Item 1. FINANCIAL STATEMENTS

						Page
Consolidated Balance Sheets (unaudited)						51
Consolidated Statements of Operations (unaudited)						52
Consolidated Statements of Comprehensive Income (unaudited)						53
Consolidated Statements of Changes in Stockholders’ Equity (unaudited)						54
Consolidated Statements of Cash Flows (unaudited)						56
Notes to Consolidated Financial Statements (unaudited)						57
Note 1 - Basis of Presentation						57
Note 2 - Securities						58
Note 3 - Loans and Leases						61
Note 4 - Allowance for Credit Losses, Nonaccrual Loans and Leases, and Concentrations of Credit Risk						62
Note 5 - Mortgage Banking and Other						71
Note 6 - Variable Interest Entities						73
Note 7 - Borrowed Funds						73
Note 8 - Derivatives						75
Note 9 - Accumulated Other Comprehensive Income (Loss)						78
Note 10 - Stockholders’ Equity						79
Note 11 - Commitments and Contingencies						80
Note 12 - Fair Value Measurements						81
Note 13 - Noninterest Income						87
Note 14 - Other Operating Expense						87
Note 15 - Earnings Per Share						88
Note 16 - Business Operating Segments						88

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CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in millions, except share data)			September 30, 2021						December 31, 2020
ASSETS:
Cash and due from banks			$1,145						$1,037
Interest-bearing cash and due from banks			12,571						11,696
Interest-bearing deposits in banks			289						306
Debt securities available for sale, at fair value (including $621 and $549 pledged to creditors, respectively)(1)			24,911						22,942
Debt securities held to maturity (fair value of $2,567 and $3,357 respectively, and including $85 and $144 pledged to creditors, respectively)(1)			2,492						3,235
Loans held for sale, at fair value			3,177						3,564
Other loans held for sale			93						439
Loans and leases			123,318						123,090
Less: Allowance for loan and lease losses			(1,855)						(2,443)
Net loans and leases			121,463						120,647
Derivative assets			1,769						1,915
Premises and equipment, net			732						759
Bank-owned life insurance			2,428						1,756
Goodwill			7,065						7,050
Other assets			8,872						8,003
TOTAL ASSETS			$187,007						$183,349
LIABILITIES AND STOCKHOLDERS’ EQUITY:
LIABILITIES:
Deposits:
Noninterest-bearing			$48,184						$43,831
Interest-bearing			104,037						103,333
Total deposits			152,221						147,164
Short-term borrowed funds			8						243
Derivative liabilities			187						128
Deferred taxes, net			689						629
Long-term borrowed funds			6,947						8,346
Other liabilities			3,532						4,166
TOTAL LIABILITIES			163,584						160,676
Contingencies (refer to Note 11)
STOCKHOLDERS’ EQUITY:
Preferred stock:
$25.00 par value,100,000,000 shares authorized; 2,050,000 and 2,000,000 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively			2,014						1,965
Common stock:
$0.01 par value, 1,000,000,000 shares authorized; 571,110,802 shares issued and 426,199,576 shares outstanding at September 30, 2021 and 569,876,133 shares issued and 427,209,831 shares outstanding at December 31, 2020			6						6
Additional paid-in capital			18,981						18,940
Retained earnings			7,648						6,445
Treasury stock, at cost, 144,911,226 and 142,666,302 shares at September 30, 2021 and December 31, 2020, respectively			(4,718)						(4,623)
Accumulated other comprehensive income (loss)			(508)						(60)
TOTAL STOCKHOLDERS’ EQUITY			$23,423						$22,673
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY			$187,007						$183,349

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

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

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CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

			Three Months Ended September 30,												Nine Months Ended September 30,
(in millions, except share and per share data)			2021						2020						2021						2020
INTEREST INCOME:
Interest and fees on loans and leases			$1,078						$1,120						$3,197						$3,614
Interest and fees on loans held for sale, at fair value			21						21						63						56
Interest and fees on other loans held for sale			1						16						9						32
Investment securities			116						121						368						398
Interest-bearing deposits in banks			6						2						12						8
Total interest income			1,222						1,280						3,649						4,108
INTEREST EXPENSE:
Deposits			35						89						127						440
Short-term borrowed funds			—						—						—						1
Long-term borrowed funds			42						54						136						210
Total interest expense			77						143						263						651
Net interest income			1,145						1,137						3,386						3,457
Provision for credit losses			(33)						428						(386)						1,492
Net interest income after provision for credit losses			1,178						709						3,772						1,965
NONINTEREST INCOME:
Mortgage banking fees			108						287						358						722
Service charges and fees			110						97						309						299
Capital markets fees			72						58						244						162
Card fees			66						57						185						161
Trust and investment services fees			61						53						179						151
Letter of credit and loan fees			39						37						115						102
Foreign exchange and interest rate products			29						27						85						85
Securities gains, net			3						1						9						4
Other income			26						37						57						55
Total noninterest income			514						654						1,541						1,741
NONINTEREST EXPENSE:
Salaries and employee benefits			509						524						1,581						1,586
Equipment and software			157						149						464						424
Outside services			144						139						420						405
Occupancy			77						81						247						247
Other operating expense			124						95						308						317
Total noninterest expense			1,011						988						3,020						2,979
Income before income tax expense			681						375						2,293						727
Income tax expense			151						61						504						126
NET INCOME			$530						$314						$1,789						$601
Net income available to common stockholders			$504						$289						$1,708						$526
Weighted-average common shares outstanding:
Basic			426,086,717						426,846,096						425,996,867						427,058,412
Diluted			427,840,964						427,992,349						427,679,885						428,142,358
Per common share information:
Basic earnings			$1.18						$0.68						$4.01						$1.23
Diluted earnings			1.18						0.68						3.99						1.23

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

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

			Three Months Ended September 30,												Nine Months Ended September 30,
(in millions)			2021						2020						2021						2020
Net income			$530						$314						$1,789						$601
Other comprehensive income (loss):
Net unrealized derivative instruments gains (losses) arising during the periods, net of income taxes of $(4), $0, $5 and $30, respectively			(11)						—						14						88
Reclassification of net derivative (gains) losses included in net income, net of income taxes of $(8), $(15), $(27) and $(27), respectively			(25)						(42)						(77)						(79)
Net unrealized debt securities gains (losses) arising during the periods, net of income taxes of $(35), $(14), $(132) and $131, respectively			(109)						(44)						(406)						405
Reclassification of net debt securities (gains) losses to net income, net of income taxes of $(1), $0, $(2) and $(1), respectively			(2)						(1)						(7)						(3)
Reclassification of actuarial loss to net income, net of income taxes of $1, $1, $2 and $2, respectively			20						3						28						10
Total other comprehensive income (loss), net of income taxes			(127)						(84)						(448)						421
Total comprehensive income (loss)			$403						$230						$1,341						$1,022

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

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CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED)

			Preferred Stock									Common Stock						Additional Paid-in Capital			Retained Earnings			Treasury Stock, at Cost			Accumulated Other Comprehensive Income (Loss)			Total
(in millions)			Shares			Amount						Shares			Amount
Balance at July 1, 2020			2			$1,965						427			$6			$18,908			$6,068			($4,623)			$94			$22,418
Dividends to common stockholders			—			—						—			—			—			(168)			—			—			(168)
Dividends to preferred stockholders			—			—						—			—			—			(25)			—			—			(25)
Share-based compensation plans			—			—						—			—			10			—			—			—			10
Employee stock purchase plan			—			—						—			—			4			—			—			—			4
Total comprehensive income (loss):
Net income			—			—						—			—			—			314			—			—			314
Other comprehensive income (loss)			—			—						—			—			—			—			—			(84)			(84)
Total comprehensive income (loss)			—			—						—			—			—			314			—			(84)			230
Balance at September 30, 2020			2			$1,965						427			$6			$18,922			$6,189			($4,623)			$10			$22,469
Balance at July 1, 2021			2			$2,014						426			$6			$18,964			$7,314			($4,718)			($381)			$23,199
Dividends to common stockholders			—			—						—			—			—			(167)			—			—			(167)
Dividends to preferred stockholders			—			—						—			—			—			(26)			—			—			(26)
Preferred stock redemption			—			—						—			—			—			(3)			—			—			(3)
Share-based compensation plans			—			—						—			—			11			—			—			—			11
Employee stock purchase plan			—			—						—			—			6			—			—			—			6
Total comprehensive income (loss):
Net income			—			—						—			—			—			530			—			—			530
Other comprehensive income (loss)			—			—						—			—			—			—			—			(127)			(127)
Total comprehensive income (loss)			—			—						—			—			—			530			—			(127)			403
Balance at September 30, 2021			2			$2,014						426			$6			$18,981			$7,648			($4,718)			($508)			$23,423

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

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CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED)

			Preferred Stock									Common Stock						Additional Paid-in Capital			Retained Earnings			Treasury Stock, at Cost			Accumulated Other Comprehensive Income (Loss)			Total
(in millions)			Shares			Amount						Shares			Amount
Balance at January 1, 2020			2			$1,570						433			$6			$18,891			$6,498			($4,353)			($411)			$22,201
Dividends to common stockholders			—			—						—			—			—			(504)			—			—			(504)
Dividends to preferred stockholders			—			—						—			—			—			(75)			—			—			(75)
Preferred stock issued			—			395						—			—			—			—			—			—			395
Treasury stock purchased			—			—						(7)			—			—			—			(270)			—			(270)
Share-based compensation plans			—			—						1			—			17			—			—			—			17
Employee stock purchase plan			—			—						—			—			14			—			—			—			14
Cumulative effect of change in accounting principle			—			—						—			—			—			(331)			—			—			(331)
Total comprehensive income (loss):
Net income			—			—						—			—			—			601			—			—			601
Other comprehensive income (loss)			—			—						—			—			—			—			—			421			421
Total comprehensive income (loss)			—			—						—			—			—			601			—			421			1,022
Balance at September 30, 2020			2			$1,965						427			$6			$18,922			$6,189			($4,623)			$10			$22,469
Balance at January 1, 2021			2			$1,965						427			$6			$18,940			$6,445			($4,623)			($60)			$22,673
Dividends to common stockholders			—			—						—			—			—			(502)			—			—			(502)
Dividends to preferred stockholders			—			—						—			—			—			(81)			—			—			(81)
Preferred stock issued			—			296						—			—			—			—			—			—			296
Preferred stock redemption			—			(247)						—			—			—			(3)			—			—			(250)
Treasury stock purchased			—			—						(2)			—			—			—			(95)			—			(95)
Share-based compensation plans			—			—						1			—			24			—			—			—			24
Employee stock purchase plan			—			—						—			—			17			—			—			—			17
Total comprehensive income (loss):
Net income			—			—						—			—			—			1,789			—			—			1,789
Other comprehensive income (loss)			—			—						—			—			—			—			—			(448)			(448)
Total comprehensive income (loss)			—			—						—			—			—			1,789			—			(448)			1,341
Balance at September 30, 2021			2			$2,014						426			$6			$18,981			$7,648			($4,718)			($508)			$23,423

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

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CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

