CITIZENS FINANCIAL GROUP INC/RI
For the period ended Dec 31, 2025. Filed Feb 12, 2026.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Feb 12, 2026
CFG$63.24-0.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-02-13.
0000759944-25-000013
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsIntroductionFinancial PerformanceNet Interest IncomeNoninterest IncomeNoninterest ExpenseProvision for Credit LossesIncome Tax ExpenseBusiness Operating SegmentsResults of Operations - 2023 compared with 2022SecuritiesLoans and LeasesCredit QualityDepositsBorrowed FundsCapital and Regulatory MattersLiquidityCritical Accounting EstimatesAccounting and Reporting DevelopmentsRisk GovernanceMarket RiskNon-GAAP Financial Measures and ReconciliationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-02-12.
0000759944-26-000028
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsIntroductionExecutive SummaryConsolidated Statement of Operations Analysis - 2025 compared with 2024Consolidated Statement of Operations Analysis - 2024 compared with 2023Consolidated Balance Sheet AnalysisBusiness SegmentsRisk ManagementCredit RiskMarket RiskLiquidity RiskOperational RiskCompliance RiskCapitalCritical Accounting EstimatesAccounting and Reporting DevelopmentsNon-GAAP Financial MeasuresThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 377 previous paragraphs and 396 current paragraphs.
201 unchanged; 100 reworded; 93 added; 72 removed; 4 previous and 2 current paragraphs rearranged.
Tables are not compared: 36 previous and 31 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (93)
Current report
Citizens Financial Group, Inc. | 37
Current report
This summary highlights select financial information of the Company as well as information regarding certain significant events and transactions occurring during the year ended December 31, 2025. 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 – 2025 compared with 2024” and “Consolidated Balance Sheet Analysis.”
Current report
•Net interest income of $5.9 billion increased $220 million and net interest margin of 2.97% increased 13 basis points compared to 2024. The increase in net interest income is driven by higher net interest margin which reflects lower funding costs, including the reduction of higher-cost funding given the auto loan portfolio runoff and education loan sale, lower terminated swap impacts, and fixed-rate asset repricing benefits, partially offset by lower asset yields.
Current report
•Noninterest income of $2.4 billion increased $218 million compared to 2024, reflecting growth across a number of fee categories, primarily wealth and capital markets fees.
Current report
•Noninterest expense of $5.3 billion increased $77 million compared to 2024, driven by salaries and employee benefits reflecting hiring related to the Private Bank and Private Wealth build-out, strong capital markets fee performance, and increased medical benefit costs, partially offset by a decline in other operating expense primarily driven by lower FDIC deposit insurance costs.
Current report
•Provision expense of $608 million decreased $79 million compared to 2024, reflecting improving loan mix and reduced CRE.
Current report
•Tangible book value per common share of $38.07 increased 18% from 2024, driven by a decrease in common shares outstanding of eleven million and a net increase in tangible common equity of $2.1 billion. The increase in tangible common equity is primarily attributable to increases in AOCI of $1.6 billion and retained earnings of $933 million, including net income of $1.8 billion for the year ended December 31, 2025.
Current report
See “Non-GAAP Financial Measures” for more information regarding the ROTCE and tangible book value per common share non-GAAP financial measures presented herein.
Current report
During the first quarter of 2025, we entered into an agreement to sell $1.9 billion of education loans and subsequently reclassified these loans to LHFS. Upon reclassification to LHFS, a charge-off of $25 million was recognized, which was covered by existing reserves. This transaction settled ratably each quarter throughout 2025.
Current report
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. During 2025, the Parent Company repurchased $600 million of its outstanding common stock, with remaining capacity of $1.3 billion as of December 31, 2025. See Note 15 and Item 5 for additional information on share repurchase activity.
Current report
On July 31, 2025, we issued $400 million, or 400,000 shares, of 6.500% fixed-rate reset non-cumulative perpetual Series I Preferred Stock, par value of $25 per share with a liquidation preference of $1,000 per share. Holders of Series I Preferred Stock will be entitled to receive dividend payments only when, as, and if declared by our Board of Directors. Dividends are payable quarterly in arrears on January 6, April 6, July 6, and October 6 of each year.
