Item 1. FINANCIAL STATEMENTS (UNAUDITED)

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Item 1. FINANCIAL STATEMENTS (UNAUDITED)


						Page
Consolidated Balance Sheets						41
Consolidated Statements of Operations						42
Consolidated Statements of Comprehensive Income						43
Consolidated Statements of Changes in Stockholders’ Equity						44
Consolidated Statements of Cash Flows						46
Notes to Consolidated Financial Statements						47
Note 1 - Significant Accounting Policies						47
Note 2 - Securities						47
Note 3 - Loans and Leases						50
Note 4 - Credit Quality and the Allowance for Credit Losses						50
Note 5 - Mortgage Banking and Other Serviced Loans						62
Note 6 - Variable Interest Entities						64
Note 7 - Borrowed Funds						66
Note 8 - Derivatives						67
Note 9 - Accumulated Other Comprehensive Income (Loss)						72
Note 10 - Stockholders’ Equity						73
Note 11 - Commitments and Contingencies						74
Note 12 - Fair Value Measurements						76
Note 13 - Noninterest Income						80
Note 14 - Other Operating Expense						82
Note 15 - Earnings Per Share						82
Note 16 - Business Segments						82

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CONSOLIDATED BALANCE SHEETS (UNAUDITED)


(dollars in millions, except par value)	June 30, 2026	December 31, 2025
ASSETS:
Cash and due from banks	$1,219	$1,464
Interest-bearing cash and due from banks	11,541	11,263
Interest-bearing deposits in banks(1)	1,107	961
Debt securities available for sale, at fair value (including $158 and $108 pledged to creditors, respectively)(2)	37,448	35,697
Debt securities held to maturity (fair value of $6,784 and $7,150, respectively, and including $60 and $67 pledged to creditors, respectively)(2)	7,638	7,933
Loans held for sale (includes $1,069 and $1,065, respectively, measured at fair value)	1,458	1,198
Loans and leases	147,491	142,692
Less: Allowance for loan and lease losses	(1,969)	(1,943)
Net loans and leases(1)	145,522	140,749
Premises and equipment, net	873	915
Bank-owned life insurance	3,470	3,441
Goodwill	8,220	8,187
Other intangible assets(3)	105	115
Other assets(1)	15,235	14,428
TOTAL ASSETS	$233,836	$226,351
LIABILITIES AND STOCKHOLDERS’ EQUITY:
LIABILITIES:
Deposits:
Noninterest-bearing	$40,939	$40,417
Interest-bearing	144,681	142,896
Total deposits	185,620	183,313
Short-term borrowed funds	1,159	58
Long-term borrowed funds(1)	15,190	11,224
Other liabilities(1)	5,684	5,439
TOTAL LIABILITIES	207,653	200,034
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 June 30, 2026 and December 31, 2025	2,111	2,111
Common stock:
$0.01 par value, 1,000,000,000 shares authorized; 653,998,397 shares issued and 422,677,660 shares outstanding at June 30, 2026 and 652,238,745 shares issued and 429,242,174 shares outstanding at December 31, 2025	7	7
Additional paid-in capital	22,521	22,476
Retained earnings	11,987	11,345
Treasury stock, at cost, 231,320,737 and 222,996,571 shares at June 30, 2026 and December 31, 2025, respectively	(8,182)	(7,652)
Accumulated other comprehensive income (loss)	(2,261)	(1,970)
TOTAL STOCKHOLDERS’ EQUITY	26,183	26,317
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$233,836	$226,351

(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 June 30,		Six Months Ended June 30,
(dollars in millions, except per share data)	2026	2025	2026	2025
INTEREST INCOME:
Interest and fees on loans and leases	$1,968	$1,851	$3,852	$3,680
Interest and fees on loans held for sale	26	36	47	52
Investment securities(1)	446	428	870	846
Interest-bearing deposits in banks	103	92	194	181
Total interest income	2,543	2,407	4,963	4,759
INTEREST EXPENSE:
Deposits	747	802	1,462	1,597
Short-term borrowed funds	9	9	13	17
Long-term borrowed funds	156	159	295	317
Total interest expense	912	970	1,770	1,931
Net interest income	1,631	1,437	3,193	2,828
Provision (benefit) for credit losses	134	164	274	317
Net interest income after provision (benefit) for credit losses	1,497	1,273	2,919	2,511
NONINTEREST INCOME:
Service charges and fees	117	111	229	220
Capital markets fees	153	105	287	205
Wealth fees	102	88	202	169
Card fees	89	90	172	173
Mortgage banking fees	42	73	84	132
Foreign exchange and derivative products	47	41	91	80
Letter of credit and loan fees	52	45	102	89
Securities gains, net	6	5	13	12
Other income	44	42	78	64
Total noninterest income	652	600	1,258	1,144
NONINTEREST EXPENSE:
Salaries and employee benefits	745	681	1,503	1,377
Equipment and software	195	193	392	387
Outside services	174	169	336	324
Occupancy	108	108	222	220
Other operating expense	172	168	319	325
Total noninterest expense	1,394	1,319	2,772	2,633
Income before income tax expense	755	554	1,405	1,022
Income tax expense	168	118	301	213
NET INCOME	$587	$436	$1,104	$809
Net income available to common stockholders	$554	$402	$1,038	$742
Weighted-average common shares outstanding:
Basic	422,871,137	433,640,210	424,100,982	435,967,554
Diluted	426,681,848	436,539,774	428,274,078	439,342,703
Per common share information:
Basic earnings	$1.31	$0.93	$2.45	$1.70
Diluted earnings	1.30	0.92	2.42	1.69

(1) Comprised primarily of taxable interest income for all periods presented.

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 June 30,		Six Months Ended June 30,
(dollars in millions)	2026	2025	2026	2025
Net income	$587	$436	$1,104	$809
Other comprehensive income (loss), net of tax:
Cash flow hedges:
Net unrealized gains (losses) arising during the period	(180)	83	(304)	291
Reclassification of net (gains) losses to earnings	53	145	136	293
Investment securities:
Net unrealized gains (losses) on AFS securities arising during the period	(71)	56	(171)	338
Reclassification of net (gains) losses to earnings	24	17	43	30
Defined benefit plans:

Amortization of actuarial (gain) loss to earnings	1	1	5	4
Total other comprehensive income (loss), net of tax	(173)	302	(291)	956
Total comprehensive income (loss)	$414	$738	$813	$1,765

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

Citizens Financial Group, Inc. | 43

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 April 1, 2025	2	$2,113	438	$7	$22,370	$10,566	($7,249)	($2,941)	$24,866
Dividends declared - common stock	—	—	—	—	—	(185)	—	—	(185)
Dividends declared - preferred stock	—	—	—	—	—	(34)	—	—	(34)



Treasury stock purchased	—	—	(6)	—	—	—	(200)	—	(200)
Share repurchase excise tax	—	—	—	—	—	—	(1)	—	(1)
Share-based compensation plans	—	—	1	—	42	—	—	—	42
Employee stock purchase plan	—	—	—	—	8	—	—	—	8

Total comprehensive income (loss):
Net income	—	—	—	—	—	436	—	—	436
Other comprehensive income (loss)	—	—	—	—	—	—	—	302	302
Total comprehensive income (loss)	—	—	—	—	—	436	—	302	738
Balance at June 30, 2025	2	$2,113	433	$7	$22,420	$10,783	($7,450)	($2,639)	$25,234
Balance at April 1, 2026	2	$2,111	426	$7	$22,466	$11,631	($7,955)	($2,088)	$26,172
Dividends declared - common stock	—	—	—	—	—	(198)	—	—	(198)
Dividends declared - preferred stock	—	—	—	—	—	(33)	—	—	(33)



Treasury stock purchased	—	—	(3)	—	—	—	(225)	—	(225)
Share repurchase excise tax	—	—	—	—	—	—	(2)	—	(2)
Share-based compensation plans	—	—	—	—	47	—	—	—	47
Employee stock purchase plan	—	—	—	—	8	—	—	—	8

Total comprehensive income (loss):
Net income	—	—	—	—	—	587	—	—	587
Other comprehensive income (loss)	—	—	—	—	—	—	—	(173)	(173)
Total comprehensive income (loss)	—	—	—	—	—	587	—	(173)	414
Balance at June 30, 2026	2	$2,111	423	$7	$22,521	$11,987	($8,182)	($2,261)	$26,183

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, 2025	2	$2,113	441	$7	$22,364	$10,412	($7,047)	($3,595)	$24,254
Dividends declared - common stock	—	—	—	—	—	(371)	—	—	(371)
Dividends declared - preferred stock	—	—	—	—	—	(67)	—	—	(67)



Treasury stock purchased	—	—	(10)	—	—	—	(400)	—	(400)
Share repurchase excise tax	—	—	—	—	—	—	(3)	—	(3)
Share-based compensation plans	—	—	2	—	41	—	—	—	41
Employee stock purchase plan	—	—	—	—	15	—	—	—	15

