Page
Forward-Looking Statements 6
Introduction 7
Executive Summary 7
Consolidated Statement of Operations Analysis 10
Consolidated Balance Sheet Analysis 15
Business Segments 17
Risk Management 19
Credit Risk 19
Market Risk 24
Liquidity Risk 27
Operational Risk 30
Compliance Risk 31
Capital 31
Critical Accounting Estimates 34
Accounting and Reporting Developments 36
Non-GAAP Financial Measures 38
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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 integrate 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 June 30, 2026, we had total assets of $233.8 billion, total deposits of $185.6 billion, and total stockholders’ equity of $26.2 billion. In addition, we had total client assets of $65.7 billion, including assets under management of $38.7 billion, representing assets for which continuous and regular supervisory or management services are provided, and transactional assets of $27.0 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 period. 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 $587 million and $1.1 billion for the three and six months ended June 30, 2026, respectively, increased $151 million and $295 million, with earnings per diluted common share up $0.38 to $1.30 and up $0.73 to $2.42, compared to the same periods in 2025.
•Net interest income of $1.6 billion and $3.2 billion for the three and six months ended June 30, 2026, respectively, increased $194 million and $365 million, and net interest margin of 3.16% and 3.15%, respectively, 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.
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•Noninterest income of $652 million and $1.3 billion for the three and six months ended June 30, 2026, respectively, increased $52 million and $114 million compared to the same periods in 2025, driven by growth across numerous fee categories, primarily capital markets and wealth fees, partially offset by mortgage banking fees driven by lower MSR valuation results, net of hedge impact.
•Noninterest expense of $1.4 billion and $2.8 billion for the three and six months ended June 30, 2026, respectively, increased $75 million and $139 million compared to the same periods in 2025, driven by salaries and employee benefits reflecting hiring related to the Private Bank and Private Wealth build-out, and compensation associated with growth in capital markets fees.
•Provision expense of $134 million and $274 million for the three and six months ended June 30, 2026, respectively, decreased $30 million and $43 million compared to the same periods in 2025, reflecting the runoff of certain retail portfolios and improving credit trends and loan mix.
•The efficiency ratio of 61.1% and 62.3% for the three and six months ended June 30, 2026, respectively, compared to 64.8% and 66.3% for the same periods in 2025.
•ROTCE of 13.9% and 13.1% for the three and six months ended June 30, 2026, respectively, compared to 11.0% and 10.4% for the same periods in 2025.
•Tangible book value per common share of $38.29 at June 30, 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.
Share Repurchases
During the three months ended June 30, 2026, the Parent Company repurchased $225 million of its outstanding common stock, with remaining capacity of $775 million as of June 30, 2026. See Note 10 and Item 2 for additional information on share repurchase activity.
Preferred Stock
On July 30, 2026, we issued $400 million, or 400,000 shares, of 6.750% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series J (the “Series J Preferred Stock”), par value of $25 per share with a liquidation preference of $1,000 per share. Holders of the Series J Preferred Stock will be entitled to receive dividend payments only when, as, and if declared by our Board of Directors. Any such dividends will be payable quarterly in arrears beginning on January 6, 2027.
We intend to use the net proceeds from the issuance of the Series J Preferred Stock to redeem some or all outstanding shares of our Series G Preferred Stock on the dividend payment date of October 6, 2026. Any remaining proceeds will be used for general corporate purposes. If we decide to redeem some or all of the Series G Preferred Stock, we will announce the redemption by press release or Form 8-K and an appropriate notice of redemption.
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 elected 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. 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. We continue to monitor these proposals and evaluate their potential impact on our regulatory capital ratios.
Deposit Insurance
In June 2026, the FDIC issued a notice of proposed rulemaking to amend its regulations for determining risk-based deposit insurance assessments for IDIs. The proposal would decrease initial base deposit insurance assessment rate schedules by 1 basis point and provide a downward resolution readiness adjustment to assessment rates for large institutions, such as CBNA. The resolution readiness adjustment includes a 0.5 basis point adjustment for passing virtual data room testing and a 0.5 basis point adjustment for providing prescribed data access. We are currently evaluating the proposal to determine the benefit to the Company.
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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 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.
