Citizens Financial (CFG) 8-K Barclays Americas Select Franchise Conference 2016

Barclays Americas Select Franchise Conference 2016

May 2016

Bruce Van Saun, Chairman and Chief Executive Officer

Exhibit 99.1

Important Information and GAAP/Non-GAAP Information

1

This

document

contains

forward-looking

statements

within

the

Private

Securities

Litigation

Reform

Act

of

1995.

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

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;

our

ability

to

implement

our

strategic

plan,

including

the

cost

savings

and

efficiency

components,

and

achieve

our

indicative

performance

targets;

our

ability

to

remedy

regulatory

deficiencies

and

meet

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

Basel

III

capital

standards)

and

our

ability

to

generate

capital

internally

or

raise

capital

on

favorable

terms;

the

effect

of

the

current

low

interest

rate

environment

or

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,

including

the

Dodd-Frank

Act

and

other

legislation

and

regulation

relating

to

bank

products

and

services;

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;

management’s

ability

to

identify

and

manage

these

and

other

risks;

and

any

failure

by

us

to

replicate

or

replace,

successfully,

certain

functions,

systems

and

infrastructure

provided

by

The

Royal

Bank

of

Scotland

Group

plc

(RBS).

In

addition

to

the

above

factors,

we

also

caution

that

the

amount

and

timing

of

any

future

common

stock

dividends

or

share

repurchases

will

depend

on

our

financial

condition,

earnings,

cash

needs,

regulatory

constraints,

capital

requirements

(including

requirements

of

our

subsidiaries),

and

any

other

factors

that

our

board

of

directors

deems

relevant

in

making

such

a

determination.

Therefore,

there

can

be

no

assurance

that

we

will

pay

any

dividends

to

holders

of

our

common

stock,

or

as

to

the

amount

of

any

such

dividends.

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

Part

I,

Item

1A

in

our

Annual

Report

on

Form

10-K

for

the

year

ended

December

31,

2015,

filed

with

the

United

States

Securities

and

Exchange

Commission

on

February

26,

2016.

Note:

Percentage

changes,

per

share

amounts,

and

ratios

presented

in

this

document

are

calculated

using

whole

dollars.

Non-GAAP

Financial

Measures

This

document

contains

non-GAAP

financial

measures.

The

below

presents

reconciliations

of

certain

non-GAAP

measures.

These

reconciliations

exclude

restructuring

charges

and/or

special

items,

which

are

usually

included,

where

applicable,

in

the

financial

results

presented

in

accordance

with

GAAP.

Restructuring

charges

and

special

items

include

expenses

related

to

our

efforts

to

improve

processes

and

enhance

efficiencies,

as

well

as

rebranding,

separation

from

RBS

and

regulatory

expenses.

The

non-GAAP

measures

include

"total

revenue",

"core

revenue",

"noninterest

income",

"core

noninterest

income",

"noninterest

expense",

"core

noninterest

expense",

"net

interest

income",

"core

net

interest

income",

"net

income",

"core

net

income",

"net

income

available

to

common

stockholders",

"core

net

income

available

to

common

stockholders",

"net

income

per

average

common

share",

"return

on

average

total

assets"

and

"core

return

on

average

total

assets".

In

addition,

we

present

computations

for

"tangible

book

value

per

common

share",

"return

on

average

tangible

common

equity",

"core

return

on

average

tangible

common

equity",

"efficiency

ratio",

"core

efficiency

ratio",

"core

net

interest

margin",

"operating

leverage",

"core

operating

leverage"

and

"pro

forma

Basel

III

fully

phased-in

common

equity

tier

1

capital"

as

part

of

our

non-GAAP

measures.

We

believe

these

non-GAAP

measures

provide

useful

information

to

investors

because

these

are

among

the

measures

used

by

our

management

team

to

evaluate

our

operating

performance

and

make

day-to-day

operating

decisions.

In

addition,

we

believe

restructuring

charges

and

special

items

in

any

period

do

not

reflect

the

operational

performance

of

the

business

in

that

period

and,

accordingly,

it

is

useful

to

consider

these

line

items

with

and

without

restructuring

charges

and

special

items.

We

believe

this

presentation

also

increases

comparability

of

period-to-period

results.

We

also

consider

pro

forma

capital

ratios

defined

by

banking

regulators

but

not

effective

at

each

period

end

to

be

non-GAAP

financial

measures.

Since

analysts

and

banking

regulators

may

assess

our

capital

adequacy

using

these

pro

forma

ratios,

we

believe

they

are

useful

to

provide

investors

the

ability

to

assess

our

capital

adequacy

on

the

same

basis.

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

other

companies.

We

caution

investors

not

to

place

undue

reliance

on

such

non-GAAP

measures,

but

instead

to

consider

them

with

the

most

directly

comparable

GAAP

measure.

Non-GAAP

financial

measures

have

limitations

as

analytical

tools,

and

should

not

be

considered

in

isolation,

or

as

a

substitute

for

our

results

as

reported

under

GAAP.