Total comprehensive income (loss):
Net income	—	—	—	—	—	809	—	—	809
Other comprehensive income (loss)	—	—	—	—	—	—	—	956	956
Total comprehensive income (loss)	—	—	—	—	—	809	—	956	1,765
Balance at June 30, 2025	2	$2,113	433	$7	$22,420	$10,783	($7,450)	($2,639)	$25,234
Balance at January 1, 2026	2	$2,111	429	$7	$22,476	$11,345	($7,652)	($1,970)	$26,317
Dividends declared - common stock	—	—	—	—	—	(396)	—	—	(396)
Dividends declared - preferred stock	—	—	—	—	—	(66)	—	—	(66)



Treasury stock purchased	—	—	(8)	—	—	—	(525)	—	(525)
Share repurchase excise tax	—	—	—	—	—	—	(5)	—	(5)
Share-based compensation plans	—	—	2	—	29	—	—	—	29
Employee stock purchase plan	—	—	—	—	16	—	—	—	16

Total comprehensive income (loss):
Net income	—	—	—	—	—	1,104	—	—	1,104
Other comprehensive income (loss)	—	—	—	—	—	—	—	(291)	(291)
Total comprehensive income (loss)	—	—	—	—	—	1,104	—	(291)	813
Balance at June 30, 2026	2	$2,111	423	$7	$22,521	$11,987	($8,182)	($2,261)	$26,183

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

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CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)


	Six Months Ended June 30,
(dollars in millions)	2026	2025
OPERATING ACTIVITIES
Net income	$1,104	$809
Adjustments to reconcile net income to net change due to operating activities:
Provision (benefit) for credit losses	274	317
Net change in Loans held for sale	(248)	(297)
Depreciation, amortization, and accretion	212	247
Deferred income tax expense (benefit)	(6)	(115)
Share-based compensation	82	74
Net gain on sale of assets	(13)	(14)
Net (increase) decrease in Other assets	(502)	359
Net increase (decrease) in Other liabilities	60	(707)
Net change due to operating activities	963	673
INVESTING ACTIVITIES
Investment securities:
Purchases of debt securities available for sale	(5,654)	(4,125)
Proceeds from maturities and paydowns of debt securities available for sale	2,416	1,809
Proceeds from sales of debt securities available for sale	1,183	1,117

Proceeds from maturities and paydowns of debt securities held to maturity	349	348

Net (increase) decrease in Interest-bearing deposits in banks	(146)	(45)


Purchases of loans	(103)	(503)
Sales of loans	550	911
Net (increase) decrease in Loans and leases	(5,523)	(1,821)
Capital expenditures	(21)	(47)

Other	(314)	(180)
Net change due to investing activities	(7,263)	(2,536)
FINANCING ACTIVITIES
Net increase (decrease) in Deposits	2,307	310
Net increase (decrease) in Short-term borrowed funds	1,101	249
Proceeds from issuance of long-term borrowed funds	10,647	6,033
Repayments of long-term borrowed funds	(6,693)	(5,926)
Treasury stock purchased	(525)	(400)


Dividends paid to common stockholders	(396)	(371)
Dividends paid to preferred stockholders	(71)	(67)

Other	(37)	(18)
Net change due to financing activities	6,333	(190)
Net change in cash and cash equivalents(1)	33	(2,053)
Cash and cash equivalents at beginning of period(1)	12,727	10,601
Cash and cash equivalents at end of period(1)	$12,760	$8,548
Non-cash items:
Transfer of loans from loans held for investment to LHFS	$389	$1,918

(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 2025 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 2025 Form 10-K.

NOTE 2 - SECURITIES

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


	June 30, 2026				December 31, 2025
(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	$4,499	$3	($71)	$4,431	$3,163	$10	($50)	$3,123
State and political subdivisions	1	—	—	1	1	—	—	1
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities	34,159	123	(1,554)	32,728	33,379	215	(1,374)	32,220
Other/non-agency	250	—	(2)	248	268	—	(4)	264
Total mortgage-backed securities	34,409	123	(1,556)	32,976	33,647	215	(1,378)	32,484
Collateralized loan obligations	40	—	—	40	89	—	—	89
Total debt securities available for sale, at fair value	$38,949	$126	($1,627)	$37,448	$36,900	$225	($1,428)	$35,697
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities	$7,343	$—	($852)	$6,491	$7,595	$2	($785)	$6,812
Total mortgage-backed securities	7,343	—	(852)	6,491	7,595	2	(785)	6,812
Asset-backed securities	295	—	(2)	293	338	—	—	338
Total debt securities held to maturity	$7,638	$—	($854)	$6,784	$7,933	$2	($785)	$7,150
Equity securities, at cost(2)	$991	$—	$—	$991	$807	$—	$—	$807
Equity securities, at fair value(2)	386	—	—	386	317	—	—	317

(1) Excludes portfolio level basis adjustments of $(40) million and $17 million, respectively, for securities designated in active fair value hedge relationships under the portfolio layer method at June 30, 2026 and December 31, 2025.

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

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Accrued interest receivable on debt securities totaled $154 million and $139 million as of June 30, 2026 and December 31, 2025, 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 June 30, 2026. 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	$798	$1,271	$2,430	$—	$4,499
State and political subdivisions	—	—	—	1	1
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities	360	2,142	1,598	30,059	34,159
Other/non-agency	—	—	—	250	250
Collateralized loan obligations	—	—	40	—	40
Total debt securities available for sale	1,158	3,413	4,068	30,310	38,949
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities	—	—	—	7,343	7,343
Asset-backed securities	—	295	—	—	295
Total debt securities held to maturity	—	295	—	7,343	7,638
Total amortized cost of debt securities	$1,158	$3,708	$4,068	$37,653	$46,587

Fair value:
U.S. Treasury and other	$789	$1,240	$2,402	$—	$4,431
State and political subdivisions	—	—	—	1	1
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities	356	2,097	1,533	28,742	32,728
Other/non-agency	—	—	—	248	248
Collateralized loan obligations	—	—	40	—	40
Total debt securities available for sale	1,145	3,337	3,975	28,991	37,448
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities	—	—	—	6,491	6,491
Asset-backed securities	—	293	—	—	293
Total debt securities held to maturity	—	293	—	6,491	6,784
Total fair value of debt securities	$1,145	$3,630	$3,975	$35,482	$44,232

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


	Three Months Ended June 30,		Six Months Ended June 30,
(dollars in millions)	2026	2025	2026	2025
Gains	$6	$5	$13	$12
Losses	—	—	—	—
Securities gains, net	$6	$5	$13	$12

At June 30, 2026 and December 31, 2025, debt securities with a carrying value of $3.8 billion and $3.4 billion, respectively, were pledged to secure public deposits, trust funds, FHLB borrowing capacity, repurchase agreements, and derivative contracts, and for other purposes as required or permitted by law.

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Impairment

The Company evaluated its existing HTM portfolio as of June 30, 2026 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 of its HTM portfolio through the use of credit quality indicators, which include 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 June 30, 2026.

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:


	June 30, 2026
	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	$2,201	($31)	$1,980	($40)	$4,181	($71)

Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities	10,223	(280)	11,801	(1,274)	22,024	(1,554)
Other/non-agency	—	—	248	(2)	248	(2)
Total mortgage-backed securities	10,223	(280)	12,049	(1,276)	22,272	(1,556)

Total	$12,424	($311)	$14,029	($1,316)	$26,453	($1,627)


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

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

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 June 30, 2026. 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)	June 30, 2026	December 31, 2025
Commercial and industrial	$53,467	$49,232
Commercial real estate	23,817	24,580
Total commercial	77,284	73,812
Residential mortgages	36,374	35,024
Home equity	20,276	19,069
Automobile	1,482	2,310
Education	8,044	8,416
Other retail	4,031	4,061
Total retail	70,207	68,880
Total loans and leases	$147,491	$142,692

Accrued interest receivable on loans and leases held for investment totaled $887 million and $825 million as of June 30, 2026 and December 31, 2025, 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 $42.4 billion and $40.8 billion at June 30, 2026 and December 31, 2025, 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, as well as home equity lines of credit, and totaled $26.2 billion and $19.0 billion at June 30, 2026 and December 31, 2025, respectively.

Interest income on direct financing and sales-type leases for the three months ended June 30, 2026 and 2025 was $12 million and $11 million, respectively, and is reported within Interest and fees on loans and leases in the Consolidated Statements of Operations. For the six months ended June 30, 2026 and 2025, this interest income was $24 million and $22 million, respectively.

The following table presents the composition of LHFS:


	June 30, 2026			December 31, 2025
(dollars in millions)	Residential Mortgages(1)	Commercial(2)	Total		Residential Mortgages(1)	Commercial(2)	Total
Loans held for sale at fair value	$920	$149	$1,069		$895	$170	$1,065
Other loans held for sale	—	389	389		—	133	133
Total loans held for sale	$920	$538	$1,458		$895	$303	$1,198

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

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

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, 2025, see Note 4 in the Company’s 2025 Form 10-K. There were no significant changes to the ACL reserve methodology during the six months ended June 30, 2026.