Current report
The net proceeds from the issuance of the Series I Preferred Stock were used to redeem all of the outstanding shares of our 5.650% fixed-rate reset non-cumulative perpetual Series F Preferred Stock on October 6, 2025.
Current report
For more information regarding our Series I Preferred Stock issuance and Series F Preferred Stock redemption, see Note 15.
Current report
On October 15, 2025, we announced that our Board of Directors declared a quarterly common stock dividend of $0.46 per share, a $0.04, or 9.5%, increase compared to the prior quarter. The dividend was paid on November 12, 2025 to shareholders of record at the close of business on October 29, 2025.
Current report
On July 4, 2025, H.R. 1, entitled the One Big Beautiful Bill Act, was signed into law. This bill includes a broad range of tax reform provisions affecting individuals and businesses, including extending and modifying certain key Tax Cuts & Jobs Act provisions, extending certain Inflation Reduction Act energy incentives while accelerating the phase-out of others, and implementing various other tax cuts and spending measures. We have completed our evaluation of the bill and do not expect it to have a material impact on our Consolidated Financial Statements.
Current report
See “Regulation and Supervision” in Item 1 for 2025 developments related to regulations to which we are subject.
Current report
CONSOLIDATED STATEMENT OF OPERATIONS ANALYSIS – 2025 compared with 2024
Current report
(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.
Current report
Net interest income increased $220 million, or 4%, and net interest margin increased 13 basis points compared to 2024. The increase in net interest income is driven by higher net interest margin which reflects lower funding costs, including the reduction of higher-cost funding given the auto loan portfolio runoff and education loan sale, lower terminated swap impacts, and fixed-rate asset repricing benefits, partially offset by lower asset yields.
Current report
Average deposits increased $1.2 billion compared to 2024, driven primarily by growth in the Private Bank, partially offset by a reduction in higher-cost brokered deposits.
Current report
The following table presents changes in net interest income attributable to volume and rate changes for each major interest-earning asset and interest-bearing liability category:
Current report
The following table presents the components of noninterest income:
Current report
•Wealth fees increased reflecting growth in assets under management, primarily driven by net inflows as well as market appreciation;
Current report
•Capital markets fees increased driven by higher loan syndication and equity underwriting fees, partially offset by lower M&A fees;
Current report
•Mortgage banking fees increased driven by higher MSR valuation results, net of hedging; and
Current report
The following table presents the components of noninterest expense:
Current report
•Salaries and employee benefits increased reflecting hiring related to the Private Bank and Private Wealth build-out, strong capital markets fee performance, and increased medical benefit costs; and
Current report
•Other operating expense declined driven primarily by lower FDIC deposit insurance costs, partially offset by higher operating costs.
Current report
Provision expense of $608 million compared with a provision of $687 million for 2024, reflecting improving loan mix and reduced CRE.
Current report
CONSOLIDATED STATEMENT OF OPERATIONS ANALYSIS – 2024 compared with 2023
Current report
The following table presents the major components of securities at amortized cost and fair value:
Showing the first 40 of 93 passages. Open the source sections for the rest.
Removed paragraphs (72)
Previous report
This document contains non-GAAP financial measures denoted as “Underlying” results and “including AOCI impact.” Underlying results for any given reporting period exclude certain items that may occur in that period which management does not consider indicative of our on-going financial performance. We believe these non-GAAP financial measures provide useful information to investors because they are used by management to evaluate our operating performance and make day-to-day operating decisions. In addition, we believe our Underlying results in any given reporting period reflect our on-going financial performance in that period and, accordingly, are useful to consider in addition to our GAAP financial results. We further believe the presentation of Underlying results increases comparability of period-to-period results.