Dimension

(2)

Rank

(3)

Assets: $140.1 billion

#13

Loans: $101.0 billion

#11

Deposits: $102.6 billion

#13

Branches: 1,200

#11

ATM network: 3,200

#7

Lead/joint lead

bookrunner

#9

(4)

Mortgage: $13.3 billion

#15

nationally

(7)

Student: $5.0 billion

Top 4 rank

nationally

(5)

Deposits: $102.6 billion

Top 5 rank:

9/10 markets

(1)

HELOC: $14.9 billion

Top 5 rank:

9/9 markets

(6)

Middle market lending

#5

(8)

Source:

SNL

Financial,

unless

otherwise

noted.

1)

Updated

annually,

as

of

6/30/2015,

excludes

non-retail

branches

and

banks

with

limited

retail

operations.

2)

Data

as

of

3/31/2016,

unless

otherwise

noted.

3)

Ranking

based

on

12/31/2015

data,

unless

otherwise

noted;

excludes

non-retail

depository

institutions,

includes

U.S.

subsidiaries

of

foreign

banks.

4)

Thomson

Reuters

LPC,

FY

2015

and

1Q16

ranking

based

on

number

of

deals

for

Overall

Middle

Market

(defined

as

Borrower

Revenues

<

$500MM

and

Deal

Size

<

$500MM).

5)

CFG

estimate,

based

on

published

company

reports,

where

available,

private

student

loan

origination

data

as

of

12/31/2015.

6)

According

to

Equifax;

origination

volume

as

of

4Q15

7)

According

to

IMF

Retail

Originators

Bank

Only

ranking;

reflects

CFG

organic

origination

volume

as

of

4Q15.

8)

Based

on

market

penetration,

according

to

Greenwich

Associates

4Q15

rolling

four-quarter

data

(Citizens

–

Footprint

-

$25-500MM).

Leading deposit market share of 10.7% in top 10 MSAs

–

#2 deposit market share in New England

Relatively diverse economies/affluent demographics

Serve 5 million+ individuals, institutions and companies

~17,900 colleagues

Retail presence in 11 states

Top 5 deposit market share in 9 of 10 largest MSAs

Buffalo, NY: #5

Albany, NY: #2

Pittsburgh, PA: #2

Cleveland, OH: #3

Manchester, NH: #1

Boston, MA: #2

Rochester, NY: #4

Philadelphia, PA: #4

Detroit, MI:

#8

Providence, RI: #1

Solid franchise with leading positions in attractive markets

2

(1)

(1)

(1)

Robust product offerings and balanced business mix

Commercial

Consumer

Corporate Banking

Commercial Real Estate

Franchise Finance

Asset Finance

PE/Sponsor Finance

Healthcare/Technology/

Oil & Gas/Not-for-Profit

verticals

Capital Markets

Global Markets

Treasury Solutions

Commercial Deposit Services

Retail Deposit Services

Mobile/Online Banking

Credit/Debit Card

Wealth Management

Home Equity loans/lines

Mortgage

Auto

Education Finance

Business Banking

Consumer

Commercial

Deep client

relationships

+

Extensive

product set

Commercial

Consumer

Targeting

50/50

Mix

Period-end loans and leases

(1)

$99

billion 1Q16

$74 billion 2009

Drive cross-sell and

wallet share

1)

Reflects loans and leases and loans and leases held for sale in our operating segments (Consumer and Commercial Banking). Excludes loans held in Other/Non-core loans.

Non-core assets are primarily loans inconsistent with our strategic goals, generally as a result of geographic location, industry, product type or risk level.

3

We have added real talent… starting to see the benefits

Board

Date joined             Key experience

Anthony Di Iorio

January 2014

Former CFO Deutsche Bank AG, Former Director RBS Group plc

Mark Casady

June 2014

Chairman and CEO, LPL Financial Holdings, Inc.

Lee Higdon

August 2014

Former Vice Chairman Salomon Brothers, Past President Connecticut College, Chairman

HealthSouth Corporation and Lead Director Eaton Vance Corporation

Christine Cumming 

October 2015

Former First Vice President and COO, New York Federal Reserve

Leadership

member

Title

Date

joined

Key

experience

Eric Aboaf 

Chief Financial Officer

April 2015

Treasurer, Citigroup

Don McCree 

Vice Chairman and Head of

Commercial Banking

September

2015

CEO of Corporate Banking and Treasury Services,

JPMorgan Chase & Co.

John Bahnken

Head of Wealth

October 2015

Senior Executive Vice President,

Wealth Management Group,

Bank of the West/BNP Paribas Group; formerly Bank of America

Steve Gannon 

General Counsel

August 2014

Deputy General Counsel, Capital One Financial Corporation

Beth Johnson

Chief Marketing Officer and

Head of Consumer Strategy

October 2013

Partner, Bain & Co.

Chris Nard

Head of Mortgage Banking

October 2015

Chairman and CEO, Republic Mortgage Insurance Company

Simon Griffiths

Head of Consumer

Distribution

October 2015

Managing Director of Retail Network, Santander

National Head of Branch Administration, JPMorgan Chase & Co.