Citizens Financial Group, Inc. | 50

The following table presents a summary of changes in the ACL for the three and six months ended June 30, 2026:


	Three Months Ended June 30, 2026			Six Months Ended June 30, 2026
(dollars in millions)	Commercial	Retail	Total	Commercial	Retail	Total
Allowance for loan and lease losses, beginning of period	$1,115	$843	$1,958	$1,058	$885	$1,943



Charge-offs	(76)	(90)	(166)	(167)	(182)	(349)
Recoveries	5	26	31	23	53	76
Net charge-offs	(71)	(64)	(135)	(144)	(129)	(273)
Provision expense (benefit) for loans and leases	72	74	146	202	97	299
Allowance for loan and lease losses, end of period	1,116	853	1,969	1,116	853	1,969
Allowance for unfunded lending commitments, beginning of period	189	38	227	194	46	240


Provision expense (benefit) for unfunded lending commitments	(12)	—	(12)	(17)	(8)	(25)

Allowance for unfunded lending commitments, end of period	177	38	215	177	38	215
Total allowance for credit losses, end of period	$1,293	$891	$2,184	$1,293	$891	$2,184

During the six months ended June 30, 2026, net charge-offs of $273 million and a provision for expected credit losses of $274 million resulted in an increase of $1 million to the ACL.

As of June 30, 2026, the Company’s ACL economic forecast over a two-year reasonable and supportable period contemplates a mild recession, reflecting uncertainties related to the implementation of tariffs and protectionist trade policies, inflationary pressures, the impact of higher energy prices, and geopolitical tensions. This forecast is generally applied to the retail and commercial and industrial portfolios and projects peak unemployment of approximately 5.3%, consistent with the projection at December 31, 2025, and a start-to-trough real GDP decline of approximately 0.6%, which is slightly more severe than the 0.5% projection at December 31, 2025. More severe economic scenarios are applied to certain portfolios, such as CRE general office, with peak unemployment of approximately 9.5% and a start-to-trough real GDP decline of approximately 4.4%, compared to peak unemployment of approximately 9.4% and a start-to-trough real GDP decline of approximately 4.4% at December 31, 2025.

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


	Three Months Ended June 30, 2025			Six Months Ended June 30, 2025
(dollars in millions)	Commercial	Retail	Total	Commercial	Retail	Total
Allowance for loan and lease losses, beginning of period	$1,148	$866	$2,014	$1,140	$921	$2,061



Charge-offs	(93)	(108)	(201)	(178)	(257)	(435)
Recoveries	1	33	34	5	63	68
Net charge-offs	(92)	(75)	(167)	(173)	(194)	(367)
Provision expense (benefit) for loans and leases	50	111	161	139	175	314
Allowance for loan and lease losses, end of period	1,106	902	2,008	1,106	902	2,008
Allowance for unfunded lending commitments, beginning of period	164	34	198	155	43	198


Provision expense (benefit) for unfunded lending commitments	(1)	4	3	8	(5)	3

Allowance for unfunded lending commitments, end of period	163	38	201	163	38	201
Total allowance for credit losses, end of period	$1,269	$940	$2,209	$1,269	$940	$2,209

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

Citizens Financial Group, Inc. | 51

Credit Quality Indicators

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

The Company utilizes internal risk ratings to monitor credit quality for commercial loans and leases. For more information on these ratings, see Note 4 in the Company’s 2025 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 June 30, 2026:


	Term Loans and Leases by Origination Year						Revolving Loans
(dollars in millions)	2026	2025	2024	2023	2022	Prior to 2022	Within the Revolving Period	Converted to Term	Total
Commercial and industrial
Pass	$4,611	$7,840	$3,260	$965	$1,427	$2,409	$30,602	$175	$51,289
Special Mention	—	45	14	24	8	76	539	4	710
Substandard Accrual	—	44	28	106	70	285	669	22	1,224
Nonaccrual	4	1	3	9	41	107	70	9	244
Total commercial and industrial	4,615	7,930	3,305	1,104	1,546	2,877	31,880	210	53,467
Commercial real estate
Pass	3,394	3,699	1,482	449	2,796	7,303	1,614	4	20,741
Special Mention	35	58	2	7	438	353	71	—	964
Substandard Accrual	—	2	57	21	461	967	30	—	1,538
Nonaccrual	—	—	—	4	183	385	1	1	574
Total commercial real estate	3,429	3,759	1,541	481	3,878	9,008	1,716	5	23,817
Total commercial
Pass	8,005	11,539	4,742	1,414	4,223	9,712	32,216	179	72,030
Special Mention	35	103	16	31	446	429	610	4	1,674
Substandard Accrual	—	46	85	127	531	1,252	699	22	2,762
Nonaccrual	4	1	3	13	224	492	71	10	818
Total commercial	$8,044	$11,689	$4,846	$1,585	$5,424	$11,885	$33,596	$215	$77,284

Citizens Financial Group, Inc. | 52

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


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

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. | 53

The following table presents the amortized cost basis of retail loans by vintage date and current FICO score as of June 30, 2026:


	Term Loans by Origination Year						Revolving Loans
(dollars in millions)	2026	2025	2024	2023	2022	Prior to 2022	Within the Revolving Period	Converted to Term	Total
Residential mortgages
800+	$1,131	$2,647	$1,544	$1,214	$3,274	$10,768	$—	$—	$20,578
740-799	1,580	1,768	837	588	1,266	4,506	—	—	10,545
680-739	331	467	237	226	460	1,655	—	—	3,376
620-679	48	49	50	63	132	597	—	—	939
<620	—	13	16	101	110	684	—	—	924
No FICO available(1)	—	—	—	—	2	10	—	—	12
Total residential mortgages	3,090	4,944	2,684	2,192	5,244	18,220	—	—	36,374
Home equity
800+	—	2	4	5	7	66	7,329	188	7,601
740-799	—	2	4	3	4	44	6,504	216	6,777
680-739	—	1	3	3	3	28	3,615	197	3,850
620-679	—	—	—	1	2	13	935	160	1,111
<620	—	—	—	3	1	14	596	317	931
No FICO available(1)	—	2	—	—	1	2	1	—	6
Total home equity	—	7	11	15	18	167	18,980	1,078	20,276
Automobile
800+	—	—	—	36	157	215	—	—	408
740-799	—	—	—	43	160	182	—	—	385
680-739	—	—	—	38	123	124	—	—	285
620-679	—	—	—	24	77	75	—	—	176
<620	—	—	—	30	100	98	—	—	228
No FICO available(1)	—	—	—	—	—	—	—	—	—
Total automobile	—	—	—	171	617	694	—	—	1,482
Education
800+	94	362	251	280	487	2,572	—	—	4,046
740-799	136	425	245	240	340	1,160	—	—	2,546
680-739	54	165	110	106	141	441	—	—	1,017
620-679	5	29	30	32	42	149	—	—	287
<620	1	8	10	12	19	73	—	—	123
No FICO available(1)	—	—	—	—	—	25	—	—	25
Total education	290	989	646	670	1,029	4,420	—	—	8,044
Other retail
800+	15	90	33	25	31	15	518	—	727
740-799	20	84	45	31	31	24	817	—	1,052
680-739	17	56	33	25	30	26	737	—	924
620-679	13	31	16	14	23	16	264	—	377
<620	4	14	12	11	30	17	168	—	256
No FICO available(1)	13	1	—	—	—	1	680	—	695
Total other retail	82	276	139	106	145	99	3,184	—	4,031
Total retail
800+	1,240	3,101	1,832	1,560	3,956	13,636	7,847	188	33,360
740-799	1,736	2,279	1,131	905	1,801	5,916	7,321	216	21,305
680-739	402	689	383	398	757	2,274	4,352	197	9,452
620-679	66	109	96	134	276	850	1,199	160	2,890
<620	5	35	38	157	260	886	764	317	2,462
No FICO available(1)	13	3	—	—	3	38	681	—	738
Total retail	$3,462	$6,216	$3,480	$3,154	$7,053	$23,600	$22,164	$1,078	$70,207

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

Citizens Financial Group, Inc. | 54

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


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

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

Citizens Financial Group, Inc. | 55

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


	Six Months Ended June 30, 2026
	Term Loans and Leases by Origination Year						Revolving Loans
(dollars in millions)	2026	2025	2024	2023	2022	Prior to 2022	Within the Revolving Period	Converted to Term	Total
Commercial and industrial	$—	$2	$8	$23	$4	$2	$62	$—	$101
Commercial real estate	—	—	—	12	10	44	—	—	66
Total commercial	—	2	8	35	14	46	62	—	167
Residential mortgages	—	—	—	—	—	2	—	—	2
Home equity	—	—	—	—	—	2	9	—	11
Automobile	—	—	—	2	8	7	—	—	17
Education	—	3	3	6	8	28	—	—	48
Other retail	13	11	4	4	3	4	65	—	104
Total retail	13	14	7	12	19	43	74	—	182
Total loans and leases	$13	$16	$15	$47	$33	$89	$136	$—	$349


	Six Months Ended June 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	$—	$—	$1	$24	$22	$4	$22	$—	$73
Commercial real estate	—	—	3	21	5	76	—	—	105
Total commercial	—	—	4	45	27	80	22	—	178
Residential mortgages	—	—	—	—	—	1	—	—	1
Home equity	—	—	—	1	—	1	7	—	9
Automobile	—	—	3	14	12	5	—	—	34
Education	—	2	4	10	18	48	—	—	82
Other retail	14	25	14	7	4	5	62	—	131
Total retail	14	27	21	32	34	60	69	—	257
Total loans and leases	$14	$27	$25	$77	$61	$140	$91	$—	$435

Citizens Financial Group, Inc. | 56

Nonaccrual and Past Due Assets

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


	June 30, 2026
		Days Past Due and Accruing
(dollars in millions)	Current	30-59	60-89	90+	Nonaccrual	Total	Nonaccrual with no related ACL
Commercial and industrial	$53,190	$21	$9	$3	$244	$53,467	$24
Commercial real estate	23,179	4	54	6	574	23,817	44
Total commercial	76,369	25	63	9	818	77,284	68
Residential mortgages	35,873	71	38	172	220	36,374	128
Home equity	19,841	91	28	—	316	20,276	205
Automobile	1,405	41	15	—	21	1,482	3
Education	7,973	31	17	2	21	8,044	2
Other retail	3,950	25	17	—	39	4,031	—
Total retail	69,042	259	115	174	617	70,207	338
Total	$145,411	$284	$178	$183	$1,435	$147,491	$406
Guaranteed residential mortgages(1)	$725	$28	$18	$172	$—	$943	$—


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

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

At June 30, 2026 and December 31, 2025, the Company had collateral-dependent residential mortgage and home equity loans totaling $471 million and $437 million, respectively, and collateral-dependent commercial loans totaling $245 million and $251 million, respectively.

The amortized cost basis of mortgage loans collateralized by residential real estate for which formal foreclosure proceedings were in-process was $313 million and $307 million as of June 30, 2026 and December 31, 2025, respectively.

Loan Modifications to Borrowers Experiencing Financial Difficulty

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

Citizens Financial Group, Inc. | 57

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 six months ended June 30, 2026 and 2025, 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 June 30, 2026
(dollars in millions)	Interest Rate Reduction	Term Extension	Payment Delay	Interest Rate Reduction and Term Extension	Interest Rate Reduction and Payment Delay	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	$115	$—	$1	$1	$1	$—	$119	0.22	%
Commercial real estate	—	357	20	—	—	34	48	459	1.93
Total commercial	1	472	20	1	1	35	48	578	0.75
Residential mortgages	—	8	41	2	—	14	10	75	0.21
Home equity	1	—	6	—	3	1	1	12	0.06

Education	3	—	—	—	—	—	—	3	0.04
Other retail	6	—	—	—	—	—	—	6	0.15
Total retail	10	8	47	2	3	15	11	96	0.14
Total	$11	$480	$67	$3	$4	$50	$59	$674	0.46	%


	Three Months Ended June 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	$—	$136	$—	$3	$1	$4	$144	0.32	%
Commercial real estate	—	283	49	29	43	—	404	1.54
Total commercial	—	419	49	32	44	4	548	0.76
Residential mortgages	1	13	5	1	2	1	23	0.07
Home equity	2	—	4	2	—	—	8	0.05

Education	3	—	—	—	—	—	3	0.04
Other retail	5	—	—	—	—	—	5	0.12
Total retail	11	13	9	3	2	1	39	0.06
Total	$11	$432	$58	$35	$46	$5	$587	0.42	%

Citizens Financial Group, Inc. | 58


	Six Months Ended June 30, 2026
(dollars in millions)	Interest Rate Reduction	Term Extension	Payment Delay	Interest Rate Reduction and Term Extension	Interest Rate Reduction and Payment Delay	Term Extension and Payment Delay	Interest Rate Reduction, Term Extension, and Payment Delay	Total	Total as a % of Loan Class(1)
Commercial and industrial	$3	$176	$—	$1	$1	$20	$—	$201	0.38	%
Commercial real estate	—	399	20	—	—	56	48	523	2.20
Total commercial	3	575	20	1	1	76	48	724	0.94
Residential mortgages	—	19	44	5	1	14	10	93	0.26
Home equity	1	1	8	4	3	—	1	18	0.09

Education	5	—	—	—	—	—	—	5	0.06
Other retail	11	—	—	—	—	—	—	11	0.27
Total retail	17	20	52	9	4	14	11	127	0.18
Total	$20	$595	$72	$10	$5	$90	$59	$851	0.58	%


	Six Months Ended June 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	$12	$218	$2	$3	$1	$4	$240	0.53	%
Commercial real estate	28	409	81	29	65	—	612	2.33
Total commercial	40	627	83	32	66	4	852	1.19
Residential mortgages	2	27	8	5	2	1	45	0.13
Home equity	2	—	5	3	—	—	10	0.06

Education	5	—	—	—	—	—	5	0.06
Other retail	9	—	—	—	—	—	9	0.22
Total retail	18	27	13	8	2	1	69	0.10
Total	$58	$654	$96	$40	$68	$5	$921	0.66	%

(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 six months ended June 30, 2026 and 2025, disaggregated by class of financing receivable:


	Three Months Ended June 30, 2026
(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	2.84	%	15	$—	$—
Commercial real estate	0.84		8	2	—
Residential mortgages	0.60		113	—	—
Home equity	3.40		183	—	—

Education	4.94		—	—	—
Other retail	18.78		—	—	4

Citizens Financial Group, Inc. | 59


	Three Months Ended June 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	2.71	%	19	$—	$—
Commercial real estate	0.90		8	1	—
Residential mortgages	1.09		100	—	—
Home equity	3.40		122	—	—

Education	3.97		—	—	—
Other retail	19.73		—	—	4


	Six Months Ended June 30, 2026
(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	2.69	%	18	$2	$—
Commercial real estate	0.84		10	2	—
Residential mortgages	0.65		113	—	—
Home equity	3.16		186	—	—

Education	4.70		—	—	—
Other retail	19.04		—	—	8


	Six Months Ended June 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	1.56	%	17	$—	$—
Commercial real estate	0.83		9	2	—
Residential mortgages	1.02		107	—	—
Home equity	3.81		98	—	—

Education	4.38		—	—	—
Other retail	19.92		—	—	6

(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 periods ended June 30, 2026 and 2025, 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.


	June 30, 2026
		Days Past Due and Accruing
(dollars in millions)	Current	30-59	60-89	90+	Nonaccrual	Total
Commercial and industrial	$318	$1	$1	$—	$57	$377
Commercial real estate	759	—	23	—	192	974
Total commercial	1,077	1	24	—	249	1,351
Residential mortgages	68	7	5	38	33	151
Home equity	11	—	—	—	27	38

Education	9	—	—	—	2	11
Other retail	15	1	1	—	2	19
Total retail	103	8	6	38	64	219
Total	$1,180	$9	$30	$38	$313	$1,570

Citizens Financial Group, Inc. | 60


	June 30, 2025
		Days Past Due and Accruing
(dollars in millions)	Current	30-59	60-89	90+	Nonaccrual	Total
Commercial and industrial	$278	$—	$2	$—	$91	$371
Commercial real estate	495	—	—	6	331	832
Total commercial	773	—	2	6	422	1,203
Residential mortgages	46	4	7	14	21	92
Home equity	11	—	—	—	14	25

Education	8	—	—	—	1	9
Other retail	13	2	1	—	1	17
Total retail	78	6	8	14	37	143
Total	$851	$6	$10	$20	$459	$1,346

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 June 30, 2026
(dollars in millions)	Interest Rate Reduction	Term Extension	Payment Delay	Total
Commercial and industrial	$—	$83	$—	$83
Commercial real estate	—	35	—	35
Total commercial	—	118	—	118
Residential mortgages	—	5	1	6
Home equity	—	—	—	—

Education	1	—	—	1
Other retail	1	—	—	1
Total retail	2	5	1	8
Total	$2	$123	$1	$126


	Three Months Ended June 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	$—	$26	$—	$—	$2	$28
Commercial real estate	—	6	2	—	—	8
Total commercial	—	32	2	—	2	36
Residential mortgages	1	11	1	3	—	16
Home equity	—	—	1	—	—	1

Education	—	—	—	—	—	—
Other retail	1	—	—	—	—	1
Total retail	2	11	2	3	—	18
Total	$2	$43	$4	$3	$2	$54

Citizens Financial Group, Inc. | 61


	Six Months Ended June 30, 2026
(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
Commercial and industrial	$—	$83	$—	$—	$—	$—	$83
Commercial real estate	—	84	—	—	—	—	84
Total commercial	—	167	—	—	—	—	167
Residential mortgages	—	12	1	2	1	1	17
Home equity	—	—	—	1	—	—	1

Education	1	—	—	—	—	—	1
Other retail	1	—	—	—	—	—	1
Total retail	2	12	1	3	1	1	20
Total	$2	$179	$1	$3	$1	$1	$187


	Six Months Ended June 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	$—	$27	$—	$—	$2	$29
Commercial real estate	—	76	2	—	—	78
Total commercial	—	103	2	—	2	107
Residential mortgages	1	14	2	5	—	22
Home equity	1	—	1	1	—	3

Education	1	—	—	—	—	1
Other retail	1	—	—	—	—	1
Total retail	4	14	3	6	—	27
Total	$4	$117	$5	$6	$2	$134

Unfunded commitments related to loans modified during the six months ended June 30, 2026 were $139 million at June 30, 2026. Unfunded commitments related to loans modified during the year ended December 31, 2025 were $465 million at December 31, 2025.

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 June 30,		Six Months Ended June 30,
(dollars in millions)	2026	2025	2026	2025
Cash proceeds from residential mortgage loans sold with servicing retained	$2,529	$2,734	$5,065	$4,392

Gain on sales(1)	18	21	39	37
Contractually specified servicing, late, and other ancillary fees(1)	69	69	139	139

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

Citizens Financial Group, Inc. | 62

The unpaid principal balance of residential mortgage loans related to our MSRs was $94.6 billion and $94.9 billion at June 30, 2026 and December 31, 2025, 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.

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


	As of and for the Three Months Ended June 30,		As of and for the Six Months Ended June 30,
(dollars in millions)	2026	2025	2026	2025
Fair value as of beginning of the period	$1,462	$1,397	$1,455	$1,491


Amounts capitalized	48	48	96	75

Sales(1)	—	—	—	(72)
Changes in unpaid principal balance(2)	(39)	(40)	(85)	(79)
Changes in fair value(3)	11	21	16	11
Fair value at end of the period	$1,482	$1,426	$1,482	$1,426

(1) For the six months ended June 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)	June 30, 2026	December 31, 2025
Fair value	$1,482	$1,455
Weighted average life (years)	8.2	8.0
Weighted average constant prepayment rate	6.6%	7.0%
Decline in fair value from 10% adverse change	$38	$38
Decline in fair value from 20% adverse change	$73	$73
Weighted average option adjusted spread	553 bps	588 bps
Decline in fair value from 10% adverse change	$38	$40
Decline in fair value from 20% adverse change	$75	$80

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)	June 30, 2026	December 31, 2025
Education	$301	$341
Commercial and industrial(1)	78	84

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

Citizens Financial Group, Inc. | 63

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 9 in the Company’s 2025 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)	June 30, 2026	December 31, 2025
Assets:

Interest-bearing deposits in banks	$120	$157
Net loans and leases	1,232	1,929
Other assets	10	11
Total assets	$1,362	$2,097
Liabilities:
Long-term borrowed funds	$928	$1,598
Other liabilities	2	4
Total liabilities	$930	$1,602

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 and renewable energy projects. The Company’s maximum exposure to loss resulting from its involvement with these entities is limited to the balance sheet carrying amount of its investments, unfunded commitments, and the outstanding principal balance of loans to SPEs.

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


(dollars in millions)	June 30, 2026	December 31, 2025
Lending to SPEs included in Loans and leases	$7,052	$5,631
Tax-advantaged investments included in Other assets(1)	3,120	2,967
Unfunded commitments for tax-advantaged investments included in Other liabilities(1)	1,094	1,066
Asset-backed investments included in Debt securities	1,018	1,118
Other investments included in Other assets	18	17
Unfunded commitments for other investments included in Other liabilities	2	2

(1) Includes LIHTC and renewable energy investments.

Citizens Financial Group, Inc. | 64

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 June 30, 2026 and December 31, 2025, the lending facilities had undrawn commitments to extend credit of $5.0 billion and $4.0 billion, respectively. For more information on commitments to extend credit, see Note 11.

Tax-Advantaged Investments

Low Income Housing Tax Credit Partnerships

The Company makes certain equity investments in various limited partnerships that sponsor affordable housing projects utilizing federal tax incentives pursuant to Section 42 of the Internal Revenue Code. The objective of these investments is to generate a satisfactory return on capital, encourage investment in projects that serve affordable housing product offerings, and further the goals of the 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.

The Company’s investments in LIHTC partnerships totaled $2.9 billion and $2.8 billion, respectively, as of June 30, 2026 and December 31, 2025, with unfunded commitments related to these investments totaling $1.0 billion and $1.1 billion, respectively.

Renewable Energy Entities

The Company’s investments in certain renewable energy entities provide benefits from government incentives and other tax attributes. The Company’s investments in renewable energy entities totaled $224 million and $201 million, respectively, as of June 30, 2026 and December 31, 2025, with unfunded commitments related to these investments totaling $55 million as of June 30, 2026. Unfunded commitments are contingent upon the level of electricity production attained by the renewable energy entity relative to its targeted threshold, changes in the production tax credit rates set by the Internal Revenue Service, and the achievement of commercial operation for a certain renewable energy project under its power purchase agreement.

Asset-backed securities

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

The Company did not retain any securitization interests resulting from the origination of residential mortgage loans during the three and six months ended June 30, 2026 and 2025.

Other Investments

The Company makes certain equity investments in various tax credit limited partnerships or limited liability companies in order to achieve a satisfactory return on capital and to assist the Company in achieving goals associated with the Community Reinvestment Act.

Citizens Financial Group, Inc. | 65

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 June 30,		Six Months Ended June 30,
(dollars in millions)	2026	2025	2026	2025
Tax credits recognized	$116	$104	$226	$210
Other tax benefits recognized	26	26	51	49
Amortization	(112)	(104)	(219)	(206)
Net benefit (expense) included in Income tax expense	30	26	58	53
Other income	3	2	3	4
Allocated income (loss) on investments	(4)	(4)	(8)	(7)
Net benefit (expense) included in Noninterest income	(1)	(2)	(5)	(3)
Net benefit (expense) included in the Consolidated Statements of Operations(1)	$29	$24	$53	$50

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

The Company did not recognize impairment losses resulting from the forfeiture or ineligibility of income tax credits or other circumstances during the three and six months ended June 30, 2026 and 2025.

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)	June 30, 2026	December 31, 2025


Other short-term borrowed funds(1)	$1,159	$58
Total short-term borrowed funds	$1,159	$58

(1) Consists primarily of FHLB advances and short positions held by the Company’s commercial broker dealer as of June 30, 2026, and short positions held by the Company’s commercial broker dealer as of December 31, 2025. See Note 8 for additional information regarding forward purchase contracts entered into to economically hedge short positions held by the Company’s commercial broker dealer.

Citizens Financial Group, Inc. | 66

Long-term borrowed funds

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


(dollars in millions)	June 30, 2026	December 31, 2025
Parent Company:
2.850% fixed-rate senior unsecured notes, due July 2026	$500	$500
5.841% fixed/floating-rate senior unsecured notes, due January 2030	1,247	1,246
2.500% fixed-rate senior unsecured notes, due February 2030	299	299
3.250% fixed-rate senior unsecured notes, due April 2030	748	747
3.750% fixed-rate reset subordinated debt, due February 2031(1)	—	69
4.300% fixed-rate reset subordinated debt, due February 2031(1)	—	135
4.350% fixed-rate reset subordinated debt, due February 2031(1)	—	60
5.253% fixed/floating-rate senior unsecured notes, due March 2031	747	747
5.718% fixed/floating-rate senior unsecured notes, due July 2032	1,245	1,244
2.638% fixed-rate subordinated debt, due September 2032	580	577
6.645% fixed/floating-rate senior unsecured notes, due April 2035	746	746
5.299% fixed-reset subordinated notes, due January 2036	398	—
5.641% fixed-rate reset subordinated debt, due May 2037	398	398
CBNA’s Global Note Program:
4.575% fixed/floating-rate senior unsecured notes, due August 2028	799	799
4.192% fixed/floating-rate senior unsecured notes, due January 2029	748	—
Additional Borrowings by CBNA and Other Subsidiaries:
Federal Home Loan Bank advances, 3.968% weighted average rate, due through 2045(2)(3)	5,763	2,013
Secured borrowings, 5.565% weighted average rate, due through 2031(2)(4)	955	1,625
Other	17	19
Total long-term borrowed funds	$15,190	$11,224

(1) Notes were redeemed in February 2026.

(2) Rate disclosed reflects the weighted average rate as of June 30, 2026.

(3) Represents floating-rate advances that are prepayable without penalty if paid on the monthly interest rate-reset date.

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

At June 30, 2026, the Company’s long-term borrowed funds include principal balances of $15.3 billion and unamortized debt issuance costs and discounts of $66 million. At December 31, 2025, the Company’s long-term borrowed funds include principal balances of $11.3 billion and unamortized debt issuance costs and discounts of $71 million.

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 $11.6 billion and $7.1 billion at June 30, 2026 and December 31, 2025, respectively. The Company’s available FHLB borrowing capacity was $18.9 billion and $22.1 billion at June 30, 2026 and December 31, 2025, 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 June 30, 2026, the Company’s unused secured borrowing capacity was approximately $78.3 billion, which includes unencumbered securities, FHLB borrowing capacity, and FRB discount window capacity.

NOTE 8 - DERIVATIVES

In the normal course of business, the Company enters into derivative transactions to meet the financing and hedging needs of its customers and reduce its own exposure to fluctuations in interest rates and foreign currency exchange rates. These transactions include interest rate swap contracts, interest rate options, foreign exchange contracts, residential loan commitment rate locks, interest rate future contracts, swaptions, certain commodities, forward commitments to sell TBAs, forward purchase and sale contracts, and purchase options. The Company does not use derivatives for speculative purposes. Information regarding the valuation methodology and inputs used to estimate the fair value of the Company’s derivative instruments is described in Note 18 in the Company’s 2025 Form 10-K.

