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What changed in Citizens Financial Group's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Citizens Financial Group's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+481 added−457 removedSource: 10-K (2025-02-13) vs 10-K (2024-02-16)

Top changes in Citizens Financial Group's 2024 10-K

481 paragraphs added · 457 removed · 359 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

91 edited+31 added−26 removed107 unchanged
Biggest changeWe expanded our learning academies as well as badging and bootcamp programs focusing on critical skills such as Innovation, Agile, Next Gen Tech, Banking and Credit, and Data & Analytics. Our culture is one of continuous learning, which we believe is crucial for colleagues to thrive as part of our organization and to feel a sense of accomplishment and purpose.
Biggest changeCitizens Talent Matters, launched in 2024, is a talent marketplace that creates personalized experiences to support skill-building and career advancement for colleagues. We have also expanded educational assistance and educational pathways for emerging and critical skills through our academies, which focus on areas such as Innovation, Agile, Next Gen Tech, Banking and Credit, and Data & Analytics.
We serve customers on a national basis through telephone service centers as well as through our online and mobile platforms where we offer customers the convenience of depositing funds, paying bills and transferring money between accounts and from person to person, as well as a host of other everyday transactions.
We serve customers on a national basis through telephone service centers and our online and mobile platforms where we offer customers the convenience of depositing funds, paying bills and transferring money between accounts and from person to person, as well as a host of other everyday transactions.
Some larger competitors, including certain national banks that compete in our market area, may offer a broader array of products and, due to their asset size, may be in a position to hold more exposure on their balance sheet.
Some larger competitors, including certain national banks that compete in our market area, may offer a broader array of products and be in a position to hold more exposure on their balance sheet due to their asset size.
Changes in applicable law or regulation, and in their interpretation and application by regulatory agencies and other governmental authorities, cannot be predicted, but may have a material effect on our business, financial condition or results of operations. We are subject to examinations by federal banking regulators, as well as the SEC, FINRA and various state insurance and securities regulators.
Changes in applicable law or regulation, and in their interpretation and application by regulatory agencies and other governmental authorities, cannot be predicted, but may have a material effect on our business, financial condition or results of operations. We are subject to examinations by federal banking regulators, as well as the SEC, FINRA, CFTC and various state insurance and securities regulators.
Our business strategy is designed to maximize the full potential of our businesses, drive sustainable growth and enhance profitability. Our success rests on our ability to distinguish ourselves as follows: Maintain a high-performing, customer-centric organization: We continually strive to enhance our “customer-first” culture by emphasizing the “voice of the customer” to deliver the best possible banking experience.
Our business strategy is designed to maximize the full potential of our business, drive sustainable growth and enhance profitability. Our success rests on our ability to distinguish ourselves as follows: Maintain a high-performing, customer-centric organization: We continually strive to enhance our “customer-first” culture by emphasizing the “voice of the customer” to deliver the best possible banking experience.
This statutory provision is commonly called the “Volcker Rule.” Under this rule, we are viewed as having “moderate” trading assets and liabilities, which subjects us to a simplified compliance program requirement that is appropriate for our activities, size, scope, and complexity. This Volcker Rule does not have a material impact on Citizens.
This statutory provision is commonly called the “Volcker Rule.” Under this rule, we are viewed as having “moderate” trading assets and liabilities, which subjects us to a simplified compliance program requirement that is appropriate for our activities, size, scope, and complexity. This rule does not have a material impact on Citizens.
Develop differentiated value propositions to acquire, deepen, and retain core customer segments: Our focus is on select customer segments where we believe we are well positioned to compete. In Consumer Banking, we focus on serving mass affluent and affluent customers, small businesses and high-net-worth individuals and families.
Develop differentiated value propositions to acquire, deepen, and retain core customer segments: Our focus is on select customer segments where we believe we are well positioned to compete. In Consumer Banking, we focus on serving mass affluent and affluent customers, small businesses and high-net-worth individuals.
For a further discussion of risks related to cybersecurity, see Item 1A “Risk Factors.” Citizens Financial Group, Inc. | 17 A financial institution is also required to notify its primary banking regulator within 36 hours of computer-security incidents that have materially disrupted or degraded, or is reasonably likely to materially disrupt or degrade its: • ability to carry out banking operations, activities, or processes, or deliver banking products and services to a material portion of its customer base; • business lines, including associated operations, services, functions, and support, that upon failure would result in a material loss of revenue, profit, or franchise value; or • operations, including associated services, functions, and support, the failure or discontinuance of which would pose a threat to the financial stability of the United States.
For further discussion of risks related to cybersecurity, see Item 1A “Risk Factors.” A financial institution is also required to notify its primary banking regulator within 36 hours of computer-security incidents that have materially disrupted or degraded, or is reasonably likely to materially disrupt or degrade its: • ability to carry out banking operations, activities, or processes, or deliver banking products and services to a material portion of its customer base; • business lines, including associated operations, services, functions, and support, that upon failure would result in a material loss of revenue, profit, or franchise value; or • operations, including associated services, functions, and support, the failure or discontinuance of which would pose a threat to the financial stability of the United States.
The Anti-Money Laundering Act of 2020 (“AMLA”), enacted in January 2021 as part of the National Defense Authorization Act, requires the U.S.
The Anti-Money Laundering Act of 2020 (“AMLA”), enacted in 2021 as part of the National Defense Authorization Act, requires the U.S.
Citizens Financial Group, Inc. | 14 Federal Deposit Insurance Act The FDIA requires, among other things, that federal banking regulators take “prompt corrective action” with respect to IDIs that do not meet minimum capital requirements, as described above in “Capital and Stress Testing Requirements.” The FDIA sets forth the following five capital categories: “well-capitalized,” “adequately capitalized,” “undercapitalized,” “significantly undercapitalized” and “critically undercapitalized.” An IDI’s capital category is determined based on how its capital levels compare with various relevant capital measures and certain other factors that are established by regulation.
Federal Deposit Insurance Act The FDIA requires, among other things, that federal banking regulators take “prompt corrective action” with respect to IDIs that do not meet minimum capital requirements, as described above in “Capital and Stress Testing Requirements.” The FDIA sets forth the following five capital categories: “well-capitalized,” “adequately capitalized,” “undercapitalized,” “significantly undercapitalized” and “critically undercapitalized.” An IDI’s capital category is determined based on how its capital levels compare with various relevant capital measures and certain other factors that are established by regulation.
We continue to embrace flexibility and manage our hybrid workforce in a manner that ensures colleagues are working in ways that best support our customers, foster engagement and innovation, and maintain our company culture.
We embrace flexibility and manage our hybrid workforce in a manner that ensures colleagues are working in ways that best support our customers, foster engagement and innovation, and maintain our company culture.
Long-Term Debt Requirements On August 29, 2023, the federal banking regulators issued a proposal that would require large bank holding companies and IDIs with total assets of $100 billion or more, such as CFG and CBNA, to maintain a minimum amount of long-term debt.
Long-Term Debt Requirements In August 2023, the federal banking regulators issued a proposal that would require large bank holding companies and IDIs with total assets of $100 billion or more, such as CFG and CBNA, to maintain a minimum amount of long-term debt.
Non-Core includes our indirect auto and certain purchased consumer loan portfolios that we discontinued the origination of as part of our recently announced balance sheet optimization strategy. Other includes treasury activities, wholesale funding, the securities portfolio, community development assets, and other unallocated assets, liabilities, capital, revenues, provision (benefit) for credit losses and expenses, including income tax expense.
Non-Core includes our indirect auto and certain purchased consumer loan portfolios that we discontinued the origination of in 2023 as part of our balance sheet optimization strategy. Other includes treasury activities, wholesale funding, the securities portfolio, community development assets, and other unallocated assets, liabilities, capital, revenues, provision (benefit) for credit losses and expenses, including income tax expense.
In Consumer Banking, the industry has become increasingly dependent on and oriented toward technology-driven delivery systems, permitting transactions to be conducted through online and mobile channels. In addition, technology has lowered barriers to entry and made it possible for non-bank institutions to attract funds and provide lending and other financial products and services.
Citizens Financial Group, Inc. | 8 In Consumer Banking, the industry has become increasingly dependent on and oriented toward technology-driven delivery systems, permitting transactions to be conducted through online and mobile channels. In addition, technology has lowered barriers to entry and made it possible for non-bank institutions to attract funds and provide lending and other financial products and services.
The FDIC, as required under the FDIA, established a plan in September 2020 to restore the DIF reserve ratio, 1.13% as of September 30, 2023, to meet or exceed the statutory minimum of 1.35% within eight years. This plan did not include an increase in the deposit insurance assessment rate.
The FDIC, as required under the FDIA, established a plan in September 2020 to restore the DIF reserve ratio, 1.25% as of September 30, 2024, to meet or exceed the statutory minimum of 1.35% within eight years. This plan did not include an increase in the deposit insurance assessment rate.
These documents are made available on our website as soon as reasonably practicable after they are electronically filed with or furnished to the SEC. The SEC also maintains an internet site (www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.
These documents are made available on our website as soon as reasonably practicable after they are electronically filed with or furnished to the SEC. The SEC also maintains a website (www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.
Citizens Financial Group, Inc. | 8 In Commercial Banking, we face competition in all our client segments from a variety of industry participants including traditional banking institutions, particularly large regional banks, as well as commercial finance companies, leasing companies, other non-bank lenders, and institutional investors, including collateralized loan obligation managers, hedge funds and private equity firms.
In Commercial Banking, we face competition in all our client segments from a variety of industry participants including traditional banking institutions, particularly large regional banks, as well as commercial finance companies, leasing companies, other non-bank lenders, and institutional investors, including collateralized loan obligation managers, hedge funds and private equity firms.
Our goal is to create an environment where colleagues can thrive personally and professionally and can maximize their potential. As of December 31, 2023, Citizens had 17,570 full-time equivalent employees, primarily across New England and the Mid-Atlantic.
Our goal is to create an environment where colleagues can thrive personally and professionally and can maximize their potential. As of December 31, 2024, Citizens had 17,287 full-time equivalent employees, primarily across New England and the Mid-Atlantic.
We have deployed and scaled an agile operating model to improve our speed-to-market, deliver innovative products and services and strengthen collaboration across teams. We will also continue to actively incubate new innovative ideas and harness external innovation through FinTech partnerships to help deliver differentiated value-added experiences for our customers.
We have deployed and scaled an agile operating model to improve our speed-to-market, deliver innovative products and services and strengthen collaboration across teams. We also continue to actively incubate new innovative ideas and harness external innovation through FinTech partnerships and access to venture capital firms to help deliver differentiated value-added experiences for our customers.
Section 23B of the Federal Reserve Act requires that transactions, including all covered transactions, be on terms substantially the same, or at least as favorable to the bank, as those prevailing at the time for comparable transactions with non-affiliates (the “Market Terms Requirement”).
Section 23B requires that transactions, including all covered transactions, be on terms substantially the same, or at least as favorable to the bank, as those prevailing at the time for comparable transactions with non-affiliates (the “Market Terms Requirement”).
In addition to federal registration, state securities commissions require the registration of certain broker-dealers. Heightened Risk Governance Standards CBNA is subject to OCC guidelines that impose heightened risk governance standards on large national banks with average total consolidated assets of $50 billion or more.
In addition to federal registration, state securities commissions require the registration of certain broker-dealers. Citizens Financial Group, Inc. | 20 Heightened Risk Governance Standards CBNA is subject to OCC guidelines that impose heightened risk governance standards on large national banks with average total consolidated assets of $50 billion or more.
In addition, some of our competitors may not be subject to the same regulatory requirements as we are and, therefore, may have lower costs they can pass on to customers in the form of more favorable terms.
In addition, some of our competitors may not be subject to the same regulatory requirements as we are and, therefore, may have lower costs they can pass on to customers.
In particular, the FRB reviews the dividend policies and share repurchases of a large BHC based on capital plans submitted as part of the CCAR process and the results of stress tests, as discussed above.
In particular, the FRB reviews the dividend policies and share repurchases of a large BHC based on capital plans submitted as part of the CCAR process and the results of stress tests, as discussed under “Capital and Stress Testing Requirements” above.
Anti-Money Laundering The Bank Secrecy Act (“BSA”) and the Patriot Act contain anti-money laundering (“AML”) and financial transparency provisions intended to detect and prevent the use of the U.S. financial system for money laundering and terrorist financing activities.
Citizens Financial Group, Inc. | 19 Anti-Money Laundering The Bank Secrecy Act (“BSA”) and the Patriot Act contain anti-money laundering (“AML”) and financial transparency provisions intended to detect and prevent the use of the U.S. financial system for money laundering and terrorist financing activities.
Citizens Financial Group, Inc. | 13 Resolution Planning Category IV firms such as CFG are no longer required to submit resolution plans under section 165(d) of the Dodd-Frank Act. However, CBNA is required to periodically file an IDI resolution plan with the FDIC.
Resolution Planning Category IV firms such as CFG are no longer required to submit resolution plans under section 165(d) of the Dodd-Frank Act. However, CBNA is required to periodically file an IDI resolution plan with the FDIC.
As of December 31, 2023, both the Parent Company and CBNA were well-capitalized.
As of December 31, 2024, both the Parent Company and CBNA were well-capitalized.
These programs are designed to transform how we operate and to improve the effectiveness, efficiency, and competitiveness of our franchise. Our TOP 8 program was completed in 2023, and we launched a TOP 9 program to allow us to continue to self-fund investments.
These programs are designed to transform how we operate and to improve the effectiveness, efficiency, and competitiveness of our franchise. Our TOP 9 program was completed in 2024, and we launched a TOP 10 program in 2025 to allow us to continue to self-fund investments.
Citizens Financial Group, Inc. | 12 For BHCs with $100 billion or more in assets, such as us, the FRB’s capital rules impose an institution-specific SCB on top of each of the three minimum risk-based capital ratios listed above.
For BHCs with $100 billion or more in assets, such as us, the FRB’s capital rules impose an institution-specific SCB on top of each of the three minimum risk-based capital ratios listed above.
Citizens Financial Group, Inc. | 16 Under sections 22(g) and (h) of the Federal Reserve Act and the FRB’s Regulation O, we are also subject to quantitative restrictions on extensions of credit to executive officers, directors, principal stockholders and their related interests.
Under sections 22(g) and (h) of the Federal Reserve Act and the FRB’s Regulation O, we are also subject to quantitative restrictions on extensions of credit to executive officers, directors, principal stockholders and their related interests.
Competition among providers of financial products and services continues to increase, with consumers having the opportunity to select from a growing variety of traditional and nontraditional alternatives. The ability of non-banking financial institutions, including FinTech companies, to provide services previously limited to commercial banks has also intensified competition.
Competition among providers of financial products and services continues to increase, with consumers and businesses having the opportunity to select from a growing variety of traditional and nontraditional alternatives, such as Private Credit/Direct lenders. The ability of non-banking financial institutions, including FinTech companies, to provide services previously limited to commercial banks has also intensified competition.
On October 24, 2023, the federal banking regulators issued a joint final rule that revises the agencies’ CRA regulations.
In October 2023, the federal banking regulators issued a joint final rule that revises the agencies’ CRA regulations.
The U.S. financial regulators, including the FRB, the OCC and the SEC, jointly proposed regulations in 2011 and again in 2016 to implement the incentive compensation requirements of Section 956 of the Dodd-Frank Act. These regulations have not been finalized.
The U.S. financial regulators, including the FRB, the OCC and the SEC, jointly proposed regulations in 2011 and again in 2016 to implement the incentive compensation requirements of Section 956 of the Dodd-Frank Act. Regulations implementing the requirements of Section 956 of the Dodd-Frank Act have not been finalized and future implementation remains uncertain.
The emergence of digital-only banking models has increased and we expect this trend to continue. Given their lower cost structure, these models are often, on average, able to offer higher rates on deposit products than retail banking institutions with a traditional branch footprint.
The emergence of digital-only banking models has increased and we expect this trend to continue. Given their lower cost structure, these models are typically able to offer higher rates on deposit products than traditional retail banking institutions.
The final rule also requires registrants to describe, on Form 10-K, their processes for assessing, identifying and managing material risks from cybersecurity threats and whether such risks have materially affected the registrant. Registrants must also describe Board oversight of risks from cybersecurity threats and management’s role and expertise in assessing and managing material risks from such threats.
In Form 10-K filings, registrants are required to describe their processes for assessing, identifying and managing material risks from cybersecurity threats and whether such risks have materially affected the registrant. Registrants must also describe Board oversight of risks from cybersecurity threats and management’s role and expertise in assessing and managing material risks from such threats.
In addition to other limitations, our ability to make any capital distributions, including dividends and share repurchases, is subject to the prior approval of the FRB if we are required to resubmit our capital plan. See “Capital and Stress Testing Requirements” above.
