Citizens Financial (US:CFG)2025-10-15 10:32Consolidated Financial Highlights This section overviews the company's 3Q25 financial performance, highlighting increased revenue, net income, and EPS, improved efficiency, and strong capital ratios Selected Operating Data The company achieved significant 3Q25 growth in total revenue and net income, resulting in higher diluted EPS and increased book values Selected Operating Data (3Q25 vs 2Q25 vs 3Q24) | Metric | 3Q25 | 2Q25 | 3Q24 | 3Q25 Change vs 2Q25 ($/%) | 3Q25 Change vs 3Q24 ($/%) | | :----------------------- | :----- | :----- | :----- | :------------------------ | :------------------------ | | Total revenue (in millions USD) | $2,118 | $2,037 | $1,901 | $81 (4%) | $217 (11%) | | Noninterest expense (in millions USD) | 1,335 | 1,319 | 1,259 | 16 (1%) | 76 (6%) | | Net income (in millions USD) | 494 | 436 | 382 | 58 (13%) | 112 (29%) | | Diluted earnings per share (USD) | $1.05 | $0.92 | $0.77 | $0.13 (14%) | $0.28 (36%) | | Book value per common share (USD) | $54.97 | $53.43 | $51.25 | $1.54 (3%) | $3.72 (7%) | | Tangible book value per common share (USD) | $36.73 | $35.23 | $33.54 | $1.50 (4%) | $3.19 (10%) | Financial Ratios Key financial ratios improved in 3Q25, with increased net interest margin and returns on equity, alongside a lower efficiency ratio Financial Ratios (3Q25 vs 2Q25 vs 3Q24) | Metric | 3Q25 | 2Q25 | 3Q24 | 3Q25 Change vs 2Q25 (bps) | 3Q25 Change vs 3Q24 (bps) | | :-------------------------------- | :----- | :----- | :----- | :------------------------ | :------------------------ | | Net interest margin (FTE) | 3.00% | 2.95% | 2.77% | 5 bps | 23 bps | | Return on average common equity | 7.77% | 7.18% | 6.12% | 59 bps | 165 bps | | Return on average tangible common equity | 11.75% | 11.05% | 9.45% | 70 bps | 230 bps | | Efficiency ratio | 63.03% | 64.76% | 66.23% | (173) bps | (320) bps | Capital Ratios - Period-End The company maintained stable and strong capital ratios at 3Q25 period-end, with CET1, Tier 1, and Total Capital ratios consistent Capital Ratios (Period-End 3Q25) | Metric | 3Q25 | | :------------------ | :----- | | CET1 capital ratio | 10.7% | | Tier 1 capital ratio | 11.9% | | Total capital ratio | 13.9% | | Tier 1 leverage ratio | 9.4% | | Common equity ratio | 10.6% | | Tangible common equity ratio | 7.4% | Selected Balance Sheet Data The loan-to-deposit ratio decreased QoQ and YoY, reflecting shifts in the balance of loans and deposits Loan-to-Deposit Ratio (Period-End) | Metric | 3Q25 | 2Q25 | 3Q24 | 3Q25 Change vs 2Q25 (bps) | 3Q25 Change vs 3Q24 (bps) | | :-------------------------- | :----- | :----- | :----- | :------------------------ | :------------------------ | | Loan-to-deposit ratio | 78.26% | 79.56% | 80.85% | (130) bps | (259) bps | Consolidated Statements of Operations (unaudited) This section details 3Q25 and YTD revenues, expenses, and net income, showing growth in net interest and noninterest income, boosting net income Quarterly Performance 3Q25 saw net interest income rise 4% QoQ and 9% YoY, with total noninterest income up 5% QoQ and 18% YoY, boosting net income Quarterly Performance (3Q25 vs 2Q25 vs 3Q24) | Metric | 3Q25 | 2Q25 | 3Q24 | 3Q25 Change vs 2Q25 ($/%) | 3Q25 Change vs 3Q24 ($/%) | | :-------------------------------- | :----- | :----- | :----- | :------------------------ | :------------------------ | | Total interest income (in millions USD) | $2,458 | $2,407 | $2,539 | $51 (2%) | ($81) (3%) | | Total