			Nine Months Ended September 30,
(in millions)			2021						2020
OPERATING ACTIVITIES
Net income			$1,789						$601
Adjustments to reconcile net income to net change in cash due to operating activities:
Provision for credit losses			(386)						1,492
Net change in loans held for sale			623						(655)
Depreciation, amortization and accretion			453						419
Deferred income taxes			214						(251)
Share-based compensation			47						34
Net gain on sales of:
Debt securities			(9)						(4)
Premises and equipment			(1)						—
Net (increase) decrease in other assets			(2,393)						(2,960)
Net increase (decrease) in other liabilities			833						569
Net change due to operating activities			1,170						(755)
INVESTING ACTIVITIES
Investment securities:
Purchases of debt securities available for sale			(8,669)						(5,547)
Proceeds from maturities and paydowns of debt securities available for sale			6,059						4,583
Proceeds from sales of debt securities available for sale			158						48
Proceeds from maturities and paydowns of debt securities held to maturity			752						629
Net (increase) decrease in interest-bearing deposits in banks			17						(31)
Acquisitions, net of cash acquired			(14)						(3)
Net (increase) decrease in loans and leases			(384)						(5,303)
Capital expenditures, net			(59)						1
Purchase of bank-owned life insurance			(650)						—
Other			(197)						124
Net change due to investing activities			(2,987)						(5,499)
FINANCING ACTIVITIES
Net increase (decrease) in deposits			5,057						17,608
Net increase (decrease) in short-term borrowed funds			(240)						(43)
Proceeds from issuance of long-term borrowed funds			—						8,323
Repayments of long-term borrowed funds			(1,356)						(13,258)
Treasury stock purchased			(95)						(270)
Net proceeds from issuance of preferred stock			296						395
Redemption of preferred stock			(250)						—
Dividends paid to common stockholders			(502)						(504)
Dividends paid to preferred stockholders			(88)						(73)
Premium paid to exchange subordinated debt			(1)						(80)
Payments of employee tax withholding for share-based compensation			(21)						(14)
Net change due to financing activities			2,800						12,084
Net change in cash and cash equivalents**(1)**			983						5,830
Cash and cash equivalents at beginning of period**(1)**			12,733						3,386
Cash and cash equivalents at end of period**(1)**			$13,716						$9,216

(1) Cash and cash equivalents includes cash and due from banks and interest-bearing cash and due from banks as reflected in the Consolidated Balance Sheets.

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1 - BASIS OF PRESENTATION

Basis of Presentation

The unaudited interim Consolidated Financial Statements, including the Notes presented in this document of Citizens Financial Group, Inc., have been prepared in accordance with GAAP interim reporting requirements, and therefore do not include all information and Notes included in the audited Consolidated Financial Statements in conformity with GAAP. These unaudited interim Consolidated Financial Statements and Notes presented in this document should be read in conjunction with the Company’s audited Consolidated Financial Statements and accompanying Notes included in the Company’s 2020 Form 10-K. The Company’s principal business activity is banking, conducted through its banking subsidiary, CBNA.

The unaudited interim Consolidated Financial Statements include the accounts of the Company and subsidiaries in which the Company has a controlling financial interest. All intercompany transactions and balances have been eliminated. The Company has evaluated its unconsolidated entities and does not believe that any entity in which it has an interest, but does not currently consolidate, meets the requirements to be consolidated as a variable interest entity. The unaudited interim Consolidated Financial Statements include all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the results for the interim periods. The results for interim periods are not necessarily indicative of results for a full year.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near-term relate to the determination of the ACL.

Significant Accounting Policies

For further information regarding the Company’s significant accounting policies, see Note 1 in the Company’s 2020 Form 10-K.

Completed Acquisitions

On September 1, 2021, the Company closed on its acquisition of Willamette, a Chicago, Illinois-based business valuation, forensic analysis, and transaction financial advisory services firm. This acquisition resulted in an estimated increase to goodwill of $15 million which was allocated to the Commercial business segment as of September 30, 2021. The Company expects that some adjustments of the fair values assigned to the assets acquired and liabilities assumed may subsequently be recorded, although any such adjustments are not expected to be material.

Pending Acquisitions

On May 26, 2021, the Company announced that it had entered into an agreement to acquire 80 East Coast branches and the national online deposit business from HSBC for an approximate 2.0% premium paid on deposits at closing. The branch purchase includes 66 locations in the New York City Metro area, 9 locations in the Mid-Atlantic/Washington D.C. area, and 5 locations in Southeast Florida. As of September 30, 2021, there were approximately $8.4 billion in deposits and $1.9 billion in loans. The transaction is expected to close in the first quarter of 2022, subject to the satisfaction of customary closing terms and conditions and regulatory approvals.

On July 28, 2021, the Company announced that it had entered into a definitive agreement and plan of merger under which the Company will acquire all of the outstanding shares of Investors for a combination of stock and cash. Pursuant to the terms of the agreement, Investors shareholders will receive 0.297 of a share of the Company’s common stock and $1.46 in cash for each share of Investors they own. The acquisition of Investors builds our physical presence in the northeast with the addition of 154 branches located in the greater New York City and Philadelphia metropolitan areas and across New Jersey. As of September 30, 2021, Investors had total assets of $27.3 billion, including $21.6 billion of loans, $24.5 billion of liabilities, including $20.4 billion of deposits, and $2.8 billion of stockholders’ equity. The merger is expected to close in early second quarter 2022, subject to approval by the shareholders of Investors, regulatory approvals, and other customary closing conditions.

On September 8, 2021, Citizens entered into a definitive agreement to acquire JMP in an all-cash transaction. Under the agreement, JMP shareholders will receive $7.50 for each common share of JMP they own,

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or approximately $149 million in cash. This transaction is targeted to close in mid-fourth quarter 2021, subject to approval by the shareholders of JMP and other customary closing conditions.

NOTE 2 - SECURITIES

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

			September 30, 2021															December 31, 2020
(in millions)			Amortized Cost			Gross Unrealized Gains			Gross Unrealized Losses			Fair Value						Amortized Cost			Gross Unrealized Gains			Gross Unrealized Losses			Fair Value
U.S. Treasury and other			$11			$—			$—			$11						$11			$—			$—			$11
State and political subdivisions			2			—			—			2						3			—			—			3
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities			23,838			307			(305)			23,840						21,954			571			(19)			22,506
Other/non-agency			280			11			—			291						396			26			—			422
Total mortgage-backed securities			24,118			318			(305)			24,131						22,350			597			(19)			22,928
Collateralized loan obligations			767			—			—			767						—			—			—			—
Total debt securities available for sale, at fair value			$24,898			$318			($305)			$24,911						$22,364			$597			($19)			$22,942
Federal agencies and U.S. government sponsored entities			$1,705			$73			$—			$1,778						$2,342			$122			$—			$2,464
Total mortgage-backed securities			1,705			73			—			1,778						2,342			122			—			2,464
Asset-backed securities			787			2			—			789						893			—			—			893
Total debt securities held to maturity			$2,492			$75			$—			$2,567						$3,235			$122			$—			$3,357
Equity securities, at cost			$616			$—			$—			$616						$604			$—			$—			$604
Equity securities, at fair value			88			—			—			88						66			—			—			66

Accrued interest receivable on debt securities totaled $53 million and $55 million as of September 30, 2021 and December 31, 2020, 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 September 30, 2021. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without incurring penalties.

			September 30, 2021
			Distribution of Maturities
(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			$11			$—			$—			$—			$11
State and political subdivisions			—			—			—			2			2
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities			1			32			1,989			21,816			23,838
Other/non-agency			—			—			—			280			280
Collateralized loan obligations			—			—			—			767			767
Total debt securities available for sale			12			32			1,989			22,865			24,898
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities			—			—			—			1,705			1,705
Asset-backed securities			—			—			787			—			787
Total debt securities held to maturity			—			—			787			1,705			2,492
Total amortized cost of debt securities			$12			$32			$2,776			$24,570			$27,390
Fair value:
U.S. Treasury and other			$11			$—			$—			$—			$11
State and political subdivisions			—			—			—			2			2
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities			1			33			2,036			21,770			23,840
Other/non-agency			—			—			—			291			291
Collateralized loan obligations			—			—			—			767			767
Total debt securities available for sale			12			33			2,036			22,830			24,911
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities			—			—			—			1,778			1,778
Asset-backed securities			—			—			789			—			789
Total debt securities held to maturity			—			—			789			1,778			2,567
Total fair value of debt securities			$12			$33			$2,825			$24,608			$27,478

Taxable interest income from investment securities as presented in the Consolidated Statements of Operations was $116 million and $121 million for the three months ended September 30, 2021 and 2020, respectively, and $368 million and $398 million for the nine months ended September 30, 2021 and 2020, respectively.

The following table presents realized gains and losses on securities:

			Three Months Ended September 30,												Nine Months Ended September 30,
(in millions)			2021						2020						2021						2020
Gains on sale of debt securities			$3						$1						$9						$4
Losses on sale of debt securities			—						—						—						—
Debt securities gains, net			$3						$1						$9						$4

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The following table presents the amortized cost and fair value of debt securities pledged:

			September 30, 2021									December 31, 2020
(in millions)			Amortized Cost			Fair Value						Amortized Cost			Fair Value
Pledged against derivatives, to qualify for fiduciary powers, and to secure public and other deposits as required by law			$4,547			$4,556						$3,818			$3,937
Pledged against FHLB borrowed funds			227			239						394			423
Pledged against repurchase agreements			1			1						224			231

The Company regularly enters into security repurchase agreements with unrelated counterparties, which involve the transfer of a security from one party to another, and a subsequent transfer of substantially the same security back to the original party. These repurchase agreements are typically short-term in nature and are accounted for as secured borrowed funds in the Company’s Consolidated Balance Sheets. The Company recognized no offsetting of short-term receivables or payables as of September 30, 2021 or December 31, 2020. The Company offsets certain derivative assets and derivative liabilities in the Consolidated Balance Sheets. For further information, see Note 8.

Securitizations of mortgage loans retained in the investment portfolio were $60 million and $223 million for the three and nine months ended September 30, 2021, respectively. There were $34 million securitizations of mortgage loans retained in the investment portfolio for the three and nine months ended September 30, 2020. These securitizations include a substantive guarantee by a third party. In 2021, the guarantors were FNMA, FHLMC, and GNMA. The debt securities received from the guarantors are classified as AFS.

Impairment

As of September 30, 2021, the Company concluded that 68% of HTM securities met the zero expected credit loss criteria; therefore, no ACL was recognized. For the remainder, the lifetime expected credit losses 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 September 30, 2021.

The following tables present AFS mortgage-backed debt securities with fair values below their respective carrying values, separated by the duration the securities have been in a continuous unrealized loss position:

			September 30, 2021
			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
Federal agencies and U.S. government sponsored entities			$682			($21)						$11,969			($284)						$12,651			($305)

			December 31, 2020
			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
Federal agencies and U.S. government sponsored entities			$1,991			($19)						$—			$—						$1,991			($19)

Citizens does not currently have the intent to sell these debt securities, and it is not more likely than not that the Company will be required to sell these debt securities prior to recovery of their amortized cost bases. Citizens has determined that credit losses are not expected to be incurred on the agency MBS, non-agency MBS, and CLOs identified with unrealized losses as of September 30, 2021. The unrealized losses on these debt securities reflect non-credit-related factors driven by changes in interest rates. Therefore, the Company has determined that these debt securities are not impaired.

