What are the updated thoughts on deposit pricing pressure, competitive landscape, and deposit beta expectations for coming quarters, especially regarding noninterest-bearing mix?

Competition is steady. Expect deposit betas in the high 40s, similar to previous cycles. Confidence in growing noninterest-bearing deposits, particularly in the private bank and consumer. Diverse levers like CD rollovers (100 bps net benefit), Citizens Access, and DDA mix help manage costs. “I think we have a more diverse set of levers to manage our deposit costs than our peers. Obviously, the private bank being idiosyncratic to us and the growth that we're seeing an outsized mix of DDA and low cost is one very big one for us in helping us manage deposits.”

What is the conviction level for Q4 fee income guidance, particularly for capital markets, and how sustainable is the demand in middle-market sponsor activity?

Very strong conviction. M&A pipeline is at record levels with high-quality deals and increasing fees per transaction. Debt capital markets started Q4 strong due to Q3 slips. Equity backlog is strong, awaiting big transactions. Overall, feel very good about Q4. “Our pipeline, especially on the M&A side, have never been higher than they are today. And not only that, the quality of the deals that we're looking at and executing now are just continue to get stronger.”

What are the key drivers behind the strong growth in the Private Bank, and what is the outlook from here?

Growth driven by scaling in markets (700 people, expanding offices), client followership from early hires (50%-60% of prior books reassembled), and commercial bank referrals (Capital Markets, IPO, M&A advisory). Expect steady to accelerating momentum, with ROE remaining in the 20%-25% range. “The Private Bank again delivered strong deposit growth, ending the quarter at $18.5 billion. Importantly, the overall deposit mix and cost continues to be very attractive. The Private Bank also delivered solid loan growth in the quarter, adding $2 billion of loans to end the quarter at $11.7 billion.”

CFG

Citizens Financial Group (CFG) Q3 FY26 earnings call: guidance and Q&A

Earnings call· Sep 2026 (Q3 FY26)· Financials· Oct 16, 2026

Source: earnings call transcript

Executive summary

Citizens Financial Group Q3 FY26 — Strong Earnings Growth and Capital Returns

Citizens Financial Group delivered a strong third quarter, marked by record revenues and robust earnings growth, driven by continued net interest margin expansion and disciplined expense management. The company remains confident in its strategic initiatives, particularly the Private Bank's accelerated growth and the ReImagine the Bank program's increasing benefits, positioning it well for sustained profitability and capital returns despite ongoing macro volatility.

Highlights

EPS grew 8.5% sequentially and 34% year-on-year to $1.41.
ROTCE improved to 15.1%, up from 13.9% in Q2, with a clear path to 16%-18% by end of FY27.
Delivered strong positive operating leverage of 5.3% year-on-year and 6.3% year-to-date.
Net interest income (NII) increased 2.7% sequentially and 13% year-on-year, with NIM expanding 2 basis points to 3.19%.
Dividend increased 13% to $0.52 per share, and share repurchase program capacity increased by $1.3 billion to $1.95 billion.

Concerns

Fee income was down 1% linked quarter due to volatile capital markets conditions, though pipelines are strong for Q4.
AOCI adjusted CET1 ratio ended the quarter at 8.7%, impacted by interest rate movements.
Modest reduction in ACL coverage ratio to 1.47% due to portfolio mix shifts.