interest expense (in millions USD) | 970 | 970 | 1,170 | — (0%) | ($200) (17%) | | Net interest income (in millions USD) | 1,488 | 1,437 | 1,369 | 51 (4%) | 119 (9%) | | Total noninterest income (in millions USD) | 630 | 600 | 532 | 30 (5%) | 98 (18%) | | Total revenue (in millions USD) | 2,118 | 2,037 | 1,901 | 81 (4%) | 217 (11%) | | Provision for credit losses (in millions USD) | 154 | 164 | 172 | (10) (6%) | (18) (10%) | | Total noninterest expense (in millions USD) | 1,335 | 1,319 | 1,259 | 16 (1%) | 76 (6%) | | Net income (in millions USD) | $494 | $436 | $382 | $58 (13%) | $112 (29%) | Year-to-Date Performance For 9M 2025, net interest income increased 2% YoY and noninterest income grew 11% YoY, leading to an 18% rise in net income Year-to-Date Performance (9M 2025 vs 9M 2024) | Metric | 9M 2025 | 9M 2024 | 9M 2025 Change vs 9M 2024 ($/%) | | :-------------------------------- | :------ | :------ | :------------------------------- | | Total interest income (in millions USD) | $7,217 | $7,724 | ($507) (7%) | | Total interest expense (in millions USD) | 2,901 | 3,503 | ($602) (17%) | | Net interest income (in millions USD) | 4,316 | 4,221 | 95 (2%) | | Total noninterest income (in millions USD) | 1,774 | 1,602 | 172 (11%) | | Total revenue (in millions USD) | 6,090 | 5,823 | 267 (5%) | | Provision for credit losses (in millions USD) | 471 | 525 | (54) (10%) | | Total noninterest expense (in millions USD) | 3,968 | 3,918 | 50 (1%) | | Net income (in millions USD) | $1,303 | $1,108 | $195 (18%) | Consolidated Balance Sheets (unaudited) This section details the company's 3Q25 financial position, showing increased assets and deposits, decreased long-term borrowed funds, and shifts in funding Period-End Balances As of Sept 30, 2025, total assets and deposits increased QoQ and YoY, while long-term borrowed funds significantly decreased Consolidated Balance Sheet Highlights (Sept 30, 2025 vs June 30, 2025 vs Sept 30, 2024) | Metric | Sept 30, 2025 | June 30, 2025 | Sept 30, 2024 | Change vs June 30, 2025 ($/%) | Change vs Sept 30, 2024 ($/%) | | :-------------------------------- | :------------ | :------------ | :------------ | :----------------------------- | :----------------------------- | | ASSETS | | | | | | | Total Assets (in millions USD) | $222,747 | $218,310 | $219,706 | $4,437 (2%) | $3,041 (1%) | | Loans and leases (net) (in millions USD) | 138,898 | 137,296 | 139,553 | 1,602 (1%) | (655) (0%) | | Debt securities available for sale (in millions USD) | 35,419 | 34,658 | 32,835 | 761 (2%) | 2,584 (8%) | | LIABILITIES | | | | | | | Total Deposits (in millions USD) | 180,011 | 175,086 | 175,188 | 4,925 (3%) | 4,823 (3%) | | Noninterest-bearing deposits (in millions USD) | 39,472 | 38,001 | 35,978 | 1,471 (4%) | 3,494 (10%) | | Total long-term borrowed funds (in millions USD) | 10,441 | 12,526 | 13,944 | (2,085) (17%) | (3,503) (25%) | | Total Liabilities (in millions USD) | 196,918 | 193,076 | 194,774 | 3,842 (2%) | 2,144 (1%) | | STOCKHOLDERS' EQUITY | | | | | | | Total Stockholders' Equity (in millions USD) | 25,829 | 25,234 | 24,932 | 595 (2%) | 897 (4%) | | Total tangible common equity (in millions USD) | $15,848 | $15,246 | $14,931 | $602 (4%) | $917 (6%) | Loans and Deposits This section details period-end loan and deposit portfolios, showing growth in commercial and residential loans, declines in auto and education loans, and overall deposit increases Loans and Leases Breakdown Total loans and leases increased 