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NOTE 3 - LOANS AND LEASES

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.

The following table presents loans and leases, excluding LHFS.

(in millions)			September 30, 2021						December 31, 2020
Commercial and industrial(1)			$41,854						$44,173
Commercial real estate			14,508						14,652
Leases			1,593						1,968
Total commercial			57,955						60,793
Residential mortgages(2)			21,513						19,539
Home equity			11,889						12,149
Automobile			13,492						12,153
Education			13,000						12,308
Other retail			5,469						6,148
Total retail			65,363						62,297
Total loans and leases			$123,318						$123,090

(1) Includes $1.9 billion and $4.2 billion of PPP loans fully guaranteed by the SBA as of September 30, 2021 and December 31, 2020, respectively.

(2) Includes fully or partially guaranteed FHA, VA and USDA loans of $1.4 billion at September 30, 2021 and $249 million at December 31, 2020, including loans acquired through an exercise of the GNMA early buyout option.

Included in other assets is accrued interest receivable on loans and leases held for investment totaling $464 million and $449 million as of September 30, 2021 and December 31, 2020, respectively.

During the three months ended September 30, 2021 and 2020, the Company purchased $323 million and $801 million of education loans, and $119 million and $101 million of other retail loans, respectively. During the three months ended September 30, 2021, the Company purchased $478 million of residential mortgage loans as compared to none in the same period of 2020. During the nine months ended September 30, 2021 and 2020, the Company purchased $975 million and $1.7 billion of education loans, and $472 million and $628 million of other retail loans, respectively. During the nine months ended September 30, 2021, the Company purchased $478 million of residential mortgage loans as compared to none in the same period of 2020.

During the three months ended September 30, 2021 and 2020, the Company sold $202 million and $94 million of commercial loans, respectively. During the three months ended September 30, 2020, the Company sold $879 million of education loans as compared to none in the same period of 2021. During the nine months ended September 30, 2021 and 2020, the Company sold $765 million and $356 million of commercial loans, respectively. During the nine months ended September 30, 2020, the Company sold $1.5 billion of residential mortgage loans and $879 million of education loans as compared to none in the same period of 2021.

Loans pledged as collateral for FHLB borrowed funds, primarily residential mortgages and home equity products, totaled $25.2 billion and $25.5 billion at September 30, 2021 and December 31, 2020, respectively. Loans pledged as collateral to support the contingent ability to borrow at the FRB discount window, if necessary, were primarily comprised of education, automobile, commercial and industrial, and commercial real estate loans, and totaled $38.1 billion and $40.0 billion at September 30, 2021 and December 31, 2020, respectively.

Interest income on direct financing and sales-type leases was $12 million and $17 million for the three months ended September 30, 2021 and 2020, respectively, and is reported within interest and fees on loans and leases in the Consolidated Statements of Operations. For the nine months ended September 30, 2021 and 2020, this interest income was $37 million and $54 million, respectively.

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The following table presents the composition of LHFS.

			September 30, 2021												December 31, 2020
(in millions)			Residential Mortgages**(1)**			Commercial**(2)**						Total						Residential Mortgages**(1)**			Commercial**(2)**			Total
Loans held for sale at fair value			$3,104			$73						$3,177						$3,416			$148			$3,564
Other loans held for sale			—			93						93						—			439			439

(1) Residential mortgage LHFS 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 generally consist of loans associated with the Company’s syndication business.

NOTE 4 - ALLOWANCE FOR CREDIT LOSSES, NONACCRUAL LOANS AND LEASES, AND CONCENTRATIONS OF CREDIT RISK

Allowance for Credit Losses

Recorded in the ACL is management’s estimate of expected credit losses in the Company’s loan and lease portfolios. See Note 5 in the Company’s 2020 Form 10-K for a detailed discussion of the ACL reserve methodology and estimation techniques as of December 31, 2020. There were no significant changes to the ACL reserve methodology in the nine months ended September 30, 2021.

The following table presents a summary of changes in the ALLL and the allowance for unfunded lending commitments for the three months ended and nine months ended September 30, 2021:

			Three Months Ended September 30, 2021												Nine Months Ended September 30, 2021
(in millions)			Commercial			Retail			Total						Commercial			Retail			Total
Allowance for loan and lease losses, beginning of period			$953			$994			$1,947						$1,233			$1,210			$2,443
Charge-offs			(17)			(70)			(87)						(196)			(243)			(439)
Recoveries			3			40			43						37			122			159
Net charge-offs			(14)			(30)			(44)						(159)			(121)			(280)
Provision charged to income			(72)			24			(48)						(207)			(101)			(308)
Allowance for loan and lease losses, end of period			$867			$988			$1,855						$867			$988			$1,855
Allowance for unfunded lending commitments, beginning of period			$121			$13			$134						$186			$41			$227
Provision for unfunded lending commitments			9			6			15						(56)			(22)			(78)
Allowance for unfunded lending commitments, end of period			$130			$19			$149						$130			$19			$149

Overall, an ending ACL balance of $2.0 billion at September 30, 2021 compared to $2.7 billion at December 31, 2020. The difference in ACL as of September 30, 2021 as compared to December 31, 2020 was due to net charge-offs of $280 million, as detailed below, coupled with a credit provision benefit of $386 million. This reflected strong credit performance across the retail and commercial loan portfolios, and improvement in the macroeconomic outlook.

The decrease in commercial net charge-offs of $126 million for the nine months ended September 30, 2021 as compared to the nine months ended September 30, 2020 reflects the economic recovery following the COVID-19 pandemic and associated lockdowns. Retail net charge-offs were down $97 million in the nine months ended September 30, 2021 as compared to the nine months ended September 30, 2020 as a result of government stimulus and forbearance programs as well as strong collateral values in residential real estate and automobile.

To determine the ACL as of September 30, 2021, Citizens utilized an economic forecast that generally reflects real GDP growth of approximately 5.8% over 2021. The forecast also projects the unemployment rate to be in the range of 5.3% to 6.3% throughout 2021. This forecast reflects an overall improved macroeconomic outlook as compared to December 31, 2020. We continue to utilize our qualitative allowance framework to reassess and adjust ACL reserve levels. Macroeconomic forecast risk, driven by uncertainty and volatility of key macroeconomic variables, is one of the primary factors influencing our qualitative reserve. As the economic recovery following the COVID-19 pandemic has continued, we have assessed risks to the recovery, including potential for continuing impacts from COVID-19 variants, challenges in the global supply chain, and recent inflationary trends, as well as potential impacts from ending monetary and fiscal stimulus programs. In addition to judgment applied to the commercial portfolio as a whole, Citizens continued to apply management judgment

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to adjust the modeled reserves in the commercial industry sectors most impacted by the COVID-19 pandemic and associated lockdowns, including CRE retail, CRE office and hospitality and casual dining.

The following table presents a summary of changes in the ALLL and the allowance for unfunded lending commitments for the three months and nine months ended September 30, 2020:

			Three Months Ended September 30, 2020												Nine Months Ended September 30, 2020
(in millions)			Commercial			Retail			Total						Commercial			Retail			Total
Allowance for loan and lease losses, beginning of period			$1,235			$1,213			$2,448						$674			$578			$1,252
Cumulative effect of change in accounting principle			—			—			—						(176)			629			453
Allowance for loan and lease losses, beginning of period, adjusted			1,235			1,213			2,448						498			1,207			1,705
Charge-offs			(171)			(86)			(257)						(292)			(319)			(611)
Recoveries			1			37			38						7			101			108
Net charge-offs			(170)			(49)			(219)						(285)			(218)			(503)
Provision charged to income			224			89			313						1,076			264			1,340
Allowance for loan and lease losses, end of period			$1,289			$1,253			$2,542						$1,289			$1,253			$2,542
Allowance for unfunded lending commitments, beginning of period			$69			$10			$79						$44			$—			$44
Cumulative effect of change in accounting principle			—			—			—						(3)			1			(2)
Allowance for unfunded lending commitments, beginning of period, adjusted			69			10			79						41			1			42
Provision for unfunded lending commitments			83			32			115						111			41			152
Allowance for unfunded lending commitments, end of period			$152			$42			$194						$152			$42			$194

Credit Quality Indicators

The Company presents loan and lease portfolio segments and classes by credit quality indicator and vintage year. Citizens defines the vintage date for the purpose of this disclosure as the date of the most recent credit decision. In general, renewals are categorized as new credit decisions and reflect the renewal date as the vintage date. Loans modified in a TDR are considered a continuation of the original loan and vintage date corresponds with the most recent credit decision.

For commercial loans and leases, Citizens utilizes regulatory classification ratings to monitor credit quality. The assignment of regulatory classification ratings occurs at loan origination and are periodically re-evaluated by Citizens utilizing a risk-based approach, including any time management becomes aware of information affecting the borrowers' ability to fulfill their obligations. The review process considers both quantitative and qualitative factors. Loans with a “pass” rating are those that the Company believes will fully repay in accordance with the contractual loan terms. Commercial loans and leases identified as “criticized” have some weakness or potential weakness that indicate an increased probability of future loss. Citizens groups “criticized” loans into three categories, “special mention,” “substandard,” and “doubtful.” Special mention loans have potential weaknesses that, if left uncorrected, may result in deterioration of the Company’s credit position at some future date. Substandard loans are inadequately protected loans; these loans have well-defined weaknesses that could hinder normal repayment or collection of the debt. Doubtful loans have the same weaknesses as substandard, with the added characteristic that the possibility of loss is high and collection of the full amount of the loan is improbable.

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The following table presents the amortized cost basis of commercial loans and leases, by vintage date and regulatory classification rating, as of September 30, 2021:

			Term Loans by Origination Year																																				Revolving Loans
(in millions)			2021						2020						2019						2018						2017						Prior to 2017						Within the Revolving Period			Converted to Term						Total
Commercial and industrial
Pass(1)			$6,411						$4,086						$4,723						$3,079						$1,723						$2,480						$16,578			$138						$39,218
Special Mention			4						47						226						148						55						182						451			2						1,115
Substandard			40						110						229						121						91						227						550			18						1,386
Doubtful			26						8						12						21						11						17						37			3						135
Total commercial and industrial			6,481						4,251						5,190						3,369						1,880						2,906						17,616			161						41,854
Commercial real estate
Pass			1,073						2,586						3,835						2,484						863						1,343						962			—						13,146
Special Mention			46						3						148						99						169						151						—			—						616
Substandard			28						97						91						279						150						81						9			—						735
Doubtful			—						9						—						—						—						2						—			—						11
Total commercial real estate			1,147						2,695						4,074						2,862						1,182						1,577						971			—						14,508
Leases
Pass			284						281						191						180						79						504						—			—						1,519
Special Mention			2						16						2						8						5						16						—			—						49
Substandard			1						16						6						—						—						1						—			—						24
Doubtful			—						—						—						—						—						1						—			—						1
Total leases			287						313						199						188						84						522						—			—						1,593
Total commercial
Pass(1)			7,768						6,953						8,749						5,743						2,665						4,327						17,540			138						53,883
Special Mention			52						66						376						255						229						349						451			2						1,780
Substandard			69						223						326						400						241						309						559			18						2,145
Doubtful			26						17						12						21						11						20						37			3						147
Total commercial			$7,915						$7,259						$9,463						$6,419						$3,146						$5,005						$18,587			$161						$57,955

(1) Includes $1.9 billion of PPP loans designated as pass that are fully guaranteed by the SBA originating in 2021 and 2020.

