Item 1. FINANCIAL STATEMENTS (UNAUDITED)

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Item 1. FINANCIAL STATEMENTS (UNAUDITED)


						Page
Consolidated Balance Sheets						38
Consolidated Statements of Operations						39
Consolidated Statements of Comprehensive Income						40
Consolidated Statements of Changes in Stockholders’ Equity						41
Consolidated Statements of Cash Flows						43
Notes to Consolidated Financial Statements						44
Note 1 - Significant Accounting Policies						44
Note 2 - Securities						44
Note 3 - Loans and Leases						47
Note 4 - Credit Quality and the Allowance for Credit Losses						47
Note 5 - Mortgage Banking and Other Serviced Loans						59
Note 6 - Variable Interest Entities						61
Note 7 - Borrowed Funds						63
Note 8 - Derivatives						64
Note 9 - Accumulated Other Comprehensive Income (Loss)						68
Note 10 - Stockholders’ Equity						69
Note 11 - Commitments and Contingencies						71
Note 12 - Fair Value Measurements						72
Note 13 - Noninterest Income						76
Note 14 - Other Operating Expense						77
Note 15 - Earnings Per Share						78
Note 16 - Business Segments						78

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CONSOLIDATED BALANCE SHEETS (UNAUDITED)


(dollars in millions, except par value)	September 30, 2025	December 31, 2024
ASSETS:
Cash and due from banks	$1,254	$1,409
Interest-bearing cash and due from banks	10,396	9,192
Interest-bearing deposits in banks(1)	694	635
Debt securities available for sale, at fair value (including $115 and $152 pledged to creditors, respectively)(2)	35,419	32,765
Debt securities held to maturity (fair value of $7,295 and $7,540, respectively, and including $68 and $83 pledged to creditors, respectively)(2)	8,124	8,599
Loans held for sale (includes $768 and $825, respectively, measured at fair value)	1,334	858
Loans and leases	140,870	139,203
Less: Allowance for loan and lease losses	(1,972)	(2,061)
Net loans and leases(1)	138,898	137,142
Derivative assets	721	408
Premises and equipment, net	857	875
Bank-owned life insurance	3,422	3,364
Goodwill	8,187	8,187
Other intangible assets(3)	123	146
Other assets(1)	13,318	13,941
TOTAL ASSETS	$222,747	$217,521
LIABILITIES AND STOCKHOLDERS’ EQUITY:
LIABILITIES:
Deposits:
Noninterest-bearing	$39,472	$36,920
Interest-bearing	140,539	137,856
Total deposits	180,011	174,776
Short-term borrowed funds	214	—
Long-term borrowed funds(1)	10,441	12,401
Derivative liabilities	738	1,220
Other liabilities(1)	5,514	4,870
TOTAL LIABILITIES	196,918	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 September 30, 2025 and December 31, 2024	2,111	2,113
Common stock:
$0.01 par value, 1,000,000,000 shares authorized; 652,107,285 shares issued and 431,453,142 shares outstanding at September 30, 2025 and 650,068,324 shares issued and 440,543,381 shares outstanding at December 31, 2024	7	7
Additional paid-in capital	22,448	22,364
Retained earnings	11,056	10,412
Treasury stock, at cost, 220,654,143 and 209,524,943 shares at September 30, 2025 and December 31, 2024, respectively	(7,526)	(7,047)
Accumulated other comprehensive income (loss)	(2,267)	(3,595)
TOTAL STOCKHOLDERS’ EQUITY	25,829	24,254
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$222,747	$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 September 30,		Nine Months Ended September 30,
(dollars in millions, except per share data)	2025	2024	2025	2024
INTEREST INCOME:
Interest and fees on loans and leases	$1,897	$1,976	$5,577	$6,038
Interest and fees on loans held for sale	31	19	83	56
Investment securities	433	423	1,279	1,239
Interest-bearing deposits in banks	97	121	278	391
Total interest income	2,458	2,539	7,217	7,724
INTEREST EXPENSE:
Deposits	816	990	2,413	2,942
Short-term borrowed funds	5	3	22	14
Long-term borrowed funds	149	177	466	547
Total interest expense	970	1,170	2,901	3,503
Net interest income	1,488	1,369	4,316	4,221
Provision (benefit) for credit losses	154	172	471	525
Net interest income after provision (benefit) for credit losses	1,334	1,197	3,845	3,696
NONINTEREST INCOME:
Service charges and fees	112	109	332	311
Capital markets fees	166	94	371	346
Card fees	87	93	260	271
Wealth fees	93	76	262	219
Mortgage banking fees	49	46	181	149
Foreign exchange and derivative products	42	36	122	111
Letter of credit and loan fees	48	45	137	130
Securities gains, net	2	9	14	14
Other income	31	24	95	51
Total noninterest income	630	532	1,774	1,602
NONINTEREST EXPENSE:
Salaries and employee benefits	705	647	2,082	1,983
Equipment and software	197	194	584	576
Outside services	161	146	485	469
Occupancy	106	108	326	335
Other operating expense	166	164	491	555
Total noninterest expense	1,335	1,259	3,968	3,918
Income before income tax expense	629	470	1,651	1,380
Income tax expense	135	88	348	272
NET INCOME	$494	$382	$1,303	$1,108
Net income available to common stockholders	$457	$344	$1,199	$1,005
Weighted-average common shares outstanding:
Basic	431,365,552	446,561,996	434,416,696	453,993,833
Diluted	435,472,350	449,913,467	437,915,596	456,461,330
Per common share information:
Basic earnings	$1.06	$0.77	$2.76	$2.21
Diluted earnings	1.05	0.77	2.74	2.20

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 September 30,		Nine Months Ended September 30,
(dollars in millions)	2025	2024	2025	2024
Net income	$494	$382	$1,303	$1,108
Other comprehensive income (loss), net of tax:
Cash flow hedges:
Net unrealized gains (losses) arising during the period	(16)	450	275	(84)
Reclassification of net (gains) losses to earnings	144	203	437	522
Investment securities:
Net unrealized gains (losses) on AFS securities arising during the period	223	541	561	339
Reclassification of net (gains) losses to earnings	18	13	48	42
Defined benefit plans:
Net actuarial gain (loss) arising during the period	—	—	—	4
Amortization of actuarial (gain) loss to earnings	3	2	7	9
Total other comprehensive income (loss), net of tax	372	1,209	1,328	832
Total comprehensive income (loss)	$866	$1,591	$2,631	$1,940

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 July 1, 2024	2	$2,112	453	$6	$22,299	$10,079	($6,492)	($4,135)	$23,869
Dividends declared - common stock	—	—	—	—	—	(190)	—	—	(190)
Dividends declared - preferred stock	—	—	—	—	—	(38)	—	—	(38)



Treasury stock purchased	—	—	(8)	—	—	—	(325)	—	(325)
Share repurchase excise tax	—	—	—	—	—	—	(3)	—	(3)
Share-based compensation plans	—	—	—	—	21	—	—	—	21
Employee stock purchase plan	—	—	—	—	7	—	—	—	7

Total comprehensive income (loss):
Net income	—	—	—	—	—	382	—	—	382
Other comprehensive income (loss)	—	—	—	—	—	—	—	1,209	1,209
Total comprehensive income (loss)	—	—	—	—	—	382	—	1,209	1,591
Balance at September 30, 2024	2	$2,112	445	$6	$22,327	$10,233	($6,820)	($2,926)	$24,932
Balance at July 1, 2025	2	$2,113	433	$7	$22,420	$10,783	($7,450)	($2,639)	$25,234
Dividends declared - common stock	—	—	—	—	—	(184)	—	—	(184)
Dividends declared - preferred stock	—	—	—	—	—	(32)	—	—	(32)

Preferred stock issued	—	393	—	—	—	—	—	—	393
Preferred stock redemption	—	(395)	—	—	—	(5)	—	—	(400)
Treasury stock purchased	—	—	(2)	—	—	—	(75)	—	(75)
Share repurchase excise tax	—	—	—	—	—	—	(1)	—	(1)
Share-based compensation plans	—	—	—	—	21	—	—	—	21
Employee stock purchase plan	—	—	—	—	7	—	—	—	7

Total comprehensive income (loss):
Net income	—	—	—	—	—	494	—	—	494
Other comprehensive income (loss)	—	—	—	—	—	—	—	372	372
Total comprehensive income (loss)	—	—	—	—	—	494	—	372	866
Balance at September 30, 2025	2	$2,111	431	$7	$22,448	$11,056	($7,526)	($2,267)	$25,829

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	—	—	—	—	—	(581)	—	—	(581)
Dividends declared - preferred stock	—	—	—	—	—	(103)	—	—	(103)

Preferred stock issued	—	391	—	—	—	—	—	—	391
Preferred stock redemption	—	(293)	—	—	—	(7)	—	—	(300)
Treasury stock purchased	—	—	(23)	—	—	—	(825)	—	(825)
Share repurchase excise tax	—	—	—	—	—	—	(9)	—	(9)
Share-based compensation plans	—	—	2	—	57	—	—	—	57
Employee stock purchase plan	—	—	—	—	20	—	—	—	20

Total comprehensive income (loss):
Net income	—	—	—	—	—	1,108	—	—	1,108
Other comprehensive income (loss)	—	—	—	—	—	—	—	832	832
Total comprehensive income (loss)	—	—	—	—	—	1,108	—	832	1,940
Balance at September 30, 2024	2	$2,112	445	$6	$22,327	$10,233	($6,820)	($2,926)	$24,932
Balance at January 1, 2025	2	$2,113	441	$7	$22,364	$10,412	($7,047)	($3,595)	$24,254
Dividends declared - common stock	—	—	—	—	—	(555)	—	—	(555)
Dividends declared - preferred stock	—	—	—	—	—	(99)	—	—	(99)