1% QoQ but decreased 1% YoY, with commercial and industrial loans growing, while automobile loans declined significantly Loans and Leases (Sept 30, 2025 vs June 30, 2025 vs Sept 30, 2024) | Loan Category | Sept 30, 2025 | June 30, 2025 | Sept 30, 2024 | Change vs June 30, 2025 ($/%) | Change vs Sept 30, 2024 ($/%) | | :------------------------ | :------------ | :------------ | :------------ | :----------------------------- | :----------------------------- | | Commercial and industrial (in millions USD) | $46,953 | $45,412 | $43,825 | $1,541 (3%) | $3,128 (7%) | | Commercial real estate (in millions USD) | 25,540 | 26,230 | 27,983 | (690) (3%) | (2,443) (9%) | | Total commercial (in millions USD) | 72,493 | 71,642 | 71,808 | 851 (1%) | 685 (1%) | | Residential mortgages (in millions USD) | 34,477 | 33,823 | 32,379 | 654 (2%) | 2,098 (6%) | | Home equity (in millions USD) | 18,415 | 17,711 | 15,992 | 704 (4%) | 2,423 (15%) | | Automobile (in millions USD) | 2,816 | 3,407 | 5,540 | (591) (17%) | (2,724) (49%) | | Education (in millions USD) | 8,556 | 8,550 | 11,118 | 6 (0%) | (2,562) (23%) | | Total loans and leases (in millions USD) | $140,870 | $139,304 | $141,632 | $1,566 (1%) | ($762) (1%) | Deposits Breakdown Total deposits increased 3% QoQ and YoY, driven by noninterest-bearing demand and money market deposits, while time deposits decreased Deposits (Sept 30, 2025 vs June 30, 2025 vs Sept 30, 2024) | Deposit Category | Sept 30, 2025 | June 30, 2025 | Sept 30, 2024 | Change vs June 30, 2025 ($/%) | Change vs Sept 30, 2024 ($/%) | | :------------------------ | :------------ | :------------ | :------------ | :----------------------------- | :----------------------------- | | Noninterest-bearing demand (in millions USD) | $39,472 | $38,001 | $35,978 | $1,471 (4%) | $3,494 (10%) | | Checking with interest (in millions USD) | 35,219 | 34,918 | 33,680 | 301 (1%) | 1,539 (5%) | | Savings (in millions USD) | 24,759 | 25,400 | 26,489 | (641) (3%) | (1,730) (7%) | | Money market (in millions USD) | 59,709 | 55,638 | 54,654 | 4,071 (7%) | 5,055 (9%) | | Time (in millions USD) | 20,852 | 21,129 | 24,387 | (277) (1%) | (3,535) (14%) | | Total deposits (in millions USD) | $180,011 | $175,086 | $175,188 | $4,925 (3%) | $4,823 (3%) | Average Balance Sheets, Annualized Yields and Rates This section analyzes average balances, yields, and rates, showing increased net interest margin and spread in 3Q25, reflecting effective asset-liability management Quarterly Trends in Yields and Rates 3Q25 saw net interest margin (FTE) rise 5 bps QoQ and 23 bps YoY to 3.00%, with improved interest rate spread, indicating better profitability Quarterly Trends (3Q25 vs 2Q25 vs 3Q24) | Metric | 3Q25 | 2Q25 | 3Q24 | 3Q25 Change vs 2Q25 | 3Q25 Change vs 3Q24 | | :-------------------------------- | :----- | :----- | :----- | :------------------ | :------------------ | | Total interest-earning assets (Avg Bal, in millions USD) | $197,598 | $196,318 | $197,164 | $1,280 | $434 | | Total interest-earning assets (Rate) | 4.92% | 4.89% | 5.09% | 3 bps | (17) bps | | Total interest-bearing liabilities (Avg Bal, in millions USD) | $150,119 | $150,202 | $151,655 | ($83) | ($1,536) | | Total interest-bearing liabilities (Rate) | 2.56% | 2.59% | 3.07% | (3) bps | (51) bps | | Interest Rate Spread | 2.36% | 2.30% | 2.02% | 6 bps | 34 bps | | Net Interest Income (FTE, in millions USD) | $1,492 | $1,441 | $1,373 | $51 | $119 | | Net Interest Margin (FTE) | 3.00% | 2.95% | 