Table 1: Major Components of Net Interest Income
Three Months Ended June 30,
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 $10,839 $103 3.78 % $8,217 $92 4.40 % $2,622 (62) bps
Taxable investment securities 48,087 446 3.71 46,537 428 3.69 1,550 2
Non-taxable investment securities 1 — 2.60 1 — 2.60 — —
Total investment securities 48,088 446 3.71 46,538 428 3.69 1,550 2
Commercial and industrial 52,214 707 5.35 44,936 549 4.84 7,278 51
Commercial real estate 24,334 333 5.41 26,487 384 5.73 (2,153) (32)
Total commercial 76,548 1,040 5.37 71,423 933 5.17 5,125 20
Residential mortgages 35,793 367 4.09 33,420 327 3.92 2,373 17
Home equity 19,876 319 6.43 17,324 308 7.14 2,552 (71)
Automobile 1,667 20 4.78 3,705 41 4.41 (2,038) 37
Education 8,183 124 6.11 8,660 128 5.94 (477) 17
Other retail 4,061 98 9.67 4,277 114 10.66 (216) (99)
Total retail 69,580 928 5.34 67,386 918 5.46 2,194 (12)
Total loans and leases 146,128 1,968 5.36 138,809 1,851 5.31 7,319 5
Loans held for sale 1,715 26 6.04 2,754 36 5.29 (1,039) 75
Interest-earning assets 206,770 2,543 4.90 196,318 2,407 4.89 10,452 1
Noninterest-earning assets 22,493 21,343 1,150
Total assets $229,263 $217,661 $11,602
Liabilities and Stockholders’ Equity
Checking with interest $38,632 $132 1.38 % $33,847 $123 1.46 % $4,785 (8)
Savings 23,780 64 1.06 25,536 85 1.34 (1,756) (28)
Money market 60,295 374 2.49 54,716 376 2.75 5,579 (26)
Time 21,032 177 3.39 22,679 218 3.85 (1,647) (46)
Total interest-bearing deposits 143,739 747 2.08 136,778 802 2.35 6,961 (27)
Short-term borrowed funds 989 9 3.43 925 9 3.96 64 (53)
Long-term borrowed funds 13,112 156 4.74 12,499 159 5.07 613 (33)
Total borrowed funds 14,101 165 4.65 13,424 168 5.00 677 (35)
Total interest-bearing liabilities 157,840 912 2.31 150,202 970 2.59 7,638 (28)
Noninterest-bearing demand deposits 39,881 37,350 2,531
Other noninterest-bearing liabilities 5,592 5,503 89
Total liabilities 203,313 193,055 10,258
Stockholders’ equity 25,950 24,606 1,344
Total liabilities and stockholders’ equity $229,263 $217,661 $11,602
Interest rate spread 2.59 % 2.30 % 29
Net interest income and net interest margin $1,631 3.16 % $1,437 2.94 % 22
Net interest income and net interest margin, FTE(1) $1,634 3.17 % $1,441 2.95 % 22
Memo: Total deposits (interest-bearing and noninterest-bearing demand) $183,620 $747 1.63 % $174,128 $802 1.85 % $9,492 (22) bps
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Six Months Ended June 30,
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 $10,461 $194 3.69 % $8,155 $181 4.41 % $2,306 (72) bps
Taxable investment securities 47,511 870 3.67 46,304 846 3.66 1,207 1
Non-taxable investment securities 1 — 2.60 1 — 2.60 — —
Total investment securities 47,512 870 3.67 46,305 846 3.66 1,207 1
Commercial and industrial 51,183 1,351 5.25 44,271 1,064 4.78 6,912 47
Commercial real estate 24,367 661 5.39 26,749 771 5.73 (2,382) (34)
Total commercial 75,550 2,012 5.30 71,020 1,835 5.14 4,530 16
Residential mortgages 35,442 720 4.06 33,147 645 3.89 2,295 17
Home equity 19,555 626 6.45 16,988 601 7.14 2,567 (69)
Automobile 1,878 44 4.73 4,047 88 4.40 (2,169) 33
Education 8,312 251 6.09 9,670 276 5.76 (1,358) 33
Other retail 4,039 199 9.94 4,385 235 10.79 (346) (85)
Total retail 69,226 1,840 5.34 68,237 1,845 5.44 989 (10)
Total loans and leases 144,776 3,852 5.32 139,257 3,680 5.29 5,519 3
Loans held for sale 1,613 47 5.85 1,975 52 5.30 (362) 55
Interest-earning assets 204,362 4,963 4.85 195,692 4,759 4.86 8,670 (1)
Noninterest-earning assets 22,395 21,297 1,098
Total assets $226,757 $216,989 $9,768
Liabilities and Stockholders’ Equity:
Checking with interest $37,834 $254 1.36 % $33,273 $233 1.41 % $4,561 (5)
Savings 23,937 129 1.08 25,647 174 1.37 (1,710) (29)
Money market 60,218 724 2.43 54,575 733 2.71 5,643 (28)
Time 20,900 355 3.42 22,977 457 4.01 (2,077) (59)
Total interest-bearing deposits 142,889 1,462 2.06 136,472 1,597 2.36 6,417 (30)
Short-term borrowed funds 723 13 3.53 800 17 4.20 (77) (67)
Long-term borrowed funds 12,099 295 4.87 12,578 317 5.04 (479) (17)
Total borrowed funds 12,822 308 4.80 13,378 334 4.99 (556) (19)
Total interest-bearing liabilities 155,711 1,770 2.29 149,850 1,931 2.59 5,861 (30)
Noninterest-bearing demand deposits 39,585 36,948 2,637
Other noninterest-bearing liabilities 5,433 5,736 (303)
Total liabilities 200,729 192,534 8,195
Stockholders’ equity 26,028 24,455 1,573
Total liabilities and stockholders’ equity $226,757 $216,989 $9,768
Interest rate spread 2.56 % 2.27 % 29
Net interest income and net interest margin $3,193 3.15 % $2,828 2.91 % 24
Net interest income and net interest margin, FTE(1) $3,199 3.16 % $2,836 2.92 % 24
Memo: Total deposits (interest-bearing and noninterest-bearing demand) $182,474 $1,462 1.62 % $173,420 $1,597 1.86 % $9,054 (24) 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 $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.