Preferred stock issued	—	393	—	—	—	—	—	—	393
Preferred stock redemption	—	(395)	—	—	—	(5)	—	—	(400)
Treasury stock purchased	—	—	(12)	—	—	—	(475)	—	(475)
Share repurchase excise tax	—	—	—	—	—	—	(4)	—	(4)
Share-based compensation plans	—	—	2	—	62	—	—	—	62
Employee stock purchase plan	—	—	—	—	22	—	—	—	22

Total comprehensive income (loss):
Net income	—	—	—	—	—	1,303	—	—	1,303
Other comprehensive income (loss)	—	—	—	—	—	—	—	1,328	1,328
Total comprehensive income (loss)	—	—	—	—	—	1,303	—	1,328	2,631
Balance at September 30, 2025	2	$2,111	431	$7	$22,448	$11,056	($7,526)	($2,267)	$25,829

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

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CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)


	Nine Months Ended September 30,
(dollars in millions)	2025	2024
OPERATING ACTIVITIES
Net income	$1,303	$1,108
Adjustments to reconcile net income to net change due to operating activities:
Provision (benefit) for credit losses	471	525
Net change in Loans held for sale	(81)	62
Depreciation, amortization, and accretion	366	374
Deferred income tax expense (benefit)	(93)	(50)
Share-based compensation	97	76
Net gain on sale of assets	(16)	(14)
Net (increase) decrease in Other assets	357	(14)
Net increase (decrease) in Other liabilities	(35)	(549)
Net change due to operating activities	2,369	1,518
INVESTING ACTIVITIES
Investment securities:
Purchases of debt securities available for sale	(5,545)	(6,497)
Proceeds from maturities and paydowns of debt securities available for sale	2,770	2,112
Proceeds from sales of debt securities available for sale	1,218	2,080

Proceeds from maturities and paydowns of debt securities held to maturity	537	501

Net (increase) decrease in Interest-bearing deposits in banks	(59)	(243)


Purchases of loans	(642)	(517)
Sales of loans	1,428	186
Net (increase) decrease in Loans and leases	(3,475)	3,860
Capital expenditures, net	(82)	(74)

Other	(183)	(29)
Net change due to investing activities	(4,033)	1,379
FINANCING ACTIVITIES
Net increase (decrease) in Deposits	5,235	(2,154)
Net increase (decrease) in Short-term borrowed funds	214	(490)
Proceeds from issuance of long-term borrowed funds	6,534	13,185
Repayments of long-term borrowed funds	(8,520)	(12,741)
Treasury stock purchased	(475)	(825)
Net proceeds from issuance of preferred stock	393	391
Redemption of preferred stock	—	(300)
Dividends paid to common stockholders	(555)	(581)
Dividends paid to preferred stockholders	(100)	(96)

Other	(13)	1
Net change due to financing activities	2,713	(3,610)
Net change in cash and cash equivalents(1)	1,049	(713)
Cash and cash equivalents at beginning of period(1)	10,601	11,628
Cash and cash equivalents at end of period(1)	$11,650	$10,915
Non-cash items:
Transfer of loans from loans held for investment to LHFS	$1,939	$249

Loans securitized and transferred to AFS securities	87	181

(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, certain information and footnote disclosures required for annual financial statements prepared in accordance with GAAP are omitted. In the opinion of management, the Consolidated Financial Statements include all adjustments, consisting of normal recurring adjustments, necessary to fairly present the Company’s interim period results. 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 consolidated 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:


	September 30, 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	$4,563	$23	($72)	$4,514	$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	31,865	160	(1,474)	30,551	30,897	33	(2,135)	28,795
Other/non-agency	268	—	(5)	263	273	—	(13)	260
Total mortgage-backed securities	32,133	160	(1,479)	30,814	31,170	33	(2,148)	29,055
Collateralized loan obligations	90	—	—	90	184	—	—	184
Total debt securities available for sale, at fair value	$36,787	$183	($1,551)	$35,419	$34,986	$36	($2,257)	$32,765
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities	$7,767	$1	($830)	$6,938	$8,187	$—	($1,051)	$7,136
Total mortgage-backed securities	7,767	1	(830)	6,938	8,187	—	(1,051)	7,136
Asset-backed securities	357	—	—	357	412	1	(9)	404
Total debt securities held to maturity	$8,124	$1	($830)	$7,295	$8,599	$1	($1,060)	$7,540
Equity securities, at cost(2)	$710	$—	$—	$710	$710	$—	$—	$710
Equity securities, at fair value(2)	286	—	—	286	220	—	—	220

(1) Excludes portfolio level basis adjustments of $37 million and $(75) million, respectively, for securities designated in active fair value hedge relationships under the portfolio layer method at September 30, 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 $135 million and $125 million as of September 30, 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 September 30, 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	$—	$3,380	$1,183	$—	$4,563
State and political subdivisions	—	—	—	1	1
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities	100	2,274	1,120	28,371	31,865
Other/non-agency	—	—	—	268	268
Collateralized loan obligations	—	—	90	—	90
Total debt securities available for sale	100	5,654	2,393	28,640	36,787
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities	—	—	—	7,767	7,767
Asset-backed securities	—	357	—	—	357
Total debt securities held to maturity	—	357	—	7,767	8,124
Total amortized cost of debt securities	$100	$6,011	$2,393	$36,407	$44,911

Fair value:
U.S. Treasury and other	$—	$3,311	$1,203	$—	$4,514
State and political subdivisions	—	—	—	1	1
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities	99	2,235	1,073	27,144	30,551
Other/non-agency	—	—	—	263	263
Collateralized loan obligations	—	—	90	—	90
Total debt securities available for sale	99	5,546	2,366	27,408	35,419
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities	—	—	—	6,938	6,938
Asset-backed securities	—	357	—	—	357
Total debt securities held to maturity	—	357	—	6,938	7,295
Total fair value of debt securities	$99	$5,903	$2,366	$34,346	$42,714

Taxable interest income from investment securities as presented in the Consolidated Statements of Operations was $433 million and $423 million for the three months ended September 30, 2025 and 2024, respectively, and $1.3 billion and $1.2 billion for the nine months ended September 30, 2025 and 2024, respectively.

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


	Three Months Ended September 30,		Nine Months Ended September 30,
(dollars in millions)	2025	2024	2025	2024
Gains	$2	$9	$14	$14
Losses	—	—	—	—
Securities gains, net	$2	$9	$14	$14

At September 30, 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, and derivative contracts, and for other purposes as required or permitted by law.

Retained interests from the sale and securitization of originated mortgage loans totaled $87 million during the three and nine months ended September 30, 2025. Retained interests from the sale and securitization of originated mortgage loans totaled $48 million and $181 million, respectively, during the three and nine months ended September 30, 2024. The debt securities received from the issuers, FNMA and FHLMC, include a substantive guarantee and are classified as Debt securities available for sale in the Consolidated Balance Sheets.

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Impairment

The Company evaluated its existing HTM portfolio as of September 30, 2025 and concluded that 96% of HTM securities met the zero expected credit loss criteria and, therefore, no ACL was recognized. Lifetime expected credit losses on the remainder of the HTM portfolio were determined to be insignificant based on the modeling of the Company’s credit loss position in the securities. The Company monitors the credit exposure through the use of credit quality indicators. For these securities, the Company uses external credit ratings or an internally derived credit rating when an external rating is not available. All securities were determined to be investment grade at September 30, 2025.

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


	September 30, 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	$—	$—	$2,613	($72)	$2,613	($72)

Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities	4,760	(171)	13,230	(1,303)	17,990	(1,474)
Other/non-agency	—	—	263	(5)	263	(5)
Total mortgage-backed securities	4,760	(171)	13,493	(1,308)	18,253	(1,479)

Total	$4,760	($171)	$16,106	($1,380)	$20,866	($1,551)


	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 AFS debt securities, and it is not more likely than not that the Company will be required to sell them prior to recovery of their amortized cost bases. The Company determined that credit losses are not expected to be incurred on the AFS debt securities identified with unrealized losses as of September 30, 2025. The unrealized losses on these AFS debt securities reflect non-credit-related factors driven by changes in interest rates. Therefore, the Company determined that these AFS debt securities are not impaired.

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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)	September 30, 2025	December 31, 2024
Commercial and industrial	$46,953	$42,551
Commercial real estate	25,540	27,225
Total commercial	72,493	69,776
Residential mortgages	34,477	32,726
Home equity	18,415	16,495
Automobile	2,816	4,744
Education	8,556	10,812
Other retail	4,113	4,650
Total retail	68,377	69,427
Total loans and leases	$140,870	$139,203

Accrued interest receivable on loans and leases held for investment totaled $857 million and $816 million as of September 30, 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 $40.6 billion and $37.5 billion at September 30, 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 $20.0 billion and $22.9 billion at September 30, 2025 and December 31, 2024, respectively.

Interest income on direct financing and sales-type leases for the three months ended September 30, 2025 and 2024 was $11 million and is reported within Interest and fees on loans and leases in the Consolidated Statements of Operations. For the nine months ended September 30, 2025 and 2024, this interest income was $33 million and $31 million, respectively.

