CITIZENS FINANCIAL GROUP INC/RI - FORM 8-K - EX-99.1

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8-K - FORM 8-K - CITIZENS FINANCIAL GROUP INC/RI	d211942d8k.htm

Exhibit 99.1

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Citizens Financial Group, Inc.

Financial Supplement

Second Quarter 2016


Table of Contents	Page

Consolidated Financial Highlights		3

Consolidated Statements of Operations (unaudited)		5

Consolidated Balance Sheets (unaudited)		6

Loans and Deposits		7

Average Balance Sheets and Annualized Yields		8

Segment Financial Highlights		10

Credit-Related Information
Credit Exposure		21
Nonperforming Assets		22
Charge-offs, Recoveries and Related Ratios		23
Summary of Changes in the Allowances		25
Allowance Components		26

Capital and Ratios		27

Per-Share Related Information		28
Non-GAAP Financial Measures and Reconciliations		29
Forward-Looking Statements		36

CONSOLIDATED FINANCIAL HIGHLIGHTS

(dollars in millions, except per share and ratio data)


	QUARTERLY TRENDS																								FOR THE SIX MONTHS ENDED JUNE 30,
													2Q16 Change																	2016 Change
	2Q16			1Q16		4Q15		3Q15		2Q15			1Q16						2Q15						2016		2015			2015
													$			%			$			%								$			%
SELECTED OPERATING DATA
Total revenue	$	1,278		$	1,234	$	1,232	$	1,209	$	1,200		$	44			4	%	$	78			7	%	$	2,512	$	2,383		$	129			5	%
Noninterest expense		827			811		810		798		841			16			2			(14	)		(2	)		1,638		1,651			(13	)		(1	)

Profit before provision for credit losses		451			423		422		411		359			28			7			92			26			874		732			142			19
Provision for credit losses		90			91		91		76		77			(1	)		(1	)		13			17			181		135			46			34
NET INCOME		243			223		221		220		190			20			9			53			28			466		399			67			17
Net income, excluding restructuring charges and special items¹		243			223		221		220		215			20			9			28			13			466		430			36			8
Net income available to common stockholders		243			216		221		213		190			27			13			53			28			459		399			60			15
Net income available to common stockholders, excluding restructuring charges and special items¹		243			216		221		213		215			27			13			28			13			459		430			29			7
PER COMMON SHARE DATA
Basic earnings	$	0.46		$	0.41	$	0.42	$	0.40	$	0.35		$	0.05			12	%	$	0.11			31	%	$	0.87	$	0.74		$	0.13			18	%
Diluted earnings		0.46			0.41		0.42		0.40		0.35			0.05			12			0.11			31			0.87		0.73			0.14			19
Basic earnings, excluding restructuring charges and special items¹		0.46			0.41		0.42		0.40		0.40			0.05			12			0.06			15			0.87		0.79			0.08			10
Diluted earnings, excluding restructuring charges and special items¹		0.46			0.41		0.42		0.40		0.40			0.05			12			0.06			15			0.87		0.79			0.08			10
Cash dividends declared and paid per share		0.12			0.10		0.10		0.10		0.10			0.02			20			0.02			20			0.22		0.20			0.02			10
Book value		37.76			37.28		36.76		36.68		36.00			0.48			1			1.76			5			37.76		36.00			1.76			5
Tangible book value¹		25.72			25.21		24.63		24.52		24.03			0.51			2			1.69			7			25.72		24.03			1.69			7
COMMON SHARES OUTSTANDING
Average: Basic		528,968,330			528,070,648		527,648,630		530,985,255		537,729,248			897,682			—	%		(8,760,918	)		(2	%)		528,519,489		541,986,653			(13,467,164	)		(2	%)
Diluted		530,365,203			530,446,188		530,275,673		533,398,158		539,909,366			(80,985	)		—			(9,544,163	)		(2	)		530,396,871		544,804,268			(14,407,397	)		(3	)
Common shares at period-end		529,094,976			528,933,727		527,774,428		527,636,510		537,149,717			161,249			—			(8,054,741	)		(1	)		529,094,976		537,149,717			(8,054,741	)		(1	)
Closing share price	$	19.98		$	20.95	$	26.19	$	23.86	$	27.31		($	0.97	)		(5	)	($	7.33	)		(27	)	$	19.98	$	27.31		($	7.33	)		(27	)
Market capitalization		10,571			11,081		13,822		12,589		14,670			(510	)		(5	)		(4,099	)		(28	)		10,571		14,670			(4,099	)		(28	)
SEGMENT NET INCOME
Consumer Banking	$	90		$	71	$	67	$	68	$	66		$	19			27	%	$	24			36	%	$	161	$	127		$	34			27	%
Commercial Banking		164			133		152		145		135			31			23			29			21			297		282			15			5
Other		(11	)		19		2		7		(11	)		(30	)		(158	)		—			—			8		(10	)		18			(180	)

NET INCOME	$	243		$	223	$	221	$	220	$	190		$	20			9	%	$	53			28	%	$	466	$	399		$	67			17	%

¹	These are non-GAAP financial measures. For further information on these measures, refer to pages 29-35.

