Why is the company issuing new preferred stock, and what happens to the Series G preferred?

CFG launched a proposed public offering of Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series J. If it prices and closes, the company intends to use the net proceeds to redeem some or all of its 4.000% Series G preferred on the October 6, 2026 dividend payment date. The redemption is not assured; the company has not decided the amount or timing and would announce its decision after the offering closes.

How strong was CFG's second quarter 2026 profitability?

Net income rose 14% QoQ to $587 million and 35% YoY. Diluted EPS was $1.30 versus $1.13 in 1Q26 and $0.92 in 2Q25. ROTCE improved to 13.9%, and the efficiency ratio improved to 61.1% from 63.6% in the prior quarter, reflecting revenue growth outpacing expense growth.

What drove the improvement in net interest income and margin?

Net interest income increased 4.4% QoQ to $1.63 billion, with NIM up 3 bps to 3.17%. The company attributed the gain to lower terminated swap impacts, Non-Core runoff, and fixed-rate asset repricing, partially offset by higher funding costs. Total deposit costs rose 3 bps QoQ to 1.63%, and total cost of funds rose 5 bps to 1.85%.

Are credit conditions deteriorating?

No. Net charge-offs declined to 0.37% of average loans from 0.39% in 1Q26 and 0.48% in 2Q25. Nonaccrual loans fell 4% QoQ to $1.4 billion, driven by commercial real estate workouts, and the provision for credit losses decreased to $134 million. The allowance ratio edged down to 1.48% due to improved loan mix, though coverage of nonaccrual loans improved to 152%.

What should investors monitor going forward?

Key items include whether the Series J preferred offering prices and whether CFG redeems the Series G preferred on October 6, 2026. Investors should also watch funding dynamics, since FHLB advances rose to $5.8 billion from $2.5 billion in the prior quarter and total borrowed funds increased 33% QoQ, along with deposit cost trends and whether margin expansion and fee growth continue.

CITIZENS FINANCIAL GROUP INC/RI 8-K SEC Disclosure

01—Abstract

Summary

Summary of the 8-K filed July 21, 2026. Cited figures are marked; the original filing is the authoritative source.

Citizens Financial Group (CFG) reported strong second quarter 2026 results, with diluted EPS of $1.30^a (up 15% from $1.13 in 1Q26 and 41% from $0.92 in 2Q25), net income of $587 million, and ROTCE of 13.9%.

Pre-provision profit rose 13% sequentially to $889 million^b and 24% year over year. Net interest income grew 4.4% quarter over quarter to $1.63 billion, with net interest margin up 3 basis points to 3.17% (FTE). Noninterest income rose 8% sequentially to $652 million, led by record second-quarter capital markets fees ($153 million) and record wealth fees ($102 million).

Credit trends continued to improve: net charge-offs fell to 0.37% of average loans, nonaccrual loans declined 4% to $1.4 billion^c, and the allowance covered 152% of nonaccrual loans. Capital remained solid, with a preliminary CET1 ratio of 10.4% and tangible book value per share up 1% to $38.29. The Form 8-K also discloses that on July 21, 2026, the company launched a proposed public offering of Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series J.

If the offering prices and closes, CFG intends to use the proceeds to redeem some or all of its 4.000%^d Series G Preferred Stock on the October 6, 2026 dividend payment date. The offering is subject to market conditions, and the company has not committed to the redemption, so the amount and timing remain uncertain. Investors should watch for pricing details and any subsequent redemption notice, since a refinancing of the Series G preferred could modestly affect the company's preferred dividend cost and capital structure.

The filing also confirmed a quarterly common dividend of $0.46 per share, payable August 13, 2026. Overall, the filing portrays a bank with accelerating earnings momentum driven by net interest income growth, fee strength, and the Private Bank build-out, alongside improving asset quality. Key watch items include sustained margin expansion, deposit cost pressure (total deposit costs rose 3 basis points), the rising reliance on FHLB advances, and the outcome of the Series J preferred offering.

02—Key points

Key Highlights

Diluted EPS of $1.30, up 15% QoQ and 41% YoY; ROTCE improved to 13.9% from 12.2% in 1Q26 and 11.0% in 2Q25.
Pre-provision profit of $889 million, up 13% QoQ and 24% YoY, with positive operating leverage of 4.1% QoQ and 6.4% YoY.
Net interest margin (FTE) rose 3 bps QoQ to 3.17% and 22 bps YoY, supported by lower terminated swap impacts, Non-Core runoff, and fixed-rate asset repricing.
Record second-quarter capital markets fees of $153 million (up 14% QoQ) and record wealth fees of $102 million; total noninterest income up 8% QoQ to $652 million.
Credit quality improved: net charge-offs at 0.37% (down 2 bps QoQ and 11 bps YoY), nonaccrual loans down 4% QoQ to $1.4 billion, and ACL to nonaccrual coverage at 152%.
Period-end deposits rose 1% QoQ to $185.6 billion, led by Private Bank growth (spot deposits of $17.8 billion); CET1 ratio was a preliminary 10.4%, with TBV per share up 1% QoQ to $38.29.
Proposed Series J Fixed-Rate Reset Non-Cumulative Perpetual Preferred offering may be used to redeem some or all of the 4.000% Series G preferred on October 6, 2026, subject to market conditions and no assurance of completion.

03—Questions

Frequently Asked Questions

Why is the company issuing new preferred stock, and what happens to the Series G preferred?
CFG launched a proposed public offering of Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series J. If it prices and closes, the company intends to use the net proceeds to redeem some or all of its 4.000% Series G preferred on the October 6, 2026 dividend payment date. The redemption is not assured; the company has not decided the amount or timing and would announce its decision after the offering closes.
How strong was CFG's second quarter 2026 profitability?
Net income rose 14% QoQ to $587 million and 35% YoY. Diluted EPS was $1.30 versus $1.13 in 1Q26 and $0.92 in 2Q25. ROTCE improved to 13.9%, and the efficiency ratio improved to 61.1% from 63.6% in the prior quarter, reflecting revenue growth outpacing expense growth.
What drove the improvement in net interest income and margin?
Net interest income increased 4.4% QoQ to $1.63 billion, with NIM up 3 bps to 3.17%. The company attributed the gain to lower terminated swap impacts, Non-Core runoff, and fixed-rate asset repricing, partially offset by higher funding costs. Total deposit costs rose 3 bps QoQ to 1.63%, and total cost of funds rose 5 bps to 1.85%.
Are credit conditions deteriorating?
No. Net charge-offs declined to 0.37% of average loans from 0.39% in 1Q26 and 0.48% in 2Q25. Nonaccrual loans fell 4% QoQ to $1.4 billion, driven by commercial real estate workouts, and the provision for credit losses decreased to $134 million. The allowance ratio edged down to 1.48% due to improved loan mix, though coverage of nonaccrual loans improved to 152%.
What should investors monitor going forward?
Key items include whether the Series J preferred offering prices and whether CFG redeems the Series G preferred on October 6, 2026. Investors should also watch funding dynamics, since FHLB advances rose to $5.8 billion from $2.5 billion in the prior quarter and total borrowed funds increased 33% QoQ, along with deposit cost trends and whether margin expansion and fee growth continue.

04—Continue

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