Exhibit 99.1
Citizens Financial Group, Inc. (the “Company”) supplemental information to reflect changes to disclosure of (a) net interest income and net interest margin and (b) noninterest expense for full year and quarterly periods of 2018 and 2017, respectively.
Net interest income (NII) and Net interest margin (NIM):
$s in millions | 4Q18 | 3Q18 | 2Q18 | 1Q18 | FY2018 | |||||||||||||||||||||||||||||||||||
NII | NIM | NII | NIM | NII | NIM | NII | NIM | NII | NIM | |||||||||||||||||||||||||||||||
Prior methodology(1) | $ | 1,172 | 3.22 | % | $ | 1,148 | 3.19 | % | $ | 1,121 | 3.18 | % | $ | 1,091 | 3.16 | % | $ | 4,532 | 3.19 | % | ||||||||||||||||||||
New methodology impact(1) | — | 0.01 | — | 0.01 | — | 0.02 | — | 0.03 | — | 0.02 | ||||||||||||||||||||||||||||||
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Revised NIM | 3.23 | 3.20 | 3.20 | 3.19 | 3.21 | |||||||||||||||||||||||||||||||||||
FTE adjustment | 5 | 0.02 | 6 | 0.02 | 6 | 0.02 | 5 | 0.02 | 22 | 0.01 | ||||||||||||||||||||||||||||||
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FTE basis(2) | $ | 1,177 | 3.25 | % | $ | 1,154 | 3.22 | % | $ | 1,127 | 3.22 | % | $ | 1,096 | 3.21 | % | $ | 4,554 | 3.22 | % | ||||||||||||||||||||
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4Q17 | 3Q17 | 2Q17 | 1Q17 | FY2017 | ||||||||||||||||||||||||||||||||||||
NII | NIM | NII | NIM | NII | NIM | NII | NIM | NII | NIM | |||||||||||||||||||||||||||||||
Prior methodology(1) | $ | 1,080 | 3.08 | % | $ | 1,062 | 3.05 | % | $ | 1,026 | 2.97 | % | $ | 1,005 | 2.96 | % | $ | 4,173 | 3.02 | % | ||||||||||||||||||||
New methodology impact(1) | — | 0.02 | — | 0.02 | — | 0.02 | — | 0.03 | — | 0.02 | ||||||||||||||||||||||||||||||
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Revised NIM | 3.10 | 3.07 | 2.99 | 2.99 | 3.04 | |||||||||||||||||||||||||||||||||||
FTE adjustment | 10 | 0.02 | 10 | 0.02 | 9 | 0.03 | 9 | 0.02 | 38 | 0.02 | ||||||||||||||||||||||||||||||
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FTE basis(2) | $ | 1,090 | 3.12 | % | $ | 1,072 | 3.09 | % | $ | 1,035 | 3.02 | % | $ | 1,014 | 3.01 | % | $ | 4,211 | 3.06 | % | ||||||||||||||||||||
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1) | Consistent with its understanding of general peer practice, the Company will simplify the calculation of its reported NIM to equal net interest income, annualized based on the 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 average total interest-bearing liabilities for the period. |
2) | Net interest income and net interest margin are presented on a fully taxable-equivalent basis using the federal statutory tax rate of 21% for the 2018 periods presented and 35% for the 2017 periods presented. Interest income earned on certain assets is either completely or partially exempt from federal income tax. Because the federal income tax benefit ontax-exempt assets is realized in income tax expense, it typically results in lower interest-earning asset yields on these assets, relative to taxable assets. In the Company’s fully taxable-equivalent presentation of net interest income and net interest margin, interest income ontax-exempt assets is increased using the federal statutory tax rate to make them fullytax-equivalent to interest income earned on taxable assets. |
Note – Amounts may not sum due to rounding. |
Noninterest expense – new disclosure format:
$s in millions | 4Q18 | 3Q18 | 2Q18 | 1Q18 | FY2018 | |||||||||||||||
Salaries and employee benefits | $ | 483 | $ | 474 | $ | 453 | $ | 470 | $ | 1,880 | ||||||||||
Equipment and software expense | 124 | 117 | 110 | 113 | 464 | |||||||||||||||
Outside services | 135 | 107 | 106 | 99 | 447 | |||||||||||||||
Occupancy | 92 | 81 | 79 | 81 | 333 | |||||||||||||||
Other operating expense | 117 | 131 | 127 | 120 | 495 | |||||||||||||||
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Total noninterest expense | $ | 951 | $ | 910 | $ | 875 | $ | 883 | $ | 3,619 | ||||||||||
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4Q17 | 3Q17 | 2Q17 | 1Q17 | FY2017 | ||||||||||||||||
Salaries and employee benefits | $ | 450 | $ | 438 | $ | 432 | $ | 446 | $ | 1,766 | ||||||||||
Equipment and software expense | 113 | 110 | 109 | 111 | 443 | |||||||||||||||
Outside services | 118 | 99 | 96 | 91 | 404 | |||||||||||||||
Occupancy | 80 | 78 | 79 | 82 | 319 | |||||||||||||||
Other operating expense | 137 | 133 | 148 | 124 | 542 | |||||||||||||||
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Total noninterest expense | $ | 898 | $ | 858 | $ | 864 | $ | 854 | $ | 3,474 | ||||||||||
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Noninterest expense – prior disclosure format:
$s in millions | 4Q18 | 3Q18 | 2Q18 | 1Q18 | FY2018 | |||||||||||||||
Salaries and employee benefits | $ | 483 | $ | 474 | $ | 453 | $ | 470 | $ | 1,880 | ||||||||||
Equipment and software expense | 135 | 107 | 106 | 99 | 447 | |||||||||||||||
Outside services | 92 | 81 | 79 | 81 | 333 | |||||||||||||||
Occupancy | 74 | 70 | 64 | 67 | 275 | |||||||||||||||
Amortization of software | 50 | 47 | 46 | 46 | 189 | |||||||||||||||
Other operating expense | 117 | 131 | 127 | 120 | 495 | |||||||||||||||
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Total noninterest expense | $ | 951 | $ | 910 | $ | 875 | $ | 883 | $ | 3,619 | ||||||||||
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4Q17 | 3Q17 | 2Q17 | 1Q17 | FY2017 | ||||||||||||||||
Salaries and employee benefits | $ | 450 | $ | 438 | $ | 432 | $ | 446 | $ | 1,766 | ||||||||||
Equipment and software expense | 118 | 99 | 96 | 91 | 404 | |||||||||||||||
Outside services | 80 | 78 | 79 | 82 | 319 | |||||||||||||||
Occupancy | 67 | 65 | 64 | 67 | 263 | |||||||||||||||
Amortization of software | 46 | 45 | 45 | 44 | 180 | |||||||||||||||
Other operating expense | 137 | 133 | 148 | 124 | 542 | |||||||||||||||
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Total noninterest expense | $ | 898 | $ | 858 | $ | 864 | $ | 854 | $ | 3,474 | ||||||||||
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