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Noninterest Income
The following table presents the components of noninterest income:
Table 2: Noninterest Income
Three Months Ended June 30, Six Months Ended June 30,
(dollars in millions) 2026 2025 Change Percent 2026 2025 Change Percent
Service charges and fees $117 $111 $6 5 % $229 $220 $9 4 %
Capital markets fees 153 105 48 46 287 205 82 40
Wealth fees 102 88 14 16 202 169 33 20
Card fees 89 90 (1) (1) 172 173 (1) (1)
Mortgage banking fees 42 73 (31) (42) 84 132 (48) (36)
Foreign exchange and derivative products 47 41 6 15 91 80 11 14
Letter of credit and loan fees 52 45 7 16 102 89 13 15
Securities gains, net 6 5 1 20 13 12 1 8
Other income(1) 44 42 2 5 78 64 14 22
Noninterest income $652 $600 $52 9 % $1,258 $1,144 $114 10 %
(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:
Table 3: Noninterest Expense
Three Months Ended June 30, Six Months Ended June 30,
(dollars in millions) 2026 2025 Change Percent 2026 2025 Change Percent
Salaries and employee benefits $745 $681 $64 9 % $1,503 $1,377 $126 9 %
Equipment and software 195 193 2 1 392 387 5 1
Outside services 174 169 5 3 336 324 12 4
Occupancy 108 108 — — 222 220 2 1
Other operating expense 172 168 4 2 319 325 (6) (2)
Noninterest expense $1,394 $1,319 $75 6 % $2,772 $2,633 $139 5 %
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.
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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 $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.
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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
June 30, 2026 December 31, 2025
(dollars in millions) Amortized Cost(1) Fair Value Amortized Cost(1) Fair Value
U.S. Treasury and other $4,499 $4,431 $3,163 $3,123
State and political subdivisions 1 1 1 1
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities 34,159 32,728 33,379 32,220
Other/non-agency 250 248 268 264
Total mortgage-backed securities 34,409 32,976 33,647 32,484
Collateralized loan obligations 40 40 89 89
Total debt securities available for sale $38,949 $37,448 $36,900 $35,697
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities $7,343 $6,491 $7,595 $6,812
Total mortgage-backed securities 7,343 6,491 7,595 6,812
Asset-backed securities 295 293 338 338
Total debt securities held to maturity $7,638 $6,784 $7,933 $7,150
Total debt securities available for sale and held to maturity $46,587 $44,232 $44,833 $42,847
Equity securities, at cost(2) $991 $991 $807 $807
Equity securities, at fair value(2) 386 386 317 317
(1) Excludes portfolio level basis adjustments of $(40) million and $17 million, respectively, for securities designated in active fair value hedge relationships under the portfolio layer method at June 30, 2026 and December 31, 2025.
(2) Included in Other assets in the Consolidated Balance Sheets.
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 June 30, 2026, U.S. Treasuries and mortgage-backed securities issued by GNMA and GSEs represented 99% of the fair value of our debt securities portfolio, with approximately $40.2 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 June 30, 2026, the portfolio’s average effective duration, including hedging actions to reduce duration, was 4.1 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) June 30, 2026 December 31, 2025 Change Percent
Commercial and industrial $53,467 $49,232 $4,235 9 %
Commercial real estate 23,817 24,580 (763) (3)
Total commercial 77,284 73,812 3,472 5
Residential mortgages 36,374 35,024 1,350 4
Home equity 20,276 19,069 1,207 6
Automobile 1,482 2,310 (828) (36)
Education 8,044 8,416 (372) (4)
Other retail 4,031 4,061 (30) (1)
Total retail 70,207 68,880 1,327 2
Total loans and leases $147,491 $142,692 $4,799 3 %
The increase in total loans and leases as of June 30, 2026 compared to December 31, 2025 reflects a $3.5 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 $1.3 billion 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) June 30, 2026 % of Total Deposits December 31, 2025 % of Total Deposits
Noninterest-bearing demand $40,939 22 % $40,417 22 %
Checking with interest 40,258 22 37,428 20
Savings 23,570 13 24,353 13
Money market 60,029 32 60,062 33
Time 20,824 11 21,053 12
Total deposits $185,620 100 % $183,313 100 %
Total deposits as of June 30, 2026 increased compared to December 31, 2025, reflecting growth in the Private Bank.
