CFG 8-K
Citizens Financial Group Inc/Ri (CFG)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation ) |
(Commission File No.) | (IRS Employer Identification No.) | ||
| |
||||
| (Address of principal executive offices) | (Zip code) | |||
Registrant’s telephone number, including area code:
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class |
Trading symbol(s) |
Name of each exchange on which registered | ||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 under the Securities Act (17 CFR 230.405) or Rule 12b-2 under the Exchange Act (17 CFR 240.12b-2).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On January 20, 2021, Citizens Financial Group, Inc. (the “Company”) issued a press release announcing its fourth quarter and full year 2020 earnings and posted on its website the press release and a financial supplement. Copies of the press release and financial supplement are included as Exhibits 99.1 and 99.3, respectively, to this Current Report on Form 8-K and incorporated herein by reference.
Item 7.01 Regulation FD Disclosure.
For the benefit of investors, the Company has posted on its website an investor presentation in connection with its earnings conference call. A copy of the investor presentation is being furnished as Exhibit 99.2.
Item 9.01 Financial Statements and Exhibits.
| Exhibit Number |
Description | |||
| (d) | Exhibit 99.1 | Citizens Financial Group, Inc. press release dated January 20, 2021 | ||
| The quotation on page 1 of Exhibit 99.1 (the “Excluded Section”) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that Section, nor shall the Excluded Section be deemed incorporated by reference into any of the Company’s filings under the Securities Act of 1933, as amended (the “Securities Act”) or the Exchange Act. The information included in Exhibit 99.1, other than the Excluded Section, shall be deemed “filed” for purposes of the Exchange Act. | ||||
| Exhibit 99.2 | Citizens Financial Group, Inc. earnings release presentation issued January 20, 2021 | |||
| The information included in Exhibit 99.2 shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed incorporated by reference into any of the Company’s filings under the Securities Act or the Exchange Act. | ||||
| Exhibit 99.3 | Citizens Financial Group, Inc. financial supplement for fourth quarter and full year 2020 | |||
| The information included in Exhibit 99.3 shall be deemed “filed” for purposes of the Exchange Act. | ||||
| Exhibit 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| CITIZENS FINANCIAL GROUP, INC. | ||
| By: | /s/ John F. Woods | |
| John F. Woods | ||
| Vice Chairman and Chief Financial Officer | ||
Date: January 20, 2021
Exhibit 99.1
Citizens Financial Group, Inc. Reports Fourth Quarter Net Income of
$456 million and EPS of $0.99
Underlying net income of $480 million and EPS of $1.04*
2020 net income of $1.1 billion and EPS of $2.22, $2.41 on an Underlying basis
2020 Record pre-provision profit up 10%, up 12% on an Underlying basis
2020 Positive operating leverage of 2.7%, 4.1% on an Underlying basis
CET1 ratio increases to 10.0%
Board of Directors approves $750 million Common Stock Repurchase Program
PROVIDENCE, RI (January 20, 2021) Citizens Financial Group, Inc. (NYSE: CFG or “Citizens”) today reported fourth quarter net income of $456 million, compared with $450 million in fourth quarter 2019, with EPS of $0.99, compared with $0.98 in fourth quarter 2019. Fourth quarter 2020 Return on Average Tangible Common Equity (“ROTCE”) of 12.2% compares with 12.4% in fourth quarter 2019 and 8.3% in third quarter 2020. Full year 2020 net income available to common stockholders of $950 million compares with $1.7 billion in 2019, and EPS of $2.22, which compares with $3.81 in 2019. 2020 ROTCE of 6.93% compares with 12.6% in 2019.
On an Underlying basis, which excludes a net $24 million after-tax reduction, or $(0.05) per share, of notable items, fourth quarter 2020 net income available to common stockholders is $448 million which compares with $431 million in fourth quarter 2019 and $313 million in third quarter 2020. Underlying EPS of $1.04 per share compares with $0.99 in fourth quarter 2019 and $0.73 in third quarter 2020. Underlying fourth quarter 2020 ROTCE of 12.9% compares with 12.5% in fourth quarter 2019 and 9.0% in third quarter 2020. Tangible book value per common share of $32.72 compares with $32.08 for fourth quarter 2019 and $32.24 for third quarter 2020. Full-year 2020 Underlying net income available to common shareholders of $1.0 billion, which excludes a net $83 million after-tax reduction, or $(0.19) per share, of notable items, compares with $1.7 billion in 2019. 2020 diluted EPS of $2.41 compares with $3.84 in 2019. Underlying full year 2020 ROTCE of 7.5% compares with 12.8% in 2019. 2020 net reserve build of $923 million impacted ROTCE by 5.4%.
Citizens remains strongly capitalized and maintains ample liquidity to assist customers in navigating these challenging times. At December 31, 2020, the common equity tier 1 (“CET1”) capital ratio increased to 10.0%, the spot loan-to-deposit ratio was 83.6%, or 80.9% excluding U.S. Small Business Administration Paycheck Protection Program (“PPP”) loans, and the liquidity coverage ratio was fully compliant. At December 31, 2020, the allowance for loans and unfunded loan commitments credit losses (“ACL”) was $2.7 billion and the ACL to loans ratio was 2.17%, or 2.24% excluding PPP loans.
| * | References in this release to “Underlying” results exclude notable items and are Non-GAAP Financial Measures. Where there is a reference to “Underlying” results in a paragraph, all measures that follow these references are on the same basis. Additional information regarding the impact of notable items and Acquisitions on our results is described in this release. Please see the end of this release for important information on our use of Non-GAAP Financial Measures, and their reconciliation to GAAP financial measures. References in this release to balance sheet items are on an average basis and loans exclude loans held for sale (“LHFS”) unless otherwise noted. References to net interest margin are on a fully taxable equivalent (“FTE”) basis and all references to earnings per share represent fully diluted per common share. References to consolidated and/or commercial loans, loan growth, nonaccrual loans and allowance for loan losses include leases. The “Company” refers to Citizens. Current reporting-period regulatory capital ratios are preliminary. Select totals may not sum due to rounding. |
Citizens Financial Group, Inc.
“Citizens was able to meet the unique challenges present in 2020 and demonstrate the diversification and resilience of our business model,” said Chairman and CEO Bruce Van Saun. “Fourth quarter results highlight strong return on capital as credit costs normalize. Our capital and credit allowance position remains strong, giving us confidence that we can meet loan demand while also increasing return of capital to our shareholders. I’d like to thank our colleague base for rising to the occasion in 2020 and delivering well for our customers and stakeholders. We feel we are well positioned to benefit from economic recovery in 2021.”
Citizens announced today that its board of directors declared a first quarter 2021 common stock dividend of $0.39 per share. The dividend is payable on February 17, 2021 to shareholders of record at the close of business on February 3, 2021.
Citizens also announced today that its board of directors authorized the company to repurchase up to $750 million of its outstanding common stock beginning in first quarter 2021. CFG’s common stock repurchases may be executed in the open market or in privately negotiated transactions, including under Rule 10b5-1 plans and accelerated share repurchase and other structured transactions. The timing and exact amount of common stock repurchases will be subject to various factors, including the company’s capital position, financial performance, capital impacts of strategic initiatives, market conditions and regulatory considerations.
Fourth quarter 2020 vs. third quarter 2020
Key highlights
| • | Revenue of $1.7 billion was down 5%, reflecting slightly lower net interest income and lower noninterest income, which was down 12% from a record third quarter despite record results in capital markets, as mortgage margins began to normalize from record third quarter levels. |
| • | Results reflect an efficiency ratio of 59.3%; Underlying efficiency ratio of 56.8% reflects well-controlled expenses. |
| • | Provision for credit losses of $124 million was primarily associated with reserves for new loan originations. Net charge-offs decreased 13% to $190 million, or 61 basis points of average loans. |
| • | ROTCE of 12.2% increased 387 basis points, with Underlying ROTCE of 12.9% up 389 basis points. |
| • | Average loan-to-deposit ratio of 85.0%, or 81.9% excluding PPP loans, compares with 88.4% in third quarter 2020, given continued deposit growth. |
| • | Allowance coverage for loans of 2.17%, or 2.24% excluding PPP loans compares with 2.21% and 2.29%. Nonaccrual loans decreased $258 million as the nonaccrual loans to loans ratio of 0.83% improved from 1.03% as of September 30, 2020, and allowance coverage of nonaccrual loans of 262% increased from 214% as of September 30, 2020. |
| • | Capital remains strong, with the CET1 ratio increasing to 10.0% from 9.8% at September 30, 2020. |
| • | Tangible book value per common share of $32.72 compares with $32.24 at September 30, 2020, up 1%. |
| • | During fourth quarter 2020, Citizens paid $168 million in dividends to common shareholders. |
Fourth quarter 2020 vs. fourth quarter 2019
Key highlights
| • | Revenue of $1.7 billion increased 4%, reflecting higher noninterest income, up 17% given strength in mortgage and record capital markets, partially offset by lower net interest income, down 1%. |
| • | Generated positive operating leverage of 1.7% with efficiency ratio of 59.3%. Underlying efficiency ratio of 56.8%, and Underlying positive operating leverage of 2.1% reflects continued strong focus on top-line growth and expense management. |
2
Citizens Financial Group, Inc.
| • | Provision for credit losses of $124 million compares with $110 million in fourth quarter 2019. |
| • | ROTCE of 12.2% compares with 12.4%, while Underlying ROTCE of 12.9% compares with 12.5% for fourth quarter 2019. |
| • | Average deposits increased $19.6 billion, or 16%, as a result of government stimulus benefiting consumers and small businesses and commercial clients building liquidity given COVID-19 disruption. |
| • | Average loan-to-deposit ratio of 85.0%, or 81.9% excluding PPP loans, compares with 94.6% in fourth quarter 2019. |
| • | Allowance coverage for loans of 2.17%, or 2.24% excluding PPP loans, compares with 1.09% as of December 31, 2019, reflecting the first quarter 2020 implementation of CECL and the subsequent reserve increases in the second and third quarter 2020 primarily associated with COVID-19 impacts. |
| • | Nonaccrual loans increased by $316 million, primarily due to COVID-19 impacts, with nonaccrual loans to loans ratio of 0.83% higher than the 0.59% as of December 31, 2019, and allowance coverage of nonaccrual loans of 262% up from 184% as of December 31, 2019. |
| • | Tangible book value per share of $32.72, up 2%. |
2020 vs. 2019
Key Highlights
| • | Record total revenue of $6.9 billion increased $414 million, or 6%, as a 24% increase in noninterest income, given record results across mortgage, capital markets and wealth, was partially offset by a 1% decrease in net interest income on lower rates. |
| • | Record pre-provision profit, up 10%; up 12% on an Underlying basis. |
| • | Efficiency ratio improved 148 basis points to 57.8%, generating positive operating leverage of 2.7%. On an Underlying basis, the efficiency ratio improved 224 basis points to 56.0%, with positive operating leverage of 4.1% reflecting continued focus on top-line growth and expense management. |
| • | ROTCE of 6.9%; Underlying ROTCE of 7.5% compares with 12.6% and 12.8% in 2019 given the implementation of CECL and reserve increases tied to COVID-19 impacts. Reserve build in 2020 of $923 million impacted ROTCE by 5.4%. |
| • | Average loans of $124.5 billion increased $6.6 billion, or 5.6%, as a result of government programs like PPP and increased demand in education and point-of-sale financing. |
| • | Average deposits of $138.7 billion increased $15.4 billion, or 13%, as a result of government stimulus benefiting consumers and small businesses and commercial clients building liquidity given COVID-19 disruption. |
| • | The average loan-to-deposit ratio improved to 89.8%, or 87.5% excluding PPP loans, from 95.6%; period-end loan-to-deposit ratio improved to 83.6%, or 80.9% excluding PPP loans, from 95.0%. |
3
Citizens Financial Group, Inc.
Earnings highlights:
| Quarterly Trends | Full Year | |||||||||||||||||||||||||||||||||||||||
| 4Q20 change from | 2020 change from 2019 |
|||||||||||||||||||||||||||||||||||||||
| ($s in millions, except per share data) |
4Q20 | 3Q20 | 4Q19 | 3Q20 | 4Q19 | 2020 | 2019 | |||||||||||||||||||||||||||||||||
| $/bps | % | $/bps | % | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| Earnings |
||||||||||||||||||||||||||||||||||||||||
| Net interest income |
$ | 1,129 | $ | 1,137 | $ | 1,143 | $ | (8 | ) | (1 | )% | $ | (14 | ) | (1 | )% | $ | 4,586 | $ | 4,614 | $ | (28 | ) | |||||||||||||||||
| Noninterest income |
578 | 654 | 494 | (76 | ) | (12 | ) | 84 | 17 | 2,319 | 1,877 | 442 | ||||||||||||||||||||||||||||
| Total revenue |
1,707 | 1,791 | 1,637 | (84 | ) | (5 | ) | 70 | 4 | 6,905 | 6,491 | 414 | ||||||||||||||||||||||||||||
| Noninterest expense |
1,012 | 988 | 986 | 24 | 2 | 26 | 3 | 3,991 | 3,847 | 144 | ||||||||||||||||||||||||||||||
| Pre-provision profit |
695 | 803 | 651 | (108 | ) | (13 | ) | 44 | 7 | 2,914 | 2,644 | 270 | ||||||||||||||||||||||||||||
| Provision for credit losses |
124 | 428 | 110 | (304 | ) | (71 | ) | 14 | 13 | 1,616 | 393 | 1,223 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Net income |
456 | 314 | 450 | 142 | 45 | 6 | 1 | 1,057 | 1,791 | (734 | ) | |||||||||||||||||||||||||||||
| Preferred dividends |
32 | 25 | 23 | 7 | 28 | 9 | 39 | 107 | 73 | 34 | ||||||||||||||||||||||||||||||
| Net income available to common stockholders |
$ | 424 | $ | 289 | $ | 427 | $ | 135 | 47 | % | $ | (3 | ) | (1 | )% | $ | 950 | $ | 1,718 | $ | (768 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| After-tax notable Items |
24 | 24 | 4 | — | — | 20 | NM | 83 | 17 | 66 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Underlying net income |
$ | 480 | $ | 338 | $ | 454 | $ | 142 | 42 | % | $ | 26 | 6 | % | $ | 1,140 | $ | 1,808 | $ | (668 | ) | |||||||||||||||||||
| Underlying net income available to common stockholders |
$ | 448 | $ | 313 | $ | 431 | $ | 135 | 43 | % | $ | 17 | 4 | % | $ | 1,033 | $ | 1,735 | $ | (702 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Average common shares outstanding |
||||||||||||||||||||||||||||||||||||||||
| Basic (in millions) |
427.1 | 426.8 | 434.7 | 0.2 | — | (7.6 | ) | (2 | ) | 427.1 | 449.7 | (22.7 | ) | |||||||||||||||||||||||||||
| Diluted (in millions) |
428.9 | 428.0 | 436.5 | 0.9 | — | (7.6 | ) | (2 | ) | 428.2 | 451.2 | (23.1 | ) | |||||||||||||||||||||||||||
| Diluted earnings per share |
$ | 0.99 | $ | 0.68 | $ | 0.98 | $ | 0.31 | 46 | % | $ | 0.01 | 1 | % | $ | 2.22 | $ | 3.81 | $ | (1.59 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Underlying diluted earnings per share |
$ | 1.04 | $ | 0.73 | $ | 0.99 | $ | 0.31 | 42 | % | $ | 0.05 | 5 | % | $ | 2.41 | $ | 3.84 | $ | (1.43 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Performance metrics |
||||||||||||||||||||||||||||||||||||||||
| Net interest margin |
2.75 | % | 2.82 | % | 3.04 | % | (7 | ) bps | (30 | ) bps | 2.88 | % | 3.14 | % | (26 | ) bps | ||||||||||||||||||||||||
| Net interest margin, FTE |
2.75 | 2.83 | 3.06 | (8 | ) | (31 | ) | 2.89 | 3.16 | (27 | ) | |||||||||||||||||||||||||||||
| Effective income tax rate |
20.2 | 16.1 | 16.8 | 406 | 340 | 18.5 | 20.4 | (189 | ) | |||||||||||||||||||||||||||||||
| Efficiency ratio |
59 | 55 | 60 | 410 | (100 | ) | 58 | 59 | (148 | ) | ||||||||||||||||||||||||||||||
| Underlying efficiency ratio |
57 | 53 | 58 | 339 | (119 | ) | 56 | 58 | (224 | ) | ||||||||||||||||||||||||||||||
| Return on average common equity |
8.2 | 5.6 | 8.3 | 260 | (10 | ) | 4.6 | 8.5 | (380 | ) | ||||||||||||||||||||||||||||||
| Return on average tangible common equity |
12.2 | 8.3 | 12.4 | 387 | (19 | ) | 6.9 | 12.6 | (571 | ) | ||||||||||||||||||||||||||||||
| Underlying return on average tangible common equity |
12.9 | 9.0 | 12.5 | 389 | 40 | 7.5 | 12.8 | (523 | ) | |||||||||||||||||||||||||||||||
| Return on average total assets |
1.00 | 0.70 | 1.08 | 30 | (8 | ) | 0.60 | 1.10 | (50 | ) | ||||||||||||||||||||||||||||||
| Underlying return on average total tangible assets |
1.10 | % | 0.79 | % | 1.14 | % | 31 | bps | (4 | ) bps | 0.67 | % | 1.16 | % | (49 | ) bps | ||||||||||||||||||||||||
| Capital adequacy(1,2) |
||||||||||||||||||||||||||||||||||||||||
| Common equity tier 1 capital ratio |
10.0 | % | 9.8 | % | 10.0 | % | ||||||||||||||||||||||||||||||||||
| Total capital ratio |
13.4 | 13.3 | 13.0 | |||||||||||||||||||||||||||||||||||||
| Tier 1 leverage ratio |
9.4 | 9.5 | 10.0 | |||||||||||||||||||||||||||||||||||||
| Allowance for credit losses to loans and leases |
2.17 | % | 2.21 | % | 1.09 | % | (4 | ) bps | 108 | bps | ||||||||||||||||||||||||||||||
| Asset quality(2) |
||||||||||||||||||||||||||||||||||||||||
| Nonaccrual loans and leases to loans and leases |
0.83 | % | 1.03 | % | 0.59 | % | (20 | ) bps | 24 | bps | ||||||||||||||||||||||||||||||
| Allowance for credit losses to nonaccrual loans and leases |
262 | 214 | 184 | NM | NM | |||||||||||||||||||||||||||||||||||
| Net charge-offs as a % of average loans and leases |
0.61 | % | 0.70 | % | 0.41 | % | (9 | ) bps | 20 | bps | 0.56 | % | 0.36 | % | 20 | bps | ||||||||||||||||||||||||
| 1) | Current reporting-period regulatory capital ratios are preliminary. |
| 2) | Capital adequacy and asset-quality ratios calculated on a period-end basis, except net charge-offs. |
4
Citizens Financial Group, Inc.
The following table provides information on Underlying results which exclude the impact of notable items.
Underlying results:
| Quarterly Trends | Full Year | |||||||||||||||||||||||||||||||
| 4Q20 change from | 2020 Change |
|||||||||||||||||||||||||||||||
| ($s in millions, except per share data) |
4Q20 | 3Q20 | 4Q19 | 3Q20 | 4Q19 | 2020 | 2019 | from 2019 | ||||||||||||||||||||||||
| Net interest income |
$ | 1,129 | $ | 1,137 | $ | 1,143 | (1 | )% | (1 | )% | $ | 4,586 | $ | 4,614 | (1 | )% | ||||||||||||||||
| Noninterest income |
578 | 654 | 494 | (12 | ) | 17 | 2,319 | 1,877 | 24 | % | ||||||||||||||||||||||
| Total revenue |
$ | 1,707 | $ | 1,791 | $ | 1,637 | (5 | )% | 4 | % | $ | 6,905 | $ | 6,491 | 6 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Noninterest expense |
1,012 | 988 | 986 | 2 | 3 | 3,991 | 3,847 | 4 | ||||||||||||||||||||||||
| Notable items |
42 | 31 | 37 | 35 | 14 | 125 | 68 | 84 | ||||||||||||||||||||||||
| Underlying noninterest expense |
$ | 970 | $ | 957 | $ | 949 | 1 | % | 2 | % | $ | 3,866 | $ | 3,779 | 2 | % | ||||||||||||||||
| Underlying pre-provision profit |
737 | 834 | 688 | (12 | ) | 7 | 3,039 | 2,712 | 12 | |||||||||||||||||||||||
| Provision for credit losses |
124 | 428 | 110 | (71 | ) | 13 | 1,616 | 393 | NM | |||||||||||||||||||||||
| Net income available to common stockholders |
424 | 289 | 427 | 47 | (1 | ) | 950 | 1,718 | (45 | ) | ||||||||||||||||||||||
| Underlying net income available to common stockholders |
448 | 313 | 431 | 43 | 4 | 1,033 | 1,735 | (40 | ) | |||||||||||||||||||||||
| Performance metrics |
||||||||||||||||||||||||||||||||
| Diluted EPS |
$ | 0.99 | $ | 0.68 | $ | 0.98 | 46 | % | 1 | % | $ | 2.22 | $ | 3.81 | (42 | )% | ||||||||||||||||
| Underlying EPS |
$ | 1.04 | $ | 0.73 | $ | 0.99 | 42 | % | 5 | % | $ | 2.41 | $ | 3.84 | (37 | )% | ||||||||||||||||
| Efficiency ratio |
59 | % | 55 | % | 60 | % | 410 | bps | (100 | ) bps | 58 | % | 59 | % | (148 | ) bps | ||||||||||||||||
| Underlying efficiency ratio |
57 | 53 | 58 | 339 | (119 | ) | 56 | 58 | (224 | ) | ||||||||||||||||||||||
| Return on average tangible common equity |
12.2 | 8.3 | 12.4 | 387 | (19 | ) | 6.93 | 12.6 | (571 | ) | ||||||||||||||||||||||
| Underlying return on average tangible common equity |
12.9 | % | 9.0 | % | 12.5 | % | 389 | bps | 40 | bps | 7.53 | % | 12.8 | % | (523 | ) bps | ||||||||||||||||
| Operating leverage |
(7.1 | )% | 1.7 | % | 2.7 | % | ||||||||||||||||||||||||||
| Underlying operating leverage |
(6.0 | )% | 2.1 | % | 4.1 | % | ||||||||||||||||||||||||||
5
Citizens Financial Group, Inc.
Discussion of results:
| Net interest income | 4Q20 change from | |||||||||||||||||||||||||||
| ($s in millions) |
4Q20 | 3Q20 | 4Q19 | 3Q20 | 4Q19 | |||||||||||||||||||||||
| $/bps | % | $/bps | % | |||||||||||||||||||||||||
| Interest income: |
||||||||||||||||||||||||||||
| Interest and fees on loans and leases and loans held for sale |
$ | 1,125 | $ | 1,157 | $ | 1,335 | $ | (32 | ) | (3 | )% | $ | (210 | ) | (16 | )% | ||||||||||||
| Investment securities |
121 | 121 | 159 | — | — | (38 | ) | (24 | ) | |||||||||||||||||||
| Interest-bearing deposits in banks |
3 | 2 | 7 | 1 | 50 | (4 | ) | (57 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Total interest income |
$ | 1,249 | $ | 1,280 | $ | 1,501 | $ | (31 | ) | (2 | )% | $ | (252 | ) | (17 | )% | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Interest expense: |
||||||||||||||||||||||||||||
| Deposits |
$ | 69 | $ | 89 | $ | 263 | $ | (20 | ) | (22 | )% | $ | (194 | ) | (74 | )% | ||||||||||||
| Short-term borrowed funds |
1 | — | 2 | 1 | 100 | (1 | ) | (50 | ) | |||||||||||||||||||
| Long-term borrowed funds |
50 | 54 | 93 | (4 | ) | (7 | ) | (43 | ) | (46 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Total interest expense |
$ | 120 | $ | 143 | $ | 358 | $ | (23 | ) | (16 | )% | $ | (238 | ) | (66 | )% | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Net interest income |
$ | 1,129 | $ | 1,137 | $ | 1,143 | $ | (8 | ) | (1 | )% | $ | (14 | ) | (1 | )% | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Net interest margin, FTE |
2.75 | % | 2.83 | % | 3.06 | % | (8 | )bps | (31 | )bps | ||||||||||||||||||
Fourth quarter 2020 vs. third quarter 2020
Net interest income of $1.1 billion decreased 1% given lower asset yields and lower loan balances, largely in commercial driven by line of credit repayments and payoffs outpacing originations, partially offset by improved funding mix and lower deposit costs.
| • | Net interest margin of 2.75% decreased 8 basis points reflecting a 9 basis point impact from elevated cash balances given strong deposit flows. Results also include lower earning-asset yields that were partially offset by the impact of disciplined deposit pricing actions, improved funding mix and the start of PPP forgiveness. Interest-bearing deposit costs decreased 8 basis points. |
| • | Excluding the impact of elevated cash balances, net interest margin would have been approximately 2.92% for fourth quarter 2020 and 2.91% for third quarter 2020. |
Fourth quarter 2020 vs. fourth quarter 2019
Net interest income of $1.1 billion decreased 1% as 10% growth in interest-earning assets, including the addition of PPP loans, and improvements in funding mix and deposit pricing were more than offset by the lower rate and challenging yield curve environment.
| • | Net interest margin of 2.75% decreased 31 basis points, primarily reflecting the impact of lower interest rates (29 basis points) and elevated cash balances (17 basis points) given strong deposit flows, partially offset by improved funding mix and deposit pricing (19 basis points). Interest-bearing deposit costs decreased 82 basis points, reflecting strong pricing discipline. |
6
Citizens Financial Group, Inc.
| Noninterest Income | 4Q20 change from | |||||||||||||||||||||||||||
| ($s in millions) |
4Q20 | 3Q20 | 4Q19 | 3Q20 | 4Q19 | |||||||||||||||||||||||
| $ | % | $ | % | |||||||||||||||||||||||||
| Mortgage banking fees |
$ | 193 | $ | 287 | $ | 80 | $ | (94 | ) | (33 | )% | $ | 113 | 141 | % | |||||||||||||
| Service charges and fees |
104 | 97 | 128 | 7 | 7 | (24 | ) | (19 | ) | |||||||||||||||||||
| Capital markets fees |
88 | 58 | 66 | 30 | 52 | 22 | 33 | |||||||||||||||||||||
| Card fees |
56 | 57 | 64 | (1 | ) | (2 | ) | (8 | ) | (13 | ) | |||||||||||||||||
| Trust and investment services fees |
52 | 53 | 52 | (1 | ) | (2 | ) | — | — | |||||||||||||||||||
| Letter of credit and loan fees |
38 | 37 | 35 | 1 | 3 | 3 | 9 | |||||||||||||||||||||
| Foreign exchange and interest rate products |
35 | 27 | 49 | 8 | 30 | (14 | ) | (29 | ) | |||||||||||||||||||
| Securities gains, net |
— | 1 | 4 | (1 | ) | (100 | ) | (4 | ) | (100 | ) | |||||||||||||||||
| Other income(1) |
12 | 37 | 16 | (25 | ) | (68 | ) | (4 | ) | (25 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Noninterest income |
$ | 578 | $ | 654 | $ | 494 | $ | (76 | ) | (12 | )% | $ | 84 | 17 | % | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| 1) | Other income includes bank-owned life insurance and other income. |
Fourth quarter 2020 vs. third quarter 2020
Noninterest income of $578 million decreased $76 million, or 12%, from the $654 million record in third quarter 2020.
| • | Mortgage banking fees declined 33% from record levels given lower gain-on-sale margins reflecting an increase in industry capacity, and lower mortgage servicing rights hedging results. Production volumes remained near record levels. |
| • | Several categories saw growth: |
| • | Record capital markets fees were up 52%, driven by higher M&A advisory and loan syndication fees. |
| • | Foreign exchange and interest rate products revenue was up 30%, reflecting higher customer activity levels tied to increased variable rate loan originations. |
| • | Service charges and fees were up 7%, given continued recovery from COVID-19 impacts. |
| • | Other income declined from a third quarter 2020 level that included a gain on sale of education loans. |
Fourth quarter 2020 vs. fourth quarter 2019
Noninterest income of $578 million increased $84 million, or 17%, reflecting:
| • | Strong growth in mortgage banking fees, up $113 million, driven by higher production volumes and gain-on-sale margins. |
| • | Record capital market fees, up 33%, reflect an increase in M&A advisory and loan syndication fees. |
| • | These results were partially offset by lower service charges and fees, and card fees reflecting COVID-19 impacts, and lower foreign exchange and interest rate products revenue reflecting lower loan originations, less volatility and smaller CVA benefit. |
7
Citizens Financial Group, Inc.
| Noninterest Expense | 4Q20 change from | |||||||||||||||||||||||||||
| ($s in millions) |
4Q20 | 3Q20 | 4Q19 | 3Q20 | 4Q19 | |||||||||||||||||||||||
| $ | % | $ | % | |||||||||||||||||||||||||
| Salaries and employee benefits |
$ | 537 | $ | 524 | $ | 502 | $ | 13 | 2 | % | $ | 35 | 7 | % | ||||||||||||||
| Equipment and software expense |
141 | 149 | 133 | (8 | ) | (5 | ) | 8 | 6 | |||||||||||||||||||
| Outside services |
148 | 139 | 142 | 9 | 6 | 6 | 4 | |||||||||||||||||||||
| Occupancy |
84 | 81 | 88 | 3 | 4 | (4 | ) | (5 | ) | |||||||||||||||||||
| Other operating expense |
102 | 95 | 121 | 7 | 7 | (19 | ) | (16 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Noninterest expense |
$ | 1,012 | $ | 988 | $ | 986 | $ | 24 | 2 | % | $ | 26 | 3 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Notable items |
$ | 42 | $ | 31 | $ | 37 | $ | 11 | 35 | % | $ | 5 | 14 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Underlying, as applicable |
||||||||||||||||||||||||||||
| Salaries and employee benefits |
$ | 519 | $ | 511 | $ | 496 | $ | 8 | 2 | % | $ | 23 | 5 | % | ||||||||||||||
| Equipment and software expense |
140 | 148 | 130 | (8 | ) | (5 | ) | 10 | 8 | |||||||||||||||||||
| Outside services |
131 | 123 | 122 | 8 | 7 | 9 | 7 | |||||||||||||||||||||
| Occupancy |
78 | 80 | 80 | (2 | ) | (3 | ) | (2 | ) | (3 | ) | |||||||||||||||||
| Other operating expense |
102 | 95 | 121 | 7 | 7 | (19 | ) | (16 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Underlying noninterest expense |
$ | 970 | $ | 957 | $ | 949 | $ | 13 | 1 | % | $ | 21 | 2 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Fourth quarter 2020 vs. third quarter 2020
Noninterest expense of $1.0 billion increased $24 million, or 2%. On an Underlying basis, noninterest expense of $970 million increased 1% reflecting higher compensation expense and outside services tied to strong Consumer-related volumes and seasonal impacts, partially offset by continued expense discipline.
The effective tax rate was 20.2%. On an Underlying basis, the effective tax rate of 21.7% compares with 16.8%, which reflected the greater impact of tax-advantaged investments given lower pre-tax income.
Fourth quarter 2020 vs. fourth quarter 2019
Noninterest expense of $1.0 billion increased $26 million, or 3%. Underlying noninterest expense of $970 million was up 2% given strong expense discipline and benefit of the TOP program. Increases in compensation expense, reflecting strong mortgage production volumes, higher equipment and software expense, given continued investments in technology, and higher outside services largely tied to growth initiatives, were partially offset by a decrease in other operating expense, given lower travel and advertising costs.
On an Underlying basis, the effective tax rate of 21.7% compares with 21.5%.
8
| Consolidated balance sheet review(1) | 4Q20 change from | |||||||||||||||||||||||||||
| ($s in millions) |
4Q20 | 3Q20 | 4Q19 | 3Q20 | 4Q19 | |||||||||||||||||||||||
| $/bps | % | $/bps | % | |||||||||||||||||||||||||
| Total assets |
$ | 183,349 | $ | 179,228 | $ | 165,733 | $ | 4,121 | 2 | % | $ | 17,616 | 11 | % | ||||||||||||||
| Total loans and leases |
123,090 | 124,071 | 119,088 | (981 | ) | (1 | ) | 4,002 | 3 | |||||||||||||||||||
| Total loans held for sale |
4,003 | 3,714 | 3,330 | 289 | 8 | 673 | 20 | |||||||||||||||||||||
| Deposits |
147,164 | 142,921 | 125,313 | 4,243 | 3 | 21,851 | 17 | |||||||||||||||||||||
| Stockholders’ equity |
22,673 | 22,469 | 22,201 | 204 | 1 | 472 | 2 | |||||||||||||||||||||
| Stockholders’ common equity |
20,708 | 20,504 | 20,631 | 204 | 1 | 77 | — | |||||||||||||||||||||
| Tangible common equity |
$ | 13,979 | $ | 13,771 | $ | 13,893 | $ | 208 | 2 | % | $ | 86 | 1 | % | ||||||||||||||
| Loan-to-deposit ratio (period-end)(2) |
83.6 | % | 86.8 | % | 95.0 | % | (317 | )bps | (1,139 | )bps | ||||||||||||||||||
| Loans to deposit ratio (average)(2) |
85.0 | 88.4 | 94.6 | (337 | ) | (964 | ) | |||||||||||||||||||||
| Common equity tier 1 capital ratio(3) |
10.0 | 9.8 | 10.0 | |||||||||||||||||||||||||
| Total capital ratio(3) |
13.4 | % | 13.3 | % | 13.0 | % | ||||||||||||||||||||||
| 1) | Represents period end unless otherwise noted. |
| 2) | Excludes loans held for sale. |
| 3) | Current reporting period regulatory capital ratios are preliminary. |
Fourth quarter 2020 vs. third quarter 2020
Total assets of $183.3 billion at December 31, 2020, increased $4.1 billion, reflecting a $4.1 billion increase in the investment portfolio given higher cash balances, partially offset by a $692 million decrease in loans and loans held for sale, reflecting commercial line of credit repayments and overall payoffs outpacing originations.
