Item 1. FINANCIAL STATEMENTS (UNAUDITED)

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Item 1. FINANCIAL STATEMENTS (UNAUDITED)


						Page
Consolidated Balance Sheets						34
Consolidated Statements of Operations						35
Consolidated Statements of Comprehensive Income						36
Consolidated Statements of Changes in Stockholders’ Equity						37
Consolidated Statements of Cash Flows						38
Notes to Consolidated Financial Statements						39
Note 1 - Significant Accounting Policies						39
Note 2 - Securities						39
Note 3 - Loans and Leases						42
Note 4 - Credit Quality and the Allowance for Credit Losses						42
Note 5 - Mortgage Banking and Other Serviced Loans						52
Note 6 - Variable Interest Entities						53
Note 7 - Borrowed Funds						55
Note 8 - Derivatives						56
Note 9 - Accumulated Other Comprehensive Income (Loss)						60
Note 10 - Stockholders’ Equity						60
Note 11 - Commitments and Contingencies						61
Note 12 - Fair Value Measurements						62
Note 13 - Noninterest Income						67
Note 14 - Other Operating Expense						68
Note 15 - Earnings Per Share						69
Note 16 - Business Segments						69

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CONSOLIDATED BALANCE SHEETS (UNAUDITED)


(dollars in millions, except par value)	March 31, 2025	December 31, 2024
ASSETS:
Cash and due from banks	$1,082	$1,409
Interest-bearing cash and due from banks	10,459	9,192
Interest-bearing deposits in banks(1)	685	635
Debt securities available for sale, at fair value (including $110 and $152 pledged to creditors, respectively)(2)	34,208	32,765
Debt securities held to maturity (fair value of $7,515 and $7,540, respectively, and including $70 and $83 pledged to creditors, respectively)(2)	8,469	8,599
Loans held for sale (includes $1,137 and $825, respectively, measured at fair value)	2,820	858
Loans and leases	137,635	139,203
Less: Allowance for loan and lease losses	(2,014)	(2,061)
Net loans and leases(1)	135,621	137,142
Derivative assets	760	408
Premises and equipment, net	855	875
Bank-owned life insurance	3,386	3,364
Goodwill	8,187	8,187
Other intangible assets(3)	137	146
Other assets(1)	13,479	13,941
TOTAL ASSETS	$220,148	$217,521
LIABILITIES AND STOCKHOLDERS’ EQUITY:
LIABILITIES:
Deposits:
Noninterest-bearing	$37,556	$36,920
Interest-bearing	140,020	137,856
Total deposits	177,576	174,776
Short-term borrowed funds	47	—
Derivative liabilities	883	1,220
Long-term borrowed funds(1)	12,267	12,401
Other liabilities(1)	4,509	4,870
TOTAL LIABILITIES	195,282	193,267
Commitments and Contingencies (refer to Note 11)
STOCKHOLDERS’ EQUITY:
Preferred stock:
$25.00 par value,100,000,000 shares authorized; 2,150,000 shares issued and outstanding at March 31, 2025 and December 31, 2024	2,113	2,113
Common stock:
$0.01 par value, 1,000,000,000 shares authorized; 651,676,964 shares issued and 437,668,127 shares outstanding at March 31, 2025 and 650,068,324 shares issued and 440,543,381 shares outstanding at December 31, 2024	7	7
Additional paid-in capital	22,370	22,364
Retained earnings	10,566	10,412
Treasury stock, at cost, 214,008,837 and 209,524,943 shares at March 31, 2025 and December 31, 2024, respectively	(7,249)	(7,047)
Accumulated other comprehensive income (loss)	(2,941)	(3,595)
TOTAL STOCKHOLDERS’ EQUITY	24,866	24,254
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$220,148	$217,521

(1) Includes amounts in consolidated VIEs. See Note 6 for additional information.

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

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

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 March 31,
(dollars in millions, except per share data)	2025	2024
INTEREST INCOME:
Interest and fees on loans and leases	$1,829	$2,051
Interest and fees on loans held for sale	16	20
Investment securities	418	399
Interest-bearing deposits in banks	89	140
Total interest income	2,352	2,610
INTEREST EXPENSE:
Deposits	795	987
Short-term borrowed funds	8	7
Long-term borrowed funds	158	174
Total interest expense	961	1,168
Net interest income	1,391	1,442
Provision (benefit) for credit losses	153	171
Net interest income after provision (benefit) for credit losses	1,238	1,271
NONINTEREST INCOME:
Service charges and fees	109	96
Capital markets fees	100	118
Card fees	83	86
Wealth fees	81	68
Mortgage banking fees	59	49
Foreign exchange and derivative products	39	36
Letter of credit and loan fees	44	42
Securities gains, net	7	5
Other income	22	17
Total noninterest income	544	517
NONINTEREST EXPENSE:
Salaries and employee benefits	696	691
Equipment and software	194	192
Outside services	155	158
Occupancy	112	114
Other operating expense	157	203
Total noninterest expense	1,314	1,358
Income before income tax expense	468	430
Income tax expense	95	96
NET INCOME	$373	$334
Net income available to common stockholders	$340	$304
Weighted-average common shares outstanding:
Basic	438,320,757	461,358,681
Diluted	442,200,180	463,797,964
Per common share information:
Basic earnings	$0.78	$0.66
Diluted earnings	0.77	0.65

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

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)


	Three Months Ended March 31,
(dollars in millions)	2025	2024
Net income	$373	$334
Other comprehensive income (loss):
Cash flow hedges:
Net unrealized gains (losses) on cash flow hedge derivatives arising during the period, net of income taxes of $76 and ($145), respectively	208	(405)
Reclassification adjustment for net (gains) losses on cash flow hedge derivatives included in net income, net of income taxes of $54 and $54, respectively	148	149
AFS securities:
Net unrealized gains (losses) on AFS securities arising during the period, net of income taxes of $95 and ($56), respectively	282	(173)
Reclassification of net securities (gains) losses on AFS securities to net income, net of income taxes of $4 and $5, respectively	13	14
Defined benefit plans:
Actuarial gain (loss) arising during the period, net of income taxes of $— and $1, respectively	—	4
Amortization of actuarial (gain) loss to net income, net of income taxes of $1 and $1, respectively	3	5
Total other comprehensive income (loss), net of income taxes	654	(406)
Total comprehensive income (loss)	$1,027	($72)

The accompanying Notes to 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
(dollars and shares in millions)	Shares	Amount	Shares	Amount
Balance at January 1, 2024	2	$2,014	466	$6	$22,250	$9,816	($5,986)	($3,758)	$24,342
Dividends declared - common stock	—	—	—	—	—	(197)	—	—	(197)
Dividends declared - preferred stock	—	—	—	—	—	(30)	—	—	(30)



Treasury stock purchased	—	—	(9)	—	—	—	(300)	—	(300)
Share repurchase excise tax	—	—	—	—	—	—	(4)	—	(4)
Share-based compensation plans	—	—	1	—	15	—	—	—	15
Employee stock purchase plan	—	—	—	—	7	—	—	—	7

Total comprehensive income (loss):
Net income	—	—	—	—	—	334	—	—	334
Other comprehensive income (loss)	—	—	—	—	—	—	—	(406)	(406)
Total comprehensive income (loss)	—	—	—	—	—	334	—	(406)	(72)
Balance at March 31, 2024	2	$2,014	458	$6	$22,272	$9,923	($6,290)	($4,164)	$23,761
Balance at January 1, 2025	2	$2,113	441	$7	$22,364	$10,412	($7,047)	($3,595)	$24,254
Dividends declared - common stock	—	—	—	—	—	(186)	—	—	(186)
Dividends declared - preferred stock	—	—	—	—	—	(33)	—	—	(33)



Treasury stock purchased	—	—	(4)	—	—	—	(200)	—	(200)
Share repurchase excise tax	—	—	—	—	—	—	(2)	—	(2)
Share-based compensation plans	—	—	1	—	(1)	—	—	—	(1)
Employee stock purchase plan	—	—	—	—	7	—	—	—	7

Total comprehensive income (loss):
Net income	—	—	—	—	—	373	—	—	373
Other comprehensive income (loss)	—	—	—	—	—	—	—	654	654
Total comprehensive income (loss)	—	—	—	—	—	373	—	654	1,027
Balance at March 31, 2025	2	$2,113	438	$7	$22,370	$10,566	($7,249)	($2,941)	$24,866