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The following table presents the amortized cost basis of commercial loans and leases, by vintage date and regulatory classification rating, as of December 31, 2020:

			Term Loans by Origination Year																																				Revolving Loans
(in millions)			2020						2019						2018						2017						2016						Prior to 2016						Within the Revolving Period			Converted to Term						Total
Commercial and industrial
Pass(1)			$8,036						$5,730						$4,180						$2,174						$1,157						$1,980						$17,281			$340						$40,878
Special Mention			34						264						163						84						60						173						771			34						1,583
Substandard			91						195						248						100						81						127						600			22						1,464
Doubtful			65						10						34						38						3						31						63			4						248
Total commercial and industrial			8,226						6,199						4,625						2,396						1,301						2,311						18,715			400						44,173
Commercial real estate
Pass			1,848						2,836						2,810						1,106						566						919						3,271			—						13,356
Special Mention			19						130						121						92						94						48						300			—						804
Substandard			116						2						65						5						53						26						149			—						416
Doubtful			16						26						8						—						—						2						24			—						76
Total commercial real estate			1,999						2,994						3,004						1,203						713						995						3,744			—						14,652
Leases
Pass			455						246						229						139						180						673						—			—						1,922
Special Mention			3						4						2						4						2						18						—			—						33
Substandard			—						2						2						4						4						—						—			—						12
Doubtful			—						—						—						—						—						1						—			—						1
Total leases			458						252						233						147						186						692						—			—						1,968
Total commercial
Pass(1)			10,339						8,812						7,219						3,419						1,903						3,572						20,552			340						56,156
Special Mention			56						398						286						180						156						239						1,071			34						2,420
Substandard			207						199						315						109						138						153						749			22						1,892
Doubtful			81						36						42						38						3						34						87			4						325
Total commercial			$10,683						$9,445						$7,862						$3,746						$2,200						$3,998						$22,459			$400						$60,793

(1) Includes $4.2 billion of PPP loans designated as pass that are fully guaranteed by the SBA originating in 2020.

For retail loans, Citizens 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 FICO scores, as of September 30, 2021:

			Term Loans by Origination Year																																				Revolving Loans
(in millions)			2021						2020						2019						2018						2017						Prior to 2017						Within the Revolving Period			Converted to Term						Total
Residential mortgages
800+			$1,585						$3,179						$1,403						$395						$784						$2,389						$—			$—						$9,735
740-799			2,607						2,087						853						265						384						1,253						—			—						7,449
680-739			639						613						356						173						185						611						—			—						2,577
620-679			84						117						169						103						112						306						—			—						891
<620			8						56						166						167						165						281						—			—						843
No FICO available(1)			2						5						1						—						—						10						—			—						18
Total residential mortgages			4,925						6,057						2,948						1,103						1,630						4,850						—			—						21,513
Home equity
800+			—						2						6						6						4						154						4,333			294						4,799
740-799			1						1						5						5						8						137						3,405			299						3,861
680-739			—						1						8						13						17						151						1,665			250						2,105
620-679			—						3						13						23						19						123						345			176						702
<620			—						2						16						22						21						96						86			179						422
Total home equity			1						9						48						69						69						661						9,834			1,198						11,889
Automobile
800+			1,287						897						608						286						183						84						—			—						3,345
740-799			1,781						1,177						707						344						195						85						—			—						4,289
680-739			1,436						958						589						277						154						69						—			—						3,483
620-679			680						436						297						156						89						45						—			—						1,703
<620			120						142						168						118						75						45						—			—						668
No FICO available(1)			4						—						—						—						—						—						—			—						4
Total automobile			5,308						3,610						2,369						1,181						696						328						—			—						13,492
Education
800+			1,080						1,865						921						566						519						951						—			—						5,902
740-799			1,245						1,743						730						402						297						550						—			—						4,967
680-739			369						526						246						150						113						278						—			—						1,682
620-679			29						60						41						34						28						105						—			—						297
<620			2						8						11						11						10						46						—			—						88
No FICO available(1)			10						—						—						—						—						54						—			—						64
Total education			2,735						4,202						1,949						1,163						967						1,984						—			—						13,000
Other retail
800+			134						288						154						79						37						35						366			—						1,093
740-799			211						395						216						103						47						29						711			2						1,714
680-739			179						308						151						69						29						14						667			5						1,422
620-679			114						150						51						24						8						5						264			5						621
<620			19						39						19						11						3						3						78			6						178
No FICO available(1)			120						7						—						—						—						—						313			1						441
Total other retail			777						1,187						591						286						124						86						2,399			19						5,469
Total retail
800+			4,086						6,231						3,092						1,332						1,527						3,613						4,699			294						24,874
740-799			5,845						5,403						2,511						1,119						931						2,054						4,116			301						22,280
680-739			2,623						2,406						1,350						682						498						1,123						2,332			255						11,269
620-679			907						766						571						340						256						584						609			181						4,214
<620			149						247						380						329						274						471						164			185						2,199
No FICO available(1)			136						12						1						—						—						64						313			1						527
Total retail			$13,746						$15,065						$7,905						$3,802						$3,486						$7,909						$12,233			$1,217						$65,363

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

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The following table presents the amortized cost basis of retail loans, by vintage date and FICO scores, as of December 31, 2020:

			Term Loans by Origination Year																																				Revolving Loans
(in millions)			2020						2019						2018						2017						2016						Prior to 2016						Within the Revolving Period			Converted to Term						Total
Residential mortgages
800+			$2,687						$1,885						$638						$1,129						$1,615						$1,755						$—			$—						$9,709
740-799			2,931						1,133						398						527						743						904						—			—						6,636
680-739			784						351						162						172						295						458						—			—						2,222
620-679			97						94						44						56						66						223						—			—						580
<620			12						28						35						58						50						185						—			—						368
No FICO available(1)			1						2						1						5						1						14						—			—						24
Total residential mortgages			6,512						3,493						1,278						1,947						2,770						3,539						—			—						19,539
Home equity
800+			2						8						10						7						5						216						4,319			344						4,911
740-799			2						6						7						6						5						180						3,234			331						3,771
680-739			1						6						10						15						8						179						1,632			284						2,135
620-679			—						10						18						21						14						136						402			195						796
<620			1						17						30						29						18						122						105			214						536
Total home equity			6						47						75						78						50						833						9,692			1,368						12,149
Automobile
800+			1,056						812						424						312						169						62						—			—						2,835
740-799			1,514						1,022						531						344						172						59						—			—						3,642
680-739			1,347						889						461						282						138						47						—			—						3,164
620-679			669						484						259						157						84						32						—			—						1,685
<620			140						242						189						137						79						34						—			—						821
No FICO available(1)			2						—						—						—						—						4						—			—						6
Total automobile			4,728						3,449						1,864						1,232						642						238						—			—						12,153
Education
800+			1,817						1,363						849						781						578						777						—			—						6,165
740-799			1,797						1,009						541						387						251						423						—			—						4,408
680-739			450						294						173						127						90						221						—			—						1,355
620-679			26						35						33						28						25						95						—			—						242
<620			2						5						10						10						8						41						—			—						76
No FICO available(1)			2						—						—						—						—						60						—			—						62
Total education			4,094						2,706						1,606						1,333						952						1,617						—			—						12,308
Other retail
800+			461						380						163						77						15						44						341			—						1,481
740-799			620						460						184						81						19						31						638			2						2,035
680-739			495						302						111						48						10						13						561			5						1,545
620-679			248						104						37						14						3						5						174			7						592
<620			24						30						17						6						1						3						77			8						166
No FICO available(1)			54						1						—						—						—						—						272			2						329
Total other retail			1,902						1,277						512						226						48						96						2,063			24						6,148
Total retail
800+			6,023						4,448						2,084						2,306						2,382						2,854						4,660			344						25,101
740-799			6,864						3,630						1,661						1,345						1,190						1,597						3,872			333						20,492
680-739			3,077						1,842						917						644						541						918						2,193			289						10,421
620-679			1,040						727						391						276						192						491						576			202						3,895
<620			179						322						281						240						156						385						182			222						1,967
No FICO available(1)			59						3						1						5						1						78						272			2						421
Total retail			$17,242						$10,972						$5,335						$4,816						$4,462						$6,323						$11,755			$1,392						$62,297

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

Citizens Financial Group, Inc. | 67

Nonaccrual and Past Due Assets

The following table presents nonaccrual loans and leases and loans accruing and 90 days or more past due:

			As of September 30, 2021												As of December 31, 2020
(in millions)			Nonaccrual loans and leases			90+ days past due and accruing			Nonaccrual with no related ACL						Nonaccrual loans and leases			90+ days past due and accruing			Nonaccrual with no related ACL
Commercial and industrial			$170			$4			$61						$280			$20			$56
Commercial real estate			98			—			1						176			—			2
Leases			1			—			—						2			1			—
Total commercial			269			4			62						458			21			58
Residential mortgages(1)			164			293			142						167			30			96
Home equity			216			—			188						276			—			207
Automobile			55			—			29						72			—			17
Education			23			1			2						18			2			2
Other retail			20			14			2						28			9			—
Total retail			478			308			363						561			41			322
Total loans and leases			$747			$312			$425						$1,019			$62			$380

(1) 90+ days past due and accruing includes $289 million and $21 million of loans fully or partially guaranteed by the FHA, VA, and USDA for September 30, 2021 and December 31, 2020, respectively.

Interest income is generally not recognized for loans and leases that are on nonaccrual status. The Company reverses accrued interest receivable with a charge to interest income upon classifying the loan or lease as nonaccrual.

The following table presents an analysis of the age of both accruing and nonaccrual loan and lease past due amounts:

			September 30, 2021																		December 31, 2020
			Days Past Due																		Days Past Due
(in millions)			Current-29			30-59			60-89			90+			Total						Current-29			30-59			60-89			90+			Total
Commercial and industrial			$41,783			$25			$3			$43			$41,854						$43,817			$223			$16			$117			$44,173
Commercial real estate			14,402			3			5			98			14,508						14,531			1			85			35			14,652
Leases			1,591			—			1			1			1,593						1,956			9			—			3			1,968
Total commercial			57,776			28			9			142			57,955						60,304			233			101			155			60,793
Residential mortgages(1)			20,861			155			57			440			21,513						19,291			59			21			168			19,539
Home equity			11,654			35			16			184			11,889						11,848			61			28			212			12,149
Automobile			13,318			117			42			15			13,492						11,901			170			65			17			12,153
Education			12,941			33			14			12			13,000						12,255			33			13			7			12,308
Other retail			5,371			39			28			31			5,469						6,047			38			29			34			6,148
Total retail			64,145			379			157			682			65,363						61,342			361			156			438			62,297
Total			$121,921			$407			$166			$824			$123,318						$121,646			$594			$257			$593			$123,090

(1) 90+ days past due includes $289 million and $44 million of loans fully or partially guaranteed by the FHA, VA, and USDA at September 30, 2021 and December 31, 2020, respectively.

At September 30, 2021 and December 31, 2020, the Company had collateral-dependent residential mortgage and home equity loans totaling $543 million and $552 million, respectively. At September 30, 2021 and December 31, 2020, the Company had collateral-dependent commercial loans totaling $42 million and $206 million, respectively.

