CFG-PH

MKT CAP $10.5BP/E 5.4DIV YIELD 7.24%FCF YIELD —REV TTM $8.7B +11.0%NET INCOME $2.1B +33.5%NET DEBT $11.1B52W 24.67 – 26.82SEC XBRL · TTM TO Invalid Date

How CFG-PH rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

Text kept

56%

of sentences unchanged

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new sentences

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Length

−115

words, now 9,184

New in FY2025

See the “Risk Management” section in Item 7 for a discussion of our risk management framework and the primary risks we face.
Risks and uncertainties associated with each element of our strategy exist, many of which are not within our control.
Supervisory requirements and expectations on us as a financial holding company and a bank holding company and any regulator-imposed limits on our activities could adversely affect our ability to implement our strategic plan, expand our business, continue to improve our financial performance, and make capital distributions to our stockholders.
Our operations are subject to regulation, supervision, and examination by the federal banking regulators, as well as the CFPB.
Citizens Financial Group, Inc. | 20 Inflationary pressures could have an adverse effect on our business, financial position, and results of operations.
Volatility and uncertainty related to inflation and its associated effects may enhance or contribute to certain risks that we face by negatively impacting our funding costs and expenses, including increasing funding costs and expenses related to talent acquisition and retention.
Inflation may also negatively impact consumer demand and client purchasing power for our products and services, as well as the ability of our borrowers to repay their obligations.
Our other funding sources are dependent on our ability to securitize loans in secondary markets, raise funds in the debt and equity capital markets, pledge loans and/or securities for borrowing from the FHLB, pledge securities as collateral for borrowing under repurchase agreements, and sell AFS securities.
Our ability to meet our obligations and support our operations could be materially affected by a variety of conditions, including market-wide illiquidity or disruption, a general loss of market or customer confidence in the financial services industry or in the Company specifically, or reductions in one or more of our credit ratings.
These conditions could limit our ability to retain deposits, securitize or sell assets, access debt and equity capital markets, or otherwise borrow money at a reasonable cost.
If these conditions, among others, are severe enough they could also create unanticipated material outflows of cash due to, among other factors, draws on unfunded commitments or deposit attrition, which could have a significant adverse impact on our liquidity.
In addition, changes to the FHLB’s or the FRB’s underwriting guidelines for wholesale borrowings or lending policies may limit or restrict our ability to borrow and could have a significant adverse impact on our liquidity as a result.
An increase in rates could lower the collateral value of these securities, reducing the amount we could borrow and leading to losses in the event of their sale.
An increase in interest rates could weaken demand for loans by customers, reducing our net interest income due to lower loan balances and origination-related fee income due to lower production volume.
An increase in rates could also have an adverse impact on our credit costs, as borrowers may have difficulty in making higher interest payments, as well as on our AFS securities portfolio, which could trigger the recognition of losses in the event the securities need to be sold.
A prolonged period of low interest rates may result in us holding lower yielding loans and securities should rates rise rapidly after such a period.
The yield curve, typically upward sloping with short-term rates lower than long-term rates, could cause our net interest income and net interest margin to decline if it were to flatten or invert, as the cost of our short-term funding is likely to increase relative to the yield we can earn on our long-term assets.
Citizens Financial Group, Inc. | 21 Interest rates and the yield curve are highly sensitive to many factors that are beyond our control, including general economic conditions and the policies of various governmental and regulatory agencies, most notably the Federal Open Market Committee.
Although we have policies and procedures designed to manage our interest rate risk as discussed in the “Risk Management” section in Item 7, there can be no assurance that these policies and procedures will be effective in preventing material adverse effects on our profitability.