CONSOLIDATED FINANCIAL HIGHLIGHTS, CONTINUED

(dollars in millions, except ratio and headcount data)


	QUARTERLY TRENDS																											FOR THE SIX MONTHS ENDED JUNE 30,
																2Q16 Change																		2016 Change
	2Q16			1Q16			4Q15			3Q15			2Q15			1Q16						2Q15						2016			2015			2015
																$			%			$			%									$			%
FINANCIAL RATIOS
Net interest margin		2.84	%		2.86	%		2.77	%		2.76	%		2.72	%		(2	) bps					12	bps					2.85	%		2.74	%		11	bps
Return on average common equity		4.94			4.45			4.51			4.40			3.94			49	bps					100	bps					4.70			4.15			55	bps
Return on average common equity, excluding restructuring charges and special items¹		4.94			4.45			4.51			4.40			4.45			49	bps					49	bps					4.70			4.47			23	bps
Return on average tangible common equity¹		7.30			6.61			6.75			6.60			5.90			69	bps					140	bps					6.96			6.21			75	bps
Return on average tangible common equity, excluding restructuring and special items¹		7.30			6.61			6.75			6.60			6.67			69	bps					63	bps					6.96			6.70			26	bps
Return on average total assets		0.69			0.65			0.64			0.65			0.56			4	bps					13	bps					0.67			0.60			7	bps
Return on average total assets, excluding restructuring charges and special items¹		0.69			0.65			0.64			0.65			0.64			4	bps					5	bps					0.67			0.65			2	bps
Return on average total tangible assets¹		0.72			0.68			0.67			0.68			0.59			4	bps					13	bps					0.70			0.63			7	bps
Return on average total tangible assets, excluding restructuring and special items¹		0.72			0.68			0.67			0.68			0.67			4	bps					5	bps					0.70			0.68			2	bps
Effective income tax rate		32.61			32.87			33.45			34.12			32.69			(26	) bps					(8	) bps					32.73			33.21			(48	) bps
Efficiency ratio¹		64.71			65.66			65.76			66.02			70.02			(95	) bps					(531	) bps					65.18			69.27			(409	) bps
Efficiency ratio, excluding restructuring and special items¹		64.71			65.66			65.76			66.02			66.70			(95	) bps					(199	) bps					65.18			67.17			(199	) bps
CAPITAL RATIOS - PERIOD END (PRELIMINARY)²
CET1 capital ratio		11.5	%		11.6	%		11.7	%		11.8	%		11.8	%
Tier 1 capital ratio		11.7			11.9			12.0			12.0			12.1
Total capital ratio		14.9			15.1			15.3			15.4			15.3
Tier 1 leverage ratio		10.3			10.4			10.5			10.4			10.4
SELECTED BALANCE SHEET DATA (PERIOD END)
Total assets	$	145,183		$	140,077		$	138,208		$	135,447		$	137,251		$	5,106			4	%	$	7,932			6	%	$	145,183		$	137,251		$	7,932			6	%
Loans and leases:
Commercial		49,557			47,972			46,214			45,269			45,068			1,585			3			4,489			10			49,557			45,068			4,489			10
Retail		53,994			53,019			52,828			52,162			51,470			975			2			2,524			5			53,994			51,470			2,524			5

Total loans and leases		103,551			100,991			99,042			97,431			96,538			2,560			3			7,013			7			103,551			96,538			7,013			7
Deposits	$	106,257		$	102,606		$	102,539		$	101,866		$	100,615		$	3,651			4		$	5,642			6		$	106,257		$	100,615		$	5,642			6
Long-term borrowed funds		11,810			10,035			9,886			4,153			3,890			1,775			18			7,920			204			11,810			3,890			7,920			204
Total stockholders’ equity		20,226			19,965			19,646			19,600			19,586			261			1			640			3			20,226			19,586			640			3
Loans-to-deposits ratio (period-end balances)³		98.25	%		99.16	%		96.94	%		96.06	%		96.64	%		(91	) bps					161	bps					98.25	%		96.64	%		161	bps
Loans-to-deposits ratio (average balances)³		99.52			98.66			97.21			96.29			97.49			86	bps					203	bps					99.10			98.02			108	bps
Full-time equivalent colleagues		17,828			17,902			17,714			17,817			17,903			(74	)		—	%		(75	)		—	%		17,828			17,903			(75	)		—	%

¹	These are non-GAAP financial measures. For further information on these measures, refer to pages 29-35.