Fourth quarter 2020 vs. fourth quarter 2019
Total assets of $183.3 billion at December 31, 2020, increased $17.6 billion, or 11%, reflecting a $4.7 billion increase in loans and loans held for sale, largely driven by $4.1 billion of PPP loans to business customers. Results also reflect a $11.7 billion increase in the investment portfolio given higher cash balances from strong deposit flows.
| Interest-earning assets | 4Q20 change from | |||||||||||||||||||||||||||
| ($s in millions) |
4Q20 | 3Q20 | 4Q19 | 3Q20 | 4Q19 | |||||||||||||||||||||||
| $ | % | $ | % | |||||||||||||||||||||||||
| Period-end interest-earning assets |
||||||||||||||||||||||||||||
| Investments and interest-bearing deposits |
$ | 38,849 | $ | 34,764 | $ | 27,177 | $ | 4,085 | 12 | % | $ | 11,672 | 43 | % | ||||||||||||||
| Commercial loans and leases |
60,793 | 62,362 | 57,538 | (1,569 | ) | (3 | ) | 3,255 | 6 | |||||||||||||||||||
| Retail loans |
62,297 | 61,709 | 61,550 | 588 | 1 | 747 | 1 | |||||||||||||||||||||
| Total loans and leases |
123,090 | 124,071 | 119,088 | (981 | ) | (1 | ) | 4,002 | 3 | |||||||||||||||||||
| Loans held for sale, at fair value |
3,564 | 3,587 | 1,946 | (23 | ) | (1 | ) | 1,618 | 83 | |||||||||||||||||||
| Other loans held for sale |
439 | 127 | 1,384 | 312 | 246 | (945 | ) | (68 | ) | |||||||||||||||||||
| Total loans and leases and loans held for sale |
127,093 | 127,785 | 122,418 | (692 | ) | (1 | ) | 4,675 | 4 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Total period-end interest-earning assets |
$ | 165,942 | $ | 162,549 | $ | 149,595 | $ | 3,393 | 2 | % | $ | 16,347 | 11 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Average interest-earning assets |
||||||||||||||||||||||||||||
| Investments and interest-bearing deposits |
$ | 36,777 | $ | 30,908 | $ | 27,280 | $ | 5,869 | 19 | % | $ | 9,497 | 35 | % | ||||||||||||||
| Commercial loans and leases |
61,515 | 63,861 | 57,661 | (2,346 | ) | (4 | ) | 3,854 | 7 | |||||||||||||||||||
| Retail loans |
61,946 | 61,051 | 61,244 | 895 | 1 | 702 | 1 | |||||||||||||||||||||
| Total loans and leases |
123,461 | 124,912 | 118,905 | (1,451 | ) | (1 | ) | 4,556 | 4 | |||||||||||||||||||
| Loans held for sale, at fair value |
3,185 | 3,295 | 2,209 | (110 | ) | (3 | ) | 976 | 44 | |||||||||||||||||||
| Other loans held for sale |
110 | 1,061 | 517 | (951 | ) | (90 | ) | (407 | ) | (79 | ) | |||||||||||||||||
| Total loans and leases and loans held for sale |
126,756 | 129,268 | 121,631 | (2,512 | ) | (2 | ) | 5,125 | 4 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Total average interest-earning assets |
$ | 163,533 | $ | 160,176 | $ | 148,911 | $ | 3,357 | 2 | % | $ | 14,622 | 10 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Fourth quarter 2020 vs. third quarter 2020
Period-end interest-earning assets of $165.9 billion increased $3.4 billion, largely reflecting a $4.1 billion increase in the investment portfolio given higher interest-bearing cash balances, and a $588 million increase in retail loans, partially offset by a $1.6 billion decrease in commercial loans.
| • | Commercial loans declined 3%, driven by line of credit repayments and overall payoffs outpacing originations. |
Citizens Financial Group, Inc.
| • | Retail loan growth of 1% was driven by education, auto, and other retail, namely point-of-sale finance, partially offset by run-off of personal unsecured in other retail, and lower residential mortgage and home equity. |
| • | The average effective duration of the securities portfolio was 3.0 years compared with 2.75 years at September 30, 2020. |
Average interest-earning assets of $163.5 billion increased $3.4 billion, or 2%, reflecting $5.9 billion growth in the investment portfolio and a $895 million increase in retail loans, partially offset by a $2.3 billion decrease in commercial loans driven by line of credit repayments and a $1.1 billion decrease in loans held for sale.
| • | The increase in retail loans reflects growth in education, residential mortgage and point-of-sale finance, partially offset by lower home equity and the run-off of personal unsecured in other retail. |
Fourth quarter 2020 vs. fourth quarter 2019
Period-end interest-earning assets of $165.9 billion increased $16.3 billion, or 11%, driven by a $11.7 billion increase in the investment portfolio and a $4.7 billion, or 4%, increase in loans and loans held for sale.
| • | The investment portfolio increased $11.7 billion given higher interest-bearing cash balances, reflecting strong deposit flows. |
| • | The increase in commercial loans of $3.3 billion, or 6%, reflects the $4.1 billion of PPP loans to business customers partially offset by line of credit repayments and payoffs outpacing originations. |
| • | Retail loans increased $747 million reflecting growth in education and residential mortgage, partially offset by lower home equity and other retail, namely personal unsecured and credit card. |
| • | The average effective duration of the securities portfolio of 3.0 years decreased from 3.7 years at December 31, 2019, as lower long-term rates drove an increase in securities prepayment speeds. |
Average interest-earning assets of $163.5 billion increased $14.6 billion, or 10%, reflecting a $5.1 billion, or 4%, increase in loans and loans held for sale and a $9.5 billion, or 35%, increase in the investment portfolio given higher interest-bearing cash balances. Loan growth includes a $3.9 billion increase in commercial and $702 million increase in retail.
| • | Commercial loan growth reflects $4.5 billion of PPP loans, partially offset by line of credit repayments and payoffs outpacing originations. |
| • | Retail loan growth was driven by education and residential mortgage, partially offset by the impact of loan sales, lower home equity and other retail, as the reduction in card and run-off of personal unsecured more than offset the growth in point-of-sale finance. |
10
Citizens Financial Group, Inc.
| Deposits | 4Q20 change from | |||||||||||||||||||||||||||
| ($s in millions) |
4Q20 | 3Q20 | 4Q19 | 3Q20 | 4Q19 | |||||||||||||||||||||||
| $ | % | $ | % | |||||||||||||||||||||||||
| Period-end deposits |
||||||||||||||||||||||||||||
| Demand deposits |
$ | 43,831 | $ | 41,249 | $ | 29,233 | $ | 2,582 | 6 | % | $ | 14,598 | 50 | % | ||||||||||||||
| Checking with interest |
27,204 | 27,141 | 24,840 | 63 | — | 2,364 | 10 | |||||||||||||||||||||
| Savings |
18,044 | 17,237 | 13,779 | 807 | 5 | 4,265 | 31 | |||||||||||||||||||||
| Money market accounts |
48,569 | 46,400 | 38,725 | 2,169 | 5 | 9,844 | 25 | |||||||||||||||||||||
| Term deposits |
9,516 | 10,894 | 18,736 | (1,378 | ) | (13 | ) | (9,220 | ) | (49 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Total period-end deposits |
$ | 147,164 | $ | 142,921 | $ | 125,313 | $ | 4,243 | 3 | % | $ | 21,851 | 17 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Average deposits |
||||||||||||||||||||||||||||
| Demand deposits |
$ | 42,411 | $ | 40,608 | $ | 29,928 | $ | 1,803 | 4 | % | $ | 12,483 | 42 | % | ||||||||||||||
| Checking with interest |
26,432 | 26,638 | 23,545 | (206 | ) | (1 | ) | 2,887 | 12 | |||||||||||||||||||
| Savings |
17,566 | 16,902 | 13,582 | 664 | 4 | 3,984 | 29 | |||||||||||||||||||||
| Money market accounts |
48,667 | 45,187 | 38,809 | 3,480 | 8 | 9,858 | 25 | |||||||||||||||||||||
| Term deposits |
10,191 | 12,032 | 19,788 | (1,841 | ) | (15 | ) | (9,597 | ) | (48 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Total average deposits |
$ | 145,267 | $ | 141,367 | $ | 125,652 | $ | 3,900 | 3 | % | $ | 19,615 | 16 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Fourth quarter 2020 vs. third quarter 2020
Total period-end deposits of $147.2 billion increased $4.2 billion, or 3%, as growth in demand, money market accounts and savings and checking with interest were partially offset by lower term deposits.
| • | Citizens Access® deposits were $5.9 billion at December 31, 2020, down from $6.2 billion at September 30, 2020, due to the run-off of term deposits. |
Average deposits of $145.3 billion increased $3.9 billion, or 3%, driven by money market, demand deposits and savings, partially offset by a decrease in term deposits.
Fourth quarter 2020 vs. fourth quarter 2019
Total period-end deposits of $147.2 billion at December 31, 2020 increased $21.9 billion, or 17%, from December 31, 2019, reflecting growth in demand deposits, money market accounts, savings and checking with interest, partially offset by a decrease in term deposits.
Average deposits of $145.3 billion increased $19.6 billion, or 16%, as a result of government stimulus benefiting consumers and small businesses and clients building liquidity given COVID-19 disruption. An increase in demand deposits, savings and checking with interest and money market accounts was partially offset by a decrease in term deposits.
| Borrowed Funds | 4Q20 change from | |||||||||||||||||||||||||||
| ($s in millions) |
4Q20 | 3Q20 | 4Q19 | 3Q20 | 4Q19 | |||||||||||||||||||||||
| $ | % | $ | % | |||||||||||||||||||||||||
| Period-end borrowed funds |
||||||||||||||||||||||||||||
| Short-term borrowed funds |
$ | 243 | $ | 252 | $ | 274 | $ | (9 | ) | (4 | )% | $ | (31 | ) | (11 | )% | ||||||||||||
| Long-term borrowed funds |
||||||||||||||||||||||||||||
| FHLB advances |
19 | 19 | 5,008 | — | — | (4,989 | ) | (100 | ) | |||||||||||||||||||
| Senior debt |
6,740 | 7,504 | 7,382 | (764 | ) | (10 | ) | (642 | ) | (9 | ) | |||||||||||||||||
| Subordinated debt and other debt |
1,587 | 1,586 | 1,657 | 1 | — | (70 | ) | (4 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Total borrowed funds |
$ | 8,589 | $ | 9,361 | $ | 14,321 | $ | (772 | ) | (8 | )% | $ | (5,732 | ) | (40 | )% | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Average borrowed funds |
||||||||||||||||||||||||||||
| Short-term borrowed funds |
$ | 232 | $ | 240 | $ | 504 | $ | (8 | ) | (3 | )% | $ | (272 | ) | (54 | )% | ||||||||||||
| Long-term borrowed funds |
||||||||||||||||||||||||||||
| FHLB advances |
19 | 6 | 3,259 | 13 | 217 | (3,240 | ) | (99 | ) | |||||||||||||||||||
| Senior debt |
6,845 | 7,515 | 7,914 | (670 | ) | (9 | ) | (1,069 | ) | (14 | ) | |||||||||||||||||
| Subordinated debt and other debt |
1,586 | 1,675 | 1,657 | (89 | ) | (5 | ) | (71 | ) | (4 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Total average borrowed funds |
$ | 8,682 | $ | 9,436 | $ | 13,334 | $ | (754 | ) | (8 | )% | $ | (4,652 | ) | (35 | )% | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
11
Citizens Financial Group, Inc.
Fourth quarter 2020 vs. third quarter 2020
| • | Total borrowed funds were down 8% as strong deposit levels allowed for a reduction in senior debt. |
Fourth quarter 2020 vs. fourth quarter 2019
| • | Borrowed funds declined as strong deposit flows allowed for significantly lower levels of borrowed funds, with FHLB advances near zero and a reduction in senior and subordinated debt. |
| Capital | 4Q20 change from | |||||||||||||||||||||||||||
| ($s and shares in millions except per share data) |
4Q20 | 3Q20 | 4Q19 | 3Q20 | 4Q19 | |||||||||||||||||||||||
| Period-end capital | $ | % | $ | % | ||||||||||||||||||||||||
| Stockholders’ equity |
$ | 22,673 | $ | 22,469 | $ | 22,201 | $ | 204 | 1 | % | $ | 472 | 2 | % | ||||||||||||||
| Stockholders’ common equity |
20,708 | 20,504 | 20,631 | 204 | 1 | 77 | — | |||||||||||||||||||||
| Tangible common equity |
13,979 | 13,771 | 13,893 | 208 | 2 | 86 | 1 | |||||||||||||||||||||
| Tangible book value per common share |
$ | 32.72 | $ | 32.24 | $ | 32.08 | $ | 0.48 | 1 | $ | 0.64 | 2 | ||||||||||||||||
| Common shares - at end of period |
427.2 | 427.1 | 433.1 | 0.1 | — | (5.9 | ) | (1 | ) | |||||||||||||||||||
| Common shares - average (diluted) |
428.9 | 428.0 | 436.5 | 0.9 | — | % | (7.6 | ) | (2 | )% | ||||||||||||||||||
| Common equity tier 1 capital ratio(1) |
10.0 | % | 9.8 | % | 10.0 | % | ||||||||||||||||||||||
| Total capital ratio(1) |
13.4 | 13.3 | 13.0 | |||||||||||||||||||||||||
| Tier 1 leverage ratio(1) |
9.4 | % | 9.5 | % | 10.0 | % | ||||||||||||||||||||||
| 1) Current reporting-period regulatory capital ratios are preliminary. | ||||||||||||||
| Fourth quarter 2020 |
| • | At December 31, 2020, our Basel III capital ratios continued to strengthen, with a CET1 capital ratio of 10.0% compared with 9.8% at September 30, 2020 and 10.0% at December 31, 2019. |
| • | Total capital ratio of 13.4% compared with 13.3% at September 30, 2020 and 13.0% as of December 31, 2019. |
| • | Tangible book value per common share of $32.72 increased 1.0% compared with third quarter 2020 and increased 2.0% from fourth quarter 2019. |
| • | Citizens paid $168 million in dividends to common shareholders in fourth quarter 2020. This compares with $168 million in dividends to common shareholders in third quarter 2020 and total capital of $558 million returned to shareholders in fourth quarter 2019, including share repurchases and common dividends. In 2020, the company returned $892 million to common shareholders, including share repurchases and common dividends, compared with $1.84 billion in 2019. |
| Credit quality review | 4Q20 change from | |||||||||||||||||||||||||||
| ($s in millions) |
4Q20 | 3Q20 | 4Q19 | 3Q20 | 4Q19 | |||||||||||||||||||||||
| $/bps | % | $/bps | % | |||||||||||||||||||||||||
| Nonaccrual loans and leases |
$ | 1,019 | $ | 1,277 | $ | 703 | $ | (258 | ) | (20 | )% | $ | 316 | 45 | % | |||||||||||||
| 90+ days past due and accruing |
62 | 28 | 25 | 34 | 121 | 37 | 148 | |||||||||||||||||||||
| Net charge-offs |
190 | 219 | 122 | (29 | ) | (13 | ) | 68 | 56 | |||||||||||||||||||
| Provision for credit losses |
124 | 428 | 110 | (304 | ) | (71 | ) | 14 | 13 | |||||||||||||||||||
| Allowance for credit losses |
$ | 2,670 | $ | 2,736 | $ | 1,296 | $ | (66 | ) | (2 | )% | 1,374 | 106 | % | ||||||||||||||
| Nonaccrual loans and leases to loans and leases |
0.83 | % | 1.03 | % | 0.59 | % | (20 | ) bps | 24 | bps | ||||||||||||||||||
| Net charge-offs as a % of total loans and leases |
0.61 | 0.70 | 0.41 | (9 | ) | 20 | ||||||||||||||||||||||
| Allowance for credit losses to loans and leases |
2.17 | 2.21 | 1.09 | (4 | ) | 108 | ||||||||||||||||||||||
| Allowance for credit losses to nonaccrual loans and leases |
262.0 | % | 214.2 | % | 184.3 | % | NM | NM | ||||||||||||||||||||
12
Citizens Financial Group, Inc.
Fourth quarter 2020 vs. third quarter 2020
| • | Nonaccrual loans of $1.0 billion decreased $258 million, or 20%, reflecting a $302 million decrease in commercial given charge-offs, returns to accrual and repayments and a $44 million increase in retail as loans exit forbearance. |
| • | The nonaccrual loans to loans ratio of 0.83% improved from 1.03% at September 30, 2020. |
| • | Net charge-offs were 61 basis points of average loans and leases, down from 70 basis points. |
| • | Net charge-offs of $190 million decreased $29 million driven by commercial, as a reduction in charge-offs in the C&I and leasing portfolios was partly offset by an increase in commercial real estate as a result of COVID-19 impacts. |
| • | Provision for credit losses of $124 million was primarily associated with reserves for new loan originations. Third quarter 2020 provision for credit losses was $428 million. |
| • | Allowance for credit losses ratio of 2.17%, or 2.24% before the impact of PPP loans, compares with 2.21% as of September 30, 2020, or 2.29% before the impact of PPP loans. |
| • | The allowance for credit losses to nonaccrual loans and leases ratio of 262% compares with 214% as of September 30, 2020. |
Fourth quarter 2020 vs. fourth quarter 2019
| • | Nonaccrual loans increased $316 million, or 45%, driven by a $213 million increase in commercial and a $103 million increase in retail, largely reflecting COVID-19 impacts. |
| • | The nonaccrual loans to loans ratio of 0.83% increased from 0.59% at December 31, 2019. |
| • | Net charge-offs of $190 million increased $68 million reflecting an increase in commercial, driven by commercial real estate as a result of COVID-19 impacts, partially offset by reduction in retail given the impact of forbearance. |
| • | Net charge-offs were 61 basis points of average loans and leases and 41 basis points in fourth quarter 2019. |
| • | Provision for credit losses of $124 million on a CECL basis compares with $110 million in fourth quarter 2019. Net charge-offs increased 56% to $190 million, or 61 basis points of average loans. |
| • | Allowance for credit losses of $2.7 billion compares with a pre-CECL adoption allowance of $1.3 billion at December 31, 2019. Allowance for credit losses ratio of 2.17% as of December 31, 2020, or 2.24% before the impact of PPP loans, compares with 1.09% as of December 31, 2019. |
| • | The allowance for credit losses to nonaccrual loans and leases ratio of 262% compares with 184% as of December 31, 2019. |
13
Citizens Financial Group, Inc.
Notable items:
Third and fourth quarter 2020 and fourth quarter 2019 results reflect notable items primarily related to TOP 6 transformational and revenue and efficiency initiatives. These results also reflect notable items related to integration costs primarily tied to the August 1, 2018 Franklin American Mortgage Company (“FAMC”) acquisition. These notable items have been excluded from reported results to better reflect Underlying operating results.
Cumulative after-tax integration costs related to the FAMC acquisition totaled $34 million through the end of fourth quarter 2020.
| Notable items - integration costs | 4Q20 | 3Q20 | 4Q19 | Cumulative after-tax integration costs |
||||||||||||||||||||||||||||||||
|
($s in millions, except per share data) |
Pre-tax | After-tax | Pre-tax | After-tax | Pre-tax | After-tax | FAMC | Other | Total | |||||||||||||||||||||||||||
| Noninterest income |
$ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | (3 | ) | $ | — | $ | (3 | ) | ||||||||||||||||
| Salaries & benefits |
$ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | (10 | ) | $ | — | $ | (10 | ) | ||||||||||||||||
| Equipment and software expense |
— | — | (1 | ) | (1 | ) | (1 | ) | (1 | ) | (3 | ) | — | (3 | ) | |||||||||||||||||||||
| Outside services |
(2 | ) | (2 | ) | (1 | ) | (1 | ) | (1 | ) | (1 | ) | (15 | ) | (6 | ) | (21 | ) | ||||||||||||||||||
| Occupancy |
— | — | — | — | — | — | (1 | ) | — | (1 | ) | |||||||||||||||||||||||||
| Other expense |
— | — | — | — | — | — | (2 | ) | — | (2 | ) | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Noninterest expense |
$ | (2 | ) | $ | (2 | ) | $ | (2 | ) | $ | (2 | ) | $ | (2 | ) | $ | (2 | ) | $ | (31 | ) | (6 | ) | $ | (37 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Total Integration Costs | $ | (2 | ) | $ | (2 | ) | $ | (2 | ) | $ | (2 | ) | $ | (2 | ) | $ | (2 | ) | $ | (34 | ) | $ | (6 | ) | $ | (40 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Other notable items - primarily tax and TOP |
4Q20 | 3Q20 | 4Q19 | |||||||||||||||||||||
| ($s in millions, except per share data) |
Pre-tax | After-tax | Pre-tax | After-tax | Pre-tax | After-tax | ||||||||||||||||||
| Tax notable items |
$ | — | $ | 7 | $ | — | $ | — | $ | — | $ | 24 | ||||||||||||
| Other notable items- TOP & other actions | ||||||||||||||||||||||||
| Noninterest income |
||||||||||||||||||||||||
| Salaries & benefits |
(18 | ) | (14 | ) | (13 | ) | (9 | ) | (6 | ) | (5 | ) | ||||||||||||
| Equipment and software expense |
(1 | ) | — | — | — | (2 | ) | (1 | ) | |||||||||||||||
| Outside services |
(15 | ) | (11 | ) | (15 | ) | (12 | ) | (19 | ) | (14 | ) | ||||||||||||
| Occupancy |
(6 | ) | (4 | ) | (1 | ) | (1 | ) | (8 | ) | (6 | ) | ||||||||||||
| Other expense |
— | — | — | — | — | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Noninterest expense |
$ | (40 | ) | $ | (29 | ) | $ | (29 | ) | $ | (22 | ) | $ | (35 | ) | $ | (26 | ) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total Other Notable Items |
$ | (40 | ) | $ | (22 | ) | $ | (29 | ) | $ | (22 | ) | $ | (35 | ) | $ | (2 | ) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total Notable Items |
$ | (42 | ) | $ | (24 | ) | $ | (31 | ) | $ | (24 | ) | $ | (37 | ) | $ | (4 | ) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| EPS Impact |
$ | (0.05 | ) | $ | (0.05 | ) | $ | (0.02 | ) | |||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||
14
Citizens Financial Group, Inc.
| Notable items - integration costs | FY 2020 | FY 2019 | ||||||||||||||
| ($s in millions, except per share data) |
Pre-tax | After-tax | Pre-tax | After-tax | ||||||||||||
| Noninterest income |
$ | — | $ | — | $ | — | $ | — | ||||||||
| Salaries & benefits | $ | — | $ | — | $ | (4 | ) | $ | (3 | ) | ||||||
| Equipment and software expense | (2 | ) | (2 | ) | (1 | ) | (1 | ) | ||||||||
| Outside services | (8 | ) | (6 | ) | (13 | ) | (10 | ) | ||||||||
| Occupancy | — | — | — | — | ||||||||||||
| Other expense | — | — | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Noninterest expense | $ | (10 | ) | $ | (8 | ) | $ | (18 | ) | $ | (14 | ) | ||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total Integration Costs | $ | (10 | ) | $ | (8 | ) | $ | (18 | ) | $ | (14 | ) | ||||
|
|
|
|
|
|
|
|
|
|||||||||
| Other notable items - primarily tax and TOP | FY 2020 | FY 2019 | ||||||||||||||
| ($s in millions, except per share data) |
Pre-tax | After-tax | Pre-tax | After-tax | ||||||||||||
| Tax notable items | $ | — | $ | 11 | $ | — | $ | 34 | ||||||||
| Other notable items- TOP & other actions | ||||||||||||||||
| Noninterest income |
$ | — | $ | — | $ | — | $ | — | ||||||||
| Salaries & benefits | (45 | ) | (34 | ) | (10 | ) | (8 | ) | ||||||||
| Equipment and software expense | (1 | ) | — | (2 | ) | (1 | ) | |||||||||
| Outside services | (55 | ) | (42 | ) | (30 | ) | (22 | ) | ||||||||
| Occupancy | (14 | ) | (10 | ) | (8 | ) | (6 | ) | ||||||||
| Other expense | — | — | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Noninterest expense | $ | (115 | ) | $ | (86 | ) | $ | (50 | ) | $ | (37 | ) | ||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total Other Notable Items | $ | (115 | ) | $ | (75 | ) | $ | (50 | ) | $ | (3 | ) | ||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total Notable Items | $ | (125 | ) | $ | (83 | ) | $ | (68 | ) | $ | (17 | ) | ||||
|
|
|
|
|
|
|
|
|
|||||||||
| EPS Impact |
$ | (0.19 | ) | $ | (0.03 | ) | ||||||||||
|
|
|
|
|
|||||||||||||
15
Citizens Financial Group, Inc.
Corresponding Financial Tables and Information
Investors are encouraged to review the foregoing summary and discussion of Citizens’ earnings and financial condition in conjunction with the detailed financial tables and other information available on the Investor Relations portion of the company’s website at www.citizensbank.com/about-us.
Media: Peter Lucht - 781.655.2289
Investors: Kristin Silberberg - 203.900.6854
Conference Call
CFG management will host a live conference call today with details as follows:
Time: 8:00 am ET
Dial-in: (877) 336-4437, conference ID 3135691
Webcast/Presentation: The live webcast will be available at http://investor.citizensbank.com under Events & Presentations.
Replay Information: A replay of the conference call will be available beginning at 12:00 pm ET on January 20 through February 20, 2021. Please dial (866) 207-1041 and enter access code 2698893. The webcast replay will be available at http://investor.citizensbank.com under Events & Presentations.
About Citizens Financial Group, Inc.
Citizens Financial Group, Inc. is one of the nation’s oldest and largest financial institutions, with $183.3 billion in assets as of December 31, 2020. Headquartered in Providence, Rhode Island, Citizens offers a broad range of retail and commercial banking products and services to individuals, small businesses, middle-market companies, large corporations and institutions. Citizens helps its customers reach their potential by listening to them and by understanding their needs in order to offer tailored advice, ideas and solutions. In Consumer Banking, Citizens provides an integrated experience that includes mobile and online banking, a 24/7 customer contact center and the convenience of approximately 2,700 ATMs and approximately 1,000 branches in 11 states in the New England, Mid-Atlantic and Midwest regions. Consumer Banking products and services include a full range of banking, lending, savings, wealth management and small business offerings. In Commercial Banking, Citizens offers 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 or visit us on Twitter, LinkedIn or Facebook.
16
Citizens Financial Group, Inc.
Non-GAAP Financial Measures and Reconciliations
(in millions, except share, per-share and ratio data)
Non-GAAP Financial Measures:
This document contains non-GAAP financial measures denoted as Underlying results. Underlying results for any given reporting period exclude certain items that may occur in that period which Management does not consider indicative of the Company’s on-going financial performance. We believe these non-GAAP financial measures provide useful information to investors because they are used by our Management to evaluate our operating performance and make day-to-day operating decisions. In addition, we believe our Underlying results in any given reporting period reflect our on-going financial performance in that period and, accordingly, are useful to consider in addition to our GAAP financial results. We further believe the presentation of Underlying results increases comparability of period-to-period results. The following tables present reconciliations of our non-GAAP measures to the most directly comparable GAAP financial measures.
Other companies may use similarly titled non-GAAP financial measures that are calculated differently from the way we calculate such measures. Accordingly, our non-GAAP financial measures may not be comparable to similar measures used by such companies. We caution investors not to place undue reliance on such non-GAAP financial measures, but to consider them with the most directly comparable GAAP measures. Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as a substitute for our results reported under GAAP.
17
Citizens Financial Group, Inc.
Non-GAAP financial measures and reconciliations
(in millions, except share, per-share and ratio data)
| QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||||||||||||
| 4Q20 Change | 2020 Change | |||||||||||||||||||||||||||||||||||||||||||||||
| 4Q20 | 3Q20 | 4Q19 | 3Q20 | 4Q19 | 2020 | 2019 | 2019 | |||||||||||||||||||||||||||||||||||||||||
| $ | % | $ | % | $ | % | |||||||||||||||||||||||||||||||||||||||||||
| Total revenue, Underlying: |
||||||||||||||||||||||||||||||||||||||||||||||||
| Total revenue (GAAP) |
A | $ | 1,707 | $ | 1,791 | $ | 1,637 | ($ | 84 | ) | (5 | %) | $ | 70 | 4 | % | $ | 6,905 | $ | 6,491 | $ | 414 | 6 | % | ||||||||||||||||||||||||
| Less: Notable items |
— | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||
| Total revenue, Underlying (non-GAAP) |
B | $ | 1,707 | $ | 1,791 | $ | 1,637 | ($ | 84 | ) | (5 | %) | $ | 70 | 4 | % | $ | 6,905 | $ | 6,491 | $ | 414 | 6 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||
| Noninterest expense, Underlying: |
||||||||||||||||||||||||||||||||||||||||||||||||
| Noninterest expense (GAAP) |
C | $ | 1,012 | $ | 988 | $ | 986 | $ | 24 | 2 | % | $ | 26 | 3 | % | $ | 3,991 | $ | 3,847 | $ | 144 | 4 | % | |||||||||||||||||||||||||
| Less: Notable items |
42 | 31 | 37 | 11 | 35 | 5 | 14 | 125 | 68 | 57 | 84 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||
| Noninterest expense, Underlying (non-GAAP) |
D | $ | 970 | $ | 957 | $ | 949 | $ | 13 | 1 | % | $ | 21 | 2 | % | $ | 3,866 | $ | 3,779 | $ | 87 | 2 | % | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||
| Pre-provision profit: |
||||||||||||||||||||||||||||||||||||||||||||||||
| Total revenue (GAAP) |
A | $ | 1,707 | $ | 1,791 | $ | 1,637 | ($ | 84 | ) | (5 | %) | $ | 70 | 4 | % | $ | 6,905 | $ | 6,491 | $ | 414 | 6 | % | ||||||||||||||||||||||||
| Less: Noninterest expense (GAAP) |
C | 1,012 | 988 | 986 | 24 | 2 | 26 | 3 | 3,991 | 3,847 | 144 | 4 | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||
| Pre-provision profit (GAAP) |
$ | 695 | $ | 803 | $ | 651 | ($ | 108 | ) | (13 | %) | $ | 44 | 7 | % | $ | 2,914 | $ | 2,644 | $ | 270 | 10 | % | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||
| Pre-provision profit, Underlying: |
||||||||||||||||||||||||||||||||||||||||||||||||
| Total revenue, Underlying (non-GAAP) |
B | $ | 1,707 | $ | 1,791 | $ | 1,637 | ($ | 84 | ) | (5 | %) | $ | 70 | 4 | % | $ | 6,905 | $ | 6,491 | $ | 414 | 6 | % | ||||||||||||||||||||||||
| Less: Noninterest expense, Underlying (non-GAAP) |
D | 970 | 957 | 949 | 13 | 1 | 21 | 2 | 3,866 | 3,779 | 87 | 2 | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||
| Pre-provision profit, Underlying (non-GAAP) |
$ | 737 | $ | 834 | $ | 688 | ($ | 97 | ) | (12 | %) | $ | 49 | 7 | % | $ | 3,039 | $ | 2,712 | $ | 327 | 12 | % | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||
| Income before income tax expense, Underlying: |
||||||||||||||||||||||||||||||||||||||||||||||||
| Income before income tax expense (GAAP) |
E | $ | 571 | $ | 375 | $ | 541 | $ | 196 | 52 | % | $ | 30 | 6 | % | $ | 1,298 | $ | 2,251 | ($ | 953 | ) | (42 | %) | ||||||||||||||||||||||||
| Less: Expense before income tax benefit related to notable items |
(42 | ) | (31 | ) | (37 | ) | (11 | ) | (35 | ) | (5 | ) | (14 | ) | (125 | ) | (68 | ) | (57 | ) | (84 | ) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||
| Income before income tax expense, Underlying (non-GAAP) |
F | $ | 613 | $ | 406 | $ | 578 | $ | 207 | 51 | % | $ | 35 | 6 | % | $ | 1,423 | $ | 2,319 | ($ | 896 | ) | (39 | %) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||
| Income tax expense, Underlying: |
||||||||||||||||||||||||||||||||||||||||||||||||
| Income tax expense (GAAP) |
G | $ | 115 | $ | 61 | $ | 91 | $ | 54 | 89 | % | $ | 24 | 26 | % | $ | 241 | $ | 460 | ($ | 219 | ) | (48 | %) | ||||||||||||||||||||||||
| Less: Income tax benefit related to notable items |
(18 | ) | (7 | ) | (33 | ) | (11 | ) | (157 | ) | 15 | 45 | (42 | ) | (51 | ) | 9 | 18 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||
| Income tax expense, Underlying (non-GAAP) |
H | $ | 133 | $ | 68 | $ | 124 | $ | 65 | 96 | % | $ | 9 | 7 | % | $ | 283 | $ | 511 | ($ | 228 | ) | (45 | %) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||
| Net income, Underlying: |
||||||||||||||||||||||||||||||||||||||||||||||||
| Net income (GAAP) |
I | $ | 456 | $ | 314 | $ | 450 | $ | 142 | 45 | % | $ | 6 | 1 | % | $ | 1,057 | $ | 1,791 | ($ | 734 | ) | (41 | %) | ||||||||||||||||||||||||
| Add: Notable items, net of income tax benefit |
24 | 24 | 4 | — | — | 20 | NM | 83 | 17 | 66 | NM | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||
| Net income, Underlying (non-GAAP) |
J | $ | 480 | $ | 338 | $ | 454 | $ | 142 | 42 | % | $ | 26 | 6 | % | $ | 1,140 | $ | 1,808 | ($ | 668 | ) | (37 | %) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||
| Net income available to common stockholders, Underlying: |
||||||||||||||||||||||||||||||||||||||||||||||||
| Net income available to common stockholders (GAAP) |
K | $ | 424 | $ | 289 | $ | 427 | $ | 135 | 47 | % | ($ | 3 | ) | (1 | %) | $ | 950 | $ | 1,718 | ($ | 768 | ) | (45 | %) | |||||||||||||||||||||||
| Add: Notable items, net of income tax benefit |
24 | 24 | 4 | — | — | 20 | NM | 83 | 17 | 66 | NM | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||
| Net income available to common stockholders, Underlying (non-GAAP) |
L | $ | 448 | $ | 313 | $ | 431 | $ | 135 | 43 | % | $ | 17 | 4 | % | $ | 1,033 | $ | 1,735 | ($ | 702 | ) | (40 | %) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||
18
Citizens Financial Group, Inc.