Our ability to implement our strategic plan and our future success depends on our ability to attract, retain, and motivate highly-skilled and qualified personnel, including senior management, other key employees, and directors.
Limitations on the manner in which regulated financial institutions, such as us, can compensate their officers and employees may make it more difficult for such institutions to compete for talent with financial institutions and other companies not subject to these or similar limitations.
In addition, under the terms of our derivatives contracts, we may be required to post additional collateral or terminate such contracts if we don’t maintain a minimum credit rating.
For more information regarding our credit ratings, see the “Liquidity Risk” section in Item 7.
Our financial performance may be adversely affected by deterioration in borrower credit quality.
If the economic environment were to deteriorate, our borrowers may have difficulty in repaying their loans which could result in higher credit losses and increased loan loss provision expense.
A significant portion of our earning assets are in the form of loans to borrowers across the U.S., primarily for residential, commercial and industrial, commercial real estate, education, and other retail purposes.
A deterioration in economic conditions or changes in consumer or business behavior that negatively impact home or commercial property values could, in event of the borrower’s default, result in materially higher credit losses.
Citizens Financial Group, Inc. | 22 Our framework for managing risks may not be effective in mitigating risk and loss.
Our risk management framework is made up of various processes and strategies to manage our risk exposure and may not be effective under all conditions and circumstances.
If our risk management framework proves ineffective, we could suffer unexpected losses and could be materially adversely affected.
Our financial and accounting estimates and risk management framework rely on analytical forecasting and models.
Finally, information provided to our regulators based on poorly designed or implemented models could be inaccurate or insufficient, which could adversely affect some of the decisions that our regulators make, including those related to capital distributions to our stockholders, and subject us to supervisory criticism and costs related to remediation.
Citizens Financial Group, Inc. | 23 The preparation of our financial statements requires us to make subjective determinations and use estimates that may vary from actual results and materially impact our financial condition and results of operations.
The financial services industry, including the banking sector, continues to make technological enhancements to meet customer preferences, as well as meet legal and regulatory requirements, and we may not be able to compete effectively as a result of these changes.
Citizens Financial Group, Inc. | 24 In addition, changes in the legal and regulatory framework under which we operate require us to update our information systems to ensure compliance.
Given the significant number of ongoing regulatory reform initiatives, it is possible that we may incur higher than expected information technology costs in order to comply with current and impending regulations.
Risks related to cyberattacks on our vendors and other third parties, including supply chain attacks affecting our software and information technology service providers, are on the rise as such attacks become more frequent and severe.
Although we believe that we have appropriate information security procedures and controls based on our adherence to applicable laws and regulations and industry standards, our technologies, systems, and networks may be the target of cyberattacks or information security breaches that could result in the unauthorized release, gathering, monitoring, misuse, theft, sale, or loss or destruction of the confidential and/or proprietary information of CFG, and our customers, vendors, counterparties, or employees.
We and our third-party vendors are under continuous threat of loss or network degradation due to cyberattacks, such as computer viruses, malicious or destructive code, phishing attacks, ransomware, and Distributed Denial of Service attacks (collectively, “fraudulent schemes”).
Also, our customers are routinely the target of fraudulent schemes as we continue to expand customer capabilities to utilize the Internet and other remote channels to transact business.