In addition to other limitations, our ability to make any capital distributions, including dividends and share repurchases, is subject to the prior approval of the FRB if we are required to resubmit our capital plan.
Intellectual Property In the highly competitive banking industry in which we operate, trademarks, service marks and logos are important to the success of our business. We own and license a variety of trademarks, service marks, logos and pending registrations and are spending significant resources to develop our stand-alone brands.
Intellectual Property In the highly competitive banking industry in which we operate, trademarks, service marks and logos are important to the success of our business. We own and license a variety of trademarks, service marks, and logos and are developing resources to enhance our stand-alone brands.
Under the proposal, Category III and IV firms, including the Company as a Category IV firm, would become subject to the same capital treatment regarding the inclusion of AOCI, deductions, and rules for minority interest as Category I and II firms.
Under the proposal, the Company and CBNA would become subject to the same capital treatment regarding the inclusion of AOCI, deductions, and rules for minority interest as Category I and II firms.
For more details regarding our regulatory capital and SCB, see the “Capital and Regulatory Matters” section of Item 7. We are also subject to the FRB's risk-based capital requirements for market risk. See the “Market Risk” section of Item 7 for additional details.
We are also subject to the FRB's risk-based capital requirements for market risk. See the “Market Risk” section of Item 7 for additional details. For more details regarding our regulatory capital and SCB, and the AOCI impact of the Basel III Endgame proposal on our regulatory capital, see the “Capital and Regulatory Matters” section of Item 7.
The CFPB also has examination and primary enforcement authority with respect to depository institutions with $10 billion or more in assets, including the authority to prevent unfair, deceptive or abusive acts or practices in connection with the offering of consumer financial products. The OCC also examines our retail activities.
The CFPB also has examination and primary enforcement authority with respect to depository institutions with $10 billion or more in assets, such as CBNA, including the authority to prevent unfair, deceptive or abusive acts or practices in connection with the offering of consumer financial products.
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 syndicated loans, corporate finance, mergers and acquisitions, and debt and equity capital markets capabilities.
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 syndicated loans, corporate finance, mergers and acquisitions, and debt and equity capital markets capabilities. Commercial Banking is organized around client segments and their banking needs.
The FRB’s regulations which are applicable to BHCs, such as the Parent Company, separately define “well capitalized”as having a tier 1 capital ratio of at least 6% and a total capital ratio of at least 10%.
Citizens Financial Group, Inc. | 14 The FRB’s regulations which are applicable to BHCs, such as the Parent Company, separately define “well capitalized” as having a tier 1 capital ratio of at least 6% and a total capital ratio of at least 10%.
Category III and IV firms would also be required to calculate counterparty credit exposure relating to derivative transactions using the standardized approach for counterparty credit risk. Additionally, Category IV firms would become subject to the supplementary leverage ratio and the countercyclical capital buffer.
The Company and CBNA would also be required to calculate counterparty credit exposure relating to derivative transactions using the standardized approach for counterparty credit risk and would become subject to the supplementary leverage ratio and the countercyclical capital buffer.
The severity of the constraints depends on the amount of the shortfall and the institution’s “eligible retained income”, defined as the greater of four quarter trailing net income net of distributions and tax effects not reflected in net income, or the average four quarter trailing net income. On January 1, 2020, we adopted the CECL accounting standard.
The severity of the constraints depends on the amount of the shortfall and the institution’s “eligible retained income”, defined as the greater of four quarter trailing net income net of distributions and tax effects not reflected in net income, or the average four quarter trailing net income.
Our products and services are offered through more than 1,100 branches in 14 states and the District of Columbia and 105 retail and commercial non-branch offices, though certain lines of business serve national markets. At December 31, 2023, we had total assets of $222.0 billion, total deposits of $177.3 billion and total stockholders’ equity of $24.3 billion.
Our products and services are offered through more than 1,000 branches in 14 states and the District of Columbia and 97 retail and commercial non-branch offices, though certain lines of business serve national markets. At December 31, 2024, we had total assets of $217.5 billion, total deposits of $174.8 billion and total stockholders’ equity of $24.3 billion.
See Item 1C “Cybersecurity” for more information. State regulators have also been active in implementing privacy and cybersecurity standards and regulations. Recently, several states have adopted laws and regulations requiring certain financial institutions to implement cybersecurity programs and provide details with respect to these programs.
See Item 1C “Cybersecurity” for more information. State regulators have also been active in implementing privacy and cybersecurity standards and regulations. Several states have adopted laws and regulations requiring certain financial institutions to implement cybersecurity programs and provide details with respect to these programs. In addition, many states have implemented or modified their data breach notification and data privacy requirements.
Under the final rule, the special assessment is levied on an IDI’s assessment base, which is equal to estimated uninsured deposits as reported on the institution’s December 31, 2022 Call Report, excluding the first $5 billion in estimated uninsured deposits.
Under the final rule, the special assessment was levied on an IDI’s estimated uninsured deposits as reported on its December 31, 2022 Call Report, excluding the first $5 billion in estimated uninsured deposits.
The special assessment is imposed at an annual rate of approximately 13.4 basis points and will be collected over eight quarterly assessment periods beginning with the first quarter of 2024. Citizens Financial Group, Inc. | 15 The FDIC’s current estimate of the loss attributable to this systemic risk determination is $16.3 billion.
The special assessment was imposed at an annual rate of approximately 13.4 basis points to be collected over eight quarterly assessment periods beginning with the first quarter of 2024. The FDIC’s current estimate of the loss attributable to this systemic risk determination is $18.9 billion.
The proposal would also replace the existing models-based approaches for credit and operational risk, which currently apply only to Category I and II firms, with two new approaches applicable to Category I through IV firms. The first would use the existing standardized approach and a proposed revised market risk capital rule.
The proposal would also replace the existing models-based approaches for credit and operational risk, which currently apply to only Category I and II firms, with two new approaches applicable to Category I through IV firms.
The team works closely with industry-sector specialists within capital markets to advise our clients. Corporate Finance also provides acquisition and follow-on financing for new and recapitalized portfolio companies of key sponsors, with services meeting the unique and time-sensitive needs of private equity firms, management companies and funds, and underwriting and portfolio management expertise for leveraged transactions and relationships.
Corporate Finance also provides acquisition and follow-on financing for new and recapitalized portfolio companies of key sponsors, with services meeting the unique and time-sensitive needs of private equity firms, management companies and funds, and underwriting and portfolio management expertise for leveraged transactions and relationships.
Transactions with Affiliates and Insiders Sections 23A and 23B of the Federal Reserve Act establish certain quantitative limits and other prudential requirements for loans, purchases of assets, and certain other transactions between a member bank or its subsidiaries and its affiliates. The term “member bank” includes national banks such as CBNA.
Transactions with Affiliates and Insiders Sections 23A and 23B of the Federal Reserve Act and the FRB’s Regulation W establish certain quantitative limits and other prudential requirements for loans, purchases of assets, and certain other transactions between a member bank, including CBNA, or its subsidiaries and its affiliates.
In addition, in August 2023, the SEC adopted a final rule that requires the disclosure of material cybersecurity incidents on Form 8-K. Registrants must describe the material aspects of the nature, scope and timing of the incident, as well as the impact of the incident on the registrant.
In addition, the SEC requires registrants to disclose material cybersecurity incidents on Form 8-K, which must describe the material aspects of the nature, scope and timing of the incident, as well as the impact of the incident on the registrant.
Citizens Financial Group, Inc. | 7 Build excellent capabilities designed to help us stand out from competitors: We strive to deliver seamless, multi-channel experiences that allow customers to interact with us when, where and how they choose. We are enhancing capabilities in key areas including consumer lending, wealth, capital markets and payments.
Citizens Financial Group, Inc. | 7 Build excellent capabilities designed to help us stand out from competitors: We strive to deliver seamless, omni-channel experiences that allow customers to interact with us when, where and how they choose.
Community Reinvestment Act The CRA requires CBNA’s primary federal bank regulatory agency, the OCC, to evaluate the bank’s record in meeting the credit needs of the communities it serves, including low- and moderate-income neighborhoods and individuals.
We will continue to monitor developments on these laws and regulations. Citizens Financial Group, Inc. | 18 Community Reinvestment Act The CRA requires CBNA’s primary federal bank regulatory agency, the OCC, to evaluate the bank’s record in meeting the credit needs of the communities it serves, including low- and moderate-income neighborhoods and individuals.
Commercial Real Estate provides financing for projects primarily in the multi-family, office, industrial, retail, healthcare and hospitality sectors. Capital Markets and Advisory serves clients through key product groups including Corporate Finance, Capital Markets, and Global Markets. Corporate Finance provides advisory services to middle-market and mid-corporate clients, including mergers and acquisitions and capital structure advice.
Commercial Real Estate provides customized debt capital solutions for middle-market operators, institutional developers, investors, and REITs. Commercial Real Estate provides financing for projects primarily in the multi-family, office, industrial, retail, healthcare and hospitality sectors. Capital Markets and Advisory serves clients through key product groups including Corporate Finance, Capital Markets, and Global Markets.
These laws and regulations are intended primarily for the protection of customers, depositors, the DIF and the banking system as a whole and not for the protection of shareholders or other investors. The discussion below outlines the material elements of selected laws and regulations applicable to us and our subsidiaries.
These laws and regulations are intended primarily for the protection of customers, depositors, the DIF and the banking system as a whole and not for the protection of shareholders or other investors.
Standards for Safety and Soundness The FDIA requires the federal banking regulators to prescribe operational and managerial standards for all IDIs, including CBNA. Regulations and interagency guidelines adopted by these agencies set forth the safety and soundness standards used to identify and address problems at IDIs before capital becomes impaired.
Regulations and interagency guidelines adopted by these agencies set forth the safety and soundness standards used to identify and address problems at IDIs before capital becomes impaired.
We have integrated the Investors acquisition and HSBC transaction and are focused on improving branch productivity and deepening relationships with those customers. By developing differentiated and targeted value propositions, building our fee-based businesses and developing innovative product solutions, we believe we can attract new customers, deepen relationships with existing customers and deliver an enhanced customer experience.
By developing differentiated and targeted value propositions, building our fee-based businesses and developing innovative product solutions, we believe we can attract new customers, deepen relationships with existing customers and deliver an enhanced customer experience.
Our Board of Directors and its Compensation and Human Resources Committee are responsible for overseeing our human capital management strategy, with senior management providing regular updates to facilitate that oversight. Leadership, Talent Development, and Talent Acquisition and Mobility Our leaders are the catalysts to achieve the culture we want to foster.
Our Board of Directors and its Compensation and Human Resources Committee are responsible for overseeing our human capital management strategy, with senior management providing regular updates to facilitate that oversight.
Guidance issued by the federal banking regulators is designed to ensure that incentive compensation arrangements take into account risk and are consistent with safe and sound practices.
We will continue to monitor the outcome of this preliminary injunction. Compensation Our compensation practices are subject to oversight by the federal banking regulators. Guidance issued jointly by the federal banking regulators is designed to ensure that incentive compensation arrangements take into account risk and are consistent with safe and sound practices.
Commercial Banking Segment Commercial Banking primarily serves companies and institutions with annual revenues of $25 million to more than $3.0 billion and strives to be a trusted advisor to our clients and preferred provider for their banking needs.
Commercial Banking Segment Commercial Banking primarily serves companies and institutions and strives to be a trusted advisor to our clients and preferred provider for their banking needs.
Consumer Banking Segment Consumer Banking serves consumer customers and small businesses with annual revenues of up to $25 million, with products and services that include deposits, mortgage and home equity lending, credit cards, small business loans, wealth management and investment services largely across our 14-state traditional banking footprint.
Consumer Banking Segment Consumer Banking serves consumer customers and small businesses, with products and services that include deposits, mortgage and home equity lending, credit cards, small business loans, and wealth management and investment services largely across our 14-state traditional banking footprint. We also offer education and point-of-sale finance loans in addition to select digital deposit products nationwide.
The proposal, commonly referred to as Basel III “Endgame,” would significantly revise the capital requirements applicable to large banking organizations with total assets of $100 billion or more, including the Company.
In July 2023, the federal banking regulators issued a proposal to implement the final components of the Basel III capital framework. The proposal, commonly referred to as Basel III “Endgame,” would significantly revise the capital requirements applicable to large banking organizations with total assets of $100 billion or more, including the Company and CBNA as Category IV firms.
The second would use a new expanded risk-based approach, consisting of new non-models-based approaches for credit risk, operational risk and credit valuation adjustment risk, as well as the proposed revised market risk capital rule. The approach resulting in the lower ratio would establish the binding ratio for purposes of satisfying regulatory capital requirements and buffers, including the SCB.
The first approach would use the existing standardized approach and a proposed revised market risk capital rule, and the second approach would use a new expanded risk-based approach, consisting of new non-models-based approaches for credit, operational, and credit valuation adjustment risk, as well as the proposed revised market risk capital rule.
This rule allowed electing banking organizations to delay the estimated impact of CECL on regulatory capital for a two-year period ending December 31, 2021, followed by a three-year transition period ending December 31, 2024. The three-year transition period will phase-in the reversal of the aggregate amount of the capital benefit provided during the initial two-year delay.
In response to the COVID disruption, the federal banking regulators adopted a final rule relative to regulatory capital treatment of the ACL under CECL. This rule allowed electing banking organizations to delay the estimated impact of CECL on regulatory capital for a two-year period ending December 31, 2021, followed by a three-year transition period ending December 31, 2024.
Based on the final rule and related accounting guidance, CBNA’s special assessment is approximately $225 million and was recognized in other operating expense in the Company’s Consolidated Statement of Operations for the year ended December 31, 2023. CBNA’s special assessment is subject to change if the eventual loss to the DIF differs from the FDIC’s current estimate.
Based on the final rule and related accounting guidance, CBNA’s special assessment is approximately $256 million, with $31 million and $225 million, respectively, recognized in other operating expense in the Company’s Consolidated Statements of Operations for the years ended December 31, 2024 and 2023.
In several areas, such as Aerospace, Defense and Government Services, Communications, Transportation and Logistics, Food and Restaurants, Human Capital Management, and Gaming we offer a more dedicated and tailored approach to better meet the unique needs of these client segments. Commercial Real Estate provides customized debt capital solutions for middle-market operators, institutional developers, investors, and REITs.
Citizens Financial Group, Inc. | 6 Corporate Banking serves commercial and industrial clients and corporate clients in the United States. In several areas, such as Aerospace, Defense and Government Services, Communications, Transportation and Logistics, Food and Restaurants, Human Capital Management, and Gaming we offer a more dedicated and tailored approach to better meet the unique needs of these client segments.
CBNA submitted its most recent resolution plan to the FDIC on December 1, 2022.
CBNA submitted its most recent resolution plan to the FDIC on December 1, 2022 in accordance with the FDIC’s Statement on Resolution Plans for IDIs issued in 2021.
Information about our Board and its committees and corporate governance, including our Code of Business Conduct and Ethics, is available on our website at investor.citizensbank.com/about-us/investor-relations/corporate-governance.
Information about our Board and its committees and corporate governance, including our Code of Business Conduct and Ethics, is available on our website at investor.citizensbank.com/about-us/investor-relations/corporate-governance. Except as specifically incorporated by reference into this Annual Report on Form 10-K, information on the aforementioned websites is not part of this report.
We make available on our website, free of charge, our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, including exhibits, and amendments to those reports that are filed or furnished to the SEC pursuant to Section 13(a) of the Securities Exchange Act of 1934.
Website Access to Citizens’ Filings with the SEC and Corporate Governance Information Our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K are available on our website, free of charge, at investor.citizensbank.com, along with amendments to such reports that are filed or furnished to the SEC pursuant to the Exchange Act of 1934.
In 2023, we launched the Private Bank, which seeks to serve high-net-worth individuals and families, as well as commercial clients, to integrate our wealth management and banking services. In Commercial Banking, we focus on serving customers in the middle-market, mid-corporate, and select industry verticals.
Our Private Bank serves high- and ultra-high-net-worth individuals, family offices, private equity/venture capital firms, and business clients through integrated wealth management and banking services. In Commercial Banking, we focus on serving customers in the middle-market, mid-corporate, and select industry verticals.
Dividends Various federal statutory provisions and regulations, as well as regulatory expectations, limit the amount of dividends that we and our subsidiaries may pay. Our payment of dividends to our stockholders is subject to oversight by the FRB.
CBNA’s special assessment is subject to change if the eventual loss to the DIF differs from the FDIC’s current estimate. Dividends Various federal statutory provisions and regulations, as well as regulatory expectations, limit the amount of dividends that we and our subsidiaries may pay.
Citizens Financial Group, Inc. | 11 Enhanced Prudential Standards and Regulatory Tailoring Rules As a BHC with over $100 billion in total consolidated assets, we are currently subject to enhanced prudential standards and associated capital and liquidity rules (“Tailoring Rules”).