Guidance & targets

Category	Target	Timeline	Confidence
Net Interest Income (NII) Growth	up about 2.5% to 3% high materiality	Q4 · FY26	High
Net Interest Margin (NIM)	3.26% high materiality	Q4 · FY26	High
Net Interest Margin (NIM)	3.30% to 3.50% high materiality	Q4 · FY27	High
Noninterest Income Growth	up approximately 4% to 5% medium materiality	Q4 · FY26	High
Expenses Growth	up about 1% medium materiality	Q4 · FY26	High
Positive Operating Leverage	over 600 basis points high materiality	Full-year FY26	High
Net Charge-off Level	stable to down slightly medium materiality	Q4 · FY26	High
CET1 Ratio	approximately 10.6% to 10.7% high materiality	End of FY26	High
Share Repurchases	$200 million high materiality	Q4 · FY26	High
Return on Tangible Common Equity (ROTCE)	16% to 18% high materiality	End of FY27	High
ReImagine the Bank Annualized Pretax Benefit	$100 million medium materiality	End of FY26	High
ReImagine the Bank Annualized Pretax Benefit	$225 million medium materiality	End of FY27	High
ReImagine the Bank Annualized Pretax Benefit	at least $450 million medium materiality	End of FY28	High
FHLB Advances	low to mid single-digit billion medium materiality	End of FY26	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Private Bank The Private Bank continues to make strong progress, driven by scaling in markets, client followership, and commercial bank referrals. Loan growth is accelerating, and the business is expected to remain self-funding with ROE in the 20%-25% range. Period-end loans: $11.7 billionLinked quarter loan growth: $2 billionPeriod-end deposits: $18.5 billionYear-over-year deposit growth: $6 billionClient assets: $12.4 billionLinked quarter client asset growth: $1.2 billionLoan portfolio spread: approximately 4% over deposit costsDeposit mix: 33% DDAHeadcount: 700 people	—	—	—	20%-25% ROE
Commercial Commercial period-end loans, excluding the Private Bank, were down due to planned reductions in CRE (multifamily and general office paydowns) and lower C&I line usage. Loan demand started to pick up in Q4, and the AI ecosystem build-out is a strong dynamic for financing opportunities. Spreads have stabilized over the last couple of quarters. Period-end loans (excluding Private Bank): down $1.5 billion	—	—	-2%	—
Retail Retail loans saw growth excluding non-core runoff. Consumer deposits represent a significant portion of total deposits. Wealth management, connected to the retail network, is experiencing strong sales growth and is a key focus for future revenue accretion. Delinquencies are flat with no signs of stress. Period-end loans (excluding noncore): up $565 millionNon-core portfolio runoff: approximately $300 millionConsumer deposits as % of total deposits: 63%Wealth sales growth: 30% to 35% year-over-yearWealth managers in retail branches: approximately 450	—	—	—	—