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

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CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)


	Three Months Ended March 31,
(dollars in millions)	2025	2024
OPERATING ACTIVITIES
Net income	$373	$334
Adjustments to reconcile net income to net change due to operating activities:
Provision (benefit) for credit losses	153	171
Net change in loans held for sale	(332)	171
Depreciation, amortization and accretion	123	102
Deferred income tax expense (benefit)	(16)	—
Share-based compensation	31	34
Net gain on sale of assets	(9)	(5)
Net (increase) decrease in other assets	34	(47)
Net increase (decrease) in other liabilities	(570)	(206)
Net change due to operating activities	(213)	554
INVESTING ACTIVITIES
Investment securities:
Purchases of debt securities available for sale	(2,365)	(3,057)
Proceeds from maturities and paydowns of debt securities available for sale	846	593
Proceeds from sales of debt securities available for sale	642	692

Proceeds from maturities and paydowns of debt securities held to maturity	150	150

Net (increase) decrease in interest-bearing deposits in banks	(50)	13


Purchases of loans	(188)	(345)
Sales of loans	240	107
Net (increase) decrease in loans and leases	(319)	2,873
Capital expenditures, net	(14)	(10)

Other	(50)	23
Net change due to investing activities	(1,108)	1,039
FINANCING ACTIVITIES
Net increase (decrease) in deposits	2,800	(914)
Net increase (decrease) in short-term borrowed funds	47	(496)
Proceeds from issuance of long-term borrowed funds	2,533	5,765
Repayments of long-term borrowed funds	(2,675)	(5,437)
Treasury stock purchased	(200)	(300)


Dividends paid to common stockholders	(186)	(197)
Dividends paid to preferred stockholders	(34)	(31)

Other	(24)	(12)
Net change due to financing activities	2,261	(1,622)
Net change in cash and cash equivalents(1)	940	(29)
Cash and cash equivalents at beginning of period(1)	10,601	11,628
Cash and cash equivalents at end of period(1)	$11,541	$11,599
Non-cash items:
Transfer of loans from loans held for investment to LHFS	$1,876	$107

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

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited interim Consolidated Financial Statements and Notes have been prepared in accordance with the instructions for Form 10-Q and, therefore, do not include all information and notes included in annual financial statements prepared in accordance with GAAP. The Consolidated Financial Statements include all adjustments, consisting of normal recurring adjustments, necessary for the fair presentation of the interim period results presented. These unaudited interim financial statements and notes should be read in conjunction with the audited Consolidated Financial Statements and Notes included in the Company’s 2024 Form 10-K. The results of operations for interim periods are not necessarily indicative of the results that may be expected for the full year.

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

Use of Estimates

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

Significant Accounting Policies

For further information regarding the Company’s significant accounting policies, see Note 1 in the Company’s 2024 Form 10-K.

NOTE 2 - SECURITIES

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


	March 31, 2025				December 31, 2024
(dollars in millions)	Amortized Cost(1)	Gross Unrealized Gains	Gross Unrealized Losses	Fair Value	Amortized Cost(1)	Gross Unrealized Gains	Gross Unrealized Losses	Fair Value
U.S. Treasury and other	$4,145	$15	($91)	$4,069	$3,631	$3	($109)	$3,525
State and political subdivisions	1	—	—	1	1	—	—	1
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities	31,444	81	(1,772)	29,753	30,897	33	(2,135)	28,795
Other/non-agency	272	—	(11)	261	273	—	(13)	260
Total mortgage-backed securities	31,716	81	(1,783)	30,014	31,170	33	(2,148)	29,055
Collateralized loan obligations	124	—	—	124	184	—	—	184
Total debt securities available for sale, at fair value	$35,986	$96	($1,874)	$34,208	$34,986	$36	($2,257)	$32,765
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities	$8,077	$—	($948)	$7,129	$8,187	$—	($1,051)	$7,136
Total mortgage-backed securities	8,077	—	(948)	7,129	8,187	—	(1,051)	7,136
Asset-backed securities	392	—	(6)	386	412	1	(9)	404
Total debt securities held to maturity	$8,469	$—	($954)	$7,515	$8,599	$1	($1,060)	$7,540
Equity securities, at cost(2)	$711	$—	$—	$711	$710	$—	$—	$710
Equity securities, at fair value(2)	236	—	—	236	220	—	—	220

(1) Excludes portfolio level basis adjustments of $(2) million and $(75) million, respectively, for securities designated in active fair value hedge relationships under the portfolio layer method at March 31, 2025 and December 31, 2024.

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

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Accrued interest receivable on debt securities totaled $129 million and $125 million as of March 31, 2025 and December 31, 2024, respectively, and is included in other assets in the Consolidated Balance Sheets.

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


	Distribution of Maturities
(dollars in millions)	1 Year or Less	After 1 Year through 5 Years	After 5 Years through 10 Years	After 10 Years	Total
Amortized cost:
U.S. Treasury and other	$—	$3,142	$1,003	$—	$4,145
State and political subdivisions	—	—	—	1	1
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities	—	2,266	1,125	28,053	31,444
Other/non-agency	—	—	—	272	272
Collateralized loan obligations	—	—	124	—	124
Total debt securities available for sale	—	5,408	2,252	28,326	35,986
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities	—	—	—	8,077	8,077
Asset-backed securities	—	392	—	—	392
Total debt securities held to maturity	—	392	—	8,077	8,469
Total amortized cost of debt securities	$—	$5,800	$2,252	$36,403	$44,455

Fair value:
U.S. Treasury and other	$—	$3,054	$1,015	$—	$4,069
State and political subdivisions	—	—	—	1	1
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities	—	2,202	1,070	26,481	29,753
Other/non-agency	—	—	—	261	261
Collateralized loan obligations	—	—	124	—	124
Total debt securities available for sale	—	5,256	2,209	26,743	34,208
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities	—	—	—	7,129	7,129
Asset-backed securities	—	386	—	—	386
Total debt securities held to maturity	—	386	—	7,129	7,515
Total fair value of debt securities	$—	$5,642	$2,209	$33,872	$41,723

Taxable interest income from investment securities as presented in the Consolidated Statements of Operations was $418 million and $399 million for the three months ended March 31, 2025 and 2024, respectively.

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


	Three Months Ended March 31,
(dollars in millions)	2025	2024
Gains	$7	$5
Losses	—	—
Securities gains, net	$7	$5

At March 31, 2025 and December 31, 2024, debt securities with a carrying value of $3.6 billion and $4.0 billion, respectively, were pledged to secure public deposits, trust funds, FHLB borrowing capacity, repurchase agreements, derivative contracts and for other purposes as required or permitted by law.

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Impairment

The Company evaluated its existing HTM portfolio as of March 31, 2025 and concluded that 95% of HTM securities met the zero expected credit loss criteria and, therefore, no ACL was recognized. Lifetime expected credit losses on the remainder of the HTM portfolio were determined to be insignificant based on the modeling of the Company’s credit loss position in the securities. The Company monitors the credit exposure through the use of credit quality indicators. For these securities, the Company uses external credit ratings or an internally derived credit rating when an external rating is not available. All securities were determined to be investment grade at March 31, 2025.

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


	March 31, 2025
	Less than 12 Months		12 Months or Longer		Total
(dollars in millions)	Fair Value	Gross Unrealized Losses	Fair Value	Gross Unrealized Losses	Fair Value	Gross Unrealized Losses
U.S. Treasury and other	$—	$—	$2,582	($91)	$2,582	($91)

Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities	6,836	(189)	14,089	(1,583)	20,925	(1,772)
Other/non-agency	—	—	261	(11)	261	(11)
Total mortgage-backed securities	6,836	(189)	14,350	(1,594)	21,186	(1,783)

Total	$6,836	($189)	$16,932	($1,685)	$23,768	($1,874)


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

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

The Company 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. The Company determined that credit losses are not expected to be incurred on the AFS debt securities identified with unrealized losses as of March 31, 2025. The unrealized losses on these debt securities reflect non-credit-related factors driven by changes in interest rates. Therefore, the Company 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:


(dollars in millions)	March 31, 2025	December 31, 2024
Commercial and industrial	$43,781	$42,551
Commercial real estate	26,727	27,225
Total commercial	70,508	69,776
Residential mortgages	33,114	32,726
Home equity	16,853	16,495
Automobile	4,044	4,744
Education	8,779	10,812
Other retail	4,337	4,650
Total retail	67,127	69,427
Total loans and leases	$137,635	$139,203

Accrued interest receivable on loans and leases held for investment totaled $817 million and $816 million as of March 31, 2025 and December 31, 2024, respectively, and is included in other assets in the Consolidated Balance Sheets.