2.77% | 5 bps | 23 bps | Year-to-Date Trends in Yields and Rates For 9M 2025, net interest margin (FTE) increased 10 bps YoY to 2.95%, with improved interest rate spread despite lower interest-earning assets Year-to-Date Trends (9M 2025 vs 9M 2024) | Metric | 9M 2025 | 9M 2024 | 9M 2025 Change vs 9M 2024 | | :-------------------------------- | :------ | :------ | :-------------------------- | | Total interest-earning assets (Avg Bal, in millions USD) | $196,334 | $198,561 | ($2,227) | | Total interest-earning assets (Rate) | 4.88% | 5.15% | (27) bps | | Total interest-bearing liabilities (Avg Bal, in millions USD) | $149,941 | $152,703 | ($2,762) | | Total interest-bearing liabilities (Rate) | 2.58% | 3.06% | (48) bps | | Interest Rate Spread | 2.30% | 2.09% | 21 bps | | Net Interest Income (FTE, in millions USD) | $4,328 | $4,234 | $94 | | Net Interest Margin (FTE) | 2.95% | 2.85% | 10 bps | Mortgage Banking Fees This section details mortgage banking fees, showing a QoQ decrease but YoY increase, driven by MSR valuation changes and higher residential originations Mortgage Banking Fees Summary Total mortgage banking fees decreased 33% QoQ to $49 million in 3Q25, primarily due to a 92% drop in MSR valuation changes, but increased 7% YoY Mortgage Banking Fees (3Q25 vs 2Q25 vs 3Q24) | Metric | 3Q25 | 2Q25 | 3Q24 | 3Q25 Change vs 2Q25 ($/%) | 3Q25 Change vs 3Q24 ($/%) | | :-------------------------------- | :----- | :----- | :----- | :------------------------ | :------------------------ | | Production revenue (in millions USD) | $18 | $19 | $15 | ($1) (5%) | $3 (20%) | | Mortgage servicing revenue (in millions USD) | 29 | 28 | 33 | 1 (4%) | (4) (12%) | | MSR valuation changes, net of hedge impact (in millions USD) | 2 | 26 | (2) | (24) (92%) | 4 (NM) | | Total mortgage banking fees (in millions USD) | $49 | $73 | $46 | ($24) (33%) | $3 (7%) | Residential Real Estate Originations Residential real estate originations decreased 6% QoQ but increased 19% YoY in 3Q25, with YTD originations growing 34% Residential Real Estate Originations (9M 2025 vs 9M 2024) | Metric | 9M 2025 | 9M 2024 | 9M 2025 Change vs 9M 2024 ($/%) | | :------------------------ | :------ | :------ | :------------------------------- | | Total originations (in millions USD) | $10,879 | $8,097 | $2,782 (34%) | | Originated for sale (in millions USD) | 6,781 | 5,316 | 1,465 (28%) | | Originated for investment (in millions USD) | 4,098 | 2,781 | 1,317 (47%) | Mortgage Servicing Information (UPB) Total mortgage servicing UPB increased slightly YoY, driven by owned loans serviced, offsetting a decrease in loans serviced for others Mortgage Servicing Information (UPB) (Sept 30, 2025 vs Sept 30, 2024) | Metric | Sept 30, 2025 | Sept 30, 2024 | Change vs Sept 30, 2024 ($/%) | | :------------------------ | :------------ | :------------ | :----------------------------- | | Loans serviced for others (in millions USD) | $95,244 | $96,120 | ($876) (1%) | | Owned loans serviced (in millions USD) | 34,760 | 32,655 | 2,105 (6%) | | Total (in millions USD) | $130,004 | $128,775 | $1,229 (1%) | Segment Financial Highlights This section breaks down financial performance and key metrics across Consumer, Commercial, Non-Core, and Other segments, reflecting varied market conditions Consumer Banking Consumer Banking reported increased net income and total revenue QoQ and YoY, driven by net interest and noninterest income growth, improving efficiency Consumer Banking Financial