Malcolm Griggs

Chief Credit Officer

December 2014

Head of Business Risk and Controls, Citigroup

Formerly

Chief Risk Officer, Fifth Third Bancorp

4

Aspire to be a top-performing regional bank, delivering well for all stakeholders

Colleagues

Regulators

Investors

Communities & Society

Customer-centric culture

5

Customers

Our strategy to achieve this is to:

Offer our customers a differentiated customer experience through the quality of our colleagues, products

and services

–

Foster a culture around customer-centricity, commitment to excellence, leadership, teamwork and

integrity

Build a great brand that invokes trust from our customers and reinforces our value proposition

–

Consumer: Simple. Clear. Personal.

–

Commercial: Thought Leadership

Strive to deliver attractive risk-adjusted returns by making good capital and resource allocation decisions,

being good stewards of our resources, and rigorously evaluating our execution

Operate with a strong balance sheet with regards to capital, liquidity and funding, coupled with a well-

defined and prudent risk appetite

Maintain a balanced business mix between Commercial Banking and Consumer Banking

Position the bank as a ‘community leader’ that makes a positive impact on the communities and local

economies we serve

Our objective is to be a top-performing regional bank that delivers well for our stakeholders

Our vision is to deliver the best possible banking experience

6

Our vision and strategy

Reenergize Household growth

Reposition Auto

Grow Education Finance/

Installment loans

Expand Business Banking

Expand Mortgage

Expand Wealth

Build out Mid-Corporate &

Specialty verticals

Continued development of

Capital & Global Markets

Build out Treasury Solutions

Grow Franchise Finance

Grow core Commercial Banking -

e.g. CRE, Middle Market

Target 6 -

8% average loan

growth

Target Basel III common equity

tier 1 ratio of 11.2-11.5% by year

end 2016

On track to deliver $90-115

million of pre-tax benefit from

TOP II program by end of 2016

Continue prudent and high-

return technology investment

Continued CCAR progress

Regulatory issue remediation

Improved corporate governance

Enhanced risk framework

New Vision & Credo

Organization Health Index /

Leadership standards

Continue to uptier

talent

Improved

Consumer

Bank

Continued Commercial

Banking Momentum

Balance Sheet

Growth/Optimization

Capital Mix Normalization

Enhanced Efficiency &

Infrastructure

Embed Robust

Risk/Regulatory Framework

High-Performing, Customer-

Centric Culture

1) “Tapping our Potential” Phase II revenue and efficiency initiatives launched Mid-2015.

We have developed specific initiatives to support our strategy

(1)

7

Broad set of opportunities identified

Developing program targets and timing

Program is focused on

efficiencies, balance sheet

management,

cross-sell and tax rate.

Have developed continuous improvement mindset: TOP Programs

TOP I

TOP II

Initial thoughts on TOP III

Expenses

Salaries and benefits:

Market alignment of

benefits, organizational

redesign and reduction in

FTEs

Occupancy: Branch

optimization, surplus office

exit

Other: Expand technology

outsourcing model, vendor

consolidation, IT application

consolidation, strengthened

sourcing, travel and A/V and

enhance loss collection

Revenue

Revenue enhancements:

Consumer distribution

channel effectiveness 

Commercial and

Consumer cross-sell

Pricing: Improve

customer pricing

methodology to better align

with competitive landscape

Expense

Efficiency: Operations

transformation and vendor

management

Launched first half 2014

Achieved $200 million annual cost

saves by end of 2015

Launched mid 2015

On track to deliver $90-115 million

annual pre-tax benefit by end of 2016

Tapping Our Potential (TOP) programs driving revenue growth and expense efficiencies

~$120

million

~$20

million

~$60

million

$20-25

million

$30-40

million

$40-50

million

8

We are broadly executing well, and our performance is improving

Key elements of ’13-’16 plan

Status

Grow balance sheet,

net interest income

Consumer: Auto,

Student,

Mortgage

on track

Commercial:

Middle Market, Mid-corporate

&

Specialty Verticals, CRE, Franchise Finance

Grow fee business,

noninterest income

Consumer: Wealth, Mortgage, Business Banking,

Household

Growth

behind in select

areas but TOP II

offsetting

Commercial: Treasury Solutions, Capital Markets

Maintain asset sensitivity,

benefit from higher rates

Forward curve

with Fed funds rate at

175 bps by YE2016

behind

Tightly manage expense base,

deliver positive operating

leverage

$200 million cost save program, Tech spend

catch-up

on track

Manage capital ratios

back to peer levels

Target ~11% CET1 (stage I),

peer-like mix of total capital

on track

9

Delivered attractive balance sheet and revenue growth in 2015

CFG

Peer average

4.1%

3.0%

3.9%

0.1%

3.9%

1.3%

8%

4%

CFG

Peer average

Strong loan growth

(Average total loan growth)

A scaled platform well-positioned to drive value

Source: SNL Financial and Company filings. Peers include CMA, BBT, FITB, KEY, MTB, PNC, RF, STI and USB.