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) June 30, 2026 December 31, 2025
Estimated uninsured deposits(1) $89,617 $86,877
Less: Uninsured affiliate deposits eliminated in consolidation 12,368 11,555
Less: Preferred deposits(1)(2) 7,181 6,923
CFG adjusted estimated uninsured deposits, excluding preferred deposits 70,068 68,399
Total estimated insured/secured deposits $115,552 $114,914
Insured/secured deposits to total deposits 62 % 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.
Insured/secured deposit balances continue to be broadly stable as of June 30, 2026 compared to December 31, 2025. The decrease in the insured/secured deposits percentage during 2026 reflects growth in the Private Bank and a decrease in insured Treasury brokered deposits as we continued to optimize our deposit mix.
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Borrowed Funds
Total borrowed funds of $16.3 billion as of June 30, 2026 increased $5.1 billion compared to December 31, 2025, driven by an increase in FHLB advances and senior and subordinated debt, given net issuances, 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.
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 is managed by a segment head who reports, directly or indirectly, to the Chief Executive Officer, who has final authority for resource allocation and performance assessment. The business segments reflect this management structure and the manner in which financial information is currently evaluated by the Chief Executive Officer. See Note 16 for more information regarding our business segments.
The following tables present 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 June 30,
Consumer Banking Commercial Banking
(dollars in millions) 2026 2025 2026 2025
Net interest income $1,348 $1,218 $467 $439
Noninterest income 314 329 292 232
Total revenue 1,662 1,547 759 671
Noninterest expense 1,016 963 326 317
Profit (loss) before credit losses 646 584 433 354
Net charge-offs 72 81 63 84
Income (loss) before income tax expense (benefit) 574 503 370 270
Income tax expense (benefit) 148 127 90 64
Net income (loss) $426 $376 $280 $206
Average Balances:
Total assets $85,302 $78,822 $69,614 $66,284
Total loans and leases(1) 78,550 72,402 66,421 63,057
Deposits 136,722 127,271 44,064 42,481
Interest-earning assets 79,163 72,988 67,145 63,710
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Six Months Ended June 30,
Consumer Banking Commercial Banking
(dollars in millions) 2026 2025 2026 2025
Net interest income $2,657 $2,411 $923 $880
Noninterest income 613 626 555 447
Total revenue 3,270 3,037 1,478 1,327
Noninterest expense 2,044 1,917 660 644
Profit (loss) before credit losses 1,226 1,120 818 683
Net charge-offs 143 167 127 161
Income (loss) before income tax expense (benefit) 1,083 953 691 522
Income tax expense (benefit) 279 241 168 120
Net income (loss) $804 $712 $523 $402
Average Balances:
Total assets $84,590 $78,182 $68,681 $65,827
Total loans and leases(1) 77,824 71,732 65,502 62,749
Deposits 134,934 126,504 44,706 42,330
Interest-earning assets 78,433 72,315 66,250 63,366
(1) Includes LHFS.
Consumer Banking
Net interest income increased $130 million and $246 million for the three and six months ended June 30, 2026, respectively, compared to the same periods in 2025, driven by higher net interest margin and growth in average interest-earning assets.
Noninterest income decreased $15 million and $13 million for the three and six months ended June 30, 2026, respectively, compared to the same periods in 2025. A decline in mortgage banking fees driven by lower MSR valuation results, net of hedge impact, was partially offset by an increase in wealth fees primarily driven by growth in assets under management, reflecting net inflows and market appreciation.
Noninterest expense increased $53 million and $127 million for the three and six months ended June 30, 2026, respectively, compared to the same periods in 2025, driven primarily by salaries and benefits reflecting hiring related to the Private Bank and Private Wealth build-out.
Net charge-offs decreased $9 million and $24 million for the three and six months ended June 30, 2026, respectively, compared to the same periods in 2025, driven by other retail during the three-month period, and other retail and education during the six-month period.
Commercial Banking
Net interest income increased $28 million and $43 million for the three and six months ended June 30, 2026, respectively, compared to the same periods in 2025, driven by growth in average interest-earning assets.
Noninterest income increased $60 million and $108 million for the three and six months ended June 30, 2026, respectively, compared to the same periods in 2025, driven by capital markets fees reflecting 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.
Noninterest expense increased $9 million and $16 million for the three and six months ended June 30, 2026, respectively, compared to the same periods in 2025, driven primarily by salaries and benefits reflecting compensation associated with growth in capital markets fees.
Net charge-offs decreased $21 million and $34 million for the three and six months ended June 30, 2026, respectively, compared to the same periods in 2025, driven by CRE, partially offset by an increase in commercial and industrial.