Previous report
Non-GAAP measures are denoted throughout our MD&A by the use of the term “Underlying.” Where there is a reference to these metrics in that paragraph, all measures that follow are on the same basis when applicable. For more information on the computation of non-GAAP financial measures, see “Non-GAAP Financial Measures and Reconciliations.”
Previous report
Results reflect notable items of $98 million or $0.21 per diluted common share, net of tax benefit, compared to $357 million or $0.75 per diluted common share, net of tax benefit, in 2023.
Previous report
(1) Includes integration related costs associated with acquisitions.
Previous report
(2)Primarily includes our TOP revenue and efficiency initiatives for the years ended December 31, 2024 and 2023.
Previous report
(3)Represents an industry-wide FDIC special assessment. For more information, see “Regulation and Supervision - Deposit Insurance” in Item 1.
Previous report
•Net income available to common stockholders decreased $119 million to $1.4 billion compared to 2023.
Previous report
◦On an Underlying basis, net income available to common stockholders of $1.5 billion compared to $1.8 billion in 2023.
Previous report
◦On an Underlying basis, earnings per diluted common share of $3.24 compared to $3.88 in 2023.
Previous report
•Total revenue decreased $415 million to $7.8 billion compared to 2023, driven by a decrease of 10% in net interest income.
Previous report
◦On an Underlying basis, the efficiency ratio of 65.2% compared to 60.8% in 2023.
Previous report
◦On an Underlying basis, ROTCE of 10.5% compared to 13.5%.
Previous report
•Tangible book value per common share of $32.34 increased 5% from 2023.
Previous report
For additional information regarding our financial performance, see “Results of Operations — 2024 compared with 2023” included in this report.
Previous report
(1) See Note 1 for information regarding updates to the Consolidated Balance Sheets during 2024.
Previous report
(2) Net interest income and net interest margin is presented on a FTE basis using the federal statutory tax rate of 21%. The FTE impact is predominantly attributable to commercial and industrial loans for the periods presented.
Previous report
Net interest income decreased $608 million, or 10%, compared to 2023, reflecting lower net interest margin and a decrease of 2% in average interest-earning assets.
Previous report
Net interest margin on a FTE basis decreased 25 basis points compared to 2023, reflecting higher funding and swap costs and the impact of building liquidity, partially offset by higher interest-earning-asset yields and the benefit of Non-Core portfolio runoff.
Previous report
(2) See Note 1 for information regarding updates to the Consolidated Balance Sheets during 2024.
Previous report
•Capital markets fees increased given higher underwriting, M&A advisory and loan syndication fees.
Previous report
•Card fees increased driven primarily by higher credit card fees, including favorable vendor contract negotiations.
Previous report
•Wealth fees reflect increased sales activity and higher asset management fees.
Previous report
•Foreign exchange and derivative products revenue decreased given reduced client activity related to interest rate and commodities hedging.
Previous report
•Mortgage banking fees declined reflecting lower production and servicing fees and a decline in MSR valuation, net of hedge impact.
Previous report
The decrease in noninterest expense for the year ended December 31, 2024, compared to 2023, was driven primarily by other operating expense associated with FDIC deposit insurance, reflecting an estimate of CBNA’s special assessment of $31 million and $225 million, respectively, recognized in 2024 and 2023. Other operating expense also reflects lower fraud losses and marketing and travel-related expenses. These decreases were partially offset by salaries and employee benefits reflecting hiring related to our Private Bank and Private Wealth build-out and commercial middle market bankers in expansion markets, and equipment and software given technology investments and maintenance.
Previous report
Provision expense of $687 million for 2024 was stable compared to 2023. The provision expense for 2024 reflects higher reserves against the CRE office portfolio, primarily driven by elevated interest rates and return-to-office dynamics and unsecured products and education loans given recent inflationary pressures and government actions, partially offset by a decline in total loans and leases.
Previous report
We have three business operating segments: Consumer Banking, Commercial Banking, and Non-Core. See Note 26 for more information regarding our business operating segments.
Previous report
Net charge-offs increased $51 million compared to 2023, driven primarily by other retail and education.