Loans pledged as collateral for FHLB borrowing capacity, primarily residential mortgages and home equity products, totaled $38.6 billion and $37.5 billion at March 31, 2025 and December 31, 2024, respectively. Loans pledged as collateral to support the contingent ability to borrow at the FRB discount window, if necessary, were primarily comprised of education, commercial and industrial, and commercial real estate loans, and totaled $22.3 billion and $22.9 billion at March 31, 2025 and December 31, 2024, respectively.

Interest income on direct financing and sales-type leases for the three months ended March 31, 2025 and 2024 was $11 million and is reported within interest and fees on loans and leases in the Consolidated Statements of Operations.

The following table presents the composition of LHFS:


	March 31, 2025				December 31, 2024
(dollars in millions)	Residential Mortgages(1)	Other retail(2)	Commercial(3)	Total	Residential Mortgages(1)	Commercial(3)	Total
Loans held for sale at fair value	$922	$—	$215	$1,137	$633	$192	$825
Other loans held for sale	—	1,644	39	1,683	—	33	33
Total loans held for sale	$922	$1,644	$254	$2,820	$633	$225	$858

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

(2) Other retail LHFS consist of education loans.

(3) Commercial LHFS at fair value consist of loans managed by the Company’s commercial secondary loan desk.

NOTE 4 - CREDIT QUALITY AND THE ALLOWANCE FOR CREDIT LOSSES

Allowance for Credit Losses

The Company’s estimate of expected credit losses in its loan and lease portfolios is recorded in the ACL and considers extensive historical loss experience, including the impact of loss mitigation and restructuring programs that the Company offers to borrowers experiencing financial difficulty, as well as projected loss severity as a result of loan default.

For a detailed discussion of the ACL reserve methodology and estimation techniques as of December 31, 2024, see Note 6 in the Company’s 2024 Form 10-K. There were no significant changes to the ACL reserve methodology during the three months ended March 31, 2025.

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The following table presents a summary of changes in the ACL for the three months ended March 31, 2025:


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



Charge-offs	(85)	(149)	(234)
Recoveries	4	30	34
Net charge-offs	(81)	(119)	(200)
Provision expense (benefit) for loans and leases	89	64	153
Allowance for loan and lease losses, end of period	1,148	866	2,014
Allowance for unfunded lending commitments, beginning of period	155	43	198


Provision expense (benefit) for unfunded lending commitments	9	(9)	—

Allowance for unfunded lending commitments, end of period	164	34	198
Total allowance for credit losses, end of period	$1,312	$900	$2,212

During the three months ended March 31, 2025, net charge-offs of $200 million and a provision for expected credit losses of $153 million resulted in a decrease of $47 million to the ACL.

During the first quarter of 2025, the Company entered into an agreement to sell $1.9 billion of Non-Core education loans and subsequently reclassified these loans to LHFS. Upon reclassification to LHFS, a $25 million charge-off was recognized. This transaction will settle ratably each quarter throughout 2025, with $200 million settled during the first quarter.

As of March 31, 2025, the Company’s ACL economic forecast over a two-year reasonable and supportable period reflects a mild recession inclusive of uncertainties related to the implementation of tariffs and protectionist trade policies, inflationary pressures and geopolitical tensions. This forecast projects peak unemployment of approximately 5.1%, consistent with December 31, 2024, and a start-to-trough real GDP decline of approximately 0.5% and 0.4% at March 31, 2025 and December 31, 2024, respectively, and is generally applied to the retail and commercial and industrial portfolios. More severe economic scenarios are applied within the CRE portfolio, such as general office, with peak unemployment of approximately 9.3% and start-to-trough real GDP decline of approximately 4.4% at March 31, 2025 and December 31, 2024.

The following table presents a summary of changes in the ACL for the three months ended March 31, 2024:


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



Charge-offs	(102)	(129)	(231)
Recoveries	17	33	50
Net charge-offs	(85)	(96)	(181)
Provision expense (benefit) for loans and leases	69	100	169
Allowance for loan and lease losses, end of period	1,234	852	2,086
Allowance for unfunded lending commitments, beginning of period	175	45	220


Provision expense (benefit) for unfunded lending commitments	16	(14)	2

Allowance for unfunded lending commitments, end of period	191	31	222
Total allowance for credit losses, end of period	$1,425	$883	$2,308

Credit Quality Indicators

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

The Company utilizes internal risk ratings to monitor credit quality for commercial loans and leases. For more information on these ratings see Note 6 in the Company’s 2024 Form 10-K.

Citizens Financial Group, Inc. | 43

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


	Term Loans and Leases by Origination Year						Revolving Loans
(dollars in millions)	2025	2024	2023	2022	2021	Prior to 2021	Within the Revolving Period	Converted to Term	Total
Commercial and industrial
Pass	$1,178	$5,502	$2,312	$3,878	$2,531	$2,593	$23,129	$73	$41,196
Special Mention	—	5	77	71	227	139	190	—	709
Substandard Accrual	—	12	55	144	296	294	776	16	1,593
Nonaccrual	—	—	4	83	45	62	83	6	283
Total commercial and industrial	1,178	5,519	2,448	4,176	3,099	3,088	24,178	95	43,781
Commercial real estate
Pass	774	2,558	1,099	5,193	5,066	5,923	1,361	4	21,978
Special Mention	—	—	100	1,005	355	433	80	6	1,979
Substandard Accrual	—	3	79	519	217	1,127	9	116	2,070
Nonaccrual	—	—	3	81	65	545	2	4	700
Total commercial real estate	774	2,561	1,281	6,798	5,703	8,028	1,452	130	26,727
Total commercial
Pass	1,952	8,060	3,411	9,071	7,597	8,516	24,490	77	63,174
Special Mention	—	5	177	1,076	582	572	270	6	2,688
Substandard Accrual	—	15	134	663	513	1,421	785	132	3,663
Nonaccrual	—	—	7	164	110	607	85	10	983
Total commercial	$1,952	$8,080	$3,729	$10,974	$8,802	$11,116	$25,630	$225	$70,508

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


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

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

Citizens Financial Group, Inc. | 44

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


	Term Loans by Origination Year						Revolving Loans
(dollars in millions)	2025	2024	2023	2022	2021	Prior to 2021	Within the Revolving Period	Converted to Term	Total
Residential mortgages
800+	$232	$1,568	$1,369	$3,343	$5,149	$6,701	$—	$—	$18,362
740-799	520	1,410	817	1,537	2,142	3,031	—	—	9,457
680-739	119	382	295	546	713	1,193	—	—	3,248
620-679	11	46	76	149	180	494	—	—	956
<620	—	18	133	118	163	643	—	—	1,075
No FICO available(1)	—	1	—	3	1	11	—	—	16
Total residential mortgages	882	3,425	2,690	5,696	8,348	12,073	—	—	33,114
Home equity
800+	—	1	—	3	3	75	5,770	193	6,045
740-799	—	—	—	1	3	52	5,382	224	5,662
680-739	—	—	—	1	1	43	3,064	206	3,315
620-679	—	—	1	1	1	19	788	178	988
<620	—	—	3	2	3	16	501	313	838
No FICO available(1)	—	—	—	—	—	—	5	—	5
Total home equity	—	1	4	8	11	205	15,510	1,114	16,853
Automobile
800+	—	—	63	343	575	177	—	—	1,158
740-799	—	—	87	376	482	172	—	—	1,117
680-739	—	—	82	289	322	114	—	—	807
620-679	—	—	46	166	167	64	—	—	443
<620	—	—	49	189	200	81	—	—	519
No FICO available(1)	—	—	—	—	—	—	—	—	—
Total automobile	—	—	327	1,363	1,746	608	—	—	4,044
Education
800+	52	282	347	543	1,104	2,081	—	—	4,409
740-799	75	321	320	463	556	1,064	—	—	2,799
680-739	29	145	139	193	186	397	—	—	1,089
620-679	4	42	43	48	45	123	—	—	305
<620	1	9	15	22	24	72	—	—	143
No FICO available(1)	4	1	—	—	—	29	—	—	34
Total education	165	800	864	1,269	1,915	3,766	—	—	8,779
Other retail
800+	28	155	55	34	13	13	473	—	771
740-799	39	209	77	42	14	14	836	—	1,231
680-739	28	162	69	36	12	11	808	1	1,127
620-679	12	79	38	24	8	5	318	1	485
<620	2	35	28	30	8	4	236	1	344
No FICO available(1)	2	2	—	—	—	—	375	—	379
Total other retail	111	642	267	166	55	47	3,046	3	4,337
Total retail
800+	312	2,006	1,834	4,266	6,844	9,047	6,243	193	30,745
740-799	634	1,940	1,301	2,419	3,197	4,333	6,218	224	20,266
680-739	176	689	585	1,065	1,234	1,758	3,872	207	9,586
620-679	27	167	204	388	401	705	1,106	179	3,177
<620	3	62	228	361	398	816	737	314	2,919
No FICO available(1)	6	4	—	3	1	40	380	—	434
Total retail	$1,158	$4,868	$4,152	$8,502	$12,075	$16,699	$18,556	$1,117	$67,127