Non-GAAP financial measures and reconciliations (continued)
(in millions, except share, per-share and ratio data
| QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 4Q20 Change | 2020 Change | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 4Q20 | 3Q20 | 4Q19 | 3Q20 | 4Q19 | 2020 | 2019 | 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| $/bps | % | $/bps | % | $/bps | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating leverage: |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total revenue (GAAP) |
A |
$ | 1,707 | $ | 1,791 | $ | 1,637 | ($ | 84 | ) | (4.65 | %) | $ | 70 | 4.35 | % | $ | 6,905 | $ | 6,491 | $ | 414 | 6.38 | % | ||||||||||||||||||||||||||||||||||
| Less: Noninterest expense (GAAP) |
C |
1,012 | 988 | 986 | 24 | 2.43 | 26 | 2.61 | 3,991 | 3,847 | 144 | 3.73 | ||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating leverage |
(7.08 | %) | 1.74 | % | 2.65 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating leverage, Underlying: |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total revenue, Underlying (non-GAAP) |
B |
$ | 1,707 | $ | 1,791 | $ | 1,637 | ($ | 84 | ) | (4.65 | %) | $ | 70 | 4.35 | % | $ | 6,905 | $ | 6,491 | $ | 414 | 6.39 | % | ||||||||||||||||||||||||||||||||||
| Less: Noninterest expense, Underlying (non-GAAP) |
D |
970 | 957 | 949 | 13 | 1.39 | 21 | 2.21 | 3,866 | 3,779 | 87 | 2.30 | ||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating leverage, Underlying (non-GAAP) |
(6.04 | %) | 2.14 | % | 4.09 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
| Efficiency ratio and efficiency ratio, Underlying: |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Efficiency ratio |
C/A |
59.28 | % | 55.18 | % | 60.28 | % | 410 | bps | (100 | ) | bps | 57.80 | % | 59.28 | % | (148 | ) | bps | |||||||||||||||||||||||||||||||||||||||
| Efficiency ratio, Underlying (non-GAAP) |
D/B |
56.83 | 53.44 | 58.02 | 339 | bps | (119 | ) | bps | 55.99 | 58.23 | (224 | ) | bps | ||||||||||||||||||||||||||||||||||||||||||||
| Effective income tax rate and effective income tax rate, Underlying: |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Effective income tax rate |
G/E |
20.16 | % | 16.10 | % | 16.76 | % | 406 | bps | 340 | bps | 18.54 | % | 20.43 | % | (189 | ) | bps | ||||||||||||||||||||||||||||||||||||||||
| Effective income tax rate, Underlying (non-GAAP) |
H/F |
21.70 | 16.79 | 21.52 | 491 | bps | 18 | bps | 19.92 | 22.03 | (211 | ) | bps | |||||||||||||||||||||||||||||||||||||||||||||
| Return on average common equity and return on average common equity, Underlying: |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Average common equity (GAAP) |
M |
$ | 20,547 | $ | 20,534 | $ | 20,400 | $ | 13 | — | % | $ | 147 | 1 | % | $ | 20,438 | $ | 20,325 | $ | 113 | 1 | % | |||||||||||||||||||||||||||||||||||
| Return on average common equity |
K/M |
8.20 | % | 5.60 | % | 8.30 | % | 260 | bps | (10 | ) | bps | 4.65 | % | 8.45 | % | (380 | ) | bps | |||||||||||||||||||||||||||||||||||||||
| Return on average common equity, Underlying (non-GAAP) |
L/M |
8.66 | 6.05 | 8.36 | 261 | bps | 30 | bps | 5.05 | 8.53 | (348 | ) | bps | |||||||||||||||||||||||||||||||||||||||||||||
| Return on average tangible common equity and return on average tangible common equity, Underlying: |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Average common equity (GAAP) |
M |
$ | 20,547 | $ | 20,534 | $ | 20,400 | $ | 13 | — | % | $ | 147 | 1 | % | $ | 20,438 | $ | 20,325 | $ | 113 | 1 | % | |||||||||||||||||||||||||||||||||||
| Less: Average goodwill (GAAP) |
7,050 | 7,050 | 7,044 | — | — | 6 | — | 7,049 | 7,036 | 13 | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Less: Average other intangibles (GAAP) |
60 | 62 | 69 | (2 | ) | (3 | ) | (9 | ) | (13 | ) | 64 | 71 | (7 | ) | (10 | ) | |||||||||||||||||||||||||||||||||||||||||
| Add: Average deferred tax liabilities related to goodwill (GAAP) |
377 | 375 | 373 | 2 | 1 | 4 | 1 | 376 | 371 | 5 | 1 | |||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||
| Average tangible common equity |
N |
$ | 13,814 | $ | 13,797 | $ | 13,660 | $ | 17 | — | % | $ | 154 | 1 | % | $ | 13,701 | $ | 13,589 | $ | 112 | 1 | % | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||
| Return on average tangible common equity |
K/N |
12.20 | % | 8.33 | % | 12.39 | % | 387 | bps | (19 | ) | bps | 6.93 | % | 12.64 | % | (571 | ) | bps | |||||||||||||||||||||||||||||||||||||||
| Return on average tangible common equity, Underlying (non-GAAP) |
L/N |
12.89 | 9.00 | 12.49 | 389 | bps | 40 | bps | 7.53 | 12.76 | (523 | ) | bps | |||||||||||||||||||||||||||||||||||||||||||||
| Return on average total assets and return on average total assets, Underlying: |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Average total assets (GAAP) |
O |
$ | 181,061 | $ | 177,675 | $ | 164,646 | $ | 3,386 | 2 | % | $ | 16,415 | 10 | % | $ | 176,442 | $ | 162,176 | $ | 14,266 | 9 | % | |||||||||||||||||||||||||||||||||||
| Return on average total assets |
I/O |
1.00 | % | 0.70 | % | 1.08 | % | 30 | bps | (8 | ) | bps | 0.60 | % | 1.10 | % | (50 | ) | bps | |||||||||||||||||||||||||||||||||||||||
| Return on average total assets, Underlying (non-GAAP) |
J/O |
1.05 | 0.76 | 1.09 | 29 | bps | (4 | ) | bps | 0.65 | 1.11 | (46 | ) | bps | ||||||||||||||||||||||||||||||||||||||||||||
| Return on average total tangible assets and return on average total tangible assets, Underlying: |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Average total assets (GAAP) |
P |
$ | 181,061 | $ | 177,675 | $ | 164,646 | $ | 3,386 | 2 | % | $ | 16,415 | 10 | % | $ | 176,442 | $ | 162,176 | $ | 14,266 | 9 | % | |||||||||||||||||||||||||||||||||||
| Less: Average goodwill (GAAP) |
7,050 | 7,050 | 7,044 | — | — | 6 | — | 7,049 | 7,036 | 13 | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Less: Average other intangibles (GAAP) |
60 | 62 | 69 | (2 | ) | (3 | ) | (9 | ) | (13 | ) | 64 | 71 | (7 | ) | (10 | ) | |||||||||||||||||||||||||||||||||||||||||
| Add: Average deferred tax liabilities related to goodwill (GAAP) |
377 | 375 | 373 | 2 | 1 | 4 | 1 | 376 | 371 | 5 | 1 | |||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||
| Average tangible assets |
Q |
$ | 174,328 | $ | 170,938 | $ | 157,906 | $ | 3,390 | 2 | % | $ | 16,422 | 10 | % | $ | 169,705 | $ | 155,440 | $ | 14,265 | 9 | % | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||
| Return on average total tangible assets |
I/Q |
1.04 | % | 0.73 | % | 1.13 | % | 31 | bps | (9 | ) | bps | 0.62 | % | 1.15 | % | (53 | ) | bps | |||||||||||||||||||||||||||||||||||||||
| Return on average total tangible assets, Underlying (non-GAAP) |
J/Q |
1.10 | 0.79 | 1.14 | 31 | bps | (4 | ) | bps | 0.67 | 1.16 | (49 | ) | bps | ||||||||||||||||||||||||||||||||||||||||||||
19
Citizens Financial Group, Inc.
Non-GAAP financial measures and reconciliations (continued)
(in millions, except share, per-share and ratio data)
| QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||||||||||||
| 4Q20 Change | 2020 Change | |||||||||||||||||||||||||||||||||||||||||||||||
| 4Q20 | 3Q20 | 4Q19 | 3Q20 | 4Q19 | 2020 | 2019 | 2019 | |||||||||||||||||||||||||||||||||||||||||
| $/bps | % | $/bps | % | $/bps | % | |||||||||||||||||||||||||||||||||||||||||||
| Tangible book value per common share: |
||||||||||||||||||||||||||||||||||||||||||||||||
| Common shares - at period-end (GAAP) |
R | 427,209,831 | 427,073,084 | 433,121,083 | 136,747 | — | % | (5,911,252 | ) | (1 | %) | 427,209,831 | 433,121,083 | (5,911,252 | ) | (1 | %) | |||||||||||||||||||||||||||||||
| Common stockholders’ equity (GAAP) |
$ | 20,708 | $ | 20,504 | $ | 20,631 | $ | 204 | 1 | $ | 77 | — | $ | 20,708 | $ | 20,631 | $ | 77 | — | |||||||||||||||||||||||||||||
| Less: Goodwill (GAAP) |
7,050 | 7,050 | 7,044 | — | — | 6 | — | 7,050 | 7,044 | 6 | — | |||||||||||||||||||||||||||||||||||||
| Less: Other intangible assets (GAAP) |
58 | 60 | 68 | (2 | ) | (3 | ) | (10 | ) | (15 | ) | 58 | 68 | (10 | ) | (15 | ) | |||||||||||||||||||||||||||||||
| Add: Deferred tax liabilities related to goodwill (GAAP) |
379 | 377 | 374 | 2 | 1 | 5 | 1 | 379 | 374 | 5 | 1 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||
| Tangible common equity |
S | $ | 13,979 | $ | 13,771 | $ | 13,893 | $ | 208 | 2 | % | $ | 86 | 1 | % | $ | 13,979 | $ | 13,893 | $ | 86 | 1 | % | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||
| Tangible book value per common share |
S/R | $ | 32.72 | $ | 32.24 | $ | 32.08 | $ | 0.48 | 1 | % | $ | 0.64 | 2 | % | $ | 32.72 | $ | 32.08 | $ | 0.64 | 2 | % | |||||||||||||||||||||||||
| Net income per average common share - basic and diluted and net income per average common share - basic and diluted, Underlying: |
||||||||||||||||||||||||||||||||||||||||||||||||
| Average common shares outstanding - basic (GAAP) |
T | 427,074,822 | 426,846,096 | 434,684,606 | 228,726 | — | % | (7,609,784 | ) | (2 | %) | 427,062,537 | 449,731,453 | (22,668,916 | ) | (5 | %) | |||||||||||||||||||||||||||||||
| Average common shares outstanding - diluted (GAAP) |
U | 428,881,252 | 427,992,349 | 436,500,829 | 888,903 | — | (7,619,577 | ) | (2 | ) | 428,157,780 | 451,213,701 | (23,055,921 | ) | (5 | ) | ||||||||||||||||||||||||||||||||
| Net income per average common share - basic (GAAP) |
K/T | $ | 0.99 | $ | 0.68 | $ | 0.98 | $ | 0.31 | 46 | $ | 0.01 | 1 | $ | 2.22 | $ | 3.82 | ($ | 1.60 | ) | (42 | ) | ||||||||||||||||||||||||||
| Net income per average common share - diluted (GAAP) |
K/U | 0.99 | 0.68 | 0.98 | 0.31 | 46 | 0.01 | 1 | 2.22 | 3.81 | (1.59 | ) | (42 | ) | ||||||||||||||||||||||||||||||||||
| Net income per average common share - basic, Underlying (non-GAAP) |
L/T | 1.05 | 0.73 | 0.99 | 0.32 | 44 | 0.06 | 6 | 2.42 | 3.86 | (1.44 | ) | (37 | ) | ||||||||||||||||||||||||||||||||||
| Net income per average common share - diluted, Underlying (non-GAAP) |
L/U | 1.04 | 0.73 | 0.99 | 0.31 | 42 | 0.05 | 5 | 2.41 | 3.84 | (1.43 | ) | (37 | ) | ||||||||||||||||||||||||||||||||||
20
Citizens Financial Group, Inc.
Non-GAAP financial measures and reconciliations (continued)
(in millions, except share, per-share and ratio data)
| QUARTERLY TRENDS | ||||||||||||||||||||||||||||
| 4Q20 Change | ||||||||||||||||||||||||||||
| 4Q20 | 3Q20 | 4Q19 | 3Q20 | 4Q19 | ||||||||||||||||||||||||
| $/bps | % | $/bps | % | |||||||||||||||||||||||||
| Salaries and employee benefits, Underlying: |
||||||||||||||||||||||||||||
| Salaries and employee benefits (GAAP) |
$ | 537 | $ | 524 | $ | 502 | $ | 13 | 2 | % | $ | 35 | 7 | % | ||||||||||||||
| Less: Notable items |
18 | 13 | 6 | 5 | 38 | 12 | 200 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Salaries and employee benefits, Underlying (non-GAAP) |
$ | 519 | $ | 511 | $ | 496 | $ | 8 | 2 | % | $ | 23 | 5 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Equipment and software expense, Underlying: |
||||||||||||||||||||||||||||
| Equipment and software expense (GAAP) |
$ | 141 | $ | 149 | $ | 133 | ($ | 8 | ) | (5 | %) | $ | 8 | 6 | % | |||||||||||||
| Less: Notable items |
1 | 1 | 3 | — | — | (2 | ) | (67 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Equipment and software expense, Underlying (non-GAAP) |
$ | 140 | $ | 148 | $ | 130 | ($ | 8 | ) | (5 | %) | $ | 10 | 8 | % | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Outside services, Underlying: |
||||||||||||||||||||||||||||
| Outside services (GAAP) |
$ | 148 | $ | 139 | $ | 142 | $ | 9 | 6 | % | $ | 6 | 4 | % | ||||||||||||||
| Less: Notable items |
17 | 16 | 20 | 1 | 6 | (3 | ) | (15 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Outside services, Underlying (non-GAAP) |
$ | 131 | $ | 123 | $ | 122 | $ | 8 | 7 | % | $ | 9 | 7 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Occupancy, Underlying: |
||||||||||||||||||||||||||||
| Occupancy (GAAP) |
$ | 84 | $ | 81 | $ | 88 | $ | 3 | 4 | % | ($ | 4 | ) | (5 | %) | |||||||||||||
| Less: Notable items |
6 | 1 | 8 | 5 | NM | (2 | ) | (25 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Occupancy, Underlying (non-GAAP) |
$ | 78 | $ | 80 | $ | 80 | ($ | 2 | ) | (3 | %) | ($ | 2 | ) | (3 | %) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
21
Citizens Financial Group, Inc.
Non-GAAP financial measures and reconciliations - Excluding the impact of PPP loans
(in millions, except share, per-share and ratio data
| QUARTERLY TRENDS | ||||||||||||||||||||||||||||||
| 4Q20 Change | ||||||||||||||||||||||||||||||
| 4Q20 | 3Q20 | 4Q19 | 3Q20 | 4Q19 | ||||||||||||||||||||||||||
| $/bps | % | $/bps | % | |||||||||||||||||||||||||||
| Total loans, excluding the impact of PPP loans: |
||||||||||||||||||||||||||||||
| Total loans (GAAP) |
A | $ | 123,090 | $ | 124,071 | $ | 119,088 | ($ | 981 | ) | (1 | %) | $ | 4,002 | 3 | % | ||||||||||||||
| Less: PPP loans |
4,106 | 4,653 | — | (547 | ) | (12 | ) | 4,106 | 100 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Total loans, excluding the impact of PPP loans (non-GAAP) |
B | $ | 118,984 | $ | 119,418 | $ | 119,088 | ($ | 434 | ) | — | % | ($ | 104 | ) | — | % | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Total deposits (GAAP) |
C | $ | 147,164 | $ | 142,921 | $ | 125,313 | $ | 4,243 | 3 | % | $ | 21,851 | 17 | % | |||||||||||||||
| Allowance for credit losses (GAAP) |
D | $ | 2,670 | $ | 2,736 | $ | 1,296 | ($ | 66 | ) | (2 | %) | $ | 1,374 | 106 | % | ||||||||||||||
| Average loans, excluding the impact of PPP loans: |
||||||||||||||||||||||||||||||
| Average loans (GAAP) |
E | $ | 123,461 | $ | 124,912 | $ | 118,905 | ($ | 1,451 | ) | (1 | %) | $ | 4,556 | 4 | % | ||||||||||||||
| Less: PPP loans |
4,540 | 4,709 | — | (169 | ) | (4 | ) | 4,540 | 100 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Average loans, excluding the impact of PPP loans (non-GAAP) |
F | $ | 118,921 | $ | 120,203 | $ | 118,905 | ($ | 1,282 | ) | (1 | %) | $ | 16 | — | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Average deposits (GAAP) |
G | $ | 145,267 | $ | 141,367 | $ | 125,652 | $ | 3,900 | 3 | % | $ | 19,615 | 16 | % | |||||||||||||||
| Ratios: |
||||||||||||||||||||||||||||||
| Allowance for credit losses to total loans (GAAP) |
D / A | 2.17 | % | 2.21 | % | 1.09 | % | (4 | ) bps | 108 | bps | |||||||||||||||||||
| Allowance for credit losses to total loans, excluding the impact of PPP loans (non-GAAP) |
D / B | 2.24 | % | 2.29 | % | 1.09 | % | (5 | ) bps | 115 | bps | |||||||||||||||||||
| Loans-to-deposits ratio (period-end balances) (GAAP) |
A / C | 83.64 | % | 86.81 | % | 95.03 | % | (317 | ) bps | (1,139 | ) bps | |||||||||||||||||||
| Loans-to-deposits ratio (period-end balances), excluding the impact of PPP loans (non-GAAP) |
B / C | 80.85 | % | 83.56 | % | 95.03 | % | (271 | ) bps | (1,418 | ) bps | |||||||||||||||||||
| Loans-to-deposits ratio (average balances) (GAAP) |
E / G | 84.99 | % | 88.36 | % | 94.63 | % | (337 | ) bps | (964 | ) bps | |||||||||||||||||||
| Loans-to-deposits ratio (average balances), excluding the impact of PPP loans (non-GAAP) |
F / G | 81.86 | % | 85.03 | % | 94.63 | % | (317 | ) bps | (1,277 | ) bps | |||||||||||||||||||
22
Citizens Financial Group, Inc.
Non-GAAP financial measures and reconciliations - Excluding the impact of elevated cash
(in millions, except share, per-share and ratio data
| QUARTERLY TRENDS | ||||||||||||||||||||||||||||||
| 4Q20 Change | ||||||||||||||||||||||||||||||
| 4Q20 | 3Q20 | 4Q19 | 3Q20 | 4Q19 | ||||||||||||||||||||||||||
| $/bps | % | $/bps | % | |||||||||||||||||||||||||||
| Net interest income, FTE excluding the impact of elevated cash: |
||||||||||||||||||||||||||||||
| Net interest income, FTE (GAAP) |
A | $ | 1,132 | $ | 1,140 | $ | 1,147 | ($ | 8 | ) | (1 | %) | ($ | 15 | ) | (1 | %) | |||||||||||||
| Less: Net interest income associated with elevated cash |
— | — | — | — | — | — | — | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Net Interest Income, FTE excluding the impact of elevated cash (non-GAAP) |
B | $ | 1,132 | $ | 1,140 | $ | 1,147 | ($ | 8 | ) | (1 | %) | ($ | 15 | ) | (1 | %) | |||||||||||||
| Average interest earning assets, excluding the impact of elevated cash: |
||||||||||||||||||||||||||||||
| Total Interest-Earning Assets (GAAP) |
C | $ | 163,533 | $ | 160,176 | $ | 148,911 | $ | 3,357 | 2 | % | $ | 14,622 | 10 | % | |||||||||||||||
| Less: Elevated Cash |
9,462 | 4,358 | 158 | 5,104 | 117 | 9,304 | NM | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Total Interest-Earning Assets excluding the impact of elevated cash (non-GAAP) |
D | $ | 154,071 | $ | 155,818 | $ | 148,753 | ($ | 1,747 | ) | (1 | %) | $ | 5,318 | 4 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Day count |
E | 92 | 92 | 92 | ||||||||||||||||||||||||||
| Day count (year) |
F | 366 | 366 | 365 | ||||||||||||||||||||||||||
| Ratios: |
||||||||||||||||||||||||||||||
| Net interest margin, FTE (GAAP) |
A / C /E * F | 2.75 | % | 2.83 | % | 3.06 | % | (8 | ) bps | (31 | ) bps | |||||||||||||||||||
| Net interest margin, FTE, excluding the impact of elevated cash (non-GAAP) |
B / D / E * F | 2.92 | % | 2.91 | % | 3.06 | % | 1 | bps | (14 | ) bps | |||||||||||||||||||
23
Citizens Financial Group, Inc.
Forward-Looking Statements
This document contains forward-looking statements within the meaning of Private Securities Litigation Reform Act of 1995. Statements regarding potential future share repurchases and future dividends, as well as the potential effects of the COVID-19 pandemic and associated lockdowns on our business, operations, financial performance and prospects, are forward-looking statements. Also, any statement that does not describe historical or current facts is a forward-looking statement. These statements often include the words “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “goals,” “targets,” “initiatives,” “potentially,” “probably,” “projects,” “outlook” or similar expressions or future conditional verbs such as “may,” “will,” “should,” “would,” and “could.”
Forward-looking statements are based upon the current beliefs and expectations of management, and on information currently available to management. Our statements speak as of the date hereof, and we do not assume any obligation to update these statements or to update the reasons why actual results could differ from those contained in such statements in light of new information or future events. We caution you, therefore, against relying on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance. While there is no assurance that any list of risks and uncertainties or risk factors is complete, important factors that could cause actual results to differ materially from those in the forward-looking statements include the following, without limitation:
| • | Negative economic and political conditions that adversely affect the general economy, housing prices, the job market, consumer confidence and spending habits which may affect, among other things, the level of nonperforming assets, charge-offs and provision expense; |
| • | The rate of growth in the economy and employment levels, as well as general business and economic conditions, and changes in the competitive environment; |
| • | Our ability to implement our business strategy, including the cost savings and efficiency components, and achieve our financial performance goals; |
| • | The COVID-19 pandemic and associated lockdowns and their effect on the economic and business environments in which we operate; |
| • | Our ability to meet heightened supervisory requirements and expectations; |
| • | Liabilities and business restrictions resulting from litigation and regulatory investigations; |
| • | Our capital and liquidity requirements under regulatory capital standards and our ability to generate capital internally or raise capital on favorable terms; |
| • | The effect of changes in interest rates on our net interest income, net interest margin and our mortgage originations, mortgage servicing rights and mortgages held for sale; |
| • | Changes in interest rates and market liquidity, as well as the magnitude of such changes, which may reduce interest margins, impact funding sources and affect the ability to originate and distribute financial products in the primary and secondary markets; |
| • | The effect of changes in the level of checking or savings account deposits on our funding costs and net interest margin; |
| • | Financial services reform and other current, pending or future legislation or regulation that could have a negative effect on our revenue and businesses; |
| • | A failure in or breach of our operational or security systems or infrastructure, or those of our third party vendors or other service providers, including as a result of cyber-attacks; and |
| • | Management’s ability to identify and manage these and other risks. |
In addition to the above factors, we also caution that the actual amounts and timing of any future common stock dividends or
share repurchases will be subject to various factors, including our capital position, financial performance, capital impacts of strategic initiatives, market conditions, and regulatory and accounting considerations, as well as any other factors that our Board of Directors deems relevant in making such a determination. Therefore, there can be no assurance that we will repurchase shares or pay any dividends to holders of
24
Citizens Financial Group, Inc.
our common stock, or as to the amount of any such repurchases or dividends. Further, statements about the effects of the COVID-19 pandemic and associated lockdowns on our business, operations, financial performance and prospects may constitute forward-looking statements and are subject to the risk that the actual impacts may differ, possibly materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond our control, including the scope and duration of the pandemic, actions taken by governmental authorities in response to the pandemic, and the direct and indirect impact of the pandemic on our customers, third parties and us.
More information about factors that could cause actual results to differ materially from those described in the forward-looking
statements can be found under “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2019 and Quarterly Report on Form 10-Q for the quarter ended June 30, 2020.
Note: Per share amounts and ratios presented in this document are calculated using whole dollars.
CFG-IR
25
4Q20 and 2020 Financial Results January 20, 2021 Exhibit 99.2
Forward-looking statements and use of non-GAAP financial measures Forward-Looking Statements. This document contains forward-looking statements within the meaning of Private Securities Litigation Reform Act of 1995. Statements regarding potential future share repurchases and future dividends, as well as the potential effects of the COVID-19 pandemic and associated lockdowns on our business, operations, financial performance and prospects, are forward-looking statements. Also, any statement that does not describe historical or current facts is a forward-looking statement. These statements often include the words “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “goals,” “targets,” “initiatives,” “potentially,” “probably,” “projects,” “outlook” or similar expressions or future conditional verbs such as “may,” “will,” “should,” “would,” and “could.” Forward-looking statements are based upon the current beliefs and expectations of management, and on information currently available to management. Our statements speak as of the date hereof, and we do not assume any obligation to update these statements or to update the reasons why actual results could differ from those contained in such statements in light of new information or future events. We caution you, therefore, against relying on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance. While there is no assurance that any list of risks and uncertainties or risk factors is complete, important factors that could cause actual results to differ materially from those in the forward-looking statements include the following, without limitation: Negative economic and political conditions that adversely affect the general economy, housing prices, the job market, consumer confidence and spending habits which may affect, among other things, the level of nonperforming assets, charge-offs and provision expense; The rate of growth in the economy and employment levels, as well as general business and economic conditions, and changes in the competitive environment; Our ability to implement our business strategy, including the cost savings and efficiency components, and achieve our financial performance goals; The COVID-19 pandemic and associated lockdowns and their effects on the economic and business environments in which we operate; Our ability to meet heightened supervisory requirements and expectations; Liabilities and business restrictions resulting from litigation and regulatory investigations; Our capital and liquidity requirements (including under regulatory capital standards, such as the U.S. Basel III capital rules) and our ability to generate capital internally or raise capital on favorable terms; The effect of changes in interest rates on our net interest income, net interest margin and our mortgage originations, mortgage servicing rights and mortgages held for sale; Changes in interest rates and market liquidity, as well as the magnitude of such changes, which may reduce interest margins, impact funding sources and affect the ability to originate and distribute financial products in the primary and secondary markets; The effect of changes in the level of checking or savings account deposits on our funding costs and net interest margin; Financial services reform and other current, pending or future legislation or regulation that could have a negative effect on our revenue and businesses; A failure in or breach of our operational or security systems or infrastructure, or those of our third party vendors or other service providers, including as a result of cyber-attacks; and Management’s ability to identify and manage these and other risks. In addition to the above factors, we also caution that the actual amounts and timing of any future common stock dividends or share repurchases will be subject to various factors, including our capital position, financial performance, capital impacts of strategic initiatives, market conditions, and regulatory and accounting considerations, as well as any other factors that our Board of Directors deems relevant in making such a determination. Therefore, there can be no assurance that we will repurchase shares or pay any dividends to holders of our common stock, or as to the amount of any such repurchases or dividends. Further, statements about the effects of the COVID-19 pandemic and associated lockdowns on our business, operations, financial performance and prospects may constitute forward-looking statements and are subject to the risk that the actual impacts may differ, possibly materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond our control, including the scope and duration of the pandemic, actions taken by governmental authorities in response to the pandemic, and the direct and indirect impact of the pandemic on our customers, third parties and us. Further, statements about the estimated impact of CECL are forward-looking statements and are subject to the risk that the actual impact of CECL may differ, possibly materially, from what is reflected in those statements due to, among other things, changes in macroeconomic conditions and any of the other variables discussed, as well as changes based on continuing review of models and assumptions. More information about factors that could cause actual results to differ materially from those described in the forward-looking statements can be found under “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2019 and our Quarterly Report on Form 10-Q for the period ending June 30, 2020. Non-GAAP Financial Measures: This document contains non-GAAP financial measures denoted as Underlying results. In historical periods, these results may have been referred to as Adjusted or Adjusted/Underlying results. Underlying results for any given reporting period exclude certain items that may occur in that period which Management does not consider indicative of the Company’s on-going financial performance. We believe these non-GAAP financial measures provide useful information to investors because they are used by our Management to evaluate our operating performance and make day-to-day operating decisions. In addition, we believe our Underlying results in any given reporting period reflect our on-going financial performance in that period and, accordingly, are useful to consider in addition to our GAAP financial results. We further believe the presentation of Underlying results increases comparability of period-to-period results. The Appendix presents reconciliations of our non-GAAP measures to the most directly comparable GAAP financial measures. Other companies may use similarly titled non-GAAP financial measures that are calculated differently from the way we calculate such measures. Accordingly, our non-GAAP financial measures may not be comparable to similar measures used by such companies. We caution investors not to place undue reliance on such non-GAAP financial measures, but to consider them with the most directly comparable GAAP measures. Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as a substitute for our results reported under GAAP.
4Q20 and Full Year 2020 GAAP financial summary See pages 38-39 for notes and important information on Non-GAAP Financial Measures, including “Underlying” results. “Underlying” results exclude the impact of notable items described on page 30.
4Q20 and Full Year 2020 Underlying financial summary(1) See pages 38-39 for notes and important information on Non-GAAP Financial Measures, including “Underlying” results. “Underlying” results exclude the impact of notable items described on page 30.
Overview(1) Strong full-year 2020 results despite COVID-19 disruption Underlying net income of $1.1 billion, with EPS of $2.41 Record pre-provision profit up 12% on an Underlying basis Record noninterest income, up 24%, reflects the build out of our fee businesses with record results across Mortgage, Capital Markets and Wealth Positive operating leverage of 4.1% on an Underlying basis Underlying ROTCE of 7.5% compares with 12.8% for 2019 2020 net reserve build of $923 million impacted Underlying ROTCE by 5.4 percentage points and EPS by $1.73 Prudently managing credit Allowance for credit losses coverage ratio of 2.17%, or 2.24% excluding PPP loans Net charge-offs of 61 bps, down 9 bps from 3Q20; up 20 bps YoY Retail and commercial credit trending as expected; commercial issues reside in segments most affected by COVID-19/lockdowns Robust capital, liquidity and funding 10.0% CET1 ratio(3) allows for organic loan growth and attractive return of capital to shareholders Period-end LDR ratio of 83.6%, or 80.9% excluding PPP loans, vs. 95.0% a year ago; average DDA up 42% YoY and 4% QoQ. Total available liquidity of ~$75 billion at December 31, 2020 Board of directors authorized $750 million common stock repurchase program commencing first quarter 2021 4Q20 results reflect benefit of diversified business model Underlying net income of $480 million and EPS of $1.04 Revenue of $1.7 billion up 4% YoY and down 5% QoQ from record results Strong noninterest income led by Mortgage and Capital Markets; up 17% YoY, and down 12% QoQ from record results NII down 1% YoY given challenging rate environment, partly offset by earning asset growth of 9.8% and lower funding costs; down 1% QoQ NIM of 2.75%, down 8 bps QoQ reflecting elevated cash balances; 2.92%(2) ex-elevated cash, stable QoQ Underlying efficiency ratio of 56.8%, with positive operating leverage of 2.1% YoY Underlying ROTCE increased to 12.9% from 9.0% in 3Q20 and compares with 12.5% in 4Q19 See pages 38-39 for notes and important information on Non-GAAP Financial Measures, including “Underlying” results. “Underlying” results exclude the impact of notable items described on page 30.
NII down 1% Reflects lower commercial loan balances and lower NIM NIM of 2.75%, down 8 bps Elevated cash impact of 17 bps vs. 8 bps in 3Q20; NIM ex-elevated cash up 1 bp Lower asset yields, partially offset by improved funding mix and lower deposit costs Interest-bearing deposit costs down 8 bps Highlights Net interest income $s in millions, except earning assets Average interest-earning assets Net interest income Net interest margin, FTE NII and NIM Year-Over-Year Linked Quarter Broadly stable NII with earning asset growth; NIM pressure from elevated cash balances NII down 1% 10% growth in interest-earning assets, including PPP, more than offset by lower NIM NIM of 2.75%, down 31 bps Reflects lower rates and elevated cash balances given strong deposit flows Partly offset by improved funding mix and deposit pricing Interest-bearing deposit costs down 82 bps NIM 3Q20 to 4Q20 -17 bps -8 bps NIM impact from elevated cash above target 3Q20 4Q20 NIM, FTE NIM, excluding impact of elevated cash See pages 38-39 for notes and important information on Non-GAAP Financial Measures, including “Underlying” results. “Underlying” results exclude the impact of notable items described on page 30. (1)
Noninterest income down 12% Mortgage banking fees declined 33% from a record 3Q20 given lower gain-on-sale margins while production volumes remained near record levels Record capital markets fees, up 52% driven by higher M&A advisory and loan syndication fees FX & IRP up 30% reflecting increased client activity, largely tied to higher variable rate loan originations Service charges and fees continue to recover from COVID-19 impacts Other income declined from 3Q20 level that included gain on sale of education loans Year-Over-Year Linked Quarter Noninterest income $s in millions Highlights Noninterest income up 17% Strong growth in mortgage banking fees, up 141%, driven by higher production and gain-on-sale margins Record capital markets fees up 33% on higher M&A advisory and loan syndication fees Results partially offset by lower service charges and fees and card fees reflecting COVID-19 impacts FX & IRP fees down from a record 4Q19 given lower loan originations, less volatility, and smaller CVA benefit Investments in fee businesses driving 17% YoY growth Noninterest income
$s in millions Mortgage banking fee growth Mortgage banking Well positioned to capitalize on current demand, grow share and perform well even as rates rise Highlights Highlights Record FY20 mortgage banking fees, more than tripling year-over-year, reflecting $41 billion of originations and strong gain-on-sale margins Expect another strong mortgage market in 2021 with latest industry estimates at ~$3.5 trillion originations vs. ~$4 trillion in 2020 Expect to grow CFG originations across all channels CFG purchase mix expected to increase from 38% in FY20 to ~50% in FY21 Gain-on-sale margins expected to gradually fall, reflecting growth in industry capacity and competitive dynamics Mortgage volume-related expenses expected to remain elevated in FY21 reflecting higher originations Transformation initiative on track to deliver targeted efficiency benefits in 2021 within production and servicing Digitization initiatives underway in third-party channels See pages 38-39 for notes and important information on Non-GAAP Financial Measures, including “Underlying” results. “Underlying” results exclude the impact of notable items described on page 30.
Noninterest expense(1) Expense discipline contributes to Underlying positive operating leverage of 2.1% YoY and 4.1% FY20 Year-Over-Year Linked Quarter Highlights Underlying noninterest expense up 1% Salaries and employee benefits up 2%, reflecting strong mortgage production Higher outside services tied to Consumer-related volumes and seasonal impacts Continued expense discipline providing partial offset Underlying noninterest expense up 2% given strong expense discipline and benefit of TOP program Salaries and employee benefits up 5%, reflecting strong mortgage production Equipment and software expense up 8% given continued investments in technology Outside services expense up 7% largely tied to growth initiatives Other operating expense declined 16% given lower travel and advertising costs Underlying efficiency ratio See pages 38-39 for notes and important information on Non-GAAP Financial Measures, including “Underlying” results. “Underlying” results exclude the impact of notable items described on page 30.
Average loans and leases (2) $s in billions Average core loans and leases(1) Average core loans up 4% YoY with commercial up 7% and retail up 1%; down 1% QoQ Year-Over-Year Linked Quarter Highlights Average core loans down $1.4 billion, or 1% Commercial decreased 4%, reflecting line draw repayments and payoffs outpacing originations Retail up 2% driven by increase in education and mortgage; growth in point-of-sale finance was offset by run off in personal unsecured Period-end core loans decreased $780 million, or 1%, with a $1.4 billion decrease in commercial, partly offset by a $634 million increase in retail Average core loans up $4.8 billion, or 4% Commercial up $3.9 billion, or 6.9%, including $4.5 billion of PPP loans Retail up $885 million, or 1.5%, with growth in education, partly offset by lower home equity, personal unsecured and credit card Period-end core loan growth of $4.3 billion, or 3.7%, with commercial up 6.0%, including $4.1 billion of PPP loans, and retail up 1.5%, or 4.1% before loan sale activity See pages 38-39 for notes and important information on Non-GAAP Financial Measures, including “Underlying” results. “Underlying” results exclude the impact of notable items described on page 30.