1)

Non-GAAP item. See Appendix for a reconciliation of non-GAAP items. Core CFG results exclude, as applicable, restructuring charges and special items and securities

gains. FY14 results exclude, as applicable, the following estimated impacts of the Chicago Divestiture: $26 million net interest income, $24 million noninterest income,

$42 million noninterest expense, net interest margin ~-1 bp. 2Q14 results also exclude $288 million Chicago Divestiture gain, and $9 million FFELP sale gain, 1Q15

excludes gain on sale of

mortgage portfolio of $10 million.

Peer results adjusted for similar unusual or special revenue, expense and acquisition items.

2)

Peer data as of most recent 10-Q filing. Peer estimates based on public disclosures and utilizes 200 basis point gradual increase above 12-month forward curve except

PNC, which is based on a 100 basis point gradual increase and STI, which is based on 200 basis point shock. PNC and STI excluded from peer median.

264 bps

above peers

Growing revenues faster

(Core revenue growth

)

Lower NIM compression

(Core net interest margin change

)

9 bps

above peers

Asset-sensitive balance sheet

(200 bps gradual increase over forward curve

)

Peer data as of most recent 10Q filing

(7) bps

(16) bps

Robust NII growth

(Core net interest income growth

)

379 bps

above peers

Core fee income growth

(Core noninterest income growth

)

108 bps

above peers

6.1%

2.7%

CFG

Peer median

Peer median

FY15 vs. FY14

10

CFG

Peer average

(1)

(1)

(2)

(1)

(1)

With continued focus on expense control and improving returns

11

Well-controlled expenses

(Core noninterest expense

change)

Improving returns as assets grow

(Core return on average total assets

change)

Return on equity

(Core return on average tangible common equity

change)

187 bps

above peers

61 bps

(12) bps

3 bps

(126) bps

15 bps

above peers

Efficiency improvement

(Core efficiency ratio

change)

(3.7)%

108 bps

307 bps

better than

peers

224 bps

better than

peers

Accelerating profitability

(Core net income available to

common stockholders

change)

Source: SNL Financial and Company filings. Peers include CMA, BBT, FITB, KEY, MTB, PNC, RF, STI and USB.

1)

Non-GAAP item. See Appendix for a reconciliation of non-GAAP items. Core CFG results exclude, as applicable, restructuring charges and special items, and securities gains. FY14

results exclude, as applicable, the following estimated impacts of the Chicago Divestiture: $26 million net interest income, $24 million noninterest income, $42 million noninterest

expense. 2Q14 results also exclude $288 million Chicago Divestiture gain, and $9 million FFELP sale gain, 1Q15 excludes gain on sale of mortgage portfolio of $10 million.  Peer results

adjusted for similar unusual or special revenue, expense and acquisition items.

1,382 bps

above peers

CFG

Peer average

(199) bps

10.1%

Strong operating leverage

(YoY

Core operating leverage

)

(182) bps

305 bps

487 bps

better than

peers

FY15 vs. FY14

(1)

(1)

(1)

(1)

(1)

(1)

3.1%

0.9%

Our plan has clear objectives for each stakeholder

12

Achieve current targets, then raise the bar

Strive for consistency in performance, limit tail risk

Target attractive high pay-out ratio; steady and growing dividend

Investors

Customers

Colleagues

Community

Regulators

Continue to improve customer satisfaction

Top 10 in JD Power for Consumer segment

Top performer in RM quality, value of ideas in Commercial

Gain market share in targeted businesses  within Consumer & Commercial

Achieve top-quartile Organizational Health rating

Continue to develop talent and enhance culture

Achieve heightened volunteer and financial giving aspirations

Use our position to improve the well-being of the communities we serve

Achieve and sustain heightened standards across broad regulatory agenda and

earn the respect of our regulators

Good progress made in 2015;

will continue to raise our performance in 2016

Generated 7% 1Q16 YoY average loan growth, with strength in both commercial and consumer

NII up 8% YoY and 4% QoQ

Loan yields improved 12 bps and deposit costs flat from 4Q15

Consumer

Banking

initiatives

—

1%

household

growth

YoY

led

by

strong

checking

engagement,

continued

growth

in

student; regaining momentum in Wealth; stabilizing Mortgage

Commercial

Banking

initiatives

—

Strong

loan

growth,

up

9%

YoY;

Treasury Solutions fees up 20% YoY; Capital Markets fees rebounded from market weakness in 4Q15

On track to deliver $90-115 million of pre-tax benefit from TOP II in 2016

1Q16 highlights

13

1)

Non-GAAP item. Where there is a reference to an “Adjusted” result in a paragraph, all measures which follow that “Adjusted” result are also “Adjusted” and exclude restructuring charges and special

items

as

applicable.

There

were

no

net

restructuring

charges

and

special

items

recorded

in

1Q16

or

4Q15.