The amortized cost basis of mortgage loans collateralized by residential real estate for which formal foreclosure proceedings were in process was $150 million and $119 million as of September 30, 2021 and December 31, 2020, respectively.

Citizens Financial Group, Inc. | 68

Troubled Debt Restructurings

The following tables summarize loans modified during the three and nine months ended September 30, 2021 and 2020. The balances represent the post-modification outstanding amortized cost basis and may include loans that became TDRs during the period and were subsequently paid off in full, charged off, or sold prior to period end. Pre-modification balances for modified loans approximate the post-modification balances shown.

									Three Months Ended September 30, 2021
									Amortized Cost Basis
(dollars in millions)			Number of Contracts									Interest Rate Reduction**(1)**						Maturity Extension**(2)**									Other**(3)**						Total
Commercial and industrial			7									$—									$38									$10						$48
Total commercial			7									—									38									10						48
Residential mortgages			101									2									7									7						16
Home equity			69									—									1									3						4
Automobile			224									—									—									1						1
Education			226									—									—									8						8
Other retail			549									3									—									1						4
Total retail			1,169									5									8									20						33
Total			1,176									$5									$46									$30						$81

												Three Months Ended September 30, 2020
												Amortized Cost Basis
(dollars in millions)			Number of Contracts									Interest Rate Reduction**(1)**									Maturity Extension**(2)**									Other**(3)**						Total
Commercial and industrial			14									$—									$103									$1						$104
Total commercial			14									—									103									1						104
Residential mortgages			107									9									6									4						19
Home equity			179									2									4									6						12
Automobile			1,191									1									—									18						19
Education			140									—									—									3						3
Other retail			484									1									—									—						1
Total retail			2,101									13									10									31						54
Total			2,115									$13									$113									$32						$158

												Nine Months Ended September 30, 2021
												Amortized Cost Basis
(dollars in millions)			Number of Contracts									Interest Rate Reduction**(1)**									Maturity Extension**(2)**									Other**(3)**						Total
Commercial and industrial			29									$—									$44									$64						$108
Total commercial			29									—									44									64						108
Residential mortgages			814									14									133									54						201
Home equity			318									3									9									10						22
Automobile			1,272									1									—									14						15
Education			638									—									—									21						21
Other retail			1,764									7									—									2						9
Total retail			4,806									25									142									101						268
Total			4,835									$25									$186									$165						$376

Citizens Financial Group, Inc. | 69

												Nine Months Ended September 30, 2020
												Amortized Cost Basis
(dollars in millions)			Number of Contracts									Interest Rate Reduction**(1)**									Maturity Extension**(2)**									Other**(3)**						Total
Commercial and industrial			52									$—									$106									$95						$201
Total commercial			52									—									106									95						201
Residential mortgages			348									26									27									11						64
Home equity			568									8									8									21						37
Automobile			2,368									2									—									35						37
Education			373									—									—									9						9
Other retail			2,167									8									—									2						10
Total retail			5,824									44									35									78						157
Total			5,876									$44									$141									$173						$358

(1) Includes modifications that consist of multiple concessions, one of which is an interest rate reduction.

(2) Includes modifications that consist of multiple concessions, one of which is a maturity extension (unless one of the other concessions was an interest rate reduction).

(3) Includes modifications other than interest rate reductions or maturity extensions, such as lowering scheduled payments for a specified period of time, principal forgiveness, and capitalizing arrearages. Also included are the following: deferrals, trial modifications, certain bankruptcies, loans in forbearance and prepayment plans. Modifications can include the deferral of accrued interest resulting in post-modification balances being higher than pre-modification.

Modified TDRs resulted in charge-offs of $1 million and $43 million for the three months ended September 30, 2021 and 2020, respectively. Citizens recorded $5 million and $49 million of charge-offs related to TDRs for the nine months ended September 30, 2021 and 2020, respectively.

Unfunded commitments related to TDRs were $51 million and $49 million at September 30, 2021 and December 31, 2020, respectively.

The following table provides a summary of TDRs that defaulted (became 90 days or more past due) within 12 months of their modification date:

			Three Months Ended September 30,																								Nine Months Ended September 30,
(dollars in millions)			2021						2020																		2021						2020
Commercial TDRs			$—						$14																		$23						$53
Retail TDRs(1)			37						22																		66						47
Total			$37						$36																		$89						$100

(1) Includes $34 million and $6 million of loans fully or partially government guaranteed by the FHA, VA, and USDA for the three months ended September 30, 2021 and 2020, respectively and $37 million and $14 million of loans fully or partially government guaranteed by the FHA, VA, and USDA for the nine months ended September 30, 2021 and 2020, respectively.

Concentrations of Credit Risk

Most of the Company’s lending activity is with customers located in the New England, Mid-Atlantic, and Midwest regions. Generally, loans are collateralized by assets including real estate, inventory, accounts receivable, other personal property, and investment securities. As of September 30, 2021 and December 31, 2020, Citizens had a significant amount of loans collateralized by residential and commercial real estate. There were no significant concentration risks within the commercial loan or retail loan portfolios. Exposure to credit losses arising from lending transactions may fluctuate with fair values of collateral supporting loans, which may not perform according to contractual agreements. The Company’s policy is to collateralize loans to the extent necessary. However, based on the financial strength of the applicant and facts Citizens will grant unsecured loans.

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Certain loan products, including residential mortgages, home equity loans and lines of credit, and credit cards, have contractual features that may increase credit exposure to the Company in the event of an increase in interest rates or a decline in housing values. These products include loans that exceed 90% of the value of the underlying collateral (high LTV loans), interest-only residential mortgages, and loans with low introductory rates. The following tables present balances of loans with these characteristics:

			September 30, 2021
(in millions)			Residential Mortgages									Home Equity			Other Retail			Education			Total
High loan-to-value			$179									$18			$—			$—			$197
Interest-only			3,317									—			—			1			3,318
Low introductory rate			—									—			156			—			156
Multiple characteristics and other			2									—			—			—			2
Total			$3,498									$18			$156			$1			$3,673

			December 31, 2020
(in millions)			Residential Mortgages									Home Equity			Other Retail						Total
High loan-to-value			$289									$64			$—						$353
Interest-only			2,801									—			—						2,801
Low introductory rate			—									—			170						170
Total			$3,090									$64			$170						$3,324

NOTE 5 - MORTGAGE BANKING AND OTHER

The Company sells residential mortgages to GSEs and other parties, who may issue securities backed by pools of such loans. The Company retains no beneficial interests 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.

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

			Three Months Ended September 30,												Nine Months Ended September 30,
(in millions)			2021						2020						2021						2020
Cash proceeds from residential mortgage loans sold with servicing retained			$9,024						$9,504						$28,601						$23,668
Repurchased residential mortgages			114						—						1,283						—
Gain on sales(1)			96						273						321						699
Contractually specified servicing, late and other ancillary fees(1)			63						56						181						169

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

The unpaid principal balance of residential mortgage loans related to our MSR was $87.4 billion and $81.2 billion at September 30, 2021 and December 31, 2020, respectively. The Company manages an active hedging strategy to manage the risk associated with changes in the value of the MSR portfolio, which includes the purchase of freestanding derivatives.

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

			As of and for the Three Months Ended September 30,												As of and for the Nine Months Ended September 30,
(in millions)			2021						2020						2021						2020
Fair value as of beginning of the period			$902						$568						$658						$642
Transfers upon election of fair value method(1)			—						—						—						190
Fair value as of beginning of the period, adjusted			902						568						658						832
Amounts capitalized			109						85						318						238
Changes in unpaid principal balance during the period(2)			(54)						(55)						(159)						(141)
Changes in fair value during the period(3)			21						8						161						(323)
Fair value at end of the period			$978						$606						$978						$606

(1) Effective January 1, 2020, the Company elected to account for all MSRs previously accounted for under the amortization method under the fair value method.

(2) Represents changes in value of the MSRs due to i) 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 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, which are 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 to current fair value of an immediate 50 basis point and 100 basis point adverse change in key economic assumptions and the decline in fair value if the respective adverse change was realized. 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. In reality, changes in one factor may result in changes in another (e.g., changes in interest rates, which drive changes in prepayment rates, could result in changes in the discount rates), which 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.

			September 30, 2021												December 31, 2020
			Actual			Decline in fair value due to									Actual			Decline in fair value due to
(dollars in millions)
Fair value			$978			50 bps adverse change			100 bps adverse change						$658			50 bps adverse change			100 bps adverse change
Weighted average life (in years)			6.0						4.2
Weighted average constant prepayment rate(1)			11.3%			$125			$275						17.3%			$122			$202
Weighted average option adjusted spread			582 bps			20			39						595 bps			12			24

(1) Estimated adverse change for the weighted average constant prepayment rate based on an adverse change in market interest rates.

Other Serviced Loans

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

(in millions)			September 30, 2021						December 31, 2020
Education			$809						$974
Commercial(1)			67						51

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

Citizens Financial Group, Inc. | 72

NOTE 6 - VARIABLE INTEREST ENTITIES

Citizens is involved in various entities that are considered VIEs, including investments in limited partnerships that sponsor affordable housing projects, limited liability companies that sponsor renewable energy projects or asset-backed securities, and lending to special purpose entities. Citizens’ maximum exposure to loss as a result of its involvement with these entities is limited to the balance sheet carrying amount of its investment in equity and asset-backed securities, unfunded commitments, and outstanding principal balance of loans to special purpose entities. The Company does not consolidate any of its investments in these entities. These investments are included in other assets in the Consolidated Balance Sheets. For more details see Note 10 in the 2020 Form 10-K.

A summary of these investments is presented below:

(in millions)			September 30, 2021						December 31, 2020
Lending to special purpose entities included in loans and leases			$1,849						$1,295
LIHTC investment included in other assets			1,899						1,687
LIHTC unfunded commitments included in other liabilities			910						875
Investment in asset-backed securities included in HTM securities			789						893
Renewable energy investments included in other assets			441						403

Lending to Special Purpose Entities

Citizens provides lending facilities to third-party sponsored special purpose entities. As of September 30, 2021 and December 31, 2020, the lending facilities had aggregate unpaid principal balances of $1.8 billion and $1.3 billion, respectively, and undrawn commitments to extend credit of $2.2 billion and $1.5 billion, respectively.

Low Income Housing Tax Credit Partnerships

The purpose of the Company’s equity investments is to assist in achieving the goals of the Community Reinvestment Act and to earn an adequate return of capital.

The following table presents other information related to the Company’s affordable housing tax credit investments:

			Three Months Ended September 30,												Nine Months Ended September 30,
(in millions)			2021						2020						2021						2020
Tax credits included in income tax expense			$48						$40						$150						$120
Other tax benefits included in income tax expense			11						10						36						30
Total tax benefits included in income tax expense			59						50						186						150
Less: Amortization included in income tax expense			50						42						156						127
Net benefit from affordable housing tax credit investments included in income tax expense			$9						$8						$30						$23

No LIHTC investment impairment losses were recognized in the three and nine months ended September 30, 2021 and 2020, respectively.

NOTE 7 - BORROWED FUNDS

Short-term borrowed funds

Short-term borrowed funds were $8 million and $243 million as of September 30, 2021 and December 31, 2020, respectively.