Previous report
Noninterest expense decreased $54 million compared to 2023, driven primarily by salaries and employee benefits reflecting lower headcount.
Previous report
Net interest income increased $12 million compared to 2023, driven by a decline in funding costs relative to the highest-cost marginal funding sources during 2024, including secured borrowings collateralized by auto loans and FHLB advances.
Previous report
Average loans and leases decreased $4.8 billion compared to 2023, driven by planned Non-Core portfolio runoff.
Previous report
See Note 1 for a description of changes made to the Company’s loans and leases presentation during 2024.
Previous report
See Note 1 for a description of changes made to the Company’s loans and leases presentation during 2024.
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Reworded paragraphs (100)
Previous wording
Citizens Financial Group, Inc. is one of the nation’s oldest and largest financial institutions, with $217.5 billion in assets as of December 31, 2024. Headquartered in Providence, Rhode Island, we offer a broad range of retail 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 3,100 ATMs and more than 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. 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.
Current wording
Citizens Financial Group, Inc. is one of the nation’s oldest and largest financial institutions, with $226.4 billion in assets as of December 31, 2025. Headquartered in Providence, Rhode Island, 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 3,100 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.
Previous wording
Net income decreased $99 million, with earnings per diluted common share down $0.10 to $3.03 compared to 2023.
Current wording
•Net income of $1.8 billion increased $322 million, with earnings per diluted common share up $0.83 to $3.86 compared to 2024.
Previous wording
•The efficiency ratio of 67.0% was stable compared to 2023.
Current wording
•The efficiency ratio of 64.40% compared to 67.03% in 2024.
Previous wording
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 our 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 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” and “Risk Governance” sections of this report.
Current wording
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 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 this report.
Previous wording
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, and LHFS. 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.
Current wording
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.
Previous wording
Average interest-earning assets decreased $3.6 billion compared to 2023, driven by a decline in total loans and leases, partially offset by an increase in investment securities and cash held in interest-bearing deposits.
Current wording
Average interest-earning assets decreased $1.0 billion compared to 2024, driven by a decline in total loans and leases and cash held in interest-bearing deposits, partially offset by an increase in investment securities and loans held for sale.
Previous wording
Average total borrowed funds decreased $2.5 billion compared to 2023, reflecting a decline in FHLB advances driven by Non-Core portfolio runoff, partially offset by a remix of funding to long-term senior debt and secured borrowings collateralized by loans.
Current wording
Average total borrowed funds decreased $1.8 billion compared to 2024, driven by a decline in auto collateralized borrowings, given runoff of the auto loan portfolio, and FHLB advances.
Previous wording
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 “Analysis of Financial Condition — Credit Quality” for more information.
Current wording
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.
Previous wording
Income tax expense of $379 million decreased $43 million and our effective income tax rate of 20.1% decreased from 20.8% compared to 2023. These decreases reflect a higher benefit from tax-advantaged investments.
Current wording
Income tax expense of $497 million increased $118 million, and our effective income tax rate of 21.3% increased from 20.1% compared to 2024. These increases were driven by a reduced benefit from tax-advantaged investments on higher pre-tax income.
Previous wording
(1) Excludes portfolio level basis adjustments of $(75) million and $60 million, respectively, for securities designated in active fair value hedge relationships under the portfolio layer method at December 31, 2024 and 2023.
Current wording
(1) Excludes portfolio level basis adjustments of $17 million and $(75) million, respectively, for securities designated in active fair value hedge relationships under the portfolio layer method at December 31, 2025 and 2024.
Previous wording
The primary objective of our securities portfolio is to provide a readily available source of liquidity. The portfolio primarily includes high quality, highly liquid investments reflecting our ongoing commitment to maintain strong contingent liquidity levels and pledging capacity.
Current wording
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.
Previous wording
As of December 31, 2024, 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 $36.0 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.
Current wording
As of December 31, 2025, 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 $39.1 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.