Improving

profitability and

returns

Strong capital,

liquidity and funding

Excellent credit

quality and progress

on risk management

Continued progress

on strategic growth,

efficiency and

balance sheet

optimization

initiatives

Robust capital levels with a common equity tier 1 ratio of 11.6%

1Q16 average deposits increased $6.3 billion, or 7% vs. 1Q15; loan-to-deposit ratio of 99%

Repurchased $125 million of sub-debt and issued $750 million of senior notes

Announced increase in quarterly dividend of 20% to 12¢/common share to holders of record on May 4, 2016

Provision

expense was stable with 4Q15; rose from 1Q15 levels, which included higher commercial recoveries

NPLs to total loans and leases of 1.07% remained stable with 4Q15 and improved from 1.20% in 1Q15 despite

oil & gas downgrades

Transferred $373 million of consumer real estate TDRs to held for sale in advance of a targeted June/July sale

Allowance coverage of NPLs 113% vs. 115% in 4Q15 and 106% in 1Q15

GAAP diluted EPS of $0.41 up 8% from 1Q15 and up 5% from Adjusted    diluted EPS

Adjusted

(1)

operating leverage of 3% YoY

NIM improved 9 bps to 2.86% from 2.77% in 1Q15 and 4Q15

ROTCE and efficiency ratio stable with 4Q15

(1)

(1)

Key messages

14

We have the foundation for a great franchise, and are executing a comprehensive plan to tap full potential

1Q16 was another good quarter for Citizens

Financial results continue to improve and meet expectations

Good progress on strategic initiatives, mindset of ‘continuous improvement’

Balance sheet management showing results (NIM, loan growth, TDR sale, sub-debt repurchase,

dividend increase)

Tangible book value

(1)

per share continues to grow; $25.21 at quarter-end

2016 will continue to see a focus on execution

Comprehensive plan to deliver well for all stakeholders

Key to financial results is to grow the balance sheet smartly, execute build-out of fee businesses and

continue to deliver positive operating leverage

Will seek more efficiencies to offset fee sluggishness

Capital and credit position remains strong

Peer-leading CET1 ratio permits both strong loan growth and returns to shareholders

Credit metrics remain robust; oil and gas exposure modest and well-reserved

1)

Non-GAAP item. See Appendix for a reconciliation of non-GAAP items.

15

Appendix

$1,202

$1,201

$1,201

$1,216

$1,224

106%

114%

116%

115%

113%

1Q15

2Q15

3Q15

4Q15

1Q16

Allowance for loan and lease losses

NPL coverage ratio

1.27%

1.24%

1.23%

1.23%

1.21%

Allowance to loan coverage ratio

Overall credit quality remains solid with charge offs and NPLs relatively stable

Net charge-offs of $83 million, or 0.33% of average loans and leases increased

modestly from 4Q15;

Commercial NCOs beginning to normalize but retail NCOs decreased linked

quarter, in part due to seasonality

Up 10 bps from 1Q15, which included an unusually high $28 million of

commercial recoveries

NPLs to total loans and leases remained stable at 1.07% as an increase in commercial

NPLs was largely offset by reduction in retail

Oil & gas portfolio NPLs up $210 million

TDR transaction and reclassification of GSE-guaranteed loans reduced NPLs by

$97 million and $77 million, respectively

Provision for credit losses of $91 million stable with 4Q15

Reserve increase related to the oil & gas portfolio was partially offset by the

benefit related to the planned TDR transaction as well as improvement in retail

Strong credit quality trends continue

16

Highlights

1)

Allowance for loan and lease losses to nonperforming loans and leases.

$s in millions

Net charge-offs (recoveries)

Provision for credit losses, charge-offs, NPLs

NPLs to loans

and leases

NPLs

Allowance for loan and lease losses

(1)

($22)

$7

$5

($3)

$9

$69

$68

$66

$73

$67

$7

$3

$4

$7

$7

$54

$78

$75

$77

$83

0.23%

0.33%

0.31%

0.31%

0.33%

1Q15

2Q15

3Q15

4Q15

1Q16

Commercial

Retail

SBO

Net c/o ratio

1.20%

1.09%

1.06%

1.07%

1.07%

$54

$78

$75

$77

$83

$58

$77

$76

$91

$91

$1.1B

$1.1B

$1.0B

$1.1B

$1.1B

1Q15

2Q15

3Q15

4Q15

1Q16

Net charge-offs

Provision for credit losses

32%

25%

26%

3%

8%

2%

4%

64%

22%

8%

6%

0.3%

$53.0 billion

1Q16 retail portfolio

(1)

Source: SNL Financial and Company filings. Peers include CMA, BBT, FITB, KEY, MTB, PNC, RF, STI and USB.

1)

Includes loans and leases (other than loans held for sale) from our Other portfolio allocated by product class according to our risk management system.

2)

Includes owner-occupied commercial real estate.

3)

Portfolio balances as of March 31, 2016. FICO score, LTV ratio, loan term, lien position, risk rating, property type, industry sector and geographic stratifications as of February 29, 2016, as applicable.

4)

Includes core and non-core loans.

5)

Periods

prior

to

1Q16

include

Nonaccrual

loans

plus

90+

days

past

due

and

still

accruing

loans

as

a

%

of

total.

1Q16

includes

Nonaccrual

loans

(excluding

FDIC

“covered”

loans

and

loans

guaranteed

by

the

U.S.

government)

as

a

%

of

total.