The following table presents the composition of LHFS:


	September 30, 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	$592	$—	$176	$768	$633	$192	$825
Other loans held for sale	—	466	100	566	—	33	33
Total loans held for sale	$592	$466	$276	$1,334	$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. Other commercial LHFS primarily consist of loans associated with the Company’s syndication business.

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 nine months ended September 30, 2025.

Citizens Financial Group, Inc. | 47

The following table presents a summary of changes in the ACL for the three and nine months ended September 30, 2025:


	Three Months Ended September 30, 2025			Nine Months Ended September 30, 2025
(dollars in millions)	Commercial	Retail	Total	Commercial	Retail	Total
Allowance for loan and lease losses, beginning of period	$1,106	$902	$2,008	$1,140	$921	$2,061



Charge-offs	(91)	(104)	(195)	(269)	(361)	(630)
Recoveries	6	27	33	11	90	101
Net charge-offs	(85)	(77)	(162)	(258)	(271)	(529)
Provision expense (benefit) for loans and leases	62	64	126	201	239	440
Allowance for loan and lease losses, end of period	1,083	889	1,972	1,083	889	1,972
Allowance for unfunded lending commitments, beginning of period	163	38	201	155	43	198


Provision expense (benefit) for unfunded lending commitments	19	9	28	27	4	31

Allowance for unfunded lending commitments, end of period	182	47	229	182	47	229
Total allowance for credit losses, end of period	$1,265	$936	$2,201	$1,265	$936	$2,201

During the nine months ended September 30, 2025, net charge-offs of $529 million and a provision for expected credit losses of $471 million resulted in a decrease of $58 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, of which approximately $1.4 billion has settled to date, with the remaining $500 million scheduled to settle during the fourth quarter of 2025.

As of September 30, 2025, the Company’s ACL economic forecast over a two-year reasonable and supportable period reflects the economy going into a shallow two quarter contraction inclusive of uncertainties related to the implementation of tariffs and protectionist trade policies, inflationary pressures, and geopolitical tensions. This forecast is generally applied to the retail and commercial and industrial portfolios and projects peak unemployment of approximately 5.2% and a start-to-trough real GDP decline of approximately 0.5%, compared to peak unemployment of approximately 5.1% and a start-to-trough real GDP decline of approximately 0.4% at December 31, 2024. More severe economic scenarios are applied within the CRE portfolio, such as general office, with peak unemployment of approximately 9.4% and a start-to-trough real GDP decline of approximately 4.4%, compared to peak unemployment of approximately 9.3% and a start-to-trough real GDP decline of approximately 4.4% at December 31, 2024.

Citizens Financial Group, Inc. | 48

The following table presents a summary of changes in the ACL for the three and nine months ended September 30, 2024:


	Three Months Ended September 30, 2024			Nine Months Ended September 30, 2024
(dollars in millions)	Commercial	Retail	Total	Commercial	Retail	Total
Allowance for loan and lease losses, beginning of period	$1,282	$843	$2,125	$1,250	$848	$2,098



Charge-offs	(106)	(125)	(231)	(308)	(377)	(685)
Recoveries	8	31	39	29	99	128
Net charge-offs	(98)	(94)	(192)	(279)	(278)	(557)
Provision expense (benefit) for loans and leases	3	143	146	216	322	538
Allowance for loan and lease losses, end of period	1,187	892	2,079	1,187	892	2,079
Allowance for unfunded lending commitments, beginning of period	147	34	181	175	45	220


Provision expense (benefit) for unfunded lending commitments	17	9	26	(11)	(2)	(13)

Allowance for unfunded lending commitments, end of period	164	43	207	164	43	207
Total allowance for credit losses, end of period	$1,351	$935	$2,286	$1,351	$935	$2,286

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.

The following table presents the amortized cost basis of commercial loans and leases by vintage date and internal risk rating as of September 30, 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	$5,670	$4,526	$1,631	$2,948	$1,433	$2,220	$25,906	$57	$44,391
Special Mention	—	9	38	122	179	117	232	—	697
Substandard Accrual	13	12	105	143	162	271	911	18	1,635
Nonaccrual	—	6	15	60	23	76	45	5	230
Total commercial and industrial	5,683	4,553	1,789	3,273	1,797	2,684	27,094	80	46,953
Commercial real estate
Pass	3,215	2,079	918	4,484	4,193	5,180	1,454	4	21,527
Special Mention	—	2	4	716	384	154	73	—	1,333
Substandard Accrual	—	—	94	576	165	1,006	23	113	1,977
Nonaccrual	—	—	3	94	58	535	9	4	703
Total commercial real estate	3,215	2,081	1,019	5,870	4,800	6,875	1,559	121	25,540
Total commercial
Pass	8,885	6,605	2,549	7,432	5,626	7,400	27,360	61	65,918
Special Mention	—	11	42	838	563	271	305	—	2,030
Substandard Accrual	13	12	199	719	327	1,277	934	131	3,612
Nonaccrual	—	6	18	154	81	611	54	9	933
Total commercial	$8,898	$6,634	$2,808	$9,143	$6,597	$9,559	$28,653	$201	$72,493

Citizens Financial Group, Inc. | 49

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. | 50

The following table presents the amortized cost basis of retail loans by vintage date and current FICO score as of September 30, 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+	$1,450	$1,775	$1,314	$3,238	$4,996	$6,253	$—	$—	$19,026
740-799	1,762	1,056	761	1,486	2,041	2,888	—	—	9,994
680-739	423	346	256	501	673	1,141	—	—	3,340
620-679	41	62	76	161	178	504	—	—	1,022
<620	6	20	136	123	176	619	—	—	1,080
No FICO available(1)	—	—	—	3	1	11	—	—	15
Total residential mortgages	3,682	3,259	2,543	5,512	8,065	11,416	—	—	34,477
Home equity
800+	—	2	2	5	5	68	6,401	186	6,669
740-799	—	1	3	4	3	49	5,904	209	6,173
680-739	—	2	3	3	1	38	3,363	184	3,594
620-679	—	—	1	2	2	15	867	169	1,056
<620	—	—	3	1	2	13	559	338	916
No FICO available(1)	—	—	1	1	—	2	3	—	7
Total home equity	—	5	13	16	13	185	17,097	1,086	18,415
Automobile
800+	—	—	52	260	392	92	—	—	796
740-799	—	—	66	274	329	88	—	—	757
680-739	—	—	61	211	215	59	—	—	546
620-679	—	—	35	123	120	36	—	—	314
<620	—	—	43	155	157	48	—	—	403
No FICO available(1)	—	—	—	—	—	—	—	—	—
Total automobile	—	—	257	1,023	1,213	323	—	—	2,816
Education
800+	225	276	324	529	1,034	1,904	—	—	4,292
740-799	292	286	283	406	490	930	—	—	2,687
680-739	122	132	127	169	170	352	—	—	1,072
620-679	17	41	43	48	46	122	—	—	317
<620	4	12	18	27	26	70	—	—	157
No FICO available(1)	4	—	—	—	—	27	—	—	31
Total education	664	747	795	1,179	1,766	3,405	—	—	8,556
Other retail
800+	104	105	35	33	9	11	462	—	759
740-799	110	127	50	34	11	21	782	—	1,135
680-739	75	91	44	32	9	21	739	1	1,012
620-679	37	45	24	24	6	12	282	1	431
<620	10	28	20	30	8	11	207	—	314
No FICO available(1)	13	1	—	—	—	1	447	—	462
Total other retail	349	397	173	153	43	77	2,919	2	4,113
Total retail
800+	1,779	2,158	1,727	4,065	6,436	8,328	6,863	186	31,542
740-799	2,164	1,470	1,163	2,204	2,874	3,976	6,686	209	20,746
680-739	620	571	491	916	1,068	1,611	4,102	185	9,564
620-679	95	148	179	358	352	689	1,149	170	3,140
<620	20	60	220	336	369	761	766	338	2,870
No FICO available(1)	17	1	1	4	1	41	450	—	515
Total retail	$4,695	$4,408	$3,781	$7,883	$11,100	$15,406	$20,016	$1,088	$68,377

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

Citizens Financial Group, Inc. | 51

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. | 52

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


	Nine Months Ended September 30, 2025
	Term Loans and Leases by Origination Year						Revolving Loans
(dollars in millions)	2025	2024	2023	2022	2021	Prior to 2021	Within the Revolving Period	Converted to Term	Total
Commercial and industrial	$—	$—	$2	$51	$22	$5	$26	$—	$106
Commercial real estate	—	1	3	21	12	126	—	—	163
Total commercial	—	1	5	72	34	131	26	—	269
Residential mortgages	—	—	—	—	—	2	—	—	2
Home equity	—	—	—	1	—	2	9	—	12
Automobile	—	—	4	20	16	7	—	—	47
Education	—	3	6	14	22	62	—	—	107
Other retail	29	27	16	9	4	7	101	—	193
Total retail	29	30	26	44	42	80	110	—	361
Total loans and leases	$29	$31	$31	$116	$76	$211	$136	$—	$630


	Nine Months Ended September 30, 2024
	Term Loans and Leases by Origination Year						Revolving Loans
(dollars in millions)	2024	2023	2022	2021	2020	Prior to 2020	Within the Revolving Period	Converted to Term	Total
Commercial and industrial	$—	$—	$15	$22	$1	$15	$32	$—	$85
Commercial real estate	—	—	1	22	98	102	—	—	223
Total commercial	—	—	16	44	99	117	32	—	308
Residential mortgages	—	—	—	—	—	4	—	—	4
Home equity	—	—	—	—	—	3	8	1	12
Automobile	—	5	23	23	7	4	9	1	72
Education	—	2	6	18	21	46	—	—	93
Other retail	25	10	7	12	2	8	132	—	196
Total retail	25	17	36	53	30	65	149	2	377
Total loans and leases	$25	$17	$52	$97	$129	$182	$181	$2	$685

