CITIZENS FINANCIAL GROUP INC/RI

Securities

(1) Excludes portfolio level basis adjustments of $(2) million and $(75) million, respectively, for securities designated in active fair value hedge relationships under the portfolio layer method at March 31, 2025 and December 31, 2024.

(2) Included in other assets in the Consolidated Balance Sheets.

The primary objective of our securities portfolio is to provide a readily available source of liquidity. The portfolio primarily includes high-quality, highly liquid investments reflecting our ongoing commitment to maintain strong contingent liquidity levels and pledging capacity.

As of March 31, 2025, U.S. Treasuries and mortgage-backed securities issued by GNMA and GSEs represented 98% of the fair value of our debt securities portfolio, with approximately $37.7 billion of unencumbered high-quality liquid securities serving as potential collateral for borrowings from the FHLB, FRB discount window, and the Fixed Income Clearing Corporation bilateral repurchase agreement market.

For further discussion of the use of our securities as liquidity collateral see the “Liquidity Risk” section in this report. For further discussion of liquidity requirements, see “Regulation and Supervision — Liquidity Requirements” in our 2024 Form 10-K.

We manage our securities portfolio duration and convexity risk through asset selection and securities structure, and maintain duration levels within our risk appetite in the context of our broader interest rate risk framework and limits. As of March 31, 2025, the portfolio’s average effective duration, including hedging actions to reduce duration, was 3.6 years compared to 3.7 years as of December 31, 2024.

Loans and Leases

The decrease in total loans and leases as of March 31, 2025 compared to December 31, 2024 reflects a $2.3 billion decrease in retail driven by an agreement entered into during the first quarter to sell $1.9 billion of Non-Core education loans. The decrease in retail is also attributable to Non-Core portfolio runoff, partially offset by growth in home equity and mortgage, including the Private Bank. Commercial reflects a $732 million increase driven by higher line of credit utilization, partially offset by CRE paydowns.

Credit Quality

The ACL is maintained at a level the Company believes to be appropriate to absorb expected lifetime credit losses over the contractual life of a loan or lease and on unfunded lending commitments, inclusive of recoveries. For additional information regarding the ACL, see “Critical Accounting Estimates — Allowance for Credit Losses” and Note 4 in this report, and “Credit Quality” and Note 6 in our 2024 Form 10-K.

(1)Coverage ratio includes total commercial allowance for unfunded lending commitments and total commercial allowance for loan and lease losses in the numerator and total commercial loans and leases in the denominator.

(2) Coverage ratio includes total retail allowance for unfunded lending commitments and total retail allowance for loan losses in the numerator and total retail loans in the denominator.

The ACL as of March 31, 2025 compared to December 31, 2024 decreased $47 million, driven by a $64 million decrease in retail, given the benefit of Non-Core runoff and improving loan mix, partially offset by a $17 million increase in commercial.

The decline in nonaccrual loans and leases as of March 31, 2025 compared to December 31, 2024 reflects a decrease in commercial primarily driven by the general office segment of CRE and a decrease in retail driven by the sale of Non-Core education loans and continued runoff of the auto portfolio. See “Executive Summary” for more information regarding the sale of education loans.

For the three months ended March 31, 2025, net charge-offs increased $19 million and the net charge-off ratio increased 8 basis points compared to the same period in 2024. These increases include a charge-off of $25 million resulting from the sale of Non-Core education loans. Excluding this sale, net charge-offs decreased $6 million to $175 million, or 51 basis points, compared to the same period in 2024, reflecting broadly stable retail and modestly lower commercial net charge-offs. See “Executive Summary” for more information regarding the sale of education loans.

Commercial Loan Asset Quality

Our commercial portfolio consists of traditional commercial and industrial loans, commercial leases, and commercial real estate loans. As discussed in our 2024 Form 10-K, we utilize internal risk ratings to monitor credit quality for commercial loans and leases.

Total commercial criticized balances of $7.3 billion at March 31, 2025 increased $236 million compared to December 31, 2024.

Commercial and industrial criticized balances of $2.6 billion at March 31, 2025 remained stable compared to December 31, 2024.

Commercial real estate criticized balances of $4.7 billion at March 31, 2025 increased from $4.5 billion at December 31, 2024, primarily attributable to the continued impacts of interest rates on the Multi-family sector. Approximately 97% of commercial real estate loans remain current on payments as of March 31, 2025.

For more information on the distribution of commercial loans by vintage date and regulatory classification rating, see Note 4.

(1) Credit tenant lease includes loans to nationally recognized tenants with high credit ratings and life sciences includes loans to provide lab and office space for tenants involved in the study and development of scientific discoveries.

(2) Includes Georgia, Maryland, North Carolina, South Carolina and Virginia.

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. FICO credit scores represent current and historical national industry-wide consumer level credit performance data, which management believes are the strongest indicator of potential credit losses over the contractual life of the loan and a good predictor of a borrower’s future payment performance.

(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 aging of accruing and nonaccrual retail loans, and the distribution of retail loans by vintage date and FICO score, see Note 4.

Deposits

Total deposits as of March 31, 2025 increased compared to December 31, 2024, reflecting growth in the Private Bank and an increase in consumer deposits, partially offset by a decline in commercial given seasonality.

(1) As reported on CBNA’s Call Report.

(2) Represents uninsured deposits of states and political subdivisions that are secured or collateralized as required under state law.

Borrowed Funds

Total borrowed funds of $12.3 billion as of March 31, 2025 decreased $87 million compared to December 31, 2024, driven by a decline in secured borrowings collateralized by loans, largely offset by an increase in senior debt. For more information regarding our borrowed funds, see “Liquidity Risk” and Note 7.