6)

Product view. Regulatory reporting basis. Includes non-core loans, which total 1% of Commercial loans.

7)

Product view. Regulatory reporting basis. Includes core and non-core loans. Periods prior to 1Q16 include Nonaccrual loans plus 90+ days past due and still-accruing loans as a % of total. 1Q16 includes Nonaccrual loans (excluding FDIC “covered”

loans and loans guaranteed by the U.S. government) as a % of total.

8)

Footprint defined as 11-state branch footprint (CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI & VT) and contiguous states where CFG maintains offices (IL, IN, KY, MD & ME).

$48.0 billion

1Q16 commercial portfolio

(2)

Mid-Atlantic

Midwest

New England

(2)

Leases

C&I

CRE

Mid-Atlantic

Midwest

New England

17

Diversified and granular loan mix

Weighted-average FICO score of 756

86% collateralized

(3)

69%

of

the

consumer

real

estate

portfolio

is

secured

by

a

1

lien

(3)

Highly granular, diversified portfolio with an average loan balance of less

than $10 million across the C&I, CRE and Leasing portfolios

Home

Equity

Indirect

Auto

Residential Mortgage

Education Finance

Credit Cards

Other

Non-Core

Business

Banking

Retail NCO%

(4)

Retail NPL%

(5)

Commercial NPL%

(7)

Commercial NCO%

(6)

Non-Core

31%

13%

31%

25%

Out of

footprint

(8)

25%

15%

33%

27%

CFG vs. Peers

0.6%

0.5%

0.5%

0.6%

0.6%

0.6%

0.6%

0.4%

0.6%

1.7%

1.6%

1.5%

1.5%

1.3%

1.5%

1.3%

1.3%

1.3%

0.1%

0.1%

0.3%

0.2%

-0.1%

0.0%

0.0%

0.0%

0.1%

0.6%

0.5%

0.6%

0.6%

0.4%

0.3%

0.3%

0.3%

0.8%

Out of

footprint

(8)

(3)

st

CFG           Peers

25%

19%

17%

5%

8%

26%

1.8%

98.2%

6%

9%

42%

21%

22%

Oil & Gas portfolio overview

Well-diversified portfolio with ~100 clients

Includes $339 million of corporate aircraft leases arising from

Asset Finance

$200 million of loans across seven credits moved to

nonperforming status in 1Q16 following new regulatory guidance

related to multi-tiered structures

All loans current, still paying

No charge-offs have been recorded

No second lien positions

Oil and gas portfolio loan loss reserves of $61 million as of

3/31/16

Reserves to total loans of more price-sensitive portfolios

now at 6.3%

(3)

No E&P customers have filed bankruptcy

18

Highlights

Total loans outstanding

Oil & Gas

All other loans

1)

Includes Downstream, Integrated and Midstream sub-categories.

2)

Portfolio balances as of March 31, 2016. FICO score, LTV ratio, loan term, lien position, risk rating, property type, industry sector and geographic stratifications as of February 29, 2016 as applicable.

3)

Reserves

/(More

price-sensitive

Oil

&

Gas

portfolio

outstandings

-

leases

secured

by

aircraft

($135

million)).

AAA to A-

BBB+ to BBB-

BB+ to BB-

B+ to

B

B-

and

lower

15% investment grade

~$1.1 billion

more sensitive

to declining oil

prices

Midstream

Integrated

Downstream

Reserve-Based

Lending (RBL)

Upstream,

Non-RBL

Oil Field

Services

Oil & Gas portfolio

by Sub-sector

Oil & Gas portfolio

by Investment grade-equivalent risk rating

(2)

1Q16 Oil & Gas Outstandings

$s in millions

Total

O/S

Utilized

%

Criticized

%

Nonaccrual

status

Less price-sensitive total

706

$       

64%

0%

0

$              

Upstream

314

82%

Oilfield Services

344

67%

RBL

457

63%

More price-sensitive total

1,115

69%

49%

210

Total Oil & Gas

1,821

$    

67%

30%

210

$          

(1)

Non-GAAP reconciliation table

19

(Excluding restructuring charges and special items)

$s in millions, except per share data

FOR THE YEAR ENDED DECEMBER 31,

2015

2014

2015 Change from 2014

CORE net interest income, excluding special items:

Net interest income (GAAP)

$3,402

$3,301

Less: Special items

-

-

REPORTED NON-GAAP net interest income, excluding special items

3,402

3,301

Less:

Estimated

-

Chicago

Adjustment

-

26

CORE net interest income, excluding special items

$3,402

$3,275

3.9 %

CORE noninterest income, excluding special items:

Noninterest income (GAAP)

$1,422

$1,678

Less: Special items

-

288

REPORTED NON-GAAP noninterest income, excluding special items

1,422

1,390

Less: Securities Gains

29

28

Less: FFELP sale gain

-

9

Less: Mortgage portfolio

10

-

Less:

Estimated

-

Chicago

Adjustment

-

24

CORE noninterest income, excluding special items

$1,383

$1,329

4.1 %

CORE total revenue, excluding special items:

