CITIZENS FINANCIAL GROUP INCRI

We have three business operating segments: Consumer Banking, Commercial Banking, and Non-Core. See Note 1 for a description of segment changes made during the third quarter of 2023 and Note 16 for more information regarding our business operating segments.

The following tables present certain financial data of our business operating segments. Total business operating segment financial results differ from total consolidated financial results. These differences are reflected in Other non-segment operations. See Note 16 for additional information.

(1)Includes LHFS.

Consumer Banking

Net interest income increased $82 million for the three months ended March 31, 2024, compared to the same period in 2023, driven by higher net interest margin reflecting higher interest-earning asset yields and growth in average interest-earning assets. This increase was partially offset by higher funding costs.

Noninterest income increased $2 million for the three months ended March 31, 2024, compared to the same period in 2023, driven by trust and investment services fees reflecting increased sales activity and asset management fees, and higher credit card fees. This increase was partially offset by mortgage banking fees reflecting lower servicing and production fees and service charges and fees given seasonality and lower overdraft fees.

Noninterest expense increased $46 million for the three months ended March 31, 2024, compared to the same period in 2023, driven by salaries and benefits reflecting our Private Bank start-up investment and equipment and software driven by technology investments. This increase was partially offset by reductions in other operating expense associated with lower fraud and travel.

Net charge-offs increased $18 million for the three months ended March 31, 2024, compared to the same period in 2023, driven primarily by other retail and education.

Commercial Banking

Net interest income decreased $83 million for the three months ended March 31, 2024, compared to the same period in 2023, driven by lower net interest margin, a decline in average interest-earning assets and higher funding costs, partially offset by higher interest-earning asset yields.

Noninterest income increased $26 million for the three months ended March 31, 2024, compared to the same period in 2023, driven by capital markets fees reflecting higher bond and equity underwriting fees, and M&A advisory fees. This increase was partially offset by foreign exchange and derivative products revenue given reduced client activity related to interest rate and commodities hedging.

Noninterest expense decreased $14 million for the three months ended March 31, 2024, compared to the same period in 2023, driven primarily by salaries and employee benefits reflecting lower headcount.

Net charge-offs increased $34 million for the three months ended March 31, 2024, compared to the same period in 2023, driven by the general office segment of CRE.

Non-Core

Net interest income decreased $22 million for the three months ended March 31, 2024, compared to the same period in 2023, driven by the highest-cost implied marginal funding sources during 2024, including secured borrowings collateralized by auto loans and FHLB advances.

Average loans and leases decreased $5.1 billion for the three months ended March 31, 2024, compared to the same period in 2023, driven by planned Non-Core portfolio runoff.