Citizens Financial Group Financial Model

• Total assets: Approximately $226 billion as of late 2025.
• Key asset categories: Loans and Leases (approx $141 billion), Investment Securities (Available-for-Sale and Held-to-Maturity), and Cash/Equivalents.
• Goodwill & intangibles: Represents approximately 3% to 4% of total assets, stemming from historical acquisitions like Investors Bancorp and JMP Group.
• Working capital profile: Not applicable in the traditional corporate sense. The key liquidity metric is the Loan-to-Deposit Ratio (LDR), which sits at a conservative 78.3% as of Q4 2025.
• PP&E: Minor component consisting of branch real estate, leasehold improvements, and capitalised software.
• Right-of-use assets: Operating leases for branch locations are material but standard for the industry.

• Capex as % of revenue: Typically runs at 2% to 3% of total revenue, primarily focused on technology and digital transformation.
• Maintenance capex vs. growth capex: Heavily skewed towards growth capex (digital banking, wealth management platforms) rather than physical branch maintenance.
• Capitalised software: Material component of the equipment and software line item, amortised over 3 to 5 years.
• M&A pattern: Historically a serial bolt-on acquirer (JMP Group, DH Capital, Investors Bancorp). Currently focused on organic growth and absorbing the Private Bank teams hired in 2023.

• Total debt: Long-term debt is approximately $11 billion, alongside $180 billion in deposits.
• Capital Ratios: Common Equity Tier 1 (CET1) ratio is strong at 10.7% as of Q4 2025, well above the regulatory minimum and the company's 10.0% to 10.5% target range.
• Credit rating: Investment grade (typically BBB+ / A- range depending on the agency).
• Key debt instruments: Senior unsecured notes, subordinated debt, and Federal Home Loan Bank (FHLB) advances.
• Interest rate profile: The bank actively uses interest rate swaps to manage the duration mismatch between floating-rate commercial loans and sticky retail deposits.
• Share repurchase programme: Highly active. The board authorised a $1.5 billion repurchase programme in 2025, with roughly $125 million executed per quarter.
• Dividend policy: The bank pays a quarterly dividend of $0.46 per share ($1.84 annualised), representing a payout ratio of approximately 40% to 45%.

• Operating cash flow conversion: For banks, traditional FCF is not a relevant valuation metric. Analysts focus on Free Cash Flow to Equity (FCFE) or the Dividend Discount Model (DDM).
• Major non-cash items: Provision for credit losses, depreciation and amortisation, and stock-based compensation.
• Working capital cash flow impact: Changes in loan balances (use of cash) and deposit balances (source of cash) drive the bank's liquidity position.
• Cash tax rate: The effective tax rate typically runs between 22% and 24%, benefiting slightly from tax-advantaged investments and low-income housing tax credits.

1. Assumptions: Hardcoded drivers for loan growth, deposit growth, asset yields, deposit betas, efficiency ratio, and capital return policies.
2. Summary & Scenarios: Dashboard showing EPS, ROTCE, NIM, CET1 ratio, and LDR under base, bull, and bear interest rate scenarios.
3. Average Balances & Yields: The critical NIM build. Row-level detail for Average Interest-Earning Assets (Commercial Loans, Retail Loans, Investments) and Average Interest-Bearing Liabilities (Interest-bearing Deposits, Borrowings) with corresponding yields and rates.
4. Income Statement: Mirrors the 10-K. Net Interest Income, Non-Interest Income (split by Capital Markets, Wealth, Card, etc.), Non-Interest Expense (Salaries, Occupancy, etc.), Provision for Credit Losses, and Net Income.
5. Credit & Asset Quality: Tracks Non-Performing Assets (NPAs), Net Charge-Offs (NCOs), and the Allowance for Credit Losses (ACL) roll-forward.
6. Balance Sheet: Period-end balances for Assets, Liabilities, and Shareholders' Equity. Must include Accumulated Other Comprehensive Income (AOCI).
7. Capital & RWA: Calculates Risk-Weighted Assets and builds the Common Equity Tier 1 (CET1) capital ratio.
8. Valuation: Dividend Discount Model (DDM) and Residual Income model based on ROTCE vs Cost of Equity.

