Citizens Financial Group · Earnings release

Citizens Financial Group, Inc. Reports Second Quarter 2025 Net Income of

Sequential NII Growth of 3%, Fee Growth of 10%, Positive Operating Leverage of ~5%

Key Financial Data

Second Quarter 2025 Highlights

Income

Statement

($s in millions)

–Strong revenue performance, disciplined expense management

–Continued strong Private Bank progress, contributing $0.06 to EPS, up $0.02 QoQ

–NII up 3.3%, reflects NIM up 5 bps to 2.95%, and interest-earning assets up 1%

–Strong fee performance led by Card, Wealth and Mortgage; Capital Markets saw a modest increase driven by equity underwriting and loan syndications, partly offset by delayed M&A closings

–Expenses broadly flat; positive operating leverage of ~5%; efficiency ratio improved to 64.8%

■Loans up 1% QoQ on a spot basis with growth across the Private Bank, Commercial and Consumer

■Net charge-offs of 48 bps, down slightly QoQ with favorable trends in NPAs, down 4%

■Strong ACL coverage of 1.59%, broadly stable QoQ; reflects improving loan mix

■Average deposits up 1% QoQ with growth in lower-cost categories, partially offset by a reduction in higher-cost Treasury brokered deposits

■Strong liquidity profile; spot LDR of 79.6%; pro forma LCR well exceeds Category I Bank requirement of 100%

■Strong CET1 ratio of 10.6%

Total revenue

$

$

$

Pre-provision profit

Underlying pre-provision profit

Provision for credit losses

Net income

Underlying net income

Balance Sheet

&

Credit Quality

($s in billions)

Period-end loans and leases

$

$

$

Average loans and leases

Period-end deposits

Average deposits

Period-end loan-to-deposit ratio

%

%

%

NCO ratio

%

%

%

Financial Metrics

Diluted EPS

$

$

$

Underlying Diluted EPS

ROTCE

%

%

%

Underlying ROTCE

Net interest margin, FTE

Efficiency ratio

Underlying efficiency ratio

CET1

%

%

%

TBV/Share

$

$

$

Notable Items

($s in millions except per share data)

Pre-tax $

EPS

Pre-tax $

EPS

Pre-tax $

EPS

Integration-related

$

—

$

—

$

—

$

—

$

(3)

$

TOP/FDIC-related/Other

—

—

—

—

Total

$

—

$

—

$

—

$

—

$

$

*Results presented on an Underlying basis are non-GAAP Financial Measures. See page 15 for additional information on our use of Non-GAAP Financial Measures.

Citizens Financial Group, Inc.

Comments from Chairman and CEO Bruce Van Saun

“We are pleased to report strong results today that came in ahead of expectations, paced by strong NII and fee growth, disciplined expense management, and credit results that are trending favorably,” said Chairman and CEO Bruce Van Saun. “We saw some sizable M&A advisory fees push out to July, but offset that with strong performance across other fee categories. Our key strategic initiatives, paced by the Private Bank/Private Wealth build out, continue to make good progress, and we have commenced work on a broad ‘Reimagining the Bank’ initiative that will become a multi-year TOP program and drive meaningful benefits from using new technologies to serve customers in new ways and run the bank better. We are well-positioned to have a strong second half of the year and to sustain that momentum into the medium-term.”

Citizens also announced today that its board of directors declared a quarterly common stock dividend of $0.42 per share. The dividend is payable on August 14, 2025 to shareholders of record at the close of business on July 31, 2025.

2

Citizens Financial Group, Inc.

Earnings highlights(1):

Quarterly Trends

($s in millions, except per share data)

Earnings

$/bps/%

%

$/bps/%

%

Net interest income

$

$

$

$

3

%

$

2

%

Noninterest income

8

Total revenue

5

4

Noninterest expense

5

—

1

Pre-provision profit

8

Provision for credit losses

7

Net income

Preferred dividends

1

3

(1)

(3)

Net income available to common stockholders

$

$

$

$

%

$

%

After-tax notable Items

—

—

—

—

Underlying net income

$

$

$

$

%

$

7

%

Underlying net income available to common stockholders

8

Average common shares outstanding

Basic (in millions)

(1)

(5)

Diluted (in millions)

(1)

(4)

