations of another business line are charged to the applicable business line based on its utilization of those services.

Goodwill

Goodwill is allocated to the Consumer Banking and Commercial Banking business segments for impairment testing purposes.

Substantially all revenues generated and long-lived assets held by the Company’s business segments are derived from customers that reside in the United States. No business segment earns revenue from a single external customer that represents ten percent or more of the Company’s total revenues.


						Citizens Financial Group, Inc. \| 149

The following tables present certain financial data of the Company’s business segments:


	Year Ended December 31, 2025
(dollars in millions)	Consumer Banking	Commercial Banking	Other	Consolidated
Net interest income	$4,972	$1,778	($897)	$5,853
Noninterest income	1,252	995	147	2,394
Total revenue	6,224	2,773	(750)	8,247
Direct expenses(1)(2)	2,741	911	1,659	5,311
Indirect expenses(3)	1,139	423	(1,562)	—
Noninterest expense	3,880	1,334	97	5,311
Profit (loss) before provision (benefit) for credit losses	2,344	1,439	(847)	2,936
Provision (benefit) for credit losses	328	309	(29)	608
Income (loss) before income tax expense (benefit)	2,016	1,130	(818)	2,328
Income tax expense (benefit)	510	265	(278)	497
Net income (loss)	$1,506	$865	($540)	$1,831
Total average assets	$79,925	$66,137	$72,535	$218,597

(1) Represents operating expenses incurred by the business segments and primarily includes salaries and employee benefits, equipment and software, outside services, and occupancy.

(2) Includes depreciation and amortization of $122 million, $20 million, and $305 million, respectively, for the Consumer Banking, Commercial Banking, and Other business segments.

(3) Represents allocated corporate overhead from support functions such as information technology, finance, risk, and human resources.


	Year Ended December 31, 2024
(dollars in millions)	Consumer Banking	Commercial Banking	Other	Consolidated
Net interest income	$4,564	$1,950	($881)	$5,633
Noninterest income	1,131	908	137	2,176
Total revenue	5,695	2,858	(744)	7,809
Direct expenses(1)(2)	2,609	842	1,783	5,234
Indirect expenses(3)	1,068	399	(1,467)	—
Noninterest expense	3,677	1,241	316	5,234
Profit (loss) before provision (benefit) for credit losses	2,018	1,617	(1,060)	2,575
Provision (benefit) for credit losses	331	353	3	687
Income (loss) before income tax expense (benefit)	1,687	1,264	(1,063)	1,888
Income tax expense (benefit)	434	291	(346)	379
Net income (loss)	$1,253	$973	($717)	$1,509
Total average assets	$75,064	$68,478	$75,482	$219,024

(1) Represents operating expenses incurred by the business segments and primarily includes salaries and employee benefits, equipment and software, outside services, and occupancy.

(2) Includes depreciation and amortization of $121 million, $26 million, and $304 million, respectively, for the Consumer Banking, Commercial Banking, and Other business segments.

(3) Represents allocated corporate overhead from support functions such as information technology, finance, risk, and human resources.


						Citizens Financial Group, Inc. \| 150


	Year Ended December 31, 2023
(dollars in millions)	Consumer Banking	Commercial Banking	Other	Consolidated
Net interest income	$4,187	$2,292	($238)	$6,241
Noninterest income	1,067	784	132	1,983
Total revenue	5,254	3,076	(106)	8,224
Direct expenses(1)(2)	2,519	884	2,104	5,507
Indirect expenses(3)	1,023	411	(1,434)	—
Noninterest expense	3,542	1,295	670	5,507
Profit (loss) before provision (benefit) for credit losses	1,712	1,781	(776)	2,717
Provision (benefit) for credit losses	280	250	157	687
Income (loss) before income tax expense (benefit)	1,432	1,531	(933)	2,030
Income tax expense (benefit)	373	378	(329)	422
Net income (loss)	$1,059	$1,153	($604)	$1,608
Total average assets	$72,721	$76,028	$73,472	$222,221

(1) Represents operating expenses incurred by the business segments and primarily includes salaries and employee benefits, equipment and software, outside services, and occupancy.