Enhanced Prudential Standards and Regulatory Tailoring Rules As a BHC with over $100 billion in total consolidated assets, we are currently subject to enhanced prudential standards and associated capital and liquidity rules (“Tailoring Rules”). The Tailoring Rules assign each BHC, including its bank subsidiaries, to one of four categories based on its size and certain risk-based indicators.
Bank and Financial Holding Company Regulation As a FHC, we may engage in a broader range of activities than a BHC that is not also a FHC.
CFG and CBNA are each subject to Category IV standards, the least restrictive of the requirements under the Tailoring Rules. Citizens Financial Group, Inc. | 11 Bank and Financial Holding Company Regulation As a FHC, we may engage in a broader range of activities than a BHC that is not also a FHC.
Blocked assets (e.g., property and bank deposits) cannot be paid out, withdrawn, set off or transferred in any manner without a license from OFAC.
Blocked assets (e.g., property and bank deposits) cannot be paid out, withdrawn, set off or transferred in any manner without a license from OFAC. Lists including the names of individuals and organizations suspected of aiding, harboring or engaging in terrorist acts, including the Specially Designated Nationals and Blocked Persons, is published and routinely updated by OFAC.
Citizens Financial Group, Inc. | 9 Development programs are designed to build a strong pipeline of emerging talent, including diverse talent, internally, and have been effective in increasing the development of our overall colleague base as well as increasing the number of women and people of color in senior leader roles.
Citizens Financial Group, Inc. | 9 Culture of Inclusion We aim to foster a culture where all stakeholders feel respected, valued, and heard. Development programs are designed to build a strong pipeline of emerging talent and have been effective in increasing the development of our colleague base.
In addition, we have seven business resource groups (“BRGs”), which are integral to identifying and formulating solutions to DE&I issues that are most important to customers, colleagues, and the community. Our BRGs include Citizens WIN (Women’s Impact Network), Citizens Elev8 (Rising Professionals), Prism (Multicultural), Citizens Pride (LGBTQ+), Citizens Veterans, and Citizens Awake (Disability Awareness).
They also help to identify and support initiatives that are most important to customers, colleagues, and the community. Our BRGs, which are open to all employees, include Citizens WIN (Women’s Impact Network), Citizens Elev8 (Rising Professionals), Prism (Multicultural), Citizens Pride (LGBTQ+), Citizens Veterans, Citizens Awake (Disability Awareness), and Caring for Citizens (Caregivers).
The proposal provides for a three-year transition period, with 25 percent of the long-term debt requirement to be met one year after the rule is finalized, 50 percent after two years, and 100 percent after three years. Comments on the proposal were due by January 16, 2024. We continue to evaluate the full impact of the proposal.
The proposal provides for a three-year transition period, with 25 percent of the long-term debt requirement to be met one year after the rule is finalized, 50 percent after two years, and 100 percent after three years. Standards for Safety and Soundness The FDIA requires the federal banking regulators to prescribe operational and managerial standards for all IDIs, including CBNA.
As part of this announcement, we committed to engage corporate clients in high-emitting sectors on climate-related topics, beginning with a target to engage 100% of our Oil & Gas clients by the end of 2024. In addition, we committed to achieving carbon neutrality by 2035. For more details regarding ESG and other corporate responsibility matters, go to our website.
In 2023, we announced a $50 billion Sustainable Finance Target, including $5 billion in green financing, by 2030. As part of this announcement, we committed to engage corporate clients in high-emitting sectors on climate-related topics and to achieving operational carbon neutrality by 2035. Citizens Financial Group, Inc. | 10 For more details regarding our sustainability efforts, go to our website.
Consumer Banking operates a multi-channel distribution network with a workforce of approximately 5,300 branch colleagues, approximately 1,100 branches, including 187 in-store locations, and approximately 3,200 ATMs. Our network includes approximately 1,100 specialists covering lending, savings and investment needs as well as a broad range of small business products and services.
Our network includes approximately 1,000 specialists covering lending, savings and investment needs as well as a broad range of small business products and services.
We are required to develop, maintain and submit an annual capital plan for review and approval by our Board of Directors, or one of its committees, as well as FR Y-14 reporting requirements. On July 27, 2023, the federal banking regulators issued a proposal to implement the Basel Committee on Banking Supervision’s finalization of the post-crisis bank regulatory capital reforms.
The FRB supervises Category IV firms on an ongoing basis, including evaluating the capital adequacy and capital planning processes of firms during off-cycle years. We are required to develop, maintain and submit an annual capital plan for review and approval by our Board of Directors, or one of its committees, as well as FR Y-14 reporting requirements.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe discuss the primary risks we face and our risk management framework and associated processes and strategies in the “Risk Governance” section in Item 7. You should carefully consider the following risk factors that may affect our business, financial condition, results of operations or cash flows. Other factors that could affect us are discussed in the “Forward-Looking Statements” section above.
Biggest changeYou should carefully consider the following risk factors that may affect our business, financial condition, results of operations or cash flows. However, the risk factors described below are not the only ones we face and should not be considered a complete list of risks that we may encounter.
If our funding costs rise faster than our asset yields, or if our asset yields fall faster than our funding costs, our net interest income could decrease, and our margin could contract.
If our funding costs rise faster than our asset yields, or if our asset yields fall faster than our funding costs, our net interest income could decrease, and our net interest margin could contract.
We are exposed to the risk that litigation, employee misconduct, operational failures, the outcome of regulatory or other investigations or actions, press speculation and negative publicity, perception of our environmental, social and governance practices and disclosures, among other factors, could damage our brands or reputation.
We are exposed to the risk that litigation, employee misconduct, operational failures, the outcome of regulatory or other investigations or actions, press speculation and negative publicity, and perception of our environmental, social and governance practices and disclosures, among other factors, could damage our brands or reputation.
The Parent Company depends on CBNA for substantially all of its revenue, and restrictions on dividends and other distributions by CBNA could affect its liquidity and ability to fulfill our obligations. As a BHC, the Parent Company is a separate and distinct legal entity from CBNA, our banking subsidiary.
The Parent Company depends on CBNA for substantially all of its revenue, and restrictions on dividends and other distributions by CBNA could affect its liquidity and ability to fulfill its obligations. As a BHC, the Parent Company is a separate and distinct legal entity from CBNA, our banking subsidiary.
Operational risk and losses can result from internal and external fraud; improper conduct or errors by employees or third parties; failure to document transactions properly or to obtain proper authorization; failure to comply with applicable legal and regulatory requirements and business conduct rules; equipment failures, including those caused by natural disasters or by electrical, telecommunications or other essential utility outages; business continuity and data security system failures, including those caused by computer viruses, cyber-attacks against us or our vendors, or unforeseen problems encountered while implementing new computer systems or upgrades to existing systems; or the inadequacy or failure of systems and controls, including those of our suppliers or counterparties.
Operational risk and losses can result from internal and external fraud; improper conduct or errors by employees or third parties; failure to document transactions properly or to obtain proper authorization; failure to comply with applicable legal and regulatory requirements and business conduct rules; equipment failures, including those caused by natural disasters or by electrical, telecommunications or other essential utility outages; business continuity and data security system failures, including those caused by computer viruses, cyber-attacks against us or our vendors, coding errors, or unforeseen problems encountered while implementing new computer systems or upgrades to existing systems; or the inadequacy or failure of systems and controls, including those of our suppliers or counterparties.
A deterioration in economic conditions or changes in consumer or business behavior that negatively impacts home property or commercial property values could, in event of the borrower’s default, result in materially higher credit losses. Similarly, higher unemployment levels and higher interest rates can adversely affect our customers’ ability to repay their loans, which can negatively impact our credit performance.
A deterioration in economic conditions or changes in consumer or business behavior that negatively impacts home or commercial property values could, in event of the borrower’s default, result in materially higher credit losses. Similarly, elevated unemployment levels and higher interest rates can adversely affect our customers’ ability to repay their loans, which can negatively impact our credit performance.
In addition, under the terms of our derivatives contracts, we may be required to maintain a minimum credit rating, post additional collateral or terminate such contracts. Any of these results of a ratings downgrade could increase our cost of funding, reduce our liquidity and have adverse effects on our business, financial condition and results of operations.
In addition, under the terms of our derivatives contracts, we may be required to maintain a minimum credit rating, post additional collateral or terminate such contracts. Any of these impacts of a ratings downgrade could increase our cost of funding, reduce our liquidity and have adverse effects on our business, financial condition and results of operations.
These broad market fluctuations, as well as general economic, systemic, political and market conditions, such as recessions, loss of investor confidence, interest rate changes or international currency fluctuations, may negatively affect the market price of our common stock.
Broad market fluctuations, as well as general economic, systemic, political and market conditions, such as recessions, loss of investor confidence, interest rate changes or international currency fluctuations, may negatively affect the market price of our common stock.
Financial services institutions are typically interconnected as a result of trading, investment, liquidity management, clearing, counterparty and other relationships. Within the financial services industry, the default by any one institution could lead to defaults by other institutions.
Financial services institutions are typically interconnected as a result of trading, investment, liquidity, clearing, counterparty and other relationships. Within the financial services industry, the default by any one institution could lead to defaults by other institutions.
A significant portion of our earnings assets are in the form of loans to borrowers across the U.S., primarily for residential, commercial and industrial, commercial real estate, education, auto and other retail purposes.
A significant portion of our earnings assets are in the form of loans to borrowers across the U.S., primarily for residential, commercial and industrial, commercial real estate, education, and other retail purposes.
Since our earning assets are primarily in the form of loans and debt securities, changes in interest rates can have a material impact our net interest income, net interest margin, fee income, and credit costs.
Since our earning assets are primarily in the form of loans and debt securities, changes in interest rates can have a material impact on our net interest income, net interest margin, fee income, and credit costs.
Additionally, we are also generally required to receive the FRB’s approval for any dividends, share repurchases, or redemption of capital securities if we are required to resubmit our capital plan.
We are also generally required to receive the FRB’s approval for any dividends, share repurchases, or redemption of capital securities if we are required to resubmit our capital plan.
Moreover, new regulations may require us to disclose information about a cybersecurity event before it has been resolved or fully investigated. The techniques used by cyber criminals change frequently, may not be recognized until launched and can be initiated from a variety of sources, including terrorist organizations and hostile foreign governments.
Moreover, existing regulations may require us to disclose information about a cybersecurity event before it has been resolved or fully investigated. The techniques used by cyber criminals change frequently, may not be recognized until launched and can be initiated from a variety of sources, including terrorist organizations and hostile foreign governments.
If any of the foregoing occurs, it could cause our stock price to fall and may expose us to securities class action litigation that, even if unsuccessful, could be costly to defend and a distraction to management. Citizens Financial Group, Inc. | 32 We may not repurchase shares or pay cash dividends on our common stock.
If any of the foregoing occurs, it could cause our stock price to fall and may expose us to securities class action litigation that, even if unsuccessful, could be costly to defend and a distraction to management. Citizens Financial Group, Inc. | 33 We may not repurchase shares or pay cash dividends on our common stock.
Rating agencies regularly evaluate us, and their ratings are based on a number of factors, including our financial strength and conditions affecting the financial services industry generally. Any downgrade in our ratings would likely increase our borrowing costs and could limit our access to capital markets, which would adversely affect our business.
Rating agencies regularly evaluate us, with their ratings based on a number of factors, including our financial strength and conditions affecting the financial services industry generally. Any downgrade in our ratings would likely increase our borrowing costs and could limit our access to capital markets, which would adversely affect our business.
Models may be used in processes such as determining the pricing of various products, grading loans and extending credit, measuring interest rate and other market risks, predicting losses, assessing capital adequacy and calculating regulatory capital levels, as well as estimating the value of financial instruments and balance sheet items.
Models may be used in processes such as determining the pricing of various products, grading loans and extending credit, measuring interest rate and other market risks, predicting losses, assessing capital adequacy and calculating regulatory capital levels, as well as estimating the value of financial instruments and balance sheet items, including goodwill.
If we are unable to compete effectively, our business, financial condition and results of operations could be adversely affected, perhaps materially. A reduction in our credit ratings could have a material adverse effect on our business, financial condition and results of operations. Credit ratings affect the cost and other terms upon which we are able to obtain funding.
If we are unable to compete effectively, our business, financial condition and results of operations could be adversely affected, perhaps materially. A reduction in our credit ratings could have a material adverse effect on our business, financial condition and results of operations. Credit ratings affect the cost and associated terms upon which we are able to obtain funding.
Also, our right to participate in a distribution of assets upon a subsidiary’s liquidation or reorganization is subject to the prior claims of the subsidiary’s creditors. In the event CBNA is unable to pay dividends to the Parent Company, it may not be able to service debt, pay obligations or pay dividends on its common stock.
Also, our right to participate in a distribution of assets upon a subsidiary’s liquidation or reorganization is subject to the prior claims of the subsidiary’s creditors. In the event CBNA is unable to pay dividends to the Parent Company, it may not be able to make debt service payments, pay obligations or pay dividends on its common stock.
The Parent Company typically receives substantially all of its revenue from dividends from CBNA. These dividends are the principal source of funds to pay dividends on our equity and interest and principal on our debt. Various federal and/or state laws and regulations, as well as regulatory expectations, limit the amount of dividends that CBNA may pay to the Parent Company.
The Parent Company typically receives substantially all of its revenue from dividends from CBNA and are the principal source of funds utilized to pay dividends on our equity and interest and principal on our debt. Various federal and/or state laws and regulations, as well as regulatory expectations, limit the amount of dividends that CBNA may pay to the Parent Company.
Although we have policies and procedures designed to manage our interest rate risks, as further discussed in the “Risk Governance” section in Item 7, there can be no assurance that these policies and procedures will be effective in avoiding material adverse effects on our profitability.
Although we have policies and procedures designed to manage our interest rate risk, as further discussed in the “Risk Governance” section in Item 7, there can be no assurance that these policies and procedures will be effective in avoiding material adverse effects on our profitability.
Citizens Financial Group, Inc. | 31 We are and may be subject to litigation that may have a material impact on our business. Our operations are diverse and complex and we operate in legal and regulatory environments that expose us to potentially significant litigation risk.
Citizens Financial Group, Inc. | 32 We are and may be subject to litigation that may have a material impact on our business. Our operations are diverse and complex and we operate in legal and regulatory environments that expose us to potentially significant litigation risk.
Furthermore, any extensions of credit from the Parent Company to CBNA that are included in CBNA’s capital would be subordinate in right of payment to depositors and certain other indebtedness of CBNA. • In the event of a BHC’s bankruptcy, any commitment that the BHC had been required to make to a federal bank regulatory agency to maintain the capital of a subsidiary bank will be assumed by the bankruptcy trustee and entitled to priority of payment. • In the event of impairment of the capital stock of CBNA, the Parent Company, as CBNA’s stockholder, could be required to pay such deficiency.
Furthermore, any extensions of credit from the Parent Company to CBNA that are included in CBNA’s capital would be subordinate in right of payment to depositors and certain other indebtedness of CBNA. • In the event of a BHC’s bankruptcy, any commitment that the BHC had been required to make by a federal bank regulatory agency to maintain the capital of a subsidiary bank will be assumed by the bankruptcy trustee and entitled to priority of payment. • In the event of impairment of the capital stock of CBNA, the Parent Company, as CBNA’s stockholder, could be assessed for the deficiency and required to pay that amount to CBNA.
These factors include: • quarterly variations in our results of operations or the quarterly financial results of companies perceived to be similar to us; • changes in expectations as to our future financial performance, including financial estimates by securities analysts and investors; • our announcements or our competitors’ announcements regarding new products or services, enhancements, significant contracts, acquisitions or strategic investments; • fluctuations in the market valuations of companies perceived by investors to be comparable to us; • failures of financial institutions perceived to be similar to us; • future sales of our common stock; • additions or departures of members of our senior management or other key personnel; • changes in industry conditions or perceptions; and • changes in applicable laws, rules or regulations and other dynamics.
These factors include, but are not limited to, the following: • quarterly variations in our results of operations or the quarterly financial results of companies perceived to be similar to us; • changes in expectations as to our future financial performance, including financial estimates by securities analysts and investors; • our announcements or our competitors’ announcements regarding new products or services, enhancements, significant contracts, acquisitions or strategic investments; • fluctuations in the market valuations of companies perceived by investors to be comparable to us; • failures of financial institutions perceived to be similar to us; • future sales of our common stock; • additions or departures of members of our senior management or other key personnel; • changes in industry conditions or perceptions; and • changes in applicable laws, rules or regulations and other dynamics.
Also, see “Supervisory requirements and expectations on us as a financial holding company and a bank holding company and any regulator-imposed limits on our activities could adversely affect our ability to implement our strategic plan, expand our business, continue to improve our financial performance and make capital distributions to our stockholders.” Citizens Financial Group, Inc. | 25 We are subject to a variety of cybersecurity risks that, if realized, could adversely affect how we conduct our business.