Performance (3Q25 vs 2Q25 vs 3Q24) | Metric | 3Q25 | 2Q25 | 3Q24 | 3Q25 Change vs 2Q25 ($/%) | 3Q25 Change vs 3Q24 ($/%) | | :------------------------ | :----- | :----- | :----- | :------------------------ | :------------------------ | | Net interest income (in millions USD) | $1,262 | $1,218 | $1,156 | $44 (4%) | $106 (9%) | | Noninterest income (in millions USD) | 311 | 329 | 285 | (18) (5%) | 26 (9%) | | Total revenue (in millions USD) | 1,573 | 1,547 | 1,441 | 26 (2%) | 132 (9%) | | Net income (loss) (in millions USD) | $383 | $376 | $327 | $7 (2%) | $56 (17%) | Consumer Banking Average Balances (3Q25 vs 3Q24) | Metric | 3Q25 | 3Q24 | 3Q25 Change vs 3Q24 ($/%) | | :------------------------ | :----- | :----- | :------------------------ | | Total assets (in millions USD) | $80,729 | $75,392 | $5,337 (7%) | | Total loans and leases (in millions USD) | 74,274 | 69,021 | 5,253 (8%) | | Deposits (in millions USD) | 128,547 | 121,899 | 6,648 (5%) | Consumer Banking Key Metrics (3Q25 vs 3Q24) | Metric | 3Q25 | 3Q24 | 3Q25 Change vs 3Q24 | | :------------------------ | :----- | :----- | :------------------ | | Net interest margin | 6.69% | 6.60% | 9 bps | | Efficiency ratio | 62.22% | 63.53% | (131) bps | Commercial Banking Commercial Banking saw QoQ net income and revenue increases from noninterest income, but YoY declines in net interest income and overall net income Commercial Banking Financial Performance (3Q25 vs 2Q25 vs 3Q24) | Metric | 3Q25 | 2Q25 | 3Q24 | 3Q25 Change vs 2Q25 ($/%) | 3Q25 Change vs 3Q24 ($/%) | | :------------------------ | :----- | :----- | :----- | :------------------------ | :------------------------ | | Net interest income (in millions USD) | $448 | $439 | $478 | $9 (2%) | ($30) (6%) | | Noninterest income (in millions USD) | 286 | 232 | 207 | 54 (23%) | 79 (38%) | | Total revenue (in millions USD) | 734 | 671 | 685 | 63 (9%) | 49 (7%) | | Net income (loss) (in millions USD) | $248 | $206 | $231 | $42 (20%) | $17 (7%) | Commercial Banking Average Balances (3Q25 vs 3Q24) | Metric | 3Q25 | 3Q24 | 3Q25 Change vs 3Q24 ($/%) | | :------------------------ | :----- | :----- | :------------------------ | | Total assets (in millions USD) | $66,134 | $68,092 | ($1,958) (3%) | | Total loans and leases (in millions USD) | 62,905 | 64,974 | (2,069) (3%) | | Deposits (in millions USD) | 44,482 | 44,190 | 292 (1%) | Commercial Banking Key Metrics (3Q25 vs 3Q24) | Metric | 3Q25 | 3Q24 | 3Q25 Change vs 3Q24 | | :------------------------ | :----- | :----- | :------------------ | | Net interest margin | 2.78% | 2.90% | (12) bps | | Efficiency ratio | 45.15% | 43.84% | 131 bps | Non-Core The Non-Core segment's net loss decreased QoQ and YoY, driven by increased net interest income and lower noninterest expense, despite declining assets Non-Core Financial Performance (3Q25 vs 2Q25 vs 3Q24) | Metric | 3Q25 | 2Q25 | 3Q24 | 3Q25 Change vs 2Q25 ($/%) | 3Q25 Change vs 3Q24 ($/%) | | :------------------------ | :----- | :----- | :----- | :------------------------ | :------------------------ | | Net interest income (in millions USD) | ($7) | ($5) | ($28) | ($2) (40%) | $21 (75%) | | Total revenue (in millions USD) | (3) | (2) | (28) | (1) (50%) | 25 (89%) | | Noninterest expense (in millions USD) | 12 | 15 | 23 | (3) (20%) | (11) (48%) | | Net income (loss) (in millions USD) | ($14) | ($14) | ($51) | $0 (0%) | $37 (73%) | Non-Core Average Balances (3Q25 vs 3Q24) | Metric | 3Q25 | 3Q24 | 3Q25 Change vs 3Q24 ($/%) | | :------------------------ | :----- | :----- | :------------------------ | | Total assets (in millions USD) | $4,000 | $8,389 | ($4,389) (52%) | | Total loans and leases (in millions USD) | 3,976 | 8,352 | (4,376) (52%) | Other The 'Other' segment's net loss improved QoQ and YoY, primarily due to decreased noninterest expense and an improved provision for credit losses Other Segment Financial Performance (3Q25 vs 2Q25 vs 3Q24) | Metric | 3Q25 | 2Q25 | 3Q24 | 3Q25 Change vs 2Q25 ($/%) | 3Q25 Change vs 3Q24 ($/%) | | :------------------------ | :----- | :----- | :----- | :------------------------ | :------------------------ | | Net interest income (in millions USD) | ($215) | ($215) | ($237) | $0 (0%) | $22 (9%) | | Total revenue (in millions USD) | (186) | (179) | (197) | (7) (4%) | 11 (6%) | | Noninterest expense (in millions USD) | 11 | 24 | 20 | (13) (54%) | (9) (45%) | | Provision (benefit) for credit losses (in millions USD) | (9) | (3) | (20) | (6) (200%) | 11 (55%) | | Net income (loss) (in millions USD) | ($123) | ($132) | ($125) | $9 (7%) | $2 (2%) | Other Segment Average Balances (3Q25 vs 3Q24) | Metric | 3Q25 | 3Q24 | 3Q25 Change vs 3Q24 ($/%) | | :------------------------ | :----- | :----- | :------------------------ | | Total assets (in millions USD) | $68,254 | $66,705 | $1,549 (2%) | | Deposits (in millions USD) | 2,928 | 7,962 | (5,034) (63%) | Credit-Related Information This section overviews credit quality, showing decreasing nonaccrual loans and net charge-offs, indicating overall asset quality improvement Nonaccrual loans and leases Total nonaccrual loans and leases decreased slightly QoQ and 10% YoY to $1.518 billion, driven by commercial real estate and retail reductions Nonaccrual Loans and Leases (Sept 30, 2025 vs June 30, 2025 vs Sept 30, 2024) | Category | Sept 30, 2025 | June 30, 2025 | Sept 30, 2024 | Change vs June 30, 2025 ($/%) | Change vs Sept 30, 2024 ($/%) | | :------------------------ | :------------ | :------------ | :------------ | :----------------------------- | :----------------------------- | | Commercial and industrial (in millions USD) | $230 | $233 | $219 | ($3) (1%) | $11 (5%) | | Commercial real estate (in millions USD) | 703 | 706 | 852 | (3) (0%) | (149) (17%) | | Total commercial (in millions USD) | 933 | 939 | 1,071 | (6) (1%) | (138) (13%) | | Total retail (in millions USD) | 585 | 585 | 616 | — (0%) | (31) (5%) | | Total nonaccrual loans and leases (in millions USD) | $1,518 | $1,524 | $1,687 | ($6) (0%) | ($169) (10%) | Asset Quality Ratios (Sept 30, 2025 vs Sept 30, 2024) | Metric | Sept 30, 2025 | Sept 30, 2024 | Change vs Sept 30, 2024 | | :-------------------------------- | :------------ | :------------ | :---------------------- | | Allowance for loan and lease losses to loans and leases | 1.40% | 1.47% | (7) bps | | Nonaccrual loans and leases to loans and leases | 1.08% | 1.19% | (11) bps | Loans and Leases 90 Days or More Past Due and Accruing Loans and leases 90+ days past due decreased 16% QoQ and 4% YoY to $162 million, mainly due to an 88% QoQ reduction in commercial real estate Loans and Leases 90 Days or More Past Due and Accruing (Sept 30, 2025 vs June 30, 2025 vs Sept 30, 2024) | Category | Sept 30, 2025 | June 30, 2025 | Sept 30, 2024 | Change vs June 30, 2025 ($/%) | Change vs Sept 30, 2024 ($/%) | | :------------------------ | :------------ | :------------ | :------------ | :----------------------------- | :----------------------------- | | Commercial and