(2) Includes depreciation and amortization of $112 million, $30 million, and $285 million, respectively, for the Consumer Banking, Commercial Banking, and Other business segments.

(3) Represents allocated corporate overhead from support functions such as information technology, finance, risk, and human resources.

NOTE 25 - PARENT COMPANY FINANCIALS

The following tables present the financial statements of the Parent Company:

Condensed Balance Sheets


	December 31,
(dollars in millions)	2025	2024
ASSETS:
Cash and due from banks	$2,318	$2,658
Loans and advances to:
Bank subsidiary	3,335	3,326
Nonbank subsidiaries	180	150
Investments in subsidiaries:
Bank subsidiary	26,838	24,389
Nonbank subsidiaries	383	334
Other assets	420	237
Total assets	$33,474	$31,094
LIABILITIES:
Long-term borrowed funds	$6,768	$6,480
Other liabilities	390	360
Total liabilities	7,158	6,840
Total stockholders’ equity	26,316	24,254
Total liabilities and stockholders’ equity	$33,474	$31,094


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Condensed Statements of Operations


	Year Ended December 31,
(dollars in millions)	2025	2024	2023
OPERATING INCOME:
Income from bank subsidiaries, excluding equity in undistributed income:
Dividends	$1,100	$625	$2,875
Interest	174	139	43
Management and service fees	64	67	69
Income from nonbank subsidiaries, excluding equity in undistributed income:
Dividends	10	—	—
Interest	8	9	8
All other operating income	1	1	1
Total operating income	1,357	841	2,996
OPERATING EXPENSE:
Salaries and employee benefits	33	36	39
Interest expense	350	263	129
All other expenses	34	32	31
Total operating expense	417	331	199
Income (loss) before taxes and undistributed income	940	510	2,797
Income tax expense (benefit)	(38)	(24)	(13)
Income before undistributed income of subsidiaries	978	534	2,810
Equity in undistributed income (losses) of subsidiaries:
Bank	823	939	(1,163)
Nonbank	30	36	(39)
Net income	$1,831	$1,509	$1,608
Total other comprehensive income (loss), net of income taxes(1)	1,625	163	802
Total comprehensive income (loss)	$3,456	$1,672	$2,410

(1) See Consolidated Statements of Comprehensive Income for comprehensive income (loss) detail.


						Citizens Financial Group, Inc. \| 152

Condensed Cash Flow Statements


	Year Ended December 31,
(dollars in millions)	2025	2024	2023
OPERATING ACTIVITIES
Net income	$1,831	$1,509	$1,608
Adjustments to reconcile net income to net change due to operating activities:
Deferred income tax expense (benefit)	(12)	(10)	(4)
Equity in undistributed (income) losses of subsidiaries	(853)	(975)	1,202
Other, net	132	108	96
Net increase (decrease) in Other liabilities	18	92	(17)
Net (increase) decrease in Other assets	(182)	(84)	17
Net change due to operating activities	934	640	2,902
INVESTING ACTIVITIES


Investments in and advances to subsidiaries	(129)	(2,249)	(76)
Repayment of investments in and advances to subsidiaries	80	120	30

Other investing, net	2	2	—
Net change due to investing activities	(47)	(2,127)	(46)
FINANCING ACTIVITIES
Proceeds from issuance of long-term borrowed funds	746	3,231	—
Repayments of long-term borrowed funds	(470)	(107)	—
Treasury stock purchased	(600)	(1,050)	(906)
Net proceeds from issuance of preferred stock	393	392	—
Redemption of preferred stock	(400)	(300)	—
Dividends paid to common stockholders	(755)	(769)	(808)
Dividends paid to preferred stockholders	(133)	(134)	(120)
Other financing, net	(8)	18	21
Net change due to financing activities	(1,227)	1,281	(1,813)
Net change in Cash and due from banks	(340)	(206)	1,043
Cash and due from banks at beginning of year	2,658	2,864	1,821
Cash and due from banks at end of year	$2,318	$2,658	$2,864

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