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

Citizens Financial Group, Inc. | 45

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


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

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

Citizens Financial Group, Inc. | 46

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


	Three Months Ended March 31, 2025
	Term Loans and Leases by Origination Year						Revolving Loans
(dollars in millions)	2025	2024	2023	2022	2021	Prior to 2021	Within the Revolving Period	Converted to Term	Total
Commercial and industrial	$—	$—	$1	$2	$22	$—	$9	$—	$34
Commercial real estate	—	—	—	8	—	43	—	—	51
Total commercial	—	—	1	10	22	43	9	—	85
Residential mortgages	—	—	—	—	—	1	—	—	1
Home equity	—	—	—	—	—	1	4	—	5
Automobile	—	—	2	7	7	4	—	—	20
Education	—	1	2	5	13	35	—	—	56
Other retail	4	15	8	4	2	2	32	—	67
Total retail	4	16	12	16	22	43	36	—	149
Total loans and leases	$4	$16	$13	$26	$44	$86	$45	$—	$234


	Three Months Ended March 31, 2024
	Term Loans and Leases by Origination Year						Revolving Loans
(dollars in millions)	2024	2023	2022	2021	2020	Prior to 2020	Within the Revolving Period	Converted to Term	Total
Commercial and industrial	$—	$5	$1	$4	$—	$1	$3	$—	$14
Commercial real estate	—	—	—	—	59	29	—	—	88
Total commercial	—	5	1	4	59	30	3	—	102
Residential mortgages	—	—	—	—	—	2	—	—	2
Home equity	—	—	—	—	—	1	2	1	4
Automobile	—	2	9	11	3	3	—	—	28
Education	—	—	1	6	7	18	—	—	32
Other retail	4	9	4	3	—	4	39	—	63
Total retail	4	11	14	20	10	28	41	1	129
Total loans and leases	$4	$16	$15	$24	$69	$58	$44	$1	$231

Citizens Financial Group, Inc. | 47

Nonaccrual and Past Due Assets

The following tables present an aging analysis of accruing and nonaccrual loans and leases as of March 31, 2025 and December 31, 2024:


	March 31, 2025
		Days Past Due and Accruing
(dollars in millions)	Current	30-59	60-89	90+	Nonaccrual	Total	Nonaccrual with no related ACL
Commercial and industrial	$43,420	$56	$13	$9	$283	$43,781	$45
Commercial real estate	25,887	131	5	4	700	26,727	19
Total commercial	69,307	187	18	13	983	70,508	64
Residential mortgages	32,682	60	36	138	198	33,114	147
Home equity	16,450	94	27	—	282	16,853	178
Automobile	3,900	80	25	—	39	4,044	6
Education	8,699	39	18	3	20	8,779	2
Other retail	4,207	42	27	1	60	4,337	1
Total retail	65,938	315	133	142	599	67,127	334
Total	$135,245	$502	$151	$155	$1,582	$137,635	$398
Guaranteed residential mortgages(1)	$824	$32	$19	$137	$—	$1,012	$—


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

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

At March 31, 2025 and December 31, 2024, the Company had collateral-dependent residential mortgage and home equity loans totaling $397 million and $372 million, respectively, and collateral-dependent commercial loans totaling $513 million and $607 million, respectively.

The amortized cost basis of mortgage loans collateralized by residential real estate for which formal foreclosure proceedings were in-process was $302 million and $295 million as of March 31, 2025 and December 31, 2024, respectively.

Loan Modifications to Borrowers Experiencing Financial Difficulty

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

Citizens Financial Group, Inc. | 48

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

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

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


	Three Months Ended March 31, 2025
(dollars in millions)	Interest Rate Reduction	Term Extension	Payment Delay	Principal Forgiveness	Interest Rate Reduction and Term Extension	Term Extension and Payment Delay	Total	Total as a % of Loan Class(1)
Commercial and industrial	$32	$141	$2	$—	$—	$1	$176	0.40	%
Commercial real estate	10	172	73	—	—	25	280	1.05
Total commercial	42	313	75	—	—	26	456	0.65
Residential mortgages	1	15	2	—	4	1	23	0.07
Home equity	1	—	2	—	1	—	4	0.02
Automobile	—	—	—	—	—	—	—	—
Education	2	—	—	—	—	—	2	0.02
Other retail	6	—	—	—	—	—	6	0.14
Total retail	10	15	4	—	5	1	35	0.05
Total	$52	$328	$79	$—	$5	$27	$491	0.36	%


	Three Months Ended March 31, 2024
(dollars in millions)	Interest Rate Reduction	Term Extension	Payment Delay	Principal Forgiveness	Interest Rate Reduction and Term Extension	Term Extension and Payment Delay	Total	Total as a % of Loan Class(1)
Commercial and industrial	$—	$85	$65	$—	$1	$32	$183	0.42	%
Commercial real estate	—	443	24	—	40	1	508	1.76
Total commercial	—	528	89	—	41	33	691	0.95
Residential mortgages	1	37	5	—	3	—	46	0.15
Home equity	1	1	—	—	4	—	6	0.04
Automobile	—	—	—	—	—	—	—	—
Education	3	—	18	—	—	—	21	0.18
Other retail	5	—	—	—	—	—	5	0.10
Total retail	10	38	23	—	7	—	78	0.11
Total	$10	$566	$112	$—	$48	$33	$769	0.54	%

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

Citizens Financial Group, Inc. | 49

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


	Three Months Ended March 31, 2025
(dollars in millions)	Weighted-Average Interest Rate Reduction(1)		Weighted-Average Term Extension (in Months)(1)	Weighted-Average Payment Deferral(1)	Amount of Principal Forgiven(2)
Commercial and industrial	0.81	%	10	$—	$—
Commercial real estate	0.75		10	1	—
Residential mortgages	0.98		111	—	—
Home equity	4.55		74	—	—
Automobile	—		—	—	—
Education	4.96		—	—	—
Other retail	20.30		—	—	2


	Three Months Ended March 31, 2024
(dollars in millions)	Weighted-Average Interest Rate Reduction(1)		Weighted-Average Term Extension (in Months)(1)	Weighted-Average Payment Deferral(1)	Amount of Principal Forgiven(2)
Commercial and industrial	4.49	%	9	$1	$—
Commercial real estate	0.53		16	1	—
Residential mortgages	2.01		88	—	—
Home equity	3.16		88	—	—
Automobile	—		—	—	—
Education	4.31		—	—	—
Other retail	19.80		—	—	2

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

(2) Amounts are recorded as charge-offs.