Also, see “Supervisory requirements and expectations on us as a financial holding company and a bank holding company and any regulator-imposed limits on our activities could adversely affect our ability to implement our strategic plan, expand our business, continue to improve our financial performance and make capital distributions to our stockholders.” We are subject to a variety of cybersecurity risks that, if realized, could adversely affect how we conduct our business.
There is increasing global concern over the risks of climate change and related environmental sustainability matters. The physical risks of climate change include discrete events, such as flooding and wildfires, and longer-term shifts in climate patterns, such as extreme heat, sea level rise, and more frequent and prolonged drought.
There is global concern over the risks of climate change and related environmental sustainability matters. The physical risks of climate change include discrete events, such as flooding and wildfires, and longer-term shifts in climate patterns, such as extreme heat, sea level rise, and more frequent and prolonged droughts.
Such risks may result from changes in policies, laws and regulations, technologies, or market preferences that are intended to address climate change. These changes could materially and negatively impact our or our customers’ business, results of operations, financial condition and reputation.
Such risks may result from changes in policies, laws and regulations, technologies, or market preferences that are intended to address climate change. These changes could adversely impact our or our customers’ business, results of operations, financial condition and reputation.
ITEM 1A. RISK FACTORS We are subject to a number of risks potentially impacting our business, financial condition, results of operations and cash flows. As a financial services organization, certain elements of risk are inherent in our transactions and operations and the business decisions we make.
ITEM 1A. RISK FACTORS We are subject to a number of risks potentially impacting our business, financial condition, results of operations and cash flows. As a financial services organization, certain elements of risk are inherent in what we do and the decisions we make.
For more information regarding our credit ratings, see the “Liquidity” section in Item 7. Our financial performance may be adversely affected by deterioration in borrower credit quality. Risks arising from actual or perceived changes in credit quality and uncertainty over the recoverability of amounts due from borrowers is inherent in our businesses.
For more information regarding our credit ratings, see the “Liquidity” section in Item 7. Citizens Financial Group, Inc. | 23 Our financial performance may be adversely affected by deterioration in borrower credit quality. Risks arising from actual or perceived changes in credit quality and uncertainty over the recoverability of amounts due from borrowers is inherent in our businesses.
Additionally, an increase in rates could cause recognition of losses on the debt securities in our AFS portfolio if the securities needed to be sold. Similarly, a decrease in interest rates could lower our net interest income, net interest margin and fee income.
Additionally, an increase in rates could cause the recognition of losses on our AFS securities portfolio if the securities needed to be sold. Similarly, a decrease in interest rates could reduce our net interest income, net interest margin and fee income.
As cyber threats continue to evolve, we may be required to expend significant additional resources to continue to modify or enhance our layers of defense, to investigate and remediate any information security vulnerabilities internally, to assess and mitigate issues associated with customers that have fallen victim to fraudulent schemes, and perform additional due diligence with respect to our third-party vendors.
Citizens Financial Group, Inc. | 26 As cyber threats continue to evolve, we may be required to expend significant additional resources to continue to modify or enhance our layers of defense, to investigate and remediate any information security vulnerabilities internally, to assess and mitigate issues associated with customers that have fallen victim to fraudulent schemes, and perform additional due diligence with respect to our third-party vendors.
Such events could disrupt our operations or those of our clients, customers, or service providers, including through direct damage to assets and indirect impacts from supply chain disruption and market volatility. Citizens Financial Group, Inc. | 28 We are also exposed to risks associated with the transition to a lower-carbon economy in response to concerns around climate change.
Such events could disrupt our operations or those of our clients, customers, or service providers, including through direct damage to assets and indirect impacts from supply chain disruption and market volatility. We are also exposed to risks associated with the transition to a lower-carbon economy in response to concerns around climate change.
Supervisory requirements and expectations on us as a financial holding company and a bank holding company and any regulator-imposed limits on our activities could adversely affect our ability to implement our strategic plan, expand our business, continue to improve our financial performance and make capital distributions to our stockholders.
Citizens Financial Group, Inc. | 21 Supervisory requirements and expectations on us as a financial holding company and a bank holding company and any regulator-imposed limits on our activities could adversely affect our ability to implement our strategic plan, expand our business, continue to improve our financial performance and make capital distributions to our stockholders.
Certain accounting policies are critical because they require management to make difficult, subjective or complex judgments about matters that are inherently uncertain and the likelihood that materially different estimates would result under different conditions or through the utilization of different assumptions. Our critical accounting estimates include the ACL, estimations of fair value and review of goodwill for impairment.
Certain accounting policies are critical because they require management to make difficult, subjective or complex judgments about matters that are inherently uncertain and the likelihood that materially different estimates would result under different conditions or through the utilization of different assumptions. Our critical accounting estimates include the ACL, fair value measurements and the evaluation and measurement of goodwill for impairment.
Citizens Financial Group, Inc. | 24 The preparation of our financial statements requires us to make subjective determinations and use estimates that may vary from actual results and materially impact our financial condition and results of operations. The preparation of consolidated financial statements in conformity with GAAP requires management to make significant estimates that affect the financial statements.
The preparation of our financial statements requires us to make subjective determinations and use estimates that may vary from actual results and materially impact our financial condition and results of operations. The preparation of consolidated financial statements in conformity with GAAP requires management to make significant estimates that affect the financial statements.
The financial services industry, including the banking sector, continues to make technological enhancements to meet customer preferences, as well as meet legal and regulatory requirements, and we may not be able to compete effectively as a result of these changes.
Citizens Financial Group, Inc. | 25 The financial services industry, including the banking sector, continues to make technological enhancements to meet customer preferences, as well as meet legal and regulatory requirements, and we may not be able to compete effectively as a result of these changes.
Citizens Financial Group, Inc. | 29 Our regulators may impose restrictions or limitations on our operations. From time to time, bank regulatory agencies take supervisory actions that restrict or limit a financial institution’s activities and lead it to raise capital or subject it to other requirements.
Our regulators may impose restrictions or limitations on our operations. From time to time, bank regulatory agencies take supervisory actions that restrict or limit a financial institution’s activities and lead it to raise capital or subject it to other requirements.
An increase in interest rates could cause lower demand for loans by customers, reducing our net interest income due to lower loan balances and origination-related fee income due to lower production volume, and could also have an adverse impact on our credit costs, as borrowers may have difficulty in making higher interest payments.
Citizens Financial Group, Inc. | 22 An increase in interest rates could cause lower demand for loans by customers, reducing our net interest income due to lower loan balances and origination-related fee income due to lower production volume, and could also have an adverse impact on our credit costs, as borrowers may have difficulty in making higher interest payments.
The regulatory environment in which we operate continues to be subject to significant and evolving regulatory requirements that could have a material adverse effect on our business and earnings. We are heavily regulated by multiple banking, consumer protection, securities and other regulatory authorities at the federal and state levels.
Citizens Financial Group, Inc. | 30 The regulatory environment in which we operate continues to be subject to significant and evolving regulatory requirements that could have a material adverse effect on our business and earnings. We are heavily regulated by multiple banking, consumer protection, securities and other regulatory authorities at the federal and state levels.
Changes in interest rates can have a material impact on the value of our securities, a primary objective of which is to provide a ready source of contingent liquidity. An increase in rates could lower the collateral value of these securities, reducing the amount we could borrow, and lead to losses in the event of their sale.
Changes in interest rates can have a material impact on the value of our securities portfolio, the primary objective of which is to provide a readily available source of liquidity. An increase in rates could lower the collateral value of these securities, reducing the amount we could borrow, and lead to losses in the event of their sale.
Citizens Financial Group, Inc. | 22 We could fail to attract, retain or motivate highly-skilled and qualified personnel, including our senior management, other key employees or members of our Board, which could impair our ability to successfully execute our strategic plan and otherwise adversely affect our business.
We could fail to attract, retain or motivate highly-skilled and qualified personnel, including our senior management, other key employees or members of our Board, which could impair our ability to successfully execute our strategic plan and otherwise adversely affect our business.
Citizens Financial Group, Inc. | 23 Our framework for managing risks may not be effective in mitigating risk and loss. Our risk management framework is made up of various processes and strategies to manage our risk exposure. The framework to manage risk, including the framework’s underlying assumptions, may not be effective under all conditions and circumstances.
Our framework for managing risks may not be effective in mitigating risk and loss. Our risk management framework is made up of various processes and strategies to manage our risk exposure. The framework to manage risk, including the framework’s underlying assumptions, may not be effective under all conditions and circumstances.
Changes in interest rates can affect our net interest income and margin as our asset yields and funding costs may not rise or fall in parallel, causing our net interest income to increase or decrease and our margin to expand or contract.
Our asset yields and funding costs may not rise or fall in parallel in response to changes in interest rates, causing our net interest income to increase or decrease and our net interest margin to expand or contract.
For example, a ratings downgrade could adversely affect our ability to sell or market our securities, including long-term debt, engage in certain longer-term derivatives transactions and retain our customers, particularly corporate customers who may require a minimum rating threshold in order to place funds with us.
For example, a ratings downgrade could adversely affect our ability to sell or market our securities, including long-term debt, engage in certain longer-term derivative transactions and retain customers, who may require a minimum credit rating in order to place funds with us.
In either situation, our business could incur significant costs and be adversely affected. We are exposed to reputational risk and the risk of damage to our brands and the brands of our affiliates. Our success and results depend on our reputation and the strength of our brands.
In either situation, our business could incur significant costs and be adversely affected. Citizens Financial Group, Inc. | 27 We are exposed to reputational risk and the risk of damage to our brands and the brands of our affiliates. Our success and results depend on our reputation and the strength of our brands.
Citizens Financial Group, Inc. | 27 The effects of geopolitical instability may adversely affect us and create significant risks and uncertainties for our business, with the ultimate impact dependent on future developments, which are highly uncertain and unpredictable.
The effects of geopolitical instability may adversely affect us and create significant risks and uncertainties for our business, with the ultimate impact dependent on future developments, which are highly uncertain and unpredictable.
Any weakness in these systems or controls, or any breaches or alleged breaches of such laws or regulations, could result in increased regulatory supervision, enforcement actions and other disciplinary action, and have an adverse impact on our business, applicable authorizations and licenses, reputation and results of operations.
Any weakness in these systems or controls, or any breaches or alleged breaches of such laws or regulations, could result in increased regulatory supervision, enforcement actions and other disciplinary action, especially in light of heightened regulatory expectations around information security, and have an adverse impact on our business, applicable authorizations and licenses, reputation and results of operations.
We rely on third parties for the performance of a significant portion of our information technology functions and the provision of information technology and business process services including, but not limited to, the operation of our data communications networks, hosted services, and a wide range of other support services.
Third parties perform a significant portion of our information technology functions and the provision of information technology and business process services including, but not limited to, the operation of our data communications networks, hosted services, and a wide range of other support services.
Technology within the financial services industry continues to evolve and new, unexpected technological changes could have a transformative effect on the way banks offer products and services.
Technology within the financial services industry continues to evolve and new, unexpected technological changes, including those related to artificial intelligence, could have a transformative effect on the way banks offer products and services.
Furthermore, although we maintain both business continuity and disaster recovery plans, if a terrorist attack, extreme weather event, or other catastrophe rendered our production and recovery data unusable, there can be no assurance that these plans and related capabilities will adequately protect us from such events, and our business, financial condition or results of operations could be adversely affected.
Furthermore, although we maintain both business continuity and disaster recovery plans, if a catastrophic event rendered our production and recovery data unusable, there can be no assurance that these plans and related capabilities will adequately protect us from such an event, and our business, financial condition or results of operations could be adversely affected.
Our brands and reputation could also be harmed if we sell products or services that do not perform as expected or customers’ expectations for the product are not satisfied. Unpredictable catastrophic events, including pandemics, terrorist attacks, extreme weather events and other large-scale catastrophes, could have an adverse effect on our business, financial position and results of operations.
Our brands and reputation could also be harmed if we sell products or services that do not perform as expected or customers’ expectations for the product are not satisfied. Unpredictable catastrophic events could have an adverse effect on our business, financial position and results of operations.
Holders of our common stock are only entitled to receive such dividends as our Board may declare out of funds legally available for such payments.
Holders of our common stock are only entitled to receive dividends declared by our Board out of funds legally available for such payments.
Concerns about, or a default by, one institution could lead to significant market and customer perception of the risk of similar problems at other institutions. This perception of risk could, in and of itself, lead to adverse impacts on liquidity.
Concerns about, or a default by, one institution could lead to significant market and customer perception of the risk of similar problems at other institutions.
In addition to customer deposits, our funding sources also include 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.
We rely on customer deposits to be our primary stable and low-cost source of funding. Our funding sources also include 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.
Risks Related to Regulations Governing Our Industry As a financial holding company and a bank holding company, we are subject to comprehensive regulation that could have a material adverse effect on our business and results of operations. As a FHC and a BHC, we are subject to comprehensive regulation, supervision and examination by the FRB.
Citizens Financial Group, Inc. | 29 Risks Related to Regulations Governing Our Industry As a financial holding company and a bank holding company, we are subject to comprehensive regulation that could have a material adverse effect on our business and results of operations.
There are risks and uncertainties, many of which are not within our control, associated with each element of our strategy. If we are not able to successfully execute our business strategy, we may not achieve our financial performance goals and any shortfall may be material. See the “Business Strategy” section in Item 1 for further information.
If we are not able to successfully execute our business strategy, we may not achieve our financial performance goals and any shortfall may be material. See the “Business Strategy” section in Item 1 for further information.
Further, if we are unable to satisfy the capital requirements applicable to us for any reason, we may be limited in our ability to repurchase shares and declare and pay dividends on our capital stock.
Further, if we are unable to satisfy the capital requirements applicable to us for any reason, we may be limited in our ability to repurchase shares and declare and pay dividends on our capital stock. See the “Regulation and Supervision” section in Item 1 for further discussion of the regulations to which we are subject.
Furthermore, the stock markets have experienced price and volume fluctuations that have affected and continue to affect the market price of equity securities of many companies. These fluctuations have often been unrelated or disproportionate to the operating performance of these companies.
Furthermore, stock markets experience price and volume fluctuations that affect the market price of equity securities of many companies. These fluctuations can be unrelated or disproportionate to the operating performance of these companies.
In addition, CBNA is subject to comprehensive regulation, supervision and examination by the OCC. Our regulators supervise us through regular examinations and other means that allow them to gauge management’s ability to identify, assess and control risk in all areas of operations in a safe and sound manner and to ensure compliance with laws and regulations.
Our regulators supervise us through regular examinations and other means that allow them to gauge management’s ability to identify, assess and control risk in all areas of operations in a safe and sound manner and to ensure compliance with laws and regulations. In the course of their supervision and examinations, our regulators may require improvements in various areas.
Our operations are subject to extensive regulation, supervision and examination by the federal banking regulators, as well as the CFPB. As part of the supervisory and examination process, if we are unsuccessful in meeting the requirements and expectations that apply to us, regulatory agencies may from time to time take supervisory actions against us that may not be publicly disclosed.
As part of the supervisory and examination process, if we are unsuccessful in meeting the regulatory requirements and supervisory expectations that apply to us, regulatory agencies may from time to time take supervisory actions against us, including actions that may not be publicly disclosed.
In these instances, our ability to manage risk would be limited and our risk exposure and losses could be significantly greater than our models indicated, which could harm our reputation and adversely affect our revenues and profits. Finally, information provided to our regulators based on poorly designed or implemented models could be inaccurate or insufficient.
In these instances, our ability to manage risk would be limited and our risk exposure and losses could be significantly greater than our models indicated, which could harm our reputation and adversely affect our revenues and profits.
The inability to receive dividends from CBNA could have a material adverse effect on our business, financial condition and results of operations. See the “Regulation and Supervision” section in Item 1 and the “Capital and Regulatory Matters” section in Item 7.
The inability to receive dividends from CBNA could have a material adverse effect on our business, financial condition and results of operations. See the “Regulation and Supervision” section in Item 1 for further discussion of dividends payable by CBNA as a national bank subsidiary.
Risks Related to Our Business We may not be able to successfully execute our business strategy. Our business strategy is designed to maximize the full potential of our business and drive sustainable growth and enhanced profitability, with our success resting on our ability to distinguish ourselves.
Our business strategy is designed to maximize the full potential of our business, drive sustainable growth and enhance profitability, with our success resting on our ability to distinguish ourselves.
When the yield curve flattens or inverts, our net interest income and net interest margin may decrease if the cost of our short-term funding increases relative to the yield we can earn on our long-term assets.
If the yield curve, typically upward sloping with short-term rates lower than long-term rates, were to flatten or invert, our net interest income and net interest margin may decrease if the cost of our short-term funding increases relative to the yield we can earn on our long-term assets.