Citizens Financial Group, Inc. | 73

Long-term borrowed funds

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

(in millions)			September 30, 2021						December 31, 2020
Parent Company:
2.375% fixed-rate senior unsecured debt, due July 2021(1)			$—						$350
4.150% fixed-rate subordinated debt, due September 2022(2)			168						182
3.750% fixed-rate subordinated debt, due July 2024(2)			90						159
4.023% fixed-rate subordinated debt, due October 2024(2)			17						25
4.350% fixed-rate subordinated debt, due August 2025(2)			133						193
4.300% fixed-rate subordinated debt, due December 2025(2)			336						450
2.850% fixed-rate senior unsecured notes, due July 2026			497						497
2.500% fixed-rate senior unsecured notes, due February 2030			298						297
3.250% fixed-rate senior unsecured notes, due April 2030			745						745
3.750% fixed-rate reset subordinated debt, due February 2031(2)			69						—
4.300% fixed-rate reset subordinated debt, due February 2031(2)			135						—
4.350% fixed-rate reset subordinated debt, due February 2031(2)			61						—
2.638% fixed-rate subordinated debt, due September 2032			548						543
CBNA’s Global Note Program:
2.550% senior unsecured notes, due May 2021			—						1,003
3.250% senior unsecured notes, due February 2022			704						716
0.845% floating-rate senior unsecured notes, due February 2022(3)			300						299
0.932% floating-rate senior unsecured notes, due May 2022(3)			250						250
2.650% senior unsecured notes, due May 2022			505						510
3.700% senior unsecured notes, due March 2023			517						527
1.082% floating-rate senior unsecured notes, due March 2023(3)			250						249
2.250% senior unsecured notes, due April 2025			746						746
3.750% senior unsecured notes, due February 2026			533						551
Additional Borrowings by CBNA and Other Subsidiaries:
Federal Home Loan Bank advances, 0.864% weighted average rate, due through 2041			19						19
Other			26						35
Total long-term borrowed funds			$6,947						$8,346

(1) Notes were redeemed on June 28, 2021.

(2) September 30, 2021 balances reflect the February 2021 completion of $265 million in private exchange offers for five series of outstanding subordinated notes whereby participants received newly issued 3.750%, 4.300%, and 4.350% fixed-rate reset subordinated notes due 2031 which are redeemable by the Company five years prior to their maturity.

(3) Rate disclosed reflects the floating rate as of September 30, 2021.

The Parent Company’s long-term borrowed funds as of September 30, 2021 and December 31, 2020 included principal balances of $3.2 billion and $3.5 billion, respectively, and unamortized deferred issuance costs and/or discounts of $82 million and $90 million, respectively. CBNA and other subsidiaries’ long-term borrowed funds as of September 30, 2021 and December 31, 2020 included principal balances of $3.8 billion and $4.8 billion, respectively, with unamortized deferred issuance costs and/or discounts of $8 million and $11 million, respectively, and hedging basis adjustments of $63 million and $112 million, respectively. See Note 8 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 at least sufficient to satisfy the collateral maintenance level established by the FHLB. The utilized borrowing capacity for FHLB advances and letters of credit was $2.2 billion and $3.2 billion at September 30, 2021 and December 31, 2020, respectively. The Company’s available FHLB borrowing capacity was $15.1 billion and $13.9 billion at September 30, 2021 and December 31, 2020, respectively. Citizens 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 September 30, 2021, the Company’s unused secured borrowing capacity was approximately $63.6 billion, which includes unencumbered securities, FHLB borrowing capacity, and FRB discount window capacity.

Citizens Financial Group, Inc. | 74

The following table presents a summary of maturities for the Company’s long-term borrowed funds at September 30, 2021:

(in millions)			Parent Company			CBNA and Other Subsidiaries			Consolidated
Year
2021			$—			$4			$4
2022			168			1,765			1,933
2023			—			768			768
2024			107			—			107
2025			469			760			1,229
2026 and thereafter			2,353			553			2,906
Total			$3,097			$3,850			$6,947

NOTE 8 - DERIVATIVES

In the normal course of business, Citizens enters into a variety of derivative transactions to meet the financing needs of its customers and to 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 sale contracts and purchase options. The Company does not use derivatives for speculative purposes. Information regarding the valuation methodology and inputs used to estimate the fair value of the Company’s derivative instruments is described in Note 19 in the Company’s 2020 Form 10-K.

The following table presents derivative instruments included in the Consolidated Balance Sheets:

			September 30, 2021												December 31, 2020
(in millions)			Notional Amount**(1)**			Derivative Assets			Derivative Liabilities						Notional Amount**(1)**			Derivative Assets			Derivative Liabilities
Derivatives designated as hedging instruments:
Interest rate contracts			$23,450			$18			$2						$22,300			$1			$3
Derivatives not designated as hedging instruments:
Interest rate contracts			142,109			912			167						149,021			1,565			214
Foreign exchange contracts			16,342			249			205						16,789			320			291
Commodities contracts			539			822			822						246			62			61
TBA contracts			9,284			44			9						11,149			8			65
Other contracts			5,604			53			—						8,051			197			—
Total derivatives not designated as hedging instruments						2,080			1,203									2,152			631
Gross derivative fair values						2,098			1,205									2,153			634
Less: Gross amounts offset in the Consolidated Balance Sheets(2)						(233)			(233)									(182)			(182)
Less: Cash collateral applied(2)						(96)			(785)									(56)			(324)
Total net derivative fair values presented in the Consolidated Balance Sheets						$1,769			$187									$1,915			$128

(1) The notional or contractual amount of interest rate derivatives and foreign exchange contracts is the amount upon which interest and other payments under the contract are based. For interest rate contracts, the notional amount is typically not exchanged. Therefore, notional amounts should not be taken as the measure of credit or market risk, as they do not measure the true economic risk of these contracts.

(2) 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.

The Company’s derivative transactions are internally divided into three sub-groups: institutional, customer 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. The Company formally documents at inception all hedging relationships, as well as risk management objectives and strategies for undertaking various accounting

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hedges. Additionally, the Company monitors the effectiveness of its hedge relationships during the duration of the hedge period. The methods utilized to assess hedge effectiveness vary based on hedge relationship and the Company monitors each relationship to ensure that management’s initial intent continues to be satisfied. The Company discontinues hedge accounting treatment when it is determined that a derivative is not expected to be, or has ceased to be, effective as a hedge and subsequently reflects changes in the fair value of the derivative in earnings after termination of the hedge relationship.

Fair Value Hedges

Citizens has outstanding interest rate swap agreements utilized to manage the interest rate exposure on its long-term borrowings and AFS debt securities. Certain fair value hedges have been designated as a last-of-layer hedge, which affords the Company the ability to execute a fair value hedge of the interest rate risk associated with a portfolio of similar prepayable assets whereby the last dollar amount estimated to remain in the portfolio of assets is identified as the hedged item.

The following table presents the change in fair value of interest rate contracts designated as fair value hedges, as well as the change in fair value of the related hedged items attributable to the risk being hedged, included in the Consolidated Statements of Operations:

			Three Months Ended September 30,												Nine Months Ended September 30,
(in millions)			2021						2020						2021						2020			Affected Line Item in the Consolidated Statements of Operations
Interest rate swaps hedging borrowed funds			($13)						($16)						($51)						$82			Interest expense - long-term borrowed funds
Hedged long-term debt attributable to the risk being hedged			13						17						50						(78)			Interest expense - long-term borrowed funds
Interest rate swaps hedging fixed rate loans			—						—						—						17			Interest and fees on loans and leases
Hedged fixed rate loans attributable to the risk being hedged			—						—						—						(17)			Interest and fees on loans and leases
Interest rate swaps hedging debt securities available for sale			7						7						39						(114)			Interest income - investment securities
Hedged debt securities available for sale attributable to risk being hedged			(7)						(7)						(39)						114			Interest income - investment securities

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

			September 30, 2021									December 31, 2020
(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			$7,287			$—						$10,869			$—
Carrying amount of hedged liabilities			—			2,259						—			3,307
Cumulative amount of fair value hedging adjustments included in the carrying amount of the hedged items			57			63						96			112

(1) The Company designated $2.0 billion as the hedged amount (from a closed portfolio of prepayable financial assets with an amortized cost basis of $7.3 billion and $10.9 billion as of September 30, 2021 and December 31, 2020, respectively) in a last-of-layer hedging relationship, which commenced in the third quarter of 2019.

Cash Flow Hedges

Citizens has outstanding interest rate swap agreements designed to hedge a portion of the Company’s floating-rate assets, and liabilities. All of these swaps have been deemed highly effective cash flow hedges. During the next 12 months, there are $76 million in pre-tax net gains on derivative instruments included in OCI expected to be reclassified to net interest income in the Consolidated Statements of Operations. This amount could differ from amounts actually recognized due to changes in interest rates, hedge de-designations, and the addition of other hedges subsequent to September 30, 2021.

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 relating to derivative instruments designated as cash flow hedges:

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			Three Months Ended September 30,												Nine Months Ended September 30,
(in millions)			2021						2020						2021						2020
Amount of pre-tax net gains (losses) recognized in OCI			($15)						$—						$19						$118
Amount of pre-tax net gains (losses) reclassified from OCI into interest income			46						68						141						128
Amount of pre-tax net gains (losses) reclassified from OCI into interest expense			(13)						(11)						(37)						(22)

Derivatives Not Designated As Hedging Instruments

Economic Hedges

The Company’s economic hedges include those related to offsetting customer derivatives, residential mortgage loan derivatives (including interest rate lock commitments and forward sales commitments) and derivatives to hedge its residential MSR portfolio. Customer derivatives include interest rate, foreign exchange and commodity derivative contracts designed to meet the hedging and financing needs of the Company’s customers, and are economically hedged by the Company to offset its market exposure. Interest rate lock commitments on residential mortgage loans that will be held for sale are considered derivative instruments, and are economically hedged by entering into forward sale commitments to manage changes in fair value due to interest rate risk. Residential MSR portfolio derivatives are entered to hedge the risk of changes in the fair value of the Company’s MSRs.