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


	March 31, 2025
		Days Past Due and Accruing
(dollars in millions)	Current	30-59	60-89	90+	Nonaccrual	Total
Commercial and industrial	$311	$17	$—	$3	$51	$382
Commercial real estate	380	33	—	—	385	798
Total commercial	691	50	—	3	436	1,180
Residential mortgages	51	4	3	17	19	94
Home equity	9	—	1	—	12	22
Automobile	—	—	—	—	—	—
Education	8	—	—	—	1	9
Other retail	13	2	1	—	1	17
Total retail	81	6	5	17	33	142
Total	$772	$56	$5	$20	$469	$1,322

Citizens Financial Group, Inc. | 50


	March 31, 2024
		Days Past Due and Accruing
(dollars in millions)	Current	30-59	60-89	90+	Nonaccrual	Total
Commercial and industrial	$223	$1	$5	$—	$144	$373
Commercial real estate	667	38	5	33	136	879
Total commercial	890	39	10	33	280	1,252
Residential mortgages	71	17	—	22	15	125
Home equity	5	—	—	—	10	15
Automobile	—	—	—	—	—	—
Education	51	1	—	—	6	58
Other retail	10	1	1	—	1	13
Total retail	137	19	1	22	32	211
Total	$1,027	$58	$11	$55	$312	$1,463

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


	Three Months Ended March 31, 2025
(dollars in millions)	Interest Rate Reduction	Term Extension	Payment Delay	Interest Rate Reduction and Term Extension	Total
Commercial and industrial	$—	$—	$—	$—	$—
Commercial real estate	—	71	—	—	71
Total commercial	—	71	—	—	71
Residential mortgages	—	5	1	2	8
Home equity	1	—	—	1	2
Automobile	—	—	—	—	—
Education	—	—	—	—	—
Other retail	1	—	—	—	1
Total retail	2	5	1	3	11
Total	$2	$76	$1	$3	$82


	Three Months Ended March 31, 2024
(dollars in millions)	Interest Rate Reduction	Term Extension	Payment Delay	Interest Rate Reduction and Term Extension	Total
Commercial and industrial	$—	$34	$—	$—	$34
Commercial real estate	—	38	—	—	38
Total commercial	—	72	—	—	72
Residential mortgages	—	6	—	—	6
Home equity	—	—	—	—	—
Automobile	—	—	—	—	—
Education	2	—	—	—	2
Other retail	—	—	—	—	—
Total retail	2	6	—	—	8
Total	$2	$78	$—	$—	$80

Unfunded commitments related to loans modified during the three months ended March 31, 2025 were $157 million at March 31, 2025. Unfunded commitments related to loans modified during the year ended December 31, 2024 were $206 million at December 31, 2024.

Citizens Financial Group, Inc. | 51

NOTE 5 - MORTGAGE BANKING AND OTHER SERVICED LOANS

Mortgage Banking

The Company sells residential mortgages into the secondary market and retains no beneficial interest in these sales, but may retain the servicing rights for the loans sold. The Company may exercise its option to repurchase eligible government guaranteed residential mortgages or may be obligated to subsequently repurchase a loan if the purchaser discovers a representation or warranty violation such as noncompliance with eligibility or servicing requirements, or customer fraud that should have been identified in a loan file review.

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


	Three Months Ended March 31,
(dollars in millions)	2025	2024
Cash proceeds from residential mortgage loans sold with servicing retained	$1,658	$1,488

Gain on sales(1)	16	15
Contractually specified servicing, late and other ancillary fees(1)	70	79

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

The unpaid principal balance of residential mortgage loans related to our MSRs was $95.2 billion and $95.6 billion at March 31, 2025 and December 31, 2024, respectively. The Company manages the risk associated with changes in the value of the MSRs with an active economic hedging strategy, which includes the purchase of freestanding derivatives.

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


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


Amounts capitalized		27	18

Sales(1)		(72)	—
Changes in unpaid principal balance during the period(2)		(39)	(46)
Changes in fair value during the period(3)		(10)	40
Fair value at end of the period		$1,397	$1,564

(1) For the three months ended March 31, 2025, represents the sale of the excess servicing yield on MSRs related to certain FNMA mortgages with a total unpaid principal balance of $10.5 billion.

(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 determined based on current market interest rates. The valuation does not attempt to forecast or predict the future direction of interest rates.

Citizens Financial Group, Inc. | 52

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


(dollars in millions)	March 31, 2025	December 31, 2024
Fair value	$1,397	$1,491
Weighted average life (years)	8.5	8.7
Weighted average constant prepayment rate	7.1%	6.7%
Decline in fair value from 10% adverse change	$35	$35
Decline in fair value from 20% adverse change	$67	$67
Weighted average option adjusted spread	628 bps	632 bps
Decline in fair value from 10% adverse change	$40	$42
Decline in fair value from 20% adverse change	$79	$84

The Company has mortgage banking derivatives that include commitments to originate mortgages held for sale, certain loan sale agreements, and other financial instruments that meet the definition of a derivative. Refer to Note 8 for additional information.

Other Serviced Loans

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


(dollars in millions)	March 31, 2025	December 31, 2024
Education	$397	$420
Commercial and industrial(1)	90	92

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

NOTE 6 - VARIABLE INTEREST ENTITIES

The Company, in the normal course of business, engages in a variety of activities with entities that are considered VIEs, as defined by GAAP, with its variable interest arising from contractual, ownership or other monetary interests in the entity. A VIE typically does not have sufficient equity at risk to finance its activities without additional subordinated financial support from other parties.

For more details regarding the Company’s involvement with VIEs see Note 11 in the Company’s 2024 Form 10-K.

Consolidated VIEs

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


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

Interest-bearing deposits in banks	$197	$209
Net loans and leases	3,313	3,843

Other assets	21	21
Total assets	$3,531	$4,073
Liabilities:
Long-term borrowed funds	$2,885	$3,375
Other liabilities	7	8
Total liabilities	$2,892	$3,383

Citizens Financial Group, Inc. | 53

Secured Borrowings

The Company utilizes a portion of its auto loan portfolio to support certain secured borrowing arrangements, which provide a source of funding for the Company and involves the transfer of auto loans to bankruptcy remote special purpose entities (“SPEs”). These SPEs then issue asset-backed notes to third parties collateralized by the transferred loans.

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

Unconsolidated VIEs

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

A summary of these investments is presented below:


(dollars in millions)	March 31, 2025	December 31, 2024
Lending to special purpose entities included in loans and leases	$4,221	$4,215
LIHTC investments included in other assets	2,685	2,631
LIHTC unfunded commitments included in other liabilities	1,142	1,109
Asset-backed investments included in HTM securities	392	412
Renewable energy investments included in other assets	256	269
NMTC investments included in other assets	2	2

Lending to Special Purpose Entities

The Company provides lending facilities to third-party sponsored special purpose entities. As of March 31, 2025 and December 31, 2024, the lending facilities had undrawn commitments to extend credit of $2.9 billion and $2.8 billion, respectively. For more information on commitments to extend credit see Note 11.

Asset-backed securities

The Company’s investments in asset-backed securities are collateralized by education loans sold to a third-party sponsored VIE. The Company acts as the primary servicer for the sold loans and receives a servicing fee. A third-party servicer is responsible for all loans that become significantly delinquent.

Low Income Housing Tax Credit Partnerships

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

Renewable Energy Entities

The Company’s investments in certain renewable energy entities provide benefits from government incentives and other tax attributes (e.g., tax depreciation).

Contingent commitments related to the Company’s renewable energy investments were $44 million at March 31, 2025, and are expected to be paid in varying amounts through 2027. These payments are contingent upon the level of electricity production attained by the renewable energy entity relative to its targeted threshold, changes in the production tax credit rates set by the Internal Revenue Service, and the achievement of commercial operation for a certain renewable energy project under its power purchase agreement.

New Markets Tax Credit Program

The Company participates in the NMTC program which provides a tax incentive for private sector investment into economic development projects and businesses located in low-income communities.

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


	Three Months Ended March 31,
(dollars in millions)	2025	2024
Tax credits recognized	$106	$97
Other tax benefits recognized	23	23
Amortization	(102)	(99)
Net benefit (expense) included in income tax expense	27	21
Other income	2	1
Allocated income (loss) on investments	(3)	(3)
Net benefit (expense) included in noninterest income	(1)	(2)
Net benefit (expense) included in the Consolidated Statements of Operations(1)	$26	$19

(1) Includes the impact of tax credit investments when the election to apply the proportional amortization method was in effect during the periods presented. For 2025 and 2024, this includes LIHTC, renewable energy and NMTC investments.