In the normal course of business, we have been named, from time to time, as a defendant in various legal actions, including arbitrations, class actions and other litigation, arising in connection with our activities as a financial services institution, including with respect to alleged unfair or deceptive business practices, mis-selling of certain products, violations of contract or intellectual property rights, and other compliance or operational failures.
These actions arise in connection with our activities as a financial services institution, including with respect to alleged unfair or deceptive business practices, mis-selling of certain products, violations of contract or intellectual property rights, and other compliance or operational failures.
Therefore, we encounter risk as part of the normal course of our business and design a risk management framework and associated processes to help manage these risks.
Therefore, we encounter risk as part of the normal course of our business and design risk management processes to help manage these risks. See the “Risk Governance” section in Item 7 for a discussion of our risk management framework and the primary risks we face.
Liquidity problems and losses or defaults by other institutions, as the financial soundness of financial institutions is closely related as a result of these credit, trading, clearing and other relationships. Even the perceived lack of creditworthiness of, or questions about, a counterparty may lead to market-wide liquidity problems and losses or defaults by various institutions.
Even the perceived lack of creditworthiness of, or questions about, a counterparty may lead to market-wide liquidity problems and losses or defaults by various institutions.
The FASB and SEC periodically change the financial accounting and reporting standards that govern the accounting for our financial results and the preparation of our consolidated financial statements. These changes can be hard to predict and can materially impact how we record and report our financial condition and results of operations.
Changes in our accounting policies or standards could materially affect how we report our financial results and condition. The FASB and SEC periodically change financial accounting and reporting standards that govern accounting for our financial results and preparation of our consolidated financial statements.
Consumers can also complete transactions such as paying bills and/or transferring funds directly without the assistance of banks. In addition, the emergence, adoption and evolution of new technologies that do not require intermediation, including distributed ledgers such as digital assets and blockchain, as well as advances in robotic process automation, could significantly affect the competition for financial services.
In addition, the emergence, adoption and evolution of new technologies that do not require intermediation, including distributed ledgers such as digital assets and blockchain, as well as advances in automation, artificial intelligence and robotics, could significantly affect the competition for financial services.
In addition, we have undertaken certain actions to enhance our credit policies and guidelines to address potential risks associated with particular industries or types of customers. However, we may not be able to effectively implement these initiatives, or consistently follow and refine our credit risk management system.
In addition, we have undertaken certain actions to enhance our credit policies and guidelines to address potential risks associated with particular industries or types of customers.
Cybercriminals can use fraudulent schemes directly targeting our customers or our own systems to compromise and directly extract funds from a customer’s account or access sensitive customer data. Certain technology protections such as Customer Profiling and Step-Up Authentications are implemented so that we are compliant with the FFIEC Authentication and Access to Financial Institution Services and Systems guidelines.
Cybercriminals can use fraudulent schemes directly targeting our customers or our own systems to compromise and directly extract funds from a customer’s account or access sensitive customer data. Certain technology protections such as Customer Profiling and Step-Up Authentications have been implemented, but there can be no assurance that these protections will be effective.
We must maintain adequate funding to meet current and future obligations, including customer loan requests, customer deposit maturities and withdrawals, debt service, equipment and premises leases, and other cash commitments, under both normal operating conditions and under periods of company-specific and/or market stress. We primarily rely on customer deposits to be a relatively stable and low-cost source of funding.
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.
Evolving technologies and the increased sophistication and activities of organized crime, hackers, terrorists, nation-states, activists and other external parties present a significant information security risk to large financial institutions such as us. Third parties with whom we or our customers do business also present operational and information security risks to us, including security breaches or failures of their own systems.
Evolving technologies, including the introduction of Generative Artificial Intelligence and Large Language Models, and the increased sophistication and activities of organized crime, hackers, terrorists, nation-states, activists and other external parties present a significant information security risk to large financial institutions such as us.
Citizens Financial Group, Inc. | 30 The Parent Company could be required to act as a “source of strength” to CBNA, which would have a material adverse effect on our business, financial condition and results of operations. FRB policy historically required BHCs to act as a source of financial and managerial strength to their subsidiary banks.
See “Regulation and Supervision” in Item 1 for further discussion of the regulations to which we are subject. Citizens Financial Group, Inc. | 31 The Parent Company could be required to act as a “source of strength” to CBNA, which would have a material adverse effect on our business, financial condition and results of operations.
Changes in the spread between short-term and long-term interest rates (i.e., the yield curve) can also have a material impact on our net interest income and net interest margin. Typically, the yield curve is upward sloping, with short-term rates being lower than long-term rates.
A prolonged period of low interest rates may result in us holding lower yielding loans and securities should rates rise rapidly after the period of low interest rates. Changes in the spread between short-term and long-term interest rates (i.e., the yield curve) can also have a material impact on our net interest income and net interest margin.
Prolonged periods of inflation may impact our profitability by negatively impacting our costs and expenses, including increasing funding costs and expense related to talent acquisition and retention, and negatively impacting consumer demand and client purchasing power for our products and services.
Volatility and uncertainty related to inflation and the effects of inflation may enhance or contribute to some of the risks of our business by negatively impacting our costs and expenses, including increasing funding costs and expenses related to talent acquisition and retention, and negatively impacting consumer demand and client purchasing power for our products and services, as well as the ability of borrowers to repay their obligations.
With respect to non-banking financial institutions, technology and other changes have lowered barriers to entry and made it possible for non-banks to offer products and services traditionally provided by banks. For example, consumers can maintain funds that would have historically been held as bank deposits in brokerage accounts or mutual funds.
Citizens Financial Group, Inc. | 28 With respect to non-banking financial institutions, technology and other changes have lowered barriers to entry and made it possible for non-banks to offer products and services traditionally provided by banks.
In some cases, we could be required to apply a new or revised standard retroactively, which would result in the recasting of our prior period financial statements. Our financial and accounting estimates and risk management framework rely on analytical forecasting and models.
These changes can be hard to predict and can materially impact how we record and report our financial condition and results of operations. In some cases, we could be required to apply a new or revised standard retroactively, which would result in the recasting of our prior period financial statements.
See the “Regulation and Supervision” section in Item 1 for further information. Difficult economic conditions, including inflationary pressures, would likely have an adverse effect on our business, financial position and results of operations. From March 2022 to July 2023, the FRB raised its benchmark interest rate eleven times in response to inflationary pressures throughout the economy.
See the “Regulation and Supervision” section in Item 1 for further information. Inflationary pressures could have an adverse effect on our business, financial position and results of operations.
In the course of their supervision and examinations, our regulators may require improvements in various areas. We may be required to devote substantial resources to meet supervisory expectations or remediate supervisory findings.
We may be required to devote substantial resources to meet supervisory expectations or remediate supervisory findings.
If any of the foregoing were to occur, it may result in an increase in the level of nonaccrual loans and a higher risk exposure for us, which could have a material adverse effect on us. Changes in our accounting policies or in accounting standards could materially affect how we report our financial results and condition.
However, we may not be able to effectively implement these initiatives, or consistently follow and refine our credit risk management system, which may result in an increase in the level of nonaccrual loans and a higher risk exposure for us, which could have a material adverse effect on us.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWhile we look to numerous frameworks to ensure the CSP is maintained in line with regulatory expectations and industry best practices, the National Institute of Standards and Technology cybersecurity framework is the primary standard against which we benchmark ourselves. Both the Risk and Audit Committees have oversight of the management of our cybersecurity risk.
Biggest changeWhile we look to numerous frameworks to ensure the CSP is maintained in line with regulatory expectations and industry best practices, the National Institute of Standards and Technology cybersecurity framework is the primary standard against which we benchmark ourselves. Both the Risk and Audit Committees of our Board have oversight of the management of our cybersecurity risk.
The CSP incorporates all of our security policies and covers the core elements of access control, infrastructure security, cybersecurity event and incident management, data protection, third-party vendor cyber risk oversight, payment security, and training and awareness. Independent assessment and benchmarking of the CSP are regularly completed, and the CSP is reviewed and assessed by federal regulators.
The CSP incorporates all of our security policies and covers the core elements of access control, infrastructure security, cybersecurity event and incident management, data protection, third-party vendor cyber risk oversight, and training and awareness. Independent assessment and benchmarking of the CSP are regularly completed, and the CSP is reviewed and assessed by federal regulators.
Results are reported to key stakeholders and identified issues are tracked and monitored. Citizens Financial Group, Inc. | 33 The Company regularly reviews the nature of its business activities and modifies the CSP as appropriate.
Results are reported to key stakeholders and identified issues are tracked and monitored. Citizens Financial Group, Inc. | 34 The Company regularly reviews the nature of its business activities and modifies the CSP as appropriate.
Non-Financial Risk Management coordinates the development, maintenance, and day-to-day oversight of the Company’s Enterprise Risk Management Governance Framework (“the Framework”), which defines an integrated enterprise-wide approach to risk management. This centrally managed program is designed to ensure that all business lines play a role in the successful implementation of the CSP.
Operational Risk Management coordinates the development, maintenance, and day-to-day oversight of the Company’s Enterprise Risk Management Governance Framework (“the Framework”), which defines an integrated enterprise-wide approach to risk management. This centrally managed program is designed to ensure that all business lines play a role in the successful implementation of the CSP.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES We lease five operations centers in Boston, Medford, and Westwood, Massachusetts; Pittsburgh, Pennsylvania; and Glen Allen, Virginia. We own two principal operations centers in Johnston and East Providence, Rhode Island. At December 31, 2023, our subsidiaries owned and operated a total of 60 facilities and leased an additional 1,193 facilities.
Biggest changeITEM 2. PROPERTIES We lease five operations centers in Boston, Medford, and Westwood, Massachusetts; Pittsburgh, Pennsylvania; and Glen Allen, Virginia. We own two principal operations centers in Johnston and East Providence, Rhode Island. At December 31, 2024, our subsidiaries owned and operated a total of 58 facilities and leased an additional 1,101 facilities.
We believe our current facilities are adequate to meet our needs. See Note 7 and Note 9 in Item 8 for more information regarding our premises and equipment, and leases, respectively. ITEM 3. LEGAL PROCEEDINGS Information required by this item is presented in Note 19 in Item 8 and is incorporated herein by reference. ITEM 4.
We believe our current facilities are adequate to meet our needs. See Note 7 and Note 9 in Item 8 for more information regarding our premises and equipment, and leases, respectively. ITEM 3. LEGAL PROCEEDINGS Information required by this item is presented in Note 19 in Item 8 and is incorporated herein by reference.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThis graph shall not be deemed “soliciting material” or be filed with the Securities and Exchange Commission for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any filing of Citizens Financial Group, Inc. under the Securities Act of 1933, as amended, or the Exchange Act. 12/31/2023 12/31/2022 12/31/2021 12/31/2020 12/31/2019 12/31/2018 CFG $140 $157 $181 $132 $142 $100 S&P 500 Index 207 164 200 156 131 100 KBW BKX Index 132 133 169 122 136 100 Peer Regional Bank Average 133 134 162 120 134 100 Citizens Financial Group, Inc. | 35 Issuer Purchase of Equity Securities Details of the repurchases of the Company’s common stock during the three months ended December 31, 2023 are included below: Period Total Number of Shares Repurchased (1) Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) Maximum Dollar Amount of Shares That May Yet Be Purchased as Part of Publicly Announced Plans or Programs (2) October 1, 2023 - October 31, 2023 329 $16.82 — $1,094,000,058 November 1, 2023 - November 30, 2023 335 $23.43 — $1,094,000,058 December 1, 2023 - December 31, 2023 691 $12.41 — $1,094,000,058 (1) Reflects shares repurchased to satisfy applicable tax withholding obligations in connection with an employee share-based compensation plan and the forfeiture of unvested restricted stock awards.
Biggest changeThis graph shall not be deemed soliciting material or be filed with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any filing of Citizens Financial Group, Inc. under the Securities Act of 1933, as amended, or the Exchange Act. 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 CFG $100 $93 $128 $111 $99 $136 S&P 500 Index 100 118 152 125 157 197 KBW BKX Index 100 90 124 98 97 133 Peer Regional Bank Average 100 89 120 100 99 126 Citizens Financial Group, Inc. | 36 Issuer Purchase of Equity Securities Details of the repurchases of the Company’s common stock during the three months ended December 31, 2024 are included below: Period Total Number of Shares Repurchased (1) Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) Maximum Dollar Amount of Shares That May Yet Be Purchased as Part of Publicly Announced Plans or Programs (2) October 1, 2024 - October 31, 2024 4,530,928 $44.06 4,530,917 $725,357,995 November 1, 2024 - November 30, 2024 285 $42.12 — $725,357,995 December 1, 2024 - December 31, 2024 575,505 $44.06 575,505 $700,000,000 (1) Includes shares repurchased to satisfy applicable tax withholding obligations in connection with an employee share-based compensation plan and the forfeiture of unvested restricted stock awards.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is traded on the New York Stock Exchange under the symbol “CFG.” As of February 1, 2024, our common stock was owned by 7,086 holders of record (including Cede & Co.) and approximately 445,000 beneficial shareholders whose shares were held in “street name” through a broker or bank.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is traded on the New York Stock Exchange under the symbol “CFG.” As of February 4, 2025, our common stock was owned by 6,717 holders of record (including Cede & Co.) and approximately 484,000 beneficial shareholders whose shares were held in “street name” through a broker or bank.
(2) On February 17, 2023, the Company announced that its Board of Directors increased the capacity under its common share repurchase program by an additional $1.15 billion, which was incremental to the $850 million of capacity remaining as of December 31, 2022 under the prior June 2022 authorization.
(2) On June 28, 2024, the Company announced that its Board of Directors increased the capacity under its common share repurchase program by an additional $656 million, which was incremental to the $594 million of capacity remaining under the prior February 2023 authorization.
Citizens Financial Group, Inc. | 34 The following graph compares the cumulative total stockholder returns for our performance during the five-year period ended December 31, 2023 relative to the performance of the Standard & Poor’s 500 ® index, a commonly referenced U.S. equity benchmark consisting of leading companies from diverse economic sectors; the KBW Nasdaq Bank Index (“BKX”), composed of 24 leading national money centers, regional banks and thrifts; and a group of other banks that constitute our peer regional banks.
The following graph shows the cumulative total shareholder return on our common stock during the five-year period ended December 31, 2024 compared to (i) the Standard & Poor’s 500 ® index; (ii) the KBW Nasdaq Bank Index (“BKX”), composed of 24 banking stocks representing large U.S. national money centers, regional banks and thrift institutions; and (iii) a group of other regional banks that constitute our peers.
Removed
The graph assumes a $100 investment at the closing price on December 31, 2018 in each of CFG common stock, the S&P 500 index, the BKX and the peer market-capitalization weighted average and assumes all dividends were reinvested on the date paid.
Added
The graph assumes an initial investment of $100 at the closing price on December 31, 2019 and that all dividends were reinvested. The points on the graph represent the cumulative total return on the last trading day of the fiscal year indicated.