Average funding and cost of funds Strong deposit growth, with improving mix and pricing; interest-bearing deposit costs down to 27 bps Growing lower-cost deposits(1) $s in billions Period end loan-to-deposit ratio Year-Over-Year Linked Quarter Highlights Average deposits up 3% driven by money market, demand deposits and savings, partially offset by a decrease in term deposits Citizens Access® deposits of $6.1 billion, down 4% given run off of term deposits Interest-bearing deposit costs down 8 bps to 27 bps; targeting low/mid-teen deposit costs by year-end 2021 Total deposit costs down 6 bps Average deposits up 16% reflecting growth in demand deposits, money market, savings and checking with interest, partially offset by a decrease in term deposits Interest-bearing deposit costs down 82 bps Total deposit costs down 64 bps See pages 38-39 for notes and important information on Non-GAAP Financial Measures, including “Underlying” results. “Underlying” results exclude the impact of notable items described on page 30.
Credit quality(1) Provision for credit losses Total net c/os Net c/o ratio Provision for credit losses, net charge-offs Highlights NCOs down $29 million QoQ driven by commercial, with a reduction in charge-offs in C&I and leasing largely offset by an increase in CRE as a result of COVID-19 impacts 4Q20 provision of $124 million compares with 3Q20 of $428 million and $110 million at 4Q19 Nonaccrual loans decreased $258 million QoQ reflecting a $302 million decrease in commercial given charge-offs, returns to accrual and repayments and a $44 million increase in retail as loans exit forbearance ACL to loans of 2.24%, ex PPP, down from 2.29% for 3Q20 Primarily reflects net charge-offs exceeding the reserve impact of new loan originations. The benefit from an improved economic forecast was offset by increasing qualitative reserves against commercial areas of concern ACL to nonaccrual loans and leases ratio of 262% compares with 214% as of 3Q20 and 184% as of 4Q19 $s in millions $s in millions Nonaccrual loans See pages 38-39 for notes and important information on Non-GAAP Financial Measures, including “Underlying” results. “Underlying” results exclude the impact of notable items described on page 30. Allowance for credit losses $s in millions (3) (2)
CET1 ratio improved to 10.0%(1) QoQ, at the high end of our targeted 9.75-10.0% operating range Citizens board of directors authorized the Company to repurchase up to $750 million of the Company’s common stock beginning in first quarter 2021 Demonstrating strong PPNR generation through current stress environment PPNR as % of average assets has strengthened in recent years reflecting benefits of investments, an increasingly diversified revenue base and continued expense discipline Strong capital & PPNR growth reflects diversified business model Highlights Strong Underlying PPNR performance(3) $s in billions Capital levels continue to strengthen See pages 38-39 for notes and important information on Non-GAAP Financial Measures, including “Underlying” results. “Underlying” results exclude the impact of notable items described on page 30.
TOP programs a key driver of positive operating leverage since IPO Underlying(1) Underlying ex acquisitions(1) +7% CAGR 2014-2020 Expense +3% Announced pre-tax benefits $s in millions Year-over-year operating leverage averages ~4% from 2015-2020 ~$325 million announced July 2019 ~85% efficiency/~15% revenue ~$100 million upsizing announced October 2020 Efficiency-focused Achieved ~$225 million pre-tax run-rate benefit by YE2020 On track for total ~$400-$425 million pre-tax run-rate benefit by YE2021 Revenue See pages 38-39 for notes and important information on Non-GAAP Financial Measures, including “Underlying” results. “Underlying” results exclude the impact of notable items described on page 30.
Strategic priorities Consumer Commercial E2E digital transformation to increase sales and drive self-service interactions Leverage Citizens Access® and lending capabilities to deliver national value proposition Citizens Pay launch and consumer-led point-of-sale pilot Accelerate growth in Wealth Branch transformation/advisory focus Strengthen corporate finance advisory model with deep industry expertise across key verticals Grow mid-corporate client base through geographic expansion into Southeast, Texas and California Enhance capabilities in Treasury Solutions and Capital Markets to deepen relationships Next Gen Technology Modern operating model Culture/ leadership/ talent Enterprise-wide payments Enterprise-wide initiatives supporting Consumer and Commercial E2E digital transformation National expansion Deepening relationships Enhancing coverage model Expanding geographic reach Building solution sets and fee capabilities
FY2021 outlook Net interest income down slightly vs FY20 High single digit decrease in FY NIM ~1.5-2% increase reflecting TOP benefits, partially offset by higher mortgage volume-related expenses and reinvestment in strategic initiatives Tax rate of ~21% Net charge-offs ~50-65 bps; expect meaningful reserve release 2021 expectations vs. Underlying 2020(1) Expect to maintain CET1 ratio in the 9.75-10.0% range YE 2021: fed funds rate unchanged at 0.0-0.25% Ending 10-year Treasury rate of ~1.25-1.50% range Full-year GDP growth in the ~4.5-5% range Down high single digits from record FY20 reflecting lower mortgage banking fees given decline in gain-on-sale margins Underlying 2020(1) Net interest income, NIM Noninterest expense, tax rate Credit Capital management Key economic assumptions Noninterest income $4,586 million net interest income 2.89% NIM full-year; 2.75% NIM in 4Q20 $3,866 million noninterest expense, up 2.3% 56.0% efficiency ratio 19.9% tax rate 56 bps net charge-off ratio; 2.17% ACL ratio Maintained dividend at $0.39 per quarter 10.0% CET1 ratio(3) $2,319 million noninterest income Mid/high single digit spot loan growth with acceleration in 2H; ~2% average loan growth vs. FY20 Average interest-earning assets up ~1.5-2.0% Balance sheet growth $124.5 billion average loans (excluding LHFS) $159.3 billion average interest-earning assets YE 2020: fed funds rate of ~1.50-1.75% 10-year Treasury rate of ~1.75-2.25% range Full-year GDP growth in the ~2–2.5% range See pages 38-39 for notes and important information on Non-GAAP Financial Measures, including “Underlying” results. “Underlying” results exclude the impact of notable items described on page 30.
1Q21 outlook vs. 4Q20 We offer commentary on factors influencing key categories See pages 38-39 for notes and important information on Non-GAAP Financial Measures, including “Underlying” results. “Underlying” results exclude the impact of notable items described on page 30.
Key messages(1) Citizens 2020 results demonstrate strength and resiliency of franchise and strong execution despite COVID-19 disruption Record fee income with record results across Mortgage, Capital Markets and Wealth reflecting investments made to broaden capabilities and increase scale Delivered Underlying positive operating leverage of 4%; PPNR growth of 12% YoY Underlying ROTCE of 7.5% compares with 12.8% for 2019 reflecting COVID-19 disruption; net reserve build during 2020 impacted EPS by $1.73 and ROTCE by 5.4 percentage points TBV/share of $32.72 up 2% YoY Underlying 4Q20 results reflect the benefit of Citizens diversified business model Strong fee income led by Mortgage and record Capital Markets; up 17% YoY and down 12% QoQ from record results Positive operating leverage of 2.1% YoY; 56.8% efficiency ratio Citizens remains well capitalized and maintains ample liquidity Robust capital levels with CET1 ratio of 10.0%(2) Prudent ACL/loans ratio of 2.17%, 2.24% excluding PPP loans Board authorized $750 million share repurchase program Continue to make progress on our strategic initiatives, while incorporating changes from the environment TOP 6 Program achieved FY2020 pre-tax run-rate target of ~$225 million; on track for expected total pre-tax run-rate benefit of ~$400-$425 million by YE2021 Prioritizing major strategic initiatives: Consumer national expansion; growing POS finance; broadening Commercial coverage, and enhancing advisory capabilities Seeking to come out of crisis with positive momentum See pages 38-39 for notes and important information on Non-GAAP Financial Measures, including “Underlying” results. “Underlying” results exclude the impact of notable items described on page 30.
Appendix
$s in billions $s in billions Year-over-Year Underlying results(1) $s in millions Return on average total tangible assets $s in millions, except per share data á 4% á 16% á 7% â 4 bps á 4% $0.99 $1.04 á 5% á 40 bps Pre-provision profit Average Loans Return on average total tangible assets Net income available to common shareholders and EPS Average deposits Return on average tangible common equity See pages 38-39 for notes and important information on Non-GAAP Financial Measures, including “Underlying” results. “Underlying” results exclude the impact of notable items described on page 30.
$s in billions $s in billions Linked-quarter Underlying results(1) $s in millions $s in millions, except per share data â 1% á 3% â 12% á 31 bps á 43% $0.73 $1.04 á 42% á 389 bps Pre-provision profit Return on average total tangible assets Average loans Net income available to common shareholders and EPS Return on average tangible common equity Average deposits See pages 38-39 for notes and important information on Non-GAAP Financial Measures, including “Underlying” results. “Underlying” results exclude the impact of notable items described on page 30.
Full year Underlying results(1) $s in millions $s in millions, except per share data á 12% $s in billions $s in billions á 6% á 13% $3.84 â 49 bps â 523 bps $2.41 â 37% â 40% Pre-provision profit Net income available to common shareholders and EPS Average deposits Return on average tangible common equity Average loans Return on average total tangible assets See pages 38-39 for notes and important information on Non-GAAP Financial Measures, including “Underlying” results. “Underlying” results exclude the impact of notable items described on page 30.
Credit quality – monitoring delinquencies as forbearance programs wind down Broadly stable early-stage consumer delinquency trends ~94% of borrowers exited forbearance are current Total retail forbearance rate has declined to 2.3% at 12/31/20 Retail *Using a methodology which assumes forbearance ends after customers’ first scheduled post-forbearance payment. Under an alternative method where forbearance ends immediately after the last deferred payment, the forbearance rate would be ~1.5% Commercial Commercial deferrals down to ~0.5% at year-end Business Banking deferrals ~1% at year-end See pages 38-39 for notes and important information on Non-GAAP Financial Measures, including “Underlying” results. “Underlying” results exclude the impact of notable items described on page 30.
Allocation of allowance for credit losses by product type See pages 38-39 for notes and important information on Non-GAAP Financial Measures, including “Underlying” results. “Underlying” results exclude the impact of notable items described on page 30.
Highlights Commercial credit – diversified portfolio with prudent credit discipline Overall Highly granular and diversified portfolio in terms of geography, industry and asset class The nascent economic recovery, improved liquidity given capital raising and federal stimulus continues to reduce the areas of market concern Areas of market concern declined to 4.6% of the total CFG loan portfolio at 4Q20 from 4.9% at 3Q20 Areas of market concern have ~3.3x the reserve coverage compared to total commercial portfolio ex PPP Industry sector of market concern Areas stabilizing Continued concern See pages 38-39 for notes and important information on Non-GAAP Financial Measures, including “Underlying” results. “Underlying” results exclude the impact of notable items described on page 30. Reserve coverage (3) (3)
Retail credit - diversified portfolio with prudent credit discipline ~70% of the retail portfolio is secured Mortgage weighted-average LTV of 63% with ~3% of the portfolio with refreshed FICO scores <650 ~50% of the HELOC portfolio is secured by 1st lien ~70% of HELOC has CLTV <70; ~95% CLTV < 80 Education refinance portfolio borrowers at origination have been employed ~5 years on average with: ~30% co-sign ~60% have advanced degrees Education In School ~90% co-sign Vast majority of point-of-sale portfolio subject to loss sharing arrangements Commentary Broadly stable QoQ trends on FICO scores, delinquencies See pages 38-39 for notes and important information on Non-GAAP Financial Measures, including “Underlying” results. “Underlying” results exclude the impact of notable items described on page 30.
Reiterating medium-term financial targets(1) Medium-term financial targets Economic assumptions Real GDP growth of ~4.5 to 5% for 2021; trending toward ~2.0% to 3.0% annually over the medium term Unemployment rate: ~5.0% by YE2021; trending toward ~3.5% annually over the medium term No Fed Funds rate changes in 2021; modest upward Fed moves begin 1H2023. Expect curve steepening over 2021/22 ~14-16% ~9.75-10.00% ~55% ROTCE Efficiency Ratio CET1 ~35-40% Dividend payout ratio See pages 38-39 for notes and important information on Non-GAAP Financial Measures, including “Underlying” results. “Underlying” results exclude the impact of notable items described on page 30.
FY2021 expense outlook (1) $s in millions Noninterest expense 2019-2020 Noninterest expense outlook 2020-2021 Engineering/ Cyber/Digital Wealth National Expansion Point-of-sale Commercial expansion Branch rationalization E2E digitization Organization simplification Tech optimization Mortgage Operations Contact centers Marketing +1.5 to +2.0% $s in millions +2.3% Engineering/ Cyber/Digital Commercial expansion Point-of-sale Procurement Branch rationalization Organization simplification Mortgage Journey Mortgage Operations Contact centers See pages 38-39 for notes and important information on Non-GAAP Financial Measures, including “Underlying” results. “Underlying” results exclude the impact of notable items described on page 30.
Digital usage and engagement trends YoY -13 pts +8 pts +5 pts Digital adoption and engagement continues to accelerate within regional footprint Consumer deposit transaction mix Digital Active Households +7% Digital Logins +15% Digital as % of sales +11 pts Active Mobile Households +15% 4Q20 YoY New mobile app for iOS customers launched in January after Android launch in 4Q20 Digital Net Promotor Score increased 12-14 points in 4Q20 YoY Citizens Access® raised $5.9 billion deposits digitally as of December 31, 2020 Leverage Citizens Access® and lending capabilities to deliver national value proposition Accelerating end-to-end (“E2E”) digitization Customer journey-based re-imagination of the consumer experience, creating digital-first workflows and operational processes; loan servicing and deposit operations launched Improve efficiency of customer interactions, e.g., self-serve capabilities Drive long-term efficiency, e.g., “war” on paper, further branch rationalization Digital trends driving national expansion and E2E digitization efforts
Notable Items(1) Fourth and third quarter 2020 and fourth quarter 2019 results reflect notable items primarily related to TOP 6 transformational and revenue and efficiency initiatives. Fourth and third quarter 2020 and fourth quarter 2019 results also reflect notable items related to integration costs primarily tied to the August 1, 2018 Franklin American Mortgage Company ("FAMC") acquisition. These notable items have been excluded from reported results to better reflect Underlying operating results. Cumulative integration costs related to the FAMC acquisition totaled $34 million after-tax through the end of fourth quarter 2020. See pages 38-39 for notes and important information on Non-GAAP Financial Measures, including “Underlying” results. “Underlying” results exclude the impact of notable items described on page 30.
Non-GAAP financial measures and reconciliations $s in millions, except share, per share and ratio data
Non-GAAP financial measures and reconciliations $s in millions, except share, per share and ratio data
Non-GAAP financial measures and reconciliations $s in millions, except share, per share and ratio data
Non-GAAP financial measures and reconciliations $s in millions, except share, per share and ratio data
Non-GAAP financial measures and reconciliations $s in millions, except share, per share and ratio data
Non-GAAP financial measures and reconciliations
Non-GAAP financial measures and reconciliations
Notes Notes on Non-GAAP Financial Measures See important information on Non-GAAP Financial Measures, as applicable, at the beginning and end of this presentation for an explanation of our use of these metrics and non-GAAP financial measures and their reconciliations to GAAP financial measures. “Underlying” or “Adjusted” results exclude the impact of notable items. Where there is a reference to Underlying results in a paragraph or table, all measures that follow these references are on the same basis, when applicable. General Notes References to net interest margin are on a fully taxable equivalent ("FTE") basis. In 1Q19, Citizens changed its quarterly presentation of net interest income and net interest margin (NIM). Consistent with our understanding of general peer practice, the Company simplified the calculation of its reported NIM to equal net interest income, annualized based on the actual number of days in the period, divided by average total interest earning assets for the period. Under the Company’s prior methodology, NIM was calculated using the difference between the annualized yield on average total interest-earning assets and total interest-bearing liabilities for the period. The Company also began presenting both net interest income and NIM on an FTE basis. Prior periods have been revised consistent with the current presentation. Beginning in the first quarter of 2019, borrowed funds balances and the associated interest expense are based on original maturity. Prior periods have been adjusted to conform with the current period presentation. Throughout this presentation, references to consolidated and/or commercial loans and loan growth include leases. Loans held for sale are also referred to as LHFS. Select totals may not sum due to rounding. Current period regulatory capital ratios based on Basel III standardized approach are preliminary Throughout this presentation, reference to balance sheet items are on an average basis and loans exclude held for sale unless otherwise noted. NIM excluding elevated cash adjusts interest-earning assets to exclude the impact of cash above targeted operating levels References to “Underlying results before the impact of Acquisitions” exclude the impact of acquisitions occurring after 2Q18 and notable items, as applicable Notes on slide 3 – 3Q20 GAAP financial summary See above general note a). In 3Q18, we revised our method of calculating the loan-to-deposit ratio to exclude loans held for sale, consistent with general industry practice. Full-time equivalent employees. Notes on slide 4 – 3Q20 Underlying financial summary See above note on non-GAAP financial measures. Notes on slide 5 – Overview See above note on non-GAAP financial measures. See above general note on NIM excluding the impact of elevated cash See above general note e). Notes on slide 6 – Net interest income See above note on non-GAAP financial measures. See above general note on NIM excluding the impact of elevated cash Notes on slide 8 – Mortgage banking fees See above general note d). Notes on slide 9 – Noninterest expense See above note on non-GAAP financial measures. Notes on slide 10 – Average loans and leases See above general note d). Non-core loans are primarily liquidating loans and lease portfolios inconsistent with our strategic priorities, generally as a result of geographic location, industry, product type or risk level and are included in Other. Notes on slide 11 – Average funding and cost of funds Throughout this presentation, reference to balance sheet items are on an average basis and loans exclude held for sale unless otherwise noted. Notes on slide 12 – Credit quality Beginning in the fourth quarter of 2019, nonperforming balances exclude both fully and partially guaranteed residential mortgage loans sold to Ginnie Mae for which the Company has the right, but not the obligation, to repurchase. Prior periods have been adjusted to exclude partially guaranteed amounts to conform with the current period presentation. See above note on non-GAAP financial measures. Allowance for credit losses to nonperforming loans and leases. Notes on slide 13 – Strong capital & PPNR growth reflects diversified business model See above general note e). For regulatory capital purposes, in connection with the Federal Reserve’s final interim rule as of April 3, 2020, 100% of the $451 million Day-1 CECL impact recorded as of January 1, 2020 will be deferred over a two-year period ending January 1, 2022, at which time it will be phased in on a pro-rata basis over a three-year period ending January 1, 2025. Additionally, 25% of the cumulative reserve build of $923 million since January 1, 2020, or $231 million, will be phased in over the same time frame. See above note on non-GAAP financial measures. Notes on slide 14 – TOP programs a key driver of positive operating leverage since IPO See above note on non-GAAP financial measures. Notes on slide 16 – FY2021 outlook See above note on non-GAAP financial measures.
Notes on slide 17 – 1Q21 outlook vs. 4Q20 See above note on non-GAAP financial measures. Notes on slide 18 – Key messages See above note on non-GAAP financial measures. See above general note e). Notes on slide 20 – Year-over-Year Underlying results See above note on non-GAAP financial measures. Notes on slide 21 – Linked-quarter Underlying results See above note on non-GAAP financial measures. Notes on slide 22 – Full year Underlying results See above note on non-GAAP financial measures. Notes on slide 23 – Credit quality – monitoring delinquencies as forbearance programs wind down Represents portion of the portfolio granted forbearance; percentage based on principal balances. Represents loans in which principal and/or interest was suspended for COVID-19 relief Total excludes business banking Notes on slide 24 – Allocation of allowance for credit losses by product type Includes commercial leases. See above note on non-GAAP financial measures. Notes on slide 25 – Commercial credit – diversified portfolio with prudent credit discipline All other includes sectors with a balance less than 1% of total CFG loans. See above general note d). See above note on non-GAAP financial measures Notes on slide 26 – Retail credit - diversified portfolio with prudent credit discipline See above general note d). Notes on slide 27 – Reiterating medium-term financial targets See above note on non-GAAP financial measures. Notes on slide 28 – FY2021 expense outlook See above note on non-GAAP financial measures. Notes on slide 30 – Notable Items See above note on non-GAAP financial measures. Notes continued
Exhibit 99.3 Financial Supplement Fourth Quarter and Full Year 2020 1Exhibit 99.3 Financial Supplement Fourth Quarter and Full Year 2020 1
Table of Contents Page Consolidated Financial Highlights 3 Consolidated Statements of Operations (unaudited) 5 Consolidated Balance Sheets (unaudited) 6 Loans and Deposits 7 Average Balance Sheets 8 Average Annualized Yields and Rates 9 Segment Financial Highlights 10 Credit-Related Information: Nonaccrual loans and leases 14 Loans and Leases 90 Days or More Past Due and Accruing 15 Charge-offs, Recoveries, and Related Ratios 16 Summary of Changes in the Components of the Allowance for Credit Losses 18 Capital and Ratios 19 Non-GAAP Financial Measures and Reconciliations 20 The information in this Financial Supplement is preliminary and based on company data available at the time of the earnings presentation. It speaks only as of the particular date or dates included in the accompanying pages. The Company does not undertake an obligation to, and disclaims any duty to, update any of the information provided. Any forward-looking statements in this Financial Supplement are subject to the forward- looking statements language contained in the Company’s reports filed with the SEC pursuant to the Securities Exchange Act of 1934, which can be found on the SEC’s website (www.sec.gov) or on the Company’s website (www.citizensbank.com). The Company’s future financial performance is subject to the risks and uncertainties described in its SEC filings. 2Table of Contents Page Consolidated Financial Highlights 3 Consolidated Statements of Operations (unaudited) 5 Consolidated Balance Sheets (unaudited) 6 Loans and Deposits 7 Average Balance Sheets 8 Average Annualized Yields and Rates 9 Segment Financial Highlights 10 Credit-Related Information: Nonaccrual loans and leases 14 Loans and Leases 90 Days or More Past Due and Accruing 15 Charge-offs, Recoveries, and Related Ratios 16 Summary of Changes in the Components of the Allowance for Credit Losses 18 Capital and Ratios 19 Non-GAAP Financial Measures and Reconciliations 20 The information in this Financial Supplement is preliminary and based on company data available at the time of the earnings presentation. It speaks only as of the particular date or dates included in the accompanying pages. The Company does not undertake an obligation to, and disclaims any duty to, update any of the information provided. Any forward-looking statements in this Financial Supplement are subject to the forward- looking statements language contained in the Company’s reports filed with the SEC pursuant to the Securities Exchange Act of 1934, which can be found on the SEC’s website (www.sec.gov) or on the Company’s website (www.citizensbank.com). The Company’s future financial performance is subject to the risks and uncertainties described in its SEC filings. 2
CONSOLIDATED FINANCIAL HIGHLIGHTS (in millions, except share, per-share and ratio data) QUARTERLY TRENDS FULL YEAR 4Q20 Change 2020 Change 4Q20 3Q20 2Q20 1Q20 4Q19 3Q20 4Q19 2020 2019 2019 $/bps % $/bps % $/bps % SELECTED OPERATING DATA Total revenue $1,707 $1,791 $1,750 $1,657 $1,637 ($84) (5%) $70 4% $6,905 $6,491 $414 6% Noninterest expense 1,012 988 979 1,012 986 24 2 26 3 3,991 3,847 144 4 Profit before provision for credit losses 695 803 771 645 651 (108) (13) 44 7 2,914 2,644 270 10 Provision for credit losses 124 428 464 600 110 (304) (71) 14 13 1,616 393 1,223 NM NET INCOME 456 314 253 34 450 142 45 6 1 1,057 1,791 (734) (41) 1 Net income, Underlying 480 338 263 59 454 142 42 26 6 1,140 1,808 (668) (37) Net income available to common stockholders 424 289 225 12 427 135 47 (3) (1) 950 1,718 (768) (45) Net income available to common 1 stockholders, Underlying 448 313 235 37 431 135 43 17 4 1,033 1,735 (702) (40) PER COMMON SHARE DATA Basic earnings $0.99 $0.68 $0.53 $0.03 $0.98 $0.31 46% $0.01 1% $2.22 $3.82 ($1.60) (42%) Diluted earnings 0.99 0.68 0.53 0.03 0.98 0.31 46 0.01 1 2.22 3.81 (1.59) (42) 1 Basic earnings, Underlying 1.05 0.73 0.55 0.09 0.99 0.32 44 0.06 6 2.42 3.86 (1.44) (37) 1 Diluted earnings, Underlying 1.04 0.73 0.55 0.09 0.99 0.31 42 0.05 5 2.41 3.84 (1.43) (37) Cash dividends declared and paid per common share 0.39 0.39 0.39 0.39 0.36 — — 0.03 8 1.56 1.36 0.20 15 Book value per common share 48.47 48.01 47.92 47.78 47.63 0.46 1 0.84 2 48.47 47.63 0.84 2 Tangible book value per common share 32.72 32.24 32.13 31.97 32.08 0.48 1 0.64 2 32.72 32.08 0.64 2 Dividend payout ratio 39 % 58 % 74 % 1,398 % 37 % (1,829) bps 265 bps 70 % 36% 3,453 bps 1 Dividend payout ratio, Underlying 37 53 71 451 36 (1,608) bps 82 bps 65 35 2,930 bps COMMON SHARES OUTSTANDING Average: Basic 427,074,822 426,846,096 426,613,053 427,718,421 434,684,606 228,726 —% (7,609,784) (2%) 427,062,537 449,731,453 (22,668,916) (5%) Diluted 428,881,252 427,992,349 427,566,920 429,388,855 436,500,829 888,903 — (7,619,577) (2) 428,157,780 451,213,701 (23,055,921) (5) Common shares at period-end 427,209,831 427,073,084 426,824,594 426,586,533 433,121,083 136,747 — (5,911,252) (1) 427,209,831 433,121,083 (5,911,252) (1) 1 These are non-GAAP financial measures. For further information on these measures, refer to Non-GAAP Financial Measures and Reconciliations. 3CONSOLIDATED FINANCIAL HIGHLIGHTS (in millions, except share, per-share and ratio data) QUARTERLY TRENDS FULL YEAR 4Q20 Change 2020 Change 4Q20 3Q20 2Q20 1Q20 4Q19 3Q20 4Q19 2020 2019 2019 $/bps % $/bps % $/bps % SELECTED OPERATING DATA Total revenue $1,707 $1,791 $1,750 $1,657 $1,637 ($84) (5%) $70 4% $6,905 $6,491 $414 6% Noninterest expense 1,012 988 979 1,012 986 24 2 26 3 3,991 3,847 144 4 Profit before provision for credit losses 695 803 771 645 651 (108) (13) 44 7 2,914 2,644 270 10 Provision for credit losses 124 428 464 600 110 (304) (71) 14 13 1,616 393 1,223 NM NET INCOME 456 314 253 34 450 142 45 6 1 1,057 1,791 (734) (41) 1 Net income, Underlying 480 338 263 59 454 142 42 26 6 1,140 1,808 (668) (37) Net income available to common stockholders 424 289 225 12 427 135 47 (3) (1) 950 1,718 (768) (45) Net income available to common 1 stockholders, Underlying 448 313 235 37 431 135 43 17 4 1,033 1,735 (702) (40) PER COMMON SHARE DATA Basic earnings $0.99 $0.68 $0.53 $0.03 $0.98 $0.31 46% $0.01 1% $2.22 $3.82 ($1.60) (42%) Diluted earnings 0.99 0.68 0.53 0.03 0.98 0.31 46 0.01 1 2.22 3.81 (1.59) (42) 1 Basic earnings, Underlying 1.05 0.73 0.55 0.09 0.99 0.32 44 0.06 6 2.42 3.86 (1.44) (37) 1 Diluted earnings, Underlying 1.04 0.73 0.55 0.09 0.99 0.31 42 0.05 5 2.41 3.84 (1.43) (37) Cash dividends declared and paid per common share 0.39 0.39 0.39 0.39 0.36 — — 0.03 8 1.56 1.36 0.20 15 Book value per common share 48.47 48.01 47.92 47.78 47.63 0.46 1 0.84 2 48.47 47.63 0.84 2 Tangible book value per common share 32.72 32.24 32.13 31.97 32.08 0.48 1 0.64 2 32.72 32.08 0.64 2 Dividend payout ratio 39 % 58 % 74 % 1,398 % 37 % (1,829) bps 265 bps 70 % 36% 3,453 bps 1 Dividend payout ratio, Underlying 37 53 71 451 36 (1,608) bps 82 bps 65 35 2,930 bps COMMON SHARES OUTSTANDING Average: Basic 427,074,822 426,846,096 426,613,053 427,718,421 434,684,606 228,726 —% (7,609,784) (2%) 427,062,537 449,731,453 (22,668,916) (5%) Diluted 428,881,252 427,992,349 427,566,920 429,388,855 436,500,829 888,903 — (7,619,577) (2) 428,157,780 451,213,701 (23,055,921) (5) Common shares at period-end 427,209,831 427,073,084 426,824,594 426,586,533 433,121,083 136,747 — (5,911,252) (1) 427,209,831 433,121,083 (5,911,252) (1) 1 These are non-GAAP financial measures. For further information on these measures, refer to Non-GAAP Financial Measures and Reconciliations. 3