CFG operating KPIs by quarter

CFG operating KPIs stated on its earnings calls, by fiscal quarter
KPI	Dec 2024 Q4 FY24	Mar 2025 Q1 FY25	Sep 2025 Q3 FY25	Dec 2025 Q4 FY25	Mar 2026 Q1 FY26	Jun 2026 Q2 FY26	This call Sep 2026 Q3 FY26	Change vs prior quarter
Assets under management (AUM) Private Bank	$4.7B We reached $7 billion in deposits, $3.1 billion in loans and $4.7 billion in AUM and we were profitable in the quarter. Source: earnings call transcript	$5.2B The Private Bank continued to see excellent growth, reaching $8.7 billion in deposits and $5.2 billion in AUM. Source: earnings call transcript	$7.6B We ended the quarter with $7.6 billion in AUM, up $1.1 billion linked quarter, reflecting the continued strong conversion rates of the wealth lift-outs. Source: earnings call transcript	—	—	—	—	+46.2%
Common equity tier 1 ratio (CET1)	10.8% We ended the year in a very strong balance sheet position with CET1 at 10.8% or 9.1% adjusted for the AOCI opt-out removal, a pro forma Category 1 LCR of 119% and an ACL coverage ratio of 1.62%, up from 1.61% in the prior quarter. Source: earnings call transcript	—	10.7% Our CET1 increased 10 basis points to 10.7%. Source: earnings call transcript	10.6% Our CET1 ratio is 10.6%, and adjusting for the AOCI opt-out removal, our CET1 ratio increased to 9.5%. Source: earnings call transcript	10.5% Our balance sheet position continues to be robust with CET1 at 10.5% and our allowance for loan losses at 1.52%. Source: earnings call transcript	10.4% We ended the second quarter with CET1 at 10.4%, while executing $225 million in stock buybacks during the quarter. Source: earnings call transcript	10.5% We maintained excellent balance sheet strength, ending the quarter with CET1 at a healthy 10.5% at the top end of our medium-term target operating range. Source: earnings call transcript	+0.1 pt
Common equity tier 1 ratio (CET1) Adjusted for AOCI opt-out removal	9.1% We ended the year in a very strong balance sheet position with CET1 at 10.8% or 9.1% adjusted for the AOCI opt-out removal, a pro forma Category 1 LCR of 119% and an ACL coverage ratio of 1.62%, up from 1.61% in the prior quarter. Source: earnings call transcript	9.1% We ended the quarter in a very strong balance sheet position with CET1 at 10.64% or 9.1% adjusted for the AOCI opt-out removal. Source: earnings call transcript	9.4% And adjusting for the AOCI opt-out removal, our CET1 ratio is 9.4%. Source: earnings call transcript	—	—	—	8.7% Our AOCI adjusted CET1 ratio and TCE ratio ended the quarter at 8.7% and 6.7%, respectively. Source: earnings call transcript	—
Net interest margin	2.87% As you can see from the NIM walk at the bottom of the slide, our margin was up 10 basis points to 2.87%, reflecting the benefit of non-core runoff, fixed rate asset repricing and better deposit and loan betas partially offset by our net asset-sensitive position as rates declined. Source: earnings call transcript	2.9% Highlights include NIM expansion of 3 basis points to 2.90%; core loan growth of 1%; resilience in our fee categories despite some softness in capital markets, given market uncertainty; and credit trends remaining favorable along with continued share repurchases. Source: earnings call transcript	3% Net interest margin continues to steadily expand, up 5 basis points to 3% and average loan volume was up 1%, which combined, delivered 3.5% NII growth. Source: earnings call transcript	3.07% Our net interest margin continues to steadily expand, up 7 basis points this quarter to 3.07%. Source: earnings call transcript	3.14% As you see from the NIM back at the bottom of the slide, our margin improved 7 basis points to 3.14%, driven primarily by the benefits of the reduced drag from terminated swaps and noncore runoff with a 5 basis point of combined impact. Source: earnings call transcript	—	—	+0.1 pt
Return on tangible common equity (ROTCE)	10.7% We generated underlying net income of $412 million, EPS of $0.85 and ROTCE of 10.7%. Source: earnings call transcript	9.6% Referencing Slides 5 and 6, we delivered EPS of $0.77 for the first quarter with ROTCE of 9.6%. Source: earnings call transcript	—	12.2% For the fourth quarter, we generated EPS of $1.13, up 8% linked quarter and 36% year-on-year, and delivered a 12.2% ROTCE. Source: earnings call transcript	12.2% Referencing Slides 3 and 4, we delivered EPS of $1.13 for the first quarter with ROTCE of 12.2%. Source: earnings call transcript	—	—	0 pt
Employees Private Bank	—	—	~500 We continue to build out our Private Bank team with additional hires in Southern California, and we now have around 500 people in the business, quite the ramp from a start-up in 2023. Source: earnings call transcript	—	<600 In terms of talent, the main needs we've taken the business from about 150 people at launch up to close to 600 today, including all the support dedicated support people. Source: earnings call transcript	—	<700 We're now up to almost 700 people. Source: earnings call transcript	—
Efficiency ratio	—	—	63% Disciplined expense management and strong revenues resulted in approximately 170 basis points of improvements in our efficiency ratio to 63%. Source: earnings call transcript	62% Disciplined expense management and strong revenues resulted in approximately 79 basis points of improvement in our efficiency ratio to 62%. Source: earnings call transcript	—	61% On Slide 7, expenses were managed tightly, up about 1% linked quarter, and we improved our efficiency ratio to 61%. Source: earnings call transcript	—	—
Branches Private Bank	—	—	—	—	—	10 We also opened a private bank office in West Palm Beach, our 10th. Source: earnings call transcript	10 We have 10 PBOs. Source: earnings call transcript	0%

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Product announcements

Product	Type	Timeline	Details
Private Bank Office Expansion	expansion	Q3 FY26
Consumer Next Branch Project	roadmap	Ongoing

Deals & partnerships

DH Capital Acquisition of a digital infrastructure lead adviser.

The acquisition of DH Capital provided Citizens with a great position in understanding and owning key relationships in the digital infrastructure sector, facilitating its entry into financing the AI ecosystem build-out.

Risks & headwinds

Volatile Capital Markets Conditions Q3 FY26

Fee income down 1% linked quarter

Mitigation:Strong pipelines for Q4, particularly in M&A, which is at record levels; maintaining strong market share.

Higher Interest Rates Impact on Bond Refinancing Q4 FY26

Some opportunistic bond refinancing may push out

Mitigation:Not yet observed, but acknowledged as a potential offset to strong capital markets pipeline.