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

NOTE 7 - BORROWED FUNDS

Short-term borrowed funds

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


(dollars in millions)	March 31, 2025	December 31, 2024


Other short-term borrowed funds	$47	$—
Total short-term borrowed funds	$47	$—

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Long-term borrowed funds

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


(dollars in millions)	March 31, 2025	December 31, 2024
Parent Company:
4.350% fixed-rate subordinated debt, due August 2025	133	133
4.300% fixed-rate subordinated debt, due December 2025	336	336
2.850% fixed-rate senior unsecured notes, due July 2026	499	499
5.841% fixed/floating-rate senior unsecured notes, due January 2030	1,245	1,245
2.500% fixed-rate senior unsecured notes, due February 2030	299	299
3.250% fixed-rate senior unsecured notes, due April 2030	747	747
3.750% fixed-rate reset subordinated debt, due February 2031	69	69
4.300% fixed-rate reset subordinated debt, due February 2031	135	135
4.350% fixed-rate reset subordinated debt, due February 2031	61	60
5.253% fixed/floating-rate senior unsecured notes, due March 2031	746	—
5.718% fixed/floating-rate senior unsecured notes, due July 2032	1,244	1,243
2.638% fixed-rate subordinated debt, due September 2032	571	570
6.645% fixed/floating-rate senior unsecured notes, due April 2035	745	745
5.641% fixed-rate reset subordinated debt, due May 2037	398	398
CBNA’s Global Note Program:
2.250% senior unsecured notes, due April 2025	750	750
5.284% fixed/floating-rate senior unsecured notes, due January 2026(1)	—	350
3.750% senior unsecured notes, due February 2026	494	492
4.575% fixed/floating-rate senior unsecured notes, due August 2028	798	798
Additional Borrowings by CBNA and Other Subsidiaries:
Federal Home Loan Bank advances, 2.944% weighted average rate, due through 2043(2)	42	53
Secured borrowings, 5.565% weighted average rate, due through 2031(2)(3)	2,937	3,461
Other	18	18
Total long-term borrowed funds	$12,267	$12,401

(1) Notes were redeemed on January 27, 2025.

(2) Rate disclosed reflects the weighted average rate as of March 31, 2025.

(3) Collateralized by loans. See Note 6 for additional information.

At March 31, 2025, the Company’s long-term borrowed funds include principal balances of $12.4 billion, unamortized debt issuance costs and discounts of $84 million, and hedging basis adjustments of ($6) million. At December 31, 2024, the Company’s long-term borrowed funds include principal balances of $12.5 billion, unamortized debt issuance costs and discounts of $85 million, and hedging basis adjustments of ($8) million. See Note 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 sufficient to satisfy the collateral maintenance level established by the FHLB. The utilized FHLB borrowing capacity, primarily for advances and letters of credit, was $4.7 billion and $4.6 billion at March 31, 2025 and December 31, 2024, respectively. The Company’s available FHLB borrowing capacity was $23.0 billion and $21.1 billion at March 31, 2025 and December 31, 2024, respectively. The Company can also borrow from the FRB discount window to meet short-term liquidity requirements. Collateral, including certain loans, is pledged to support this borrowing capacity. At March 31, 2025, the Company’s unused secured borrowing capacity was approximately $77.4 billion, which includes unencumbered securities, FHLB borrowing capacity, and FRB discount window capacity.

NOTE 8 - DERIVATIVES

In the normal course of business, the Company enters into derivative transactions to meet the financing and hedging needs of its customers and reduce its own exposure to fluctuations in interest rates and foreign currency exchange rates. These transactions include interest rate swap contracts, interest rate options, foreign exchange contracts, residential loan commitment rate locks, interest rate future contracts, swaptions, certain commodities, forward commitments to sell TBAs, forward purchase and sale contracts, and purchase options. The Company does not use derivatives for speculative purposes. Information regarding the valuation methodology and inputs used to estimate the fair value of the Company’s derivative instruments is described in Note 20 in the Company’s 2024 Form 10-K.

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


	March 31, 2025			December 31, 2024
(dollars in millions)	Notional Amount	Derivative Assets	Derivative Liabilities	Notional Amount	Derivative Assets	Derivative Liabilities
Derivatives designated as hedging instruments:
Interest rate contracts	$72,140	$284	$10	$69,077	$402	$5
Derivatives not designated as hedging instruments:
Interest rate contracts	163,936	175	674	171,193	160	905
Foreign exchange contracts	36,876	318	326	34,749	472	411
Commodities contracts	1,133	689	634	1,136	429	379
TBA contracts	3,167	2	10	2,714	10	8
Other contracts	1,080	9	3	615	3	2
Total derivatives not designated as hedging instruments	206,192	1,193	1,647	210,407	1,074	1,705
Total gross derivatives	278,332	1,477	1,657	279,484	1,476	1,710
Less: Gross amounts offset in the Consolidated Balance Sheets(1)		(411)	(411)		(391)	(391)
Less: Cash collateral applied(1)		(306)	(363)		(677)	(99)
Total net derivatives presented in the Consolidated Balance Sheets		$760	$883		$408	$1,220

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

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

Derivatives Designated As Hedging Instruments

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

Fair Value Hedges

In a fair value hedge, changes in the fair value of both the derivative instrument and the hedged asset or liability attributable to the risk being hedged are recognized in the same income statement line item in the Consolidated Statements of Operations when the changes in fair value occur. At March 31, 2025 and December 31, 2024, the Company has designated $4.7 billion of interest rate swaps as fair value hedges of its fixed-rate prepayable AFS securities using the portfolio layer method. This approach allows the Company to designate as the hedged item a stated amount of the assets that are not expected to be affected by prepayments, defaults and other factors affecting the timing and amount of cash flows. At March 31, 2025 and December 31, 2024, the Company has also designated $3.2 billion and $3.1 billion, respectively, of interest rate swaps as fair value hedges to manage interest rate risk within its nonprepayable fixed-rate AFS securities portfolio.

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


	Location and Amount of Gains (Losses) Recognized
	Interest Income	Interest Expense
(dollars in millions)	Investment Securities	Long-Term Borrowed Funds
Three Months Ended March 31, 2025
Gains (losses) on fair value hedges recognized on:
Hedged items	$116	($2)
Derivatives	(118)	2
Amounts related to interest settlements on derivatives	11	(2)
Total net interest income recognized on fair value hedges	$9	($2)
Three Months Ended March 31, 2024
Gains (losses) on fair value hedges recognized on:
Hedged items	($135)	$3
Derivatives	139	(3)
Amounts related to interest settlements on derivatives	25	(4)
Total net interest income recognized on fair value hedges	$29	($4)

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


(dollars in millions)	March 31, 2025		December 31, 2024
	Debt securities available for sale(1)	Long-term borrowed funds		Debt securities available for sale(1)	Long-term borrowed funds
Carrying amount of hedged assets(2)	$9,623	$—		$9,557	$—
Carrying amount of hedged liabilities	—	494		—	491
Cumulative amount of fair value hedging adjustments included in the carrying amount of the hedged items	20	(6)		(97)	(8)

(1) Includes the amortized cost basis of closed portfolios used to designate hedging relationships under the portfolio layer method. The hedged item is a layer of the closed portfolio which is expected to be remaining at the end of the hedging relationship. As of March 31, 2025 and December 31, 2024, the amortized cost basis of the closed portfolios used in these hedging relationships was $6.3 billion and $6.4 billion, respectively, including associated cumulative basis adjustments of $(2) million and $(75) million, respectively. The amount of the designated hedging instruments was $4.7 billion at March 31, 2025 and December 31, 2024.

(2) Carrying amount represents amortized cost.

Cash Flow Hedges

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

The Company enters into interest rate swap agreements designed primarily to hedge a portion of its floating-rate assets and liabilities. All of these swaps are deemed highly effective cash flow hedges. From time to time, the Company may also enter into certain interest rate option agreements that utilize interest rate floors and/or caps. Option premiums paid and received are excluded from the assessment of hedge effectiveness and are amortized over the life of the instruments. During the first quarter of 2025, the Company entered into a cash flow hedge with a notional amount of $1.5 billion to manage the variability in cash flows related to the sale of Non-Core education loans, which will settle ratably each quarter throughout 2025.

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


	Three Months Ended March 31,
(dollars in millions)	2025	2024
Pre-tax net gains (losses) recognized in OCI	$284	($550)
Pre-tax net gains (losses) reclassified from AOCI into interest income	(202)	(203)

Pre-tax net gains (losses) reclassified from AOCI into interest expense	—	—

Citizens Financial Group, Inc. | 58

Using the March 31, 2025 interest rate curve, the Company estimates that $612 million in pre-tax net losses related to cash flow hedge strategies will be reclassified from AOCI to earnings over the next 12 months. These losses could differ from amounts recognized due to changes in interest rates, hedge de-designations or the addition of other hedges after March 31, 2025.