Citizens Financial Group, Inc. | 53

Nonaccrual and Past Due Assets

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


	September 30, 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	$46,624	$52	$8	$39	$230	$46,953	$24
Commercial real estate	24,668	90	72	7	703	25,540	25
Total commercial	71,292	142	80	46	933	72,493	49
Residential mortgages	34,052	80	43	114	188	34,477	150
Home equity	18,007	83	28	—	297	18,415	206
Automobile	2,702	62	21	—	31	2,816	4
Education	8,482	34	18	2	20	8,556	2
Other retail	4,010	32	22	—	49	4,113	1
Total retail	67,253	291	132	116	585	68,377	363
Total	$138,545	$433	$212	$162	$1,518	$140,870	$412
Guaranteed residential mortgages(1)	$795	$44	$23	$114	$—	$976	$—


	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 September 30, 2025 and December 31, 2024, the Company had collateral-dependent residential mortgage and home equity loans totaling $427 million and $372 million, respectively, and collateral-dependent commercial loans totaling $250 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 $299 million and $295 million as of September 30, 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. | 54

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

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

The following tables present the period-end amortized cost of loans to borrowers experiencing financial difficulty that were modified during the three and nine months ended September 30, 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 September 30, 2025
(dollars in millions)	Interest Rate Reduction	Term Extension	Payment Delay	Interest Rate Reduction and Term Extension	Term Extension and Payment Delay	Interest Rate Reduction, Term Extension and Payment Delay	Total	Total as a % of Loan Class(1)
Commercial and industrial	$1	$151	$—	$2	$—	$1	$155	0.33	%
Commercial real estate	—	388	22	—	102	—	512	2.00
Total commercial	1	539	22	2	102	1	667	0.92
Residential mortgages	1	18	6	5	—	1	31	0.09
Home equity	2	1	6	3	—	—	12	0.07

Education	3	—	—	—	—	—	3	0.04
Other retail	5	—	—	—	—	—	5	0.12
Total retail	11	19	12	8	—	1	51	0.07
Total	$12	$558	$34	$10	$102	$2	$718	0.51	%


	Three Months Ended September 30, 2024
(dollars in millions)	Interest Rate Reduction	Term Extension	Payment Delay	Interest Rate Reduction and Term Extension	Term Extension and Payment Delay	Total	Total as a % of Loan Class(1)
Commercial and industrial	$—	$75	$25	$1	$3	$104	0.24	%
Commercial real estate	—	156	23	67	94	340	1.22
Total commercial	—	231	48	68	97	444	0.62
Residential mortgages	1	15	1	4	1	22	0.07
Home equity	2	1	—	4	—	7	0.04

Education	3	1	16	—	—	20	0.18
Other retail	5	—	—	—	—	5	0.10
Total retail	11	17	17	8	1	54	0.08
Total	$11	$248	$65	$76	$98	$498	0.35	%

Citizens Financial Group, Inc. | 55


	Nine Months Ended September 30, 2025
(dollars in millions)	Interest Rate Reduction	Term Extension	Payment Delay	Interest Rate Reduction and Term Extension	Term Extension and Payment Delay	Interest Rate Reduction, Term Extension, and Payment Delay	Total	Total as a % of Loan Class(1)
Commercial and industrial	$16	$322	$2	$5	$1	$4	$350	0.75	%
Commercial real estate	28	707	66	29	103	—	933	3.65
Total commercial	44	1,029	68	34	104	4	1,283	1.77
Residential mortgages	3	42	13	9	1	2	70	0.20
Home equity	5	1	11	5	—	—	22	0.12

Education	8	—	—	—	—	—	8	0.09
Other retail	13	—	—	—	—	—	13	0.32
Total retail	29	43	24	14	1	2	113	0.17
Total	$73	$1,072	$92	$48	$105	$6	$1,396	0.99	%


	Nine Months Ended September 30, 2024
(dollars in millions)	Interest Rate Reduction	Term Extension	Payment Delay	Interest Rate Reduction and Term Extension	Term Extension and Payment Delay	Interest Rate Reduction, Term Extension, and Payment Delay	Total	Total as a % of Loan Class(1)
Commercial and industrial	$—	$179	$86	$1	$23	$—	$289	0.66	%
Commercial real estate	—	505	100	130	144	—	879	3.14
Total commercial	—	684	186	131	167	—	1,168	1.63
Residential mortgages	4	63	9	8	1	1	86	0.27
Home equity	3	2	—	9	—	—	14	0.09

Education	9	2	39	—	—	—	50	0.45
Other retail	13	—	—	—	—	—	13	0.27
Total retail	29	67	48	17	1	1	163	0.23
Total	$29	$751	$234	$148	$168	$1	$1,331	0.94	%

(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.

The following tables present the financial effect of loans to borrowers experiencing financial difficulty that were modified during the three and nine months ended September 30, 2025 and 2024, disaggregated by class of financing receivable:


	Three Months Ended September 30, 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	2.18	%	20	$—	$—
Commercial real estate	—		12	5	—
Residential mortgages	1.40		107	—	—
Home equity	3.01		143	—	—

Education	5.22		—	—	—
Other retail	19.89		—	—	6

Citizens Financial Group, Inc. | 56


	Three Months Ended September 30, 2024
(dollars in millions)	Weighted-Average Interest Rate Reduction(1)		Weighted-Average Term Extension (in Months)(1)	Weighted-Average Payment Deferral(1)	Amount of Principal Forgiven(2)
Commercial and industrial	3.62	%	14	$11	$—
Commercial real estate	4.31		9	1	—
Residential mortgages	1.52		94	—	—
Home equity	4.32		51	—	—

Education	4.44		24	—	—
Other retail	20.79		—	—	1


	Nine Months Ended September 30, 2025
(dollars in millions)	Weighted-Average Interest Rate Reduction(1)		Weighted-Average Term Extension (in Months)(1)	Weighted-Average Payment Deferral(1)	Amount of Principal Forgiven(2)
Commercial and industrial	1.52	%	18	$—	$—
Commercial real estate	0.83		12	5	—
Residential mortgages	1.27		110	—	—
Home equity	3.41		121	—	—

Education	4.71		—	—	—
Other retail	19.86		—	—	12


	Nine Months Ended September 30, 2024
(dollars in millions)	Weighted-Average Interest Rate Reduction(1)		Weighted-Average Term Extension (in Months)(1)	Weighted-Average Payment Deferral(1)	Amount of Principal Forgiven(2)
Commercial and industrial	3.72	%	15	$3	$—
Commercial real estate	2.83		17	1	—
Residential mortgages	1.59		92	—	—
Home equity	4.03		75	—	—

Education	4.42		24	—	—
Other retail	20.23		—	—	5

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

(2) Amounts are recorded as charge-offs.

The following tables present an aging analysis of the period-end amortized cost of loans to borrowers experiencing financial difficulty that were modified during the twelve month period ending September 30, 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.


	September 30, 2025
		Days Past Due and Accruing
(dollars in millions)	Current	30-59	60-89	90+	Nonaccrual	Total
Commercial and industrial	$348	$1	$—	$35	$61	$445
Commercial real estate	733	83	2	4	293	1,115
Total commercial	1,081	84	2	39	354	1,560
Residential mortgages	49	7	6	16	19	97
Home equity	8	—	—	—	22	30

Education	8	—	—	—	2	10
Other retail	13	2	1	—	1	17
Total retail	78	9	7	16	44	154
Total	$1,159	$93	$9	$55	$398	$1,714

Citizens Financial Group, Inc. | 57


	September 30, 2024
		Days Past Due and Accruing
(dollars in millions)	Current	30-59	60-89	90+	Nonaccrual	Total
Commercial and industrial	$211	$35	$1	$—	$54	$301
Commercial real estate	590	30	63	—	287	970
Total commercial	801	65	64	—	341	1,271
Residential mortgages	73	6	4	16	12	111
Home equity	11	—	—	—	8	19

Education	34	1	—	—	35	70
Other retail	12	1	1	—	1	15
Total retail	130	8	5	16	56	215
Total	$931	$73	$69	$16	$397	$1,486

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 September 30, 2025
(dollars in millions)	Interest Rate Reduction	Term Extension	Payment Delay	Interest Rate Reduction and Term Extension	Term Extension and Payment Delay	Total
Commercial and industrial	$—	$36	$—	$—	$—	$36
Commercial real estate	—	4	—	—	—	4
Total commercial	—	40	—	—	—	40
Residential mortgages	1	8	4	3	—	16
Home equity	—	—	—	—	—	—

Education	1	—	—	—	—	1
Other retail	1	—	—	—	—	1
Total retail	3	8	4	3	—	18
Total	$3	$48	$4	$3	$—	$58


	Three Months Ended September 30, 2024
(dollars in millions)	Interest Rate Reduction	Term Extension	Payment Delay	Term Extension and Payment Delay	Total
Commercial and industrial	$1	$3	$—	$15	$19
Commercial real estate	—	75	21	—	96
Total commercial	1	78	21	15	115
Residential mortgages	—	11	—	—	11
Home equity	—	—	—	—	—

Education	1	—	—	—	1
Other retail	1	—	—	—	1
Total retail	2	11	—	—	13
Total	$3	$89	$21	$15	$128