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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 retail banking portfolio is comprised of five 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 June 30, 2026 and December 31, 2025.
Commercial
Our commercial banking portfolio consists of traditional commercial and industrial loans, commercial leases, and commercial real estate loans.
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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 $5.3 billion at June 30, 2026 decreased from $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 $2.2 billion at June 30, 2026 decreased from $2.6 billion at December 31, 2025 as repayments, upgrades, and charge-offs outpaced downgrades.
The following table presents our commercial and industrial loan portfolio by industry sector:
Table 9: Commercial and Industrial Loans by Industry Sector
June 30, 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 $9,852 7 % $8,579 6 %
Secured private credit finance 4,875 3 3,963 3
Other finance and insurance 5,615 4 4,633 3
Other manufacturing 3,619 2 3,604 3
Technology 3,387 2 3,203 2
Accommodation and food services 2,055 1 2,044 1
Health, pharma, and social assistance 2,374 2 2,368 2
Professional, scientific, and technical services 2,803 2 2,407 2
Energy and related 1,872 1 1,816 1
Other services 2,360 2 2,419 2
Wholesale trade 3,168 2 2,604 2
Retail trade 1,722 1 1,744 1
Arts, entertainment, and recreation 1,658 1 1,683 1
Administrative and waste management 1,577 1 1,486 1
Automotive 1,201 1 1,245 1
Rental and leasing 1,830 1 1,257 1
Consumer products manufacturing 586 1 717 1
Other 2,913 2 3,460 2
Total commercial and industrial $53,467 36 % $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 $3.1 billion at June 30, 2026 decreased from $3.7 billion at December 31, 2025. Approximately 97% of CRE loans remain current on payments as of June 30, 2026 as repayments, upgrades, and charge-offs outpaced downgrades.
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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
June 30, 2026 December 31, 2025
(dollars in millions) Balance % of Total Loans and Leases Balance % of Total Loans and Leases
Property type
Multifamily $8,637 6 % $9,196 6 %
Office
Credit tenant lease and life sciences(1) 1,845 1 2,043 1
Other general office 2,264 1 2,416 2
Industrial 2,445 2 2,369 2
Retail 2,738 2 2,714 2
Co-op 1,698 1 1,771 1
Data center 844 1 736 1
Hospitality 346 — 331 —
Other 3,000 2 3,004 2
Total commercial real estate $23,817 16 % $24,580 17 %
State
New York $6,159 4 % $6,238 4 %
New Jersey 2,907 2 2,899 2
Pennsylvania 2,026 1 2,166 2
California 2,926 2 2,775 2
Massachusetts 1,438 1 1,638 1
Texas 1,290 1 1,244 1
Florida 825 1 960 1
Other Southeast(2) 1,984 1 2,265 1
Other 4,262 3 4,395 3
Total commercial real estate $23,817 16 % $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
June 30, 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 98.63 % 0.20 % 0.10 % 0.47 % 0.60 % 98.64 % 0.27 % 0.13 % 0.40 % 0.56 %
Home equity 97.85 0.45 0.14 — 1.56 97.67 0.50 0.15 0.01 1.67
Automobile 94.80 2.77 1.01 — 1.42 95.37 2.55 0.87 — 1.21
Education 99.12 0.39 0.21 0.02 0.26 99.12 0.43 0.19 0.02 0.24
Other retail 97.99 0.62 0.42 — 0.97 97.44 0.86 0.57 — 1.13
Total retail 98.34 % 0.37 % 0.16 % 0.25 % 0.88 % 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) June 30, 2026 December 31, 2025 Change Percent
Commercial and industrial $244 $277 ($33) (12) %
Commercial real estate 574 618 (44) (7)
Total commercial 818 895 (77) (9)
Residential mortgages 220 196 24 12
Home equity 316 319 (3) (1)
Automobile 21 28 (7) (25)
Education 21 20 1 5
Other retail 39 46 (7) (15)
Total retail 617 609 8 1
Nonaccrual loans and leases $1,435 $1,504 ($69) (5 %)
Nonaccrual loans and leases to total loans and leases 0.97 % 1.05 % (8 bps)
Allowance for loan and lease losses to nonaccrual loans and leases 137 129 8 %
Allowance for credit losses to nonaccrual loans and leases 152 145 7 %
Nonaccrual loans and leases as of June 30, 2026 declined compared to December 31, 2025, driven by improvement in commercial, 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 June 30, 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
June 30, 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 $53,467 $521 0.98 % 36 % $49,232 $508 1.03 % 35 %
Commercial real estate 23,817 595 2.50 16 24,580 550 2.24 17
Total commercial 77,284 1,116 1.44 52 73,812 1,058 1.43 52
Residential mortgages 36,374 221 0.61 25 35,024 225 0.64 25
Home equity 20,276 120 0.59 14 19,069 126 0.66 13
Automobile 1,482 6 0.41 1 2,310 10 0.42 2
Education 8,044 259 3.22 5 8,416 261 3.10 6
Other retail 4,031 247 6.12 3 4,061 263 6.48 3
Total retail 70,207 853 1.22 48 68,880 885 1.28 48
Total loans and leases $147,491 $1,969 1.33 % 100 % $142,692 $1,943 1.36 % 100 %
Allowance for Unfunded Lending Commitments
Commercial(2) $177 1.67 % $194 1.70 %
Retail(3) 38 1.27 46 1.35
Total allowance for unfunded lending commitments 215 240
Allowance for credit losses $147,491 $2,184 1.48 % $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 June 30, 2026 increased $1 million compared to December 31, 2025, reflecting consideration for economic uncertainty and targeted risk concerns, largely offset by improved loan mix, given runoff of certain retail portfolios.