Derivatives Not Designated As Hedging Instruments

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

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

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

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


	Amounts Recognized in Noninterest Income for the
	Three Months Ended March 31,		Affected Line Item in the Consolidated Statements of Operations
(dollars in millions)	2025	2024
Economic hedge type:
Customer interest rate contracts	$165	($494)		Foreign exchange and derivative products
Derivatives hedging interest rate risk	(157)	503		Foreign exchange and derivative products
Customer foreign exchange contracts	98	(110)		Foreign exchange and derivative products
Derivatives hedging foreign exchange risk	(131)	145		Foreign exchange and derivative products
Customer commodity contracts	343	35		Foreign exchange and derivative products
Derivatives hedging commodity price risk	(336)	(32)		Foreign exchange and derivative products
Residential loan commitments	6	(2)		Mortgage banking fees
Derivatives hedging residential loan commitments and mortgage loans held for sale, at fair value	(13)	3		Mortgage banking fees
Derivative contracts used to hedge residential MSRs	22	(38)		Mortgage banking fees
Total	($3)	$10

Citizens Financial Group, Inc. | 59

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 March 31,
(dollars in millions)	Net Unrealized Gains (Losses) on Cash Flow Hedges	Net Unrealized Gains (Losses) on Investment Securities	Defined Benefit Plans	Total AOCI
Balance at January 1, 2024	($1,087)	($2,338)	($333)	($3,758)
Other comprehensive income (loss) before reclassifications	(405)	(173)	4	(574)
Amounts reclassified to the Consolidated Statements of Operations	149	14	5	168
Net other comprehensive income (loss)	(256)	(159)	9	(406)
Balance at March 31, 2024	($1,343)	($2,497)	($324)	($4,164)
Balance at January 1, 2025	($925)	($2,369)	($301)	($3,595)
Other comprehensive income (loss) before reclassifications	208	282	—	490
Amounts reclassified to the Consolidated Statements of Operations	148	13	3	164
Net other comprehensive income (loss)	356	295	3	654
Balance at March 31, 2025	($569)	($2,074)	($298)	($2,941)
Primary location in the Consolidated Statements of Operations of amounts reclassified from AOCI	Net interest income	Securities gains, net and Net interest income	Other operating expense

NOTE 10 - STOCKHOLDERS’ EQUITY

Preferred Stock

The following table summarizes the Company’s preferred stock:


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

(1) Equivalent to $25 per depositary share.

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

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

For further detail regarding the terms and conditions of the Company’s preferred stock, see Note 17 in the Company’s 2024 Form 10-K.

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Dividends

The following table summarizes the Company’s dividend activity for the three months ended March 31, 2025 and 2024.


	Three Months Ended March 31, 2025			Three Months Ended March 31, 2024
(dollars in millions, except per share data)	Dividends Declared per Share	Dividends Declared	Dividends Paid	Dividends Declared per Share	Dividends Declared	Dividends Paid
Common stock	$0.42	$186	$186	$0.42	$197	$197
Preferred stock
Series B	$19.11	$6	$6	$21.72	$7	$7
Series C	19.50	6	6	15.94	5	5
Series D	—	—	—	15.88	5	5
Series E	12.50	5	6	12.50	5	5
Series F	14.13	6	6	14.13	5	6
Series G	10.00	3	3	10.00	3	3
Series H	18.44	7	7	—	—	—
Total preferred stock		$33	$34		$30	$31

Treasury Stock

During the three months ended March 31, 2025 and 2024, the Company repurchased $200 million, or 4,483,894 shares, and $300 million, or 9,244,939 shares, respectively, 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 19 in the Company’s 2024 Form 10-K.


(dollars in millions)	March 31, 2025	December 31, 2024
Commitments to extend credit	$94,106	$93,460
Letters of credit	1,875	1,845
Loans sold with recourse	91	93
Marketing rights	12	14
Risk participation agreements	5	1
Total	$96,089	$95,413

Commitments to Extend Credit

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

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. Letters of credit are generally secured, with collateral including, but not limited to, cash, accounts receivable, inventory or investment securities. Credit risk associated with letters of credit is considered in determining the appropriate amount of allowances for unfunded commitments. Standby letters of credit and commercial letters of credit are issued for terms of up to two years and one year, respectively.

Citizens Financial Group, Inc. | 61

Other Commitments

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

Marketing Rights - During 2003, the Company entered into a 25-year agreement to acquire the naming and marketing rights of a baseball stadium in Pennsylvania.
Loans sold with recourse - the Company is an originator and servicer of residential mortgages and routinely sells such mortgage loans in the secondary market and to GSEs. In the context of such sales, the Company makes certain representations and warranties regarding the characteristics of the underlying loans and, as a result, may be contractually required to repurchase such loans or indemnify certain parties against losses for certain breaches of those representations and warranties. The Company also sells the government guaranteed portion of certain SBA loans to outside investors, for which it retains the servicing rights.
Risk Participation Agreements - RPAs are guarantees issued by the Company to other parties for a fee, whereby the Company agrees to participate in the credit risk of a derivative customer of the other party. The current amount of credit exposure is spread out over multiple counterparties. At March 31, 2025, the remaining terms on these RPAs ranged from less than one year to nine years.

Contingencies

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

In these disputes and proceedings, the Company contests liability and the amount of damages as appropriate. Given their complex nature, and based on the Company's experience, it may be years before some of these matters are 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

The Company measures or monitors many of its assets and liabilities on a fair value basis. Fair value is used on a recurring basis for assets and liabilities for which fair value is the required or elected measurement basis of accounting. Fair value is also used on a nonrecurring basis to evaluate assets for impairment or for disclosure purposes. Nonrecurring fair value adjustments typically involve the application of lower of cost or market accounting or write-downs of individual assets. Fair value measurement guidance is also applied to 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

The Company elected to account for residential mortgage LHFS and certain commercial 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:


	March 31, 2025			December 31, 2024
(dollars in millions)	Aggregate Fair Value	Aggregate Unpaid Principal	Aggregate Fair Value Greater (Less) Than Aggregate Unpaid Principal	Aggregate Fair Value	Aggregate Unpaid Principal	Aggregate Fair Value Greater (Less) Than Aggregate Unpaid Principal
Residential mortgage loans held for sale	$922	$894	$28	$633	$625	$8
Commercial loans held for sale	215	226	(11)	192	199	(7)

For more information on the election of the fair value option for these assets see Note 20 in the Company’s 2024 Form 10-K.

Recurring Fair Value Measurements

The Company 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 fair value on a recurring basis, see Note 20 in the Company’s 2024 Form 10-K.

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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 March 31, 2025:


(dollars in millions)	Total	Level 1	Level 2	Level 3
Debt securities available for sale:
Mortgage-backed securities	$30,014	$—	$30,014	$—

Collateralized loan obligations	124	—	124	—
State and political subdivisions	1	—	1	—
U.S. Treasury and other	4,069	4,069	—	—
Total debt securities available for sale	34,208	4,069	30,139	—
Loans held for sale:
Residential loans held for sale	922	—	922	—
Commercial loans held for sale	215	—	215	—
Total loans held for sale, at fair value	1,137	—	1,137	—
Mortgage servicing rights	1,397	—	—	1,397
Derivative assets:
Interest rate contracts	459	—	459	—
Foreign exchange contracts	318	—	318	—
Commodities contracts	689	—	689	—
TBA contracts	2	—	2	—
Other contracts	9	—	1	8
Total derivative assets	1,477	—	1,469	8
Equity securities, at fair value(1)	178	178	—	—
Short-term investments	55	20	35	—
Total assets	$38,452	$4,267	$32,780	$1,405
Derivative liabilities:
Interest rate contracts	$684	$—	$684	$—
Foreign exchange contracts	326	—	326	—
Commodities contracts	634	—	634	—
TBA contracts	10	—	10	—
Other contracts	3	—	—	3
Total derivative liabilities	1,657	—	1,654	3
Short-term borrowed funds	47	39	8	—
Other liabilities	106	—	106	—
Total liabilities	$1,810	$39	$1,768	$3

(1) Excludes investments of $58 million included in other assets in the Consolidated Balance Sheets that are measured at fair value using the net asset value per share (or its equivalent) practical expedient. These investments include capital contributions to private investment funds and have unfunded capital commitments of $23 million at March 31, 2025, which may be called at any time during prescribed time periods. The credit exposure is generally limited to the carrying amount of investments made and unfunded capital commitments.