CONSOLIDATED FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio and headcount data) QUARTERLY TRENDS FULL YEAR 4Q20 Change 2020 Change 4Q20 3Q20 2Q20 1Q20 4Q19 3Q20 4Q19 2020 2019 2019 $/bps % $/bps % $/bps % FINANCIAL RATIOS Net interest margin 2.75 % 2.82 % 2.87 % 3.09 % 3.04 % (7) bps (29) bps 2.88 % 3.14 % (26) bps 1 Net interest margin, FTE 2.75 2.83 2.88 3.10 3.06 (8) bps (31) bps 2.89 3.16 (27) bps Return on average common equity 8.20 5.60 4.44 0.24 8.30 260 bps (10) bps 4.65 8.45 (380) bps 2 Return on average common equity, Underlying 8.66 6.05 4.63 0.74 8.36 261 bps 30 bps 5.05 8.53 (348) bps Return on average tangible common equity 12.20 8.33 6.62 0.36 12.39 387 bps (19) bps 6.93 12.64 (571) bps Return on average tangible common equity, 2 Underlying 12.89 9.00 6.90 1.10 12.49 389 bps 40 bps 7.53 12.76 (523) bps Return on average total assets 1.00 0.70 0.57 0.08 1.08 30 bps (8) bps 0.60 1.10 (50) bps 2 Return on average total assets, Underlying 1.05 0.76 0.59 0.14 1.09 29 bps (4) bps 0.65 1.11 (46) bps Return on average total tangible assets 1.04 0.73 0.59 0.09 1.13 31 bps (9) bps 0.62 1.15 (53) bps 2 Return on average total tangible assets, Underlying 1.10 0.79 0.61 0.15 1.14 31 bps (4) bps 0.67 1.16 (49) bps Effective income tax rate 20.16 16.10 17.69 24.13 16.76 406 bps 340 bps 18.54 20.43 (189) bps 2 Effective income tax rate, Underlying 21.70 16.79 19.36 24.52 21.52 491 bps 18 bps 19.92 22.03 (211) bps Efficiency ratio 59.28 55.18 55.91 61.10 60.28 410 bps (100) bps 57.80 59.28 (148) bps 2 Efficiency ratio, Underlying 56.83 53.44 54.85 59.08 58.02 339 bps (119) bps 55.99 58.23 (224) bps Noninterest income as a % of total revenue 34 % 37 % 34 % 30 % 30 % (300) bps 400 bps 34 % 29 % 500 bps CAPITAL RATIOS - PERIOD-END (PRELIMINARY) CET1 capital ratio 10.0 % 9.8 % 9.6 % 9.4 % 10.0 % Tier 1 capital ratio 11.3 11.2 10.9 10.5 11.1 Total capital ratio 13.4 13.3 13.1 12.5 13.0 Tier 1 leverage ratio 9.4 9.5 9.3 9.6 10.0 Tangible common equity ratio 7.9 8.0 7.9 8.0 8.7 SELECTED BALANCE SHEET DATA Loans-to-deposits ratio (period-end balances) 83.64 % 86.81 % 87.53 % 95.54 % 95.03 % (317) bps (1,139) bps 83.64 % 95.03 % (1,139) bps Loans-to-deposits ratio (average balances) 84.99 88.36 90.93 95.60 94.63 (337) bps (964) bps 89.77 95.62 (585) bps Full-time equivalent colleagues 17,584 17,930 18,312 17,863 17,997 (346) (2) (413) (2) 17,584 17,997 (413) (2) 1 Net interest income and net interest margin is presented on a fully taxable-equivalent ( FTE ) basis using the federal statutory tax rate of 21%. The FTE impact is predominantly attributable to commercial loans for the periods presented. 2 These are non-GAAP financial measures. For further information on these measures, refer to Non-GAAP Financial Measures and Reconciliations. 4CONSOLIDATED FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio and headcount data) QUARTERLY TRENDS FULL YEAR 4Q20 Change 2020 Change 4Q20 3Q20 2Q20 1Q20 4Q19 3Q20 4Q19 2020 2019 2019 $/bps % $/bps % $/bps % FINANCIAL RATIOS Net interest margin 2.75 % 2.82 % 2.87 % 3.09 % 3.04 % (7) bps (29) bps 2.88 % 3.14 % (26) bps 1 Net interest margin, FTE 2.75 2.83 2.88 3.10 3.06 (8) bps (31) bps 2.89 3.16 (27) bps Return on average common equity 8.20 5.60 4.44 0.24 8.30 260 bps (10) bps 4.65 8.45 (380) bps 2 Return on average common equity, Underlying 8.66 6.05 4.63 0.74 8.36 261 bps 30 bps 5.05 8.53 (348) bps Return on average tangible common equity 12.20 8.33 6.62 0.36 12.39 387 bps (19) bps 6.93 12.64 (571) bps Return on average tangible common equity, 2 Underlying 12.89 9.00 6.90 1.10 12.49 389 bps 40 bps 7.53 12.76 (523) bps Return on average total assets 1.00 0.70 0.57 0.08 1.08 30 bps (8) bps 0.60 1.10 (50) bps 2 Return on average total assets, Underlying 1.05 0.76 0.59 0.14 1.09 29 bps (4) bps 0.65 1.11 (46) bps Return on average total tangible assets 1.04 0.73 0.59 0.09 1.13 31 bps (9) bps 0.62 1.15 (53) bps 2 Return on average total tangible assets, Underlying 1.10 0.79 0.61 0.15 1.14 31 bps (4) bps 0.67 1.16 (49) bps Effective income tax rate 20.16 16.10 17.69 24.13 16.76 406 bps 340 bps 18.54 20.43 (189) bps 2 Effective income tax rate, Underlying 21.70 16.79 19.36 24.52 21.52 491 bps 18 bps 19.92 22.03 (211) bps Efficiency ratio 59.28 55.18 55.91 61.10 60.28 410 bps (100) bps 57.80 59.28 (148) bps 2 Efficiency ratio, Underlying 56.83 53.44 54.85 59.08 58.02 339 bps (119) bps 55.99 58.23 (224) bps Noninterest income as a % of total revenue 34 % 37 % 34 % 30 % 30 % (300) bps 400 bps 34 % 29 % 500 bps CAPITAL RATIOS - PERIOD-END (PRELIMINARY) CET1 capital ratio 10.0 % 9.8 % 9.6 % 9.4 % 10.0 % Tier 1 capital ratio 11.3 11.2 10.9 10.5 11.1 Total capital ratio 13.4 13.3 13.1 12.5 13.0 Tier 1 leverage ratio 9.4 9.5 9.3 9.6 10.0 Tangible common equity ratio 7.9 8.0 7.9 8.0 8.7 SELECTED BALANCE SHEET DATA Loans-to-deposits ratio (period-end balances) 83.64 % 86.81 % 87.53 % 95.54 % 95.03 % (317) bps (1,139) bps 83.64 % 95.03 % (1,139) bps Loans-to-deposits ratio (average balances) 84.99 88.36 90.93 95.60 94.63 (337) bps (964) bps 89.77 95.62 (585) bps Full-time equivalent colleagues 17,584 17,930 18,312 17,863 17,997 (346) (2) (413) (2) 17,584 17,997 (413) (2) 1 Net interest income and net interest margin is presented on a fully taxable-equivalent ( FTE ) basis using the federal statutory tax rate of 21%. The FTE impact is predominantly attributable to commercial loans for the periods presented. 2 These are non-GAAP financial measures. For further information on these measures, refer to Non-GAAP Financial Measures and Reconciliations. 4
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (in millions) QUARTERLY TRENDS FULL YEAR 4Q20 Change 2020 Change 4Q20 3Q20 2Q20 1Q20 4Q19 3Q20 4Q19 2020 2019 2019 $ % $ % $ % INTEREST INCOME Interest and fees on loans and leases $1,105 $1,120 $1,192 $1,302 $1,312 ($15) (1%) ($207) (16%) $4,719 $5,441 ($722) (13%) Interest and fees on loans held for sale 19 21 20 15 18 (2) (10) 1 6 75 63 12 19 Interest and fees on other loans held for sale 1 16 7 9 5 (15) (94) (4) (80) 33 13 20 154 Investment securities 121 121 130 147 159 — — (38) (24) 519 642 (123) (19) Interest-bearing deposits in banks 3 2 1 5 7 1 50 (4) (57) 11 30 (19) (63) Total interest income 1,249 1,280 1,350 1,478 1,501 (31) (2) (252) (17) 5,357 6,189 (832) (13) INTEREST EXPENSE Deposits 69 89 124 227 263 (20) (22) (194) (74) 509 1,155 (646) (56) Short-term borrowed funds 1 — — 1 2 1 100 (1) (50) 2 10 (8) (80) Long-term borrowed funds 50 54 66 90 93 (4) (7) (43) (46) 260 410 (150) (37) Total interest expense 120 143 190 318 358 (23) (16) (238) (66) 771 1,575 (804) (51) Net interest income 1,129 1,137 1,160 1,160 1,143 (8) (1) (14) (1) 4,586 4,614 (28) (1) NONINTEREST INCOME Mortgage banking fees 193 287 276 159 80 (94) (33) 113 141 915 302 613 203 Service charges and fees 104 97 84 118 128 7 7 (24) (19) 403 505 (102) (20) Capital markets fees 88 58 61 43 66 30 52 22 33 250 216 34 16 Card fees 56 57 48 56 64 (1) (2) (8) (13) 217 254 (37) (15) Trust and investment services fees 52 53 45 53 52 (1) (2) — — 203 202 1 — Letter of credit and loan fees 38 37 31 34 35 1 3 3 9 140 135 5 4 Foreign exchange and interest rate products 35 27 34 24 49 8 30 (14) (29) 120 155 (35) (23) Securities gains, net — 1 3 — 4 (1) (100) (4) (100) 4 19 (15) (79) Other income 12 37 8 10 16 (25) (68) (4) (25) 67 89 (22) (25) Total noninterest income 578 654 590 497 494 (76) (12) 84 17 2,319 1,877 442 24 TOTAL REVENUE 1,707 1,791 1,750 1,657 1,637 (84) (5) 70 4 6,905 6,491 414 6 Provision for credit losses 124 428 464 600 110 (304) (71) 14 13 1,616 393 1,223 NM NONINTEREST EXPENSE Salaries and employee benefits 537 524 513 549 502 13 2 35 7 2,123 2,026 97 5 Equipment and software expense 141 149 142 133 133 (8) (5) 8 6 565 514 51 10 Outside services 148 139 131 135 142 9 6 6 4 553 498 55 11 Occupancy 84 81 82 84 88 3 4 (4) (5) 331 333 (2) (1) Other operating expense 102 95 111 111 121 7 7 (19) (16) 419 476 (57) (12) Total noninterest expense 1,012 988 979 1,012 986 24 2 26 3 3,991 3,847 144 4 Income before income tax expense 571 375 307 45 541 196 52 30 6 1,298 2,251 (953) (42) Income tax expense 115 61 54 11 91 54 89 24 26 241 460 (219) (48) Net income $456 $314 $253 $34 $450 $142 45% $6 1% $1,057 $1,791 ($734) (41%) 1 Net income, Underlying $480 $338 $263 $59 $454 $142 42% $26 6% $1,140 $1,808 ($668) (37%) Net income available to common stockholders $424 $289 $225 $12 $427 $135 47% ($3) (1%) $950 $1,718 ($768) (45%) 1 Net income available to common stockholders, Underlying $448 $313 $235 $37 $431 $135 43% $17 4% $1,033 $1,735 ($702) (40%) 1 These are non-GAAP financial measures. For further information on these measures, refer to Non-GAAP Financial Measures and Reconciliations. 5CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (in millions) QUARTERLY TRENDS FULL YEAR 4Q20 Change 2020 Change 4Q20 3Q20 2Q20 1Q20 4Q19 3Q20 4Q19 2020 2019 2019 $ % $ % $ % INTEREST INCOME Interest and fees on loans and leases $1,105 $1,120 $1,192 $1,302 $1,312 ($15) (1%) ($207) (16%) $4,719 $5,441 ($722) (13%) Interest and fees on loans held for sale 19 21 20 15 18 (2) (10) 1 6 75 63 12 19 Interest and fees on other loans held for sale 1 16 7 9 5 (15) (94) (4) (80) 33 13 20 154 Investment securities 121 121 130 147 159 — — (38) (24) 519 642 (123) (19) Interest-bearing deposits in banks 3 2 1 5 7 1 50 (4) (57) 11 30 (19) (63) Total interest income 1,249 1,280 1,350 1,478 1,501 (31) (2) (252) (17) 5,357 6,189 (832) (13) INTEREST EXPENSE Deposits 69 89 124 227 263 (20) (22) (194) (74) 509 1,155 (646) (56) Short-term borrowed funds 1 — — 1 2 1 100 (1) (50) 2 10 (8) (80) Long-term borrowed funds 50 54 66 90 93 (4) (7) (43) (46) 260 410 (150) (37) Total interest expense 120 143 190 318 358 (23) (16) (238) (66) 771 1,575 (804) (51) Net interest income 1,129 1,137 1,160 1,160 1,143 (8) (1) (14) (1) 4,586 4,614 (28) (1) NONINTEREST INCOME Mortgage banking fees 193 287 276 159 80 (94) (33) 113 141 915 302 613 203 Service charges and fees 104 97 84 118 128 7 7 (24) (19) 403 505 (102) (20) Capital markets fees 88 58 61 43 66 30 52 22 33 250 216 34 16 Card fees 56 57 48 56 64 (1) (2) (8) (13) 217 254 (37) (15) Trust and investment services fees 52 53 45 53 52 (1) (2) — — 203 202 1 — Letter of credit and loan fees 38 37 31 34 35 1 3 3 9 140 135 5 4 Foreign exchange and interest rate products 35 27 34 24 49 8 30 (14) (29) 120 155 (35) (23) Securities gains, net — 1 3 — 4 (1) (100) (4) (100) 4 19 (15) (79) Other income 12 37 8 10 16 (25) (68) (4) (25) 67 89 (22) (25) Total noninterest income 578 654 590 497 494 (76) (12) 84 17 2,319 1,877 442 24 TOTAL REVENUE 1,707 1,791 1,750 1,657 1,637 (84) (5) 70 4 6,905 6,491 414 6 Provision for credit losses 124 428 464 600 110 (304) (71) 14 13 1,616 393 1,223 NM NONINTEREST EXPENSE Salaries and employee benefits 537 524 513 549 502 13 2 35 7 2,123 2,026 97 5 Equipment and software expense 141 149 142 133 133 (8) (5) 8 6 565 514 51 10 Outside services 148 139 131 135 142 9 6 6 4 553 498 55 11 Occupancy 84 81 82 84 88 3 4 (4) (5) 331 333 (2) (1) Other operating expense 102 95 111 111 121 7 7 (19) (16) 419 476 (57) (12) Total noninterest expense 1,012 988 979 1,012 986 24 2 26 3 3,991 3,847 144 4 Income before income tax expense 571 375 307 45 541 196 52 30 6 1,298 2,251 (953) (42) Income tax expense 115 61 54 11 91 54 89 24 26 241 460 (219) (48) Net income $456 $314 $253 $34 $450 $142 45% $6 1% $1,057 $1,791 ($734) (41%) 1 Net income, Underlying $480 $338 $263 $59 $454 $142 42% $26 6% $1,140 $1,808 ($668) (37%) Net income available to common stockholders $424 $289 $225 $12 $427 $135 47% ($3) (1%) $950 $1,718 ($768) (45%) 1 Net income available to common stockholders, Underlying $448 $313 $235 $37 $431 $135 43% $17 4% $1,033 $1,735 ($702) (40%) 1 These are non-GAAP financial measures. For further information on these measures, refer to Non-GAAP Financial Measures and Reconciliations. 5
CONSOLIDATED BALANCE SHEETS (unaudited) (in millions) PERIOD-END BALANCES AS OF DECEMBER 31, 2020 CHANGE Dec 31, 2020 Sept 30, 2020 June 30, 2020 Mar 31, 2020 Dec 31, 2019 September 30, 2020 December 31, 2019 $ % $ % ASSETS Cash and due from banks $1,037 $904 $1,088 $1,155 $1,175 $133 15% ($138) (12%) Interest-bearing cash and due from banks 11,696 8,312 6,358 2,903 2,211 3,384 41 9,485 NM Interest-bearing deposits in banks 306 328 475 280 297 (22) (7) 9 3 Debt securities available for sale, at fair value 22,942 22,884 22,144 22,307 20,613 58 — 2,329 11 Debt securities held to maturity 3,235 2,578 2,856 3,071 3,202 657 25 33 1 Loans held for sale, at fair value 3,564 3,587 3,631 2,911 1,946 (23) (1) 1,618 83 Other loans held for sale 439 127 1,362 350 1,384 312 246 (945) (68) Loans and leases 123,090 124,071 125,713 127,528 119,088 (981) (1) 4,002 3 Less: Allowance for loan and lease losses (2,443) (2,542) (2,448) (2,171) (1,252) 99 (4) (1,191) 95 Net loans and leases 120,647 121,529 123,265 125,357 117,836 (882) (1) 2,811 2 Derivative assets 1,915 2,030 2,069 1,968 807 (115) (6) 1,108 137 Premises and equipment 759 747 751 746 761 12 2 (2) — Bank-owned life insurance 1,756 1,751 1,739 1,736 1,725 5 — 31 2 Goodwill 7,050 7,050 7,050 7,050 7,044 — — 6 — 1 Other assets 8,003 7,401 7,086 6,885 6,732 602 8 1,271 19 TOTAL ASSETS $183,349 $179,228 $179,874 $176,719 $165,733 $4,121 2% $17,616 11% LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES Deposits: Noninterest-bearing $43,831 $41,249 $40,545 $32,398 $29,233 $2,582 6% $14,598 50% Interest-bearing 103,333 101,672 103,073 101,077 96,080 1,661 2 7,253 8 Total deposits 147,164 142,921 143,618 133,475 125,313 4,243 3 21,851 17 Short-term borrowed funds 243 252 255 1,059 274 (9) (4) (31) (11) Derivative liabilities 128 100 198 234 120 28 28 8 7 Deferred taxes, net 629 638 709 782 866 (9) (1) (237) (27) Long-term borrowed funds: FHLB advances 19 19 6 8,007 5,008 — — (4,989) (100) Senior debt 6,740 7,504 7,519 6,775 7,382 (764) (10) (642) (9) Subordinated debt and other debt 1,587 1,586 1,677 1,655 1,657 1 — (70) (4) Total long-term borrowed funds 8,346 9,109 9,202 16,437 14,047 (763) (8) (5,701) (41) 2 Other liabilities 4,166 3,739 3,474 2,782 2,912 427 11 1,254 43 TOTAL LIABILITIES 160,676 156,759 157,456 154,769 143,532 3,917 2 17,144 12 STOCKHOLDERS' EQUITY Preferred stock: $25.00 par value, 100,000,000 shares authorized for each of the periods presented 1,965 1,965 1,965 1,570 1,570 — — 395 25 Common stock: $0.01 par value, 1,000,000,000 shares authorized for each of the periods presented 6 6 6 6 6 — — — — Additional paid-in capital 18,940 18,922 18,908 18,901 18,891 18 — 49 — Retained earnings 6,445 6,189 6,068 6,011 6,498 256 4 (53) (1) Treasury stock, at cost (4,623) (4,623) (4,623) (4,623) (4,353) — — (270) (6) Accumulated other comprehensive (loss) income (60) 10 94 85 (411) (70) NM 351 85 TOTAL STOCKHOLDERS' EQUITY 22,673 22,469 22,418 21,950 22,201 204 1 472 2 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $183,349 $179,228 $179,874 $176,719 $165,733 $4,121 2% $17,616 11% Memo: Total tangible common equity $13,979 $13,771 $13,716 $13,639 $13,893 $208 2% $86 1% 1 In the fourth quarter of 2020, we reclassified due from broker as well as equity securities, at fair value and at cost, to other assets. Prior periods have been adjusted to conform with the current period presentation. 2 In the fourth quarter of 2020, we reclassified due to broker to other liabilities. Prior periods have been adjusted to conform with the current period presentation. 6CONSOLIDATED BALANCE SHEETS (unaudited) (in millions) PERIOD-END BALANCES AS OF DECEMBER 31, 2020 CHANGE Dec 31, 2020 Sept 30, 2020 June 30, 2020 Mar 31, 2020 Dec 31, 2019 September 30, 2020 December 31, 2019 $ % $ % ASSETS Cash and due from banks $1,037 $904 $1,088 $1,155 $1,175 $133 15% ($138) (12%) Interest-bearing cash and due from banks 11,696 8,312 6,358 2,903 2,211 3,384 41 9,485 NM Interest-bearing deposits in banks 306 328 475 280 297 (22) (7) 9 3 Debt securities available for sale, at fair value 22,942 22,884 22,144 22,307 20,613 58 — 2,329 11 Debt securities held to maturity 3,235 2,578 2,856 3,071 3,202 657 25 33 1 Loans held for sale, at fair value 3,564 3,587 3,631 2,911 1,946 (23) (1) 1,618 83 Other loans held for sale 439 127 1,362 350 1,384 312 246 (945) (68) Loans and leases 123,090 124,071 125,713 127,528 119,088 (981) (1) 4,002 3 Less: Allowance for loan and lease losses (2,443) (2,542) (2,448) (2,171) (1,252) 99 (4) (1,191) 95 Net loans and leases 120,647 121,529 123,265 125,357 117,836 (882) (1) 2,811 2 Derivative assets 1,915 2,030 2,069 1,968 807 (115) (6) 1,108 137 Premises and equipment 759 747 751 746 761 12 2 (2) — Bank-owned life insurance 1,756 1,751 1,739 1,736 1,725 5 — 31 2 Goodwill 7,050 7,050 7,050 7,050 7,044 — — 6 — 1 Other assets 8,003 7,401 7,086 6,885 6,732 602 8 1,271 19 TOTAL ASSETS $183,349 $179,228 $179,874 $176,719 $165,733 $4,121 2% $17,616 11% LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES Deposits: Noninterest-bearing $43,831 $41,249 $40,545 $32,398 $29,233 $2,582 6% $14,598 50% Interest-bearing 103,333 101,672 103,073 101,077 96,080 1,661 2 7,253 8 Total deposits 147,164 142,921 143,618 133,475 125,313 4,243 3 21,851 17 Short-term borrowed funds 243 252 255 1,059 274 (9) (4) (31) (11) Derivative liabilities 128 100 198 234 120 28 28 8 7 Deferred taxes, net 629 638 709 782 866 (9) (1) (237) (27) Long-term borrowed funds: FHLB advances 19 19 6 8,007 5,008 — — (4,989) (100) Senior debt 6,740 7,504 7,519 6,775 7,382 (764) (10) (642) (9) Subordinated debt and other debt 1,587 1,586 1,677 1,655 1,657 1 — (70) (4) Total long-term borrowed funds 8,346 9,109 9,202 16,437 14,047 (763) (8) (5,701) (41) 2 Other liabilities 4,166 3,739 3,474 2,782 2,912 427 11 1,254 43 TOTAL LIABILITIES 160,676 156,759 157,456 154,769 143,532 3,917 2 17,144 12 STOCKHOLDERS' EQUITY Preferred stock: $25.00 par value, 100,000,000 shares authorized for each of the periods presented 1,965 1,965 1,965 1,570 1,570 — — 395 25 Common stock: $0.01 par value, 1,000,000,000 shares authorized for each of the periods presented 6 6 6 6 6 — — — — Additional paid-in capital 18,940 18,922 18,908 18,901 18,891 18 — 49 — Retained earnings 6,445 6,189 6,068 6,011 6,498 256 4 (53) (1) Treasury stock, at cost (4,623) (4,623) (4,623) (4,623) (4,353) — — (270) (6) Accumulated other comprehensive (loss) income (60) 10 94 85 (411) (70) NM 351 85 TOTAL STOCKHOLDERS' EQUITY 22,673 22,469 22,418 21,950 22,201 204 1 472 2 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $183,349 $179,228 $179,874 $176,719 $165,733 $4,121 2% $17,616 11% Memo: Total tangible common equity $13,979 $13,771 $13,716 $13,639 $13,893 $208 2% $86 1% 1 In the fourth quarter of 2020, we reclassified due from broker as well as equity securities, at fair value and at cost, to other assets. Prior periods have been adjusted to conform with the current period presentation. 2 In the fourth quarter of 2020, we reclassified due to broker to other liabilities. Prior periods have been adjusted to conform with the current period presentation. 6
LOANS AND DEPOSITS (in millions) PERIOD-END BALANCES AS OF DECEMBER 31, 2020 CHANGE Dec 31, 2020 Sept 30, 2020 June 30, 2020 Mar 31, 2020 Dec 31, 2019 Sept 30, 2020 December 31, 2019 $ % $ % LOANS AND LEASES Commercial and industrial¹ $44,173 $45,185 $48,017 $49,092 $41,479 ($1,012) (2%) $2,694 6% Commercial real estate 14,652 14,889 14,485 14,502 13,522 (237) (2) 1,130 8 Leases 1,968 2,288 2,428 2,438 2,537 (320) (14) (569) (22) Total commercial 60,793 62,362 64,930 66,032 57,538 (1,569) (3) 3,255 6 Residential mortgages 19,539 19,633 19,245 18,721 19,083 (94) — 456 2 Home equity 12,149 12,322 12,541 12,992 13,154 (173) (1) (1,005) (8) Automobile 12,153 12,035 12,028 12,157 12,120 118 1 33 — Education 12,308 11,631 10,591 10,887 10,347 677 6 1,961 19 Other retail 6,148 6,088 6,378 6,739 6,846 60 1 (698) (10) Total retail 62,297 61,709 60,783 61,496 61,550 588 1 747 1 Total loans and leases $123,090 $124,071 $125,713 $127,528 $119,088 ($981) (1%) $4,002 3% Loans held for sale, at fair value 3,564 3,587 3,631 2,911 1,946 (23) (1) 1,618 83 Other loans held for sale 439 127 1,362 350 1,384 312 246 (945) (68) Loans and leases and loans held for sale $127,093 $127,785 $130,706 $130,789 $122,418 ($692) (1%) $4,675 4% DEPOSITS Demand $43,831 $41,249 $40,545 $32,398 $29,233 $2,582 6% $14,598 50% Checking with interest 27,204 27,141 27,200 25,358 24,840 63 — 2,364 10 Regular savings 18,044 17,237 16,665 14,702 13,779 807 5 4,265 31 Money market accounts 48,569 46,400 44,965 42,972 38,725 2,169 5 9,844 25 Term deposits 9,516 10,894 14,243 18,045 18,736 (1,378) (13) (9,220) (49) Total deposits $147,164 $142,921 $143,618 $133,475 $125,313 $4,243 3% $21,851 17% 1 The commercial loan class has been renamed commercial and industrial, and the commercial loans and leases loan segment has been renamed commercial. 7LOANS AND DEPOSITS (in millions) PERIOD-END BALANCES AS OF DECEMBER 31, 2020 CHANGE Dec 31, 2020 Sept 30, 2020 June 30, 2020 Mar 31, 2020 Dec 31, 2019 Sept 30, 2020 December 31, 2019 $ % $ % LOANS AND LEASES Commercial and industrial¹ $44,173 $45,185 $48,017 $49,092 $41,479 ($1,012) (2%) $2,694 6% Commercial real estate 14,652 14,889 14,485 14,502 13,522 (237) (2) 1,130 8 Leases 1,968 2,288 2,428 2,438 2,537 (320) (14) (569) (22) Total commercial 60,793 62,362 64,930 66,032 57,538 (1,569) (3) 3,255 6 Residential mortgages 19,539 19,633 19,245 18,721 19,083 (94) — 456 2 Home equity 12,149 12,322 12,541 12,992 13,154 (173) (1) (1,005) (8) Automobile 12,153 12,035 12,028 12,157 12,120 118 1 33 — Education 12,308 11,631 10,591 10,887 10,347 677 6 1,961 19 Other retail 6,148 6,088 6,378 6,739 6,846 60 1 (698) (10) Total retail 62,297 61,709 60,783 61,496 61,550 588 1 747 1 Total loans and leases $123,090 $124,071 $125,713 $127,528 $119,088 ($981) (1%) $4,002 3% Loans held for sale, at fair value 3,564 3,587 3,631 2,911 1,946 (23) (1) 1,618 83 Other loans held for sale 439 127 1,362 350 1,384 312 246 (945) (68) Loans and leases and loans held for sale $127,093 $127,785 $130,706 $130,789 $122,418 ($692) (1%) $4,675 4% DEPOSITS Demand $43,831 $41,249 $40,545 $32,398 $29,233 $2,582 6% $14,598 50% Checking with interest 27,204 27,141 27,200 25,358 24,840 63 — 2,364 10 Regular savings 18,044 17,237 16,665 14,702 13,779 807 5 4,265 31 Money market accounts 48,569 46,400 44,965 42,972 38,725 2,169 5 9,844 25 Term deposits 9,516 10,894 14,243 18,045 18,736 (1,378) (13) (9,220) (49) Total deposits $147,164 $142,921 $143,618 $133,475 $125,313 $4,243 3% $21,851 17% 1 The commercial loan class has been renamed commercial and industrial, and the commercial loans and leases loan segment has been renamed commercial. 7