industrial (in millions USD) | $39 | $3 | $5 | $36 (NM) | $34 (NM) | | Commercial real estate (in millions USD) | 7 | 60 | 15 | (53) (88%) | (8) (53%) | | Total commercial (in millions USD) | 46 | 63 | 20 | (17) (27%) | 26 (130%) | | Residential mortgages (in millions USD) | 114 | 128 | 146 | (14) (11%) | (32) (22%) | | Total loans and leases (in millions USD) | $162 | $194 | $169 | ($32) (16%) | ($7) (4%) | Charge-offs, Recoveries, and Related Ratios Total net charge-offs decreased 3% QoQ and 16% YoY to $162 million, driven by commercial and retail reductions, with an 8 bps YoY drop in the overall rate Total Gross Charge-offs (3Q25 vs 2Q25 vs 3Q24) | Metric | 3Q25 | 2Q25 | 3Q24 | 3Q25 Change vs 2Q25 ($/%) | 3Q25 Change vs 3Q24 ($/%) | | :------------------------ | :----- | :----- | :----- | :------------------------ | :------------------------ | | Total commercial (in millions USD) | $91 | $93 | $106 | ($2) (2%) | ($15) (14%) | | Total retail (in millions USD) | 104 | 108 | 125 | (4) (4%) | (21) (17%) | | Total gross charge-offs (in millions USD) | $195 | $201 | $231 | ($6) (3%) | ($36) (16%) | Total Net Charge-offs (3Q25 vs 2Q25 vs 3Q24) | Metric | 3Q25 | 2Q25 | 3Q24 | 3Q25 Change vs 2Q25 ($/%) | 3Q25 Change vs 3Q24 ($/%) | | :------------------------ | :----- | :----- | :----- | :------------------------ | :------------------------ | | Total commercial (in millions USD) | $85 | $92 | $98 | ($7) (8%) | ($13) (13%) | | Total retail (in millions USD) | 77 | 75 | 94 | 2 (3%) | (17) (18%) | | Total net charge-offs (in millions USD) | $162 | $167 | $192 | ($5) (3%) | ($30) (16%) | Annualized Net Charge-off Rates (3Q25 vs 3Q24) | Category | 3Q25 | 3Q24 | Change (bps) | | :------------------------ | :----- | :----- | :----------- | | Commercial and industrial | 0.26% | 0.49% | (23) bps | | Commercial real estate | 0.85% | 0.62% | 23 bps | | Total commercial | 0.47% | 0.54% | (7) bps | | Automobile | 0.43% | 0.81% | (38) bps | | Education | 0.92% | 0.85% | 7 bps | | Other retail | 5.45% | 4.93% | 52 bps | | Total loans and leases | 0.46% | 0.54% | (8) bps | Summary of Changes in the Components of the Allowance for Credit Losses Total allowance for credit losses decreased 0% QoQ and 4% YoY to $2.201 billion, driven by a reduction in allowance for loan and lease losses Allowance for Loan and Lease Losses (Sept 30, 2025 vs June 30, 2025 vs Sept 30, 2024) | Metric | Sept 30, 2025 | June 30, 2025 | Sept 30, 2024 | Change vs June 30, 2025 ($/%) | Change vs Sept 30, 2024 ($/%) | | :-------------------------------- | :------------ | :------------ | :------------ | :----------------------------- | :----------------------------- | | Beginning balance (in millions USD) | $2,008 | $2,014 | $2,125 | ($6) (0%) | ($117) (6%) | | Total net charge-offs (in millions USD) | 162 | 167 | 192 | (5) (3%) | (30) (16%) | | Total provision for loan and lease losses (in millions USD) | 126 | 161 | 146 | (35) (22%) | (20) (14%) | | Ending balance (in millions USD) | $1,972 | $2,008 | $2,079 | ($36) (2%) | ($107) (5%) | Total Allowance for Credit Losses (Sept 30, 2025 vs Sept 30, 2024) | Metric | Sept 30, 2025 | Sept 30, 2024 | Change vs Sept 30, 2024 ($/%) | | :-------------------------------- | :------------ | :------------ | :----------------------------- | | Ending balance (in millions USD) | $2,201 | $2,286 | ($85) (4%) | Capital and Ratios This section details key capital ratios, including CET1, Tier 1, and Total Capital, showing strong and slightly