Diluted earnings per share

$

$

$

$

%

$

%

Underlying diluted earnings per share

Performance metrics

Net interest margin

%

%

%

5

bps

8

bps

Net interest margin, FTE

5

8

Effective income tax rate

Efficiency ratio

Underlying efficiency ratio

Return on average tangible common equity

Underlying return on average tangible common equity

(4)

Return on average total tangible assets

8

Underlying return on average total tangible assets

%

%

%

bps

5

bps

Capital adequacy(2,3)

Common equity tier 1 capital ratio

%

%

%

Total capital ratio

Tier 1 leverage ratio

Tangible common equity ratio

Allowance for credit losses to loans and leases

%

%

%

(2)

bps

(4)

bps

Asset quality(3)

Nonaccrual loans and leases to loans and leases

%

%

%

(6)

bps

1

bp

Allowance for credit losses to nonaccrual loans and leases

5

%

(6)

%

Net charge-offs as a % of average loans and leases

%

%

%

bps

(4)

bps

(1) Unless otherwise noted, references to balance sheet items are on an average basis, loans exclude loans held for sale, earnings per share

represent fully diluted per common share and references to NIM are on a FTE basis.

(2) Current reporting-period regulatory capital ratios are preliminary.

(3) Capital adequacy and asset-quality ratios calculated on a period-end basis, except net charge-offs.

3

Citizens Financial Group, Inc.

The following table provides information on Underlying results which exclude the impact of notable items.

Underlying results:

Quarterly Trends

($s in millions, except per share data)

$/bps

%

$/bps

%

Net interest income

$

$

$

$

3

%

$

2

%

Noninterest income

9

Total revenue

$

$

$

$

5

%

$

4

%

Noninterest expense

5

—

4

Provision for credit losses

7

Net income available to common stockholders

$

$

$

$

%

$

8

%

Performance metrics

EPS

$

$

$

$

%

$

%

Efficiency ratio

%

%

%

bps

bps

Return on average tangible common equity

%

%

%

bps

(4)

bps

Consolidated balance sheet summary(1):

($s in millions)

$/bps

%

$/bps

%

Total assets

$

$

$

$

(1)

%

$

(1)

%

Total loans and leases

1

(2)

Total loans held for sale

Deposits

(1)

(1)

Stockholders' equity

1

6

Stockholders' common equity

2

6

Tangible common equity

$

$

$

$

3

%

$

%

Loan-to-deposit ratio (period-end)(2)

%

%

%

bps

bps

Loan-to-deposit ratio (average)(2)

%

%

%

bps

bps

(1) Represents period-end unless otherwise noted.

(2) Excludes loans held for sale.

4

Citizens Financial Group, Inc.

Notable items:

There are no notable items in second quarter 2025 or first quarter 2025, as our intention going forward is to limit these to those items of greatest significance. Second quarter 2024 results reflect notable items primarily related to integration costs associated with recent acquisitions, as well as TOP revenue and efficiency initiatives and a notable item for an industry-wide FDIC special assessment. These notable items were excluded from reported results to better reflect Underlying operating results.

Notable items - Integration-related

($s in millions, except per share data)

Pre-tax

After-tax

Pre-tax

After-tax

Pre-tax

After-tax

Salaries & benefits

$

—

$

—

$

—

$

—

$

(3)

$

(2)

Equipment and software

—

—

—

—

—

—

Outside services

—

—

—

—

—

—

Occupancy

—

—

—

—

—

—

Other expense

—

—

—

—

—

—

Noninterest expense

$

—

$

—

$

—

$

—

$

(3)

$

(2)

EPS Impact - Noninterest expense

$

—

$

—

$

Total Integration-related

$

—

$

—

$

—

$

—

$

(3)

$

(2)

EPS Impact - Total Integration-related

$

—

$

—

$

Other notable items - TOP & Other

($s in millions, except per share data)

Pre-tax

After-tax

Pre-tax

After-tax

Pre-tax

After-tax

Tax notable items

$

—

$

—

$

—

$

—

$

—

$

7

Noninterest income

—

—

—

—

4

3

Salaries & benefits

—

—

—

—

(5)

(4)

Equipment and software

—

—

—

—

(4)

(3)

Outside services

—

—

—

—

(7)

Occupancy

—

—

—

—

(6)

(4)

FDIC special assessment(1)

—

—

—

—

(5)

(4)

Other expense

—

—

—

—

(3)

(2)

Noninterest expense

$

—

$

—

$

—

$

—

$

$

Total Other Notable Items

$

—

$

—

$

—

$

—

$

$

EPS Impact - Other Notable Items

$

—

$

—

$

Total Notable Items

$

—

$

—

$

—

$

—

$

$

Total EPS Impact

$

—

$

—

$

(1) The FDIC special assessment earnings per share impact is $(0.01) second quarter 2024.