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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, 2024:


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

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

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


	Three Months Ended March 31, 2025
(dollars in millions)		Mortgage Servicing Rights	Other Derivative Contracts
Beginning balance		$1,491	$1
Issuances		27	16

Sales(1)		(72)	—
Settlements(2)		(39)	(16)
Changes in fair value during the period recognized in earnings(3)		(10)	4
Ending balance		$1,397	$5


	Three Months Ended March 31, 2024
(dollars in millions)	Mortgage Servicing Rights	Other Derivative Contracts
Beginning balance	$1,552	$7



Issuances	18	13


Settlements(2)	(46)	(10)
Changes in fair value during the period recognized in earnings(3)	40	(2)
Ending balance	$1,564	$8

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

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

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

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


			As of March 31, 2025	As of December 31, 2024
Financial Instrument(1)	Valuation Technique	Unobservable Input	Range (Weighted Average)	Range (Weighted Average)
Mortgage servicing rights	Discounted Cash Flow	Constant prepayment rate	5.65-16.12% CPR (7.10% CPR)	5.08-16.32% CPR (6.70% CPR)
Option adjusted spread	398-1,058 bps (628 bps)		398-1,058 bps (632 bps)
Other derivative contracts	Internal Model	Pull through rate	6.67-99.93% (82.98%)	5.09-99.90% (83.06%)
MSR value	31.71-163.78 bps (117.97 bps)		23.91-171.64 bps (121.23 bps)

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

Nonrecurring Fair Value Measurements

Fair value is also used on a nonrecurring basis to evaluate certain assets for impairment or for disclosure purposes. For more information on the valuation techniques utilized to measure fair value on a nonrecurring basis, see Note 20 in the Company’s 2024 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 March 31,
(dollars in millions)	2025	2024
Collateral-dependent loans	($59)	($56)

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


	March 31, 2025				December 31, 2024
(dollars in millions)	Total	Level 1	Level 2	Level 3	Total	Level 1	Level 2	Level 3
Collateral-dependent loans	$910	$—	$910	$—	$979	$—	$979	$—

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Fair Value of Financial Instruments

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


	March 31, 2025
	Total		Level 1		Level 2		Level 3
(dollars in millions)	Carrying Value	Estimated Fair Value	Carrying Value	Estimated Fair Value	Carrying Value	Estimated Fair Value	Carrying Value	Estimated Fair Value
Financial assets:
Debt securities held to maturity	$8,469	$7,515	$—	$—	$8,077	$7,129	$392	$386
Loans held for sale	1,683	1,683	—	—	—	—	1,683	1,683
Net loans and leases	135,621	134,844	—	—	910	910	134,711	133,934
Other assets	711	711	—	—	689	689	22	22
Financial liabilities:
Deposits	177,576	177,508	—	—	177,576	177,508	—	—

Long-term borrowed funds	12,267	12,222	—	—	12,267	12,222	—	—


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

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

NOTE 13 - NONINTEREST INCOME

A portion of the Company’s noninterest income relates to certain fee-based revenue earned from contracts with customers based on the amount of consideration expected to be received upon the transfer of control of a good or service. For a description of the components of revenue from contracts with customers and how each component is recognized for the principal products and services of the Company’s business segments, see Note 21 in the Company’s 2024 Form 10-K.

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


	Three Months Ended March 31, 2025
(dollars in millions)	Consumer Banking	Commercial Banking	Non-Core	Other	Consolidated
Service charges and fees	$74	$34	$—	$—	$108
Card fees	67	13	—	—	80
Capital markets fees	—	95	—	—	95
Wealth fees	81	—	—	—	81
Other banking fees	1	2	—	—	3
Total revenue from contracts with customers	$223	$144	$—	$—	$367
Total revenue from other sources(1)	74	71	—	32	177
Total noninterest income	$297	$215	$—	$32	$544


	Three Months Ended March 31, 2024
(dollars in millions)	Consumer Banking	Commercial Banking	Non-Core	Other	Consolidated
Service charges and fees	$63	$33	$—	$—	$96
Card fees	66	15	—	3	84
Capital markets fees	—	116	—	—	116
Wealth fees	68	—	—	—	68
Other banking fees	1	2	—	—	3
Total revenue from contracts with customers	$198	$166	$—	$3	$367
Total revenue from other sources(1)	60	61	—	29	150
Total noninterest income	$258	$227	$—	$32	$517

(1) Includes bank-owned life insurance income of $27 million and $24 million for the three months ended March 31, 2025 and 2024, respectively.

For the three months ended March 31, 2025 and 2024, the Company recognized trailing commissions of $4 million related to previous investment sales.

NOTE 14 - OTHER OPERATING EXPENSE

The following table presents the details of other operating expense:


	Three Months Ended March 31,
(dollars in millions)	2025	2024
Marketing	$40	$35
Deposit insurance(1)	38	76
Other	79	92
Other operating expense	$157	$203

(1) Includes an industry-wide FDIC special assessment of $35 million for the three months ended March 31, 2024.

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NOTE 15 - EARNINGS PER SHARE


	Three Months Ended March 31,
(dollars in millions, except per share data)	2025	2024
Numerator (basic and diluted):
Net income	$373	$334
Less: Preferred stock dividends	33	30

Net income available to common stockholders	$340	$304
Denominator:
Weighted-average common shares outstanding - basic	438,320,757	461,358,681
Dilutive common shares: share-based awards	3,879,423	2,439,283
Weighted-average common shares outstanding - diluted	442,200,180	463,797,964
Earnings per common share:
Basic	$0.78	$0.66
Diluted(1)	0.77	0.65

(1) Potential dilutive common shares are 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 126,523 and 1,305,850 for the three months ended March 31, 2025 and 2024, respectively.

NOTE 16 - BUSINESS SEGMENTS

The Company is managed by its CODM, the Chief Executive Officer, on a segment basis. The Company’s three reportable business segments are Consumer Banking, Commercial Banking, and Non-Core. The business segments are determined based on the products and services provided, or the type of customer served. Each business segment has a segment head that reports directly to the Chief Executive Officer, who has final authority over resource allocation decisions and performance assessment. The business segments reflect this management structure and the manner in which financial information is currently evaluated by the Chief Executive Officer.

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

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

For more information on the Company’s business segments, as well as Other non-segment operations, see Note 26 in the Company’s 2024 Form 10-K.

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	Three Months Ended March 31, 2025
(dollars in millions)	Consumer Banking	Commercial Banking	Non-Core	Other	Consolidated
Net interest income	$1,193	$441	($15)	($228)	$1,391
Noninterest income	297	215	—	32	544
Total revenue	1,490	656	(15)	(196)	1,935
Direct expenses(1)(2)	669	218	—	427	1,314
Indirect expenses(3)	285	109	16	(410)	—
Noninterest expense	954	327	16	17	1,314
Profit (loss) before provision (benefit) for credit losses	536	329	(31)	(213)	621
Provision (benefit) for credit losses	86	77	37	(47)	153
Income (loss) before income tax expense (benefit)	450	252	(68)	(166)	468
Income tax expense (benefit)	114	56	(17)	(58)	95
Net income (loss)	$336	$196	($51)	($108)	$373
Total average assets	$77,534	$65,366	$6,536	$66,873	$216,309

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

(2) Includes depreciation and amortization of $31 million, $5 million and $75 million, respectively, for the Consumer Banking, Commercial Banking and Other business segments.

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


	Three Months Ended March 31, 2024
(dollars in millions)	Consumer Banking	Commercial Banking	Non-Core	Other	Consolidated
Net interest income	$1,093	$514	($37)	($128)	$1,442
Noninterest income	258	227	—	32	517
Total revenue	1,351	741	(37)	(96)	1,959
Direct expenses(1)(2)	576	213	1	568	1,358
Indirect expenses(3)	327	104	24	(455)	—
Noninterest expense	903	317	25	113	1,358
Profit (loss) before provision (benefit) for credit losses	448	424	(62)	(209)	601
Provision (benefit) for credit losses	81	81	19	(10)	171
Income (loss) before income tax expense (benefit)	367	343	(81)	(199)	430
Income tax expense (benefit)	95	84	(21)	(62)	96
Net income (loss)	$272	$259	($60)	($137)	$334
Total average assets	$73,833	$70,100	$10,554	$66,283	$220,770

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

(2) Includes depreciation and amortization of $27 million, $7 million and $77 million, respectively, for the Consumer Banking, Commercial Banking and Other business segments.

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

Previous: Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS · Next: Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK