Citizens Financial Group Inc.

05/04/2026 | Press release | Distributed by Public on 05/04/2026 09:21

Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Page
Forward-Looking Statements
Introduction
Executive Summary
Consolidated Statement of Operations Analysis
Consolidated Balance Sheet Analysis
Business Segments
Risk Management
Credit Risk
Market Risk
Liquidity Risk
Operational Risk
Compliance Risk
Capital
Critical Accounting Estimates
Accounting and Reporting Developments
Non-GAAP Financial Measures
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FORWARD-LOOKING STATEMENTS
This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statement that does not describe historical or current facts is a forward-looking statement. These statements often include the words "believes," "expects," "anticipates," "estimates," "intends," "plans," "goals," "targets," "initiatives," "potentially," "probably," "projects," "outlook," and "guidance", or similar expressions or future conditional verbs such as "may," "will," "likely," "should," "would," and "could."
Forward-looking statements are based upon the current beliefs and expectations of management and on information currently available to management. Our statements speak as of the date hereof, and we do not assume any obligation to update these statements or to update the reasons why actual results could differ from those contained in such statements in light of new information or future events. We caution you, therefore, against relying on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance. While there is no assurance that any list of risks and uncertainties or risk factors is complete, important factors that could cause actual results to differ materially from those in the forward-looking statements include the following, without limitation:
•Negative economic, business, and political conditions, including as a result of the interest rate environment, supply chain disruptions, tariffs, inflationary pressures, and labor shortages that adversely affect the general economy, housing prices, the job market, consumer confidence, and spending habits;
•The general state of the economy and employment, as well as general business and economic conditions, and changes in the competitive environment;
•Our capital and liquidity requirements under regulatory standards and our ability to generate capital and liquidity on favorable terms;
•The effect of changes in our credit ratings on our cost of funding, access to capital markets, ability to market our securities, and overall liquidity position;
•The effect of changes in the level of commercial and consumer deposits on our funding costs and net interest margin;
•Our ability to achieve our financial performance goals and execute on our strategic business initiatives, including the continued expansion of Private Bank and Private Wealth, and our aim to position us as a more innovative, modern, and customer-centric bank;
•The effects of geopolitical instability, including the war in Ukraine and the conflict in the Middle East, on economic and market conditions, inflationary pressures and the interest rate environment, commodity price and foreign exchange rate volatility, and heightened cybersecurity risks;
•Our ability to comply with supervisory requirements and expectations as well as new or amended regulations;
•Liabilities and business restrictions resulting from litigation and regulatory investigations;
•The impact of changes in interest rates on our net interest income, net interest margin, mortgage originations, and mortgage servicing rights, as well as on market liquidity, which could affect our funding sources and ability to originate and distribute financial products in the primary and secondary markets;
•Financial services reform and other current, pending, or future legislation or regulation that could have a negative effect on our revenue and businesses;
•Environmental risks, such as physical or transition risks associated with climate change, and social and governance risks that could adversely affect our reputation, operations, business, and customers;
•A failure in, or breach of, our compliance with laws, as well as operational or security systems or infrastructure, or those of our third-party vendors or other service providers, including as a result of cyberattacks; and
•Management's ability to identify and manage these and other risks.
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In addition to the above factors, we also caution that the actual amounts and timing of any future common stock dividends or share repurchases will be subject to various factors, including our capital position, financial performance, balance sheet growth, market conditions, and regulatory considerations, as well as any other factors that our Board of Directors deems relevant in making such a determination. Therefore, there can be no assurance that we will repurchase shares from, or pay any dividends to, holders of our common stock, or as to the amount of any such repurchases or dividends.
More information about factors that could cause actual results to differ materially from those described in the forward-looking statements can be found in the "Risk Factors" section in Part I, Item 1A of our 2025 Form 10-K.
INTRODUCTION
Citizens Financial Group, Inc., headquartered in Providence, Rhode Island, is one of the nation's oldest and largest financial institutions. We offer a broad range of retail, private banking, wealth management, and commercial banking products and services to individuals, small businesses, middle-market companies, large corporations, and institutions. We help our customers reach their potential by listening to them and by understanding their needs in order to offer tailored advice, ideas, and solutions. In Consumer Banking, we provide an integrated experience that includes mobile and online banking, a full-service customer contact center, and the convenience of approximately 3,000 ATMs and approximately 1,000 branches in 14 states and the District of Columbia. Consumer Banking products and services include a full range of banking, lending, savings, wealth management, and small business offerings. Consumer Banking includes Citizens Private Bank and Private Wealth, which integrates banking services and wealth management solutions to serve high- and ultra-high-net-worth individuals and families, as well as investors, entrepreneurs, and businesses. In Commercial Banking, we offer a broad complement of financial products and solutions, including lending and leasing, deposit and treasury management services, foreign exchange, interest rate and commodity risk management solutions, as well as loan syndication, corporate finance, merger and acquisition, and debt and equity capital markets capabilities.
At March 31, 2026, we had total assets of $227.9 billion, total deposits of $184.0 billion, and total stockholders' equity of $26.2 billion. In addition, we had total client assets of $62.6 billion, including assets under management of $36.8 billion, representing assets for which continuous and regular supervisory or management services are provided, and transactional assets of $25.8 billion, representing assets for which execution, custody, recordkeeping, reporting, and other services are provided.
The following MD&A is intended to assist readers in their analysis of the accompanying unaudited interim Consolidated Financial Statements and supplemental financial information. It should be read in conjunction with the unaudited interim Consolidated Financial Statements and Notes to Consolidated Financial Statements in Part I, Item 1, as well as other information contained in this document and our 2025 Form 10-K.
EXECUTIVE SUMMARY
This summary highlights select financial information of the Company as well as information regarding certain significant events and transactions occurring during the three months ended March 31, 2026. This summary should be read in conjunction with this entire document for a more complete understanding of trends, events, commitments, uncertainties, liquidity, capital resources, and critical accounting policies and estimates. Each of these items, taken individually or collectively, could have an impact on the Company's financial condition, results of operations, and cash flows. For additional information regarding our financial performance and condition, see "Consolidated Statement of Operations Analysis" and "Consolidated Balance Sheet Analysis."
Key Financial Highlights
•Net income of $517 million for the three months ended March 31, 2026 increased $144 million, with earnings per diluted common share up $0.36 to $1.13 compared to the same period in 2025.
•Net interest income of $1.6 billion for the three months ended March 31, 2026 increased $171 million, and net interest margin of 3.14% increased 25 basis points compared to the same period in 2025. The increase in net interest income reflects higher net interest margin driven by improved funding costs, including the reduction of higher-cost funding given runoff of the auto loan portfolio, terminated swap impacts, and fixed-rate asset repricing benefits, partially offset by lower asset yields.
•Noninterest income of $606 million for the three months ended March 31, 2026 increased $62 million compared to the same period in 2025, reflecting growth across a number of fee categories, primarily capital markets and wealth fees.
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•Noninterest expense of $1.4 billion for the three months ended March 31, 2026 increased $64 million compared to the same period in 2025, driven by salaries and employee benefits reflecting hiring related to the Private Bank and Private Wealth build-out and strong capital markets fee performance, partially offset by a decline in other operating expense reflecting lower FDIC deposit insurance costs.
•Provision expense of $140 million for the three months ended March 31, 2026 decreased $13 million compared to the same period in 2025, reflecting runoff of certain retail portfolios and improving credit trends and loan mix.
•The efficiency ratio of 63.6% for the three months ended March 31, 2026 compared to 67.9% for the same period in 2025.
•ROTCE of 12.2% for the three months ended March 31, 2026 compared to 9.6% for the same period in 2025.
•Tangible book value per common share of $37.94 at March 31, 2026 was broadly stable compared to $38.07 at December 31, 2025.
See "Non-GAAP Financial Measures" for more information regarding the ROTCE and tangible book value per common share non-GAAP financial measures presented herein.
Matrix Capital Acquisition
In March 2026, we completed the acquisition of substantially all of the assets of Matrix Capital Markets Group, Inc., a market-leading advisory firm in the Downstream Energy & Convenience Retail sector, with additional expertise and proven success in the Automotive Aftermarket and Outdoor Recreation and Marine sectors. This transaction further strengthens our sector-focused advisory capabilities.
Share Repurchases
During the three months ended March 31, 2026, the Parent Company repurchased $300 million of its outstanding common stock, with remaining capacity of $1.0 billion as of March 31, 2026. See Note 10 and Item 2 for additional information on share repurchase activity.
Debt Offerings
In January 2026, the Parent Company issued $400 million of fixed-reset subordinated notes due 2036. These notes bear interest at a rate of 5.299% per annum to January 28, 2031, and at a rate equal to the Five-Year U.S. Treasury Rate plus 1.45% from January 29, 2031 to, but excluding, the maturity date of January 29, 2036.
In January 2026, CBNA issued $750 million of fixed-to-floating rate senior notes due 2029. These notes bear interest at a rate of 4.192% per annum to January 28, 2028, and at a rate of compounded SOFR plus 0.70% from January 29, 2028 to, but excluding, the maturity date of January 29, 2029.
Regulatory Developments
Capital
In March 2026, the FRB, FDIC, and OCC issued joint proposals to modernize the regulatory capital framework for banking organizations. The first proposal would subject Category I and II banking organizations to a single set of risk-based capital requirements under an expanded risk-based approach ("ERBA") and a revised market risk framework (the "ERBA proposal"). Category III and Category IV banking organizations would be subject to the revised market risk framework if specified thresholds for aggregate trading assets and liabilities are met and would also have the option to adopt the ERBA in its entirety. The second proposal would revise certain elements of the capital rule under the standardized approach (the "revised standardized approach proposal") and would apply to banking organizations that are not classified as Category I or II and have not otherwise opted to adopt the ERBA.
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The ERBA proposal would introduce differentiated capital requirements based on specified credit risk factors, establish a standardized operational risk requirement aligned with a banking organization's business volume, and implement a revised market risk framework that incorporates a new models-based methodology designed to better capture tail risk and market liquidity risk. The proposal would also increase the aggregate trading assets and liabilities threshold for application of the market risk framework from $1 billion to $5 billion for non-Category I and II banking organizations. The revised standardized approach proposal would modify risk-based capital requirements by introducing a broader range of risk weights for residential mortgages based on more granular risk factors and reducing risk weights for certain other exposures. The proposal would also require most elements of AOCI to be recognized in regulatory capital, subject to a five-year transition period.
Both proposals would also eliminate the threshold-based deduction for mortgage servicing assets ("MSAs"), subjecting all MSAs to a 250 percent risk weight, and would provide for the future adjustment of certain dollar-based regulatory thresholds using a predetermined indexing methodology intended to reflect inflation and preserve their intended application over time. We continue to monitor developments related to these proposals and to evaluate their potential impact on our regulatory capital ratios.
Recovery Planning
In April 2026, the OCC adopted a final rule rescinding its Guidelines Establishing Standards for Recovery Planning (the "Guidelines"), which applied to insured national banks, federal savings associations, and federal branches of foreign banks with average total assets exceeding $100 billion ("covered banks"). As a result of the rescission, CBNA is no longer required to develop and maintain formal recovery planning documentation and is no longer subject to OCC examination for compliance with the Guidelines. Although the rescission is intended to reduce unnecessary regulatory burden, covered banks are still expected to maintain prudent risk management practices, including preparing for operational and market stresses, which CBNA continues to address through the Company's existing risk management framework. The final rule is effective May 1, 2026.
Anti-Money Laundering and Countering the Financing of Terrorism ("AML/CFT") Programs
In April 2026, the OCC, FDIC, and National Credit Union Administration (collectively, the "Agencies") issued a proposed rule to amend their respective AML/CFT program requirements to align with changes concurrently proposed by the Financial Crimes Enforcement Network ("FinCEN"). The proposal requires a bank's AML/CFT program to be risk-based with a designated AML/CFT officer located in the United States and clarifies that only significant or systemic failures to implement a properly established AML/CFT program would warrant enforcement or significant supervisory actions. FinCEN's role in the Agencies' supervision and enforcement process is also enhanced through the establishment of a new consultation framework for certain actions taken by the Agencies. The Agencies proposed a 12-month implementation period following issuance of the final rule and are currently soliciting comments.
CONSOLIDATED STATEMENT OF OPERATIONS ANALYSIS
Net Interest Income
Net interest income is our largest source of revenue and is the difference between the interest earned on interest-earning assets (generally loans and investment securities) and the interest expense incurred in connection with interest-bearing liabilities (generally deposits and borrowed funds). The level of net interest income is primarily a function of the difference between the effective yield on our average interest-earning assets and the effective cost of our average interest-bearing liabilities. Factors that influence our net interest income include, but are not limited to, the pricing and mix of interest-earning assets and interest-bearing liabilities which, in turn, are impacted by external factors such as economic conditions, competition for loans and deposits, the monetary policy of the FRB, and market interest rates. For further discussion, refer to the "Market Risk" section of our 2025 Form 10-K.
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The following table presents the major components of our net interest income. Average balance represents amortized cost, excluding the unamortized basis adjustments related to the transfer of certain HTM securities from AFS. The yield/rate is based on annualized interest income or expense for the periods presented and includes the impact of hedging activities associated with the respective asset and liability categories.
Table 1: Major Components of Net Interest Income
Three Months Ended March 31,
2026 2025
Change
(dollars in millions)
Average
Balance
Income/
Expense
Yield/
Rate
Average
Balance
Income/
Expense
Yield/
Rate
Average
Balance
Yield/
Rate (bps)
Assets
Interest-bearing cash and due from banks and deposits in banks $10,079 $91 3.60 % $8,092 $89 4.42 % $1,987 (82) bps
Taxable investment securities 46,928 424 3.62 46,068 418 3.63 860 (1)
Non-taxable investment securities 1 - 2.60 1 - 2.60 - -
Total investment securities 46,929 424 3.62 46,069 418 3.63 860 (1)
Commercial and industrial 50,140 644 5.14 43,599 515 4.72 6,541 42
Commercial real estate 24,401 328 5.38 27,013 387 5.74 (2,612) (36)
Total commercial 74,541 972 5.22 70,612 902 5.11 3,929 11
Residential mortgages 35,090 353 4.03 32,872 318 3.86 2,218 17
Home equity 19,230 307 6.47 16,647 293 7.13 2,583 (66)
Automobile 2,090 24 4.68 4,394 47 4.38 (2,304) 30
Education 8,442 127 6.08 10,690 148 5.61 (2,248) 47
Other retail 4,017 101 10.22 4,495 121 10.91 (478) (69)
Total retail 68,869 912 5.34 69,098 927 5.41 (229) (7)
Total loans and leases 143,410 1,884 5.28 139,710 1,829 5.26 3,700 2
Loans held for sale
1,511 21 5.65 1,187 16 5.34 324 31
Interest-earning assets 201,929 2,420 4.81 195,058 2,352 4.84 6,871 (3)
Noninterest-earning assets 22,295 21,251 1,044
Total assets $224,224 $216,309 $7,915
Liabilities and Stockholders' Equity
Checking with interest $37,027 $122 1.33 % $32,693 $110 1.36 % $4,334 (3)
Savings 24,095 65 1.10 25,760 89 1.39 (1,665) (29)
Money market 60,141 350 2.36 54,432 357 2.66 5,709 (30)
Time
20,766 178 3.46 23,277 239 4.17 (2,511) (71)
Total interest-bearing deposits 142,029 715 2.04 136,162 795 2.37 5,867 (33)
Short-term borrowed funds 454 4 3.74 675 8 4.53 (221) (79)
Long-term borrowed funds 11,075 139 5.03 12,657 158 5.01 (1,582) 2
Total borrowed funds 11,529 143 4.98 13,332 166 4.99 (1,803) (1)
Total interest-bearing liabilities 153,558 858 2.26 149,494 961 2.60 4,064 (34)
Noninterest-bearing demand deposits
39,286 36,543 2,743
Other noninterest-bearing liabilities 5,274 5,971 (697)
Total liabilities 198,118 192,008 6,110
Stockholders' equity 26,106 24,301 1,805
Total liabilities and stockholders' equity $224,224 $216,309 $7,915
Interest rate spread 2.55 % 2.24 % 31
Net interest income and net interest margin $1,562 3.14 % $1,391 2.89 % 25
Net interest income and net interest margin, FTE(1)
$1,565 3.14 % $1,395 2.90 % 24
Memo: Total deposits (interest-bearing and noninterest-bearing demand)
$181,315 $715 1.60 % $172,705 $795 1.87 % $8,610 (27) bps
(1) Net interest income and net interest margin on an FTE basis are non-GAAP financial measures. See "Non-GAAP Financial Measures" for more information.
Net interest income increased $171 million, or 12%, and net interest margin increased 25 basis points for the three months ended March 31, 2026, compared to the same period in 2025. The increase in net interest income reflects higher net interest margin driven by improved funding costs, including the reduction of higher-cost funding given runoff of the auto loan portfolio, terminated swap impacts, and fixed-rate asset repricing benefits, partially offset by lower asset yields.
Average interest-earning assets increased $6.9 billion for the three months ended March 31, 2026, compared to the same period in 2025, driven by an increase in total loans and leases, cash held in interest-bearing deposits, and investment securities.
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Average deposits increased $8.6 billion for the three months ended March 31, 2026, compared to the same period in 2025, driven primarily by growth in the Private Bank and in commercial, partially offset by a reduction in higher-cost brokered deposits.
Average total borrowed funds decreased $1.8 billion for the three months ended March 31, 2026, compared to the same period in 2025, driven primarily by a decline in auto collateralized borrowings, given runoff of the auto loan portfolio, partially offset by an increase in FHLB advances.
Noninterest Income
The following table presents the components of noninterest income:
Table 2: Noninterest Income
Three Months Ended March 31,
(dollars in millions) 2026 2025 Change Percent
Service charges and fees $112 $109 $3 3 %
Capital markets fees 134 100 34 34
Wealth fees
100 81 19 23
Card fees 83 83 - -
Mortgage banking fees 42 59 (17) (29)
Foreign exchange and derivative products 44 39 5 13
Letter of credit and loan fees 50 44 6 14
Securities gains, net 7 7 - -
Other income(1)
34 22 12 55
Noninterest income $606 $544 $62 11 %
(1) Includes bank-owned life insurance income and other income for all periods presented.
The primary drivers for the change in noninterest income for the three months ended March 31, 2026, compared to the same period in 2025, are described below:
•Capital markets fees increased driven by higher M&A, loan syndication, and equity underwriting fees;
•Wealth fees increased primarily driven by growth in assets under management, largely from net inflows; and
•Mortgage banking fees decreased reflecting lower MSR valuation results, net of hedge impact, and lower servicing revenue, partially offset by higher production revenue.
Noninterest Expense
The following table presents the components of noninterest expense:
Table 3: Noninterest Expense
Three Months Ended March 31,
(dollars in millions) 2026 2025 Change Percent
Salaries and employee benefits $758 $696 $62 9 %
Equipment and software 197 194 3 2
Outside services 162 155 7 5
Occupancy 114 112 2 2
Other operating expense 147 157 (10) (6)
Noninterest expense $1,378 $1,314 $64 5 %
The primary drivers for the change in noninterest expense for the three months ended March 31, 2026, compared to the same period in 2025, are described below:
•Salaries and employee benefits increased reflecting hiring related to the Private Bank and Private Wealth build-out, and strong capital markets fee performance; and
•Other operating expense declined reflecting lower FDIC deposit insurance costs.
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Provision for Credit Losses
The provision for credit losses is the result of a detailed analysis performed to estimate our ACL. The total provision for credit losses includes the provision for loan and lease losses and the provision for unfunded commitments. Refer to "Risk Management - Credit Risk" for more information.
Provision expense of $140 million for the three months ended March 31, 2026 compared with a provision of $153 million for the same period in 2025, reflecting runoff of certain retail portfolios and improving credit trends and loan mix.
Income Tax Expense
Income tax expense of $133 million increased $38 million and our effective income tax rate of 20.5% increased from 20.3% for the three months ended March 31, 2026, compared to the same period in 2025. These increases were driven by a reduced benefit from tax-advantaged investments on higher pre-tax income. Provision for income taxes is calculated by applying the estimated annual effective tax rate to year-to-date pre-tax income, adjusting for discrete items that occurred during the period.
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CONSOLIDATED BALANCE SHEET ANALYSIS
Securities
The following table presents the major components of securities at amortized cost and fair value:
Table 4: Amortized Cost and Fair Value of Securities
March 31, 2026 December 31, 2025
(dollars in millions)
Amortized
Cost(1)
Fair Value
Amortized
Cost(1)
Fair Value
U.S. Treasury and other $4,385 $4,334 $3,163 $3,123
State and political subdivisions 1 1 1 1
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities 32,986 31,675 33,379 32,220
Other/non-agency 265 262 268 264
Total mortgage-backed securities 33,251 31,937 33,647 32,484
Collateralized loan obligations 89 89 89 89
Total debt securities available for sale $37,726 $36,361 $36,900 $35,697
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities $7,484 $6,684 $7,595 $6,812
Total mortgage-backed securities 7,484 6,684 7,595 6,812
Asset-backed securities 316 314 338 338
Total debt securities held to maturity $7,800 $6,998 $7,933 $7,150
Total debt securities available for sale and held to maturity
$45,526 $43,359 $44,833 $42,847
Equity securities, at cost(2)
$836 $836 $807 $807
Equity securities, at fair value(2)
336 336 317 317
(1) Excludes portfolio level basis adjustments of $(4) million and $17 million, respectively, for securities designated in active fair value hedge relationships under the portfolio layer method at March 31, 2026 and December 31, 2025.
(2) Included in Other assets in the Consolidated Balance Sheets.
The primary objective of our securities portfolio is to provide a readily available source of liquidity. The portfolio primarily includes high-quality and highly liquid investments that reflect our ongoing commitment to maintain strong contingent liquidity levels and pledging capacity.
As of March 31, 2026, U.S. Treasuries and mortgage-backed securities issued by GNMA and GSEs represented 98% of the fair value of our debt securities portfolio, with approximately $39.4 billion of unencumbered high-quality liquid securities serving as potential collateral for borrowings from the FHLB, FRB discount window, and the Fixed Income Clearing Corporation bilateral repurchase agreement market.
For further discussion of the use of our securities as liquidity collateral see the "Liquidity Risk" section in this report. For further discussion of liquidity requirements, see "Regulation and Supervision - Liquidity Requirements" in our 2025 Form 10-K.
We manage our securities portfolio duration and convexity risk through asset selection and securities structure, and maintain duration levels within our risk appetite in the context of our broader interest rate risk framework and limits. As of March 31, 2026, the portfolio's average effective duration, including hedging actions to reduce duration, was 4 years compared with 3.8 years as of December 31, 2025.
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Loans and Leases
The following table presents loans and leases, excluding LHFS:
Table 5: Composition of Loans and Leases, Excluding LHFS
(dollars in millions) March 31, 2026 December 31, 2025 Change Percent
Commercial and industrial $50,307 $49,232 $1,075 2 %
Commercial real estate 24,282 24,580 (298) (1)
Total commercial 74,589 73,812 777 1
Residential mortgages 35,404 35,024 380 1
Home equity 19,449 19,069 380 2
Automobile 1,863 2,310 (447) (19)
Education 8,340 8,416 (76) (1)
Other retail 4,022 4,061 (39) (1)
Total retail 69,078 68,880 198 -
Total loans and leases $143,667 $142,692 $975 1 %
The increase in total loans and leases as of March 31, 2026 compared to December 31, 2025 reflects a $777 million increase in commercial driven by net new money originations in corporate banking and higher line of credit utilization, partially offset by CRE paydowns. Retail reflects a $198 million increase driven by growth in home equity and mortgage, including the Private Bank, partially offset by runoff of the auto loan portfolio.
Deposits
The following table presents the composition of deposits:
Table 6: Composition of Deposits
(dollars in millions) March 31, 2026 % of Total Deposits December 31, 2025 % of Total Deposits
Noninterest-bearing demand
$41,672 23 % $40,417 22 %
Checking with interest 37,675 21 37,428 20
Savings 24,114 13 24,353 13
Money market 59,611 32 60,062 33
Time
20,963 11 21,053 12
Total deposits $184,035 100 % $183,313 100 %
Total deposits as of March 31, 2026 were broadly stable compared to December 31, 2025, reflecting growth in the Private Bank, partially offset by lower commercial deposits given seasonality.
The following table presents an analysis of estimated insured/secured deposits as a percentage of total deposits:
Table 7: Uninsured and Insured/Secured Deposits
(dollars in millions) March 31, 2026 December 31, 2025
Estimated uninsured deposits(1)
$87,165 $86,877
Less: Uninsured affiliate deposits eliminated in consolidation 11,614 11,555
Less: Preferred deposits(1)(2)
6,552 6,923
CFG adjusted estimated uninsured deposits, excluding preferred deposits
68,999 68,399
Total estimated insured/secured deposits $115,036 $114,914
Insured/secured deposits to total deposits 63 % 63 %
(1) As reported on CBNA's Call Report.
(2) Represents uninsured deposits of states and political subdivisions that are secured or collateralized as required under state law.
Borrowed Funds
Total borrowed funds of $12.3 billion as of March 31, 2026 increased $1.0 billion compared to December 31, 2025, driven by an increase in senior and subordinated debt, given net issuances, and FHLB advances, partially offset by a decline in secured borrowings collateralized by auto loans as the associated portfolio runs off. For more information regarding our borrowed funds, see "Liquidity Risk" and Note 7.
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BUSINESS SEGMENTS
We have two reportable business segments: Consumer Banking and Commercial Banking. The business segments are determined based on the products and services provided, or the type of customer served. Each business segment has a segment head that reports directly to the Chief Executive Officer, who has final authority over resource allocation decisions and performance assessment. The business segments reflect this management structure and the manner in which financial information is currently evaluated by the Chief Executive Officer. See Note 16 for more information regarding our business segments.
The following table presents certain financial data of our reportable business segments. Total business segment financial results differ from total consolidated financial results. These differences are reflected in Other non-segment operations, consisting primarily of treasury and community development, and include assets, liabilities, capital, revenues, provision (benefit) for credit losses, expenses, and income tax expense (benefit) not attributed to the Company's reportable business segments.
Table 8: Selected Financial Data for Business Segments
Three Months Ended March 31,
Consumer Banking Commercial Banking
(dollars in millions) 2026 2025 2026 2025
Net interest income $1,309 $1,193 $456 $441
Noninterest income 299 297 263 215
Total revenue 1,608 1,490 719 656
Noninterest expense 1,028 954 334 327
Profit (loss) before credit losses
580 536 385 329
Net charge-offs 71 86 64 77
Income (loss) before income tax expense (benefit)
509 450 321 252
Income tax expense (benefit)
131 114 78 56
Net income (loss)
$378 $336 $243 $196
Average Balances:
Total assets $83,870 $77,534 $67,737 $65,366
Total loans and leases(1)
77,089 71,054 64,574 62,437
Deposits 133,126 125,728 45,354 42,178
Interest-earning assets 77,695 71,635 65,345 63,018
(1) Includes LHFS.
Consumer Banking
Net interest income increased $116 million for the three months ended March 31, 2026, compared to the same period in 2025, driven by higher net interest margin and growth in average interest-earning assets.
Noninterest income increased $2 million for the three months ended March 31, 2026, compared to the same period in 2025. An increase in wealth fees primarily driven by growth in assets under management, largely from net inflows, was partially offset by a decline in mortgage banking fees reflective of lower MSR valuation results, net of hedge impact, lower servicing revenue, and higher production revenue.
Noninterest expense increased $74 million for the three months ended March 31, 2026, compared to the same period in 2025, driven primarily by salaries and benefits reflecting hiring related to the Private Bank and Private Wealth build-out.
Net charge-offs decreased $15 million for the three months ended March 31, 2026, compared to the same period in 2025, driven by education and other retail.
Commercial Banking
Net interest income increased $15 million for the three months ended March 31, 2026, compared to the same period in 2025, driven by growth in average interest-earning assets and slightly higher net interest margin.
Noninterest income increased $48 million for the three months ended March 31, 2026, compared to the same period in 2025, driven by capital markets fees reflecting higher M&A, loan syndication, and equity underwriting fees.
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Noninterest expense increased $7 million for the three months ended March 31, 2026, compared to the same period in 2025, driven primarily by salaries and benefits given strong capital markets fee performance.
Net charge-offs decreased $13 million for the three months ended March 31, 2026, compared to the same period in 2025, driven by CRE, partially offset by an increase in commercial and industrial.
RISK MANAGEMENT
We are committed to maintaining a strong, integrated, and proactive approach to the management of all risks to which we are exposed in pursuit of our business objectives. A key aspect of our Board's responsibility as the main decision-making body is setting our risk appetite to ensure that the level of risk that we are willing to accept in the attainment of our strategic business and financial objectives is clearly understood.
To enable our Board to carry out its objectives, it has delegated authority for risk management activities, as well as governance and oversight of those activities, to a number of Board and executive management level risk committees. The Executive Risk Committee, chaired by the Chief Risk Officer, is responsible for oversight of risk across the enterprise and actively considers our inherent material risks, analyzes our overall risk profile, and seeks confirmation that the risks are being appropriately identified, assessed, and mitigated. Reporting to the Executive Risk Committee are the following committees covering specific areas of risk: Compliance and Operational Risk, Model Risk, Credit Policy, Asset Liability, Business Initiatives Review, and Conduct and Ethics.
There have been no significant changes in our risk management practices, risk framework, risk appetite, or credit risk management as described in "Risk Management" in our 2025 Form 10-K.
Credit Risk
Credit risk represents the potential for loss arising from the failure of a customer, counterparty, or issuer to perform in accordance with the contractual terms of an obligation. While the majority of our credit risk is associated with lending activities, we do engage with other financial counterparties for a variety of purposes including investing, asset and liability management, and trading activities. Given the financial impact of credit risk on our earnings and balance sheet, the assessment, approval, and management of credit risk represents a significant part of our overall risk management responsibility.
Our independent Credit Risk Function is responsible for reviewing and approving the credit risk appetite across all lines of business and credit products, approving larger and higher-risk credit transactions, monitoring portfolio performance, identifying problem credit exposures, and ensuring remedial management. Credit Risk actively monitors and manages concentrations of loan limits, loan types, industries, and geographies to ensure that our risk appetite is well balanced to achieve our goals.
We employ a comprehensive and integrated risk control program to proactively identify, measure, monitor, and mitigate existing and emerging credit risks across the credit life cycle including origination, account/portfolio management, and loss mitigation and recovery. For more information regarding our credit risk management practices, see "Credit Risk" in our 2025 Form 10-K.
Consumer
Our consumer banking portfolio is comprised of five retail categories of loans: residential mortgages, home equity, education, automobile, and other retail.
As discussed in our 2025 Form 10-K, we utilize LTV, along with other credit attributes, as part of our overall risk management analysis and monitoring of our real estate secured portfolio, as it is an important measure of collateral quality and potential loss severity. While LTV is primarily utilized at origination for underwriting purposes, we continue to monitor LTV distribution and trends to evaluate collateral risk and sensitivity to changes in property values.
LTV information on our outstanding residential mortgage and home equity portfolios is updated quarterly based on relevant home price indices. LTV is the ratio of the loan's outstanding principal balance to the current property value estimate. For home equity and second mortgages, CLTV is the ratio of the first mortgage original principal balance and the second lien outstanding principal balance combined to the current property value estimate. The weighted-average CLTV for our real estate secured portfolio was 50% as of March 31, 2026 and December 31, 2025.
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Commercial
Our commercial banking portfolio consists of traditional commercial and industrial loans, commercial leases, and commercial real estate loans.
As discussed in our 2025 Form 10-K, we utilize internal risk ratings to monitor credit quality for commercial loans and leases. Criticized balances include loans with an internal risk rating of Special Mention, Substandard Accrual, or Nonaccrual. Total commercial criticized balances of $6.1 billion at March 31, 2026 compared to $6.3 billion at December 31, 2025. For more information on internal risk ratings and the distribution of commercial loans and leases by vintage date and internal risk rating, see Note 4. In addition, see discussion of criticized balances below for our commercial and industrial and CRE portfolios.
Commercial and Industrial
The commercial and industrial portfolio includes both loans and leases made to commercial customers for use in normal business operations to finance working capital needs, equipment purchases, capital call facilities, or other projects/acquisitions. Commercial and industrial criticized balances of $2.5 billion at March 31, 2026 remained stable compared to December 31, 2025.
The following table presents our commercial and industrial loan portfolio by industry sector:
Table 9: Commercial and Industrial Loans by Industry Sector
March 31, 2026 December 31, 2025
(dollars in millions) Balance
% of
Total Loans and Leases
Balance
% of
Total Loans and Leases
Industry sector
Finance and insurance
Capital call facilities $8,756 6 % $8,579 6 %
Secured private credit finance 4,096 3 3,963 3
Other finance and insurance 5,268 4 4,633 3
Other manufacturing 3,561 2 3,604 3
Technology 3,117 2 3,203 2
Accommodation and food services 2,011 1 2,044 1
Health, pharma, and social assistance 2,486 2 2,368 2
Professional, scientific, and technical services 2,667 2 2,407 2
Energy and related 1,862 1 1,816 1
Other services 2,295 2 2,419 2
Wholesale trade 2,636 2 2,604 2
Retail trade 1,862 1 1,744 1
Arts, entertainment, and recreation 1,670 1 1,683 1
Administrative and waste management 1,597 1 1,486 1
Automotive 1,299 1 1,245 1
Rental and leasing 1,198 1 1,257 1
Consumer products manufacturing 721 1 717 1
Other 3,205 2 3,460 2
Total commercial and industrial $50,307 35 % $49,232 35 %
Commercial Real Estate
The CRE portfolio consists of both commercial property and construction loans that support a wide range of property development and investment activities including, but not limited to, multifamily, office spaces, industrial facilities, and retail shopping centers. Commercial real estate criticized balances of $3.6 billion at March 31, 2026 remained stable compared to December 31, 2025. Approximately 95% of CRE loans remain current on payments as of March 31, 2026.
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The following table presents our CRE loan portfolio by property type and state:
Table 10: Commercial Real Estate by Property Type and State
March 31, 2026 December 31, 2025
(dollars in millions) Balance
% of
Total Loans and Leases
Balance
% of
Total Loans and Leases
Property type
Multifamily $8,919 6 % $9,196 6 %
Office
Credit tenant lease and life sciences(1)
1,908 1 2,043 1
Other general office 2,445 2 2,416 2
Industrial 2,315 2 2,369 2
Retail 2,648 2 2,714 2
Co-op 1,747 1 1,771 1
Data center 690 1 736 1
Hospitality 317 - 331 -
Other 3,293 2 3,004 2
Total commercial real estate $24,282 17 % $24,580 17 %
State
New York $6,293 4 % $6,238 4 %
New Jersey 2,905 2 2,899 2
Pennsylvania 2,016 1 2,166 2
California 2,944 2 2,775 2
Massachusetts 1,450 1 1,638 1
Texas 1,415 1 1,244 1
Florida 900 1 960 1
Other Southeast(2)
2,109 2 2,265 1
Other 4,250 3 4,395 3
Total commercial real estate $24,282 17 % $24,580 17 %
(1) Credit tenant lease includes loans to nationally recognized tenants with high credit ratings and life sciences includes loans to provide lab and office space for tenants involved in the study and development of scientific discoveries.
(2) Includes Georgia, Maryland, North Carolina, South Carolina, and Virginia.
Loan Asset Quality
Delinquency
We utilize credit scores provided by FICO and payment and delinquency status, among other data points, to monitor credit quality for retail loans. FICO credit scores represent current and historical national industry-wide consumer level credit performance data, which management believes are the strongest indicator of potential credit losses over the contractual life of the loan and a good predictor of a borrower's future payment performance. A loan's past due status is determined based on its contractual repayment terms or, if modified, based on its restructured terms.
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The following table presents an aging analysis of accruing and nonaccrual loans for our retail loan portfolio:
Table 11: Retail Loan Portfolio Analysis
March 31, 2026 December 31, 2025
Days Past Due and Accruing Days Past Due and Accruing
Current 30-59 60-89 90+ Nonaccrual Current 30-59 60-89 90+ Nonaccrual
Residential mortgages
98.58 % 0.20 % 0.10 % 0.51 % 0.61 % 98.64 % 0.27 % 0.13 % 0.40 % 0.56 %
Home equity 97.62 0.54 0.17 - 1.67 97.67 0.50 0.15 0.01 1.67
Automobile 95.33 2.63 0.81 - 1.23 95.37 2.55 0.87 - 1.21
Education 99.11 0.40 0.22 0.02 0.25 99.12 0.43 0.19 0.02 0.24
Other retail 97.61 0.77 0.50 - 1.12 97.44 0.86 0.57 - 1.13
Total retail 98.23 % 0.42 % 0.18 % 0.26 % 0.91 % 98.26 % 0.46 % 0.19 % 0.21 % 0.88 %
Loans that are 90 days or more past due and accruing are not placed on nonaccrual status and continue to accrue interest if they are (i) adequately secured by collateral, in the process of collection, and reasonably expected to be restored to current status, (ii) managed in homogeneous portfolios with specified charge-off timeframes adhering to regulatory guidelines, or (iii) insured or guaranteed by a U.S. government agency.
For more information on the aging of accruing and nonaccrual retail loans and the distribution of retail loans by vintage date and FICO score, see Note 4.
Nonperforming Assets
Nonaccrual loans and leases are those on which the accrual of interest is suspended and excludes LHFS, loans insured or guaranteed by a U.S. government agency, and loans accounted for at fair value. For more information on nonaccrual loans and leases, see Note 4.
The following table presents nonaccrual loans and leases:
Table 12: Nonaccrual Loans and Leases
(dollars in millions) March 31, 2026 December 31, 2025 Change Percent
Commercial and industrial $188 $277 ($89) (32) %
Commercial real estate 679 618 61 10
Total commercial 867 895 (28) (3)
Residential mortgages 217 196 21 11
Home equity 324 319 5 2
Automobile 23 28 (5) (18)
Education 21 20 1 5
Other retail 45 46 (1) (2)
Total retail 630 609 21 3
Nonaccrual loans and leases $1,497 $1,504 ($7) - %
Nonaccrual loans and leases to total loans and leases 1.04 % 1.05 % (1 bps)
Allowance for loan and lease losses to nonaccrual loans and leases 131 129 2 %
Allowance for credit losses to nonaccrual loans and leases 146 145 1 %
Nonaccrual loans and leases as of March 31, 2026 declined slightly compared to December 31, 2025, reflecting improvement in commercial driven by commercial and industrial, partially offset by an increase in retail primarily driven by mortgage.
Other real estate owned represents property acquired through foreclosure or other proceedings and totaled $17 million and $19 million, respectively, as of March 31, 2026 and December 31, 2025.
Allowance for Credit Losses
The ACL, comprised of the ALLL and the allowance for unfunded lending commitments, is maintained at a level the Company believes to be appropriate to absorb expected lifetime credit losses over the contractual life of a loan or lease and on unfunded lending commitments, inclusive of recoveries. For additional information regarding the ACL, see "Critical Accounting Estimates - Allowance for Credit Losses" and Note 4 in this report, and Note 4 in our 2025 Form 10-K.
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The following table presents the ACL and associated coverage ratio for our loan and lease portfolios:
Table 13: Allocation of the ACL and Related Coverage Ratios by Portfolio
March 31, 2026 December 31, 2025
(dollars in millions) Loans and Leases Allowance
Coverage Ratio
% of Total Loans and Leases(1)
Loans and Leases Allowance
Coverage Ratio
% of Total Loans and Leases(1)
Allowance for Loan and Lease Losses
Commercial and industrial $50,307 $560 1.11 % 35 % $49,232 $508 1.03 % 35 %
Commercial real estate 24,282 555 2.28 17 24,580 550 2.24 17
Total commercial 74,589 1,115 1.50 52 73,812 1,058 1.43 52
Residential mortgages 35,404 209 0.59 25 35,024 225 0.64 25
Home equity 19,449 121 0.62 13 19,069 126 0.66 13
Automobile 1,863 8 0.42 1 2,310 10 0.42 2
Education 8,340 253 3.03 6 8,416 261 3.10 6
Other retail 4,022 252 6.30 3 4,061 263 6.48 3
Total retail 69,078 843 1.22 48 68,880 885 1.28 48
Total loans and leases $143,667 $1,958 1.36 % 100 % $142,692 $1,943 1.36 % 100 %
Allowance for Unfunded Lending Commitments
Commercial(2)
$189 1.75 % $194 1.70 %
Retail(3)
38 1.27 46 1.35
Total allowance for unfunded lending commitments
227 240
Allowance for credit losses $143,667 $2,185 1.52 % $142,692 $2,183 1.53 %
(1) Represents the percentage of each loan category to total loans and leases.
(2) Coverage ratio includes total commercial allowance for unfunded lending commitments and total commercial allowance for loan and lease losses in the numerator and total commercial loans and leases in the denominator.
(3) Coverage ratio includes total retail allowance for unfunded lending commitments and total retail allowance for loan losses in the numerator and total retail loans in the denominator.
The ACL as of March 31, 2026 increased $2 million compared to December 31, 2025, reflecting consideration for economic uncertainty and targeted risk concerns, partially offset by improved loan mix, given runoff of certain retail portfolios, and lower general office reserves.
The following table presents the net charge-off ratio for our loan and lease portfolios:
Table 14: Ratio of Net Charge-Offs to Average Loans and Leases
Three Months Ended March 31,
2026 2025
(dollars in millions) Net Charge-Offs Average Balance Ratio Net Charge-Offs Average Balance Ratio
Commercial and industrial $35 $50,140 0.28 % $30 $43,599 0.28 %
Commercial real estate 38 24,401 0.64 51 27,013 0.77
Total commercial 73 74,541 0.40 81 70,612 0.47
Residential mortgages (2) 35,090 (0.02) - 32,872 0.01
Home equity 2 19,230 0.04 - 16,647 (0.01)
Automobile 2 2,090 0.35 8 4,394 0.73
Education 16 8,442 0.80 51 10,690 1.92
Other retail 47 4,017 4.74 60 4,495 5.46
Total retail 65 68,869 0.38 119 69,098 0.70
Total loans and leases $138 $143,410 0.39 % $200 $139,710 0.58 %
For the three months ended March 31, 2026, net charge-offs decreased $62 million and the net charge-off ratio decreased 19 basis points compared to the same period in 2025, reflecting a decrease in retail given a $25 million charge-off resulting from the sale of education loans in the first quarter of 2025 and a decrease in CRE.
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Market Risk
Market risk refers to potential losses arising from changes in interest rates, foreign exchange rates, equity prices, commodity prices, and/or other relevant market rates or prices. Modest market risk arises from trading activities that serve customer needs, including the hedging of interest rate and foreign exchange risks. As described below, the market risk arising from our non-trading banking activities, such as the origination of loans and deposit gathering, is more significant. We have established enterprise-wide policies and methodologies to identify, measure, monitor, and report market risk. We actively manage market risk for both non-trading and trading activities.
Non-Trading Risk
Our non-trading banking activities expose us to market risk. This market risk is composed of interest rate risk, as we have no commodity risk and de minimis direct currency and equity risk. We also have market risk related to capital markets loan originations, as well as the valuation of our MSRs. There have been no significant changes in our sources of interest rate risk, interest rate risk practices, risk framework, metrics, or assumptions as described in "Market Risk - Non-Trading Risk" in our 2025 Form 10-K.
The table below presents the sensitivity of net interest income to various parallel yield curve shifts from the market implied forward yield curve. Our policies involve measuring exposures as a percentage change in net interest income over the next year due to either instantaneous or gradual parallel changes in rates relative to the market implied forward yield curve. As the following table illustrates, our balance sheet is slightly asset sensitive; net interest income would benefit from an increase in interest rates, while exposure to a decline in interest rates is within limits established and monitored by senior management. While an instantaneous and severe shift in interest rates is included in this analysis, we believe that any actual shift in interest rates would be more gradual and, therefore, have a more modest impact.
Table 15: Sensitivity of Net Interest Income
Estimated % Change in Net Interest Income over 12 Months
Basis points March 31, 2026 December 31, 2025
Gradual Change in Interest Rates
+200 1.6 % 2.0 %
+100 0.9 1.0
-100 (0.8) (1.1)
-200 (1.7) (2.4)
Instantaneous Change in Interest Rates
+200 1.9 % 1.8 %
+100 1.3 1.1
-100 (1.7) (1.9)
-200 (4.5) (4.8)
We continue to manage asset sensitivity within the scope of our policy, changing market conditions, and changes in our balance sheet. The Company's base case net interest income assumes the forward-rate path implied by the period-end yield curve is realized. The rate risk exposure is then measured based on assumed changes from that base case rate path.
Our risk position is slightly asset sensitive to a gradual change in rates as of March 31, 2026, consistent with our position as of December 31, 2025. Our interest rate sensitivity incorporates the impact of changes in our balance sheet mix, including securities, loans, deposits, borrowed funds, and hedge activity. Receive-fixed swaps that offset our naturally asset-sensitive balance sheet represent the primary hedging tool utilized to manage overall asset sensitivity. Pay-fixed swaps against our securities portfolio are also utilized to protect capital by reducing AOCI volatility.
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We use a valuation measure of exposure to structural interest rate risk, EVE, as a supplement to net interest income simulations. EVE complements net interest income simulation analysis as it estimates risk exposure over a long-term horizon. EVE measures the extent to which the economic value of assets, liabilities, and off-balance sheet instruments may change in response to fluctuations in interest rates. This analysis is highly dependent upon assumptions applied to assets and liabilities with non-contractual maturities. We employ sophisticated models for prepayments and deposit pricing and attrition, which provide a granular view of cash flows based on the unique characteristics of the underlying products and customer segments. The change in value is expressed as a percentage of regulatory capital.
We use interest rate derivative contracts as part of our ALM strategy to manage exposure to the variability in the interest cash flows on our floating-rate assets and wholesale funding, the variability in the fair value of AFS securities, and to hedge market risk on fixed-rate capital markets debt issuances.
The following table presents interest rate derivative contracts that we have entered into as of March 31, 2026 and December 31, 2025:
Table 16: Interest Rate Hedges Used to Manage Non-Trading Interest Rate Exposure
March 31, 2026 December 31, 2025
Weighted Average Weighted Average
(dollars in millions) Notional Amount Maturity (Years) Fixed Rate Reset Rate Notional Amount Maturity (Years) Fixed Rate Reset Rate
Fair value hedges:
Asset conversion swaps:
AFS securities:
Pay fixed/receive SOFR $5,826 3.9 3.8 % 3.7 % $6,608 3.8 3.8 % 3.9 %
Total fair value hedges $5,826 $6,608
Cash flow hedges:
Asset conversion swaps:
Loans:
Swaps
Receive fixed/pay SOFR $31,750 1.0 3.4 3.7 $30,750 1.0 3.4 3.9
Receive fixed/pay SOFR - forward-starting 17,000 3.3 3.6 3.6 17,000 3.3 3.6 3.3
Basis swaps
Receive SOFR/pay 1-month term SOFR 11,000 0.7 - 3.7/3.7 12,000 0.8 - 3.9/3.7
Receive SOFR/pay 1-month term SOFR - forward-starting - - - - 1,000 1.0 - 3.9/3.7
Total cash flow hedges $59,750 $60,750
Total hedges $65,576 $67,358
Included in AOCI are net losses from terminated swaps of $185 million that will reduce net interest income by $62 million in the second quarter of 2026, $52 million in the third quarter of 2026, $27 million in the fourth quarter of 2026, and $44 million thereafter.
Capital Markets
A key component of our capital markets activities is the underwriting and distribution of corporate credit facilities to finance M&A transactions or other corporate purposes for our clients. We have a rigorous risk management process around these activities, including a limit structure capping our underwriting risk, potential loss, and sub-limits for specific asset classes. Further, the ability to approve underwriting exposure is delegated only to senior level individuals in the credit risk management and capital markets organizations with each transaction, at a minimum, requiring approval of one business approver and one credit approver. Such approvals are frequently handled in the context of a committee meeting forum known as the Loan Underwriting Approval Committee.
Mortgage Servicing Rights
We have market risk associated with the value of residential MSRs, which are impacted by various types of inherent risks, including duration, basis, convexity, volatility, and yield curve.
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As part of our overall risk management strategy we enter into various freestanding derivatives, such as interest rate swaps, interest rate swaptions, interest rate futures, and forward contracts to purchase mortgage-backed securities to economically hedge the changes in fair value of our MSRs. For more information regarding the fair value of our MSRs and associated derivatives see Note 5 and Note 8.
As with our traded market risk-based activities, earnings at risk excludes the impact of MSRs. MSRs are captured under our single price risk management framework that is used for calculating a management VaR consistent with the definition used by banking regulators.
Trading Risk
We are exposed to market risk primarily through client facilitation activities from certain derivative and foreign exchange products as well as underwriting and market making activities. Market risk exposure arises from fluctuations in interest rates, basis spreads, volatility, foreign exchange rates, equity prices, and credit spreads across various financial instruments. There have been no significant changes in our market risk governance, market risk measurement, or market risk practices including VaR, stressed VaR, sensitivity analysis, stress testing, VaR model review and validation, and VaR backtesting as described in "Market Risk - Trading Risk" in our 2025 Form 10-K.
Market Risk Regulatory Capital
The U.S. banking regulators' "Market Risk Rule" covers the calculation of market risk capital. Under this rule, all of our client facing trades and associated hedges maintain a low net risk and qualify as "covered positions." The internal management VaR measure is calculated based on the same population of trades that is utilized for regulatory VaR.
Table 17: Results of Modeled and Non-Modeled Measures for Regulatory Capital Calculations
(dollars in millions) For the Three Months Ended March 31, 2026 For the Three Months Ended March 31, 2025
Market Risk Category
Period End
Average
High Low Period End Average High Low
Interest Rate $1 $1 $1 $- $1 $2 $3 $-
Foreign Exchange Currency Rate - - - - - - - -
Credit Spread - 1 1 - 1 2 3 1
Commodity - - - - - - - -
General VaR 1 1 2 1 2 2 4 1
Specific Risk VaR - - - - - - - -
Total VaR $1 $1 $2 $1 $2 $2 $4 $1
Stressed General VaR $9 $4 $9 $2 $10 $10 $15 $6
Stressed Specific Risk VaR - - - - - - - -
Total Stressed VaR $9 $4 $9 $2 $10 $10 $15 $6
Market Risk Regulatory Capital $16 $36
Specific Risk Not Modeled Add-on 20 27
de Minimis Exposure Add-on 16 1
Total Market Risk Regulatory Capital $52 $64
Market Risk-Weighted Assets $653 $804
Liquidity Risk
We consider the effective and prudent management of liquidity, defined as our ability to meet our obligations when they come due, fundamental to our safety and soundness. As a financial institution, we must maintain operating liquidity to meet expected daily and forecasted cash flow requirements, as well as contingent liquidity to meet unexpected and stress-scenario funding requirements. Reflecting the importance of meeting all unexpected and stress-scenario funding requirements, we identify and manage contingent liquidity, consisting of cash balances at the FRB, unencumbered high-quality liquid securities, and unused FHLB borrowing capacity. Separately, we also identify and manage asset liquidity as a subset of contingent liquidity, consisting of cash balances at the FRB and unencumbered high-quality liquid securities. We maintain additional secured borrowing capacity at the FRB discount window, but do not view this as a primary means of funding, but rather a potential source in a stressed environment or during a market disruption. We manage liquidity at the consolidated enterprise level and at each material legal entity.
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Liquidity risk is the risk arising from the inability to meet our obligations when they come due. We must maintain adequate funding to meet current and future obligations, including customer loan requests, deposit maturities and withdrawals, debt service, leases, and other cash commitments, under both normal operating conditions and periods of company-specific and/or market stress.
Liquidity risk is measured and managed by the Funding and Liquidity unit within our Treasury group in accordance with policy guidelines promulgated by our Board and the Asset Liability Committee. The Funding and Liquidity unit is responsible for maintaining a liquidity management framework that effectively manages liquidity risk. Processes within this framework include, but are not limited to, regular and comprehensive reporting, including current levels versus threshold limits for a broad set of liquidity metrics and early warning indicators, explanatory commentary relating to emerging risk trends and, as appropriate, recommended remedial strategies, liquidity stress testing, contingency funding plans, and collateral management.
Our Funding and Liquidity unit's primary goals are to deliver and maintain prudent levels of operating liquidity to support expected and projected funding requirements; contingent liquidity to support unexpected funding requirements resulting from idiosyncratic, systemic, and combination stress events; and regulatory liquidity requirements in a timely manner from stable and cost-efficient funding sources. We seek to accomplish these goals by funding loans with stable deposits, by prudently controlling dependence on wholesale funding, particularly short-term unsecured funding, and by maintaining ample available liquidity, including a contingent liquidity buffer of unencumbered high-quality loans and securities.
The Funding and Liquidity unit monitors a variety of liquidity and funding metrics and early warning indicators, including specific risk thresholds limits. These monitoring tools are broadly classified as follows:
•Current liquidity sources and capacities, including cash balances at the FRB, free and liquid securities, and secured borrowing capacity at the FHLB and FRB discount window;
•Liquidity stress sources, including idiosyncratic, systemic, and combined stresses, in addition to evolving regulatory requirements; and
•Current and prospective exposures, including secured and unsecured wholesale funding, and spot and cumulative cash-flow gaps across a variety of horizons.
Further, certain of these metrics are monitored individually for CBNA and for our consolidated enterprise on a daily basis, including cash position, unencumbered securities, asset liquidity, and available FHLB borrowing capacity. In order to identify emerging trends and risks and inform funding decisions, specific metrics are also forecasted over a one-year horizon.
We rely on customer deposits to be our primary stable and low-cost source of funding. Our other funding sources are dependent on our ability to securitize loans in secondary markets, raise funds in the debt and equity capital markets, pledge loans and/or securities for borrowing from the FHLB, pledge securities as collateral for borrowing under repurchase agreements, and sell AFS securities. In addition, we maintain a contingency funding plan designed to ensure that liquidity sources are sufficient to meet ongoing obligations and commitments, particularly in a stressed environment or during a market disruption. The plan identifies members of the liquidity contingency team and provides a framework for management to follow, including notification and escalation of potential liquidity stress events.
As of March 31, 2026:
•Organically generated deposits continue to be our primary source of funding, resulting in a consolidated period-end loan-to-deposit ratio, excluding LHFS, of 78.1%;
•Our total available liquidity, comprised of contingent liquidity and available discount window capacity, was approximately $91.8 billion:
◦Contingent liquidity was $73.7 billion, consisting of unencumbered high-quality liquid securities of $39.4 billion, unused FHLB capacity of $23.2 billion, and cash balances at the FRB of $11.1 billion; and
◦Available discount window capacity was $18.1 billion, defined as available total borrowing capacity from the FRB based on identified collateral, which is primarily secured by non-mortgage commercial and retail loans.
For a summary of our sources and uses of cash by type of activity for the three months ended March 31, 2026 and 2025, see the Consolidated Statements of Cash Flows in Item 1.
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Parent Company Liquidity
Our Parent Company's primary sources of cash are dividends and interest received from CBNA resulting from investing in bank equity and subordinated debt as well as externally issued preferred stock, senior debt, and subordinated debt. Uses of cash include the routine cash flow requirements as a bank holding company, including periodic share repurchases and payments of dividends, interest, and expenses; the needs of subsidiaries, including CBNA for additional equity and, as required, its need for debt financing; and the support for extraordinary funding requirements when necessary. To the extent the Parent Company relies on wholesale borrowings, uses also include payments of related principal and interest.
During the three months ended March 31, 2026, the Parent Company issued $400 million of 5.299% fixed-reset subordinated notes due 2036.
Our Parent Company's cash and cash equivalents represent a source of liquidity that can be used to meet various needs and totaled $2.4 billion and $2.3 billion as of March 31, 2026 and December 31, 2025, respectively.
During the three months ended March 31, 2026 and 2025, the Parent Company declared dividends on common stock of $198 million and $186 million, respectively, and declared dividends on preferred stock of $33 million.
During the three months ended March 31, 2026 and 2025, the Parent Company repurchased $300 million and $200 million, respectively, of its outstanding common stock.
CBNA Liquidity
As CBNA's primary business involves taking deposits and making loans, a key role of liquidity management is to ensure that customers have timely access to funds. Liquidity management also involves maintaining sufficient liquidity to repay wholesale borrowings, pay operating expenses, and support extraordinary funding requirements when necessary. In the ordinary course of business, the liquidity of CBNA is managed by matching sources and uses of cash. The primary sources of bank liquidity include deposits from our consumer and commercial customers; payments of principal and interest on loans and debt securities; and wholesale borrowings, as needed. The primary uses of bank liquidity include withdrawals and maturities of deposits; payment of interest on deposits; funding of loans and related commitments; and funding of securities purchases. To the extent that CBNA relies on wholesale borrowings, uses also include payments of related principal and interest.
During the three months ended March 31, 2026, CBNA issued $750 million of 4.192% fixed-to-floating rate senior notes due 2029.
Credit Ratings
Credit ratings assigned by agencies such as Moody's, Standard and Poor's, and Fitch impact our access to unsecured wholesale market funds and to large uninsured customer deposits and are presented in the table below. We currently have a "stable" outlook at Standard & Poor's, a "stable" outlook at Moody's, and a "positive" outlook at Fitch. Changes in our public credit ratings could affect both the cost and availability of our wholesale funding.
Table 18: Credit Ratings
March 31, 2026
Moody's
Standard &
Poor's
Fitch
Citizens Financial Group, Inc.:
Long-term issuer Baa1 BBB+ BBB+
Short-term issuer NR A-2 F1
Subordinated debt Baa1 BBB BBB
Preferred Stock Baa3 BB+ BB
Citizens Bank, National Association:
Long-term issuer A3 A- BBB+
Short-term issuer (P) P-2 A-2 F1
Long-term deposits A1 NR A-
Short-term deposits P-1 NR F1
NR = Not rated
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Regulatory liquidity requirements represent another key driver of systemic liquidity conditions and management practices, with the FRB and OCC regularly evaluating our liquidity as part of the overall supervisory process. For further discussion, see the "Liquidity Requirements" section under "Regulation and Supervision" in our 2025 Form 10-K.
Off-Balance Sheet Arrangements
We engage in a variety of activities that are not reflected in our Consolidated Balance Sheets that are generally referred to as "off-balance sheet arrangements." For more information on these types of activities, see Note 11.
Operational Risk
Operational risk is the risk of loss due to human error, third-party performance failures, or inadequate or failed internal systems and controls and includes certain risks such as fraud, legal, and natural disasters. To mitigate these risks, we maintain a comprehensive system of internal controls designed to identify, assess, and monitor potential threats to our operations. Our risk management framework includes regular audits, employee training, cybersecurity measures, and business continuity planning. We continuously evaluate and enhance these controls to adapt to evolving risks and regulatory requirements, ensuring the integrity, reliability, and efficiency of our operations.
Cybersecurity
The Company's Cybersecurity Program ("CSP") drives an end-to-end, continuous process that protects our customers, colleagues, assets, premises, systems, and information (electronic and non-electronic), and is designed to ensure compliance with current and emerging federal and state laws and regulations. The CSP is designed to ensure the effective implementation of the Corporate Security and Resilience Operating Model across all business lines of the Company and is under the supervision of the Chief Security Officer.
The CSP is designed to assess and mitigate threats and risks to the Company. New and emerging threats are assessed through an intelligence lifecycle, which includes threat modeling. In addition, risk assessment processes drive risk identification and measurement related to security. Once risks are identified and measured, the Company's Enterprise Risk Management Governance Framework is leveraged to track and mitigate them. Control testing is utilized to demonstrate that risks are managed effectively, identify gaps in expected control operation, and develop appropriate remediation plans, in order to manage risk to the Company within tolerable limits.
The Company regularly reviews the nature of its business activities and modifies the CSP as appropriate. Many of the elements of the CSP are related to cyber defense and are in place to reduce our risk to a wide range of potential cyber threats that may target our assets and information daily. The effectiveness of the CSP is assessed and measured periodically by various lines of defense within the Company and is conducted primarily through risk assessments, assurance testing, and an independent audit. External organizations are also routinely engaged to assess our CSP and test our perimeter defenses. The effectiveness of the CSP is reported periodically to the appropriate governance committees. For more information regarding our cybersecurity risk management practices and governance, see Item 1C in our 2025 Form 10-K.
Compliance Risk
Financial institutions are subject to many laws, rules, and regulations at both the federal and state levels. These broad-based laws, rules, and regulations include, but are not limited to, expectations relating to anti-money laundering, lending limits, client privacy, fair lending, prohibitions against unfair, deceptive, or abusive acts or practices, protections for military members as they enter active duty, and community reinvestment. Adherence to the increasing volume and complexity of regulatory changes can increase our overall compliance risk. As such, we utilize various resources to help ensure expectations are met, including a team of compliance experts dedicated to ensuring our conformance with all applicable laws, rules, and regulations. Our colleagues receive training for several broad-based laws and regulations including, but not limited to, anti-money laundering and customer privacy. Colleagues engaged in lending activities also receive training for laws and regulations related to flood disaster protection, equal credit opportunity, fair lending, and/or other courses related to the extension of credit. We hold ourselves to a high standard for adherence to compliance management and seek to continuously enhance our performance.
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CAPITAL
As a bank and financial holding company, we are subject to regulation and supervision by the FRB. Our banking subsidiary, CBNA, is a national banking association primarily regulated by the OCC. See "Executive Summary - Regulatory Developments" in this report and "Regulation and Supervision" in our 2025 Form 10-K for more information.
Capital Adequacy Process
Our assessment of capital adequacy begins with our Board-approved risk appetite and risk management framework. This framework provides for the identification, measurement, and management of material risks. There have been no significant changes to our capital adequacy risk appetite and risk management framework as described in "Capital" in our 2025 Form 10-K.
The FRB regularly supervises and evaluates our capital adequacy and capital planning processes, including the submission of an annual capital plan approved by our Board of Directors or one of its committees. Under the FRB's capital requirements, we must maintain capital ratios above the sum of the regulatory minimum and SCB requirement to avoid restrictions on capital distributions and discretionary bonus payments. The FRB utilizes the supervisory stress test to determine our SCB, which is re-calibrated with each biennial supervisory stress test and updated annually to reflect our planned common stock dividends. As an institution subject to Category IV standards, we are subject to biennial supervisory stress testing in even-numbered years. In August 2025, the FRB provided us with our updated SCB requirement of 4.5%, which is effective from October 1, 2025 to September 30, 2026. However, in February 2026, the SCB effective date was moved from October 1, 2026 to October 1, 2027 because the FRB extended the notification deadlines while its enhanced transparency proposal and related stress test model changes remain under public comment and will not be finalized before the 2026 supervisory stress test, resulting in our SCB remaining in place until October 1, 2028, pending other regulatory actions.
Regulations relating to capital planning, regulatory reporting, stress testing, and capital buffer requirements applicable to firms like us are presently subject to rulemaking and potential further guidance and interpretation by the applicable federal regulators. We will continue to evaluate the impact of these and any other regulatory changes, including their potential resultant changes in our regulatory and compliance costs.
For more information on our capital adequacy process, see "Capital" in our 2025 Form 10-K.
Regulatory Capital Ratios and Capital Composition
Under the current U.S. Basel III capital framework, we, and our banking subsidiary, CBNA, must meet the following specific minimum requirements: CET1 capital ratio of 4.5%, Tier 1 capital ratio of 6.0%, Total capital ratio of 8.0%, and Tier 1 leverage ratio of 4.0%. As a bank holding company, our SCB of 4.5% is imposed on top of the three minimum risk-based capital ratios listed above, and a CCB of 2.5% is imposed on top of the three minimum risk-based capital ratios listed above for CBNA.
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For additional discussion of the U.S. Basel III capital framework and its related application, see "Regulation and Supervision" in our 2025 Form 10-K. The table below presents the regulatory capital ratios for CFG and CBNA under the U.S. Basel III Standardized rules:
Table 19: Regulatory Capital Ratios Under the U.S. Basel III Standardized Rules
March 31, 2026 December 31, 2025
(dollars in millions) Amount Ratio Amount Ratio
Required Minimum Capital Ratio(1)
CET1 capital
CFG $18,178 10.5 % $18,240 10.6 % 9.0 %
CBNA 20,871 12.1 20,946 12.3 7.0
Tier 1 capital
CFG 20,289 11.7 20,351 11.9 10.5
CBNA 20,871 12.1 20,946 12.3 8.5
Total capital
CFG 23,751 13.7 23,654 13.8 12.5
CBNA 24,084 14.0 24,135 14.1 10.5
Tier 1 leverage
CFG 20,289 9.3 20,351 9.5 4.0
CBNA 20,871 9.6 20,946 9.8 4.0
Risk-weighted assets
CFG 173,268 171,493
CBNA 172,259 170,656
Quarterly adjusted average assets(2)
CFG 218,192 215,321
CBNA 217,215 214,310
(1) Represents minimum requirement under the current capital framework plus the SCB of 4.5% and CCB of 2.5% for CFG and CBNA, respectively. The SCB and CCB are not applicable to the Tier 1 leverage ratio.
(2) Represents total average assets less certain amounts deducted from Tier 1 capital.
At March 31, 2026, CFG's CET1, Tier 1, and Total capital ratios decreased compared to December 31, 2025. Common share repurchases, dividends, and a $1.8 billion increase in RWA were partially offset by net income. Higher commercial and industrial loans was the key driver for the increase in RWA.
At March 31, 2026, CBNA's CET1, Tier 1, and Total capital ratios decreased compared to December 31, 2025. Dividend payments to the Parent Company and a $1.6 billion increase in RWA were partially offset by net income. Higher commercial and industrial loans was the key driver for the increase in RWA.
At March 31, 2026, CFG's and CBNA's Tier 1 leverage ratio decreased compared to December 31, 2025, reflecting an increase in quarterly adjusted average assets and their respective changes in Tier 1 capital described above.
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The following table presents the components of our regulatory capital under the U.S. Basel III capital framework:
Table 20: Capital Composition Under the U.S. Basel III Capital Framework
(dollars in millions) March 31, 2026 December 31, 2025
Total common stockholders' equity $24,061 $24,206
Adjustments:
Net unrealized (gains)/losses recorded in AOCI, net of tax:
Debt securities 1,684 1,603
Derivatives 159 118
Unamortized net periodic benefit costs 245 249
Deductions:
Goodwill, net of deferred tax liability (7,796) (7,763)
Other intangible assets, net of deferred tax liability (101) (104)
Deferred tax assets that arise from tax loss and credit carryforwards (74) (69)
Total CET1 capital
18,178 18,240
Qualifying preferred stock 2,111 2,111
Total Tier 1 capital
20,289 20,351
Qualifying subordinated debt(1)
1,374 1,239
Allowance for credit losses 2,185 2,183
Exclusions from Tier 2 capital:
Allowance on PCD assets (97) (119)
Adjusted allowance for credit losses 2,088 2,064
Total capital $23,751 $23,654
(1) As of March 31, 2026 and December 31, 2025, there is no non-qualifying subordinated debt excluded from regulatory capital. See Note 7 for more details on our outstanding subordinated debt.
Capital Transactions
We completed the following capital transactions during the three months ended March 31, 2026:
•Repurchased $300 million of our outstanding common stock;
•Declared quarterly common stock dividends of $0.46 per share, aggregating to $198 million; and
•Declared preferred stock dividends aggregating to $33 million.
For additional detail regarding our common and preferred stock dividends see Note 10.
On June 13, 2025, we announced that our Board of Directors increased the capacity of our common share repurchase program to $1.5 billion, an increase of $1.2 billion above the $300 million of capacity remaining under the prior June 2024 authorization. All future capital distributions are subject to consideration and approval by our Board of Directors prior to execution. The timing and amount of future dividends and share repurchases will depend on various factors, including our capital position, financial performance, balance sheet growth, market conditions, and regulatory considerations.
AOCI Impact on Regulatory Capital
Under the current applicable regulatory capital rules we have made the AOCI opt-out election, which enables us to exclude components of AOCI from regulatory capital. As noted in the "Executive Summary - Regulatory Developments" section of this report, the regulatory agencies have issued a proposal that would require most elements of AOCI to be recognized in regulatory capital for non-Category I and II banking organizations like us, subject to a five-year transition period.
In light of this potential change, the Company considers capital ratios including the AOCI impact from securities and pension when evaluating capital utilization and adequacy, in addition to capital ratios defined by the regulatory agencies. These capital ratios are intended to complement our regulatory capital ratios and are viewed by management as useful measures reflective of the level of capital available to withstand unexpected market conditions. See "Non-GAAP Financial Measures" for more information.
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The following table presents our regulatory capital ratios including the AOCI impact from securities and pension:
Table 21: AOCI Impact on Regulatory Capital
March 31, 2026
CFG CBNA
(dollars in millions) CET1 Tier 1 Total CET1 Tier 1 Total
Regulatory capital, including AOCI impact:
Regulatory capital
$18,178 $20,289 $23,751 $20,871 $20,871 $24,084
Unrealized gains (losses) on securities and pension (1,929) (1,929) (1,929) (1,911) (1,911) (1,911)
Deferred tax assets - securities and pension AOCI (38) (38) (38) (41) (41) (41)
Regulatory capital, including AOCI impact (non-GAAP) $16,211 $18,322 $21,784 $18,919 $18,919 $22,132
Risk-weighted assets, including AOCI impact:
Risk-weighted assets
$173,268 $173,268 $173,268 $172,259 $172,259 $172,259
Unrealized gains (losses) on securities and pension (525) (525) (525) (507) (507) (507)
Deferred tax assets - securities and pension AOCI 1,687 1,687 1,687 1,713 1,713 1,713
Risk-weighted assets, including AOCI impact (non-GAAP)
$174,430 $174,430 $174,430 $173,465 $173,465 $173,465
Ratio:
Regulatory capital ratio
10.5 % 11.7 % 13.7 % 12.1 % 12.1 % 14.0 %
Regulatory capital ratio, including AOCI impact (non-GAAP)
9.3 % 10.5 % 12.5 % 10.9 % 10.9 % 12.8 %
CRITICAL ACCOUNTING ESTIMATES
Our Consolidated Financial Statements included in this Report are prepared in accordance with GAAP, requiring us to establish accounting policies and make estimates and assumptions that affect reported amounts.
An accounting estimate requires assumptions and judgments about uncertain matters that could have a material effect on our Consolidated Financial Statements. Estimates are made using facts and circumstances known at a point in time. Changes in those facts and circumstances could produce results substantially different from those estimates. Our most significant accounting policies and estimates and their related application are discussed below. For additional information regarding fair value measurements and goodwill, see "Critical Accounting Estimates" in our 2025 Form 10-K.
Allowance for Credit Losses
The ACL of $2.2 billion at March 31, 2026 increased $2 million compared to December 31, 2025, reflecting consideration for economic uncertainty and targeted risk concerns, partially offset by improved loan mix, given runoff of certain retail portfolios, and lower general office reserves.
As of March 31, 2026, our 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% and a start-to-trough real GDP decline of approximately 0.5%, consistent with peak unemployment and start-to-trough real GDP decline projections 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.
Our determination of the ACL is sensitive to changes in forecasted macroeconomic conditions during the reasonable and supportable forecast period. To illustrate this sensitivity, we applied a more pessimistic scenario than that described above which reflects deeper real GDP contraction across our two-year reasonable and supportable forecast period with peak unemployment of approximately 6.8% and a start-to-trough real GDP decline of approximately 2.1%. Excluding consideration of qualitative adjustments, this scenario would result in a quantitative lifetime loss estimate of approximately 1.4x our modeled period-end ACL, or an increase of approximately $700 million. This analysis relates only to the modeled credit loss estimate and not to the overall period-end ACL, which includes qualitative adjustments.
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Because several quantitative and qualitative factors are considered in determining the ACL, this sensitivity analysis does not necessarily reflect the nature and extent of future changes in the ACL or even what the ACL would be under these economic circumstances. The sensitivity analysis is intended to provide insights into the impact of adverse changes in the macroeconomic environment and the corresponding impact to modeled loss estimates. The hypothetical determination does not incorporate the impact of management judgment or other qualitative factors that could be applied in the actual estimation of the ACL and does not imply any expectation of future deterioration in our loss rates.
It remains difficult to estimate how changes in economic forecasts might affect our ACL because such forecasts consider a wide variety of variables and inputs, and changes in the variables and inputs may not occur at the same time or in the same direction, and such changes may have differing impacts by product type. The variables and inputs may be idiosyncratically affected by risks to the economy, including changing monetary and fiscal policies and inflationary trends. Changes in one or multiple of the key macroeconomic variables may have a material impact on our estimation of expected credit losses.
For additional information regarding the ACL, see Note 4 and "Critical Accounting Estimates - Allowance for Credit Losses" and Note 4 in our 2025 Form 10-K.
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ACCOUNTING AND REPORTING DEVELOPMENTS
Accounting standards issued but not adopted as of March 31, 2026:
Pronouncement Summary of Guidance Effects on Financial Statements
Disaggregation of Income Statement Expenses
Issued November 2024
•Requires tabular disclosure of certain expense types, including employee compensation, depreciation, intangible asset amortization, and selling expenses.
•Requires a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively.
•Allows for adoption on either a prospective or retrospective basis.
•Required effective date: Annual financial statements for the year ending December 31, 2027, and interim reporting periods thereafter. Early adoption is permitted.
•We are currently evaluating the impact of this ASU on our required expense disclosures in the Consolidated Financial Statements.
Targeted Improvements to the Accounting for Internal-Use Software
Issued September 2025
•Eliminates all references to software project development stages and, as a result, requires entities to start capitalizing software costs when both of the following occur: 1) Management has authorized and committed to funding the software project, and 2) It is probable the project will be completed and the software will be used to perform the function intended.
•Requires software costs to be expensed as incurred prior to meeting the capitalization requirements noted above.
•Allows for adoption on a prospective, modified transition, or retrospective basis.
•Required effective date: January 1, 2028. Early adoption is permitted.
•We are currently evaluating the impact of this ASU on our Consolidated Financial Statements.
Purchased Loans
Issued November 2025
•Expands the scope of acquired financial assets subject to the gross-up approach under ASC 326 to include purchased seasoned loans, which must meet certain criteria outlined in the ASU.
•Purchased seasoned loans do not include credit cards, debt securities, and certain trade receivables.
•Provides for an irrevocable accounting policy election to measure the ACL on purchased seasoned loans using the amortized cost basis, rather than unpaid principal balance, if a method other than a discounted cash flow method is utilized to estimate expected credit losses.
•Requires adoption on a prospective basis.
•Required effective date: January 1, 2027. Early adoption is permitted.
•Adoption of this ASU will impact our Consolidated Financial Statements on a prospective basis only when loans are acquired.
Hedge Accounting Improvements
Issued November 2025
•Expands the hedged risks permitted to be aggregated in a group of individual forecasted transactions in a cash flow hedge by changing the requirement to designate a group of individual forecasted transactions from having a shared risk exposure to having a similar risk exposure.
•Requires assessment of hedged risk similarity both at hedge inception and on an ongoing basis.
•Requires dedesignation of the hedge relationship if one or more hedged risks related to the group of individual forecasted transactions are no longer similar.
•The amendments in this ASU should be applied on a prospective basis for all hedging relationships. An entity may elect to apply the amendments to relationships that exist as of the date of adoption.
•Required effective date: January 1, 2027. Early adoption is permitted.
•Adoption of this ASU is not expected to have a material impact on our Consolidated Financial Statements.
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NON-GAAP FINANCIAL MEASURES
This document contains non-GAAP financial measures that we believe provide useful information to investors to understand our results of operations or financial condition. We caution investors not to place undue reliance on such non-GAAP financial measures, but to consider them with the most directly comparable GAAP financial measures. Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as a substitute for our results reported under GAAP.
The following tables present the computation of non-GAAP financial measures used in the MD&A, as well as the reconciliation to the comparable GAAP financial measure, as applicable:
Table 22: Reconciliation of Tangible Book Value per Common Share (non-GAAP)
(dollars in millions, except per share data) March 31, 2026 December 31, 2025
Book value per common share(1)
$56.48 $56.39
Tangible book value per common share:
Common stockholders' equity
$24,061 $24,206
Less: Goodwill
8,221 8,187
Less: Other intangible assets
112 115
Add: Deferred tax liabilities related to goodwill and other intangible assets
437 437
Tangible common equity (non-GAAP)(2)
$16,165 $16,341
Common shares outstanding at period end
426,023,578 429,242,174
Tangible book value per common share (non-GAAP)(3)
$37.94 $38.07
(1) Represents the most directly comparable GAAP financial measure to tangible book value per common share and is calculated based on common stockholders' equity divided by common shares outstanding at period end.
(2) Tangible common equity is a non-GAAP financial measure that excludes the impact of intangible assets, net of deferred taxes.
(3) Tangible book value per common share is a non-GAAP financial measure and is calculated based on tangible common equity divided by common shares outstanding at period end. We believe this non-GAAP financial measure serves as a useful tool to help evaluate the strength and discipline of a company's capital management strategies and as a conservative measure of total company value.
Table 23: Reconciliation of Return on Average Tangible Common Equity (non-GAAP)
Three Months Ended March 31,
(dollars in millions) 2026 2025
Return on average common equity(1)
8.19 % 6.21 %
Net income available to common stockholders $484 $340
Net income available to common stockholders (annualized) 1,964 1,378
Return on average tangible common equity:
Average common equity $23,995 $22,188
Less: Average goodwill 8,198 8,187
Less: Average other intangibles 114 142
Add: Average deferred tax liabilities related to goodwill and other intangible assets 437 438
Average tangible common equity (non-GAAP)(2)
$16,120 $14,297
Return on average tangible common equity (non-GAAP)(3)
12.19 % 9.64 %
(1) Represents the most directly comparable GAAP financial measure to return on average tangible common equity and is calculated based on annualized net income available to common stockholders divided by average common equity.
(2) Average tangible common equity is a non-GAAP financial measure that excludes the impact of intangible assets, net of deferred taxes.
(3) Return on average tangible common equity is a non-GAAP financial measure and is calculated based on annualized net income available to common stockholders divided by average tangible common equity. We believe this non-GAAP financial measure serves as a useful tool to compare the profitability of financial institutions and assess the efficiency of their capital utilization without the impact of intangible assets, net of deferred taxes.
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Table 24: Reconciliation of Net Interest Income and Net Interest Margin on an FTE Basis (non-GAAP)
Three Months Ended March 31,
(dollars in millions) 2026 2025
Net interest income (annualized)
$6,337 $5,637
Average interest-earning assets
201,929 195,058
Net interest margin(1)
3.14 % 2.89 %
Net interest income $1,562 $1,391
FTE adjustment 3 4
Net interest income on an FTE basis (non-GAAP)(2)
$1,565 $1,395
Net interest income on an FTE basis (annualized) (non-GAAP)(2)
6,350 5,653
Net interest margin on an FTE basis (non-GAAP)(2)(3)
3.14 % 2.90 %
(1) Represents the most directly comparable GAAP financial measure to net interest margin on an FTE basis and is calculated based on annualized net interest income divided by average interest-earnings assets.
(2) FTE basis financial measures and ratios are adjusted for the tax-exempt status of income from certain assets held by the Company using the federal statutory tax rate of 21% and are considered non-GAAP financial measures. We believe this allows management to better assess the comparability of revenue from both taxable and tax-exempt sources.
(3) Calculated based on annualized net interest income on an FTE basis divided by average interest-earnings assets.
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