Citizens Financial Group, Inc. | 58


	Nine Months Ended September 30, 2025
(dollars in millions)	Interest Rate Reduction	Term Extension	Payment Delay	Interest Rate Reduction and Term Extension	Term Extension and Payment Delay	Total
Commercial and industrial	$—	$48	$—	$—	$—	$48
Commercial real estate	—	72	2	—	—	74
Total commercial	—	120	2	—	—	122
Residential mortgages	1	20	5	6	1	33
Home equity	1	—	1	1	—	3

Education	1	—	—	—	—	1
Other retail	1	—	—	—	—	1
Total retail	4	20	6	7	1	38
Total	$4	$140	$8	$7	$1	$160


	Nine Months Ended September 30, 2024
(dollars in millions)	Interest Rate Reduction	Term Extension	Payment Delay	Interest Rate Reduction and Term Extension	Term Extension and Payment Delay	Total
Commercial and industrial	$1	$3	$—	$—	$15	$19
Commercial real estate	—	141	21	—	—	162
Total commercial	1	144	21	—	15	181
Residential mortgages	—	22	1	1	1	25
Home equity	—	—	—	1	—	1

Education	4	—	12	—	—	16
Other retail	1	—	—	—	—	1
Total retail	5	22	13	2	1	43
Total	$6	$166	$34	$2	$16	$224

Unfunded commitments related to loans modified during the nine months ended September 30, 2025 were $342 million at September 30, 2025. Unfunded commitments related to loans modified during the year ended December 31, 2024 were $206 million at December 31, 2024.

NOTE 5 - MORTGAGE BANKING AND OTHER SERVICED LOANS

Mortgage Banking

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

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


	Three Months Ended September 30,		Nine Months Ended September 30,
(dollars in millions)	2025	2024	2025	2024
Cash proceeds from residential mortgage loans sold with servicing retained	$2,528	$2,137	$6,920	$5,432

Gain on sales(1)	19	17	56	47
Contractually specified servicing, late, and other ancillary fees(1)	70	79	209	235

(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 September 30, 2025 and December 31, 2024, respectively. The Company manages the risk associated with changes in the fair value of the MSRs with an active economic hedging strategy, which includes the purchase of freestanding derivatives.

Citizens Financial Group, Inc. | 59

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


	As of and for the Three Months Ended September 30,		As of and for the Nine Months Ended September 30,
(dollars in millions)	2025	2024	2025	2024
Fair value as of beginning of the period	$1,426	$1,568	$1,491	$1,552


Amounts capitalized	42	28	117	71

Sales(1)	—	—	(72)	—
Changes in unpaid principal balance(2)	(41)	(46)	(120)	(135)
Changes in fair value(3)	3	(49)	14	13
Fair value at end of the period	$1,430	$1,501	$1,430	$1,501

(1) For the nine months ended September 30, 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 at the time of sale.

(2) Represents changes in value of the MSRs due to i) the passage of time including the impact from both regularly scheduled loan principal payments and partial

paydowns, and ii) loans that paid off during the period.

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

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

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


(dollars in millions)	September 30, 2025	December 31, 2024
Fair value	$1,430	$1,491
Weighted average life (years)	8.0	8.7
Weighted average constant prepayment rate	7.1%	6.7%
Decline in fair value from 10% adverse change	$39	$35
Decline in fair value from 20% adverse change	$72	$67
Weighted average option adjusted spread	608 bps	632 bps
Decline in fair value from 10% adverse change	$40	$42
Decline in fair value from 20% adverse change	$80	$84

The Company has mortgage banking derivatives that include commitments to originate mortgages held for sale, certain loan sale agreements, and other financial instruments that meet the definition of a derivative. Refer to Note 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)	September 30, 2025	December 31, 2024
Education	$358	$420
Commercial and industrial(1)	88	92

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

Citizens Financial Group, Inc. | 60

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)	September 30, 2025	December 31, 2024
Assets:

Interest-bearing deposits in banks	$169	$209
Net loans and leases	2,353	3,843
Other assets	15	21
Total assets	$2,537	$4,073
Liabilities:
Long-term borrowed funds	$1,982	$3,375
Other liabilities	5	8
Total liabilities	$1,987	$3,383

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 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 is the most significant driver impacting the economic performance of the VIEs.

Unconsolidated VIEs

The Company is involved with various VIEs that are not consolidated including lending to SPEs, investments in asset-backed securities, and investments in entities that sponsor affordable housing, 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 SPEs.

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


(dollars in millions)	September 30, 2025	December 31, 2024
Lending to SPEs included in Loans and leases	$4,893	$4,215
LIHTC investments included in Other assets	2,698	2,631
LIHTC unfunded commitments included in Other liabilities	1,065	1,109
Asset-backed investments included in HTM securities	357	412
Renewable energy investments included in Other assets	217	269
NMTC investments included in Other assets	1	2

Citizens Financial Group, Inc. | 61

Lending to Special Purpose Entities

The Company provides lending facilities to third-party sponsored SPEs within its Capital Markets business. The SPEs are primarily funded through these lending facilities or a syndication in which the Company participates. The principal risk of these lending facilities is the credit risk related to the underlying assets in the SPE, in which the Company generally holds a priority position. As of September 30, 2025 and December 31, 2024, the lending facilities had undrawn commitments to extend credit of $3.2 billion and $2.8 billion, respectively. For more information on commitments to extend credit see Note 11.

Low Income Housing Tax Credit Partnerships

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

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.

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 $43 million at September 30, 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.

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 September 30,		Nine Months Ended September 30,
(dollars in millions)	2025	2024	2025	2024
Tax credits recognized	$99	$99	$309	$290
Other tax benefits recognized	24	21	73	68
Amortization	(98)	(88)	(304)	(276)
Net benefit (expense) included in Income tax expense	25	32	78	82
Other income	1	1	5	4
Allocated income (loss) on investments	(3)	(3)	(10)	(9)
Net benefit (expense) included in Noninterest income	(2)	(2)	(5)	(5)
Net benefit (expense) included in the Consolidated Statements of Operations(1)	$23	$30	$73	$77

(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 and nine months ended September 30, 2025 and 2024.

Citizens Financial Group, Inc. | 62

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)	September 30, 2025	December 31, 2024


Other short-term borrowed funds(1)	$214	$—
Total short-term borrowed funds	$214	$—

(1) Consists primarily of short positions held by the Company’s commercial broker dealer. See Note 8 for additional information regarding forward purchase contracts entered into to economically hedge these short positions.

Long-term borrowed funds

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


(dollars in millions)	September 30, 2025	December 31, 2024
Parent Company:
4.350% fixed-rate subordinated debt, due August 2025	$—	$133
4.300% fixed-rate subordinated debt, due December 2025	336	336
2.850% fixed-rate senior unsecured notes, due July 2026	500	499
5.841% fixed/floating-rate senior unsecured notes, due January 2030	1,246	1,245
2.500% fixed-rate senior unsecured notes, due February 2030	299	299
3.250% fixed-rate senior unsecured notes, due April 2030	747	747
3.750% fixed-rate reset subordinated debt, due February 2031	69	69
4.300% fixed-rate reset subordinated debt, due February 2031	135	135
4.350% fixed-rate reset subordinated debt, due February 2031	60	60
5.253% fixed/floating-rate senior unsecured notes, due March 2031	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	575	570
6.645% fixed/floating-rate senior unsecured notes, due April 2035	746	745
5.641% fixed-rate reset subordinated debt, due May 2037	398	398
CBNA’s Global Note Program:
2.250% senior unsecured notes, due April 2025	—	750
5.284% fixed/floating-rate senior unsecured notes, due January 2026(1)	—	350
3.750% senior unsecured notes, due February 2026	499	492
4.575% fixed/floating-rate senior unsecured notes, due August 2028	799	798
Additional Borrowings by CBNA and Other Subsidiaries:
Federal Home Loan Bank advances, 2.196% weighted average rate, due through 2045(2)	13	53
Secured borrowings, 5.536% weighted average rate, due through 2031(2)(3)	2,009	3,461
Other	20	18
Total long-term borrowed funds	$10,441	$12,401

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

(2) Rate disclosed reflects the weighted average rate as of September 30, 2025.

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

At September 30, 2025, the Company’s long-term borrowed funds include principal balances of $10.5 billion, unamortized debt issuance costs and discounts of $75 million, and hedging basis adjustments of ($1) 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 $4.9 billion and $4.6 billion at September 30, 2025 and December 31, 2024, respectively. The Company’s available FHLB borrowing capacity was $24.3 billion and $21.1 billion at September 30, 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 September 30, 2025, the Company’s unused secured borrowing capacity was approximately $78.0 billion, which includes unencumbered securities, FHLB borrowing capacity, and FRB discount window capacity.

Citizens Financial Group, Inc. | 63

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.

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


	September 30, 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	$72,437	$303	$2	$69,077	$402	$5
Derivatives not designated as hedging instruments:
Interest rate contracts	183,555	189	487	171,193	160	905
Foreign exchange contracts	42,050	563	399	34,749	472	411
Commodities contracts	1,213	438	381	1,136	429	379
TBA contracts	5,034	7	13	2,714	10	8
Other contracts	1,221	23	4	615	3	2
Total derivatives not designated as hedging instruments	233,073	1,220	1,284	210,407	1,074	1,705
Total gross derivatives	305,510	1,523	1,286	279,484	1,476	1,710
Less: Gross amounts offset in the Consolidated Balance Sheets(1)		(379)	(379)		(391)	(391)
Less: Cash collateral applied(1)		(423)	(169)		(677)	(99)
Total net derivatives presented in the Consolidated Balance Sheets		$721	$738		$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 hedged item. All hedging relationships are formally documented at inception, as well as risk management objectives and strategies for undertaking various accounting hedges. In addition, the effectiveness of hedge relationships is monitored during the duration of the hedge period. The methods utilized to assess hedge effectiveness vary based on the hedge relationship, with each relationship monitored to ensure that management’s initial intent continues to be satisfied. Hedge accounting treatment is discontinued when the derivative is terminated or when it is determined that a derivative is not expected to be, or has ceased to be, an effective hedge. Changes in the fair value of a derivative are reflected in earnings after termination of the hedge relationship.