Removed
The points on the graph represent the fiscal quarter-end amounts based on the last trading day in each subsequent fiscal quarter.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeFor further discussion, refer to “Market Risk — Non-Trading Risk” and “Risk Governance.” Table 2: Major Components of Net Interest Income Year Ended December 31, 2023 2022 Change (dollars in millions) Average Balances Income/ Expense Yields/ Rates Average Balances Income/ Expense Yields/ Rates Average Balances Yields/ Rates (bps) Assets Interest-bearing cash and due from banks and deposits in banks $8,531 $451 5.22 % $6,195 $128 2.04 % $2,336 318 bps Taxable investment securities 39,437 1,162 2.94 35,639 840 2.35 3,798 59 Non-taxable investment securities 2 — 2.68 3 — 2.33 (1) 35 Total investment securities 39,439 1,162 2.94 35,642 840 2.35 3,797 59 Commercial and industrial 48,693 2,956 5.99 50,002 1,942 3.83 (1,309) 216 Commercial real estate 29,206 1,804 6.09 24,746 1,026 4.09 4,460 200 Leases 1,305 46 3.53 1,521 46 3.00 (216) 53 Total commercial 79,204 4,806 5.99 76,269 3,014 3.90 2,935 209 Residential mortgages 30,660 1,052 3.43 27,759 876 3.16 2,901 27 Home Equity 14,475 1,092 7.54 13,057 555 4.25 1,418 329 Automobile 10,374 429 4.13 13,729 507 3.69 (3,355) 44 Education 12,333 621 5.04 13,047 560 4.29 (714) 75 Other retail 5,171 489 9.46 5,483 456 8.31 (312) 115 Total retail 73,013 3,683 5.04 73,075 2,954 4.04 (62) 100 Total loans and leases 152,217 8,489 5.53 149,344 5,968 3.97 2,873 156 Loans held for sale, at fair value 1,160 73 6.26 1,767 67 3.77 (607) 249 Other loans held for sale 339 29 8.43 1,188 57 4.71 (849) 372 Interest-earning assets 201,686 10,204 5.02 194,136 7,060 3.61 7,550 141 Noninterest-earning assets 20,535 20,925 (390) Total assets $222,221 $215,061 $7,160 Liabilities and Stockholders’ Equity Checking with interest $33,960 $446 1.31 % $36,127 $142 0.39 % ($2,167) 92 Money market 51,178 1,494 2.92 48,410 320 0.66 2,768 226 Savings 29,266 433 1.48 27,524 100 0.37 1,742 111 Term 19,320 772 4.00 8,330 89 1.07 10,990 293 Total interest-bearing deposits 133,724 3,145 2.35 120,391 651 0.54 13,333 181 Short-term borrowed funds 746 43 5.70 1,584 23 1.47 (838) 423 Long-term borrowed funds 15,853 775 4.86 12,078 374 3.07 3,775 179 Total borrowed funds 16,599 818 4.89 13,662 397 2.88 2,937 201 Total interest-bearing liabilities 150,323 3,963 2.63 134,053 1,048 0.78 16,270 185 Demand deposits 41,581 51,717 (10,136) Other noninterest-bearing liabilities 6,711 5,553 1,158 Total liabilities 198,615 191,323 7,292 Stockholders’ equity 23,606 23,738 (132) Total liabilities and stockholders’ equity $222,221 $215,061 $7,160 Interest rate spread 2.39 % 2.83 % (44) Net interest income and net interest margin $6,241 3.09 % $6,012 3.10 % (1) Net interest income and net interest margin, FTE (1) $6,258 3.10 % $6,023 3.10 % — Memo: Total deposits (interest-bearing and demand) $175,305 $3,145 1.79 % $172,108 $651 0.38 % $3,197 141 (1) Net interest income and net interest margin is presented on a FTE basis using the federal statutory tax rate of 21%.
Biggest changeTable 2: Major Components of Net Interest Income Year Ended December 31, 2024 2023 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 $9,566 $503 5.17 % $8,531 $451 5.22 % $1,035 (5) bps Taxable investment securities 44,627 1,658 3.71 39,437 1,162 2.94 5,190 77 Non-taxable investment securities 1 — 2.60 2 — 2.68 (1) (8) Total investment securities 44,628 1,658 3.71 39,439 1,162 2.94 5,189 77 Commercial and industrial 44,174 2,333 5.20 49,998 3,002 5.92 (5,824) (72) Commercial real estate 28,430 1,795 6.21 29,206 1,804 6.09 (776) 12 Total commercial 72,604 4,128 5.60 79,204 4,806 5.99 (6,600) (39) Residential mortgages 31,916 1,184 3.71 30,660 1,052 3.43 1,256 28 Home equity 15,603 1,231 7.89 14,475 1,092 7.54 1,128 35 Automobile 6,404 274 4.27 10,374 429 4.13 (3,970) 14 Education 11,340 613 5.41 12,333 621 5.04 (993) 37 Other retail 4,837 518 10.72 5,171 489 9.46 (334) 126 Total retail 70,100 3,820 5.45 73,013 3,683 5.04 (2,913) 41 Total loans and leases 142,704 7,948 5.52 152,217 8,489 5.53 (9,513) (1) Loans held for sale (1) 1,174 77 6.51 1,499 102 6.75 (325) (24) Interest-earning assets 198,072 10,186 5.10 201,686 10,204 5.02 (3,614) 8 Noninterest-earning assets 20,952 20,535 417 Total assets $219,024 $222,221 ($3,197) Liabilities and Stockholders’ Equity Checking with interest $32,943 $491 1.49 % $33,960 $446 1.31 % ($1,017) 18 Money market 53,053 1,705 3.21 51,178 1,494 2.92 1,875 29 Savings 27,100 476 1.76 29,266 433 1.48 (2,166) 28 Time 24,967 1,153 4.62 19,320 772 4.00 5,647 62 Total interest-bearing deposits 138,063 3,825 2.77 133,724 3,145 2.35 4,339 42 Short-term borrowed funds 252 15 5.73 746 43 5.70 (494) 3 Long-term borrowed funds 13,831 713 5.15 15,853 775 4.86 (2,022) 29 Total borrowed funds 14,083 728 5.16 16,599 818 4.89 (2,516) 27 Total interest-bearing liabilities 152,146 4,553 2.99 150,323 3,963 2.63 1,823 36 Noninterest-bearing demand deposits 36,457 41,581 (5,124) Other noninterest-bearing liabilities 6,466 6,711 (245) Total liabilities 195,069 198,615 (3,546) Stockholders’ equity 23,955 23,606 349 Total liabilities and stockholders’ equity $219,024 $222,221 ($3,197) Interest rate spread 2.11 % 2.39 % (28) Net interest income and net interest margin $5,633 2.84 % $6,241 3.09 % (25) Net interest income and net interest margin, FTE (2) $5,650 2.85 % $6,258 3.10 % (25) Memo: Total deposits (interest-bearing and noninterest-bearing demand) $174,520 $3,825 2.19 % $175,305 $3,145 1.79 % ($785) 40 bps (1) See Note 1 for information regarding updates to the Consolidated Balance Sheets during 2024.
The level of net interest income is primarily a function of the difference between the effective yield on our average interest-earning assets and the effective cost of our interest-bearing liabilities.
The level of our net interest income is primarily a function of the difference between the effective yield on our average interest-earning assets and the effective cost of our interest-bearing liabilities.
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 the broader interest rate risk framework and limits.
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.
For more information, see the “Regulation and Supervision” section in Item 1. 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. Capital requirements are determined for actual and forecasted risk portfolios using applicable regulatory capital methodologies.
See the “Regulation and Supervision” section in Item 1 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. Capital requirements are determined for actual and forecasted risk portfolios using applicable regulatory capital methodologies.
The variables and inputs may be idiosyncratically affected by risks to the economy, including changing monetary and fiscal policies, impacts from the recent stress on the banking industry, and their impact on inflationary trends. Changes in one or multiple of the key macroeconomic variables may have a material impact to our estimation of expected credit losses.
The variables and inputs may be idiosyncratically affected by risks to the economy, including changing monetary and fiscal policies, impacts from the recent stress on the banking industry, and their impact on inflationary trends. Changes in one or multiple of the key macroeconomic variables may have a material impact on our estimation of expected credit losses.
These limits and guidelines reflect our tolerance for interest rate risk over both short-term and long-term horizons. To ensure that exposure to interest rate risk is managed within our risk appetite, we measure the exposure and hedge it, as necessary.
These limits and guidelines reflect our tolerance for interest rate risk over both short- and long-term horizons. To ensure that exposure to interest rate risk is managed within our risk appetite, we measure the exposure and hedge it, as necessary.
The Treasury Asset and Liability Management team is responsible for measuring, monitoring and reporting on our structural interest rate risk position. These exposures are reported on a monthly basis to the Asset Liability Committee and at Board meetings. We measure structural interest rate risk through a variety of metrics intended to quantify both short-term and long-term exposures.
The Treasury Asset and Liability Management team is responsible for measuring, monitoring and reporting on our structural interest rate risk position. These exposures are reported on a monthly basis to the Asset Liability Committee and at Board meetings. We measure structural interest rate risk through a variety of metrics intended to quantify both short- and long-term exposures.
Third Line of Defense Our Internal Audit function is the third line of defense providing independent assurance of the effectiveness of our internal controls, governance practices, and culture so that risk is managed appropriately for the size, complexity, and risk profile of the organization. Internal Audit has complete and unrestricted access to all of our records, physical properties and personnel.
Third Line of Defense Our Internal Audit function is the third line of defense providing independent assurance of the effectiveness of our internal controls and governance practices so that risk is managed appropriately for the size, complexity, and risk profile of the organization. Internal Audit has complete and unrestricted access to all of our records, physical properties and personnel.
As the following table illustrates, our balance sheet is marginally 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.
As the following table illustrates, our balance sheet is 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.
For further discussion of the use of our securities as liquidity collateral see the “Regulation and Supervision — Liquidity Requirements” and “Liquidity Risk Management and Governance” sections in this document.
For further discussion of the use of our securities as liquidity collateral and liquidity requirements, see the “Liquidity Risk Management and Governance” and “Regulation and Supervision — Liquidity Requirements” sections in this document.
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 3,200 ATMs and more than 1,100 branches in 14 states and the District of Columbia. Consumer Banking products and services include a full range of banking, lending, savings, wealth management and small business offerings.
In Consumer Banking, we provide an integrated experience that includes mobile and online banking, a full-service customer contact center and the convenience of approximately 3,100 ATMs and more than 1,000 branches in 14 states and the District of Columbia. Consumer Banking products and services include a full range of banking, lending, savings, wealth management and small business offerings.
We are also subject to certain market risks which include potential losses arising from changes in interest rates, foreign exchange rates, equity prices, commodity prices and/or other relevant market rates or prices. Market risk in our business arises from trading activities that serve customer needs, including hedging of interest rates, foreign exchange risk and non-trading activities within capital markets.
We are also subject to certain market risks which include potential losses arising from changes in interest rates, foreign exchange rates, equity prices, commodity prices and/or other relevant market rates or prices. Market risk in our business arises from trading activities that serve customer needs, including interest rate hedging, foreign exchange risk and non-trading activities within capital markets.
For a summary of our sources and uses of cash by type of activity for the years ended December 31, 2023, 2022 and 2021, see the Consolidated Statements of Cash Flows in Item 8. The Funding and Liquidity unit monitors a variety of liquidity and funding metrics and early warning indicators and metrics, including specific risk thresholds limits.
For a summary of our sources and uses of cash by type of activity for the years ended December 31, 2024, 2023 and 2022, see the Consolidated Statements of Cash Flows in Item 8. The Funding and Liquidity unit monitors a variety of liquidity and funding metrics and early warning indicators and metrics, including specific risk thresholds limits.
The sensitivity is intended to provide insights into the impact of adverse changes in the macroeconomic environment and the corresponding impact to modeled loss estimates.
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.
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.
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.
We define our risk appetite as the maximum limit of acceptable risk beyond which we could be unable to achieve our strategic objectives and capital adequacy obligations. Citizens Financial Group, Inc. | 64 Our principal non-market risks include credit, operational, regulatory, reputational, liquidity and strategic risks.
We define our risk appetite as the maximum limit of acceptable risk beyond which we could be unable to achieve our strategic objectives and capital adequacy obligations. Citizens Financial Group, Inc. | 66 Our principal non-market risks include credit, operational, regulatory, reputational, liquidity and strategic risks.
All authority to grant credit is delegated through the independent Credit Risk function and is closely monitored and updated annually at a minimum.
Authority to grant credit is delegated through the independent Credit Risk Function and is closely monitored and updated annually, at a minimum.
As part of our overall risk management strategy we enter into various free-standing derivatives, such as interest rate swaps, interest rate swaptions, interest rate futures and forward contracts to purchase mortgage-backed securities to economically hedge the change in fair value of our MSRs.
As part of our overall risk management strategy we enter into various free-standing 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.
Objective The independent Credit Risk Function is responsible for reviewing and approving 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.
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.
Basel III capital framework and its related application, see the “Regulation and Supervision” section in Item 1. The table below presents the regulatory capital ratios for CFG and CBNA under the U.S. Basel III Standardized rules: Table 23: Regulatory Capital Ratios Under the U.S.
Basel III capital framework and its related application, see the “Regulation and Supervision” section in Item 1. The table below presents the regulatory capital ratios for CFG and CBNA under the U.S. Basel III Standardized rules: Table 22: Regulatory Capital Ratios Under the U.S.
We also assess whether there are any declines in fair value below the carrying value of assets that require recognition of a loss in the Consolidated Statements of Operations, including certain investments, capitalized servicing assets, goodwill, and core deposit and other intangible assets. For additional information regarding our fair value measurements, see Note 20.
We also assess whether there are any declines in fair value below the carrying value of assets that require recognition of a loss in the Consolidated Statements of Operations, including certain investments, loans, goodwill, and core deposit and other intangible assets. For additional information regarding our fair value measurements, see Note 20.
Reporting to the Chief Credit Officer are the heads of the second line of defense credit functions specializing in: Consumer Banking, Commercial Banking, Citizens Restructuring Management, Portfolio and Corporate Reporting, ALLL Analytics, Current Expected Credit Loss, and Credit Policy and Administration. Each team under these leaders is composed of experienced credit professionals.
Reporting to the Chief Credit Officer are the heads of the second line of defense credit functions specializing in: Consumer Banking, Commercial Banking, Private Banking, Citizens Restructuring Management, Portfolio and Corporate Reporting, ACL Analytics, Current Expected Credit Loss, and Credit Policy and Administration. Each team under these leaders is composed of experienced credit professionals.
This group conducts portfolio reviews on a risk-based cycle to evaluate individual loans and validate risk ratings, as well as test the consistency of the credit processes and the effectiveness of credit risk management.
This group conducts portfolio reviews on a risk-based cycle to evaluate individual loans and validate risk ratings, as well as tests the consistency of the credit processes and the effectiveness of credit risk management.
As a BHC, our SCB of 4.0% 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. Citizens Financial Group, Inc. | 54 For additional discussion of the U.S.
As a BHC, 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. Citizens Financial Group, Inc. | 56 For additional discussion of the U.S.
Given the financial impact of credit risk on our earnings and balance sheet, the assessment, approval and management of credit risk represents a major part of our overall risk-management responsibility.
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.
Citizens Financial Group, Inc. | 45 Table 8: Amortized Cost of AFS and HTM Securities by Contractual Maturity As of December 31, 2023 Distribution of Maturities (1) 1 Year or Less After 1 Year Through 5 Years After 5 Years Through 10 Years After 10 Years Total (dollars in millions) Amount Yield (2) Amount Yield (2) Amount Yield (2) Amount Yield (2) Amount Yield (2) Amortized cost: U.S.
Citizens Financial Group, Inc. | 47 Table 8: Amortized Cost of AFS and HTM Securities by Contractual Maturity As of December 31, 2024 Distribution of Maturities (1) 1 Year or Less After 1 Year Through 5 Years After 5 Years Through 10 Years After 10 Years Total (dollars in millions) Amount Yield (2) Amount Yield (2) Amount Yield (2) Amount Yield (2) Amount Yield (2) Amortized cost: U.S.
The following table presents interest rate derivative contracts that we have entered into as of December 31, 2023 and 2022.
The following table presents interest rate derivative contracts that we have entered into as of December 31, 2024 and 2023.
Excluding consideration of qualitative adjustments, this scenario would result in a quantitative lifetime loss estimate of approximately 1.10x our modeled period-end ACL, or an increase of approximately $233 million. This analysis relates only to the modeled credit loss estimate and not to the overall period-end ACL, which includes qualitative adjustments.
Excluding consideration of qualitative adjustments, this scenario would result in a quantitative lifetime loss estimate of approximately 1.2x our modeled period-end ACL, or an increase of approximately $400 million. This analysis relates only to the modeled credit loss estimate and not to the overall period-end ACL, which includes qualitative adjustments.
Net income and a $12.7 billion decrease in RWA, primarily driven by lower commercial and auto loans, was partially offset by dividend payments to the Parent Company and a decrease in the modified CECL transition amount as we entered the second year of the CECL three-year transition period.
Net income and a $7.1 billion decrease in RWA, primarily driven by lower commercial and auto loans, was partially offset by dividend payments to the Parent Company and a decrease in the modified CECL transition amount as we entered the third year of the CECL three-year transition period.
To the extent that CBNA has relied on wholesale borrowings, uses also include payments of related principal and interest. For further information on CBNA’s outstanding debt see Note 13.
To the extent that CBNA relies on wholesale borrowings, uses also include payments of related principal and interest. For further information on CBNA’s outstanding debt see Note 13.
The primary factors considered in commercial credit approvals are the financial strength of the borrower, assessment of the borrower’s management capabilities, cash flows from operations, industry sector trends, type and sufficiency of collateral, type of exposure, transaction structure, and the general economic outlook.
The primary factors considered in commercial credit approvals are the financial strength of the borrower, assessment of the borrower’s management capabilities, cash flows from operations, industry sector trends, type and sufficiency of collateral, type of exposure, geography, transaction structure including loan covenants, and the general economic outlook.
Citizens Financial Group, Inc. | 39 RESULTS OF OPERATIONS — 2023 compared with 2022 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, leases and investment securities) and the interest expense incurred in connection with interest-bearing liabilities (generally deposits and borrowed funds).
Citizens Financial Group, Inc. | 40 RESULTS OF OPERATIONS — 2024 compared with 2023 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).