AVERAGE BALANCE SHEETS (in millions) QUARTERLY TRENDS FULL YEAR 4Q20 Change 2020 Change 4Q20 3Q20 2Q20 1Q20 4Q19 3Q20 4Q19 2020 2019 2019 $ % $ % $ % ASSETS Interest-bearing cash and due from banks and deposits in banks $11,303 $6,250 $5,231 $1,859 $1,970 $5,053 81% $9,333 NM $6,175 $1,544 $4,631 NM Taxable investment securities 25,471 24,654 25,180 25,339 25,305 817 3 166 1 25,160 25,425 (265) (1) Non-taxable investment securities 3 4 4 4 5 (1) (25) (2) (40) 4 5 (1) (20) Total investment securities 25,474 24,658 25,184 25,343 25,310 816 3 164 1 25,164 25,430 (266) (1) Investment securities and interest-bearing deposits 36,777 30,908 30,415 27,202 27,280 5,869 19 9,497 35 31,339 26,974 4,365 16 Commercial and industrial 44,594 46,844 50,443 43,152 42,012 (2,250) (5) 2,582 6 46,255 41,702 4,553 11 Commercial real estate 14,745 14,644 14,540 13,876 13,103 101 1 1,642 13 14,452 13,160 1,292 10 Leases 2,176 2,373 2,426 2,482 2,546 (197) (8) (370) (15) 2,365 2,694 (329) (12) Total commercial 61,515 63,861 67,409 59,510 57,661 (2,346) (4) 3,854 7 63,072 57,556 5,516 10 Residential mortgages 19,543 19,427 18,872 18,866 19,495 116 1 48 — 19,178 19,308 (130) (1) Home equity 12,239 12,416 12,736 13,042 13,265 (177) (1) (1,026) (8) 12,607 13,645 (1,038) (8) Automobile 12,066 12,019 11,998 12,173 12,099 47 — (33) — 12,064 12,047 17 — Education 11,931 10,929 11,183 10,610 9,888 1,002 9 2,043 21 11,165 9,415 1,750 19 Other retail 6,167 6,260 6,557 6,854 6,497 (93) (1) (330) (5) 6,458 5,929 529 9 Total retail 61,946 61,051 61,346 61,545 61,244 895 1 702 1 61,472 60,344 1,128 2 Total loans and leases 123,461 124,912 128,755 121,055 118,905 (1,451) (1) 4,556 4 124,544 117,900 6,644 6 Loans held for sale, at fair value 3,185 3,295 2,710 1,890 2,209 (110) (3) 976 44 2,772 1,689 1,083 64 Other loans held for sale 110 1,061 510 799 517 (951) (90) (407) (79) 620 251 369 147 Total interest-earning assets 163,533 160,176 162,390 150,946 148,911 3,357 2 14,622 10 159,275 146,814 12,461 8 Allowance for loan and lease losses (2,541) (2,444) (2,172) (1,708) (1,260) (97) (4) (1,281) (102) (2,218) (1,244) (974) (78) Goodwill 7,050 7,050 7,050 7,046 7,044 — — 6 — 7,049 7,036 13 — Other noninterest-earning assets 13,019 12,893 12,525 10,893 9,951 126 1 3,068 31 12,336 9,570 2,766 29 TOTAL ASSETS $181,061 $177,675 $179,793 $167,177 $164,646 $3,386 2% $16,415 10% $176,442 $162,176 $14,266 9% LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES Checking with interest $26,432 $26,638 $26,312 $24,612 $23,545 ($206) (1%) $2,887 12% $26,002 $23,470 $2,532 11% Money market accounts 48,667 45,187 45,187 39,839 38,809 3,480 8 9,858 25 44,732 36,613 8,119 22 Regular savings 17,566 16,902 15,883 14,201 13,582 664 4 3,984 29 16,144 13,247 2,897 22 Term deposits 10,191 12,032 16,470 18,616 19,788 (1,841) (15) (9,597) (48) 14,309 21,035 (6,726) (32) Total interest-bearing deposits 102,856 100,759 103,852 97,268 95,724 2,097 2 7,132 7 101,187 94,365 6,822 7 Short-term borrowed funds 232 240 222 644 504 (8) (3) (272) (54) 334 665 (331) (50) FHLB advances 19 6 2,595 5,138 3,259 13 217 (3,240) (99) 1,929 3,637 (1,708) (47) Senior debt 6,845 7,515 7,499 7,263 7,914 (670) (9) (1,069) (14) 7,280 7,722 (442) (6) Subordinated debt and other debt 1,586 1,675 1,661 1,656 1,657 (89) (5) (71) (4) 1,644 1,655 (11) (1) Total long-term borrowed funds 8,450 9,196 11,755 14,057 12,830 (746) (8) (4,380) (34) 10,853 13,014 (2,161) (17) Total borrowed funds 8,682 9,436 11,977 14,701 13,334 (754) (8) (4,652) (35) 11,187 13,679 (2,492) (18) Total interest-bearing liabilities 111,538 110,195 115,829 111,969 109,058 1,343 1 2,480 2 112,374 108,044 4,330 4 Total demand deposits 42,411 40,608 37,745 29,362 29,928 1,803 4 12,483 42 37,553 28,936 8,617 30 Other liabilities 4,600 4,374 4,086 4,053 3,819 226 5 781 20 4,280 3,683 597 16 TOTAL LIABILITIES 158,549 155,177 157,660 145,384 142,805 3,372 2 15,744 11 154,207 140,663 13,544 10 STOCKHOLDERS' EQUITY 22,512 22,498 22,133 21,793 21,841 14 — 671 3 22,235 21,513 722 3 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $181,061 $177,675 $179,793 $167,177 $164,646 $3,386 2% $16,415 10% $176,442 $162,176 $14,266 9% Memo: Total loans and leases, including loans held for sale $126,756 $129,268 $131,975 $123,744 $121,631 ($2,512) (2%) $5,125 4% $127,936 $119,840 $8,096 7% Total deposits (interest-bearing and demand) $145,267 $141,367 $141,597 $126,630 $125,652 $3,900 3% $19,615 16% $138,740 $123,301 $15,439 13% Total average tangible common equity $13,814 $13,797 $13,706 $13,484 $13,660 $17 —% $154 1% $13,701 $13,589 $112 1% 8AVERAGE BALANCE SHEETS (in millions) QUARTERLY TRENDS FULL YEAR 4Q20 Change 2020 Change 4Q20 3Q20 2Q20 1Q20 4Q19 3Q20 4Q19 2020 2019 2019 $ % $ % $ % ASSETS Interest-bearing cash and due from banks and deposits in banks $11,303 $6,250 $5,231 $1,859 $1,970 $5,053 81% $9,333 NM $6,175 $1,544 $4,631 NM Taxable investment securities 25,471 24,654 25,180 25,339 25,305 817 3 166 1 25,160 25,425 (265) (1) Non-taxable investment securities 3 4 4 4 5 (1) (25) (2) (40) 4 5 (1) (20) Total investment securities 25,474 24,658 25,184 25,343 25,310 816 3 164 1 25,164 25,430 (266) (1) Investment securities and interest-bearing deposits 36,777 30,908 30,415 27,202 27,280 5,869 19 9,497 35 31,339 26,974 4,365 16 Commercial and industrial 44,594 46,844 50,443 43,152 42,012 (2,250) (5) 2,582 6 46,255 41,702 4,553 11 Commercial real estate 14,745 14,644 14,540 13,876 13,103 101 1 1,642 13 14,452 13,160 1,292 10 Leases 2,176 2,373 2,426 2,482 2,546 (197) (8) (370) (15) 2,365 2,694 (329) (12) Total commercial 61,515 63,861 67,409 59,510 57,661 (2,346) (4) 3,854 7 63,072 57,556 5,516 10 Residential mortgages 19,543 19,427 18,872 18,866 19,495 116 1 48 — 19,178 19,308 (130) (1) Home equity 12,239 12,416 12,736 13,042 13,265 (177) (1) (1,026) (8) 12,607 13,645 (1,038) (8) Automobile 12,066 12,019 11,998 12,173 12,099 47 — (33) — 12,064 12,047 17 — Education 11,931 10,929 11,183 10,610 9,888 1,002 9 2,043 21 11,165 9,415 1,750 19 Other retail 6,167 6,260 6,557 6,854 6,497 (93) (1) (330) (5) 6,458 5,929 529 9 Total retail 61,946 61,051 61,346 61,545 61,244 895 1 702 1 61,472 60,344 1,128 2 Total loans and leases 123,461 124,912 128,755 121,055 118,905 (1,451) (1) 4,556 4 124,544 117,900 6,644 6 Loans held for sale, at fair value 3,185 3,295 2,710 1,890 2,209 (110) (3) 976 44 2,772 1,689 1,083 64 Other loans held for sale 110 1,061 510 799 517 (951) (90) (407) (79) 620 251 369 147 Total interest-earning assets 163,533 160,176 162,390 150,946 148,911 3,357 2 14,622 10 159,275 146,814 12,461 8 Allowance for loan and lease losses (2,541) (2,444) (2,172) (1,708) (1,260) (97) (4) (1,281) (102) (2,218) (1,244) (974) (78) Goodwill 7,050 7,050 7,050 7,046 7,044 — — 6 — 7,049 7,036 13 — Other noninterest-earning assets 13,019 12,893 12,525 10,893 9,951 126 1 3,068 31 12,336 9,570 2,766 29 TOTAL ASSETS $181,061 $177,675 $179,793 $167,177 $164,646 $3,386 2% $16,415 10% $176,442 $162,176 $14,266 9% LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES Checking with interest $26,432 $26,638 $26,312 $24,612 $23,545 ($206) (1%) $2,887 12% $26,002 $23,470 $2,532 11% Money market accounts 48,667 45,187 45,187 39,839 38,809 3,480 8 9,858 25 44,732 36,613 8,119 22 Regular savings 17,566 16,902 15,883 14,201 13,582 664 4 3,984 29 16,144 13,247 2,897 22 Term deposits 10,191 12,032 16,470 18,616 19,788 (1,841) (15) (9,597) (48) 14,309 21,035 (6,726) (32) Total interest-bearing deposits 102,856 100,759 103,852 97,268 95,724 2,097 2 7,132 7 101,187 94,365 6,822 7 Short-term borrowed funds 232 240 222 644 504 (8) (3) (272) (54) 334 665 (331) (50) FHLB advances 19 6 2,595 5,138 3,259 13 217 (3,240) (99) 1,929 3,637 (1,708) (47) Senior debt 6,845 7,515 7,499 7,263 7,914 (670) (9) (1,069) (14) 7,280 7,722 (442) (6) Subordinated debt and other debt 1,586 1,675 1,661 1,656 1,657 (89) (5) (71) (4) 1,644 1,655 (11) (1) Total long-term borrowed funds 8,450 9,196 11,755 14,057 12,830 (746) (8) (4,380) (34) 10,853 13,014 (2,161) (17) Total borrowed funds 8,682 9,436 11,977 14,701 13,334 (754) (8) (4,652) (35) 11,187 13,679 (2,492) (18) Total interest-bearing liabilities 111,538 110,195 115,829 111,969 109,058 1,343 1 2,480 2 112,374 108,044 4,330 4 Total demand deposits 42,411 40,608 37,745 29,362 29,928 1,803 4 12,483 42 37,553 28,936 8,617 30 Other liabilities 4,600 4,374 4,086 4,053 3,819 226 5 781 20 4,280 3,683 597 16 TOTAL LIABILITIES 158,549 155,177 157,660 145,384 142,805 3,372 2 15,744 11 154,207 140,663 13,544 10 STOCKHOLDERS' EQUITY 22,512 22,498 22,133 21,793 21,841 14 — 671 3 22,235 21,513 722 3 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $181,061 $177,675 $179,793 $167,177 $164,646 $3,386 2% $16,415 10% $176,442 $162,176 $14,266 9% Memo: Total loans and leases, including loans held for sale $126,756 $129,268 $131,975 $123,744 $121,631 ($2,512) (2%) $5,125 4% $127,936 $119,840 $8,096 7% Total deposits (interest-bearing and demand) $145,267 $141,367 $141,597 $126,630 $125,652 $3,900 3% $19,615 16% $138,740 $123,301 $15,439 13% Total average tangible common equity $13,814 $13,797 $13,706 $13,484 $13,660 $17 —% $154 1% $13,701 $13,589 $112 1% 8
AVERAGE ANNUALIZED YIELDS AND RATES (in millions, except rates) QUARTERLY TRENDS FULL YEAR 4Q20 3Q20 2Q20 1Q20 4Q19 2020 2019 Income/ Income/ Income/ Income/ Income/ Income/ Income/ Rate Expense Rate Expense Rate Expense Rate Expense Rate Expense Rate Expense Rate Expense INTEREST-EARNING ASSETS Interest-bearing cash and due from banks and deposits in banks 0.10% $3 0.10% $2 0.09% $1 1.12% $5 1.49% $7 0.18% $11 1.94% $30 Taxable investment securities 1.89 121 1.95 121 2.15 130 2.32 147 2.47 159 2.06 519 2.51 642 Non-taxable investment securities 2.60 — 2.60 — 2.60 — 2.60 — 2.60 — 2.60 — 2.60 — Total investment securities 1.89 121 1.95 121 2.15 130 2.32 147 2.47 159 2.06 519 2.51 642 Investment securities and interest-bearing deposits 124 123 131 152 166 530 672 Commercial and industrial 3.25 370 3.20 383 3.23 412 3.82 417 3.95 424 3.36 1,582 4.25 1,797 Commercial real estate 2.58 97 2.57 96 2.87 106 3.96 139 4.26 142 2.98 438 4.71 628 Leases 2.58 14 2.65 16 2.75 16 2.83 18 2.77 18 2.71 64 2.84 77 Total commercial 3.07 481 3.03 495 3.14 534 3.81 574 3.97 584 3.25 2,084 4.29 2,502 Residential mortgages 3.08 151 3.15 153 3.19 150 3.47 164 3.40 165 3.22 618 3.56 687 Home equity 3.18 98 3.21 100 3.50 111 4.69 152 4.73 159 3.66 461 5.13 700 Automobile 4.26 129 4.23 128 4.33 129 4.34 131 4.32 132 4.29 517 4.20 506 Education 4.55 136 4.74 130 5.21 145 5.64 149 5.76 143 5.02 560 5.89 555 Other retail 7.10 110 7.22 114 7.52 123 7.77 132 7.83 129 7.41 479 8.27 491 Total retail 4.01 624 4.08 625 4.31 658 4.75 728 4.72 728 4.29 2,635 4.87 2,939 Total loans and leases 3.54 1,105 3.54 1,120 3.69 1,192 4.29 1,302 4.36 1,312 3.76 4,719 4.59 5,441 Loans held for sale, at fair value 2.41 19 2.60 21 2.85 20 3.28 15 3.38 18 2.72 75 3.74 63 Other loans held for sale 3.14 1 6.02 16 4.66 7 4.31 9 3.89 5 5.22 33 5.10 13 Total interest-earning assets 3.02 1,249 3.15 1,280 3.33 1,350 3.91 1,478 3.98 1,501 3.35 5,357 4.19 6,189 INTEREST-BEARING LIABILITIES Checking with interest 0.11 8 0.13 8 0.17 11 0.60 37 0.71 42 0.24 64 0.87 203 Money market accounts 0.22 27 0.28 33 0.35 39 0.94 93 1.12 110 0.43 192 1.23 450 Regular savings 0.15 7 0.24 10 0.39 15 0.51 18 0.52 17 0.31 50 0.57 75 Term deposits 1.09 27 1.25 38 1.44 59 1.70 79 1.88 94 1.42 203 2.03 427 Total interest-bearing deposits 0.27 69 0.35 89 0.48 124 0.94 227 1.09 263 0.50 509 1.22 1,155 Short-term borrowed funds 0.44 1 0.13 — 0.29 — 0.76 1 1.07 2 0.52 2 1.47 10 FHLB advances 0.93 — 1.42 — 0.86 6 1.87 24 1.98 16 1.53 30 2.39 88 Senior debt 1.93 33 1.84 35 2.25 42 2.69 49 3.02 60 2.18 159 3.29 254 Subordinated debt and other debt 4.35 17 4.67 19 4.22 18 4.13 17 4.20 17 4.34 71 4.12 68 Total long-term borrowed funds 2.38 50 2.35 54 2.22 66 2.56 90 2.91 93 2.39 260 3.14 410 Total borrowed funds 2.33 51 2.30 54 2.18 66 2.48 91 2.84 95 2.33 262 3.06 420 Total interest-bearing liabilities 0.43 120 0.52 143 0.66 190 1.14 318 1.30 358 0.69 771 1.46 1,575 INTEREST RATE SPREAD 2.60 2.63 2.67 2.77 2.68 2.66 2.73 NET INTEREST MARGIN AND NET INTEREST INCOME 2.75 % $1,129 2.82 % $1,137 2.87 % $1,160 3.09 % $1,160 3.04 % $1,143 2.88 % $4,586 3.14 % $4,614 1 NET INTEREST MARGIN AND NET INTEREST INCOME, FTE 2.75 % $1,132 2.83 % $1,140 2.88 % $1,163 3.10 % $1,164 3.06 % $1,147 2.89 % $4,599 3.16 % $4,635 Memo: Total deposit costs 0.19 % $69 0.25 % $89 0.35 % $124 0.72 % $227 0.83 % $263 0.37 % $509 0.94 % $1,155 1 Net interest income and net interest margin is presented on a fully taxable-equivalent ( FTE ) basis using the federal statutory tax rate of 21%. The FTE impact is predominantly attributable to commercial loans for the periods presented. 9AVERAGE ANNUALIZED YIELDS AND RATES (in millions, except rates) QUARTERLY TRENDS FULL YEAR 4Q20 3Q20 2Q20 1Q20 4Q19 2020 2019 Income/ Income/ Income/ Income/ Income/ Income/ Income/ Rate Expense Rate Expense Rate Expense Rate Expense Rate Expense Rate Expense Rate Expense INTEREST-EARNING ASSETS Interest-bearing cash and due from banks and deposits in banks 0.10% $3 0.10% $2 0.09% $1 1.12% $5 1.49% $7 0.18% $11 1.94% $30 Taxable investment securities 1.89 121 1.95 121 2.15 130 2.32 147 2.47 159 2.06 519 2.51 642 Non-taxable investment securities 2.60 — 2.60 — 2.60 — 2.60 — 2.60 — 2.60 — 2.60 — Total investment securities 1.89 121 1.95 121 2.15 130 2.32 147 2.47 159 2.06 519 2.51 642 Investment securities and interest-bearing deposits 124 123 131 152 166 530 672 Commercial and industrial 3.25 370 3.20 383 3.23 412 3.82 417 3.95 424 3.36 1,582 4.25 1,797 Commercial real estate 2.58 97 2.57 96 2.87 106 3.96 139 4.26 142 2.98 438 4.71 628 Leases 2.58 14 2.65 16 2.75 16 2.83 18 2.77 18 2.71 64 2.84 77 Total commercial 3.07 481 3.03 495 3.14 534 3.81 574 3.97 584 3.25 2,084 4.29 2,502 Residential mortgages 3.08 151 3.15 153 3.19 150 3.47 164 3.40 165 3.22 618 3.56 687 Home equity 3.18 98 3.21 100 3.50 111 4.69 152 4.73 159 3.66 461 5.13 700 Automobile 4.26 129 4.23 128 4.33 129 4.34 131 4.32 132 4.29 517 4.20 506 Education 4.55 136 4.74 130 5.21 145 5.64 149 5.76 143 5.02 560 5.89 555 Other retail 7.10 110 7.22 114 7.52 123 7.77 132 7.83 129 7.41 479 8.27 491 Total retail 4.01 624 4.08 625 4.31 658 4.75 728 4.72 728 4.29 2,635 4.87 2,939 Total loans and leases 3.54 1,105 3.54 1,120 3.69 1,192 4.29 1,302 4.36 1,312 3.76 4,719 4.59 5,441 Loans held for sale, at fair value 2.41 19 2.60 21 2.85 20 3.28 15 3.38 18 2.72 75 3.74 63 Other loans held for sale 3.14 1 6.02 16 4.66 7 4.31 9 3.89 5 5.22 33 5.10 13 Total interest-earning assets 3.02 1,249 3.15 1,280 3.33 1,350 3.91 1,478 3.98 1,501 3.35 5,357 4.19 6,189 INTEREST-BEARING LIABILITIES Checking with interest 0.11 8 0.13 8 0.17 11 0.60 37 0.71 42 0.24 64 0.87 203 Money market accounts 0.22 27 0.28 33 0.35 39 0.94 93 1.12 110 0.43 192 1.23 450 Regular savings 0.15 7 0.24 10 0.39 15 0.51 18 0.52 17 0.31 50 0.57 75 Term deposits 1.09 27 1.25 38 1.44 59 1.70 79 1.88 94 1.42 203 2.03 427 Total interest-bearing deposits 0.27 69 0.35 89 0.48 124 0.94 227 1.09 263 0.50 509 1.22 1,155 Short-term borrowed funds 0.44 1 0.13 — 0.29 — 0.76 1 1.07 2 0.52 2 1.47 10 FHLB advances 0.93 — 1.42 — 0.86 6 1.87 24 1.98 16 1.53 30 2.39 88 Senior debt 1.93 33 1.84 35 2.25 42 2.69 49 3.02 60 2.18 159 3.29 254 Subordinated debt and other debt 4.35 17 4.67 19 4.22 18 4.13 17 4.20 17 4.34 71 4.12 68 Total long-term borrowed funds 2.38 50 2.35 54 2.22 66 2.56 90 2.91 93 2.39 260 3.14 410 Total borrowed funds 2.33 51 2.30 54 2.18 66 2.48 91 2.84 95 2.33 262 3.06 420 Total interest-bearing liabilities 0.43 120 0.52 143 0.66 190 1.14 318 1.30 358 0.69 771 1.46 1,575 INTEREST RATE SPREAD 2.60 2.63 2.67 2.77 2.68 2.66 2.73 NET INTEREST MARGIN AND NET INTEREST INCOME 2.75 % $1,129 2.82 % $1,137 2.87 % $1,160 3.09 % $1,160 3.04 % $1,143 2.88 % $4,586 3.14 % $4,614 1 NET INTEREST MARGIN AND NET INTEREST INCOME, FTE 2.75 % $1,132 2.83 % $1,140 2.88 % $1,163 3.10 % $1,164 3.06 % $1,147 2.89 % $4,599 3.16 % $4,635 Memo: Total deposit costs 0.19 % $69 0.25 % $89 0.35 % $124 0.72 % $227 0.83 % $263 0.37 % $509 0.94 % $1,155 1 Net interest income and net interest margin is presented on a fully taxable-equivalent ( FTE ) basis using the federal statutory tax rate of 21%. The FTE impact is predominantly attributable to commercial loans for the periods presented. 9
SEGMENT FINANCIAL HIGHLIGHTS - CONSUMER BANKING (in millions, except ratio data) QUARTERLY TRENDS FULL YEAR CONSUMER BANKING 4Q20 Change 2020 Change 4Q20 3Q20 2Q20 1Q20 4Q19 3Q20 4Q19 2020 2019 2019 $/bps % $/bps % $/bps % Net interest income $859 $845 $814 $793 $796 $14 2% $63 8% $3,311 $3,182 $129 4% Noninterest income 375 495 428 357 296 (120) (24) 79 27 1,655 1,156 499 43 Total revenue 1,234 1,340 1,242 1,150 1,092 (106) (8) 142 13 4,966 4,338 628 14 Noninterest expense 749 742 735 738 718 7 1 31 4 2,964 2,851 113 4 Profit before provision for credit losses 485 598 507 412 374 (113) (19) 111 30 2,002 1,487 515 35 Provision for credit losses 56 55 80 97 97 1 2 (41) (42) 288 325 (37) (11) Income before income tax expense 429 543 427 315 277 (114) (21) 152 55 1,714 1,162 552 48 Income tax expense 107 136 107 79 68 (29) (21) 39 57 429 287 142 49 Net income $322 $407 $320 $236 $209 ($85) (21%) $113 54% $1,285 $875 $410 47% AVERAGE BALANCES Total assets $74,392 $73,605 $71,634 $68,415 $68,069 $787 1% $6,323 9% $72,022 $66,240 $5,782 9% 1 Total loans and leases 69,650 69,719 68,205 65,343 65,157 (69) — 4,493 7 68,237 63,396 4,841 8 Deposits 95,007 94,212 91,648 85,228 85,477 795 1 9,530 11 91,541 84,835 6,706 8 Interest-earning assets 70,529 69,925 68,256 65,393 65,208 604 1 5,321 8 68,535 63,449 5,086 8 KEY METRICS Net interest margin 4.85 % 4.81 % 4.80 % 4.88 % 4.85 % 4 bps — bps 4.83 % 5.02 % (19) bps Efficiency ratio 60.75 55.35 59.19 64.16 65.74 540 bps (499) bps 59.69 65.72 (603) bps Loans-to-deposits ratio (period-end balances) 69.38 70.61 69.17 72.94 74.15 (123) bps (477) bps 69.38 74.15 (477) bps Loans-to-deposits ratio (average balances) 70.12 69.88 71.59 74.07 73.37 24 bps (325) bps 71.34 72.81 (147) bps Return on average total tangible assets 1.72 2.21 1.80 1.39 1.22 (49) bps 50 bps 1.79 1.32 47 bps 1 Includes loans held for sale. 10SEGMENT FINANCIAL HIGHLIGHTS - CONSUMER BANKING (in millions, except ratio data) QUARTERLY TRENDS FULL YEAR CONSUMER BANKING 4Q20 Change 2020 Change 4Q20 3Q20 2Q20 1Q20 4Q19 3Q20 4Q19 2020 2019 2019 $/bps % $/bps % $/bps % Net interest income $859 $845 $814 $793 $796 $14 2% $63 8% $3,311 $3,182 $129 4% Noninterest income 375 495 428 357 296 (120) (24) 79 27 1,655 1,156 499 43 Total revenue 1,234 1,340 1,242 1,150 1,092 (106) (8) 142 13 4,966 4,338 628 14 Noninterest expense 749 742 735 738 718 7 1 31 4 2,964 2,851 113 4 Profit before provision for credit losses 485 598 507 412 374 (113) (19) 111 30 2,002 1,487 515 35 Provision for credit losses 56 55 80 97 97 1 2 (41) (42) 288 325 (37) (11) Income before income tax expense 429 543 427 315 277 (114) (21) 152 55 1,714 1,162 552 48 Income tax expense 107 136 107 79 68 (29) (21) 39 57 429 287 142 49 Net income $322 $407 $320 $236 $209 ($85) (21%) $113 54% $1,285 $875 $410 47% AVERAGE BALANCES Total assets $74,392 $73,605 $71,634 $68,415 $68,069 $787 1% $6,323 9% $72,022 $66,240 $5,782 9% 1 Total loans and leases 69,650 69,719 68,205 65,343 65,157 (69) — 4,493 7 68,237 63,396 4,841 8 Deposits 95,007 94,212 91,648 85,228 85,477 795 1 9,530 11 91,541 84,835 6,706 8 Interest-earning assets 70,529 69,925 68,256 65,393 65,208 604 1 5,321 8 68,535 63,449 5,086 8 KEY METRICS Net interest margin 4.85 % 4.81 % 4.80 % 4.88 % 4.85 % 4 bps — bps 4.83 % 5.02 % (19) bps Efficiency ratio 60.75 55.35 59.19 64.16 65.74 540 bps (499) bps 59.69 65.72 (603) bps Loans-to-deposits ratio (period-end balances) 69.38 70.61 69.17 72.94 74.15 (123) bps (477) bps 69.38 74.15 (477) bps Loans-to-deposits ratio (average balances) 70.12 69.88 71.59 74.07 73.37 24 bps (325) bps 71.34 72.81 (147) bps Return on average total tangible assets 1.72 2.21 1.80 1.39 1.22 (49) bps 50 bps 1.79 1.32 47 bps 1 Includes loans held for sale. 10
SEGMENT FINANCIAL HIGHLIGHTS - CONSUMER BANKING, CONTINUED (in millions, except ratio data) QUARTERLY TRENDS FULL YEAR 4Q20 Change 2020 Change 4Q20 3Q20 2Q20 1Q20 4Q19 3Q20 4Q19 2020 2019 2019 $/bps % $/bps % $/bps % MORTGAGE BANKING FEES Production revenue $194 $275 $271 $136 $61 ($81) (29%) $133 218% $876 $221 $655 NM Mortgage servicing revenue 3 2 9 17 16 1 50 (13) (81) 31 51 (20) (39) MSR valuation changes, net of hedge impact (3) 10 (4) 6 4 (13) NM (7) NM 9 31 (22) (71) Total mortgage banking fees $194 $287 $276 $159 $81 ($93) (32%) $113 140% $916 $303 $613 202% Gain on sale of secondary originations 2.09 % 3.04 % 3.09 % 2.36 % 0.98 % (95) bps 111 bps 2.67 % 1.18 % 149 bps RESIDENTIAL REAL ESTATE ORIGINATIONS Retail $4,096 $4,300 $3,882 $2,523 $3,196 ($204) (5%) $900 28% $14,801 $9,395 $5,406 58% Third Party 6,762 6,811 7,388 4,813 5,750 (49) (1) 1,012 18 25,774 17,011 8,763 52 Total $10,858 $11,111 $11,270 $7,336 $8,946 ($253) (2%) $1,912 21% $40,575 $26,406 $14,169 54% Originated for sale 85 % 82 % 81 % 83 % 80 % 300 bps 500 bps 83 % 80 % 300 bps Originated for investment 15 18 19 17 20 (300) bps (500) bps 17 20 (300) bps Total 100 % 100 % 100 % 100 % 100 % 100 % 100 % MORTGAGE SERVICING INFORMATION (UPB) Loans serviced for others $81,240 $80,700 $79,942 $79,157 $77,526 $540 1% $3,714 5% $81,240 $77,526 $3,714 5% Owned loans serviced 22,582 22,193 21,642 21,057 20,831 389 2 1,751 8 22,582 20,831 1,751 8 Total $103,822 $102,893 $101,584 $100,214 $98,357 $929 1% $5,465 6% $103,822 $98,357 $5,465 6% 1 MSR CARRYING VALUE MSR at fair value $658 $606 $568 $577 $642 $52 9% $16 2% $658 $642 $16 2% MSR at lower of cost or market — — — — 182 — — (182) (100) — 182 (182) (100) Total $658 $606 $568 $577 $824 $52 9% ($166) (20%) $658 $824 ($166) (20%) 1 Beginning in the first quarter of 2020, mortgage servicing rights previously accounted for at lower of cost or market are now accounted for at fair value. 11SEGMENT FINANCIAL HIGHLIGHTS - CONSUMER BANKING, CONTINUED (in millions, except ratio data) QUARTERLY TRENDS FULL YEAR 4Q20 Change 2020 Change 4Q20 3Q20 2Q20 1Q20 4Q19 3Q20 4Q19 2020 2019 2019 $/bps % $/bps % $/bps % MORTGAGE BANKING FEES Production revenue $194 $275 $271 $136 $61 ($81) (29%) $133 218% $876 $221 $655 NM Mortgage servicing revenue 3 2 9 17 16 1 50 (13) (81) 31 51 (20) (39) MSR valuation changes, net of hedge impact (3) 10 (4) 6 4 (13) NM (7) NM 9 31 (22) (71) Total mortgage banking fees $194 $287 $276 $159 $81 ($93) (32%) $113 140% $916 $303 $613 202% Gain on sale of secondary originations 2.09 % 3.04 % 3.09 % 2.36 % 0.98 % (95) bps 111 bps 2.67 % 1.18 % 149 bps RESIDENTIAL REAL ESTATE ORIGINATIONS Retail $4,096 $4,300 $3,882 $2,523 $3,196 ($204) (5%) $900 28% $14,801 $9,395 $5,406 58% Third Party 6,762 6,811 7,388 4,813 5,750 (49) (1) 1,012 18 25,774 17,011 8,763 52 Total $10,858 $11,111 $11,270 $7,336 $8,946 ($253) (2%) $1,912 21% $40,575 $26,406 $14,169 54% Originated for sale 85 % 82 % 81 % 83 % 80 % 300 bps 500 bps 83 % 80 % 300 bps Originated for investment 15 18 19 17 20 (300) bps (500) bps 17 20 (300) bps Total 100 % 100 % 100 % 100 % 100 % 100 % 100 % MORTGAGE SERVICING INFORMATION (UPB) Loans serviced for others $81,240 $80,700 $79,942 $79,157 $77,526 $540 1% $3,714 5% $81,240 $77,526 $3,714 5% Owned loans serviced 22,582 22,193 21,642 21,057 20,831 389 2 1,751 8 22,582 20,831 1,751 8 Total $103,822 $102,893 $101,584 $100,214 $98,357 $929 1% $5,465 6% $103,822 $98,357 $5,465 6% 1 MSR CARRYING VALUE MSR at fair value $658 $606 $568 $577 $642 $52 9% $16 2% $658 $642 $16 2% MSR at lower of cost or market — — — — 182 — — (182) (100) — 182 (182) (100) Total $658 $606 $568 $577 $824 $52 9% ($166) (20%) $658 $824 ($166) (20%) 1 Beginning in the first quarter of 2020, mortgage servicing rights previously accounted for at lower of cost or market are now accounted for at fair value. 11
SEGMENT FINANCIAL HIGHLIGHTS - COMMERCIAL BANKING (in millions, except ratio data) QUARTERLY TRENDS FULL YEAR COMMERCIAL BANKING 4Q20 Change 2020 Change 4Q20 3Q20 2Q20 1Q20 4Q19 3Q20 4Q19 2020 2019 2019 $/bps % $/bps % $/bps % Net interest income $438 $421 $419 $365 $363 $17 4% $75 21% $1,643 $1,466 $177 12% Noninterest income 182 144 144 125 175 38 26 7 4 595 607 (12) (2) Total revenue 620 565 563 490 538 55 10 82 15 2,238 2,073 165 8 Noninterest expense 216 210 213 221 219 6 3 (3) (1) 860 858 2 — Profit before provision for credit losses 404 355 350 269 319 49 14 85 27 1,378 1,215 163 13 Provision for credit losses 124 161 70 43 24 (37) (23) 100 NM 398 97 301 NM Income before income tax expense 280 194 280 226 295 86 44 (15) (5) 980 1,118 (138) (12) Income tax expense 59 41 59 47 64 18 44 (5) (8) 206 248 (42) (17) Net income $221 $153 $221 $179 $231 $68 44% ($10) (4%) $774 $870 ($96) (11%) AVERAGE BALANCES Total assets $58,212 $60,889 $65,280 $59,005 $56,407 ($2,677) (4%) $1,805 3% $60,839 $55,947 $4,892 9% 1 Total loans and leases 55,407 57,796 62,011 56,555 54,523 (2,389) (4) 884 2 57,935 54,355 3,580 7 Deposits 44,920 41,393 41,750 33,545 32,715 3,527 9 12,205 37 40,417 31,085 9,332 30 Interest-earning assets 55,752 58,177 62,422 57,016 54,905 (2,425) (4) 847 2 58,334 54,666 3,668 7 KEY METRICS Net interest margin 3.12 % 2.88 % 2.70 % 2.57 % 2.62 % 24 bps 50 bps 2.82 % 2.68 % 14 bps Efficiency ratio 34.94 37.03 37.93 45.06 40.60 (209) bps (566) bps 38.43 41.38 (295) bps Loans-to-deposits ratio (period-end balances) 121.09 129.43 140.79 164.10 165.24 (834) bps (4,415) bps 121.09 165.24 (4,415) bps Loans-to-deposits ratio (average balances) 122.75 138.48 147.03 167.18 165.80 (1,573) bps (4,305) bps 142.20 173.85 (3,165) bps Return on average total tangible assets 1.51 1.01 1.36 1.22 1.63 50 bps (12) bps 1.27 1.56 (29) bps 1 Includes loans held for sale. 12SEGMENT FINANCIAL HIGHLIGHTS - COMMERCIAL BANKING (in millions, except ratio data) QUARTERLY TRENDS FULL YEAR COMMERCIAL BANKING 4Q20 Change 2020 Change 4Q20 3Q20 2Q20 1Q20 4Q19 3Q20 4Q19 2020 2019 2019 $/bps % $/bps % $/bps % Net interest income $438 $421 $419 $365 $363 $17 4% $75 21% $1,643 $1,466 $177 12% Noninterest income 182 144 144 125 175 38 26 7 4 595 607 (12) (2) Total revenue 620 565 563 490 538 55 10 82 15 2,238 2,073 165 8 Noninterest expense 216 210 213 221 219 6 3 (3) (1) 860 858 2 — Profit before provision for credit losses 404 355 350 269 319 49 14 85 27 1,378 1,215 163 13 Provision for credit losses 124 161 70 43 24 (37) (23) 100 NM 398 97 301 NM Income before income tax expense 280 194 280 226 295 86 44 (15) (5) 980 1,118 (138) (12) Income tax expense 59 41 59 47 64 18 44 (5) (8) 206 248 (42) (17) Net income $221 $153 $221 $179 $231 $68 44% ($10) (4%) $774 $870 ($96) (11%) AVERAGE BALANCES Total assets $58,212 $60,889 $65,280 $59,005 $56,407 ($2,677) (4%) $1,805 3% $60,839 $55,947 $4,892 9% 1 Total loans and leases 55,407 57,796 62,011 56,555 54,523 (2,389) (4) 884 2 57,935 54,355 3,580 7 Deposits 44,920 41,393 41,750 33,545 32,715 3,527 9 12,205 37 40,417 31,085 9,332 30 Interest-earning assets 55,752 58,177 62,422 57,016 54,905 (2,425) (4) 847 2 58,334 54,666 3,668 7 KEY METRICS Net interest margin 3.12 % 2.88 % 2.70 % 2.57 % 2.62 % 24 bps 50 bps 2.82 % 2.68 % 14 bps Efficiency ratio 34.94 37.03 37.93 45.06 40.60 (209) bps (566) bps 38.43 41.38 (295) bps Loans-to-deposits ratio (period-end balances) 121.09 129.43 140.79 164.10 165.24 (834) bps (4,415) bps 121.09 165.24 (4,415) bps Loans-to-deposits ratio (average balances) 122.75 138.48 147.03 167.18 165.80 (1,573) bps (4,305) bps 142.20 173.85 (3,165) bps Return on average total tangible assets 1.51 1.01 1.36 1.22 1.63 50 bps (12) bps 1.27 1.56 (29) bps 1 Includes loans held for sale. 12
SEGMENT FINANCIAL HIGHLIGHTS - OTHER (in millions) QUARTERLY TRENDS FULL YEAR 1 OTHER 4Q20 Change 2020 Change 4Q20 3Q20 2Q20 1Q20 4Q19 3Q20 4Q19 2020 2019 2019 $ % $ % $ % Net interest income ($168) ($129) ($73) $2 ($16) ($39) (30%) ($152) NM ($368) ($34) ($334) NM Noninterest income 21 15 18 15 23 6 40 (2) (9) 69 114 (45) (39) Total revenue (147) (114) (55) 17 7 (33) (29) (154) NM (299) 80 (379) NM Noninterest expense 47 36 31 53 49 11 31 (2) (4) 167 138 29 21 Loss before provision for credit losses (194) (150) (86) (36) (42) (44) (29) (152) NM (466) (58) (408) NM Provision for credit losses (56) 212 314 460 (11) (268) NM (45) NM 930 (29) 959 NM Loss before income tax benefit (138) (362) (400) (496) (31) 224 62 (107) NM (1,396) (29) (1,367) NM Income tax benefit (51) (116) (112) (115) (41) 65 56 (10) (24) (394) (75) (319) NM Net (loss) income ($87) ($246) ($288) ($381) $10 $159 65% ($97) NM ($1,002) $46 ($1,048) NM AVERAGE BALANCES Total assets $48,457 $43,181 $42,879 $39,757 $40,170 $5,276 12% $8,287 21% $43,581 $39,989 $3,592 9% 2 Total loans and leases 1,699 1,753 1,759 1,846 1,951 (54) (3) (252) (13) 1,764 2,089 (325) (16) Deposits 5,340 5,762 8,199 7,857 7,460 (422) (7) (2,120) (28) 6,782 7,381 (599) (8) Interest-earning assets 37,252 32,074 31,712 28,537 28,798 5,178 16 8,454 29 32,406 28,699 3,707 13 1 Includes the financial impact of non-core, liquidating loan portfolios and other non-core assets, our treasury activities, wholesale funding activities, securities portfolio, community development assets and other unallocated assets, liabilities, capital, revenues, provision for credit losses, expenses and income tax expense, not attributed to our Consumer Banking or Commercial Banking segments. 2 Includes loans held for sale. 13SEGMENT FINANCIAL HIGHLIGHTS - OTHER (in millions) QUARTERLY TRENDS FULL YEAR 1 OTHER 4Q20 Change 2020 Change 4Q20 3Q20 2Q20 1Q20 4Q19 3Q20 4Q19 2020 2019 2019 $ % $ % $ % Net interest income ($168) ($129) ($73) $2 ($16) ($39) (30%) ($152) NM ($368) ($34) ($334) NM Noninterest income 21 15 18 15 23 6 40 (2) (9) 69 114 (45) (39) Total revenue (147) (114) (55) 17 7 (33) (29) (154) NM (299) 80 (379) NM Noninterest expense 47 36 31 53 49 11 31 (2) (4) 167 138 29 21 Loss before provision for credit losses (194) (150) (86) (36) (42) (44) (29) (152) NM (466) (58) (408) NM Provision for credit losses (56) 212 314 460 (11) (268) NM (45) NM 930 (29) 959 NM Loss before income tax benefit (138) (362) (400) (496) (31) 224 62 (107) NM (1,396) (29) (1,367) NM Income tax benefit (51) (116) (112) (115) (41) 65 56 (10) (24) (394) (75) (319) NM Net (loss) income ($87) ($246) ($288) ($381) $10 $159 65% ($97) NM ($1,002) $46 ($1,048) NM AVERAGE BALANCES Total assets $48,457 $43,181 $42,879 $39,757 $40,170 $5,276 12% $8,287 21% $43,581 $39,989 $3,592 9% 2 Total loans and leases 1,699 1,753 1,759 1,846 1,951 (54) (3) (252) (13) 1,764 2,089 (325) (16) Deposits 5,340 5,762 8,199 7,857 7,460 (422) (7) (2,120) (28) 6,782 7,381 (599) (8) Interest-earning assets 37,252 32,074 31,712 28,537 28,798 5,178 16 8,454 29 32,406 28,699 3,707 13 1 Includes the financial impact of non-core, liquidating loan portfolios and other non-core assets, our treasury activities, wholesale funding activities, securities portfolio, community development assets and other unallocated assets, liabilities, capital, revenues, provision for credit losses, expenses and income tax expense, not attributed to our Consumer Banking or Commercial Banking segments. 2 Includes loans held for sale. 13