Citizens Financial Group, Inc. | 64

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 September 30, 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 September 30, 2025 and December 31, 2024, the Company has also designated $3.6 billion and $3.1 billion, respectively, of interest rate swaps as fair value hedges to manage interest rate risk within its nonprepayable fixed-rate AFS securities portfolio.

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


	Location and Amount of Gains (Losses) Recognized
	Interest Income	Interest Expense
(dollars in millions)	Investment Securities	Long-Term Borrowed Funds
Three Months Ended September 30, 2025
Gains (losses) on fair value hedges recognized on:
Hedged items	$12	($3)
Derivatives	(12)	3
Amounts related to interest settlements on derivatives	14	(3)
Total net interest income recognized on fair value hedges	$14	($3)
Three Months Ended September 30, 2024
Gains (losses) on fair value hedges recognized on:
Hedged items	$302	($8)
Derivatives	(306)	8
Amounts related to interest settlements on derivatives	34	(4)
Total net interest income recognized on fair value hedges	$30	($4)
Nine Months Ended September 30, 2025
Gains (losses) on fair value hedges recognized on:
Hedged items	$178	($7)
Derivatives	(180)	7
Amounts related to interest settlements on derivatives	38	(8)
Total net interest income recognized on fair value hedges	$36	($8)
Nine Months Ended September 30, 2024
Gains (losses) on fair value hedges recognized on:
Hedged items	$128	($8)
Derivatives	(127)	8
Amounts related to interest settlements on derivatives	87	(11)
Total net interest income recognized on fair value hedges	$88	($11)

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


(dollars in millions)	September 30, 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)	$9,728	$—		$9,557	$—
Carrying amount of hedged liabilities	—	499		—	491
Cumulative amount of fair value hedging adjustments included in the carrying amount of the hedged items	83	(1)		(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 September 30, 2025 and December 31, 2024, the amortized cost basis of the closed portfolios used in these hedging relationships was $6.0 billion and $6.4 billion, respectively, including associated cumulative basis adjustments of $37 million and $(75) million, respectively. The amount of the designated hedging instruments was $4.7 billion at September 30, 2025 and December 31, 2024.

(2) Carrying amount represents amortized cost.

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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. During the third quarter of 2025, the Company terminated $466 million of this cash flow hedge in conjunction with the quarterly settlement of the education loan sale.

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 September 30,		Nine Months Ended September 30,
(dollars in millions)	2025	2024	2025	2024
Pre-tax net gains (losses) recognized in OCI	($21)	$613	$376	($114)
Pre-tax net gains (losses) reclassified from AOCI into interest income	(193)	(276)	(591)	(711)
Pre-tax net gains (losses) reclassified from AOCI into noninterest income	(4)	—	(5)	—
Pre-tax net gains (losses) reclassified from AOCI into interest expense	—	—	(1)	—

Using the September 30, 2025 interest rate curve, the Company estimates that $396 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 September 30, 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.

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

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

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

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


	Amounts Recognized in Noninterest Income for the
	Three Months Ended September 30,		Nine Months Ended September 30,		Affected Line Item in the Consolidated Statements of Operations
(dollars in millions)	2025	2024	2025	2024
Economic hedge type:
Customer interest rate contracts	($17)	$474	$218	($209)	Foreign exchange and derivative products
Derivatives hedging interest rate risk	29	(467)	(190)	233	Foreign exchange and derivative products
Customer foreign exchange contracts	(72)	151	345	18	Foreign exchange and derivative products
Derivatives hedging foreign exchange risk	107	(195)	(423)	(13)	Foreign exchange and derivative products
Customer commodity contracts	(122)	(193)	(81)	(126)	Foreign exchange and derivative products
Derivatives hedging commodity price risk	125	198	96	141	Foreign exchange and derivative products
Residential loan commitments	4	9	13	2	Mortgage banking fees
Derivatives hedging residential loan commitments and mortgage loans held for sale, at fair value	(14)	(24)	(28)	(15)	Mortgage banking fees
Derivative contracts used to hedge residential MSRs	(1)	47	26	(9)	Mortgage banking fees
Derivative contracts used to hedge equity price risk	4	—	15	—	Capital markets fees
Total	$43	$—	($9)	$22

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NOTE 9 - ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

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


(dollars in millions)	Pre-tax	Tax Effect	After-tax
Three Months Ended September 30, 2025
Net unrealized gains (losses) on cash flow hedges arising during the period	($21)	$5	($16)
Reclassification of net (gains) losses on cash flow hedges to earnings	197	(53)	144
Net unrealized gains (losses) on cash flow hedges	176	(48)	128
Net unrealized gains (losses) on AFS securities arising during the period	300	(77)	223
Reclassification of net (gains) losses on investment securities to earnings	24	(6)	18
Net unrealized gains (losses) on investment securities	324	(83)	241
Net actuarial gain (loss) arising during the period	—	—	—
Amortization of actuarial (gain) loss to earnings	4	(1)	3
Defined benefit plans	4	(1)	3
Total other comprehensive income (loss)	$504	($132)	$372
Three Months Ended September 30, 2024
Net unrealized gains (losses) on cash flow hedges arising during the period	$613	($163)	$450
Reclassification of net (gains) losses on cash flow hedges to earnings	276	(73)	203
Net unrealized gains (losses) on cash flow hedges	889	(236)	653
Net unrealized gains (losses) on AFS securities arising during the period	720	(179)	541
Reclassification of net (gains) losses on investment securities to earnings	18	(5)	13
Net unrealized gains (losses) on investment securities	738	(184)	554
Net actuarial gain (loss) arising during the period	—	—	—
Amortization of actuarial (gain) loss to earnings	3	(1)	2
Defined benefit plans	3	(1)	2
Total other comprehensive income (loss)	$1,630	($421)	$1,209
Nine Months Ended September 30, 2025
Net unrealized gains (losses) on cash flow hedges arising during the period	$376	($101)	$275
Reclassification of net (gains) losses on cash flow hedges to earnings	597	(160)	437
Net unrealized gains (losses) on cash flow hedges	973	(261)	712
Net unrealized gains (losses) on AFS securities arising during the period	753	(192)	561
Reclassification of net (gains) losses on investment securities to earnings	64	(16)	48
Net unrealized gains (losses) on investment securities	817	(208)	609
Net actuarial gain (loss) arising during the period	—	—	—
Amortization of actuarial (gain) loss to earnings	10	(3)	7
Defined benefit plans	10	(3)	7
Total other comprehensive income (loss)	$1,800	($472)	$1,328
Nine Months Ended September 30, 2024
Net unrealized gains (losses) on cash flow hedges arising during the period	($114)	$30	($84)
Reclassification of net (gains) losses on cash flow hedges to earnings	711	(189)	522
Net unrealized gains (losses) on cash flow hedges	597	(159)	438
Net unrealized gains (losses) on AFS securities arising during the period	453	(114)	339
Reclassification of net (gains) losses on investment securities to earnings	56	(14)	42
Net unrealized gains (losses) on investment securities	509	(128)	381
Net actuarial gain (loss) arising during the period	5	(1)	4
Amortization of actuarial (gain) loss to earnings	12	(3)	9
Defined benefit plans	17	(4)	13
Total other comprehensive income (loss)	$1,123	($291)	$832

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


(dollars in millions)	Net Unrealized Gains (Losses) on Cash Flow Hedges	Net Unrealized Gains (Losses) on Investment Securities	Defined Benefit Plans	Total AOCI
Three Months Ended September 30, 2025
Balance at July 1, 2025	($341)	($2,001)	($297)	($2,639)
Other comprehensive income (loss) before reclassifications	(16)	223	—	207
Amounts reclassified from AOCI to earnings	144	18	3	165
Total other comprehensive income (loss)	128	241	3	372
Balance at September 30, 2025	($213)	($1,760)	($294)	($2,267)
Three Months Ended September 30, 2024
Balance at July 1, 2024	($1,302)	($2,511)	($322)	($4,135)
Other comprehensive income (loss) before reclassifications	450	541	—	991
Amounts reclassified from AOCI to earnings	203	13	2	218
Total other comprehensive income (loss)	653	554	2	1,209
Balance at September 30, 2024	($649)	($1,957)	($320)	($2,926)
Nine Months Ended September 30, 2025
Balance at January 1, 2025	($925)	($2,369)	($301)	($3,595)
Other comprehensive income (loss) before reclassifications	275	561	—	836
Amounts reclassified from AOCI to earnings	437	48	7	492
Total other comprehensive income (loss)	712	609	7	1,328

Balance at September 30, 2025	($213)	($1,760)	($294)	($2,267)
Nine Months Ended September 30, 2024
Balance at January 1, 2024	($1,087)	($2,338)	($333)	($3,758)
Other comprehensive income (loss) before reclassifications	(84)	339	4	259

Amounts reclassified from AOCI to earnings	522	42	9	573
Total other comprehensive income (loss)	438	381	13	832

Balance at September 30, 2024	($649)	($1,957)	($320)	($2,926)
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:


			September 30, 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
Series G	1,000		300,000		296	300,000	296
Series H	1,000	(1)	400,000	(3)	392	400,000	392
Series I	1,000	(1)	400,000	(4)	393	—	—
Total			2,150,000		$2,111	2,150,000	$2,113

(1) Equivalent to $25 per depositary share.