(2) Includes Georgia, Maryland, North Carolina, South Carolina and Virginia. Retail Loan Asset Quality We utilize credit scores provided by FICO, which are generally refreshed on a quarterly basis, and payment and delinquency status, among other data points, to monitor credit quality for retail loans.
(2) Includes Georgia, Maryland, North Carolina, South Carolina and Virginia. Citizens Financial Group, Inc. | 54 Retail Loan Asset Quality We utilize credit scores provided by FICO, which are generally refreshed on a quarterly basis, and payment and delinquency status, among other data points, to monitor credit quality for retail loans.
Table 26: Credit Ratings December 31, 2023 Moody’s Standard and Poor’s Fitch Citizens Financial Group, Inc.: Long-term issuer Baa1 BBB+ BBB+ Short-term issuer NR A-2 F1 Subordinated debt Baa1 BBB BBB Preferred Stock Baa3 BB+ BB Citizens Bank, National Association: Long-term issuer Baa1 A- BBB+ Short-term issuer NR A-2 F1 Long-term deposits A1 NR A- Short-term deposits P-1 NR F1 NR = Not Rated We currently have a “stable” outlook at Standard & Poor’s, a “negative” outlook at Moody’s and a “stable” outlook at Fitch.
Table 25: Credit Ratings December 31, 2024 Moody’s Standard and Poor’s Fitch Citizens Financial Group, Inc.: Long-term issuer Baa1 BBB+ BBB+ Short-term issuer NR A-2 F1 Subordinated debt Baa1 BBB BBB Preferred Stock Baa3 BB+ BB Citizens Bank, National Association: Long-term issuer A3 A- BBB+ Short-term issuer (P) P-2 A-2 F1 Long-term deposits A1 NR A- Short-term deposits P-1 NR F1 NR = Not Rated We currently have a “stable” outlook at Standard & Poor’s, a “negative” outlook at Moody’s and a “positive” outlook at Fitch.
Citizens Financial Group, Inc. | 68 We use interest rate 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.
We use interest rate 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.
Citizens Financial Group, Inc. | 53 CAPITAL AND REGULATORY MATTERS As a BHC and FHC, we are subject to regulation and supervision by the FRB. Our banking subsidiary, CBNA, is a national banking association primarily regulated by the OCC. Our regulation and supervision continues to evolve as the legal and regulatory frameworks governing our operations continue to change.
CAPITAL AND REGULATORY MATTERS As a BHC and FHC, we are subject to regulation and supervision by the FRB. Our banking subsidiary, CBNA, is a national banking association primarily regulated by the OCC. Our regulation and supervision continues to evolve as the legal and regulatory frameworks governing our operations continue to change.
Citizens Financial Group, Inc. | 67 Since we cannot predict the future path of interest rates, we use simulation analysis to project net interest income under various interest rate scenarios including a “most likely” (implied forward) scenario, as well as a variety of extreme and unlikely scenarios.
Since we cannot predict the future path of interest rates, we use simulation analysis to project net interest income under various interest rate scenarios including a “most likely” (implied forward) scenario, as well as a variety of extreme and unlikely scenarios.
Citizens Financial Group, Inc. | 44 ANALYSIS OF FINANCIAL CONDITION Securities Table 7: Amortized Cost and Fair Value of Securities December 31, 2023 December 31, 2022 (dollars in millions) Amortized Cost (1) Fair Value Amortized Cost Fair Value U.S.
Citizens Financial Group, Inc. | 46 ANALYSIS OF FINANCIAL CONDITION Securities Table 7: Amortized Cost and Fair Value of Securities December 31, 2024 December 31, 2023 (dollars in millions) Amortized Cost (1) Fair Value Amortized Cost (1) Fair Value U.S.
The following table presents our regulatory capital ratios including the AOCI impact from securities and pension, which we believe provides useful information in light of recent events and the potential for change in the regulatory capital framework.
Citizens Financial Group, Inc. | 58 The following table presents our regulatory capital ratios including the AOCI impact from securities and pension, which we believe provides useful information in light of recent events and the potential for change in the regulatory capital framework.
Credit ratings assigned by agencies such as Moody’s, Standard and Poor’s, and Fitch impact our access to unsecured wholesale market funds and to large uninsured customer deposits and are presented in the table below.
Citizens Financial Group, Inc. | 60 Credit ratings assigned by agencies such as Moody’s, Standard and Poor’s, and Fitch impact our access to unsecured wholesale market funds and to large uninsured customer deposits and are presented in the table below.
The checks and balances in the credit process and the independence of the credit approver function are designed to appropriately assess and sanction the level of credit risk being accepted, facilitate the early recognition of credit problems when they occur, and to provide for effective problem asset management and resolution.
Checks and balances in the credit process and the independence of the credit approver function are designed to appropriately assess and sanction the level of credit risk being accepted, actively monitor the portfolio to facilitate the early recognition of credit problems, and provide for effective problem asset management and resolution.
Table 31: Results of Modeled and Non-Modeled Measures for Regulatory Capital Calculations (dollars in millions) For the Three Months Ended December 31, 2023 For the Three Months Ended December 31, 2022 Market Risk Category Period End Average High Low Period End Average High Low Interest Rate $3 $3 $5 $2 $3 $2 $3 $1 Foreign Exchange Currency Rate — — 2 — — — — — Credit Spread 1 1 2 1 2 2 2 2 Commodity — — — — — — — — General VaR 4 4 6 3 5 3 5 2 Specific Risk VaR — — — — — — — — Total VaR $4 $4 $6 $3 $5 $3 $5 $2 Stressed General VaR $4 $7 $14 $3 $12 $10 $15 $6 Stressed Specific Risk VaR — — — — — — — — Total Stressed VaR $4 $7 $14 $3 $12 $10 $15 $6 Market Risk Regulatory Capital $33 $39 Specific Risk Not Modeled Add-on 17 20 de Minimis Exposure Add-on 1 — Total Market Risk Regulatory Capital $51 $59 Market Risk-Weighted Assets $643 $739 Citizens Financial Group, Inc. | 72 Stressed VaR SVaR is an extension of VaR and utilizes a longer historical look-back horizon, fixed from January 3, 2005, to identify headline risks from more volatile periods and to provide a counterbalance to VaR, which may be low during periods of low volatility.
Table 30: Results of Modeled and Non-Modeled Measures for Regulatory Capital Calculations (dollars in millions) For the Three Months Ended December 31, 2024 For the Three Months Ended December 31, 2023 Market Risk Category Period End Average High Low Period End Average High Low Interest Rate $2 $1 $3 $1 $3 $3 $5 $2 Foreign Exchange Currency Rate — — — — — — 2 — Credit Spread 2 2 2 1 1 1 2 1 Commodity — — — — — — — — General VaR 3 2 3 1 4 4 6 3 Specific Risk VaR — — — — — — — — Total VaR $3 $2 $3 $1 $4 $4 $6 $3 Stressed General VaR $7 $7 $12 $4 $4 $7 $14 $3 Stressed Specific Risk VaR — — — — — — — — Total Stressed VaR $7 $7 $12 $4 $4 $7 $14 $3 Market Risk Regulatory Capital $28 $33 Specific Risk Not Modeled Add-on 25 17 de Minimis Exposure Add-on — 1 Total Market Risk Regulatory Capital $53 $51 Market Risk-Weighted Assets $665 $643 Stressed VaR SVaR is an extension of VaR and utilizes a longer historical look-back horizon, fixed from January 3, 2005, to identify headline risks from more volatile periods and to provide a counterbalance to VaR, which may be low during periods of low volatility.
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. More information is available at www.citizensbank.com.
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.
Table 28: Interest Rate Derivative Contracts Used to Manage Non-Trading Interest Rate Exposure December 31, 2023 December 31, 2022 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 $5,365 6.2 3.8 % 5.4 % $— — — % — % Liability conversion swaps: Long-term borrowed funds: Receive fixed/pay 3-month LIBOR — — — — 1,000 1.6 2.7 4.7 Receive fixed/pay SOFR 500 1.9 2.6 5.6 — — — — Total fair value hedges 5,865 1,000 Cash flow hedges: Asset conversion swaps: Loans: Swaps Receive fixed/pay SOFR 17,780 0.8 4.0 5.4 500 2.7 3.5 4.3 Receive fixed/pay SOFR - forward-starting 31,250 2.9 3.3 4.6 13,500 3.2 3.0 4.5 Receive fixed/pay 1-month LIBOR — — — — 15,250 3.8 1.8 4.3 Receive fixed/pay 1-month LIBOR - forward-starting — — — — 2,000 5.2 2.9 4.9 Basis swaps Receive SOFR/pay 1-month term SOFR 5,000 1.0 — 5.3/5.3 — — — — Receive SOFR/pay 1-month term SOFR - forward-starting 14,000 2.7 — 5.2/5.1 7,000 3.3 — 4.4/4.4 Floor Rate Cap Rate Floor Rate Cap Rate Options Interest rate collars (1) 1,000 1.5 2.5 3.7 — — — — Interest rate collars - forward-starting (1) 500 2.5 2.7 4.4 1,500 2.8 2.6 3.9 Floor spreads - forward-starting (2) 2,500 2.8 2.2/3.2 — — — — — Total cash flow hedges 72,030 39,750 Total hedges $77,895 $40,750 (1) Weighted average floor and cap rates represent strike rates through which CFG will receive interest if the SOFR rate falls below the floor strike rate and pay interest if the SOFR rate exceeds the cap strike rate.
Table 27: Interest Rate Hedges Used to Manage Non-Trading Interest Rate Exposure December 31, 2024 December 31, 2023 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 $7,827 4.7 3.8 % 4.5 % $5,365 6.2 3.8 % 5.4 % Liability conversion swaps: Long-term borrowed funds: Receive fixed/pay SOFR 500 0.9 2.6 4.8 500 1.9 2.6 5.6 Total fair value hedges 8,327 5,865 Cash flow hedges: Asset conversion swaps: Loans: Swaps Receive fixed/pay SOFR 26,250 1.7 3.1 4.5 17,780 0.8 4.0 5.4 Receive fixed/pay SOFR - forward-starting 20,000 3.5 3.7 4.0 31,250 2.9 3.3 4.6 Basis swaps Receive SOFR/pay 1-month term SOFR 11,500 1.6 — 4.5/4.3 5,000 1.0 — 5.3/5.3 Receive SOFR/pay 1-month term SOFR - forward-starting 3,000 2.4 — 4.0/4.0 14,000 2.7 — 5.2/5.1 Floor Rate Cap Rate Floor Rate Cap Rate Options Interest rate collars (1) — — — — 1,000 1.5 2.5 3.7 Interest rate collars - forward-starting (1) — — — — 500 2.5 2.7 4.4 Floor spreads - forward-starting (2) — — — — 2,500 2.8 2.2/3.2 — Total cash flow hedges 60,750 72,030 Total hedges $69,077 $77,895 (1) Weighted average floor and cap rates represent strike rates through which CFG will receive interest if the SOFR rate falls below the floor strike rate and pay interest if the SOFR rate exceeds the cap strike rate.
Credit Risk Overview Credit risk represents the potential for loss arising from a customer, counterparty, or issuer failing to perform in accordance with the contractual terms of the obligation.
Credit Risk Management 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.
In the fourth quarter of 2023, the quantitative impairment test estimated the fair value of the reporting units using an equal weighting of an income approach (i.e., discounted cash flows method) and market-based approach (i.e., the guideline public company method).
Valuation techniques include discounted cash flow and market approach analysis. In the fourth quarter of 2024, the quantitative impairment test estimated the fair value of the reporting units using an equal weighting of an income approach (i.e., discounted cash flows method) and market-based approach (i.e., the guideline public company method).
Refer to “Market Risk Regulatory Capital” below for details of our ten-day VaR metrics for the quarters ended December 31, 2023 and 2022. Market Risk Regulatory Capital The U.S. banking regulators’ “Market Risk Rule” covers the calculation of market risk capital.
Refer to “Market Risk Regulatory Capital” below for details of our ten-day VaR metrics for the quarters ended December 31, 2024 and 2023. Citizens Financial Group, Inc. | 75 Market Risk Regulatory Capital The U.S. banking regulators’ “Market Risk Rule” covers the calculation of market risk capital.
VaR Overview The market risk measurement model is based on historical simulation. The VaR measure estimates the extent of any fair value losses on trading positions that may occur due to broad market movements (General VaR) such as changes in the level of interest rates, foreign exchange rates, equity prices and commodity prices.
The VaR measure estimates the extent of any fair value losses on trading positions that may occur due to broad market movements (General VaR) such as changes in the level of interest rates, foreign exchange rates, equity prices and commodity prices.
Improvements to Income Tax Disclosures Issued December 2023 • Requires an annual income tax rate reconciliation table that includes specific categories and other significant categories, disaggregated by nature, that exceed 5% of income tax expense at the statutory tax rate • Requires a qualitative description of the states and local jurisdictions that make up more than 50% of the effect of the state and local income tax category • Requires description of the nature, effect and underlying causes of the reconciling items and the judgment used in categorizing these items • Requires annual disclosure of income taxes paid, net of refunds received, disaggregated by federal, state, and foreign taxes, and further disaggregated by individual jurisdictions that exceed 5% of total income taxes paid, net of refunds received • Requires disclosure of 1) income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and foreign, and 2) income tax expense (or benefit) from continuing operations disaggregated by federal, state and foreign • Eliminates the requirement to disclose the nature and estimate of the change in unrecognized tax benefits expected in the next twelve months • Eliminates the requirement to disclose the cumulative amount of each type of temporary difference when a deferred tax liability is not recognized because of the exceptions to comprehensive recognition of deferred taxes related to subsidiaries and corporate joint ventures • Required effective date: January 1, 2025 for our annual disclosures and January 1, 2026 for our interim disclosures.
Citizens Financial Group, Inc. | 64 ACCOUNTING AND REPORTING DEVELOPMENTS Accounting standards issued but not adopted as of December 31, 2024 Pronouncement Summary of Guidance Effects on Financial Statements Improvements to Income Tax Disclosures Issued December 2023 • Requires an annual income tax rate reconciliation table that includes specific categories and other significant categories, disaggregated by nature, that exceed 5% of income tax expense at the statutory tax rate • Requires a qualitative description of the states and local jurisdictions that make up more than 50% of the effect of the state and local income tax category • Requires description of the nature, effect and underlying causes of the reconciling items and the judgment used in categorizing these items • Requires annual disclosure of income taxes paid, net of refunds received, disaggregated by federal, state, and foreign taxes, and further disaggregated by individual jurisdictions that exceed 5% of total income taxes paid, net of refunds received • Requires disclosure of 1) income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and foreign, and 2) income tax expense (or benefit) from continuing operations disaggregated by federal, state and foreign • Eliminates the requirement to disclose the nature and estimate of the change in unrecognized tax benefits expected in the next twelve months • Eliminates the requirement to disclose the cumulative amount of each type of temporary difference when a deferred tax liability is not recognized because of the exceptions to comprehensive recognition of deferred taxes related to subsidiaries and corporate joint ventures • Required effective date: Annual financial statements for the year ending December 31, 2025.
This reflects the impacts of changes in our balance sheet mix, including securities, loans, deposits, borrowed funds and ongoing hedge activity, which is primarily comprised of received fixed swaps that offset our naturally asset-sensitive balance sheet.
Our interest rate sensitivity incorporates the impacts of changes in our balance sheet mix, including securities, loans, deposits, borrowed funds and hedge activity, which is primarily comprised of received fixed swaps that offset our naturally asset-sensitive balance sheet.
For additional information regarding our financial performance, see “Results of Operations — 2023 compared with 2022” included in this report.
For additional information regarding our financial performance, see “Results of Operations — 2024 compared with 2023” included in this report.
As of December 31, 2023, the portfolio’s average effective duration, including recent hedging actions to reduce duration, was 3.9 years compared to 5.8 years as of December 31, 2022.
As of December 31, 2024, the portfolio’s average effective duration, including recent hedging actions to reduce duration, was 3.7 years compared to 3.9 years as of December 31, 2023.
At December 31, 2023, CFG’s and CBNA’s total capital ratios increased driven by their respective changes in CET1 and tier 1 capital described above and a reduction in the modified AACL transition amount. At December 31, 2023, CFG’s tier 1 leverage ratio was stable compared to December 31, 2022, whereas CBNA’s tier 1 leverage ratio decreased.
At December 31, 2024, CFG’s and CBNA’s total capital ratios increased compared to December 31, 2023, driven by their respective changes in CET1 and tier 1 capital described above and a reduction in the modified AACL transition amount.
