What drove the strong year-over-year earnings growth?

Net income rose 39% and EPS 47% YoY, driven mainly by a 12% increase in net interest income from a 24 bp NIM expansion (benefit of Non-Core runoff, terminated swap roll-off, fixed-rate asset repricing and lower funding costs), an 11% rise in fees led by capital markets and wealth, and a 42% lower... (note: provision fell 8% YoY), partly offset by a 5% increase in noninterest expense. Share count also declined 3%, adding to EPS growth.

Is the quarter-over-quarter softness a concern?

Sequentially, PPNR fell 3% and EPS was flat at $1.13 (net income down 2%). Management attributed this to seasonality: fees fell 2% from a seasonally strong fourth quarter, payroll taxes lifted salaries, and the 1Q26 day count reduced NII by about $22 million. NII still rose 1.6% on higher NIM. The 2Q26 guidance points to renewed NII and fee growth.

How strong is Citizens' capital position, and what does the AOCI adjustment mean?

The reported CET1 ratio is 10.5%, down from 10.6%, and the tangible common equity ratio is 7.3%. The company also disclosed a 9.3% CET1 ratio adjusted for removal of the AOCI opt-out, which reflects how the ratio would look if unrealized securities losses were fully recognized in regulatory capital. Investors should note that this adjusted figure is materially lower, so it is a relevant sensitivity point. The company continued to return capital, repurchasing $300 million of stock and paying $198 million in common dividends.

What are the medium-term targets and key execution risks?

Management targets a NIM of 3.30%-3.50% by 4Q27 and a 16%-18% ROTCE by year-end 2027. Achieving this depends on swap roll-off, Non-Core runoff, fixed-rate repricing, and Fed funds staying in the 2.75%-3.75% range. Risks include lower rates reducing the NIM benefit, deposit competition (the cumulative interest-bearing deposit beta is targeted in the high 40s%), execution on the Reimagine the Bank program, and macro/geopolitical uncertainty that the filing explicitly flags.

Are credit costs likely to keep improving?

Current trends are favorable: NCOs declined to 39 bps, provisions fell 8% YoY, and the ACL to nonaccrual loans ratio improved to 146%. However, nonaccrual loans in retail (mainly mortgage) rose while commercial improved, 90+ day delinquencies rose to $208 million (partly FHA/VA/USDA-guaranteed), and the economic forecast assumes a mild recession. Management expects NCOs to be stable to slightly lower in 2Q26, so further improvement depends on macro conditions.

CFG 8-K: Earnings & Results & Regulation FD

01—Abstract

Summary

Summary of the 8-K filed April 16, 2026. Cited figures are marked; the original filing is the authoritative source.

Citizens Financial Group (CFG) reported first quarter 2026 net income of $517 million^a, up 39% year over year, and diluted EPS of $1.13, up 47% year over year (flat versus the seasonally softer fourth quarter of 2025, when EPS was also $1.13).

Pre-provision profit (PPNR) was $790 million^b, down 3% quarter over quarter but up 27% year over year, and positive operating leverage was 7.2% year over year. Net interest margin (NIM) expanded to 3.14%, up 7 basis points sequentially and 24 basis points year over year, while net interest income rose 12% year over year. Management reiterated a path to NIM of 3.30% to 3.50% by 4Q27 and a 16% to 18% return on tangible common equity (ROTCE) by year-end 2027.

Fees were $606 million^c, up 11% year over year but down 2% sequentially, with capital markets and wealth fees driving the annual growth. Credit trends improved. Net charge-offs fell to 0.39% of average loans from 0.43% in the prior quarter and 0.58% a year earlier, and the allowance for credit losses stood at 1.52% of loans.

Nonaccrual loans were $1.5 billion^d, roughly flat sequentially. Capital remained solid, with a CET1 ratio of 10.5% (9.3% adjusted for removal of the AOCI opt-out, a figure investors should watch closely) and tangible book value per share of $37.94, broadly stable. The company repurchased $300 million of stock and declared a quarterly dividend of $0.46 per share.