Previous wording
For further discussion of the use of our securities as liquidity collateral and liquidity requirements, see the “Liquidity Risk Management and Governance” and “Regulation and Supervision — Liquidity Requirements” sections in this document.
Current wording
For further discussion of the use of our securities as liquidity collateral and liquidity requirements, see the “Liquidity Risk” and “Regulation and Supervision – Liquidity Requirements” sections in this document.
Previous wording
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 December 31, 2024, the portfolio’s average effective duration, including recent hedging actions to reduce duration, was 3.7 years compared to 3.9 years as of December 31, 2023.
Current wording
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 December 31, 2025, the portfolio’s average effective duration, including hedging actions to reduce duration, was 3.8 years compared with 3.7 years as of December 31, 2024.
Previous wording
The decrease in total loans and leases as of December 31, 2024 compared to December 31, 2023 reflects a $4.7 billion decrease in commercial given market conditions resulting in relatively low client demand and lower line of credit utilization, partially offset by growth in the Private Bank. Retail decreased $2.1 billion, primarily driven by planned Non-Core portfolio runoff, partially offset by growth in home equity and mortgage, including the Private Bank.
Current wording
The increase in total loans and leases as of December 31, 2025 compared to December 31, 2024 reflects a $4.0 billion 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 $547 million decrease driven by an agreement entered into during the first quarter to sell $1.9 billion of education loans, as well as runoff of the auto loan portfolio, largely offset by growth in home equity and mortgage, including the Private Bank.
Previous wording
Total deposits as of December 31, 2024 decreased compared to December 31, 2023, reflecting a decline in higher-cost Treasury deposits and lower commercial balances, largely offset by growth in Private Bank deposits.
Current wording
Total deposits as of December 31, 2025 increased compared to December 31, 2024, reflecting growth in the Private Bank and commercial, partially offset by a reduction in higher-cost Treasury brokered deposits.
Previous wording
Total borrowed funds of $12.4 billion as of December 31, 2024 decreased $1.6 billion compared to December 31, 2023, driven by a decline of approximately $4.2 billion in FHLB advances, partially offset by the issuance of senior debt and secured borrowings collateralized by loans. For more information regarding our borrowed funds, see “Liquidity” and Note 13.
Current wording
Total borrowed funds of $11.3 billion as of December 31, 2025 decreased $1.1 billion compared to December 31, 2024, driven by a decline in secured borrowings collateralized by loans and senior debt, partially offset by an increase in FHLB advances. For more information regarding our borrowed funds, see “Liquidity Risk” and Note 11.
Previous wording
The following table presents 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.
Current wording
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.
Previous wording
Net interest income increased $378 million compared to 2023, driven by higher net interest margin reflecting higher interest-earning asset yields and growth in average interest-earning assets. These increases were partially offset by higher funding costs.
Current wording
Net interest income increased $408 million compared to 2024, driven by higher net interest margin and growth in average interest-earning assets.
Previous wording
Noninterest income increased $64 million compared to 2023, driven by wealth fees reflecting increased sales activity and higher asset management fees, higher credit card fees, and service charges and fees given higher overdraft and cash management fees. These increases were partially offset by mortgage banking fees reflecting lower production and servicing fees and a decline in MSR valuation, net of hedge impact.
Current wording
Noninterest income increased $121 million compared to 2024, driven by wealth fees, mortgage banking fees, and service charges and fees, reflecting growth in assets under management, primarily driven by net inflows as well as market appreciation, higher MSR valuation results, net of hedging, and higher overdraft and cash management fees.
Previous wording
Noninterest expense increased $136 million compared to 2023, driven primarily by salaries and benefits reflecting our Private Bank and Private Wealth build-out.
Current wording
Noninterest expense increased $203 million compared to 2024, driven primarily by salaries and benefits reflecting hiring related to the Private Bank and Private Wealth build-out, as well as an increase in medical benefit costs, and outside services given investments across the enterprise.
Previous wording
Net interest income decreased $342 million compared to 2023, driven by lower net interest margin, a decline in average interest-earning assets and higher funding costs.