AOCI Impact on Capital Ratios Q3 FY26

AOCI adjusted CET1 ratio at 8.7%; TCE ratio at 6.7%

Mitigation:Comfortable operating with gross CET1 slightly above target range; strong capital generation capacity (>30 bps/quarter); stock buybacks will continue as stock is considered cheap.

CRE Office Book Drag Q4 FY26 and into FY27

Still some more to go on working through the CRE office book

Mitigation:Steady decline in charge-off rate expected as the portfolio is worked through; allowance should follow this trend.

Private Credit Competition Q3-Q4 FY26

Private credit still anxiously trying to put money to work

Mitigation:Citizens is indifferent to private credit competition; if they are aggressive, it helps CCS business; if they do less, it helps syndication business.

What to watch in Q4 FY26

NII Growth Trajectory

next quarter

Current Q3 NII up 2.7% sequential

Target Q4 NII up 2.5%-3%

Why it matters

Net interest income is the primary driver of revenue and profitability for banks, and its growth trajectory is key to overall financial performance.

We expect net interest income to be up about 2.5% to 3% driven by continued margin expansion to a range of 3.26%.

Find out whether CFG delivers this. Inve re-checks your case every morning.

Q&A highlights

How does the reiterated 4Q '27 NIM target of 3.30%-3.50% hold up given rate backdrop changes, and what are the key drivers?

Management is confident due to time-based benefits from swap rolloffs, front book/back book dynamics, stable noninterest-bearing deposits, and disciplined deposit cost management (Q3 deposit costs up only 3 bps). They are asset sensitive, so further Fed hikes would be accretive.

“the outlook continues to be positive that we have a number of drivers that are going to work for us regardless of what happens in the rate environment, the so-called time-based benefits as we describe them with legacy swaps accounting drag kind of rolling off every quarter.”

asked by Scott Seifers · answered by Bruce Van Saun

2 min read 7 chapters

Detailed narrative

Strategic Initiatives Progress

Citizens continues to advance its strategic initiatives, including the private bank build-out, ReImagine the Bank program, consumer next branch project, and expansion in the New York Metro area. Significant resources are dedicated to AI leverage and cybersecurity, reflecting a focus on operational efficiency and technological advancement. The company feels it is prioritizing and executing well, positioning it for a strong Q4 and medium-term outlook.

Capital and Liquidity Strength

The company maintains robust capital, liquidity, and funding positions. Despite a lower AOCI-adjusted CET1 ratio of 8.7% and a TCE ratio of 6.7%, management is comfortable operating with a gross CET1 slightly above its 10%-10.5% target range, which will still allow for at least $200 million in Q4 share repurchases. The company generates over 30 basis points of capital every quarter.

Credit Quality and Portfolio Mix

Credit metrics remain broadly positive, with net charge-offs stable at 37 basis points. The company continues to improve its portfolio mix by reducing general office and multifamily balances and originating lower-loss content loans in C&I, residential real estate, and the private bank. The ACL coverage ratio slightly reduced to 1.47%, reflecting these mix shifts and a more conservative economic scenario.

Deposit Franchise Strength

Citizens' deposit performance is strong, with average deposits stable linked quarter, primarily driven by growth in commercial largely offset by lower consumer. Consumer deposits represent 63% of total deposits, and the mix of total interest-bearing and low-cost deposits remains stable at 42%. The Private Bank continues to drive significant deposit growth, reaching $18.5 billion at quarter-end.

Capital Markets Outlook

While Q3 fee income was down 1% linked quarter due to volatile capital markets conditions, pipelines for Q4 are very strong, particularly in M&A, which is at record levels. The company maintains strong market share, ranking as the #2 middle-market sponsor book runner for the last 12 months, and expects noninterest income to be up 4%-5% in Q4.

ReImagine the Bank Program

The ReImagine the Bank program is making very good progress, leveraging new technologies to simplify the business model and improve productivity. The program is on track to deliver $100 million of annualized pretax benefit by the end of 2026, increasing to $225 million by the end of 2027 (ahead of original plan), and targeting at least $450 million by the end of 2028.

Digital Infrastructure Financing

Citizens has a strong position in financing the AI ecosystem build-out, leveraging its acquisition of DH Capital. The company is disciplined in its balance sheet holdings, focusing on participating in early construction lending opportunities and then moving to more permanent financing, while hedging exposures. The vast majority of exposure is with investment-grade lessees.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.