Private Bank growth, now contributing $0.11 to EPS, and the multi-year Reimagine the Bank cost program (targeting roughly $450 million of pre-tax run-rate benefit by year-end 2028) remain central to the medium-term thesis. Management's 2Q26 guidance calls for NII up 3% to 4%, fees up 3% to 5%, and expenses stable to up 1%.

02—Key points

Key Highlights

EPS of $1.13 (up 47% YoY); net income of $517 million (up 39% YoY); ROTCE of 12.2%.
NIM of 3.14%, up 7 bps QoQ and 24 bps YoY; management targets 3.30%-3.50% by 4Q27 with terminated swap roll-off and Non-Core runoff as key tailwinds.
Positive operating leverage of 7.2% YoY, but negative (2.12%) QoQ as expenses rose 3% sequentially and fees fell 2%.
Credit improving: net charge-offs of 39 bps (down from 43 bps QoQ and 58 bps YoY); ACL coverage of 1.52%; nonaccrual loans of $1.5 billion, roughly flat.
Private Bank contributed $0.11 to EPS, with deposits of $16.6 billion and total client assets of $10.1 billion; period-end loans grew 1% QoQ and 4% YoY.
Capital: CET1 of 10.5% (9.3% adjusted for AOCI opt-out removal); $300 million of buybacks in 1Q26; quarterly dividend of $0.46 per share; TBV per share of $37.94.
2Q26 outlook: NII up 3%-4%, fees up 3%-5%, expenses stable to up 1%, NCOs stable to slightly down, CET1 10.5%-10.6% with ~$225 million of buybacks, and tax rate of ~22%.

03—Questions

Frequently Asked Questions

What drove the strong year-over-year earnings growth?
Net income rose 39% and EPS 47% YoY, driven mainly by a 12% increase in net interest income from a 24 bp NIM expansion (benefit of Non-Core runoff, terminated swap roll-off, fixed-rate asset repricing and lower funding costs), an 11% rise in fees led by capital markets and wealth, and a 42% lower... (note: provision fell 8% YoY), partly offset by a 5% increase in noninterest expense. Share count also declined 3%, adding to EPS growth.
Is the quarter-over-quarter softness a concern?
Sequentially, PPNR fell 3% and EPS was flat at $1.13 (net income down 2%). Management attributed this to seasonality: fees fell 2% from a seasonally strong fourth quarter, payroll taxes lifted salaries, and the 1Q26 day count reduced NII by about $22 million. NII still rose 1.6% on higher NIM. The 2Q26 guidance points to renewed NII and fee growth.
How strong is Citizens' capital position, and what does the AOCI adjustment mean?
The reported CET1 ratio is 10.5%, down from 10.6%, and the tangible common equity ratio is 7.3%. The company also disclosed a 9.3% CET1 ratio adjusted for removal of the AOCI opt-out, which reflects how the ratio would look if unrealized securities losses were fully recognized in regulatory capital. Investors should note that this adjusted figure is materially lower, so it is a relevant sensitivity point. The company continued to return capital, repurchasing $300 million of stock and paying $198 million in common dividends.
What are the medium-term targets and key execution risks?
Management targets a NIM of 3.30%-3.50% by 4Q27 and a 16%-18% ROTCE by year-end 2027. Achieving this depends on swap roll-off, Non-Core runoff, fixed-rate repricing, and Fed funds staying in the 2.75%-3.75% range. Risks include lower rates reducing the NIM benefit, deposit competition (the cumulative interest-bearing deposit beta is targeted in the high 40s%), execution on the Reimagine the Bank program, and macro/geopolitical uncertainty that the filing explicitly flags.
Are credit costs likely to keep improving?
Current trends are favorable: NCOs declined to 39 bps, provisions fell 8% YoY, and the ACL to nonaccrual loans ratio improved to 146%. However, nonaccrual loans in retail (mainly mortgage) rose while commercial improved, 90+ day delinquencies rose to $208 million (partly FHA/VA/USDA-guaranteed), and the economic forecast assumes a mild recession. Management expects NCOs to be stable to slightly lower in 2Q26, so further improvement depends on macro conditions.

04—Continue

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