Current wording
Net interest income decreased $172 million compared to 2024, driven by lower net interest margin and a decline in average interest-earning assets.
Previous wording
Noninterest income increased $124 million compared to 2023, driven by capital markets fees reflecting higher underwriting, M&A advisory and loan syndication fees, partially offset by foreign exchange and derivative products revenue given reduced client activity related to interest rate and commodities hedging.
Current wording
Noninterest income increased $87 million compared to 2024, driven by capital markets fees reflecting higher loan syndication and equity underwriting fees, partially offset by lower M&A fees.
Previous wording
Net charge-offs increased $103 million compared to 2023, driven by the office segment of CRE, partially offset by a decline in commercial and industrial.
Current wording
Net charge-offs decreased $44 million compared to 2024, driven by CRE, partially offset by an increase in commercial and industrial.
Previous wording
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 levels of risk that we are willing to accept in the attainment of our strategic business and financial objectives are clearly understood.
Current wording
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.
Previous wording
Our risk management framework is embedded in our business through a “Three Lines of Defense” model which defines responsibilities and accountabilities for risk management activities.
Current wording
Our risk management framework is embedded in our business through a “Three Lines of Defense” model that defines responsibilities for risk management activities.
Previous wording
The business lines, including their associated support functions, are the first line of defense and are accountable for identifying, assessing, managing, and controlling the risks associated with the products and services they provide. The business lines are responsible for performing regular risk assessments to identify and assess the material risks that arise in their area of responsibility, complying with relevant risk policies, testing and certifying the adequacy and effectiveness of their operational and financial reporting controls on a regular basis, establishing and documenting operating procedures, and establishing a governance structure for identifying and managing risk.
Current wording
The business lines, including their associated support functions, are the first line of defense and are responsible for identifying, assessing, managing, and controlling the risks associated with the products and services they provide. The business lines are responsible for performing regular risk assessments to identify and assess the material risks that arise in their area of responsibility, complying with relevant risk policies, testing and certifying the adequacy and effectiveness of operational and financial reporting controls on a regular basis, establishing and documenting operating procedures, and establishing a governance structure for identifying and managing risk.
Previous wording
The second line of defense includes independent monitoring and control functions accountable for the development of risk and control frameworks and related policies, and their associated implementation. This centralized risk function is independent from the business and is accountable for overseeing and challenging our business lines on the effective management of their risks including, but not limited to, credit, market, operational, regulatory, reputational, interest rate, liquidity, legal and strategic risks.
Current wording
The second line of defense includes independent monitoring and control functions responsible for the development and implementation of risk and control frameworks, along with related policies. This centralized risk function is independent from the business and is responsible for overseeing and challenging our business lines on the effective management of their risks including, but not limited to, credit, market, operational, regulatory, reputational, interest rate, liquidity, legal, and strategic risks.
Previous wording
Our Internal Audit function is the third line of defense providing independent assurance of the effectiveness of our internal controls and governance practices so that risk is managed appropriately for the size, complexity, and risk profile of the organization. Internal Audit has complete and unrestricted access to all of our records, physical properties and personnel. Internal Audit issues a report following each internal review and provides an audit opinion to the Board’s Audit Committee on a quarterly basis.
Current wording
Our Internal Audit function is the third line of defense and provides independent assurance of the effectiveness of our internal controls and governance practices so that risk is managed appropriately for the size, complexity, and risk profile of the organization. Internal Audit has complete and unrestricted access to all of our records, physical properties and personnel. Internal Audit issues a report following each internal review and provides an audit opinion to the Board’s Audit Committee on a quarterly basis.
Previous wording
Credit Review reports to the Chief Audit Executive and provides the Board, senior management and other stakeholders with independent assurance on the quality of credit portfolios and adherence to agreed Credit Risk Appetite and Credit Policies and processes. In line with its procedures and regulatory expectations, the Credit Review function undertakes a program of portfolio testing, assessing and reporting through four Risk Pillars of Asset Quality, Rating and Data Integrity, Risk Management and Credit Risk Appetite.
