CITIZENS FINANCIAL GROUP INCRI

We have three business operating segments: Consumer Banking, Commercial Banking, and Non-Core. See Note 1 for a description of segment changes made during the third quarter of 2023 and Note 16 for more information regarding our business operating segments.

The following tables present certain financial data of our business operating segments. Total business operating segment financial results differ from total consolidated financial results. These differences are reflected in Other non-segment operations.

(1)Includes LHFS.

Consumer Banking

Net interest income increased $97 million and $179 million for the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023, driven by higher net interest margin reflecting higher interest-earning asset yields and growth in average interest-earning assets. These increases were partially offset by higher funding costs.

Noninterest income increased $9 million and $11 million for the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023, driven by wealth fees reflecting increased sales activity and asset management fees, higher credit card fees, and service charges and fees given higher overdraft and cash management fees. These increases were partially offset by mortgage banking fees reflecting lower production fees, partially offset by a higher MSR valuation, net of hedge impact, and other income driven primarily by higher operational losses.

Noninterest expense increased $40 million and $86 million for the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023, driven primarily by salaries and benefits reflecting our Private Bank start-up investment.

Net charge-offs increased $16 million and $34 million for the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023, driven primarily by other retail and education.

Commercial Banking

Net interest income decreased $90 million and $173 million for the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023, driven by lower net interest margin, a decline in average interest-earning assets and higher funding costs.

Noninterest income increased $35 million and $61 million for the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023, driven by capital markets fees reflecting higher bond and equity underwriting, loan syndication, and M&A advisory fees. These increases were partially offset by foreign exchange and derivative products revenue given reduced client activity related to interest rate and commodities hedging.

Noninterest expense decreased $4 million and $18 million for the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023, driven primarily by salaries and employee benefits reflecting lower headcount.

Net charge-offs increased $19 million and $53 million for the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023, driven by the office segment of CRE.

Non-Core

Net interest income decreased $3 million and $25 million for the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023, driven by the highest-cost implied marginal funding sources during 2024, including secured borrowings collateralized by auto loans and FHLB advances, and a decline in average interest-earning assets.

Average loans and leases decreased $5.0 billion and $5.1 billion for the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023, driven by planned Non-Core portfolio runoff.