5

Citizens Financial Group, Inc.

Discussion of results:

Net interest income

($s in millions)

$/bps

%

$/bps

%

Interest income:

Interest and fees on loans and leases and loans held for sale

$

$

$

$

2

%

$

(7)

%

Investment securities

2

3

Interest-bearing deposits in banks

3

3

Total interest income

$

$

$

$

2

%

$

(7)

%

Interest expense:

Deposits

$

$

$

$

7

1

%

$

%

Short-term borrowed funds

9

8

4

1

5

Long-term borrowed funds

1

1

Total interest expense

$

$

$

$

9

1

%

$

%

Net interest income

$

$

$

$

3

%

$

2

%

Net interest margin, FTE

%

%

%

5

bps

8

bps

vs.

Net interest income of $1.4 billion increased 3.3%, reflecting a higher net interest margin, as well as a 1% increase in average interest-earning assets.

•Net interest margin of 2.95% increased 5 basis points, given the time-based benefits of Non-Core runoff and lower terminated swap impact, lower deposit costs and favorable fixed-rate asset repricing.

•Interest-bearing deposit costs decreased 2 basis points; total deposit costs decreased 2 basis points, and total cost of funds decreased 2 basis points to 2.07%.

vs.

Net interest income of $1.4 billion increased 2%, primarily reflecting a higher net interest margin, partially offset by a 1% decline in average interest-earning assets.

•Net interest margin of 2.95% increased 8 basis points, as the benefit of lower funding costs, Non-Core runoff and fixed-rate asset repricing were partially offset by the impact of variable-rate asset repricing, net of swaps.

6

Citizens Financial Group, Inc.

Noninterest Income

($s in millions)

$

%

$

%

Service charges and fees

$

$

$

$

2

2

%

$

5

5

%

Capital markets fees

5

5

Card fees

7

8

(2)

(2)

Wealth fees

7

9

Mortgage banking fees

Foreign exchange and derivative products

2

5

2

5

Letter of credit and loan fees

1

2

2

5

Securities gains, net

5

7

—

(2)

5

Other income(1)

NM

Noninterest income

$

$

$

$

%

$

8

%

Underlying, as applicable

Card fees

$

$

$

$

7

8

$

2

2

Underlying noninterest income

$

$

$

$

%

$

9

%

(1) Includes bank-owned life insurance income and other miscellaneous income for all periods presented.

vs.

Noninterest income of $600 million increased $56 million, or 10%.

•Capital markets fees increased $5 million, primarily reflecting higher equity underwriting and loan syndication fees. M&A fees were down slightly as several significant deals pushed into July given market uncertainty in the quarter.

•Card fees increased $7 million, reflecting seasonally higher purchase volumes.

•Wealth fees increased $7 million, given higher transactional revenue and an increase in advisory fees, primarily driven by net inflows.

•Mortgage banking fees increased $14 million, reflecting higher MSR valuation, net of hedge impact, as well as higher production fees.

•Foreign exchange and derivative products revenue increased $2 million, reflecting increased client hedging activity tied to heightened FX volatility, partially offset by lower commodities hedging.

•Other income increased $20 million, reflecting the benefit of various modest revenue items.

vs.

Underlying noninterest income of $600 million increased $51 million, or 9%.

•Service charges and fees increased $5 million, primarily driven by higher overdraft and cash management fees.

•Capital markets fees decreased $29 million, reflecting lower M&A and bond underwriting fees, partially offset by higher equity underwriting fees.

•Wealth fees increased $13 million, reflecting growth in AUM, primarily from the Private Bank.

•Mortgage banking fees increased $19 million, primarily driven by higher MSR valuation, net of hedging.

•Foreign exchange and derivative products revenue increased $2 million, given increased client activity in foreign exchange hedging.

7

Citizens Financial Group, Inc.