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

			Amounts Recognized in Noninterest Income for the
			Three Months Ended September 30,												Nine Months Ended September 30,									Affected Line Item in the Consolidated Statements of Operations
(in millions)			2021						2020						2021						2020
Economic hedge type:
Customer interest rate contracts			($10)						$7						($225)						$1,276			Foreign exchange and interest rate products
Derivatives hedging interest rate risk			17						1						244						(1,245)			Foreign exchange and interest rate products
Customer foreign exchange contracts			(61)						80						(158)						73			Foreign exchange and interest rate products
Derivatives hedging foreign exchange risk			95						(126)						234						(77)			Foreign exchange and interest rate products
Customer commodity contracts			468						26						881						(30)			Foreign exchange and interest rate products
Derivatives hedging commodity price risk			(465)						(25)						(874)						32			Foreign exchange and interest rate products
Residential loan commitments			(13)						36						(184)						190			Mortgage banking fees
Derivatives hedging residential loan commitments and mortgage loans held for sale, at fair value			4						6						138						(13)			Mortgage banking fees
Derivative contracts used to hedge residential MSRs			(20)						2						(149)						335			Mortgage banking fees
Total			$15						$7						($93)						$541

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NOTE 9 - ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following table presents the changes in the balances, net of income taxes, of each component of AOCI:

						As of and for the Three Months Ended September 30,
(in millions)						Net Unrealized Gains (Losses) on Derivatives						Net Unrealized Gains (Losses) on Debt Securities						Employee Benefit Plans						Total AOCI
Balance at July 1, 2020						$54						$448						($408)						$94
Other comprehensive income (loss) before reclassifications						—						(44)						—						(44)
Amounts reclassified to the Consolidated Statements of Operations						(42)						(1)						3						(40)
Net other comprehensive income (loss)						(42)						(45)						3						(84)
Balance at September 30, 2020						$12						$403						($405)						$10
Balance at July 1, 2021						($38)						$78						($421)						($381)
Other comprehensive income (loss) before reclassifications						(11)						(109)						—						(120)
Amounts reclassified to the Consolidated Statements of Operations						(25)						(2)						20						(7)
Net other comprehensive income (loss)						(36)						(111)						20						(127)
Balance at September 30, 2021						($74)						($33)						($401)						($508)
Primary location of amounts reclassified to the Consolidated Statements of Operations						Net interest income						Securities gains, net						Other operating expense

						As of and for the Nine Months Ended September 30,
(in millions)						Net Unrealized Gains (Losses) on Derivatives						Net Unrealized Gains (Losses) on Debt Securities						Employee Benefit Plans						Total AOCI
Balance at January 1, 2020						$3						$1						($415)						($411)
Other comprehensive income (loss) before reclassifications						88						405						—						493
Amounts reclassified to the Consolidated Statements of Operations						(79)						(3)						10						(72)
Net other comprehensive income (loss)						9						402						10						421
Balance at September 30, 2020						$12						$403						($405)						$10
Balance at January 1, 2021						($11)						$380						($429)						($60)
Other comprehensive income (loss) before reclassifications						14						(406)						—						(392)
Amounts reclassified to the Consolidated Statements of Operations						(77)						(7)						28						(56)
Net other comprehensive income (loss)						(63)						(413)						28						(448)
Balance at September 30, 2021						($74)						($33)						($401)						($508)
Primary location of amounts reclassified to the Consolidated Statements of Operations						Net interest income						Securities gains, net						Other operating expense

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NOTE 10 - STOCKHOLDERS’ EQUITY

Preferred Stock

The following table summarizes the Company’s preferred stock:

									September 30, 2021												December 31, 2020
(in millions, except per share and 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 A			$1,000						—						$—						250,000						$247
Series B			1,000						300,000						296						300,000						296
Series C			1,000						300,000						297						300,000						297
Series D			1,000			(1)			300,000			(2)			293						300,000						293
Series E			1,000			(1)			450,000			(3)			437						450,000						437
Series F			1,000						400,000						395						400,000						395
Series G			1,000						300,000						296						—						—
Total									2,050,000						$2,014						2,000,000						$1,965

(1) Equivalent to $25 per depositary share.

(2) Represented by 12,000,000 depositary shares each representing a 1/40th interest in the Series D Preferred Stock.

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

On July 6, 2021, the Company redeemed all outstanding shares of the 5.500% fixed-to-floating rate non-cumulative perpetual Series A Preferred Stock.

On June 11, 2021, the Company issued $300 million, or 300,000 shares, of 4.000% fixed-rate reset non-cumulative perpetual Series G Preferred Stock, par value of $25.00 per share with a liquidation preference of $1,000 per share (the “Series G Preferred Stock”). For further detail regarding the terms and conditions of the Company’s Series G Preferred Stock, see Note 10 to the Company’s Consolidated Financial Statements in the Form 10-Q for the period ended June 30, 2021.

For further detail regarding the terms and conditions of the Company’s preferred stock, see Note 16 to the Company’s Consolidated Financial Statements in the 2020 Form 10-K.

Dividends

						Three Months Ended September 30, 2021												Three Months Ended September 30, 2020
(in millions, except per share data)						Dividends Declared per Share			Dividends Declared			Dividends Paid						Dividends Declared per Share			Dividends Declared			Dividends Paid
Common stock						$0.39			$167			$167						$0.39			$168			$168
Preferred stock
Series A						$—			$—			$3						$10.90			$3			$3
Series B						—			—			9						—			—			9
Series C						15.94			5			5						15.94			4			5
Series D						15.88			5			4						15.88			4			5
Series E						12.50			6			6						12.50			6			6
Series F						14.13			6			6						19.15			8			—
Series G						12.78			4			—						—			—			—
Total preferred stock									$26			$33									$25			$28

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						Nine Months Ended September 30, 2021												Nine Months Ended September 30, 2020
(in millions, except per share data)						Dividends Declared per Share			Dividends Declared			Dividends Paid						Dividends Declared per Share			Dividends Declared			Dividends Paid
Common stock						$1.17			$502			$502						$1.17			$504			$504
Preferred stock
Series A						$20.99			$5			$8						$51.88			$13			$10
Series B						30.00			9			18						30.00			9			18
Series C						47.81			15			15						47.81			14			15
Series D						47.63			14			13						47.63			14			15
Series E						37.50			17			17						37.50			17			15
Series F						42.38			17			17						19.15			8			—
Series G						12.78			4			—						—			—			—
Total preferred stock									$81			$88									$75			$73

Treasury Stock

During the nine months ended September 30, 2021, the Company repurchased $95 million, or 2,244,924 shares, of its outstanding common stock, which are held in treasury stock.

NOTE 11 - COMMITMENTS AND CONTINGENCIES

A summary of outstanding off-balance sheet arrangements is presented below. For more information on these arrangements, see Note 18 in the Company’s 2020 Form 10-K.

(in millions)			September 30, 2021						December 31, 2020
Commitments to extend credit			$80,629						$74,160
Letters of credit			1,939						2,239
Risk participation agreements			57						98
Loans sold with recourse			70						54
Marketing rights			26						29
Total			$82,721						$76,580

Commitments to Extend Credit

Commitments to extend credit are agreements to lend to customers in accordance with conditions contractually agreed upon in advance. Generally, the commitments 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.

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 (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. Generally, letters of credit are collateralized by cash, accounts receivable, inventory or investment securities. Credit risk associated with letters of credit is considered in determining the appropriate amounts of allowances for unfunded commitments. Standby letters of credit and commercial letters of credit are issued for terms of up to ten years and one year, respectively.

Other Commitments

Citizens has additional off-balance sheet arrangements that are summarized below:

• Marketing Rights - During 2003, Citizens entered into a 25-year agreement to acquire the naming and marketing rights of a baseball stadium in Pennsylvania.

• Loans sold with recourse - Citizens 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,

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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 September 30, 2021, the remaining terms on these RPAs ranged from less than one year to eight 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, mortgage-related issues, and mis-selling of certain products. 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 finally 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 materially adverse effect on the Company’s unaudited interim Consolidated Financial Statements.

NOTE 12 - FAIR VALUE MEASUREMENTS

Citizens 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. Additionally, fair value is 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. Citizens also applies the fair value measurement guidance to determine amounts reported for certain disclosures in this Note for assets and liabilities that are not required to be reported at fair value in the financial statements.

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Fair Value Option

Citizens elected to account for residential mortgage LHFS and certain commercial and industrial, and commercial real estate LHFS at fair value. The following table presents the difference between the aggregate fair value and the aggregate unpaid principal balance of LHFS measured at fair value:

			September 30, 2021												December 31, 2020
(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, at fair value			$3,104			$3,029			$75						$3,416			$3,260			$156
Commercial and industrial, and commercial real estate loans held for sale, at fair value			73			75			(2)						148			153			(5)

For more information on the election of the fair value option for these assets see Note 19 in the Company’s 2020 Form 10-K.

Recurring Fair Value Measurements

Citizens utilizes a variety of valuation techniques to measure its assets and liabilities at fair value on a recurring basis. For more information on the valuation techniques utilized to measure recurring fair value see Note 19 in the Company’s 2020 Form 10-K.

Collateralized Loan Obligations

The fair value of CLOs is estimated using observable inputs, including prices of similar securities that trade in the market. The Company classifies these securities in Level 2 of the fair value hierarchy using these observable inputs.

Derivatives - Commodities Contracts

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

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The following table presents assets and liabilities measured at fair value, including gross derivative assets and liabilities, on a recurring basis at September 30, 2021:

(in millions)			Total			Level 1			Level 2			Level 3
Debt securities available for sale:
Mortgage-backed securities			$24,131			$—			$24,131			$—
Collateralized loan obligations			767			—			767			—
State and political subdivisions			2			—			2			—
U.S. Treasury and other			11			11			—			—
Total debt securities available for sale			24,911			11			24,900			—
Loans held for sale, at fair value:
Residential loans held for sale			3,104			—			3,104			—
Commercial loans held for sale			73			—			73			—
Total loans held for sale, at fair value			3,177			—			3,177			—
Mortgage servicing rights			978			—			—			978
Derivative assets:
Interest rate contracts			930			—			930			—
Foreign exchange contracts			249			—			249			—
Commodities contracts			822			—			822			—
TBA contracts			44			—			44			—
Other contracts			53			—			—			53
Total derivative assets			2,098			—			2,045			53
Equity securities, at fair value			88			88			—			—
Total assets			$31,252			$99			$30,122			$1,031
Derivative liabilities:
Interest rate contracts			$169			$—			$169			$—
Foreign exchange contracts			205			—			205			—
Commodities contracts			822			—			822			—
TBA contracts			9			—			9			—
Total derivative liabilities			1,205			—			1,205			—
Total liabilities			$1,205			$—			$1,205			$—

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The following table presents assets and liabilities measured at fair value, including gross derivative assets and liabilities, on a recurring basis at December 31, 2020:

(in millions)			Total			Level 1			Level 2			Level 3
Debt securities available for sale:
Mortgage-backed securities			$22,928			$—			$22,928			$—
State and political subdivisions			3			—			3			—
U.S. Treasury and other			11			11			—			—
Total debt securities available for sale			22,942			11			22,931			—
Loans held for sale, at fair value:
Residential loans held for sale			3,416			—			3,416			—
Commercial loans held for sale			148			—			148			—
Total loans held for sale, at fair value			3,564			—			3,564			—
Mortgage servicing rights			658			—			—			658
Derivative assets:
Interest rate contracts			1,566			—			1,566			—
Foreign exchange contracts			320			—			320			—
Commodities contracts			62			—			62			—
TBA contracts			8			—			8			—
Other contracts			197			—			—			197
Total derivative assets			2,153			—			1,956			197
Equity securities, at fair value			66			66			—			—
Total assets			$29,383			$77			$28,451			$855
Derivative liabilities:
Interest rate contracts			$217			$—			$217			$—
Foreign exchange contracts			291			—			291			—
Commodities contracts			61			—			61			—
TBA contracts			65			—			65			—
Total derivative liabilities			634			—			634			—
Total liabilities			$634			$—			$634			$—

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The following tables present a roll forward of the balance sheet amounts for assets measured at fair value on a recurring basis and classified as Level 3:

			Three Months Ended September 30, 2021									Nine Months Ended September 30, 2021
(in millions)			Mortgage Servicing Rights						Other Derivative Contracts						Mortgage Servicing Rights						Other Derivative Contracts
Beginning balance			$902						$89						$658						$197
Issuances			109						81						318						323
Settlements(2)			(54)						(104)						(159)						(283)
Changes in fair value during the period recognized in earnings(3)			21						(13)						161						(184)
Ending balance			$978						$53						$978						$53

			Three Months Ended September 30, 2020												Nine Months Ended September 30, 2020
(in millions)			Mortgage Servicing Rights			Asset-Backed Securities			Other Derivative Contracts						Mortgage Servicing Rights			Asset-Backed Securities			Other Derivative Contracts
Beginning balance			$568			$—			$173						$642			$—			$19
Transfers upon election of fair value method(1)			—			—			—						190			—			—
Beginning balance, adjusted			568			—			173						832			—			19
Purchases			—			813			—						—			813			—
Issuances			85			—			283						238			—			688
Settlements(2)			(55)			—			(372)						(141)			—			(792)
Changes in fair value during the period recognized in earnings(3)			8			—			125						(323)			—			294
Ending balance			$606			$813			$209						$606			$813			$209

(1) Effective January 1, 2020, the Company elected to account for all MSRs previously accounted for under the amortization method under the fair value method.