increasing capital positions Capital Ratios and Components As of Sept 30, 2025, CET1 capital ratio increased to 10.7%, with Tier 1 and Total capital ratios remaining strong, indicating robust regulatory capital Capital Ratios (Sept 30, 2025 vs June 30, 2025 vs Sept 30, 2024) | Metric | Sept 30, 2025 | June 30, 2025 | Sept 30, 2024 | Change vs June 30, 2025 | Change vs Sept 30, 2024 | | :------------------------ | :------------ | :------------ | :------------ | :---------------------- | :---------------------- | | CET1 capital ratio | 10.7% | 10.6% | 10.6% | 0.1% | 0.1% | | Tier 1 capital ratio | 11.9% | 11.9% | 11.9% | 0.0% | 0.0% | | Total capital ratio | 13.9% | 13.8% | 13.9% | 0.1% | 0.0% | | Tier 1 leverage ratio | 9.4% | 9.4% | 9.4% | 0.0% | 0.0% | Tangible Common Equity (Period-End) Period-end tangible common equity increased 4% QoQ and 6% YoY to $15.848 billion, reflecting growth in common stockholders' equity Tangible Common Equity (Period-End) (Sept 30, 2025 vs Sept 30, 2024) | Metric | Sept 30, 2025 | Sept 30, 2024 | Change vs Sept 30, 2024 ($/%) | | :------------------------ | :------------ | :------------ | :----------------------------- | | Common stockholders' equity (in millions USD) | $23,718 | $22,820 | $898 (4%) | | Total tangible common equity (in millions USD) | $15,848 | $14,931 | $917 (6%) | Non-GAAP Financial Measures and Reconciliations This section defines and reconciles non-GAAP financial measures, labeled 'Underlying,' to GAAP, providing additional insights into core operational trends Non-GAAP Financial Measures Overview The company uses 'Underlying' non-GAAP measures to exclude non-recurring items, aiding management's operational evaluation and investor insight - Non-GAAP financial measures, denoted as 'Underlying,' exclude certain items not considered indicative of the company's ongoing financial performance. Management uses these measures to evaluate operating performance and make day-to-day operating decisions27 - Investors are cautioned not to place undue reliance on non-GAAP financial measures and to consider them with the most directly comparable GAAP measures, as they have limitations as analytical tools and should not be considered in isolation28 Reconciliations of Key Non-GAAP Measures This subsection provides detailed reconciliations for non-GAAP metrics like net income, efficiency ratio, and tangible book value, highlighting notable item impacts Reconciliation: Net Income, Underlying (3Q25 vs 3Q24) | Metric | 3Q25 | 3Q24 | Change ($/%) | | :-------------------------------- | :----- | :----- | :------------ | | Net income (GAAP, in millions USD) | $494 | $382 | $112 (29%) | | Add: Notable items, net of income tax benefit (in millions USD) | — | 10 | (10) (100%) | | Net income, Underlying (non-GAAP, in millions USD) | $494 | $392 | $102 (26%) | Reconciliation: Efficiency Ratio, Underlying (3Q25 vs 3Q24) | Metric | 3Q25 | 3Q24 | Change (bps) | | :-------------------------------- | :----- | :----- | :----------- | | Efficiency ratio (GAAP) | 63.03% | 66.23% | (320) bps | | Efficiency ratio, Underlying (non-GAAP) | 63.03% | 65.61% | (258) bps | Reconciliation: Tangible Book Value Per Common Share (3Q25 vs 3Q24) | Metric | 3Q25 | 3Q24 | Change ($/%) | | :-------------------------------- | :----- | :----- | :------------ | | Book value per common share (GAAP, USD) | $54.97 | $51.25 | $3.72 (7%) | | Tangible book value per common share (non-GAAP, USD) | $36.73 | $33.54 | $3.19 (10%) |