Noninterest Expense

($s in millions)

$

%

$

%

Salaries and employee benefits

$

$

$

$

(2)

%

$

6

%

Equipment and software

(1)

(1)

3

2

Outside services

9

4

2

Occupancy

(4)

(4)

(5)

(4)

Other operating expense

7

Noninterest expense

$

$

$

$

5

—

%

$

1

%

Notable items

$

—

$

—

$

$

—

—

%

$

Underlying, as applicable

Salaries and employee benefits

$

$

$

$

(2)

%

$

7

%

Equipment and software

(1)

(1)

7

4

Outside services

9

9

Occupancy

(4)

(4)

1

1

Other operating expense

7

(7)

Underlying noninterest expense

$

$

$

$

5

—

%

$

4

%

vs.

Noninterest expense of $1.3 billion increased 0.4%.

•Salaries and employee benefits decreased $15 million, reflecting lower payroll taxes and compensation-related costs given seasonality.

•Outside services increased $14 million, primarily driven by higher technology and vendor-related costs.

•Occupancy decreased $4 million, driven by lower branch maintenance and utilities given first-quarter seasonality.

•Other operating expense increased $11 million, primarily reflecting higher seasonal marketing-related and travel costs.

The effective tax rate was 21.4% in second quarter 2025, compared with 20.3% in first quarter 2025, primarily reflecting lower benefit from tax-advantaged investments given higher income.

vs.

Underlying noninterest expense of $1.3 billion increased 4%.

•Salaries and employee benefits increased $44 million, reflecting hiring related to the Private Bank and Private Wealth build out, as well as a broader increase in salaries and benefits.

•Equipment and software increased $7 million, given technology investments.

•Outside services increased $14 million, largely driven by investments across the enterprise.

•Other operating expense decreased $12 million, reflecting lower fraud losses, FDIC insurance expense and marketing-related costs.

The effective tax rate was 21.4% in second quarter 2025 compared with 20.3% on an Underlying basis in second quarter 2024, primarily reflecting less benefit from tax-advantaged investments given higher income and higher state taxes.

8

Citizens Financial Group, Inc.

Interest-earning assets

($s in millions)

Period-end interest-earning assets

$

%

$

%

Investments

$

$

$

$

1

%

$

5

%

Interest-bearing deposits in banks

Commercial loans and leases

2

—

Retail loans

1

(3)

Total loans and leases

1

(2)

Loans held for sale

Total loans and leases and loans held for sale

1

(1)

Total period-end interest-earning assets

$

$

$

$

(1)

%

$

(1)

%

Average interest-earning assets(1)

Investments

$

$

$

$

1

%

$

4

%

Interest-bearing deposits in banks

2

Commercial loans and leases

1

(2)

Retail loans

(2)

(4)

Total loans and leases

(1)

(3)

Loans held for sale

Total loans and leases and loans held for sale

—

(2)

Total average interest-earning assets

$

$

$

$

1

%

$

(1)

%

(1) Total average interest-earning assets excludes the mark-to-market on investment securities and unsettled purchases or sales of loans and investments.

vs.

Period-end interest-earning assets of $193.4 billion decreased 1%, reflecting a $3.0 billion decrease in cash held in interest-bearing deposits and $355 million increase in investments in securities. Total loans and leases increased $1.7 billion, as growth in the Private Bank, higher line utilization and net new business in Commercial, and growth in mortgage and home equity in Consumer, were partially offset by the runoff of Non-Core loans and commercial real estate paydowns.

Average interest-earning assets of $196.3 billion increased $1.3 billion, reflecting a $469 million increase in investments and $125 million increase in cash held in interest-bearing deposits. Average total loans and leases decreased $901 million, reflecting the reclassification of ~$1.9 billion of Non-Core education loans (“Non-Core transaction”) to loans held for sale near the end of the first quarter. Excluding this transaction, there was growth in the Private Bank and Commercial, as well as in mortgage and home equity, partially offset by continued run-off of Non-Core loans and commercial real estate paydowns.

The average effective duration of the securities portfolio was 3.7 years, compared with 3.6 years at March 31, 2025 and 3.7 years at June 30, 2024.

vs.