The following tables present 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 June 30,
2026 2025
(dollars in millions) Net Charge-Offs Average Balance Ratio Net Charge-Offs Average Balance Ratio
Commercial and industrial $49 $52,214 0.38 % $39 $44,936 0.35 %
Commercial real estate 22 24,334 0.36 53 26,487 0.80
Total commercial 71 76,548 0.37 92 71,423 0.51
Residential mortgages — 35,793 0.01 — 33,420 —
Home equity — 19,876 0.01 (2) 17,324 (0.05)
Automobile 1 1,667 0.19 3 3,705 0.36
Education 20 8,183 0.94 18 8,660 0.86
Other retail 43 4,061 4.22 56 4,277 5.23
Total retail 64 69,580 0.37 75 67,386 0.45
Total loans and leases $135 $146,128 0.37 % $167 $138,809 0.48 %
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Six Months Ended June 30,
2026 2025
(dollars in millions) Net Charge-Offs Average Balance Ratio Net Charge-Offs Average Balance Ratio
Commercial and industrial $84 $51,183 0.33 % $69 $44,271 0.31 %
Commercial real estate 60 24,367 0.50 104 26,749 0.79
Total commercial 144 75,550 0.39 173 71,020 0.49
Residential mortgages (2) 35,442 (0.01) — 33,147 —
Home equity 2 19,555 0.03 (2) 16,988 (0.03)
Automobile 3 1,878 0.28 11 4,047 0.56
Education 36 8,312 0.87 69 9,670 1.44
Other retail 90 4,039 4.48 116 4,385 5.35
Total retail 129 69,226 0.38 194 68,237 0.57
Total loans and leases $273 $144,776 0.38 % $367 $139,257 0.53 %
For the three and six months ended June 30, 2026, net charge-offs decreased $32 million and $94 million, respectively, and the net charge-off ratio decreased 11 basis points and 15 basis points, respectively, compared to the same periods in 2025. These declines during the three and six months ended June 30, 2026 are driven primarily by CRE and other retail, with education also a driver during the six-month period reflecting a $25 million charge-off resulting from the sale of education loans in the first quarter of 2025.
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.
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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 June 30, 2026 December 31, 2025
Gradual Change in Interest Rates
+200 1.7 % 2.0 %
+100 0.9 1.0
-100 (0.9) (1.1)
-200 (1.8) (2.4)
Instantaneous Change in Interest Rates
+200 1.8 % 1.8 %
+100 1.3 1.1
-100 (1.6) (1.9)
-200 (4.0) (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 June 30, 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.
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.
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The following table presents interest rate derivative contracts that we have entered into as of June 30, 2026 and December 31, 2025:
Table 16: Interest Rate Hedges Used to Manage Non-Trading Interest Rate Exposure
June 30, 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 $5,432 3.6 3.8 % 3.7 % $6,608 3.8 3.8 % 3.9 %
Total fair value hedges $5,432 $6,608
Cash flow hedges:
Asset conversion swaps:
Loans:
Swaps
Receive fixed/pay SOFR $30,000 1.2 3.5 3.7 $30,750 1.0 3.4 3.9
Receive fixed/pay SOFR - forward-starting 16,750 3.2 3.7 4.0 17,000 3.3 3.6 3.3
Basis swaps
Receive SOFR/pay 1-month term SOFR 8,000 0.7 — 3.7/3.6 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 $54,750 $60,750
Total hedges $60,182 $67,358
Included in AOCI are pretax net losses from terminated swaps of $123 million that will reduce net interest income by $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.
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.
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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, commodity prices, 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 June 30, 2026 For the Three Months Ended June 30, 2025
Market Risk Category Period End Average High Low Period End Average High Low
Interest Rate $1 $1 $1 $1 $1 $1 $1 $1
Foreign Exchange Currency Rate — — — — — — — —
Credit Spread 1 1 2 1 1 2 3 1
Commodity — — — — — — — —
General VaR 2 1 5 1 2 2 3 2
Specific Risk VaR — — — — — — — —
Total VaR $2 $1 $5 $1 $2 $2 $3 $2
Stressed General VaR $10 $7 $14 $3 $9 $13 $22 $6
Stressed Specific Risk VaR — — — — — — — —
Total Stressed VaR $10 $7 $14 $3 $9 $13 $22 $6
Market Risk Regulatory Capital $25 $45
Specific Risk Not Modeled Add-on 17 28
de Minimis Exposure Add-on 3 5
Total Market Risk Regulatory Capital $45 $78
Market Risk-Weighted Assets $567 $976
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.