Current wording
Credit Review reports to the Chief Risk Officer and provides the Board, senior management, and other stakeholders with independent assurance on the quality of credit portfolios and adherence to agreed Credit Risk Appetite and Credit Policies and processes. In line with its procedures and regulatory expectations, the Credit Review function undertakes a program of portfolio testing, assessing and reporting through four Risk Pillars of Asset Quality, Rating and Data Integrity, Risk Management, and Credit Risk Appetite.
Previous wording
Risk appetite is a strategic business and risk management tool. We define our risk appetite as the maximum limit of acceptable risk beyond which we could be unable to achieve our strategic objectives and capital adequacy obligations.
Current wording
Risk appetite is a strategic business and risk management tool that we define as the maximum limit of acceptable risk beyond which we could be unable to achieve our strategic objectives and capital adequacy obligations.
Previous wording
Our principal non-market risks include credit, operational, regulatory, reputational, liquidity and strategic risks. We are also subject to certain market risks which include potential losses arising from changes in interest rates, foreign exchange rates, equity prices, commodity prices and/or other relevant market rates or prices. Market risk in our business arises from trading activities that serve customer needs, including interest rate hedging, foreign exchange risk and non-trading activities within capital markets. We have established enterprise-wide policies and methodologies to identify, measure, monitor and report on market risk. We actively manage both trading and non-trading market risks. See “Market Risk” for further information. Our risk appetite is reviewed and approved annually by the Board Risk Committee.
Current wording
Our principal non-market risks include credit, operational, regulatory, reputational, liquidity, and strategic risks. We are also subject to certain market risks which include potential losses arising from changes in interest rates, foreign exchange rates, equity prices, commodity prices, and/or other relevant market rates or prices. Market risk in our business arises from trading activities that serve customer needs, including interest rate hedging, foreign exchange risk, and non-trading activities within capital markets. We have established enterprise-wide policies and methodologies to identify, measure, monitor, and report on market risk, actively managing both trading and non-trading market risks. See “Market Risk” for further information. Our risk appetite is reviewed and approved annually by the Board Risk Committee.
Previous wording
Our consumer banking portfolio is comprised of five categories of loans to consumers: residential mortgages, home equity, education, automobile, and other retail.
Current wording
Our consumer banking portfolio is comprised of five retail categories of loans: residential mortgages, home equity, education, automobile, and other retail.
Previous wording
Borrower performance of the home equity portfolio is tracked on a monthly basis for internal reporting and risk management purposes by segmenting the portfolio into pools, which are typically based on origination vintage tranches. The performance of any related mortgage loans is also tracked regardless of whether we hold a lien on such loans. A third-party service provider is utilized to obtain updated loan information, including lien and collateral data that is aggregated from both public and private sources.
Current wording
Borrower performance of the home equity portfolio is tracked on a monthly basis for internal reporting and risk management purposes by segmenting the portfolio into pools, which are typically based on origination vintage tranches. For home equity loans where we hold a subordinated lien position the performance of any related mortgage loans is also tracked regardless of whether we hold a lien on such loans. A third-party service provider is utilized to obtain updated loan information, including lien and collateral data that is aggregated from both public and private sources.
Previous wording
Our standardized loan grading system considers many components that directly correlate to loan quality and likelihood of repayment. Substantially all loans categorized as Classified are managed by Citizens Restructuring Management, a specialized group of credit professionals that handle the day-to-day management of loan workouts, commercial recoveries, and problem loan sales to reduce losses and maximize recoveries. Their responsibilities include developing and implementing action plans, assessing risk ratings, and determining the adequacy of the ACL, accrual status, and ultimate collectability of the Classified loan portfolio.