Citizens Financial Group, Inc. | 67

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


	June 30, 2026			December 31, 2025
(dollars in millions)	Notional Amount	Derivative Assets	Derivative Liabilities	Notional Amount	Derivative Assets	Derivative Liabilities
Derivatives designated as hedging instruments:
Interest rate contracts	$60,182	$190	$52	$67,358	$366	$25
Derivatives not designated as hedging instruments:
Interest rate contracts	194,972	139	515	180,977	187	446
Foreign exchange contracts	36,756	578	368	40,401	510	373
Commodities contracts	14,131	629	585	10,974	458	405
TBA contracts	7,647	13	16	3,043	2	6
Other contracts	1,526	29	3	968	9	3
Total derivatives not designated as hedging instruments	255,032	1,388	1,487	236,363	1,166	1,233
Total gross derivatives	315,214	1,578	1,539	303,721	1,532	1,258
Less: Gross amounts offset in the Consolidated Balance Sheets(1)		(462)	(462)		(342)	(342)
Less: Cash collateral applied(1)		(544)	(67)		(494)	(137)
Total net derivatives presented in the Consolidated Balance Sheets		$572	$1,010		$696	$779

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

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

Derivatives Designated As Hedging Instruments

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

Fair Value Hedges

In a fair value hedge, changes in the fair value of both the derivative instrument and the hedged asset or liability attributable to the risk being hedged are recognized in the same income statement line item in the Consolidated Statements of Operations when the changes in fair value occur. At June 30, 2026 and December 31, 2025, the Company has designated $3.8 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 June 30, 2026 and December 31, 2025, the Company has also designated $1.7 billion and $2.8 billion, respectively, of interest rate swaps as fair value hedges to manage interest rate risk within its nonprepayable fixed-rate AFS securities portfolio.

Citizens Financial Group, Inc. | 68

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 June 30, 2026
Gains (losses) on fair value hedges recognized on:
Hedged items	($58)	$—
Derivatives	60	—
Amounts related to interest settlements on derivatives	(2)	—
Total net interest income recognized on fair value hedges	$—	$—
Three Months Ended June 30, 2025
Gains (losses) on fair value hedges recognized on:
Hedged items	$50	($2)
Derivatives	(50)	2
Amounts related to interest settlements on derivatives	13	(3)
Total net interest income recognized on fair value hedges	$13	($3)
Six Months Ended June 30, 2026
Gains (losses) on fair value hedges recognized on:
Hedged items	($97)	$—
Derivatives	99	—
Amounts related to interest settlements on derivatives	(2)	—
Total net interest income recognized on fair value hedges	$—	$—
Six Months Ended June 30, 2025
Gains (losses) on fair value hedges recognized on:
Hedged items	$166	($4)
Derivatives	(168)	4
Amounts related to interest settlements on derivatives	24	(5)
Total net interest income recognized on fair value hedges	$22	($5)

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


	June 30, 2026	December 31, 2025
(dollars in millions)	Debt securities available for sale(1)		Debt securities available for sale(1)
Carrying amount of hedged assets(2)	$6,458		$8,009

Cumulative amount of fair value hedging adjustments included in the carrying amount of the hedged items	(48)		48

(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 June 30, 2026 and December 31, 2025, the amortized cost basis of the closed portfolios used in these hedging relationships was $4.8 billion and $5.1 billion, respectively, including associated cumulative basis adjustments of $(40) million and $17 million, respectively. The amount of the designated hedging instruments was $3.8 billion at June 30, 2026 and December 31, 2025.

(2) Carrying amount represents amortized cost.

Cash Flow Hedges

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

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

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The following table presents the pretax 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 June 30,		Six Months Ended June 30,
(dollars in millions)	2026	2025	2026	2025
Pretax net gains (losses) recognized in OCI	($246)	$113	($415)	$397
Pretax net gains (losses) reclassified from AOCI into interest income	(73)	(196)	(186)	(398)
Pretax net gains (losses) reclassified from AOCI into noninterest income	—	(1)	—	(1)
Pretax net gains (losses) reclassified from AOCI into interest expense	—	(1)	—	(1)

Using the June 30, 2026 interest rate curve, the Company estimates that $114 million in pretax 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 June 30, 2026.

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.

The Company also offers at-the-market equity 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 June 30,		Six Months Ended June 30,		Affected Line Item in the Consolidated Statements of Operations
(dollars in millions)	2026	2025	2026	2025
Economic hedge type:
Customer interest rate contracts	($123)	$70	($240)	$235	Foreign exchange and derivative products
Derivatives hedging interest rate risk	136	(62)	262	(219)	Foreign exchange and derivative products
Customer foreign exchange contracts	(63)	319	(151)	417	Foreign exchange and derivative products
Derivatives hedging foreign exchange risk	88	(399)	206	(530)	Foreign exchange and derivative products
Customer commodity contracts	(268)	(302)	41	41	Foreign exchange and derivative products
Derivatives hedging commodity price risk	274	307	(26)	(29)	Foreign exchange and derivative products
Residential loan commitments	—	3	(11)	9	Mortgage banking fees
Derivatives hedging residential loan commitments and mortgage loans held for sale, at fair value	(5)	(1)	14	(14)	Mortgage banking fees
Derivative contracts used to hedge residential MSRs	(14)	5	(22)	27	Mortgage banking fees
Derivative contracts used to hedge equity price risk	13	11	14	11	Capital markets fees
Total	$38	($49)	$87	($52)

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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)	Pretax	Tax Effect	After-tax
Three Months Ended June 30, 2026
Net unrealized gains (losses) on cash flow hedges arising during the period	($246)	$66	($180)
Reclassification of net (gains) losses on cash flow hedges to earnings	73	(20)	53
Net unrealized gains (losses) on cash flow hedges	(173)	46	(127)
Net unrealized gains (losses) on AFS securities arising during the period	(94)	23	(71)
Reclassification of net (gains) losses on investment securities to earnings	32	(8)	24
Net unrealized gains (losses) on investment securities	(62)	15	(47)
Net actuarial gain (loss) arising during the period	—	—	—
Amortization of actuarial (gain) loss to earnings	1	—	1
Defined benefit plans	1	—	1
Total other comprehensive income (loss)	($234)	$61	($173)
Three Months Ended June 30, 2025
Net unrealized gains (losses) on cash flow hedges arising during the period	$113	($30)	$83
Reclassification of net (gains) losses on cash flow hedges to earnings	198	(53)	145
Net unrealized gains (losses) on cash flow hedges	311	(83)	228
Net unrealized gains (losses) on AFS securities arising during the period	76	(20)	56
Reclassification of net (gains) losses on investment securities to earnings	23	(6)	17
Net unrealized gains (losses) on investment securities	99	(26)	73
Net actuarial gain (loss) arising during the period	—	—	—
Amortization of actuarial (gain) loss to earnings	2	(1)	1
Defined benefit plans	2	(1)	1
Total other comprehensive income (loss)	$412	($110)	$302
Six Months Ended June 30, 2026
Net unrealized gains (losses) on cash flow hedges arising during the period	($415)	$111	($304)
Reclassification of net (gains) losses on cash flow hedges to earnings	186	(50)	136
Net unrealized gains (losses) on cash flow hedges	(229)	61	(168)
Net unrealized gains (losses) on AFS securities arising during the period	(227)	56	(171)
Reclassification of net (gains) losses on investment securities to earnings	57	(14)	43
Net unrealized gains (losses) on investment securities	(170)	42	(128)
Net actuarial gain (loss) arising during the period	—	—	—
Amortization of actuarial (gain) loss to earnings	6	(1)	5
Defined benefit plans	6	(1)	5
Total other comprehensive income (loss)	($393)	$102	($291)
Six Months Ended June 30, 2025
Net unrealized gains (losses) on cash flow hedges arising during the period	$397	($106)	$291
Reclassification of net (gains) losses on cash flow hedges to earnings	400	(107)	293
Net unrealized gains (losses) on cash flow hedges	797	(213)	584
Net unrealized gains (losses) on AFS securities arising during the period	453	(115)	338
Reclassification of net (gains) losses on investment securities to earnings	40	(10)	30
Net unrealized gains (losses) on investment securities	493	(125)	368
Net actuarial gain (loss) arising during the period	—	—	—
Amortization of actuarial (gain) loss to earnings	6	(2)	4
Defined benefit plans	6	(2)	4
Total other comprehensive income (loss)	$1,296	($340)	$956

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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 June 30, 2026
Balance at April 1, 2026	($159)	($1,684)	($245)	($2,088)
Other comprehensive income (loss) before reclassifications	(180)	(71)	—	(251)
Amounts reclassified from AOCI to earnings	53	24	1	78
Total other comprehensive income (loss)	(127)	(47)	1	(173)
Balance at June 30, 2026	($286)	($1,731)	($244)	($2,261)
Three Months Ended June 30, 2025
Balance at April 1, 2025	($569)	($2,074)	($298)	($2,941)
Other comprehensive income (loss) before reclassifications	83	56	—	139
Amounts reclassified from AOCI to earnings	145	17	1	163
Total other comprehensive income (loss)	228	73	1	302
Balance at June 30, 2025	($341)	($2,001)	($297)	($2,639)
Six Months Ended June 30, 2026
Balance at January 1, 2026	($118)	($1,603)	($249)	($1,970)
Other comprehensive income (loss) before reclassifications	(304)	(171)	—	(475)
Amounts reclassified from AOCI to earnings	136	43	5	184
Total other comprehensive income (loss)	(168)	(128)	5	(291)

Balance at June 30, 2026	($286)	($1,731)	($244)	($2,261)
Six Months Ended June 30, 2025
Balance at January 1, 2025	($925)	($2,369)	($301)	($3,595)
Other comprehensive income (loss) before reclassifications	291	338	—	629

Amounts reclassified from AOCI to earnings	293	30	4	327
Total other comprehensive income (loss)	584	368	4	956

Balance at June 30, 2025	($341)	($2,001)	($297)	($2,639)
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:


			June 30, 2026			December 31, 2025
(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 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	400,000	393
Total			2,150,000		$2,111	2,150,000	$2,111

(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. | 73

For further detail regarding the terms and conditions of the Company’s preferred stock, see Note 15 in the Company’s 2025 Form 10-K.