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.
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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 and 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 June 30, 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 79.5%;
•Our total available liquidity, comprised of contingent liquidity and available discount window capacity, was approximately $89.4 billion:
◦Contingent liquidity was $70.2 billion, consisting of unencumbered high-quality liquid securities of $40.2 billion, unused FHLB capacity of $18.9 billion, and cash balances at the FRB of $11.1 billion; and
◦Available discount window capacity was $19.2 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 six months ended June 30, 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 six months ended June 30, 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 $2.6 billion and $2.3 billion as of June 30, 2026 and December 31, 2025, respectively.
During the three months ended June 30, 2026 and 2025, the Parent Company declared dividends on common stock of $198 million and $185 million, respectively, and declared dividends on preferred stock of $33 million and $34 million, respectively.
During the six months ended June 30, 2026 and 2025, the Parent Company declared dividends on common stock of $396 million and $371 million, respectively, and declared dividends on preferred stock of $66 million and $67 million, respectively.
During the three months ended June 30, 2026 and 2025, the Parent Company repurchased $225 million and $200 million, respectively, of its outstanding common stock, and repurchased $525 million and $400 million, respectively, during the six months ended June 30, 2026 and 2025.
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 six months ended June 30, 2026, CBNA issued $750 million of 4.192% fixed-to-floating rate senior notes due 2029.
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Credit Ratings
Credit ratings assigned by agencies such as Moody’s, S&P, 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 S&P, 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
June 30, 2026
Moody’s S&P 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
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.
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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.
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, absent other regulatory actions or our election to participate in the supervisory stress test in 2027.
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.
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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.
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
June 30, 2026 December 31, 2025
(dollars in millions) Amount Ratio Amount Ratio Required Minimum Capital Ratio(1)
CET1 capital
CFG $18,364 10.4 % $18,240 10.6 % 9.0 %
CBNA 20,868 11.9 20,946 12.3 7.0
Tier 1 capital
CFG 20,475 11.6 20,351 11.9 10.5
CBNA 20,868 11.9 20,946 12.3 8.5
Total capital
CFG 23,933 13.6 23,654 13.8 12.5
CBNA 24,075 13.7 24,135 14.1 10.5
Tier 1 leverage
CFG 20,475 9.2 20,351 9.5 4.0
CBNA 20,868 9.4 20,946 9.8 4.0
Risk-weighted assets
CFG 176,336 171,493
CBNA 175,098 170,656
Quarterly adjusted average assets(2)
CFG 223,517 215,321
CBNA 222,307 214,310
(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 June 30, 2026, CFG’s CET1, Tier 1, and Total capital ratios decreased compared to December 31, 2025. Common share repurchases, dividends, and a $4.8 billion increase in RWA were partially offset by net income. Higher commercial and industrial loan balances were the key driver for the increase in RWA.
At June 30, 2026, CBNA’s CET1, Tier 1, and Total capital ratios decreased compared to December 31, 2025. Dividend payments to the Parent Company and a $4.4 billion increase in RWA were partially offset by net income. Higher commercial and industrial loan balances were the key driver for the increase in RWA.