Current wording
Substantially all loans with an internal risk rating of Substandard Accrual or Nonaccrual, or loans categorized as Classified, are managed by Citizens Restructuring Management, a specialized group of credit professionals that handle the day-to-day management of loan workouts, commercial recoveries, and problem loan sales to reduce losses and maximize recoveries. Their responsibilities include developing and implementing action plans, assessing risk ratings, and determining the adequacy of the ACL, accrual status, and ultimate collectability of the Classified loan portfolio.
Previous wording
For more information on the distribution of commercial loans by vintage date and regulatory classification rating, see Note 6.
Current wording
Criticized balances include loans with an internal risk rating of Special Mention, Substandard Accrual, or Nonaccrual. Total commercial criticized balances of $6.3 billion compared to $7.1 billion at December 31, 2024. 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.
Previous wording
The ACL of $2.3 billion at December 31, 2024 remained stable compared to December 31, 2023.
Current wording
Commercial and industrial criticized balances of $2.6 billion at December 31, 2025 remained stable compared to December 31, 2024.
Previous wording
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, multi-family, office spaces, industrial facilities, and retail shopping centers. These loans are typically repaid through cash flows generated from the operation, sale, or refinance of the property. Risk on these loans is mitigated by requiring collateral values that exceed the loan amount and underwriting the loan with projected cash flow in excess of the debt service requirement.
Current wording
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. These loans are typically repaid through cash flows generated from the operation, sale, or refinancing of the property. Risk on these loans is mitigated by requiring collateral values that exceed the loan amount and underwriting the loan with projected cash flow in excess of the debt service requirement.
Previous wording
Our CRE construction portfolio primarily consists of multi-family, warehouse, office and data center property types. Loans in this portfolio are generally for construction projects that have been pre-sold or pre-leased, have secured permanent financing, or are made to real estate companies with significant equity invested in the project. A specialized real estate lending group is responsible for this portfolio and actively monitors the construction phase and manages the loan disbursements according to the predetermined construction schedule. Construction loans, which are generally short term in nature, are utilized to fund the development or renovation of real estate, with repayment often tied to the successful completion and stabilization of the property.
Current wording
Our CRE construction portfolio primarily consists of multifamily, warehouse, office, and data center property types. Loans in this portfolio are generally for construction projects that have been pre-sold or pre-leased, have secured permanent financing, or are made to real estate companies with significant equity invested in the project. Portfolio Management, CRE Loan Operations, and Collateral Risk Services are responsible for this portfolio and actively monitor the construction phase and manage the loan disbursements according to the predetermined construction schedule. Construction loans, which are generally short term in nature, are utilized to fund the development or renovation of real estate, with repayment often tied to the successful completion and stabilization of the property.
Previous wording
Property-type concentrations and both geographic and property-type performance metrics are actively monitored for all CRE loan types, with a focus on loans identified as higher risk based on our risk rating methodology. The portfolio is diversified by property type and loan size, representing a significant portion of the credit risk management strategies employed for this portfolio. Subsequent to the origination, the Credit Review group provides an independent review and assessment of the quality of the underwriting and risk from new loan originations.
Current wording
Property-type concentrations and both geographic and property-type performance metrics are actively monitored for all CRE loan types, with a focus on loans identified as higher risk based on our risk rating methodology. The portfolio is diversified by property type and loan size, representing a significant portion of the credit risk management strategies employed for this portfolio. Subsequent to origination, the Credit Review group provides an independent review and assessment of the quality of the underwriting and risk from new loan originations.
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Current report — wording carried from elsewhere
•Service charges and fees increased driven primarily by higher overdraft and cash management fees.
Current report — wording carried from elsewhere
The primary drivers for the change in noninterest expense for the year ended December 31, 2025, compared to 2024, are described below:
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Previous report — wording carried elsewhere
RESULTS OF OPERATIONS — 2023 compared with 2022
Previous report — wording carried elsewhere
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.
Previous report — wording carried elsewhere
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.
Previous report — wording carried elsewhere
A primary source of our structural interest rate risk relates to faster repricing of floating-rate loans relative to core deposit funding. This source of asset sensitivity is more biased toward the short end of the yield curve.