CREDIT-RELATED INFORMATION (in millions, except ratio data) AS OF DECEMBER 31, 2020 CHANGE Dec 31, 2020 Sept 30, 2020 June 30, 2020 Mar 31, 2020 Dec 31, 2019 Sept 30, 2020 December 31, 2019 $/bps % $/bps % 1 NONACCRUAL LOANS AND LEASES Commercial and industrial $280 $435 $366 $305 $240 ($155) (36%) $40 17% Commercial real estate 176 323 61 8 2 (147) (46) 174 NM Leases 2 2 79 1 3 — — (1) (33) Total commercial 458 760 506 314 245 (302) (40) 213 87 2 Residential mortgages 167 131 112 101 93 36 27 74 80 Home equity 276 265 254 242 246 11 4 30 12 Automobile 72 80 67 69 67 (8) (10) 5 7 Education 18 16 18 21 18 2 13 — — Other retail 28 25 33 33 34 3 12 (6) (18) Total retail 561 517 484 466 458 44 9 103 22 Nonaccrual loans and leases 1,019 1,277 990 780 703 (258) (20) 316 45 Repossessed assets 19 27 33 44 45 (8) (30) (26) (58) Nonaccrual loans and leases and repossessed assets $1,038 $1,304 $1,023 $824 $748 ($266) (20%) $290 39% 3 NONACCRUAL LOANS AND LEASES BY PRODUCT Commercial $458 $760 $506 $314 $245 ($302) (40%) $213 87% Retail 580 544 517 510 503 36 7 77 15 Total nonaccrual loans and leases $1,038 $1,304 $1,023 $824 $748 ($266) (20%) $290 39% ASSET QUALITY RATIOS Allowance for loan and lease losses to loans and leases 1.98% 2.05% 1.95% 1.70% 1.05% (7) bps 93 bps Allowance for credit losses to loans and leases 2.17 2.21 2.01 1.73 1.09 (4) 108 Allowance for loan and lease losses to nonaccrual and leases 239.72 199.04 247.40 278.51 177.99 NM NM Allowance for credit losses to nonaccrual loans and leases 262.02 214.22 255.39 283.48 184.31 NM NM Nonaccrual loans and leases to loans and leases 0.83 1.03 0.79 0.61 0.59 (20) 24 1 Beginning in the first quarter of 2020 and upon the adoption of ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, nonperforming loans and leases are now referred to as nonaccrual loans and leases and other nonperforming assets are referred to as repossessed assets. 2 Beginning in the fourth quarter of 2019, nonaccrual balances exclude both fully and partially guaranteed residential mortgage loans sold to Ginnie Mae for which the Company has the right, but not the obligation, to repurchase. Prior periods have been adjusted to exclude partially guaranteed amounts to conform with the current period presentation. 3 Nonaccrual loans and leases by product includes repossessed assets. 14CREDIT-RELATED INFORMATION (in millions, except ratio data) AS OF DECEMBER 31, 2020 CHANGE Dec 31, 2020 Sept 30, 2020 June 30, 2020 Mar 31, 2020 Dec 31, 2019 Sept 30, 2020 December 31, 2019 $/bps % $/bps % 1 NONACCRUAL LOANS AND LEASES Commercial and industrial $280 $435 $366 $305 $240 ($155) (36%) $40 17% Commercial real estate 176 323 61 8 2 (147) (46) 174 NM Leases 2 2 79 1 3 — — (1) (33) Total commercial 458 760 506 314 245 (302) (40) 213 87 2 Residential mortgages 167 131 112 101 93 36 27 74 80 Home equity 276 265 254 242 246 11 4 30 12 Automobile 72 80 67 69 67 (8) (10) 5 7 Education 18 16 18 21 18 2 13 — — Other retail 28 25 33 33 34 3 12 (6) (18) Total retail 561 517 484 466 458 44 9 103 22 Nonaccrual loans and leases 1,019 1,277 990 780 703 (258) (20) 316 45 Repossessed assets 19 27 33 44 45 (8) (30) (26) (58) Nonaccrual loans and leases and repossessed assets $1,038 $1,304 $1,023 $824 $748 ($266) (20%) $290 39% 3 NONACCRUAL LOANS AND LEASES BY PRODUCT Commercial $458 $760 $506 $314 $245 ($302) (40%) $213 87% Retail 580 544 517 510 503 36 7 77 15 Total nonaccrual loans and leases $1,038 $1,304 $1,023 $824 $748 ($266) (20%) $290 39% ASSET QUALITY RATIOS Allowance for loan and lease losses to loans and leases 1.98% 2.05% 1.95% 1.70% 1.05% (7) bps 93 bps Allowance for credit losses to loans and leases 2.17 2.21 2.01 1.73 1.09 (4) 108 Allowance for loan and lease losses to nonaccrual and leases 239.72 199.04 247.40 278.51 177.99 NM NM Allowance for credit losses to nonaccrual loans and leases 262.02 214.22 255.39 283.48 184.31 NM NM Nonaccrual loans and leases to loans and leases 0.83 1.03 0.79 0.61 0.59 (20) 24 1 Beginning in the first quarter of 2020 and upon the adoption of ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, nonperforming loans and leases are now referred to as nonaccrual loans and leases and other nonperforming assets are referred to as repossessed assets. 2 Beginning in the fourth quarter of 2019, nonaccrual balances exclude both fully and partially guaranteed residential mortgage loans sold to Ginnie Mae for which the Company has the right, but not the obligation, to repurchase. Prior periods have been adjusted to exclude partially guaranteed amounts to conform with the current period presentation. 3 Nonaccrual loans and leases by product includes repossessed assets. 14
CREDIT-RELATED INFORMATION, CONTINUED (in millions, except ratio data) AS OF DECEMBER 31, 2020 CHANGE Dec 31, 2020 Sept 30, 2020 June 30, 2020 Mar 31, 2020 Dec 31, 2019 Sept 30, 2020 December 31, 2019 $/bps % $/bps % LOANS AND LEASES 90 DAYS OR MORE PAST DUE AND ACCRUING Commercial and industrial $20 $3 $33 $— $2 $17 NM $18 NM Commercial real estate — — — — — — — — — Leases 1 — — — — 1 100 1 100 Total commercial 21 3 33 — 2 18 NM 19 NM Residential mortgages 30 17 13 14 13 13 76 17 131 Home equity — — — — — — — — — Automobile — — — — — — — — — Education 2 2 2 2 2 — — — — Other retail 9 6 7 11 8 3 50 1 13 Total retail 41 25 22 27 23 16 64 18 78 Total loans and leases $62 $28 $55 $27 $25 $34 121% $37 148% 15CREDIT-RELATED INFORMATION, CONTINUED (in millions, except ratio data) AS OF DECEMBER 31, 2020 CHANGE Dec 31, 2020 Sept 30, 2020 June 30, 2020 Mar 31, 2020 Dec 31, 2019 Sept 30, 2020 December 31, 2019 $/bps % $/bps % LOANS AND LEASES 90 DAYS OR MORE PAST DUE AND ACCRUING Commercial and industrial $20 $3 $33 $— $2 $17 NM $18 NM Commercial real estate — — — — — — — — — Leases 1 — — — — 1 100 1 100 Total commercial 21 3 33 — 2 18 NM 19 NM Residential mortgages 30 17 13 14 13 13 76 17 131 Home equity — — — — — — — — — Automobile — — — — — — — — — Education 2 2 2 2 2 — — — — Other retail 9 6 7 11 8 3 50 1 13 Total retail 41 25 22 27 23 16 64 18 78 Total loans and leases $62 $28 $55 $27 $25 $34 121% $37 148% 15
CREDIT-RELATED INFORMATION, CONTINUED (in millions) QUARTERLY TRENDS FULL YEAR 4Q20 Change 2020 Change 4Q20 3Q20 2Q20 1Q20 4Q19 3Q20 4Q19 2020 2019 2019 $ % $ % $ % CHARGE-OFFS, RECOVERIES AND RELATED RATIOS GROSS CHARGE-OFFS Commercial and industrial $51 $81 $68 $47 $24 ($30) (37%) $27 113 $247 $87 $160 184% Commercial real estate 70 42 — — 9 28 67 61 NM 112 39 73 187 Leases 24 48 6 — 1 (24) (50) 23 NM 78 14 64 NM Total commercial 145 171 74 47 34 (26) (15) 111 NM 437 140 297 212 Residential mortgages 2 2 2 1 2 — — — — 7 8 (1) (13) Home equity 5 6 6 8 10 (1) (17) (5) (50) 25 39 (14) (36) Automobile 22 22 31 39 38 — — (16) (42) 114 143 (29) (20) Education 10 9 14 18 20 1 11 (10) (50) 51 72 (21) (29) Other retail 48 47 53 61 58 1 2 (10) (17) 209 213 (4) (2) Total retail 87 86 106 127 128 1 1 (41) (32) 406 475 (69) (15) Total gross charge-offs $232 $257 $180 $174 $162 ($25) (10%) $70 43% $843 $615 $228 37% GROSS RECOVERIES Commercial and industrial $4 $1 $3 $3 $7 $3 NM ($3) (43%) $11 $24 ($13) (54%) Commercial real estate 1 — — — — 1 100 1 100 1 — 1 100 Leases — — — — — — — — — — — — — Total commercial 5 1 3 3 7 4 NM (2) (29) 12 24 (12) (50) Residential mortgages 2 2 1 1 1 — — 1 100 6 9 (3) (33) Home equity 11 8 8 11 10 3 38 1 10 38 49 (11) (22) Automobile 13 15 11 12 11 (2) (13) 2 18 51 57 (6) (11) Education 4 4 4 4 4 — — — — 16 16 — — Other retail 7 8 6 6 7 (1) (13) — — 27 30 (3) (10) Total retail 37 37 30 34 33 — — 4 12 138 161 (23) (14) Total gross recoveries $42 $38 $33 $37 $40 $4 11% $2 5% $150 $185 ($35) (19%) NET CHARGE-OFFS (RECOVERIES) Commercial and industrial $47 $80 $65 $44 $17 ($33) (41%) $30 176 $236 $63 $173 NM Commercial real estate 69 42 — — 9 27 64 60 NM 111 39 72 185 Leases 24 48 6 — 1 (24) (50) 23 NM 78 14 64 NM Total commercial 140 170 71 44 27 (30) (18) 113 NM 425 116 309 NM Residential mortgages — — 1 — 1 — — (1) (100) 1 (1) 2 NM Home equity (6) (2) (2) (3) — (4) (200) (6) (100) (13) (10) (3) (30) Automobile 9 7 20 27 27 2 29 (18) (67) 63 86 (23) (27) Education 6 5 10 14 16 1 20 (10) (63) 35 56 (21) (38) Other retail 41 39 47 55 51 2 5 (10) (20) 182 183 (1) (1) Total retail 50 49 76 93 95 1 2 (45) (47) 268 314 (46) (15) Total net charge-offs $190 $219 $147 $137 $122 ($29) (13%) $68 56% $693 $430 $263 61% 16CREDIT-RELATED INFORMATION, CONTINUED (in millions) QUARTERLY TRENDS FULL YEAR 4Q20 Change 2020 Change 4Q20 3Q20 2Q20 1Q20 4Q19 3Q20 4Q19 2020 2019 2019 $ % $ % $ % CHARGE-OFFS, RECOVERIES AND RELATED RATIOS GROSS CHARGE-OFFS Commercial and industrial $51 $81 $68 $47 $24 ($30) (37%) $27 113 $247 $87 $160 184% Commercial real estate 70 42 — — 9 28 67 61 NM 112 39 73 187 Leases 24 48 6 — 1 (24) (50) 23 NM 78 14 64 NM Total commercial 145 171 74 47 34 (26) (15) 111 NM 437 140 297 212 Residential mortgages 2 2 2 1 2 — — — — 7 8 (1) (13) Home equity 5 6 6 8 10 (1) (17) (5) (50) 25 39 (14) (36) Automobile 22 22 31 39 38 — — (16) (42) 114 143 (29) (20) Education 10 9 14 18 20 1 11 (10) (50) 51 72 (21) (29) Other retail 48 47 53 61 58 1 2 (10) (17) 209 213 (4) (2) Total retail 87 86 106 127 128 1 1 (41) (32) 406 475 (69) (15) Total gross charge-offs $232 $257 $180 $174 $162 ($25) (10%) $70 43% $843 $615 $228 37% GROSS RECOVERIES Commercial and industrial $4 $1 $3 $3 $7 $3 NM ($3) (43%) $11 $24 ($13) (54%) Commercial real estate 1 — — — — 1 100 1 100 1 — 1 100 Leases — — — — — — — — — — — — — Total commercial 5 1 3 3 7 4 NM (2) (29) 12 24 (12) (50) Residential mortgages 2 2 1 1 1 — — 1 100 6 9 (3) (33) Home equity 11 8 8 11 10 3 38 1 10 38 49 (11) (22) Automobile 13 15 11 12 11 (2) (13) 2 18 51 57 (6) (11) Education 4 4 4 4 4 — — — — 16 16 — — Other retail 7 8 6 6 7 (1) (13) — — 27 30 (3) (10) Total retail 37 37 30 34 33 — — 4 12 138 161 (23) (14) Total gross recoveries $42 $38 $33 $37 $40 $4 11% $2 5% $150 $185 ($35) (19%) NET CHARGE-OFFS (RECOVERIES) Commercial and industrial $47 $80 $65 $44 $17 ($33) (41%) $30 176 $236 $63 $173 NM Commercial real estate 69 42 — — 9 27 64 60 NM 111 39 72 185 Leases 24 48 6 — 1 (24) (50) 23 NM 78 14 64 NM Total commercial 140 170 71 44 27 (30) (18) 113 NM 425 116 309 NM Residential mortgages — — 1 — 1 — — (1) (100) 1 (1) 2 NM Home equity (6) (2) (2) (3) — (4) (200) (6) (100) (13) (10) (3) (30) Automobile 9 7 20 27 27 2 29 (18) (67) 63 86 (23) (27) Education 6 5 10 14 16 1 20 (10) (63) 35 56 (21) (38) Other retail 41 39 47 55 51 2 5 (10) (20) 182 183 (1) (1) Total retail 50 49 76 93 95 1 2 (45) (47) 268 314 (46) (15) Total net charge-offs $190 $219 $147 $137 $122 ($29) (13%) $68 56% $693 $430 $263 61% 16
CREDIT-RELATED INFORMATION, CONTINUED (in millions, except rates) QUARTERLY TRENDS FULL YEAR 4Q20 Change 2020 Change 4Q20 3Q20 2Q20 1Q20 4Q19 3Q20 4Q19 2020 2019 2019 $/bps % $/bps % $/bps % ANNUALIZED NET CHARGE-OFF (RECOVERY) RATES Commercial and industrial 0.41% 0.68% 0.52% 0.41% 0.16% (27) bps 25 bps 0.51% 0.15% 36 bps Commercial real estate 1.88 1.13 — — 0.26 75 bps 162 bps 0.77 0.29 48 bps Leases 4.44 7.99 1.03 0.07 0.19 (355) bps 425 bps 3.32 0.53 279 bps Total commercial 0.91 1.06 0.42 0.30 0.19 (15) bps 72 bps 0.67 0.20 47 bps Residential mortgages — — 0.02 0.01 0.02 — bps (2) bps 0.01 — 1 bps Home equity (0.19) (0.10) (0.05) (0.10) 0.02 (9) bps (21) bps (0.11) (0.07) (4) bps Automobile 0.29 0.24 0.68 0.88 0.85 5 bps (56) bps 0.52 0.71 (19) bps Education 0.18 0.21 0.34 0.55 0.65 (3) bps (47) bps 0.31 0.59 (28) bps Other retail 2.62 2.46 2.93 3.21 3.09 16 bps (47) bps 2.82 3.09 (27) bps Total retail 0.32 0.32 0.50 0.61 0.61 — bps (29) bps 0.44 0.52 (8) bps Total loans and leases 0.61 % 0.70 % 0.46 % 0.46 % 0.41 % (9) bps 20 bps 0.56 % 0.36 % 20 bps Memo: Average loans Commercial and industrial $44,594 $46,844 $50,443 $43,152 $42,012 ($2,250) (5%) $2,582 6% $46,255 $41,702 $4,553 11% Commercial real estate 14,745 14,644 14,540 13,876 13,103 101 1 1,642 13 14,452 13,160 1,292 10 Leases 2,176 2,373 2,426 2,482 2,546 (197) (8) (370) (15) 2,365 2,694 (329) (12) Total commercial 61,515 63,861 67,409 59,510 57,661 (2,346) (4) 3,854 7 63,072 57,556 5,516 10 Residential mortgages 19,543 19,427 18,872 18,866 19,495 116 1 48 — 19,178 19,308 (130) (1) Home equity 12,239 12,416 12,736 13,042 13,265 (177) (1) (1,026) (8) 12,607 13,645 (1,038) (8) Automobile 12,066 12,019 11,998 12,173 12,099 47 — (33) — 12,064 12,047 17 — Education 11,931 10,929 11,183 10,610 9,888 1,002 9 2,043 21 11,165 9,415 1,750 19 Other retail 6,167 6,260 6,557 6,854 6,497 (93) (1) (330) (5) 6,458 5,929 529 9 Total retail 61,946 61,051 61,346 61,545 61,244 895 1 702 1 61,472 60,344 1,128 2 Total loans and leases $123,461 $124,912 $128,755 $121,055 $118,905 ($1,451) (1%) $4,556 4% $124,544 $117,900 $6,644 6% 17CREDIT-RELATED INFORMATION, CONTINUED (in millions, except rates) QUARTERLY TRENDS FULL YEAR 4Q20 Change 2020 Change 4Q20 3Q20 2Q20 1Q20 4Q19 3Q20 4Q19 2020 2019 2019 $/bps % $/bps % $/bps % ANNUALIZED NET CHARGE-OFF (RECOVERY) RATES Commercial and industrial 0.41% 0.68% 0.52% 0.41% 0.16% (27) bps 25 bps 0.51% 0.15% 36 bps Commercial real estate 1.88 1.13 — — 0.26 75 bps 162 bps 0.77 0.29 48 bps Leases 4.44 7.99 1.03 0.07 0.19 (355) bps 425 bps 3.32 0.53 279 bps Total commercial 0.91 1.06 0.42 0.30 0.19 (15) bps 72 bps 0.67 0.20 47 bps Residential mortgages — — 0.02 0.01 0.02 — bps (2) bps 0.01 — 1 bps Home equity (0.19) (0.10) (0.05) (0.10) 0.02 (9) bps (21) bps (0.11) (0.07) (4) bps Automobile 0.29 0.24 0.68 0.88 0.85 5 bps (56) bps 0.52 0.71 (19) bps Education 0.18 0.21 0.34 0.55 0.65 (3) bps (47) bps 0.31 0.59 (28) bps Other retail 2.62 2.46 2.93 3.21 3.09 16 bps (47) bps 2.82 3.09 (27) bps Total retail 0.32 0.32 0.50 0.61 0.61 — bps (29) bps 0.44 0.52 (8) bps Total loans and leases 0.61 % 0.70 % 0.46 % 0.46 % 0.41 % (9) bps 20 bps 0.56 % 0.36 % 20 bps Memo: Average loans Commercial and industrial $44,594 $46,844 $50,443 $43,152 $42,012 ($2,250) (5%) $2,582 6% $46,255 $41,702 $4,553 11% Commercial real estate 14,745 14,644 14,540 13,876 13,103 101 1 1,642 13 14,452 13,160 1,292 10 Leases 2,176 2,373 2,426 2,482 2,546 (197) (8) (370) (15) 2,365 2,694 (329) (12) Total commercial 61,515 63,861 67,409 59,510 57,661 (2,346) (4) 3,854 7 63,072 57,556 5,516 10 Residential mortgages 19,543 19,427 18,872 18,866 19,495 116 1 48 — 19,178 19,308 (130) (1) Home equity 12,239 12,416 12,736 13,042 13,265 (177) (1) (1,026) (8) 12,607 13,645 (1,038) (8) Automobile 12,066 12,019 11,998 12,173 12,099 47 — (33) — 12,064 12,047 17 — Education 11,931 10,929 11,183 10,610 9,888 1,002 9 2,043 21 11,165 9,415 1,750 19 Other retail 6,167 6,260 6,557 6,854 6,497 (93) (1) (330) (5) 6,458 5,929 529 9 Total retail 61,946 61,051 61,346 61,545 61,244 895 1 702 1 61,472 60,344 1,128 2 Total loans and leases $123,461 $124,912 $128,755 $121,055 $118,905 ($1,451) (1%) $4,556 4% $124,544 $117,900 $6,644 6% 17
CREDIT-RELATED INFORMATION, CONTINUED (in millions) QUARTERLY TRENDS FULL YEAR 4Q20 Change 2020 Change 4Q20 3Q20 2Q20 1Q20 4Q19 3Q20 4Q19 2020 2019 2019 $ % $ % $ % SUMMARY OF CHANGES IN THE COMPONENTS OF THE ALLOWANCE FOR CREDIT LOSSES Allowance for loan and lease losses - beginning $2,542 $2,448 $2,171 $1,252 $1,263 $94 4% $1,279 101% $1,252 $1,242 $10 1% Cumulative effect of change in accounting principle: Commercial — — — (176) — — — — — (176) — (176) (100) Retail — — — 629 — — — — — 629 — 629 100 Total cumulative effect of change in accounting principle — — — 453 — — — — — 453 — 453 100 Allowance for loan and lease losses - beginning, adjusted 2,542 2,448 2,171 1,705 1,263 94 4 1,279 101 1,705 1,242 463 37 Charge-offs: Commercial 145 171 74 47 34 (26) (15) 111 NM 437 140 297 212 Retail 87 86 106 127 128 1 1 (41) (32) 406 475 (69) (15) Total charge-offs 232 257 180 174 162 (25) (10) 70 43 843 615 228 37 Recoveries: Commercial 5 1 3 3 7 4 NM (2) (29) 12 24 (12) (50) Retail 37 37 30 34 33 — — 4 12 138 161 (23) (14) Total recoveries 42 38 33 37 40 4 11 2 5 150 185 (35) (19) Net charge-offs 190 219 147 137 122 (29) (13) 68 56 693 430 263 61 Provision for loan and lease losses: Commercial 84 224 554 298 (11) (140) (63) 95 NM 1,160 100 1,060 NM Retail 7 89 (130) 305 122 (82) (92) (115) (94) 271 340 (69) (20) Total provision for loan and lease losses 91 313 424 603 111 (222) (71) (20) (18) 1,431 440 991 225 Allowance for loan and lease losses - ending $2,443 $2,542 $2,448 $2,171 $1,252 ($99) (4%) $1,191 95% $2,443 $1,252 $1,191 95% Reserve for unfunded lending commitments - beginning $194 $79 $39 $44 $45 $115 146% $149 NM $44 $91 ($47) (52%) Cumulative effect of change in accounting principle — — — (2) — — — — — (2) — (2) — Provision for unfunded lending commitments 33 115 40 (3) (1) (82) (71) 34 NM 185 (47) 232 NM Reserve for unfunded lending commitments - ending $227 $194 $79 $39 $44 $33 17% $183 NM $227 $44 $183 NM Total allowance for credit losses - ending $2,670 $2,736 $2,527 $2,210 $1,296 ($66) (2%) $1,374 106% $2,670 $1,296 $1,374 106% Memo: Total allowance for credit losses by product Commercial $1,419 $1,441 $1,304 $790 $718 ($22) (2%) $701 98% $1,419 $718 $701 98% Retail 1,251 1,295 1,223 1,420 578 (44) (3) 673 116 1,251 578 673 116 Total allowance for credit losses $2,670 $2,736 $2,527 $2,210 $1,296 ($66) (2%) $1,374 106% $2,670 $1,296 $1,374 106% 18CREDIT-RELATED INFORMATION, CONTINUED (in millions) QUARTERLY TRENDS FULL YEAR 4Q20 Change 2020 Change 4Q20 3Q20 2Q20 1Q20 4Q19 3Q20 4Q19 2020 2019 2019 $ % $ % $ % SUMMARY OF CHANGES IN THE COMPONENTS OF THE ALLOWANCE FOR CREDIT LOSSES Allowance for loan and lease losses - beginning $2,542 $2,448 $2,171 $1,252 $1,263 $94 4% $1,279 101% $1,252 $1,242 $10 1% Cumulative effect of change in accounting principle: Commercial — — — (176) — — — — — (176) — (176) (100) Retail — — — 629 — — — — — 629 — 629 100 Total cumulative effect of change in accounting principle — — — 453 — — — — — 453 — 453 100 Allowance for loan and lease losses - beginning, adjusted 2,542 2,448 2,171 1,705 1,263 94 4 1,279 101 1,705 1,242 463 37 Charge-offs: Commercial 145 171 74 47 34 (26) (15) 111 NM 437 140 297 212 Retail 87 86 106 127 128 1 1 (41) (32) 406 475 (69) (15) Total charge-offs 232 257 180 174 162 (25) (10) 70 43 843 615 228 37 Recoveries: Commercial 5 1 3 3 7 4 NM (2) (29) 12 24 (12) (50) Retail 37 37 30 34 33 — — 4 12 138 161 (23) (14) Total recoveries 42 38 33 37 40 4 11 2 5 150 185 (35) (19) Net charge-offs 190 219 147 137 122 (29) (13) 68 56 693 430 263 61 Provision for loan and lease losses: Commercial 84 224 554 298 (11) (140) (63) 95 NM 1,160 100 1,060 NM Retail 7 89 (130) 305 122 (82) (92) (115) (94) 271 340 (69) (20) Total provision for loan and lease losses 91 313 424 603 111 (222) (71) (20) (18) 1,431 440 991 225 Allowance for loan and lease losses - ending $2,443 $2,542 $2,448 $2,171 $1,252 ($99) (4%) $1,191 95% $2,443 $1,252 $1,191 95% Reserve for unfunded lending commitments - beginning $194 $79 $39 $44 $45 $115 146% $149 NM $44 $91 ($47) (52%) Cumulative effect of change in accounting principle — — — (2) — — — — — (2) — (2) — Provision for unfunded lending commitments 33 115 40 (3) (1) (82) (71) 34 NM 185 (47) 232 NM Reserve for unfunded lending commitments - ending $227 $194 $79 $39 $44 $33 17% $183 NM $227 $44 $183 NM Total allowance for credit losses - ending $2,670 $2,736 $2,527 $2,210 $1,296 ($66) (2%) $1,374 106% $2,670 $1,296 $1,374 106% Memo: Total allowance for credit losses by product Commercial $1,419 $1,441 $1,304 $790 $718 ($22) (2%) $701 98% $1,419 $718 $701 98% Retail 1,251 1,295 1,223 1,420 578 (44) (3) 673 116 1,251 578 673 116 Total allowance for credit losses $2,670 $2,736 $2,527 $2,210 $1,296 ($66) (2%) $1,374 106% $2,670 $1,296 $1,374 106% 18
CAPITAL AND RATIOS (in millions, except ratio data) AS OF FULL YEAR DECEMBER 31, 2020 CHANGE 2020 Change Dec 31, Sept 30, June 30, Mar 31, Dec 31, 2020 2020 2020 2020 2019 Sept 30, 2020 December 31, 2019 2020 2019 2019 $ % $ % $ % CAPITAL RATIOS AND COMPONENTS (PRELIMINARY) CET1 capital $14,607 $14,345 $14,154 $14,007 $14,304 $262 2% $303 2% Tier 1 capital 16,572 16,310 16,119 15,577 15,874 262 2 698 4 Total capital 19,602 19,427 19,319 18,592 18,542 175 1 1,060 6 Risk-weighted assets 146,781 146,131 147,260 148,946 142,915 650 — 3,866 3 1 Adjusted average assets 175,370 171,938 174,017 161,715 158,782 3,432 2 16,588 10 CET1 capital ratio 10.0 % 9.8 % 9.6 % 9.4 % 10.0 % Tier 1 capital ratio 11.3 11.2 10.9 10.5 11.1 Total capital ratio 13.4 13.3 13.1 12.5 13.0 Tier 1 leverage ratio 9.4 9.5 9.3 9.6 10.0 TANGIBLE COMMON EQUITY (PERIOD-END) Common stockholders' equity $20,708 $20,504 $20,453 $20,380 $20,631 $204 1% $77 —% $20,708 $20,631 $77 —% Less: Goodwill 7,050 7,050 7,050 7,050 7,044 — — 6 — 7,050 7,044 6 — Less: Other intangible assets 58 60 63 66 68 (2) (3) (10) (15) 58 68 (10) (15) 2 Add: Deferred tax liabilities 379 377 376 375 374 2 1 5 1 379 374 5 1 Total tangible common equity $13,979 $13,771 $13,716 $13,639 $13,893 $208 2% $86 1% $13,979 $13,893 $86 1% TANGIBLE COMMON EQUITY (AVERAGE) Common stockholders' equity $20,547 $20,534 $20,446 $20,223 $20,400 $13 —% $147 1% $20,438 $20,325 $113 1% Less: Goodwill 7,050 7,050 7,050 7,046 7,044 — — 6 — 7,049 7,036 13 — Less: Other intangible assets 60 62 65 67 69 (2) (3) (9) (13) 64 71 (7) (10) 2 Add: Deferred tax liabilities 377 375 375 374 373 2 1 4 1 376 371 5 1 Total tangible common equity $13,814 $13,797 $13,706 $13,484 $13,660 $17 —% $154 1% $13,701 $13,589 $112 1% INTANGIBLE ASSETS (PERIOD-END) Goodwill $7,050 $7,050 $7,050 $7,050 $7,044 $— —% $6 —% $7,050 $7,044 $6 —% Other intangible assets 58 60 63 66 68 (2) (3) (10) (15) 58 68 (10) (15) Total intangible assets $7,108 $7,110 $7,113 $7,116 $7,112 ($2) —% ($4) —% $7,108 $7,112 ($4) —% 1 Adjusted average assets include quarterly average assets, less deductions for disallowed goodwill and other intangible assets, net of deferred tax liabilities related to tax deductible goodwill, and the accumulated other comprehensive income impact related to the adoption of post-retirement benefit plan guidance under GAAP. 2 Deferred tax liabilities relate to tax-deductible goodwill, which is netted against goodwill when calculating tangible common equity. 19CAPITAL AND RATIOS (in millions, except ratio data) AS OF FULL YEAR DECEMBER 31, 2020 CHANGE 2020 Change Dec 31, Sept 30, June 30, Mar 31, Dec 31, 2020 2020 2020 2020 2019 Sept 30, 2020 December 31, 2019 2020 2019 2019 $ % $ % $ % CAPITAL RATIOS AND COMPONENTS (PRELIMINARY) CET1 capital $14,607 $14,345 $14,154 $14,007 $14,304 $262 2% $303 2% Tier 1 capital 16,572 16,310 16,119 15,577 15,874 262 2 698 4 Total capital 19,602 19,427 19,319 18,592 18,542 175 1 1,060 6 Risk-weighted assets 146,781 146,131 147,260 148,946 142,915 650 — 3,866 3 1 Adjusted average assets 175,370 171,938 174,017 161,715 158,782 3,432 2 16,588 10 CET1 capital ratio 10.0 % 9.8 % 9.6 % 9.4 % 10.0 % Tier 1 capital ratio 11.3 11.2 10.9 10.5 11.1 Total capital ratio 13.4 13.3 13.1 12.5 13.0 Tier 1 leverage ratio 9.4 9.5 9.3 9.6 10.0 TANGIBLE COMMON EQUITY (PERIOD-END) Common stockholders' equity $20,708 $20,504 $20,453 $20,380 $20,631 $204 1% $77 —% $20,708 $20,631 $77 —% Less: Goodwill 7,050 7,050 7,050 7,050 7,044 — — 6 — 7,050 7,044 6 — Less: Other intangible assets 58 60 63 66 68 (2) (3) (10) (15) 58 68 (10) (15) 2 Add: Deferred tax liabilities 379 377 376 375 374 2 1 5 1 379 374 5 1 Total tangible common equity $13,979 $13,771 $13,716 $13,639 $13,893 $208 2% $86 1% $13,979 $13,893 $86 1% TANGIBLE COMMON EQUITY (AVERAGE) Common stockholders' equity $20,547 $20,534 $20,446 $20,223 $20,400 $13 —% $147 1% $20,438 $20,325 $113 1% Less: Goodwill 7,050 7,050 7,050 7,046 7,044 — — 6 — 7,049 7,036 13 — Less: Other intangible assets 60 62 65 67 69 (2) (3) (9) (13) 64 71 (7) (10) 2 Add: Deferred tax liabilities 377 375 375 374 373 2 1 4 1 376 371 5 1 Total tangible common equity $13,814 $13,797 $13,706 $13,484 $13,660 $17 —% $154 1% $13,701 $13,589 $112 1% INTANGIBLE ASSETS (PERIOD-END) Goodwill $7,050 $7,050 $7,050 $7,050 $7,044 $— —% $6 —% $7,050 $7,044 $6 —% Other intangible assets 58 60 63 66 68 (2) (3) (10) (15) 58 68 (10) (15) Total intangible assets $7,108 $7,110 $7,113 $7,116 $7,112 ($2) —% ($4) —% $7,108 $7,112 ($4) —% 1 Adjusted average assets include quarterly average assets, less deductions for disallowed goodwill and other intangible assets, net of deferred tax liabilities related to tax deductible goodwill, and the accumulated other comprehensive income impact related to the adoption of post-retirement benefit plan guidance under GAAP. 2 Deferred tax liabilities relate to tax-deductible goodwill, which is netted against goodwill when calculating tangible common equity. 19
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS (in millions, except share, per-share and ratio data) Non-GAAP Financial Measures This document contains non-GAAP financial measures denoted as Underlying results. Underlying results for any given reporting period exclude certain items that may occur in that period which Management does not consider indicative of the Company’s on-going financial performance. We believe these non-GAAP financial measures provide useful information to investors because they are used by our Management to evaluate our operating performance and make day-to-day operating decisions. In addition, we believe our Underlying results in any given reporting period reflect our on-going financial performance in that period and, accordingly, are useful to consider in addition to our GAAP financial results. We further believe the presentation of Underlying results increases comparability of period-to-period results. The following tables present reconciliations of our non-GAAP measures to the most directly comparable GAAP financial measures. Other companies may use similarly titled non-GAAP financial measures that are calculated differently from the way we calculate such measures. Accordingly, our non-GAAP financial measures may not be comparable to similar measures used by such companies. We caution investors not to place undue reliance on such non-GAAP financial measures, but to consider them with the most directly comparable GAAP measures. Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as a substitute for our results reported under GAAP. 20NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS (in millions, except share, per-share and ratio data) Non-GAAP Financial Measures This document contains non-GAAP financial measures denoted as Underlying results. Underlying results for any given reporting period exclude certain items that may occur in that period which Management does not consider indicative of the Company’s on-going financial performance. We believe these non-GAAP financial measures provide useful information to investors because they are used by our Management to evaluate our operating performance and make day-to-day operating decisions. In addition, we believe our Underlying results in any given reporting period reflect our on-going financial performance in that period and, accordingly, are useful to consider in addition to our GAAP financial results. We further believe the presentation of Underlying results increases comparability of period-to-period results. The following tables present reconciliations of our non-GAAP measures to the most directly comparable GAAP financial measures. Other companies may use similarly titled non-GAAP financial measures that are calculated differently from the way we calculate such measures. Accordingly, our non-GAAP financial measures may not be comparable to similar measures used by such companies. We caution investors not to place undue reliance on such non-GAAP financial measures, but to consider them with the most directly comparable GAAP measures. Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as a substitute for our results reported under GAAP. 20