At June 30, 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) June 30, 2026 December 31, 2025
Total common stockholders' equity $24,072 $24,206
Adjustments:
Net unrealized (gains)/losses recorded in AOCI, net of tax:
Debt securities 1,731 1,603
Derivatives 286 118
Unamortized net periodic benefit costs 244 249
Deductions:
Goodwill, net of deferred tax liability (7,793) (7,763)
Other intangible assets, net of deferred tax liability (96) (104)
Deferred tax assets that arise from tax loss and credit carryforwards (80) (69)
Total CET1 capital 18,364 18,240
Qualifying preferred stock 2,111 2,111
Total Tier 1 capital 20,475 20,351
Qualifying subordinated debt(1) 1,376 1,239
Allowance for credit losses 2,184 2,183
Exclusions from Tier 2 capital:
Allowance on PCD assets (102) (119)
Adjusted allowance for credit losses 2,082 2,064
Total capital $23,933 $23,654
(1) As of June 30, 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 six months ended June 30, 2026:
•Repurchased $525 million of our outstanding common stock;
•Declared quarterly common stock dividends of $0.46 per share, aggregating to $396 million; and
•Declared preferred stock dividends aggregating to $66 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
June 30, 2026
CFG CBNA
(dollars in millions) CET1 Tier 1 Total CET1 Tier 1 Total
Regulatory capital, including AOCI impact:
Regulatory capital $18,364 $20,475 $23,933 $20,868 $20,868 $24,075
Unrealized gains (losses) on securities and pension (1,975) (1,975) (1,975) (1,956) (1,956) (1,956)
Deferred tax assets - securities and pension AOCI (35) (35) (35) (37) (37) (37)
Regulatory capital, including AOCI impact (non-GAAP) $16,354 $18,465 $21,923 $18,875 $18,875 $22,082
Risk-weighted assets, including AOCI impact:
Risk-weighted assets $176,336 $176,336 $176,336 $175,098 $175,098 $175,098
Unrealized gains (losses) on securities and pension (533) (533) (533) (514) (514) (514)
Deferred tax assets - securities and pension AOCI 1,599 1,599 1,599 1,576 1,576 1,576
Risk-weighted assets, including AOCI impact (non-GAAP) $177,402 $177,402 $177,402 $176,160 $176,160 $176,160
Ratio:
Regulatory capital ratio 10.4 % 11.6 % 13.6 % 11.9 % 11.9 % 13.7 %
Regulatory capital ratio, including AOCI impact (non-GAAP) 9.2 % 10.4 % 12.4 % 10.7 % 10.7 % 12.5 %
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 June 30, 2026 increased $1 million compared to December 31, 2025, reflecting consideration for economic uncertainty and targeted risk concerns, largely offset by improved loan mix, given runoff of certain retail portfolios.
As of June 30, 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%, consistent with the projection at December 31, 2025, and a start-to-trough real GDP decline of approximately 0.6%, which is slightly more severe than the 0.5% projection at December 31, 2025. More severe economic scenarios are applied to certain portfolios, such as CRE general office, with peak unemployment of approximately 9.5% and a start-to-trough real GDP decline of approximately 4.4%, compared to peak unemployment of approximately 9.4% and a start-to-trough real GDP decline of approximately 4.4% at December 31, 2025.
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 7.6% 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 1.5x 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 in this report 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 June 30, 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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Pronouncement Summary of Guidance Effects on Financial Statements
Environmental Credits and Environmental Credit Obligations Issued May 2026 •Defines environmental credits and environmental credit obligations. •Requires asset recognition when it is probable that an environmental credit will be used to settle an environmental credit obligation, transferred in an exchange transaction, or used in a nonreciprocal transfer. •Costs to obtain all other environmental credits are required to be expensed as incurred. •Requires disclosure of the total expense recognized for environmental credits not initially recognized as an asset or subsequently derecognized, as well as total impairment expense. •Requires disclosure of the nature of the change and the related effect on earnings if an entity changes its use or intended use of its environmental credits. •Required effective date: January 1, 2028. 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) June 30, 2026 December 31, 2025
Book value per common share(1) $56.95 $56.39
Tangible book value per common share:
Common stockholders' equity $24,072 $24,206
Less: Goodwill 8,220 8,187
Less: Other intangible assets 105 115
Add: Deferred tax liabilities related to goodwill and other intangible assets 438 437
Tangible common equity (non-GAAP)(2) $16,185 $16,341
Common shares outstanding at period end 422,677,660 429,242,174
Tangible book value per common share (non-GAAP)(3) $38.29 $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 June 30, Six Months Ended June 30,
(dollars in millions) 2026 2025 2026 2025
Return on average common equity(1) 9.31 % 7.18 % 8.75 % 6.70 %
Net income available to common stockholders $554 $402 $1,038 $742
Net income available to common stockholders (annualized) 2,219 1,614 2,092 1,497
Return on average tangible common equity:
Average common equity $23,839 $22,494 $23,917 $22,342
Less: Average goodwill 8,221 8,187 8,209 8,187
Less: Average other intangibles 109 134 111 138
Add: Average deferred tax liabilities related to goodwill and other intangible assets 438 438 437 438
Average tangible common equity (non-GAAP)(2) $15,947 $14,611 $16,034 $14,455
Return on average tangible common equity (non-GAAP)(3) 13.91 % 11.05 % 13.05 % 10.35 %
(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 June 30, Six Months Ended June 30,
(dollars in millions) 2026 2025 2026 2025
Net interest income (annualized) $6,542 $5,770 $6,440 $5,704
Average interest-earning assets 206,770 196,318 204,362 195,692
Net interest margin(1) 3.16 % 2.94 % 3.15 % 2.91 %
Net interest income $1,631 $1,437 $3,193 $2,828
FTE adjustment 3 4 6 8
Net interest income on an FTE basis (non-GAAP)(2) $1,634 $1,441 $3,199 $2,836
Net interest income on an FTE basis (annualized) (non-GAAP)(2) 6,555 5,786 6,453 5,720
Net interest margin on an FTE basis (non-GAAP)(2)(3) 3.17 % 2.95 % 3.16 % 2.92 %
(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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