CITIZENS FINANCIAL GROUP INC/RI

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.

The following tables present 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.

(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 $194 million and $365 million for the three and six months ended June 30, 2026, respectively, and net interest margin increased 22 basis points and 24 basis points, compared to the same periods in 2025. The increase in net interest income reflects an increase in interest-earning assets, higher net interest margin, terminated swap impacts, and fixed-rate asset repricing benefits.

Average interest-earning assets increased $10.5 billion and $8.7 billion for the three and six months ended June 30, 2026, respectively, compared to the same periods in 2025, driven by an increase in total loans and leases, cash held in interest-bearing deposits, and investment securities.

Average deposits increased $9.5 billion and $9.1 billion for the three and six months ended June 30, 2026, respectively, compared to the same periods 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 increased $677 million and decreased $556 million for the three and six months ended June 30, 2026, respectively, compared to the same periods in 2025. The fluctuation during the three- and six-month periods reflects an increase in FHLB advances and a decline in auto collateralized borrowings, given paydowns.

Noninterest Income

The following table presents the components of noninterest income:

(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 and six months ended June 30, 2026, compared to the same periods in 2025, are described below:

•Capital markets fees increased driven by higher M&A, loan syndication, and bond underwriting fees during the three- and six-month periods, with higher equity underwriting fees also a driver during the six-month period;

•Wealth fees increased primarily driven by growth in assets under management, reflecting net inflows and market appreciation; and

•Mortgage banking fees decreased primarily driven by lower MSR valuation results, net of hedge impact.

Noninterest Expense

The following table presents the components of noninterest expense:

The primary drivers for the change in noninterest expense for the three and six months ended June 30, 2026, compared to the same periods in 2025, are described below:

•Salaries and employee benefits increased reflecting hiring related to the Private Bank and Private Wealth build-out, and compensation associated with growth in capital markets fees;

•Outside services increased primarily driven by costs to implement our Reimagine the Bank program, which leverages technology innovation to reshape how we serve customers and operate our business; and

•Other operating expense declined during the six-month period reflecting lower FDIC deposit insurance costs.

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 $134 million and $274 million for the three and six months ended June 30, 2026, respectively, compared with a provision of $164 million and $317 million for the same periods in 2025, reflecting the runoff of certain retail portfolios and improving credit trends and loan mix.

Income Tax Expense

Income tax expense of $168 million and $301 million increased $50 million and $88 million for the three and six months ended June 30, 2026, respectively, compared to the same periods in 2025. The effective income tax rate of 22.3% and 21.4% for the three and six months ended June 30, 2026 increased from 21.4% and 20.9%, respectively, compared to the same periods in 2025. These increases were driven by a reduced benefit from tax-advantaged investments on higher pretax income. Provision for income taxes is calculated by applying the estimated annual effective tax rate to year-to-date pretax income, adjusting for discrete items that occurred during the period.