Dividends

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


	Three Months Ended June 30, 2026			Three Months Ended June 30, 2025
(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	$0.46	$198	$198	$0.42	$185	$185
Preferred stock
Series B	$17.54	$5	$5	$19.08	$6	$6
Series C	17.94	6	5	19.47	6	6
Series E	12.50	5	5	12.50	6	5
Series F	—	—	—	14.12	5	5
Series G	10.00	3	3	10.00	3	3
Series H	18.44	8	8	18.44	8	8
Series I	16.25	6	7	—	—	—
Total preferred stock		$33	$33		$34	$33


	Six Months Ended June 30, 2026			Six Months Ended June 30, 2025
(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	$0.92	$396	$396	$0.84	$371	$371
Preferred stock
Series B	$34.83	$10	$10	$38.19	$12	$12
Series C	35.61	11	11	38.97	12	12
Series E	25.00	11	11	25.00	11	11
Series F	—	—	—	28.25	11	11
Series G	20.00	6	6	20.00	6	6
Series H	36.88	15	15	36.88	15	15
Series I	32.50	13	18	—	—	—
Total preferred stock		$66	$71		$67	$67

Treasury Stock

During the six months ended June 30, 2026 and 2025, the Company repurchased $525 million, or 8,324,166 shares, and $400 million, or 9,612,964 shares, respectively, of its outstanding common stock, which are held in treasury stock.

NOTE 11 - COMMITMENTS AND CONTINGENCIES

A summary of outstanding off-balance sheet arrangements is presented below. For more information on these arrangements, see Note 17 in the Company’s 2025 Form 10-K.


(dollars in millions)	June 30, 2026	December 31, 2025
Commitments to extend credit	$109,801	$105,880
Letters of credit	2,731	1,902
Loans sold with recourse	79	85
Risk participation agreements	18	37
Other commitments	7	11
Total	$112,636	$107,915

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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 or activity (performance). The Company’s exposure to credit loss in the event of counterparty nonperformance in connection with the above instruments is represented by the contractual amount of those instruments. Letters of credit are generally secured according to the creditworthiness of the counterparty, with collateral including, but not limited to, cash, accounts receivable, inventory, or investment securities. Credit risk associated with letters of credit is considered in determining the appropriate amount of the allowance for unfunded commitments. Standby and commercial letters of credit are issued for terms of no more than two years and one year, respectively.

Loans Sold with Recourse

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

Risk Participation Agreements

RPAs are guarantees issued by the Company to other parties for a fee, whereby the Company agrees to participate in the credit risk of a derivative customer of the other party. The current amount of credit exposure is spread out over multiple counterparties. At June 30, 2026, the remaining terms on these RPAs ranged from less than one year to nine years.

Contingencies

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

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

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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 18 in the Company’s 2025 Form 10-K.

Fair Value Option

The Company has elected to account for residential mortgage LHFS and certain commercial LHFS under the fair value option. Under the fair value option, residential mortgage LHFS and certain commercial LHFS are initially measured at fair value with subsequent changes in fair value recognized in Mortgage banking fees and Capital markets fees, respectively, in the Consolidated Statements of Operations. The following table presents the difference between the aggregate fair value and the aggregate unpaid principal balance of LHFS measured at fair value:


	June 30, 2026			December 31, 2025
(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	$920	$901	$19	$895	$872	$23
Commercial loans held for sale	149	156	(7)	170	185	(15)

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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 June 30, 2026:


(dollars in millions)	Total	Level 1	Level 2	Level 3
Debt securities available for sale:
Mortgage-backed securities	$32,976	$—	$32,976	$—

Collateralized loan obligations	40	—	40	—
State and political subdivisions	1	—	1	—
U.S. Treasury and other	4,431	4,431	—	—
Total debt securities available for sale	37,448	4,431	33,017	—
Loans held for sale:
Residential loans held for sale	920	—	920	—
Commercial loans held for sale	149	—	149	—
Total loans held for sale, at fair value	1,069	—	1,069	—
Mortgage servicing rights	1,482	—	—	1,482
Derivative assets:
Interest rate contracts	329	—	329	—
Foreign exchange contracts	578	—	578	—
Commodities contracts	629	—	629	—
TBA contracts	13	—	13	—
Other contracts	29	—	20	9
Total derivative assets	1,578	—	1,569	9
Equity securities, at fair value(1)	316	316	—	—
Short-term investments	438	417	21	—
Total assets	$42,331	$5,164	$35,676	$1,491
Derivative liabilities:
Interest rate contracts	$567	$—	$567	$—
Foreign exchange contracts	368	—	368	—
Commodities contracts	585	—	585	—
TBA contracts	16	—	16	—
Other contracts	3	—	1	2
Total derivative liabilities	1,539	—	1,537	2
Short-term borrowed funds	461	460	1	—
Other liabilities	65	—	65	—
Total liabilities	$2,065	$460	$1,603	$2

(1) Excludes investments of $70 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 $12 million at June 30, 2026, 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, 2025:


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

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

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


	Three Months Ended June 30, 2026		Six Months Ended June 30, 2026
(dollars in millions)	Mortgage Servicing Rights	Other Derivative Contracts	Mortgage Servicing Rights	Other Derivative Contracts
Beginning balance	$1,462	$1	$1,455	$5
Issuances	48	16	96	33


Settlements(2)	(39)	(9)	(85)	(18)
Changes in fair value recognized in earnings(3)	11	(1)	16	(13)
Ending balance	$1,482	$7	$1,482	$7


	Three Months Ended June 30, 2025		Six Months Ended June 30, 2025
(dollars in millions)	Mortgage Servicing Rights	Other Derivative Contracts	Mortgage Servicing Rights	Other Derivative Contracts
Beginning balance	$1,397	$5	$1,491	$1



Issuances	48	18	75	34

Sales(1)	—	—	(72)	—
Settlements(2)	(40)	(11)	(79)	(27)
Changes in fair value recognized in earnings(3)	21	3	11	7
Ending balance	$1,426	$15	$1,426	$15

(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:


			June 30, 2026	December 31, 2025
Financial Instrument(1)	Valuation Technique	Unobservable Input	Range (Weighted Average)	Range (Weighted Average)
Mortgage servicing rights	Discounted Cash Flow	Constant prepayment rate	6-16% CPR (7% CPR)	6-15% CPR (7% CPR)
Option adjusted spread	398-1,001 bps (553 bps)		398-1,038 bps (588 bps)
Other derivative contracts	Internal Model	Pull through rate	24-100% (85%)	8-100% (85%)
MSR value	26-181 bps (131 bps)		25-177 bps (134 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 recorded in earnings on assets measured at fair value on a nonrecurring basis, regardless of whether the asset is still held at period end:


	Three Months Ended June 30,		Six Months Ended June 30,
(dollars in millions)	2026	2025	2026	2025
Collateral-dependent loans	($24)	($26)	($50)	($85)

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


	June 30, 2026				December 31, 2025
(dollars in millions)	Total	Level 1	Level 2	Level 3	Total	Level 1	Level 2	Level 3
Collateral-dependent loans	$123	$—	$32	$91	$135	$—	$24	$111

Citizens Financial Group, Inc. | 79

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.