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

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

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

Citizens Financial Group, Inc. | 69

On July 31, 2025, the Company issued $400 million, or 400,000 shares, of 6.500% fixed-rate reset non-cumulative perpetual Series I Preferred Stock, par value of $25 per share with a liquidation preference of $1,000 per share (the “Series I Preferred Stock”). As a result of this issuance, the Company received net proceeds of $393 million after underwriting fees and other expenses. The Series I Preferred Stock has no stated maturity and will not be subject to any sinking fund or other obligation of the Company. The Series I Preferred Stock is redeemable at the Company’s option, in whole or in part, on any dividend payment date on or after October 6, 2030 or, in whole but not in part, at any time within the 90 days following a regulatory capital treatment event at a redemption price equal to $1,000 per share, plus any declared and unpaid dividends. The Company may not redeem shares of the Series I Preferred Stock without the prior approval of the FRB or other appropriate federal banking agency as required under applicable capital rules. Except in limited circumstances or otherwise required by law, holders of the Series I Preferred Stock do not have any voting rights.

In September 2025, the Company provided notice of its intent to redeem all outstanding shares of the 5.650% fixed-rate reset non-cumulative perpetual Series F Preferred Stock on October 6, 2025. Upon providing notice, the Series F Preferred Stock was reclassified from Preferred stock to Other liabilities in the Consolidated Balance Sheets. On October 6, 2025, the Company redeemed all outstanding shares of the Series F Preferred Stock at a redemption price of $1,000 per share.

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.

Dividends

The following tables summarize the Company’s common and preferred stock dividend activity:


	Three Months Ended September 30, 2025			Three Months Ended September 30, 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	$184	$184	$0.42	$190	$190
Preferred stock
Series B	$19.07	$5	$5	$21.68	$6	$7
Series C	19.46	5	6	22.07	6	6
Series D	—	—	—	—	—	7
Series E	12.50	6	6	12.50	6	6
Series F	14.13	6	6	14.13	6	6
Series G	10.00	3	3	10.00	3	3
Series H	18.43	7	7	27.25	11	—

Total preferred stock		$32	$33		$38	$35


	Nine Months Ended September 30, 2025			Nine Months Ended September 30, 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	$1.26	$555	$555	$1.26	$581	$581
Preferred stock
Series B	$57.26	$17	$17	$65.06	$19	$20
Series C	58.43	17	18	60.54	18	16
Series D	—	—	—	39.66	12	17
Series E	37.50	17	17	37.50	17	17
Series F	42.38	17	17	42.38	17	17
Series G	30.00	9	9	30.00	9	9
Series H	55.31	22	22	27.25	11	—

Total preferred stock		$99	$100		$103	$96

Treasury Stock

During the nine months ended September 30, 2025 and 2024, the Company repurchased $475 million, or 11,129,200 shares, and $825 million, or 23,006,560 shares, respectively, of its outstanding common stock, which are held in treasury stock.

Citizens Financial Group, Inc. | 70

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)	September 30, 2025	December 31, 2024
Commitments to extend credit	$100,650	$93,460
Letters of credit	1,901	1,845
Loans sold with recourse	89	93
Risk participation agreements	29	1
Other commitments	11	14
Total	$102,680	$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 the allowance for unfunded commitments. Standby and commercial letters of credit are issued for terms of up to two years and one year, respectively.

Loans Sold with Recourse

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

Risk Participation Agreements

RPAs are guarantees issued by the Company to other parties for a fee, whereby the Company agrees to participate in the credit risk of a derivative customer of the other party. The current amount of credit exposure is spread out over multiple counterparties. At September 30, 2025, the remaining terms on these RPAs ranged from less than one year to ten 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.

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

Based on information currently available, the advice of legal counsel and other advisers, and established reserves, management believes that the aggregate liabilities, if any, potentially arising from these proceedings will not have a 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 disclosures in this Note related to assets and liabilities that are not required to be reported at fair value in the financial statements.

For more information on the measurement of fair value for the Company’s assets and liabilities, including the election of the fair value option and valuation techniques utilized to measure fair value on a recurring and nonrecurring basis, see Note 20 in the Company’s 2024 Form 10-K.

Fair Value Option

The Company has 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:


	September 30, 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	$592	$573	$19	$633	$625	$8
Commercial loans held for sale	176	186	(10)	192	199	(7)

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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. The following table presents assets and liabilities measured at fair value, including gross derivative assets and liabilities, on a recurring basis at September 30, 2025:


(dollars in millions)	Total	Level 1	Level 2	Level 3
Debt securities available for sale:
Mortgage-backed securities	$30,814	$—	$30,814	$—

Collateralized loan obligations	90	—	90	—
State and political subdivisions	1	—	1	—
U.S. Treasury and other	4,514	4,514	—	—
Total debt securities available for sale	35,419	4,514	30,905	—
Loans held for sale:
Residential loans held for sale	592	—	592	—
Commercial loans held for sale	176	—	176	—
Total loans held for sale, at fair value	768	—	768	—
Mortgage servicing rights	1,430	—	—	1,430
Derivative assets:
Interest rate contracts	492	—	492	—
Foreign exchange contracts	563	—	563	—
Commodities contracts	438	—	438	—
TBA contracts	7	—	7	—
Other contracts	23	—	15	8
Total derivative assets	1,523	—	1,515	8
Equity securities, at fair value(1)	224	224	—	—
Short-term investments	73	30	43	—
Total assets	$39,437	$4,768	$33,231	$1,438
Derivative liabilities:
Interest rate contracts	$489	$—	$489	$—
Foreign exchange contracts	399	—	399	—
Commodities contracts	381	—	381	—
TBA contracts	13	—	13	—
Other contracts	4	—	—	4
Total derivative liabilities	1,286	—	1,282	4
Short-term borrowed funds	213	203	10	—
Other liabilities	162	—	162	—
Total liabilities	$1,661	$203	$1,454	$4

(1) Excludes investments of $62 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 $17 million at September 30, 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 assets and liabilities measured at fair value on a recurring basis and classified as Level 3:


	Three Months Ended September 30, 2025		Nine Months Ended September 30, 2025
(dollars in millions)	Mortgage Servicing Rights	Other Derivative Contracts	Mortgage Servicing Rights	Other Derivative Contracts
Beginning balance	$1,426	$15	$1,491	$1
Issuances	42	21	117	55

Sales(1)	—	—	(72)	—
Settlements(2)	(41)	(33)	(120)	(60)
Changes in fair value recognized in earnings(3)	3	1	14	8
Ending balance	$1,430	$4	$1,430	$4


	Three Months Ended September 30, 2024		Nine Months Ended September 30, 2024
(dollars in millions)	Mortgage Servicing Rights	Other Derivative Contracts	Mortgage Servicing Rights	Other Derivative Contracts
Beginning balance	$1,568	$6	$1,552	$7



Issuances	28	18	71	47


Settlements(2)	(46)	(27)	(135)	(50)
Changes in fair value recognized in earnings(3)	(49)	—	13	(7)
Ending balance	$1,501	($3)	$1,501	($3)

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

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

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

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


			September 30, 2025	December 31, 2024
Financial Instrument(1)	Valuation Technique	Unobservable Input	Range (Weighted Average)	Range (Weighted Average)
Mortgage servicing rights	Discounted Cash Flow	Constant prepayment rate	5.86-14.80% CPR (7.10% CPR)	5.08-16.32% CPR (6.70% CPR)
Option adjusted spread	398-1,058 bps (608 bps)		398-1,058 bps (632 bps)
Other derivative contracts	Internal Model	Pull through rate	8.15-99.89% (83.07%)	5.09-99.90% (83.06%)
MSR value	42.30-171.00 bps (124.76 bps)		23.91-171.64 bps (121.23 bps)

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

Nonrecurring Fair Value Measurements

Fair value is also used on a nonrecurring basis to evaluate certain assets for impairment or for disclosure purposes. The following table presents losses on assets measured at fair value on a nonrecurring basis and recorded in earnings:


	Three Months Ended September 30,		Nine Months Ended September 30,
(dollars in millions)	2025	2024	2025	2024
Collateral-dependent loans	($39)	($36)	($124)	($156)

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


	September 30, 2025				December 31, 2024
(dollars in millions)	Total	Level 1	Level 2	Level 3	Total	Level 1	Level 2	Level 3
Collateral-dependent loans	$677	$—	$677	$—	$979	$—	$979	$—

Citizens Financial Group, Inc. | 75

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.