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS, CONTINUED (in millions, except share, per-share and ratio data) QUARTERLY TRENDS FULL YEAR 4Q20 Change 2020 Change 4Q20 3Q20 2Q20 1Q20 4Q19 3Q20 4Q19 2020 2019 2019 $ % $ % $ % Total revenue, Underlying: Total revenue (GAAP) A $1,707 $1,791 $1,750 $1,657 $1,637 ($84) (5%) $70 4% $6,905 $6,491 $414 6% Less: Notable items — — — — — — — — — — — — — Total revenue, Underlying (non-GAAP) B $1,707 $1,791 $1,750 $1,657 $1,637 ($84) (5%) $70 4% $6,905 $6,491 $414 6% Noninterest expense, Underlying: Noninterest expense (GAAP) C $1,012 $988 $979 $1,012 $986 $24 2% $26 3% $3,991 $3,847 $144 4% Less: Notable items 42 31 19 33 37 11 35 5 14 125 68 57 84 Noninterest expense, Underlying (non-GAAP) D $970 $957 $960 $979 $949 $13 1% $21 2% $3,866 $3,779 $87 2% Pre-provision profit: Total revenue (GAAP) A $1,707 $1,791 $1,750 $1,657 $1,637 ($84) (5%) $70 4% $6,905 $6,491 $414 6% Less: Noninterest expense (GAAP) C 1,012 988 979 1,012 986 24 2 26 3 3,991 3,847 144 4 Pre-provision profit (GAAP) $695 $803 $771 $645 $651 ($108) (13%) $44 7% $2,914 $2,644 $270 10% Pre-provision profit, Underlying: Total revenue, Underlying (non-GAAP) B $1,707 $1,791 $1,750 $1,657 $1,637 ($84) (5%) $70 4% $6,905 $6,491 $414 6% Less: Noninterest expense, Underlying (non-GAAP) D 970 957 960 979 949 13 1 21 2 3,866 3,779 87 2 Pre-provision profit, Underlying (non-GAAP) $737 $834 $790 $678 $688 ($97) (12%) $49 7% $3,039 $2,712 $327 12% Income before income tax expense, Underlying: Income before income tax expense (GAAP) E $571 $375 $307 $45 $541 $196 52% $30 6% $1,298 $2,251 ($953) (42%) Less: Expense before income tax benefit related to notable items (42) (31) (19) (33) (37) (11) (35) (5) (14) (125) (68) (57) (84) Income before income tax expense, Underlying (non-GAAP) F $613 $406 $326 $78 $578 $207 51% $35 6% $1,423 $2,319 ($896) (39%) Income tax expense, Underlying: Income tax expense (GAAP) G $115 $61 $54 $11 $91 $54 89% $24 26% $241 $460 ($219) (48%) Less: Income tax benefit related to notable items (18) (7) (9) (8) (33) (11) (157) 15 45 (42) (51) 9 18 Income tax expense, Underlying (non-GAAP) H $133 $68 $63 $19 $124 $65 96% $9 7% $283 $511 ($228) (45%) Net income, Underlying: Net income (GAAP) I $456 $314 $253 $34 $450 $142 45% $6 1% $1,057 $1,791 ($734) (41%) Add: Notable items, net of income tax benefit 24 24 10 25 4 — — 20 NM 83 17 66 NM Net income, Underlying (non-GAAP) J $480 $338 $263 $59 $454 $142 42% $26 6% $1,140 $1,808 ($668) (37%) Net income available to common stockholders, Underlying: Net income available to common stockholders (GAAP) K $424 $289 $225 $12 $427 $135 47% ($3) (1%) $950 $1,718 ($768) (45%) Add: Notable items, net of income tax benefit 24 24 10 25 4 — — 20 NM 83 17 66 NM Net income available to common stockholders, Underlying (non-GAAP) L $448 $313 $235 $37 $431 $135 43% $17 4% $1,033 $1,735 ($702) (40%) 21NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS, CONTINUED (in millions, except share, per-share and ratio data) QUARTERLY TRENDS FULL YEAR 4Q20 Change 2020 Change 4Q20 3Q20 2Q20 1Q20 4Q19 3Q20 4Q19 2020 2019 2019 $ % $ % $ % Total revenue, Underlying: Total revenue (GAAP) A $1,707 $1,791 $1,750 $1,657 $1,637 ($84) (5%) $70 4% $6,905 $6,491 $414 6% Less: Notable items — — — — — — — — — — — — — Total revenue, Underlying (non-GAAP) B $1,707 $1,791 $1,750 $1,657 $1,637 ($84) (5%) $70 4% $6,905 $6,491 $414 6% Noninterest expense, Underlying: Noninterest expense (GAAP) C $1,012 $988 $979 $1,012 $986 $24 2% $26 3% $3,991 $3,847 $144 4% Less: Notable items 42 31 19 33 37 11 35 5 14 125 68 57 84 Noninterest expense, Underlying (non-GAAP) D $970 $957 $960 $979 $949 $13 1% $21 2% $3,866 $3,779 $87 2% Pre-provision profit: Total revenue (GAAP) A $1,707 $1,791 $1,750 $1,657 $1,637 ($84) (5%) $70 4% $6,905 $6,491 $414 6% Less: Noninterest expense (GAAP) C 1,012 988 979 1,012 986 24 2 26 3 3,991 3,847 144 4 Pre-provision profit (GAAP) $695 $803 $771 $645 $651 ($108) (13%) $44 7% $2,914 $2,644 $270 10% Pre-provision profit, Underlying: Total revenue, Underlying (non-GAAP) B $1,707 $1,791 $1,750 $1,657 $1,637 ($84) (5%) $70 4% $6,905 $6,491 $414 6% Less: Noninterest expense, Underlying (non-GAAP) D 970 957 960 979 949 13 1 21 2 3,866 3,779 87 2 Pre-provision profit, Underlying (non-GAAP) $737 $834 $790 $678 $688 ($97) (12%) $49 7% $3,039 $2,712 $327 12% Income before income tax expense, Underlying: Income before income tax expense (GAAP) E $571 $375 $307 $45 $541 $196 52% $30 6% $1,298 $2,251 ($953) (42%) Less: Expense before income tax benefit related to notable items (42) (31) (19) (33) (37) (11) (35) (5) (14) (125) (68) (57) (84) Income before income tax expense, Underlying (non-GAAP) F $613 $406 $326 $78 $578 $207 51% $35 6% $1,423 $2,319 ($896) (39%) Income tax expense, Underlying: Income tax expense (GAAP) G $115 $61 $54 $11 $91 $54 89% $24 26% $241 $460 ($219) (48%) Less: Income tax benefit related to notable items (18) (7) (9) (8) (33) (11) (157) 15 45 (42) (51) 9 18 Income tax expense, Underlying (non-GAAP) H $133 $68 $63 $19 $124 $65 96% $9 7% $283 $511 ($228) (45%) Net income, Underlying: Net income (GAAP) I $456 $314 $253 $34 $450 $142 45% $6 1% $1,057 $1,791 ($734) (41%) Add: Notable items, net of income tax benefit 24 24 10 25 4 — — 20 NM 83 17 66 NM Net income, Underlying (non-GAAP) J $480 $338 $263 $59 $454 $142 42% $26 6% $1,140 $1,808 ($668) (37%) Net income available to common stockholders, Underlying: Net income available to common stockholders (GAAP) K $424 $289 $225 $12 $427 $135 47% ($3) (1%) $950 $1,718 ($768) (45%) Add: Notable items, net of income tax benefit 24 24 10 25 4 — — 20 NM 83 17 66 NM Net income available to common stockholders, Underlying (non-GAAP) L $448 $313 $235 $37 $431 $135 43% $17 4% $1,033 $1,735 ($702) (40%) 21
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS, CONTINUED (in millions, except share, per-share and ratio data) QUARTERLY TRENDS FULL YEAR 4Q20 Change 2020 Change 4Q20 3Q20 2Q20 1Q20 4Q19 3Q20 4Q19 2020 2019 2019 $/bps % $/bps % $/bps % Operating leverage: Total revenue (GAAP) A $1,707 $1,791 $1,750 $1,657 $1,637 ($84) (4.65%) $70 4.35% $6,905 $6,491 $414 6.38% Less: Noninterest expense (GAAP) C 1,012 988 979 1,012 986 24 2.43 26 2.61 3,991 3,847 144 3.73 Operating leverage (7.08%) 1.74% 2.65% Operating leverage, Underlying: Total revenue, Underlying (non-GAAP) B $1,707 $1,791 $1,750 $1,657 $1,637 ($84) (4.65%) $70 4.35% $6,905 $6,491 $414 6.39% Less: Noninterest expense, Underlying (non-GAAP) D 970 957 960 979 949 13 1.39 21 2.21 3,866 3,779 87 2.30 Operating leverage, Underlying (non-GAAP) (6.04%) 2.14% 4.09% Efficiency ratio and efficiency ratio, Underlying: Efficiency ratio C/A 59.28 % 55.18% 55.91% 61.10% 60.28% 410 bps (100) bps 57.80 % 59.28 % (148) bps Efficiency ratio, Underlying (non-GAAP) D/B 56.83 53.44 54.85 59.08 58.02 339 bps (119) bps 55.99 58.23 (224) bps Effective income tax rate and effective income tax rate, Underlying: Effective income tax rate G/E 20.16% 16.10% 17.69% 24.13% 16.76% 406 bps 340 bps 18.54 % 20.43 % (189) bps Effective income tax rate, Underlying (non-GAAP) H/F 21.70 16.79 19.36 24.52 21.52 491 bps 18 bps 19.92 22.03 (211) bps Return on average common equity and return on average common equity, Underlying: Average common equity (GAAP) M $20,547 $20,534 $20,446 $20,223 $20,400 $13 —% $147 1% $20,438 $20,325 $113 1% Return on average common equity K/M 8.20 % 5.60% 4.44% 0.24% 8.30% 260 bps (10) bps 4.65 % 8.45 % (380) bps Return on average common equity, Underlying (non-GAAP) L/M 8.66 6.05 4.63 0.74 8.36 261 bps 30 bps 5.05 8.53 (348) bps Return on average tangible common equity and return on average tangible common equity, Underlying: Average common equity (GAAP) M $20,547 $20,534 $20,446 $20,223 $20,400 $13 —% $147 1% $20,438 $20,325 $113 1% Less: Average goodwill (GAAP) 7,050 7,050 7,050 7,046 7,044 — — 6 — 7,049 7,036 13 — Less: Average other intangibles (GAAP) 60 62 65 67 69 (2) (3) (9) (13) 64 71 (7) (10) Add: Average deferred tax liabilities related to goodwill (GAAP) 377 375 375 374 373 2 1 4 1 376 371 5 1 Average tangible common equity N $13,814 $13,797 $13,706 $13,484 $13,660 $17 —% $154 1% $13,701 $13,589 $112 1% Return on average tangible common equity K/N 12.20 % 8.33% 6.62% 0.36% 12.39% 387 bps (19) bps 6.93 % 12.64 % (571) bps Return on average tangible common equity, Underlying (non- GAAP) L/N 12.89 9.00 6.90 1.10 12.49 389 bps 40 bps 7.53 12.76 (523) bps Return on average total assets and return on average total assets, Underlying: Average total assets (GAAP) O $181,061 $177,675 $179,793 $167,177 $164,646 $3,386 2% $16,415 10% $176,442 $162,176 $14,266 9% Return on average total assets I/O 1.00 % 0.70% 0.57% 0.08% 1.08% 30 bps (8) bps 0.60 % 1.10 % (50) bps Return on average total assets, Underlying (non-GAAP) J/O 1.05 0.76 0.59 0.14 1.09 29 bps (4) bps 0.65 1.11 (46) bps 22NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS, CONTINUED (in millions, except share, per-share and ratio data) QUARTERLY TRENDS FULL YEAR 4Q20 Change 2020 Change 4Q20 3Q20 2Q20 1Q20 4Q19 3Q20 4Q19 2020 2019 2019 $/bps % $/bps % $/bps % Operating leverage: Total revenue (GAAP) A $1,707 $1,791 $1,750 $1,657 $1,637 ($84) (4.65%) $70 4.35% $6,905 $6,491 $414 6.38% Less: Noninterest expense (GAAP) C 1,012 988 979 1,012 986 24 2.43 26 2.61 3,991 3,847 144 3.73 Operating leverage (7.08%) 1.74% 2.65% Operating leverage, Underlying: Total revenue, Underlying (non-GAAP) B $1,707 $1,791 $1,750 $1,657 $1,637 ($84) (4.65%) $70 4.35% $6,905 $6,491 $414 6.39% Less: Noninterest expense, Underlying (non-GAAP) D 970 957 960 979 949 13 1.39 21 2.21 3,866 3,779 87 2.30 Operating leverage, Underlying (non-GAAP) (6.04%) 2.14% 4.09% Efficiency ratio and efficiency ratio, Underlying: Efficiency ratio C/A 59.28 % 55.18% 55.91% 61.10% 60.28% 410 bps (100) bps 57.80 % 59.28 % (148) bps Efficiency ratio, Underlying (non-GAAP) D/B 56.83 53.44 54.85 59.08 58.02 339 bps (119) bps 55.99 58.23 (224) bps Effective income tax rate and effective income tax rate, Underlying: Effective income tax rate G/E 20.16% 16.10% 17.69% 24.13% 16.76% 406 bps 340 bps 18.54 % 20.43 % (189) bps Effective income tax rate, Underlying (non-GAAP) H/F 21.70 16.79 19.36 24.52 21.52 491 bps 18 bps 19.92 22.03 (211) bps Return on average common equity and return on average common equity, Underlying: Average common equity (GAAP) M $20,547 $20,534 $20,446 $20,223 $20,400 $13 —% $147 1% $20,438 $20,325 $113 1% Return on average common equity K/M 8.20 % 5.60% 4.44% 0.24% 8.30% 260 bps (10) bps 4.65 % 8.45 % (380) bps Return on average common equity, Underlying (non-GAAP) L/M 8.66 6.05 4.63 0.74 8.36 261 bps 30 bps 5.05 8.53 (348) bps Return on average tangible common equity and return on average tangible common equity, Underlying: Average common equity (GAAP) M $20,547 $20,534 $20,446 $20,223 $20,400 $13 —% $147 1% $20,438 $20,325 $113 1% Less: Average goodwill (GAAP) 7,050 7,050 7,050 7,046 7,044 — — 6 — 7,049 7,036 13 — Less: Average other intangibles (GAAP) 60 62 65 67 69 (2) (3) (9) (13) 64 71 (7) (10) Add: Average deferred tax liabilities related to goodwill (GAAP) 377 375 375 374 373 2 1 4 1 376 371 5 1 Average tangible common equity N $13,814 $13,797 $13,706 $13,484 $13,660 $17 —% $154 1% $13,701 $13,589 $112 1% Return on average tangible common equity K/N 12.20 % 8.33% 6.62% 0.36% 12.39% 387 bps (19) bps 6.93 % 12.64 % (571) bps Return on average tangible common equity, Underlying (non- GAAP) L/N 12.89 9.00 6.90 1.10 12.49 389 bps 40 bps 7.53 12.76 (523) bps Return on average total assets and return on average total assets, Underlying: Average total assets (GAAP) O $181,061 $177,675 $179,793 $167,177 $164,646 $3,386 2% $16,415 10% $176,442 $162,176 $14,266 9% Return on average total assets I/O 1.00 % 0.70% 0.57% 0.08% 1.08% 30 bps (8) bps 0.60 % 1.10 % (50) bps Return on average total assets, Underlying (non-GAAP) J/O 1.05 0.76 0.59 0.14 1.09 29 bps (4) bps 0.65 1.11 (46) bps 22
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS, CONTINUED (in millions, except share, per-share and ratio data) QUARTERLY TRENDS FULL YEAR 4Q20 Change 2020 Change 4Q20 3Q20 2Q20 1Q20 4Q19 3Q20 4Q19 2020 2019 2019 $/bps % $/bps % $/bps % Return on average total tangible assets and return on average total tangible assets, Underlying: Average total assets (GAAP) P $181,061 $177,675 $179,793 $167,177 $164,646 $3,386 2% $16,415 10% $176,442 $162,176 $14,266 9% Less: Average goodwill (GAAP) 7,050 7,050 7,050 7,046 7,044 — — 6 — 7,049 7,036 13 — Less: Average other intangibles (GAAP) 60 62 65 67 69 (2) (3) (9) (13) 64 71 (7) (10) Add: Average deferred tax liabilities related to goodwill (GAAP) 377 375 375 374 373 2 1 4 1 376 371 5 1 Average tangible assets Q $174,328 $170,938 $173,053 $160,438 $157,906 $3,390 2% $16,422 10% $169,705 $155,440 $14,265 9% Return on average total tangible assets I/Q 1.04 % 0.73% 0.59% 0.09% 1.13% 31 bps (9) bps 0.62 % 1.15 % (53) bps Return on average total tangible assets, Underlying (non-GAAP) J/Q 1.10 0.79 0.61 0.15 1.14 31 bps (4) bps 0.67 1.16 (49) bps Tangible book value per common share: Common shares - at period-end (GAAP) R 427,209,831 427,073,084 426,824,594 426,586,533 433,121,083 136,747 —% (5,911,252) (1%) 427,209,831 433,121,083 (5,911,252) (1%) Common stockholders' equity (GAAP) $20,708 $20,504 $20,453 $20,380 $20,631 $204 1 $77 — $20,708 $20,631 $77 — Less: Goodwill (GAAP) 7,050 7,050 7,050 7,050 7,044 — — 6 — 7,050 7,044 6 — Less: Other intangible assets (GAAP) 58 60 63 66 68 (2) (3) (10) (15) 58 68 (10) (15) Add: Deferred tax liabilities related to goodwill (GAAP) 379 377 376 375 374 2 1 5 1 379 374 5 1 Tangible common equity S $13,979 $13,771 $13,716 $13,639 $13,893 $208 2% $86 1% $13,979 $13,893 $86 1% Tangible book value per common share S/R $32.72 $32.24 $32.13 $31.97 $32.08 $0.48 1% $0.64 2% $32.72 $32.08 $0.64 2% Net income per average common share - basic and diluted and net income per average common share - basic and diluted, Underlying: Average common shares outstanding - basic (GAAP) T 427,074,822 426,846,096 426,613,053 427,718,421 434,684,606 228,726 —% (7,609,784) (2%) 427,062,537 449,731,453 (22,668,916) (5%) Average common shares outstanding - diluted (GAAP) U 428,881,252 427,992,349 427,566,920 429,388,855 436,500,829 888,903 — (7,619,577) (2) 428,157,780 451,213,701 (23,055,921) (5) Net income per average common share - basic (GAAP) K/T $0.99 $0.68 $0.53 $0.03 $0.98 $0.31 46 $0.01 1 $2.22 $3.82 ($1.60) (42) Net income per average common share - diluted (GAAP) K/U 0.99 0.68 0.53 0.03 0.98 0.31 46 0.01 1 2.22 3.81 (1.59) (42) Net income per average common share - basic, Underlying (non-GAAP) L/T 1.05 0.73 0.55 0.09 0.99 0.32 44 0.06 6 2.42 3.86 (1.44) (37) Net income per average common share - diluted, Underlying (non- GAAP) L/U 1.04 0.73 0.55 0.09 0.99 0.31 42 0.05 5 2.41 3.84 (1.43) (37) Dividend payout ratio and dividend payout ratio, Underlying: Cash dividends declared and paid per common share V $0.39 $0.39 $0.39 $0.39 $0.36 $— —% $0.03 8% $1.56 $1.36 $0.20 15% Dividend payout ratio V/(K/T) 39 % 58 % 74 % 1,398 % 37 % (1,829) bps 265 bps 70 % 36 % 3,453 bps Dividend payout ratio, Underlying (non-GAAP) V/(L/T) 37 53 71 451 36 (1,608) bps 82 bps 65 35 2,930 bps 23NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS, CONTINUED (in millions, except share, per-share and ratio data) QUARTERLY TRENDS FULL YEAR 4Q20 Change 2020 Change 4Q20 3Q20 2Q20 1Q20 4Q19 3Q20 4Q19 2020 2019 2019 $/bps % $/bps % $/bps % Return on average total tangible assets and return on average total tangible assets, Underlying: Average total assets (GAAP) P $181,061 $177,675 $179,793 $167,177 $164,646 $3,386 2% $16,415 10% $176,442 $162,176 $14,266 9% Less: Average goodwill (GAAP) 7,050 7,050 7,050 7,046 7,044 — — 6 — 7,049 7,036 13 — Less: Average other intangibles (GAAP) 60 62 65 67 69 (2) (3) (9) (13) 64 71 (7) (10) Add: Average deferred tax liabilities related to goodwill (GAAP) 377 375 375 374 373 2 1 4 1 376 371 5 1 Average tangible assets Q $174,328 $170,938 $173,053 $160,438 $157,906 $3,390 2% $16,422 10% $169,705 $155,440 $14,265 9% Return on average total tangible assets I/Q 1.04 % 0.73% 0.59% 0.09% 1.13% 31 bps (9) bps 0.62 % 1.15 % (53) bps Return on average total tangible assets, Underlying (non-GAAP) J/Q 1.10 0.79 0.61 0.15 1.14 31 bps (4) bps 0.67 1.16 (49) bps Tangible book value per common share: Common shares - at period-end (GAAP) R 427,209,831 427,073,084 426,824,594 426,586,533 433,121,083 136,747 —% (5,911,252) (1%) 427,209,831 433,121,083 (5,911,252) (1%) Common stockholders' equity (GAAP) $20,708 $20,504 $20,453 $20,380 $20,631 $204 1 $77 — $20,708 $20,631 $77 — Less: Goodwill (GAAP) 7,050 7,050 7,050 7,050 7,044 — — 6 — 7,050 7,044 6 — Less: Other intangible assets (GAAP) 58 60 63 66 68 (2) (3) (10) (15) 58 68 (10) (15) Add: Deferred tax liabilities related to goodwill (GAAP) 379 377 376 375 374 2 1 5 1 379 374 5 1 Tangible common equity S $13,979 $13,771 $13,716 $13,639 $13,893 $208 2% $86 1% $13,979 $13,893 $86 1% Tangible book value per common share S/R $32.72 $32.24 $32.13 $31.97 $32.08 $0.48 1% $0.64 2% $32.72 $32.08 $0.64 2% Net income per average common share - basic and diluted and net income per average common share - basic and diluted, Underlying: Average common shares outstanding - basic (GAAP) T 427,074,822 426,846,096 426,613,053 427,718,421 434,684,606 228,726 —% (7,609,784) (2%) 427,062,537 449,731,453 (22,668,916) (5%) Average common shares outstanding - diluted (GAAP) U 428,881,252 427,992,349 427,566,920 429,388,855 436,500,829 888,903 — (7,619,577) (2) 428,157,780 451,213,701 (23,055,921) (5) Net income per average common share - basic (GAAP) K/T $0.99 $0.68 $0.53 $0.03 $0.98 $0.31 46 $0.01 1 $2.22 $3.82 ($1.60) (42) Net income per average common share - diluted (GAAP) K/U 0.99 0.68 0.53 0.03 0.98 0.31 46 0.01 1 2.22 3.81 (1.59) (42) Net income per average common share - basic, Underlying (non-GAAP) L/T 1.05 0.73 0.55 0.09 0.99 0.32 44 0.06 6 2.42 3.86 (1.44) (37) Net income per average common share - diluted, Underlying (non- GAAP) L/U 1.04 0.73 0.55 0.09 0.99 0.31 42 0.05 5 2.41 3.84 (1.43) (37) Dividend payout ratio and dividend payout ratio, Underlying: Cash dividends declared and paid per common share V $0.39 $0.39 $0.39 $0.39 $0.36 $— —% $0.03 8% $1.56 $1.36 $0.20 15% Dividend payout ratio V/(K/T) 39 % 58 % 74 % 1,398 % 37 % (1,829) bps 265 bps 70 % 36 % 3,453 bps Dividend payout ratio, Underlying (non-GAAP) V/(L/T) 37 53 71 451 36 (1,608) bps 82 bps 65 35 2,930 bps 23
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS, CONTINUED (in millions, except share, per-share and ratio data) QUARTERLY TRENDS FULL YEAR 4Q20 Change 2020 Change 4Q20 3Q20 2Q20 1Q20 4Q19 3Q20 4Q19 2020 2019 2019 $ % $ % $/bps % Salaries and employee benefits, Underlying: Salaries and employee benefits (GAAP) $537 $524 $513 $549 $502 $13 2% $35 7% $2,123 $2,026 $97 5% Less: Notable items 18 13 4 10 6 5 38 12 200 45 14 31 221 Salaries and employee benefits, Underlying (non-GAAP) $519 $511 $509 $539 $496 $8 2% $23 5% $2,078 $2,012 $66 3% Equipment and software expense, Underlying: Equipment and software expense (GAAP) $141 $149 $142 $133 $133 ($8) (5%) $8 6% $565 $514 $51 10% Less: Notable items 1 1 — 1 3 — — (2) (67) 3 3 — — Equipment and software expense, Underlying (non-GAAP) $140 $148 $142 $132 $130 ($8) (5%) $10 8% $562 $511 $51 10% Outside services, Underlying: Outside services (GAAP) $148 $139 $131 $135 $142 $9 6% $6 4% $553 $498 $55 11% Less: Notable items 17 16 12 18 20 1 6 (3) (15) 63 43 20 47 Outside services, Underlying (non-GAAP) $131 $123 $119 $117 $122 $8 7% $9 7% $490 $455 $35 8% Occupancy, Underlying: Occupancy (GAAP) $84 $81 $82 $84 $88 $3 4% ($4) (5%) $331 $333 ($2) (1%) Less: Notable items 6 1 3 4 8 5 NM (2) (25) 14 8 6 75 Occupancy, Underlying (non-GAAP) $78 $80 $79 $80 $80 ($2) (3%) ($2) (3%) $317 $325 ($8) (2%) 24NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS, CONTINUED (in millions, except share, per-share and ratio data) QUARTERLY TRENDS FULL YEAR 4Q20 Change 2020 Change 4Q20 3Q20 2Q20 1Q20 4Q19 3Q20 4Q19 2020 2019 2019 $ % $ % $/bps % Salaries and employee benefits, Underlying: Salaries and employee benefits (GAAP) $537 $524 $513 $549 $502 $13 2% $35 7% $2,123 $2,026 $97 5% Less: Notable items 18 13 4 10 6 5 38 12 200 45 14 31 221 Salaries and employee benefits, Underlying (non-GAAP) $519 $511 $509 $539 $496 $8 2% $23 5% $2,078 $2,012 $66 3% Equipment and software expense, Underlying: Equipment and software expense (GAAP) $141 $149 $142 $133 $133 ($8) (5%) $8 6% $565 $514 $51 10% Less: Notable items 1 1 — 1 3 — — (2) (67) 3 3 — — Equipment and software expense, Underlying (non-GAAP) $140 $148 $142 $132 $130 ($8) (5%) $10 8% $562 $511 $51 10% Outside services, Underlying: Outside services (GAAP) $148 $139 $131 $135 $142 $9 6% $6 4% $553 $498 $55 11% Less: Notable items 17 16 12 18 20 1 6 (3) (15) 63 43 20 47 Outside services, Underlying (non-GAAP) $131 $123 $119 $117 $122 $8 7% $9 7% $490 $455 $35 8% Occupancy, Underlying: Occupancy (GAAP) $84 $81 $82 $84 $88 $3 4% ($4) (5%) $331 $333 ($2) (1%) Less: Notable items 6 1 3 4 8 5 NM (2) (25) 14 8 6 75 Occupancy, Underlying (non-GAAP) $78 $80 $79 $80 $80 ($2) (3%) ($2) (3%) $317 $325 ($8) (2%) 24
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS - SEGMENTS (in millions, except ratio data) FOURTH QUARTER 2020 THIRD QUARTER 2020 SECOND QUARTER 2020 Consumer Commercial Consumer Commercial Consumer Commercial Banking Banking Other Consolidated Banking Banking Other Consolidated Banking Banking Other Consolidated Net income (loss) available to common stockholders: Net income (loss) A $322 $221 ($87) $456 $407 $153 ($246) $314 $320 $221 ($288) $253 Less: Preferred stock dividends — — 32 32 — — 25 25 — — 28 28 Net income (loss) available to common stockholders B $322 $221 ($119) $424 $407 $153 ($271) $289 $320 $221 ($316) $225 Return on average total tangible assets: Average total assets (GAAP) $74,392 $58,212 $48,457 $181,061 $73,605 $60,889 $43,181 $177,675 $71,634 $65,280 $42,879 $179,793 Less: Average goodwill (GAAP) 122 52 6,876 7,050 122 52 6,876 7,050 122 52 6,876 7,050 Average other intangibles (GAAP) 39 5 16 60 40 5 17 62 41 6 18 65 Add: Average deferred tax liabilities related to goodwill (GAAP) 3 1 373 377 2 1 372 375 2 1 372 375 Average tangible assets C $74,234 $58,156 $41,938 $174,328 $73,445 $60,833 $36,660 $170,938 $71,473 $65,223 $36,357 $173,053 Return on average total tangible assets A/C 1.72 % 1.51 % NM 1.04 % 2.21 % 1.01 % NM 0.73 % 1.80 % 1.36 % NM 0.59 % Efficiency ratio: Noninterest expense (GAAP) D $749 $216 $47 $1,012 $742 $210 $36 $988 $735 $213 $31 $979 Net interest income (GAAP) 859 438 (168) 1,129 845 421 (129) 1,137 814 419 (73) 1,160 Noninterest income (GAAP) 375 182 21 578 495 144 15 654 428 144 18 590 Total revenue (GAAP) E $1,234 $620 ($147) $1,707 $1,340 $565 ($114) $1,791 $1,242 $563 ($55) $1,750 Efficiency ratio D/E 60.75 % 34.94 % NM 59.28 % 55.35 % 37.03 % NM 55.18 % 59.19 % 37.93 % NM 55.91 % FIRST QUARTER 2020 FOURTH QUARTER 2019 Consumer Commercial Consumer Commercial Banking Banking Other Consolidated Banking Banking Other Consolidated Net income (loss) available to common stockholders: Net income (loss) A $236 $179 ($381) $34 $209 $231 $10 $450 Less: Preferred stock dividends — — 22 22 — — 23 23 Net income (loss) available to common stockholders B $236 $179 ($403) $12 $209 $231 ($13) $427 Return on average total tangible assets: Average total assets (GAAP) $68,415 $59,005 $39,757 $167,177 $68,069 $56,407 $40,170 $164,646 Less: Average goodwill (GAAP) 122 48 6,876 7,046 122 46 6,876 7,044 Average other intangibles (GAAP) 43 6 18 67 63 6 — 69 Add: Average deferred tax liabilities related to goodwill (GAAP) 1 1 372 374 1 1 371 373 Average tangible assets C $68,251 $58,952 $33,235 $160,438 $67,885 $56,356 $33,665 $157,906 Return on average total tangible assets A/C 1.39 % 1.22 % NM 0.09 % 1.22 % 1.63 % NM 1.13 % Efficiency ratio: Noninterest expense (GAAP) D $738 $221 $53 $1,012 $718 $219 $49 $986 Net interest income (GAAP) 793 365 2 1,160 796 363 (16) 1,143 Noninterest income (GAAP) 357 125 15 497 296 175 23 494 Total revenue (GAAP) E $1,150 $490 $17 $1,657 $1,092 $538 $7 $1,637 Efficiency ratio D/E 64.16 % 45.06 % NM 61.10 % 65.74 % 40.60 % NM 60.28 % 25NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS - SEGMENTS (in millions, except ratio data) FOURTH QUARTER 2020 THIRD QUARTER 2020 SECOND QUARTER 2020 Consumer Commercial Consumer Commercial Consumer Commercial Banking Banking Other Consolidated Banking Banking Other Consolidated Banking Banking Other Consolidated Net income (loss) available to common stockholders: Net income (loss) A $322 $221 ($87) $456 $407 $153 ($246) $314 $320 $221 ($288) $253 Less: Preferred stock dividends — — 32 32 — — 25 25 — — 28 28 Net income (loss) available to common stockholders B $322 $221 ($119) $424 $407 $153 ($271) $289 $320 $221 ($316) $225 Return on average total tangible assets: Average total assets (GAAP) $74,392 $58,212 $48,457 $181,061 $73,605 $60,889 $43,181 $177,675 $71,634 $65,280 $42,879 $179,793 Less: Average goodwill (GAAP) 122 52 6,876 7,050 122 52 6,876 7,050 122 52 6,876 7,050 Average other intangibles (GAAP) 39 5 16 60 40 5 17 62 41 6 18 65 Add: Average deferred tax liabilities related to goodwill (GAAP) 3 1 373 377 2 1 372 375 2 1 372 375 Average tangible assets C $74,234 $58,156 $41,938 $174,328 $73,445 $60,833 $36,660 $170,938 $71,473 $65,223 $36,357 $173,053 Return on average total tangible assets A/C 1.72 % 1.51 % NM 1.04 % 2.21 % 1.01 % NM 0.73 % 1.80 % 1.36 % NM 0.59 % Efficiency ratio: Noninterest expense (GAAP) D $749 $216 $47 $1,012 $742 $210 $36 $988 $735 $213 $31 $979 Net interest income (GAAP) 859 438 (168) 1,129 845 421 (129) 1,137 814 419 (73) 1,160 Noninterest income (GAAP) 375 182 21 578 495 144 15 654 428 144 18 590 Total revenue (GAAP) E $1,234 $620 ($147) $1,707 $1,340 $565 ($114) $1,791 $1,242 $563 ($55) $1,750 Efficiency ratio D/E 60.75 % 34.94 % NM 59.28 % 55.35 % 37.03 % NM 55.18 % 59.19 % 37.93 % NM 55.91 % FIRST QUARTER 2020 FOURTH QUARTER 2019 Consumer Commercial Consumer Commercial Banking Banking Other Consolidated Banking Banking Other Consolidated Net income (loss) available to common stockholders: Net income (loss) A $236 $179 ($381) $34 $209 $231 $10 $450 Less: Preferred stock dividends — — 22 22 — — 23 23 Net income (loss) available to common stockholders B $236 $179 ($403) $12 $209 $231 ($13) $427 Return on average total tangible assets: Average total assets (GAAP) $68,415 $59,005 $39,757 $167,177 $68,069 $56,407 $40,170 $164,646 Less: Average goodwill (GAAP) 122 48 6,876 7,046 122 46 6,876 7,044 Average other intangibles (GAAP) 43 6 18 67 63 6 — 69 Add: Average deferred tax liabilities related to goodwill (GAAP) 1 1 372 374 1 1 371 373 Average tangible assets C $68,251 $58,952 $33,235 $160,438 $67,885 $56,356 $33,665 $157,906 Return on average total tangible assets A/C 1.39 % 1.22 % NM 0.09 % 1.22 % 1.63 % NM 1.13 % Efficiency ratio: Noninterest expense (GAAP) D $738 $221 $53 $1,012 $718 $219 $49 $986 Net interest income (GAAP) 793 365 2 1,160 796 363 (16) 1,143 Noninterest income (GAAP) 357 125 15 497 296 175 23 494 Total revenue (GAAP) E $1,150 $490 $17 $1,657 $1,092 $538 $7 $1,637 Efficiency ratio D/E 64.16 % 45.06 % NM 61.10 % 65.74 % 40.60 % NM 60.28 % 25
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS - SEGMENTS (CONTINUED) (in millions, except ratio data) FULL YEAR 2020 2019 Consumer Commercial Consumer Commercial Banking Banking Other Consolidated Banking Banking Other Consolidated Net income (loss) available to common stockholders: Net income (loss) A $1,285 $774 ($1,002) $1,057 $875 $870 $46 $1,791 Less: Preferred stock dividends — — 107 107 — — 73 73 Net income (loss) available to common stockholders B $1,285 $774 ($1,109) $950 $875 $870 ($27) $1,718 Return on average total tangible assets: Average total assets (GAAP) $72,022 $60,839 $43,581 $176,442 $66,240 $55,947 $39,989 $162,176 Less: Average goodwill (GAAP) 122 51 6,876 7,049 120 40 6,876 7,036 Average other intangibles (GAAP) 41 6 17 64 65 6 — 71 Add: Average deferred tax liabilities related to goodwill (GAAP) 2 1 373 376 — — 371 371 Average tangible assets C $71,861 $60,783 $37,061 $169,705 $66,055 $55,901 $33,484 $155,440 Return on average total tangible assets A/C 1.79 % 1.27 % NM 0.62 % 1.32 % 1.56 % NM 1.15 % Efficiency ratio: Noninterest expense (GAAP) D $2,964 $860 $167 $3,991 $2,851 $858 $138 $3,847 Net interest income (GAAP) 3,311 1,643 (368) 4,586 3,182 1,466 (34) 4,614 Noninterest income (GAAP) 1,655 595 69 2,319 1,156 607 114 1,877 Total revenue (GAAP) E $4,966 $2,238 ($299) $6,905 $4,338 $2,073 $80 $6,491 Efficiency ratio D/E 59.69 % 38.43 % NM 57.80 % 65.72 % 41.38 % NM 59.28 % 26NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS - SEGMENTS (CONTINUED) (in millions, except ratio data) FULL YEAR 2020 2019 Consumer Commercial Consumer Commercial Banking Banking Other Consolidated Banking Banking Other Consolidated Net income (loss) available to common stockholders: Net income (loss) A $1,285 $774 ($1,002) $1,057 $875 $870 $46 $1,791 Less: Preferred stock dividends — — 107 107 — — 73 73 Net income (loss) available to common stockholders B $1,285 $774 ($1,109) $950 $875 $870 ($27) $1,718 Return on average total tangible assets: Average total assets (GAAP) $72,022 $60,839 $43,581 $176,442 $66,240 $55,947 $39,989 $162,176 Less: Average goodwill (GAAP) 122 51 6,876 7,049 120 40 6,876 7,036 Average other intangibles (GAAP) 41 6 17 64 65 6 — 71 Add: Average deferred tax liabilities related to goodwill (GAAP) 2 1 373 376 — — 371 371 Average tangible assets C $71,861 $60,783 $37,061 $169,705 $66,055 $55,901 $33,484 $155,440 Return on average total tangible assets A/C 1.79 % 1.27 % NM 0.62 % 1.32 % 1.56 % NM 1.15 % Efficiency ratio: Noninterest expense (GAAP) D $2,964 $860 $167 $3,991 $2,851 $858 $138 $3,847 Net interest income (GAAP) 3,311 1,643 (368) 4,586 3,182 1,466 (34) 4,614 Noninterest income (GAAP) 1,655 595 69 2,319 1,156 607 114 1,877 Total revenue (GAAP) E $4,966 $2,238 ($299) $6,905 $4,338 $2,073 $80 $6,491 Efficiency ratio D/E 59.69 % 38.43 % NM 57.80 % 65.72 % 41.38 % NM 59.28 % 26