Total revenue (GAAP)

A

$4,824

$4,979

Less: Special items

-

288

REPORTED NON-GAAP total revenues, excluding special items

B

4,824

4,691

Less: Securities Gains

29

28

Less: FFELP sale gain

-

9

Less: Mortgage portfolio

10

-

Less:

Estimated

-

Chicago

Adjustment

-

Net

interest

income

-

26

Less:

Estimated

-

Chicago

Adjustment

-

Noninterest

income

-

24

CORE total revenue, excluding special items

C

$4,785

$4,604

3.9 %

CORE noninterest expense, excluding restructuring charges and special items:

Noninterest expense (GAAP)

D

$3,259

$3,392

Less: Restructuring charges and special items

50 

169 

REPORTED NON-GAAP Noninterest expense, excluding restructuring charges and special items

E

3,209

3,223

Less:

Estimated

-

Chicago

Adjustment

-

42

CORE Noninterest expense, excluding restructuring charges and special items

F

$3,209

$3,181

0.9 %

CORE Efficiency ratio:

Efficiency ratio (non-GAAP)

D/A

68 %

68 %

REPORTED NON-GAAP Efficiency ratio, excluding restructuring charges and special items

E/B

67 %

69 %

CORE-

Efficiency ratio, excluding restructuring charges and special items

F/C

67 %

69 %

(199)

bps

20

(Excluding restructuring charges and special items)

$s in millions, except per share data

Non-GAAP reconciliation table

FOR THE YEAR ENDED DECEMBER 31,

2015

2014

2015 Change from 2014

CORE net income, excluding restructuring charges and special items:

Net income (GAAP)

G

$840

$865

Add: Restructuring charges and special items, net of income tax expense (benefit)

31 

(75)

REPORTED NON-GAAP net Income, excluding restructuring charges and special items

871

790

Add: CORE restructuring charges and special items, net of income tax expense (benefit)

(27)

(30)

CORE net income, excluding restructuring charges and special items

H

$844

$760

11.1 %

Effective Tax Rate (GAAP)

33.52%

31.80%

CORE net income available to common stockholders, excluding restructuring charges and special items:

Net income available to common stockholders (GAAP)

I

$833

$865

Add: Restructuring charges and special items, net of income tax expense (benefit)

31

(75)

REPORTED NON-GAAP net income available to common stockholders, excluding restructuring charges and special items

864

790

Add: CORE restructuring charges and special items, net of income tax expense (benefit)

(27)

(30)

CORE net income available to common stockholders, excluding restructuring charges and special items

J

$837

$760

10.1 %

Return on average tangible common equity and return on average tangible common equity, excluding restructuring charges and special items:

Average common equity (GAAP)

$19,354

$19,399

Less: Average goodwill (GAAP)

6,876 

6,876 

Less: Average other intangibles (GAAP)

4 

7 

Add: Average deferred tax liabilities related to goodwill (GAAP)

445 

377 

Average tangible common equity (non-GAAP)

K

$12,919

$12,893

Return on average tangible common equity (non-GAAP)

I/K

6.45 %

6.71 %

REPORTED NON-GAAP  Return on average tangible common equity, excluding restructuring charges and special items

6.69 %

6.13 %

Core -

Return on average tangible common equity, excluding restructuring charges and special items

J/K

6.48 %

5.87 %

61 bps

Return on average total assets, excluding restructuring charges and special items:

Average total assets (GAAP)

L

$135,070

$127,624

Return on average total assets (GAAP)

G/L

0.62 %

0.68 %

Core -

Return on average total assets

H/L

0.63 %

0.60 %

3

bps

Operating leverage:

Total revenue (GAAP)

A

$4,824

$4,979

(3.11)%

Noninterest expense (GAAP)

D

$3,259

$3,392

(3.92)%

Operating leverage (non-GAAP)

81 bps

Operating leverage, excluding restructuring charges and special items:

Total revenue, excluding restructuring charges and special items (non-GAAP)

B

$4,824

$4,691

2.84%

Less: Noninterest expense, excluding restructuring charges and special items (non-GAAP)

E

$3,209

$3,223

(0.43)%

Operating leverage, excluding restructuring charges and special items: (non-GAAP)

327 bps

CORE Operating leverage, excluding restructuring charges and special items:

Total revenue, excluding restructuring charges and special items (non-GAAP)

C

$4,785

$4,604

3.93%

Less: Noninterest expense, excluding restructuring charges and special items (non-GAAP)

F

$3,209

$3,181

0.88 %

CORE Operating leverage, excluding restructuring charges and special items: (non-GAAP)

305 bps

Non-GAAP reconciliation table

21

(Excluding Chicago Divestiture)

$s in millions

2015

2014

Core net interest margin, excluding Chicago adjustment:

Average interest earning assets (GAAP)

$122,950

$116,187

Less:

Estimated

-

Chicago

adjustment

-

516

Earning assets

M

$122,950

$115,671

Earning asset yield

N

3.12%

3.14%

Calculated interest income (GAAP)