1. "Net Interest Income = (Average Interest-Earning Assets x Asset Yield) - (Average Interest-Bearing Liabilities x Cost of Funds)"
2. "Net Interest Margin (NIM) = Annualised Net Interest Income / Average Interest-Earning Assets"
3. "Provision for Credit Losses = Net Charge-Offs + Change in Allowance for Credit Losses"
4. "Allowance for Credit Losses (End of Period) = ACL (Beginning of Period) + Provision for Credit Losses - Net Charge-Offs"
5. "Efficiency Ratio = Non-Interest Expense / (Net Interest Income + Non-Interest Income)"
6. "Return on Tangible Common Equity (ROTCE) = (Net Income - Preferred Dividends + Intangible Amortisation) / Average Tangible Common Equity"
7. "Tangible Book Value per Share = (Total Equity - Preferred Equity - Goodwill - Intangible Assets) / Period-End Shares Outstanding"
8. "Loan-to-Deposit Ratio = Period-End Total Loans and Leases / Period-End Total Deposits"
9. "CET1 Ratio = Common Equity Tier 1 Capital / Risk-Weighted Assets"
10. "Earnings Per Share (Diluted) = (Net Income - Preferred Dividends) / Diluted Weighted Average Shares Outstanding"

The Average Balances & Yields sheet is the engine of the model; it feeds Net Interest Income directly into the Income Statement. The Credit & Asset Quality sheet calculates the Provision for Credit Losses, which feeds the Income Statement, whilst the ending ACL balance feeds the Balance Sheet. The Income Statement generates Net Income, which flows into the Balance Sheet via Retained Earnings. The Balance Sheet provides the equity and asset figures required by the Capital & RWA sheet to calculate the CET1 ratio. The CET1 ratio then dictates the capacity for share repurchases and dividends on the Assumptions sheet, creating a dynamic capital return loop.

• Assets and Liabilities are entered as positive numbers.
• Revenue and Income items are positive.
• Expense items (Interest Expense, Non-Interest Expense, Provision for Credit Losses) are entered as positive numbers and subtracted in the relevant subtotal formulas.
• Net Charge-Offs are entered as positive numbers.
• Dividends and Share Repurchases are entered as positive numbers and subtracted from Retained Earnings and Common Stock respectively.

• Failing to deduct preferred stock dividends from Net Income when calculating EPS and ROTCE, which artificially inflates profitability metrics.
• Mismatching average balances and period-end balances. NIM must be calculated using average balances, whilst LDR and capital ratios must use period-end balances.
• Ignoring the impact of Accumulated Other Comprehensive Income (AOCI) on Tangible Book Value. Unrealised losses on Available-for-Sale (AFS) securities flow through AOCI and directly impact TBV per share.
• Modelling the Provision for Credit Losses simply as a percentage of loans, rather than properly rolling forward the Allowance for Credit Losses (ACL) by adding Provision and subtracting Net Charge-Offs.
• Underestimating the expense drag of the Private Bank buildout. Salaries and benefits have structurally stepped up, and modelling historical efficiency ratios without adjusting for this will overstate operating leverage.
• Applying a static deposit beta in a changing interest rate environment. Deposit costs often lag asset yields on the way up and remain sticky on the way down.
• Forgetting to reduce the diluted share count by the volume of share repurchases executed in the period.
• Misaligning the tax rate. CFG benefits from specific tax-advantaged investments; using the statutory 21% corporate rate without adjusting for state taxes and tax credits will yield incorrect net income.

• "Balance sheet must balance: Total Assets = Total Liabilities + Shareholders' Equity in every period."
• "Net Interest Margin (NIM) should remain within the 2.80% to 3.50% range based on management guidance and historical performance."
• "Efficiency Ratio should not drop below 55% or exceed 65%; flag if outside this band."
• "Loan-to-Deposit Ratio (LDR) should remain below 85% (currently around 78%) to reflect the bank's conservative liquidity posture."
• "CET1 Ratio must remain above the management target of 10.0%; if it falls below, the model should automatically throttle share repurchases."
• "Net Charge-Off (NCO) ratio should typically run between 0.35% and 0.55% of average loans; flag if credit quality deteriorates beyond 0.60%."
• "Return on Tangible Common Equity (ROTCE) should track towards the management medium-term target of 16% to 18%."
• "Dividend payout ratio should remain between 35% and 45% of Net Income available to common shareholders."

• Filings: SEC EDGAR for CFG 10-K and 10-Q filings; Citizens Investor Relations page for quarterly earnings presentations and financial supplements.
• Key Peers: KeyCorp (KEY), Truist Financial (TFC), M&T Bank (MTB), Fifth Third Bancorp (FITB), and Regions Financial (RF).
• Industry Data: Federal Reserve H.8 data for weekly commercial bank balances; FDIC Quarterly Banking Profile for industry-wide NIM and credit quality trends.
• Consensus Estimates: Bloomberg or FactSet for consensus EPS, NIM, and ROTCE estimates to validate model outputs.

• Citizens Financial Group, Inc. Q4 2025 Earnings Press Release and Investor Presentation (January 21, 2026).
• Citizens Financial Group, Inc. Annual Report on Form 10-K for the year ended December 31, 2025.
• FDIC Public Section Resolution Plan for Citizens Bank, National Association.
• Zacks Equity Research Report on CFG Wealth Management Expansion (March 2026).