	September 30, 2025
	Total		Level 1		Level 2		Level 3
(dollars in millions)	Carrying Value	Estimated Fair Value	Carrying Value	Estimated Fair Value	Carrying Value	Estimated Fair Value	Carrying Value	Estimated Fair Value
Financial assets(1):



Debt securities held to maturity	$8,124	$7,295	$—	$—	$7,767	$6,938	$357	$357
Loans held for sale	566	566	—	—	—	—	566	566
Net loans and leases	138,898	138,627	—	—	677	677	138,221	137,950
Other assets	710	710	—	—	689	689	21	21
Financial liabilities:
Deposits	180,011	179,967	—	—	180,011	179,967	—	—
Short-term borrowed funds	1	1	—	—	1	1	—	—
Long-term borrowed funds	10,441	10,649	—	—	10,441	10,649	—	—


	December 31, 2024
	Total		Level 1		Level 2		Level 3
(dollars in millions)	Carrying Value	Estimated Fair Value	Carrying Value	Estimated Fair Value	Carrying Value	Estimated Fair Value	Carrying Value	Estimated Fair Value
Financial assets(1):



Debt securities held to maturity	$8,599	$7,540	$—	$—	$8,187	$7,136	$412	$404
Loans held for sale	33	33	—	—	—	—	33	33
Net loans and leases	137,142	136,293	—	—	979	979	136,163	135,314
Other assets	710	710	—	—	689	689	21	21
Financial liabilities:
Deposits	174,776	174,651	—	—	174,776	174,651	—	—

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

(1) Excludes cash-related financial instruments not recorded at fair value in the Consolidated Balance Sheets with a carrying value and estimated fair value of $12.3 billion and $11.2 billion at September 30, 2025 and December 31, 2024, respectively.

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.

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 September 30, 2025
(dollars in millions)	Consumer Banking	Commercial Banking	Non-Core	Other	Consolidated
Service charges and fees	$78	$33	$—	$—	$111
Card fees	73	12	—	—	85
Capital markets fees	—	158	—	—	158
Wealth fees	93	—	—	—	93
Other banking fees	1	4	—	—	5
Total revenue from contracts with customers	$245	$207	$—	$—	$452
Total revenue from other sources(1)	66	79	4	29	178
Total noninterest income	$311	$286	$4	$29	$630

Citizens Financial Group, Inc. | 76


	Three Months Ended September 30, 2024
(dollars in millions)	Consumer Banking	Commercial Banking	Non-Core	Other	Consolidated
Service charges and fees	$75	$34	$—	$—	$109
Card fees	73	12	—	6	91
Capital markets fees	—	88	—	—	88
Wealth fees	76	—	—	—	76
Other banking fees	1	2	—	—	3
Total revenue from contracts with customers	$225	$136	$—	$6	$367
Total revenue from other sources(1)	60	71	—	34	165
Total noninterest income	$285	$207	$—	$40	$532


	Nine Months Ended September 30, 2025
(dollars in millions)	Consumer Banking	Commercial Banking	Non-Core	Other	Consolidated
Service charges and fees	$229	$101	$—	$—	$330
Card fees	214	38	—	—	252
Capital markets fees	—	348	—	—	348
Wealth fees	262	—	—	—	262
Other banking fees	2	8	—	—	10
Total revenue from contracts with customers	$707	$495	$—	$—	$1,202
Total revenue from other sources(1)	230	238	7	97	572
Total noninterest income	$937	$733	$7	$97	$1,774


	Nine Months Ended September 30, 2024
(dollars in millions)	Consumer Banking	Commercial Banking	Non-Core	Other	Consolidated
Service charges and fees	$213	$97	$—	$—	$310
Card fees	213	40	—	13	266
Capital markets fees	—	330	—	—	330
Wealth fees	219	—	—	—	219
Other banking fees	2	8	—	1	11
Total revenue from contracts with customers	$647	$475	$—	$14	$1,136
Total revenue from other sources(1)	173	201	—	92	466
Total noninterest income	$820	$676	$—	$106	$1,602

(1) Includes bank-owned life insurance income of $30 million and $26 million for the three months ended September 30, 2025 and 2024, respectively, and $85 million and $80 million for the nine months ended September 30, 2025 and 2024, respectively.

For the three months ended September 30, 2025 and 2024, the Company recognized trailing commissions of $4 million related to previous investment sales. For the nine months ended September 30, 2025 and 2024, the Company recognized $12 million and $11 million, respectively.

NOTE 14 - OTHER OPERATING EXPENSE

The following table presents the details of Other operating expense:


	Three Months Ended September 30,		Nine Months Ended September 30,
(dollars in millions)	2025	2024	2025	2024
Marketing	$44	$40	$129	$124
Deposit insurance(1)	32	40	108	162
Other	90	84	254	269
Other operating expense	$166	$164	$491	$555

(1) Includes an industry-wide FDIC special assessment of $40 million for the nine months ended September 30, 2024.

Citizens Financial Group, Inc. | 77

NOTE 15 - EARNINGS PER SHARE

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

The following table presents the calculation of basic and diluted EPS:


	Three Months Ended September 30,		Nine Months Ended September 30,
(dollars in millions, except per share data)	2025	2024	2025	2024
Numerator (basic and diluted):
Net income	$494	$382	$1,303	$1,108
Less: Preferred stock dividends	32	38	99	103
Less: Impact of preferred stock redemption	5	—	5	—
Net income available to common stockholders	$457	$344	$1,199	$1,005
Denominator:
Weighted-average common shares outstanding - basic	431,365,552	446,561,996	434,416,696	453,993,833
Dilutive common shares: share-based awards	4,106,798	3,351,471	3,498,900	2,467,497
Weighted-average common shares outstanding - diluted	435,472,350	449,913,467	437,915,596	456,461,330
Earnings per common share:
Basic	$1.06	$0.77	$2.76	$2.21
Diluted(1)	1.05	0.77	2.74	2.20

(1) Excluded from the computation of diluted EPS were weighted-average antidilutive shares totaling 3,454 and 141,698 for the three months ended September 30, 2025 and 2024, respectively, and 16,910 and 409,167 for the nine months ended September 30, 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.

Citizens Financial Group, Inc. | 78

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


	Three Months Ended September 30, 2025
(dollars in millions)	Consumer Banking	Commercial Banking	Non-Core	Other	Consolidated
Net interest income	$1,262	$448	($7)	($215)	$1,488
Noninterest income	311	286	4	29	630
Total revenue	1,573	734	(3)	(186)	2,118
Direct expenses(1)(2)	692	223	1	419	1,335
Indirect expenses(3)	287	110	11	(408)	—
Noninterest expense	979	333	12	11	1,335
Profit (loss) before provision (benefit) for credit losses	594	401	(15)	(197)	783
Provision (benefit) for credit losses	81	78	4	(9)	154
Income (loss) before income tax expense (benefit)	513	323	(19)	(188)	629
Income tax expense (benefit)	130	75	(5)	(65)	135
Net income (loss)	$383	$248	($14)	($123)	$494
Total average assets	$80,729	$66,134	$4,000	$68,254	$219,117

(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 $30 million, $5 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.


	Three Months Ended September 30, 2024
(dollars in millions)	Consumer Banking	Commercial Banking	Non-Core	Other	Consolidated
Net interest income	$1,156	$478	($28)	($237)	$1,369
Noninterest income	285	207	—	40	532
Total revenue	1,441	685	(28)	(197)	1,901
Direct expenses(1)(2)	586	205	1	467	1,259
Indirect expenses(3)	330	95	22	(447)	—
Noninterest expense	916	300	23	20	1,259
Profit (loss) before provision (benefit) for credit losses	525	385	(51)	(217)	642
Provision (benefit) for credit losses	84	91	17	(20)	172
Income (loss) before income tax expense (benefit)	441	294	(68)	(197)	470
Income tax expense (benefit)	114	63	(17)	(72)	88
Net income (loss)	$327	$231	($51)	($125)	$382
Total average assets	$75,392	$68,092	$8,389	$66,705	$218,578

(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 $29 million, $6 million, and $79 million, respectively, for the Consumer Banking, Commercial Banking and Other business segments.

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

Citizens Financial Group, Inc. | 79


	Nine Months Ended September 30, 2025
(dollars in millions)	Consumer Banking	Commercial Banking	Non-Core	Other	Consolidated
Net interest income	$3,673	$1,328	($27)	($658)	$4,316
Noninterest income	937	733	7	97	1,774
Total revenue	4,610	2,061	(20)	(561)	6,090
Direct expenses(1)(2)	2,040	660	2	1,266	3,968
Indirect expenses(3)	856	317	41	(1,214)	—
Noninterest expense	2,896	977	43	52	3,968
Profit (loss) before provision (benefit) for credit losses	1,714	1,084	(63)	(613)	2,122
Provision (benefit) for credit losses	248	239	43	(59)	471
Income (loss) before income tax expense (benefit)	1,466	845	(106)	(554)	1,651
Income tax expense (benefit)	371	195	(27)	(191)	348
Net income (loss)	$1,095	$650	($79)	($363)	$1,303
Total average assets	$79,040	$65,931	$5,241	$67,494	$217,706

(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 $92 million, $15 million, and $230 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.


	Nine Months Ended September 30, 2024
(dollars in millions)	Consumer Banking	Commercial Banking	Non-Core	Other	Consolidated
Net interest income	$3,369	$1,486	($96)	($538)	$4,221
Noninterest income	820	676	—	106	1,602
Total revenue	4,189	2,162	(96)	(432)	5,823
Direct expenses(1)(2)	1,728	626	3	1,561	3,918
Indirect expenses(3)	1,006	302	71	(1,379)	—
Noninterest expense	2,734	928	74	182	3,918
Profit (loss) before provision (benefit) for credit losses	1,455	1,234	(170)	(614)	1,905
Provision (benefit) for credit losses	249	262	46	(32)	525
Income (loss) before income tax expense (benefit)	1,206	972	(216)	(582)	1,380
Income tax expense (benefit)	311	223	(55)	(207)	272
Net income (loss)	$895	$749	($161)	($375)	$1,108
Total average assets	$74,510	$69,046	$9,450	$66,514	$219,520

(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 $84 million, $21 million, and $233 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