	June 30, 2026
	Total		Level 1		Level 2		Level 3
(dollars in millions)	Carrying Value	Estimated Fair Value	Carrying Value	Estimated Fair Value	Carrying Value	Estimated Fair Value	Carrying Value	Estimated Fair Value
Financial assets(1):



Debt securities held to maturity	$7,638	$6,784	$—	$—	$7,343	$6,491	$295	$293
Loans held for sale	389	389	—	—	—	—	389	389
Net loans and leases	145,522	146,418	—	—	471	471	145,051	145,947
Other assets	991	991	—	—	943	943	48	48
Financial liabilities:
Deposits	185,620	185,558	—	—	185,620	185,558	—	—
Short-term borrowed funds	698	698	—	—	698	698	—	—
Long-term borrowed funds	15,190	15,007	—	—	15,190	15,007	—	—


	December 31, 2025
	Total		Level 1		Level 2		Level 3
(dollars in millions)	Carrying Value	Estimated Fair Value	Carrying Value	Estimated Fair Value	Carrying Value	Estimated Fair Value	Carrying Value	Estimated Fair Value
Financial assets(1):



Debt securities held to maturity	$7,933	$7,150	$—	$—	$7,595	$6,812	$338	$338
Loans held for sale	133	133	—	—	—	—	133	133
Net loans and leases	140,749	140,131	—	—	437	437	140,312	139,694
Other assets	807	807	—	—	768	768	39	39
Financial liabilities:
Deposits	183,313	183,277	—	—	183,313	183,277	—	—
Short-term borrowed funds	6	6	—	—	6	6	—	—
Long-term borrowed funds	11,224	11,472	—	—	11,224	11,472	—	—

(1) Excludes cash-related financial instruments not recorded at fair value in the Consolidated Balance Sheets with a carrying value and estimated fair value of $13.4 billion and $13.6 billion at June 30, 2026 and December 31, 2025, 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 19 in the Company’s 2025 Form 10-K.

Citizens Financial Group, Inc. | 80

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 June 30, 2026
(dollars in millions)	Consumer Banking	Commercial Banking	Other	Consolidated
Service charges and fees	$79	$39	$—	$118
Capital markets fees	—	144	—	144
Wealth fees	102	—	—	102
Card fees	73	13	—	86
Other banking fees	—	1	—	1
Total revenue from contracts with customers	$254	$197	$—	$451
Total revenue from other sources(1)	60	95	46	201
Total noninterest income	$314	$292	$46	$652


	Three Months Ended June 30, 2025
(dollars in millions)	Consumer Banking	Commercial Banking	Other	Consolidated
Service charges and fees	$77	$34	$—	$111
Capital markets fees	—	95	—	95
Wealth fees	88	—	—	88
Card fees	74	13	—	87
Other banking fees	—	2	—	2
Total revenue from contracts with customers	$239	$144	$—	$383
Total revenue from other sources(1)	90	88	39	217
Total noninterest income	$329	$232	$39	$600


	Six Months Ended June 30, 2026
(dollars in millions)	Consumer Banking	Commercial Banking	Other	Consolidated
Service charges and fees	$155	$74	$—	$229
Capital markets fees	—	264	—	264
Wealth fees	202	—	—	202
Card fees	138	24	4	166
Other banking fees	1	4	—	5
Total revenue from contracts with customers	$496	$366	$4	$866
Total revenue from other sources(1)	117	189	86	392
Total noninterest income	$613	$555	$90	$1,258


	Six Months Ended June 30, 2025
(dollars in millions)	Consumer Banking	Commercial Banking	Other	Consolidated
Service charges and fees	$151	$68	$—	$219
Capital markets fees	—	190	—	190
Wealth fees	169	—	—	169
Card fees	141	26	—	167
Other banking fees	1	4	—	5
Total revenue from contracts with customers	$462	$288	$—	$750
Total revenue from other sources(1)	164	159	71	394
Total noninterest income	$626	$447	$71	$1,144

(1) Includes bank-owned life insurance income of $33 million and $28 million for the three months ended June 30, 2026 and 2025, respectively, and $62 million and $55 million for the six months ended June 30, 2026 and 2025, respectively.

For the three months ended June 30, 2026 and 2025, the Company recognized trailing commissions of $5 million and $4 million, respectively, related to previous investment sales. For the six months ended June 30, 2026 and 2025, the Company recognized $9 million and $8 million, respectively.

Citizens Financial Group, Inc. | 81

NOTE 14 - OTHER OPERATING EXPENSE

The following table presents the details of Other operating expense:


	Three Months Ended June 30,		Six Months Ended June 30,
(dollars in millions)	2026	2025	2026	2025
Marketing	$43	$45	$84	$85
Deposit insurance	38	38	68	76
Other	91	85	167	164
Other operating expense	$172	$168	$319	$325

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 June 30,		Six Months Ended June 30,
(dollars in millions, except per share data)	2026	2025	2026	2025
Numerator (basic and diluted):
Net income	$587	$436	$1,104	$809
Less: Preferred stock dividends	33	34	66	67

Net income available to common stockholders	$554	$402	$1,038	$742
Denominator:
Weighted-average common shares outstanding - basic	422,871,137	433,640,210	424,100,982	435,967,554
Dilutive common shares: share-based awards	3,810,711	2,899,564	4,173,096	3,375,149
Weighted-average common shares outstanding - diluted	426,681,848	436,539,774	428,274,078	439,342,703
Earnings per common share:
Basic	$1.31	$0.93	$2.45	$1.70
Diluted(1)	1.30	0.92	2.42	1.69

(1) Excluded from the computation of diluted EPS were weighted-average antidilutive shares totaling 4,655 and 1,703,819 for the three months ended June 30, 2026 and 2025, respectively, and 5,077 and 1,144,513 for the six months ended June 30, 2026 and 2025, respectively.

NOTE 16 - BUSINESS SEGMENTS

The Company is managed by its CODM, the Chief Executive Officer, on a segment basis. The Company’s two reportable business segments are Consumer Banking and Commercial Banking. The business segments are determined based on the products and services provided, or the type of customer served. Each business segment is managed by a segment head who reports, directly or indirectly, to the Chief Executive Officer, who has final authority for resource allocation 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.

Citizens Financial Group, Inc. | 82

For more information on the Company’s business segments, as well as Other non-segment operations, see Note 24 in the Company’s 2025 Form 10-K.

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


	Three Months Ended June 30, 2026
(dollars in millions)	Consumer Banking	Commercial Banking	Other	Consolidated
Net interest income	$1,348	$467	($184)	$1,631
Noninterest income	314	292	46	652
Total revenue	1,662	759	(138)	2,283
Direct expenses(1)(2)	725	222	447	1,394
Indirect expenses(3)	291	104	(395)	—
Noninterest expense	1,016	326	52	1,394
Profit (loss) before provision (benefit) for credit losses	646	433	(190)	889
Provision (benefit) for credit losses	72	63	(1)	134
Income (loss) before income tax expense (benefit)	574	370	(189)	755
Income tax expense (benefit)	148	90	(70)	168
Net income (loss)	$426	$280	($119)	$587
Total average assets	$85,302	$69,614	$74,347	$229,263

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

(2) Includes depreciation and amortization of $31 million, $4 million, and $72 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 June 30, 2025
(dollars in millions)	Consumer Banking	Commercial Banking	Other	Consolidated
Net interest income	$1,218	$439	($220)	$1,437
Noninterest income	329	232	39	600
Total revenue	1,547	671	(181)	2,037
Direct expenses(1)(2)	679	219	421	1,319
Indirect expenses(3)	284	98	(382)	—
Noninterest expense	963	317	39	1,319
Profit (loss) before provision (benefit) for credit losses	584	354	(220)	718
Provision (benefit) for credit losses	81	84	(1)	164
Income (loss) before income tax expense (benefit)	503	270	(219)	554
Income tax expense (benefit)	127	64	(73)	118
Net income (loss)	$376	$206	($146)	$436
Total average assets	$78,822	$66,284	$72,555	$217,661

(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 $32 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.

Citizens Financial Group, Inc. | 83


	Six Months Ended June 30, 2026
(dollars in millions)	Consumer Banking	Commercial Banking	Other	Consolidated
Net interest income	$2,657	$923	($387)	$3,193
Noninterest income	613	555	90	1,258
Total revenue	3,270	1,478	(297)	4,451
Direct expenses(1)(2)	1,449	450	873	2,772
Indirect expenses(3)	595	210	(805)	—
Noninterest expense	2,044	660	68	2,772
Profit (loss) before provision (benefit) for credit losses	1,226	818	(365)	1,679
Provision (benefit) for credit losses	143	127	4	274
Income (loss) before income tax expense (benefit)	1,083	691	(369)	1,405
Income tax expense (benefit)	279	168	(146)	301
Net income (loss)	$804	$523	($223)	$1,104
Total average assets	$84,590	$68,681	$73,486	$226,757

(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 $63 million, $8 million, and $145 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.


	Six Months Ended June 30, 2025
(dollars in millions)	Consumer Banking	Commercial Banking	Other	Consolidated
Net interest income	$2,411	$880	($463)	$2,828
Noninterest income	626	447	71	1,144
Total revenue	3,037	1,327	(392)	3,972
Direct expenses(1)(2)	1,348	437	848	2,633
Indirect expenses(3)	569	207	(776)	—
Noninterest expense	1,917	644	72	2,633
Profit (loss) before provision (benefit) for credit losses	1,120	683	(464)	1,339
Provision (benefit) for credit losses	167	161	(11)	317
Income (loss) before income tax expense (benefit)	953	522	(453)	1,022
Income tax expense (benefit)	241	120	(148)	213
Net income (loss)	$712	$402	($305)	$809
Total average assets	$78,182	$65,827	$72,980	$216,989

(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 $61 million, $10 million, and $155 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