(2) Represents changes in value of the MSRs due to i) 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 value primarily driven by market conditions. These changes are recorded in mortgage banking fees in the Consolidated Statements of Operations.

The following table presents quantitative information about the Company’s Level 3 assets, including the range and weighted-average of the significant unobservable inputs used to fair value these assets, as well as valuation techniques used.

						As of September 30, 2021
						Valuation Technique			Unobservable Input			Range (Weighted Average)
Mortgage servicing rights						Discounted Cash Flow			Constant prepayment rate			9.96-27.98% CPR (11.3% CPR)
			Option adjusted spread			350-1,318 bps (582 bps)
Other derivative contracts						Internal Model			Pull through rate			10.96-100.00% (83.30%)
			MSR value			(10.00)-145.29 bps (99.79 bps)

Nonrecurring Fair Value Measurements

Fair value is also used on a nonrecurring basis to evaluate certain assets for impairment or for disclosure purposes. For more information on the valuation techniques utilized to measure nonrecurring fair value see Note 19 in the Company’s 2020 Form 10-K.

The following table presents losses on assets measured at fair value on a nonrecurring basis and recorded in earnings:

			Three Months Ended September 30,												Nine Months Ended September 30,
(in millions)			2021						2020						2021						2020
Collateral-dependent loans			($4)						($21)						($23)						($65)

Citizens Financial Group, Inc. | 85

The following table presents assets measured at fair value on a nonrecurring basis:

			September 30, 2021															December 31, 2020
(in millions)			Total			Level 1			Level 2			Level 3						Total			Level 1			Level 2			Level 3
Collateral-dependent loans			$585			$—			$585			$—						$758			$—			$758			$—

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

			September 30, 2021
			Total									Level 1									Level 2									Level 3
(in millions)			Carrying Value			Estimated Fair Value						Carrying Value			Estimated Fair Value						Carrying Value			Estimated Fair Value						Carrying Value			Estimated Fair Value
Financial assets:
Debt securities held to maturity			$2,492			$2,567						$—			$—						$1,705			$1,778						$787			$789
Other loans held for sale			93			93						—			—						—			—						93			93
Loans and leases			123,318			123,318						—			—						585			585						122,733			122,733
Other assets			616			616						—			—						593			593						23			23
Financial liabilities:
Deposits			152,221			152,237						—			—						152,221			152,237						—			—
Short-term borrowed funds			8			8						—			—						8			8						—			—
Long-term borrowed funds			6,947			7,260						—			—						6,947			7,260						—			—

			December 31, 2020
			Total									Level 1									Level 2									Level 3
(in millions)			Carrying Value			Estimated Fair Value						Carrying Value			Estimated Fair Value						Carrying Value			Estimated Fair Value						Carrying Value			Estimated Fair Value
Financial assets:
Debt securities held to maturity			$3,235			$3,357						$—			$—						$2,342			$2,464						$893			$893
Other loans held for sale			439			439						—			—						—			—						439			439
Loans and leases			123,090			123,678						—			—						758			758						122,332			122,920
Other assets			604			604						—			—						596			596						8			8
Financial liabilities:
Deposits			147,164			147,223						—			—						147,164			147,223						—			—
Short-term borrowed funds			243			243						—			—						243			243						—			—
Long-term borrowed funds			8,346			8,850						—			—						8,346			8,850						—			—

Citizens Financial Group, Inc. | 86

NOTE 13 - NONINTEREST INCOME

Revenues from Contracts with Customers

The following table presents the components of revenue from contracts with customers disaggregated by revenue stream and business operating segment:

			Three Months Ended September 30, 2021															Three Months Ended September 30, 2020
(in millions)			Consumer Banking			Commercial Banking			Other			Consolidated						Consumer Banking			Commercial Banking			Other			Consolidated
Service charges and fees			$82			$27			$—			$109						$71			$25			$—			$96
Card fees			57			8			—			65						49			7			—			56
Capital markets fees			—			69			—			69						—			50			—			50
Trust and investment services fees			61			—			—			61						53			—			—			53
Other banking fees			—			3			—			3						—			3			—			3
Total revenue from contracts with customers			$200			$107			$—			$307						$173			$85			$—			$258
Total revenue from other sources			115			61			31			207						322			59			15			396
Total noninterest income			$315			$168			$31			$514						$495			$144			$15			$654

			Nine Months Ended September 30, 2021															Nine Months Ended September 30, 2020
(in millions)			Consumer Banking			Commercial Banking			Other			Consolidated						Consumer Banking			Commercial Banking			Other			Consolidated
Service charges and fees			$230			$78			$—			$308						$222			$76			$—			$298
Card fees			160			23			—			183						136			24			—			160
Capital markets fees			—			225			—			225						—			163			—			163
Trust and investment services fees			179			—			—			179						151			—			—			151
Other banking fees			—			7			—			7						—			7			—			7
Total revenue from contracts with customers			$569			$333			$—			$902						$509			$270			$—			$779
Total revenue from other sources			380			183			76			639						771			143			48			962
Total noninterest income			$949			$516			$76			$1,541						$1,280			$413			$48			$1,741

The Company recognized trailing commissions of $4 million and $3 million for the three months ended September 30, 2021 and 2020, respectively, and $12 million and $10 million for the nine months ended September 30, 2021 and 2020, respectively, related to ongoing commissions from previous investment sales.

NOTE 14 - OTHER OPERATING EXPENSE

The following table presents the details of other operating expense:

			Three Months Ended September 30,												Nine Months Ended September 30,
(in millions)			2021						2020						2021						2020
Marketing			$32						$24						$82						$75
Other			92						71						226						242
Other operating expense			$124						$95						$308						$317

Citizens Financial Group, Inc. | 87

NOTE 15 - EARNINGS PER SHARE

			Three Months Ended September 30,												Nine Months Ended September 30,
(in millions, except share and per share data)			2021						2020						2021						2020
Numerator (basic and diluted):
Net income			$530						$314						$1,789						$601
Less: Preferred stock dividends			26						25						81						75
Net income available to common stockholders			$504						$289						$1,708						$526
Denominator:
Weighted-average common shares outstanding - basic			426,086,717						426,846,096						425,996,867						427,058,412
Dilutive common shares: share-based awards			1,754,247						1,146,253						1,683,018						1,083,946
Weighted-average common shares outstanding - diluted			427,840,964						427,992,349						427,679,885						428,142,358
Earnings per common share:
Basic			$1.18						$0.68						$4.01						$1.23
Diluted(1)			1.18						0.68						3.99						1.23

(1) Potential dilutive common shares were excluded from the computation of diluted EPS in the periods where the effect would be antidilutive. Excluded from the computation of diluted EPS were weighted average antidilutive shares totaling 10,614 and 1,193,668 for the three months ended September 30, 2021 and 2020, respectively, and 4,238 and 1,249,785 for the nine months ended September 30, 2021 and 2020, respectively.

NOTE 16 - BUSINESS OPERATING SEGMENTS

Citizens is managed by its Chief Executive Officer on a segment basis. The Company’s two business operating 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 segment has a segment head who reports directly to the Chief Executive Officer. The Chief Executive Officer 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. For more information on the Company’s business operating segments, as well as Other non-segment operations, see Note 25 in the Company’s 2020 Form 10-K.

			As of and for the Three Months Ended September 30, 2021
(in millions)			Consumer Banking						Commercial Banking						Other						Consolidated
Net interest income			$919						$428						($202)						$1,145
Noninterest income			315						168						31						514
Total revenue			1,234						596						(171)						1,659
Noninterest expense			749						226						36						1,011
Profit (loss) before provision for credit losses			485						370						(207)						648
Provision for credit losses			35						15						(83)						(33)
Income (loss) before income tax expense (benefit)			450						355						(124)						681
Income tax expense (benefit)			114						81						(44)						151
Net income (loss)			$336						$274						($80)						$530
Total average assets			$75,070						$56,702						$54,336						$186,108

			As of and for the Three Months Ended September 30, 2020
(in millions)			Consumer Banking						Commercial Banking						Other						Consolidated
Net interest income			$845						$421						($129)						$1,137
Noninterest income			495						144						15						654
Total revenue			1,340						565						(114)						1,791
Noninterest expense			742						210						36						988
Profit (loss) before provision for credit losses			598						355						(150)						803
Provision for credit losses			55						161						212						428
Income (loss) before income tax expense (benefit)			543						194						(362)						375
Income tax expense (benefit)			136						41						(116)						61
Net income (loss)			$407						$153						($246)						$314
Total average assets			$73,605						$60,889						$43,181						$177,675

Citizens Financial Group, Inc. | 88

			As of and for the Nine Months Ended September 30, 2021
(in millions)			Consumer Banking						Commercial Banking						Other						Consolidated
Net interest income			$2,679						$1,268						($561)						$3,386
Noninterest income			949						516						76						1,541
Total revenue			3,628						1,784						(485)						4,927
Noninterest expense			2,250						679						91						3,020
Profit (loss) before provision for credit losses			1,378						1,105						(576)						1,907
Provision for credit losses			139						150						(675)						(386)
Income (loss) before income tax expense (benefit)			1,239						955						99						2,293
Income tax expense (benefit)			315						205						(16)						504
Net income (loss)			$924						$750						$115						$1,789
Total average assets			$75,317						$57,318						$51,756						$184,391

			As of and for the Nine Months Ended September 30, 2020
(in millions)			Consumer Banking						Commercial Banking						Other						Consolidated
Net interest income			$2,452						$1,205						($200)						$3,457
Noninterest income			1,280						413						48						1,741
Total revenue			3,732						1,618						(152)						5,198
Noninterest expense			2,215						644						120						2,979
Profit (loss) before provision for credit losses			1,517						974						(272)						2,219
Provision for credit losses			232						274						986						1,492
Income (loss) before income tax expense (benefit)			1,285						700						(1,258)						727
Income tax expense (benefit)			322						147						(343)						126
Net income (loss)			$963						$553						($915)						$601
Total average assets			$71,227						$61,722						$41,943						$174,892

There have been no significant changes in the management accounting practices utilized by the Company regarding the basis of presentation for segment results as discussed in Note 25 in the Company’s 2020 Form 10-K.