Table 18: Retail Loan Portfolio Analysis December 31, 2023 December 31, 2022 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 (1) 97.34 % 0.90 % 0.38 % 0.82 % 0.56 % 97.68 % 0.32 % 0.15 % 1.07 % 0.78 % Home equity 97.34 0.55 0.22 — 1.89 97.68 0.46 0.14 — 1.72 Automobile 96.94 1.74 0.58 — 0.74 97.93 1.24 0.37 — 0.46 Education 99.14 0.41 0.19 0.02 0.24 99.30 0.28 0.13 0.03 0.26 Other retail 97.02 0.97 0.67 0.57 0.77 97.71 0.81 0.55 0.41 0.52 Total retail 97.56 % 0.85 % 0.36 % 0.40 % 0.83 % 98.02 % 0.52 % 0.21 % 0.46 % 0.79 % Table 19: Retail Asset Quality Metrics December 31, 2023 December 31, 2022 Average refreshed FICO for total portfolio 772 770 CLTV ratio for secured real estate (1) 50 % 50 % (1) The real estate secured portfolio CLTV is calculated as the mortgage and second lien loan balance divided by the most recently available value of the property.
Table 17: Retail Loan Portfolio Analysis December 31, 2024 December 31, 2023 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 97.81 % 0.77 % 0.28 % 0.55 % 0.59 % 97.34 % 0.90 % 0.38 % 0.82 % 0.56 % Home equity 97.59 0.53 0.16 — 1.72 97.34 0.55 0.22 — 1.89 Automobile 96.18 2.11 0.70 — 1.01 96.94 1.74 0.58 — 0.74 Education 98.83 0.42 0.21 0.02 0.52 99.14 0.41 0.19 0.02 0.24 Other retail 96.86 0.99 0.67 0.02 1.46 97.02 0.97 0.67 0.57 0.77 Total retail 97.75 % 0.76 % 0.30 % 0.26 % 0.93 % 97.56 % 0.85 % 0.36 % 0.40 % 0.83 % Table 18: Retail Asset Quality Metrics December 31, 2024 December 31, 2023 Average refreshed FICO for total portfolio 775 772 CLTV ratio for secured real estate (1) 50 % 50 % (1) The real estate secured portfolio CLTV is calculated as the mortgage and second lien loan balance divided by the most recently available value of the property.
For more information on the computation of non-GAAP financial measures, see “Non-GAAP Financial Measures and Reconciliations.” Citizens Financial Group, Inc. | 38 FINANCIAL PERFORMANCE Key Highlights Net income decreased $465 million, with earnings per diluted common share down $0.97 to $3.13 compared to 2022.
For more information on the computation of non-GAAP financial measures, see “Non-GAAP Financial Measures and Reconciliations.” Citizens Financial Group, Inc. | 39 FINANCIAL PERFORMANCE Key Highlights Net income decreased $99 million, with earnings per diluted common share down $0.10 to $3.03 compared to 2023.
Treasuries and mortgage-backed securities issued by GNMA and GSEs represent 96% of the fair value of our debt securities portfolio, with approximately $31.4 billion of unencumbered high-quality liquid securities serving as potential collateral for borrowings from the FHLB, FRB discount window, the Fixed Income Clearing Corporation bilateral repurchase agreement market, and the Bank Term Funding Program.
Treasuries and mortgage-backed securities issued by GNMA and GSEs represented 98% of the fair value of our debt securities portfolio, with approximately $36.0 billion of unencumbered high-quality liquid securities serving as potential collateral for borrowings from the FHLB, FRB discount window, and the Fixed Income Clearing Corporation bilateral repurchase agreement market.
The table below reports net interest income exposures against a variety of interest rate scenarios. 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.
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.
When approving customers for a new loan or extension of an existing credit line, credit scores are used in conjunction with other credit risk variables such as affordability, length of term, collateral value, collateral type, and lien subordination.
Credit scoring models are used to forecast the probability of default of an applicant prior to origination. When approving customers for a new loan or extension of an existing credit line, credit scores are used in conjunction with other credit risk variables such as affordability, length of term, collateral value, collateral type, and lien subordination.
Results reflect notable items of $357 million or $0.75 per diluted common share, net of tax benefit, compared to $352 million or $0.74 per diluted common share, net of tax benefit, in 2022.
Results reflect notable items of $98 million or $0.21 per diluted common share, net of tax benefit, compared to $357 million or $0.75 per diluted common share, net of tax benefit, in 2023.
Early adoption is permitted. • Adoption is not expected to have a material impact on our Consolidated Financial Statements, but is expected to have a meaningful impact on our required disclosures in the Income Taxes Note to the Consolidated Financial Statements.
Early adoption is permitted. • Adoption is expected to have a meaningful impact on our required income tax disclosures in the Consolidated Financial Statements.
Citizens Financial Group, Inc. | 65 Lending authority is granted by the second line of defense credit risk function to each underwriter to ensure proper oversight of the underwriting teams. The amount of delegated authority depends on the experience of the individual. We periodically evaluate the performance of each underwriter and annually reauthorize their delegated authority.
Citizens Financial Group, Inc. | 67 Lending authority is granted to each first line approver by the second line of defense credit risk function to ensure proper oversight of the underwriting teams. We periodically evaluate the performance of each first line approver and annually reauthorize their delegated authority.
Client facilitation activities consist primarily of interest rate derivatives, financially settled commodity derivatives and foreign exchange contracts where we enter into offsetting trades with a separate counterparty or exchange to manage our market risk exposure.
Securities underwriting and trading activities are conducted through CBNA and Citizens JMP Securities, LLC. Client facilitation activities consist primarily of interest rate derivatives, financially settled commodity derivatives and foreign exchange contracts where we enter into offsetting trades with a separate counterparty or exchange to manage our market risk exposure.
Approximately 98% of commercial real estate loans remain current on payments as of December 31, 2023. For more information on the distribution of commercial loans by vintage date and internal risk rating, see Note 6.
Approximately 96% of commercial real estate loans remain current on payments as of December 31, 2024. For more information on the distribution of commercial loans by vintage date and regulatory classification rating, see Note 6.
In addition to customer deposits, our funding sources also include 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.
We rely on customer deposits to be our primary stable and low-cost source of funding. Our funding sources also include 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.
Table 30: Pre-Tax Gains (Losses) Recorded in the Consolidated Statements of Operations and the Consolidated Statements of Comprehensive Income on Cash Flow Hedges Year Ended December 31, (dollars in millions) 2023 2022 Amount of pre-tax net gains (losses) recognized in OCI ($145) ($1,806) Amount of pre-tax net gains (losses) reclassified from AOCI into interest income (596) (111) Amount of pre-tax net gains (losses) reclassified from AOCI into interest expense — (4) Using the interest rate curve at December 31, 2023, we estimate that approximately $914 million in pre-tax net losses related to cash flow hedge strategies will be reclassified from AOCI to net interest income over the next 12 months, including $460 million from terminated swaps.
Table 29: Pre-Tax Gains (Losses) Recorded in the Consolidated Statements of Operations and the Consolidated Statements of Comprehensive Income on Cash Flow Hedges Year Ended December 31, (dollars in millions) 2024 2023 Pre-tax net gains (losses) recognized in OCI ($725) ($145) Pre-tax net gains (losses) reclassified from AOCI into interest income (945) (596) Pre-tax net gains (losses) reclassified from AOCI into interest expense (1) — Using the December 31, 2024 interest rate curve we estimate that $718 million in pre-tax net losses related to cash flow hedge strategies will be reclassified from AOCI to net interest income over the next 12 months.
The table below presents the sensitivity of net interest income to various parallel yield curve shifts from the market implied forward yield curve: Table 27: Sensitivity of Net Interest Income Estimated % Change in Net Interest Income over 12 Months December 31, Basis points 2023 2022 Instantaneous Change in Interest Rates +200 — % 4.8 % +100 0.5 2.4 -100 (1.5) (2.5) -200 (3.0) (5.6) Gradual Change in Interest Rates +200 0.4 % 2.7 % +100 0.5 1.4 -100 (1.0) (1.4) -200 (1.9) (3.0) We continue to manage asset sensitivity within the scope of our policy, changing market conditions and changes in our balance sheet.
Table 26: Sensitivity of Net Interest Income Estimated % Change in Net Interest Income over 12 Months December 31, Basis points 2024 2023 Instantaneous Change in Interest Rates +200 1.8 % — % +100 1.1 0.5 -100 (1.3) (1.5) -200 (3.3) (3.0) Gradual Change in Interest Rates +200 2.2 % 0.4 % +100 1.0 0.5 -100 (0.9) (1.0) -200 (1.8) (1.9) We continue to manage asset sensitivity within the scope of our policy, changing market conditions and changes in our balance sheet.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Page Introduction 38 Financial Performance 39 Results of Operations - 2023 compared with 2022 40 Net Interest Income 40 Noninterest Income 42 Noninterest Expense 42 Provision for Credit Losses 43 Income Tax Expense 43 Business Operating Segments 43 Results of Operations - 2022 compared with 2021 44 Analysis of Financial Condition 45 Securities 45 Loans and Leases 46 Credit Quality 48 Deposits 53 Borrowed Funds 53 Capital and Regulatory Matters 54 Liquidity 58 Critical Accounting Estimates 61 Accounting and Reporting Developments 63 Risk Governance 64 Market Risk 66 Non-GAAP Financial Measures and Reconciliations 75 Citizens Financial Group, Inc. | 37 INTRODUCTION Citizens Financial Group, Inc. is one of the nation’s oldest and largest financial institutions, with $222.0 billion in assets as of December 31, 2023.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Page Introduction 39 Financial Performance 40 Results of Operations - 2024 compared with 2023 41 Net Interest Income 41 Noninterest Income 44 Noninterest Expense 44 Provision for Credit Losses 45 Income Tax Expense 45 Business Operating Segments 45 Results of Operations - 2023 compared with 2022 46 Analysis of Financial Condition 47 Securities 47 Loans and Leases 48 Credit Quality 50 Deposits 55 Borrowed Funds 56 Capital and Regulatory Matters 56 Liquidity 59 Critical Accounting Estimates 62 Accounting and Reporting Developments 65 Risk Governance 66 Market Risk 71 Non-GAAP Financial Measures and Reconciliations 78 Citizens Financial Group, Inc. | 38 INTRODUCTION Citizens Financial Group, Inc. is one of the nation’s oldest and largest financial institutions, with $217.5 billion in assets as of December 31, 2024.
Borrowed Funds Total borrowed funds of $14.0 billion as of December 31, 2023 decreased $1.9 billion compared to December 31, 2022, driven by a decline in FHLB advances, partially offset by the issuance of secured borrowings collateralized by auto loans. For more information regarding our borrowed funds see “Liquidity” and Note 13.
Borrowed Funds Total borrowed funds of $12.4 billion as of December 31, 2024 decreased $1.6 billion compared to December 31, 2023, driven by a decline of approximately $4.2 billion in FHLB advances, partially offset by the issuance of senior debt and secured borrowings collateralized by loans. For more information regarding our borrowed funds, see “Liquidity” and Note 13.
As of December 31, 2023: • Organically generated deposits continue to be our primary source of funding, resulting in a consolidated period-end loans-to-deposits ratio, excluding LHFS, of 82.3%; ◦ Estimated insured/secured deposits comprise 71% of our consolidated deposit base of $177.3 billion. • Our total available liquidity, comprised of contingent liquidity and available discount window capacity, was approximately $78.8 billion; ◦ Contingent liquidity was $57.1 billion, consisting of unencumbered high-quality liquid securities of $31.4 billion, unused FHLB capacity of $15.9 billion, and our cash balances at the FRB of $9.8 billion; and ◦ Available discount window capacity was $21.7 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.
Citizens Financial Group, Inc. | 61 As of December 31, 2024: • Organically generated deposits continue to be our primary source of funding, resulting in a consolidated period-end loans-to-deposits ratio, excluding LHFS, of 79.6%; ◦ Estimated insured/secured deposits comprise 67% of our consolidated deposit base of $174.8 billion. • Our total available liquidity, comprised of contingent liquidity and available discount window capacity, was approximately $83.1 billion; ◦ Contingent liquidity was $66.2 billion, consisting of unencumbered high-quality liquid securities of $36.0 billion, unused FHLB capacity of $21.1 billion, and our cash balances at the FRB of $9.1 billion; and ◦ Available discount window capacity was $16.9 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.
Citizens Financial Group, Inc. | 66 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.
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.
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 value at risk consistent with the definition used by banking regulators.
MSRs are captured under our single price risk management framework that is used for calculating a management value at risk consistent with the definition used by banking regulators.
The maximum level of credit exposure to individual credit borrowers is limited by policy guidelines based on the perceived risk of each borrower or related group of borrowers. Concentration risk is managed through limits on industry asset class and loan quality factors.
Citizens Financial Group, Inc. | 69 Credit exposure to individual borrowers is managed by policy guidelines based on the perceived risk of each borrower, or related group of borrowers, with concentration risk managed through limits on industry sectors, asset classes and loan quality factors.
To illustrate the 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, resulting in a 1.7% peak-to-trough decline in real GDP.
To illustrate the sensitivity, we applied a more pessimistic scenario than that described above which reflects deeper real GDP contraction across our two-year reasonable and supportable forecast period with peak unemployment of approximately 6.0% and start-to-trough real GDP decline of approximately 2.0%.
These factors are influenced by 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.
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.
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 19.
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 19. CRITICAL ACCOUNTING ESTIMATES Our audited Consolidated Financial Statements included in this Report are prepared in accordance with GAAP.
Organizational Structure Management and oversight of credit risk is the responsibility of both the business line and the second line of defense. The second line of defense, the independent Credit Risk Function, is led by the Chief Credit Officer who oversees all credit risk and reports to the Chief Risk Officer.
Our second line of defense, the independent Credit Risk Function, is led by the Chief Credit Officer who oversees all credit risk and reports to the Chief Risk Officer.
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.
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.
Basel III Standardized Rules December 31, 2023 December 31, 2022 (dollars in millions) Amount Ratio Amount Ratio Required Minimum Capital Ratio (1) CET1 capital CFG $18,358 10.6 % $18,574 10.0 % 8.5 % CBNA 19,411 11.3 20,669 11.2 7.0 Tier 1 capital CFG 20,372 11.8 20,588 11.1 10.0 CBNA 19,411 11.3 20,669 11.2 8.5 Total capital CFG 23,608 13.7 23,755 12.8 12.0 CBNA 22,453 13.0 23,534 12.7 10.5 Tier 1 leverage CFG 20,372 9.3 20,588 9.3 4.0 CBNA 19,411 8.9 20,669 9.4 4.0 Risk-weighted assets CFG 172,601 185,224 CBNA 172,094 184,781 Quarterly adjusted average assets (2) CFG 219,591 220,779 CBNA 218,974 220,182 (1) Represents minimum requirement under the current capital framework plus the SCB of 4.0% and CCB of 2.5% for CFG and CBNA, respectively.
Basel III Standardized Rules December 31, 2024 December 31, 2023 (dollars in millions) Amount Ratio Amount Ratio Required Minimum Capital Ratio (1) CET1 capital CFG $17,900 10.8 % $18,358 10.6 % 9.0 % CBNA 20,250 12.3 19,411 11.3 7.0 Tier 1 capital CFG 20,013 12.1 20,372 11.8 10.5 CBNA 20,250 12.3 19,411 11.3 8.5 Total capital CFG 23,232 14.0 23,608 13.7 12.5 CBNA 23,362 14.2 22,453 13.0 10.5 Tier 1 leverage CFG 20,013 9.4 20,372 9.3 4.0 CBNA 20,250 9.6 19,411 8.9 4.0 Risk-weighted assets CFG 165,699 172,601 CBNA 164,986 172,094 Quarterly adjusted average assets (2) CFG 212,555 219,591 CBNA 211,849 218,974 (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.
As an institution subject to Category IV standards, we are subject to biennial supervisory stress testing in even-numbered years; however, the FRB required us to participate in the 2023 CCAR supervisory stress test to incorporate the effects of the Investors acquisition. Our SCB associated with the 2023 supervisory stress test was 4.0%, effective October 1, 2023 through September 30, 2024.
As an institution subject to Category IV standards, we are subject to biennial supervisory stress testing in even-numbered years. Our SCB associated with the 2024 CCAR supervisory stress test was 4.5%, effective October 1, 2024 through September 30, 2025.
These models are developed based on internal performance data over prior interest rate cycles and calibrated to our experience and outlook for rates across a diverse set of market environments.
Similarly, we employ dynamic prepayment and mortgage rate models to project prepayment behaviors specific to each of our product offerings. These models are developed based on internal performance data over prior interest rate cycles and calibrated to our experience and outlook for rates across a diverse set of market environments.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Quantitative and qualitative disclosures about market risk are presented in the “Market Risk” section of Part II, Item 7 and is incorporated herein by reference. Citizens Financial Group, Inc. | 77
Biggest changeITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Quantitative and qualitative disclosures about market risk are presented in the “Market Risk” section of Part II, Item 7 and is incorporated herein by reference. Citizens Financial Group, Inc. | 80

Other CFG 10-K year-over-year comparisons