and 39 more.

Gone since FY2024

See the “Risk Governance” section in Item 7 for a discussion of our risk management framework and the primary risks we face.
Our business strategy is designed to maximize the full potential of our business, drive sustainable growth and enhance profitability, with our success resting on our ability to distinguish ourselves.
There are risks and uncertainties, many of which are not within our control, associated with each element of our strategy.
Citizens Financial Group, Inc. | 21 Supervisory requirements and expectations on us as a financial holding company and a bank holding company and any regulator-imposed limits on our activities could adversely affect our ability to implement our strategic plan, expand our business, continue to improve our financial performance and make capital distributions to our stockholders.
Our operations are subject to extensive regulation, supervision and examination by the federal banking regulators, as well as the CFPB.
Inflationary pressures could have an adverse effect on our business, financial position and results of operations.
Volatility and uncertainty related to inflation and the effects of inflation may enhance or contribute to some of the risks of our business by negatively impacting our costs and expenses, including increasing funding costs and expenses related to talent acquisition and retention, and negatively impacting consumer demand and client purchasing power for our products and services, as well as the ability of borrowers to repay their obligations.
Our funding sources also include our ability to securitize loans in secondary markets, raise funds in the debt and equity capital markets, pledge loans and/or securities for borrowing from the FHLB, pledge securities as collateral for borrowing under repurchase agreements, and sell AFS securities.
Our ability to meet our obligations and support our operations could be materially affected by a variety of conditions, including market-wide illiquidity or disruption, a loss of market or customer confidence in the financial services industry generally or in the Company specifically, or reductions in one or more of our credit ratings.
This could limit our ability to retain our deposits, securitize or sell assets, access the debt or equity capital markets, or otherwise borrow money at a reasonable cost.
Additionally, these conditions, among others, if severe enough, could create unanticipated material outflows of cash due to, among other factors, draws on unfunded commitments or deposit attrition, which could have significant adverse impact on our liquidity.
Further, changes to the FHLB’s or the FRB’s underwriting guidelines for wholesale borrowings or lending policies may limit or restrict our ability to borrow, and therefore could have a significant adverse impact on our liquidity.
An increase in rates could lower the collateral value of these securities, reducing the amount we could borrow, and lead to losses in the event of their sale.
Citizens Financial Group, Inc. | 22 An increase in interest rates could cause lower demand for loans by customers, reducing our net interest income due to lower loan balances and origination-related fee income due to lower production volume, and could also have an adverse impact on our credit costs, as borrowers may have difficulty in making higher interest payments.
Additionally, an increase in rates could cause the recognition of losses on our AFS securities portfolio if the securities needed to be sold.
A prolonged period of low interest rates may result in us holding lower yielding loans and securities should rates rise rapidly after the period of low interest rates.
If the yield curve, typically upward sloping with short-term rates lower than long-term rates, were to flatten or invert, our net interest income and net interest margin may decrease if the cost of our short-term funding increases relative to the yield we can earn on our long-term assets.
Interest rates and the yield curve are highly sensitive to many factors that are beyond our control, including general economic conditions and the policies of various governmental and regulatory agencies and, in particular, the Federal Open Market Committee.
Although we have policies and procedures designed to manage our interest rate risk, as further discussed in the “Risk Governance” section in Item 7, there can be no assurance that these policies and procedures will be effective in avoiding material adverse effects on our profitability.
Our ability to implement our strategic plan and our future success depends on our ability to attract, retain and motivate highly-skilled and qualified personnel, including our senior management and other key employees and directors.
Limitations on the manner in which regulated financial institutions, such as us, can compensate their officers and employees, including those contained in pending rule proposals implementing the requirements of Section 956 of the Dodd-Frank Act, may make it more difficult for such institutions to compete for talent with financial institutions and other companies not subject to these or similar limitations.
In addition, under the terms of our derivatives contracts, we may be required to maintain a minimum credit rating, post additional collateral or terminate such contracts.
For more information regarding our credit ratings, see the “Liquidity” section in Item 7.
Citizens Financial Group, Inc. | 23 Our financial performance may be adversely affected by deterioration in borrower credit quality.
If the economic environment were to deteriorate, more of our borrowers may have difficulty in repaying their loans which could result in higher credit losses and increased loan loss provision expense.
A significant portion of our earnings assets are in the form of loans to borrowers across the U.S., primarily for residential, commercial and industrial, commercial real estate, education, and other retail purposes.
A deterioration in economic conditions or changes in consumer or business behavior that negatively impacts home or commercial property values could, in event of the borrower’s default, result in materially higher credit losses.
Our framework for managing risks may not be effective in mitigating risk and loss.
Our risk management framework is made up of various processes and strategies to manage our risk exposure.
The framework to manage risk, including the framework’s underlying assumptions, may not be effective under all conditions and circumstances.
If the risk management framework proves ineffective, we could suffer unexpected losses and could be materially adversely affected.
Citizens Financial Group, Inc. | 24 Our financial and accounting estimates and risk management framework rely on analytical forecasting and models.
Finally, information provided to our regulators based on poorly designed or implemented models could be inaccurate or insufficient, which could adversely affect some of the decisions that our regulators make, including those related to capital distributions to our stockholders, and subject us to supervisory criticism and costs relating to remediation.
The preparation of our financial statements requires us to make subjective determinations and use estimates that may vary from actual results and materially impact our financial condition and results of operations.
Citizens Financial Group, Inc. | 25 The financial services industry, including the banking sector, continues to make technological enhancements to meet customer preferences, as well as meet legal and regulatory requirements, and we may not be able to compete effectively as a result of these changes.
In addition, changes in the legal and regulatory framework under which we operate require us to update our information systems to ensure compliance.
Given the significant number of ongoing regulatory reform initiatives, it is possible that we incur higher than expected information technology costs in order to comply with current and impending regulations.
Risks related to cyber-attacks on our vendors and other third parties, including supply chain attacks affecting our software and information technology service providers, are on the rise as such attacks become more frequent and severe.
Although we believe that we have appropriate information security procedures and controls based on our adherence to applicable laws and regulations and industry standards, our technologies, systems, and networks may be the target of cyber-attacks or information security breaches that could result in the unauthorized release, gathering, monitoring, misuse, theft, sale or loss or destruction of the confidential and/or proprietary information of CFG, and our customers, vendors, counterparties, or employees.
We and our third-party vendors are under continuous threat of loss or network degradation due to cyber-attacks, such as computer viruses, malicious or destructive code, phishing attacks, ransomware, and Distributed Denial of Service (“DDoS”) attacks (collectively, “fraudulent schemes”).

and 44 more.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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