$3,854

$3,664

Less: Estimated -

Chicago adjustment

-

21

Interest income excluding Chicago adjustment (non-GAAP)

O

$3,854

$3,643

Total Interest-bearing liabilities balance (GAAP)

$86,256

$79,609

Less:

Estimated

-

Chicago

adjustment

-

1,960

Less: Estimated replacement funding -

deposits

-

(1,442)

Interest-bearing liabilities

P

$86,256

$79,091

Interest-bearing liabilities rate

Q

0.52%

0.46%

Calculated interest expense (GAAP)

$452

$363

Add:

Estimated

-

Chicago

adjustment

$0

$5

Interest expense excluding Chicago adjustment (non-GAAP)

R

$452

$368

Net interest income excluding Chicago adjustment (non-GAAP)

S=O-R

$3,402

$3,275

Core net interest margin, excluding Chicago adjustment (non-GAAP)

((M*N)-(P*Q))/M

2.75%

2.82%

(7)

bps

FOR THE YEAR ENDED

DECEMBER 31,

2015 Change

from 2014

Non-GAAP reconciliation table

22

(Excluding restructuring charges and special items)

$s in millions, except per share data

2016

2015

2016 Change from 2015

Total revenue, excluding special items:

Total revenue (GAAP)

T

$1,234

$1,183

Less: Special items

-

-

Total revenues, excluding special items (non-GAAP)

U

$1,234

$1,183

4.3 %

Noninterest expense, excluding restructuring charges and special items:

Noninterest expense (GAAP)

V

$811

$810

Less: Restructuring charges and special items

—

10 

Noninterest expense, excluding restructuring charges and special items (non-GAAP)

W

$811

$800

1.4 %

Efficiency ratio:

Efficiency ratio (non-GAAP)

V/T

66 %

68 %

Efficiency ratio, excluding restructuring charges and special items  (non-GAAP)

W/U

66 %

68 %

(199)

bps

Operating leverage:

Total revenue (GAAP)

T

$1,234

$1,183

4%

Noninterest expense (GAAP)

V

$811

$810

0%

Operating leverage (non-GAAP)

4%

Operating leverage, excluding restructuring charges and special items:

Total revenue, excluding restructuring charges and special items (non-GAAP)

U

$1,234

$1,183

4%

Less: Noninterest expense, excluding restructuring charges and special items (non-GAAP)

W

$811

$800

1%

Operating leverage, excluding restructuring charges and special items: (non-GAAP)

3%

Net income, excluding restructuring charges and special items:

Net income (GAAP)

X

$223

$209

Add: Restructuring charges and special items, net of income tax expense

—

6 

Net income, excluding restructuring charges and special items (non-GAAP)

Y

$223

$215

3.7 %

Net income available to common stockholders, excluding restructuring charges and special items:

Net income available to common stockholders (GAAP)

Z

$216

$209

Add: Restructuring charges and special items, net of income tax expense

-

6

Net income available to common stockholders, excluding restructuring charges and special items (non-GAAP)

AA

$216

$215

0.5 %

Net income per average common share -

basic and diluted, excluding restructuring charges and special items:

Average common shares outstanding -

basic (GAAP)

BB

528,070,648 

546,291,363 

Average common shares outstanding -

diluted (GAAP)

CC

530,446,188 

549,798,717 

Net income available to common stockholders (GAAP)

Z

216 

209 

Net income per average common share -

basic (GAAP)

Z/BB

0.41

0.38

8 %

Net income per average common share -

diluted (GAAP)

Z/CC

0.41

0.38

8 %

Net income available to common stockholders, excluding restructuring charges and special items (non-GAAP)

AA

216 

215 

Net income per average common share -

basic, excluding restructuring charges and special items (non-GAAP)

AA/BB

0.41

0.39

5 %

Net income per average common share -

diluted, excluding restructuring charges and special items (non-GAAP)

AA/CC

0.41

0.39

5 %

Return on average tangible common equity and return on average tangible common equity, excluding restructuring charges and special items:

Average common equity (GAAP)

$19,567

$19,407

Less: Average goodwill (GAAP)

6,876 

6,876 

Less: Average other intangibles (GAAP)

3 

5 

Add: Average deferred tax liabilities related to goodwill (GAAP)

481 

422 

Average tangible common equity (non-GAAP)

DD

$13,169

$12,948

Return on average tangible common equity (non-GAAP)

Z/DD

6.61 %

6.53 %

Return on average tangible common equity, excluding restructuring charges and special items (non-GAAP)

AA/DD

6.61 %

6.73 %

(12)

bps

Tangible book value per common share:

Common shares -

at end of period (GAAP)

EE

528,933,727 

Stockholders' equity (GAAP)

$19,718

Less: Goodwill (GAAP)

6,876 

Less: Other intangible assets (GAAP)

3 

Add: Deferred tax liabilities related to goodwill (GAAP)

494 

Tangible common equity (non-GAAP)

FF

$13,333

Tangible book value per common share (non-GAAP)

FF/EE

$25.21

FOR THE QUARTER ENDED MARCH 31,

23