Period-end interest-earning assets of $193.4 billion decreased 1%, reflecting a $3.0 billion decrease in investments in cash held in interest-bearing deposits and a $1.1 billion decrease in total loans and leases and loans held for sale, partially offset by a $2.2 billion increase in investments in securities. The decrease in loans and leases is driven by a $2.2 billion decrease in retail reflecting continued Non-Core portfolio runoff and the Non-Core transaction, partially offset by growth in home equity and mortgage, including in the Private Bank. Results also include a decrease in Commercial loans of $292 million reflecting paydowns in commercial real estate and C&I balance sheet optimization actions, partially offset by higher line utilization.

Average interest-earning assets of $196.3 billion decreased $2.1 billion, or 1%, reflecting a $2.6 billion decrease in total loans and leases and loans held for sale and a $1.4 billion decrease in cash held in interest-bearing deposits, partially offset by a $1.8 billion increase in investments in securities.

9

Citizens Financial Group, Inc.

Deposits

($s in millions)

Period-end deposits

$

%

$

%

Non-interest bearing demand

$

$

$

$

1

%

$

3

%

Checking with interest

1

1

Savings

(1)

(7)

Money market

(1)

6

Time

Total period-end deposits

$

$

$

$

(1)

%

$

(1)

%

Average deposits

Non-interest bearing demand

$

$

$

$

2

%

$

3

%

Checking with interest

4

1

Savings

(1)

(7)

Money market

1

6

Time

(3)

(8)

Total average deposits

$

$

$

$

1

%

$

—

%

vs.

Total period-end deposits of $175.1 billion are down 1%, largely reflecting a $2.7 billion decline in higher-cost Treasury brokered and retail time deposits, partially offset by growth in Commercial non-interest bearing demand and checking with interest.

Average deposits of $174.1 billion increased 1%, driven by growth in retail and Private bank lower-cost categories, partially offset by a reduction in higher-cost Treasury brokered and retail time deposits.

vs.

Total period-end deposits of $175.1 billion decreased 1%, as growth in the Private Bank of $4.7 billion and an increase in Consumer deposits was more than offset by a reduction in higher-cost Treasury brokered deposits and slightly lower Commercial balances.

Average deposits of $174.1 billion were up slightly.

Citizens Financial Group, Inc.

Borrowed Funds

($s in millions)

Period-end borrowed funds

$

%

$

%

Short-term borrowed funds

$

$

$

2

$

NM

$

NM

Long-term borrowed funds

FHLB advances

NM

Senior debt

5

Subordinated debt and other debt

(1)

(4)

Auto collateralized borrowings

Total borrowed funds

$

$

$

$

4

%

$

(2)

%

Average borrowed funds

Short-term borrowed funds

$

$

$

$

$

%

Long-term borrowed funds

FHLB advances

Senior debt

(1)

5

Subordinated debt and other debt

(3)

(4)

Auto collateralized borrowings

Total average borrowed funds

$

$

$

$

1

%

$

%

vs.

Period-end borrowed funds increased $461 million, as a $1.5 billion increase in FHLB advances was largely offset by a decrease in senior debt of $747 million, reflecting a debt maturity and a decrease in collateralized borrowings on auto loans of $474 million given runoff of the associated portfolio.

Average borrowed funds increased $92 million, reflecting a $468 million increase in FHLB advances largely offset by a $485 million decrease in auto collateralized borrowings.

vs.

Period-end borrowed funds decreased by $309 million, reflecting a decrease of $1.8 billion in auto collateralized borrowings, partially offset by an increase of $1.0 billion in FHLB advances and $309 million in senior debt given net issuances.

Average borrowed funds decreased by $2.0 billion, reflecting a $1.6 billion decrease in auto collateralized borrowings, given runoff of the associated portfolio, and a decrease of $1.3 billion in FHLB advances, partially offset by a $358 million increase in senior debt issuances.

Citizens Financial Group, Inc.

Capital

($s and shares in millions, except per share data)

Period-end capital

$

%

$

%

Stockholders' equity

$

$

$

$

1

%

$

6

%

Stockholders' common equity

2

6

Tangible common equity

3

Tangible book value per common share

$

$

$

$

4

%

$

%

Common shares - at end of period

(1)

(4)

Common shares - average (diluted)

(1)

%

(4)

%

Common equity tier 1 capital ratio(1)

%

%

%

Total capital ratio(1)

Tangible common equity ratio