²	Basel III transitional rules for institutions applying the standardized approach to calculating risk-weighted assets became effective January 1, 2015. The capital ratios and associated components are prepared using the Basel III standardized transitional approach.

³	Ratios include loans and leases held for sale.

CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

(dollars in millions)


	QUARTERLY TRENDS																						FOR THE SIX MONTHS ENDED JUNE 30,
											2Q16																2016 Change
	2Q16		1Q16		4Q15		3Q15		2Q15		1Q16						2Q15						2016		2015		2015
											$			%			$			%							$			%
INTEREST INCOME:
Interest and fees on loans and leases	$	896	$	868	$	830	$	812	$	790	$	28			3	%	$	106			13	%	$	1,764	$	1,569	$	195			12	%
Interest and fees on loans held for sale		3		3		2		3		3		—			—			—			—			6		3		3			100
Interest and fees on other loans held for sale		4		1		—		3		3		3			NM			1			33			5		6		(1	)		(17	)
Investment securities		141		145		153		154		155		(4	)		(3	)		(14	)		(9	)		286		314		(28	)		(9	)
Interest-bearing deposits in banks		2		2		1		2		1		—			—			1			100			4		2		2			100

Total interest income		1,046		1,019		986		974		952		27			3			94			10			2,065		1,894		171			9

INTEREST EXPENSE:
Deposits		63		60		60		65		60		3			5			3			5			123		112		11			10
Federal funds purchased and securities sold under agreements to repurchase		—		1		3		4		2		(1	)		(100	)		(2	)		(100	)		1		9		(8	)		(89	)
Other short-term borrowed funds		12		11		16		17		19		1			9			(7	)		(37	)		23		34		(11	)		(32	)
Long-term borrowed funds		48		43		37		32		31		5			12			17			55			91		63		28			44

Total interest expense		123		115		116		118		112		8			7			11			10			238		218		20			9

Net interest income		923		904		870		856		840		19			2			83			10			1,827		1,676		151			9

NONINTEREST INCOME:
Service charges and fees		150		144		156		145		139		6			4			11			8			294		274		20			7
Card fees		51		50		60		60		60		1			2			(9	)		(15	)		101		112		(11	)		(10	)
Trust and investment services fees		38		37		39		41		41		1			3			(3	)		(7	)		75		77		(2	)		(3	)
Capital markets fees		35		22		15		21		30		13			59			5			17			57		52		5			10
Foreign exchange and letter of credit fees		21		21		23		22		22		—			—			(1	)		(5	)		42		45		(3	)		(7	)
Mortgage banking fees		25		18		20		18		30		7			39			(5	)		(17	)		43		63		(20	)		(32	)
Bank-owned life insurance income		13		13		16		14		14		—			—			(1	)		(7	)		26		26		—			—
Securities gains, net		4		9		10		2		9		(5	)		(56	)		(5	)		(56	)		13		17		(4	)		(24	)
Other income		18		16		23		30		15		2			13			3			20			34		41		(7	)		(17	)

Total noninterest income		355		330		362		353		360		25			8			(5	)		(1	)		685		707		(22	)		(3	)

TOTAL REVENUE		1,278		1,234		1,232		1,209		1,200		44			4			78			7			2,512		2,383		129			5
Provision for credit losses		90		91		91		76		77		(1	)		(1	)		13			17			181		135		46			34
NONINTEREST EXPENSE:
Salaries and employee benefits		432		425		402		404		411		7			2			21			5			857		830		27			3
Outside services		86		91		104		89		99		(5	)		(5	)		(13	)		(13	)		177		178		(1	)		(1	)
Occupancy		76		76		74		75		90		—			—			(14	)		(16	)		152		170		(18	)		(11	)
Equipment expense		64		65		67		62		65		(1	)		(2	)		(1	)		(2	)		129		128		1			1
Amortization of software		41		39		38		35		37		2			5			4			11			80		73		7			10
Other operating expense		128		115		125		133		139		13			11			(11	)		(8	)		243		272		(29	)		(11	)

Total noninterest expense		827		811		810		798		841		16			2			(14	)		(2	)		1,638		1,651		(13	)		(1	)

Income before income tax expense		361		332		331		335		282		29			9			79			28			693		597		96			16
Income tax expense		118		109		110		115		92		9			8			26			28			227		198		29			15

NET INCOME	$	243	$	223	$	221	$	220	$	190	$	20			9	%	$	53			28	%	$	466	$	399	$	67			17	%

Net income, excluding restructuring charges and special items¹	$	243	$	223	$	221	$	220	$	215	$	20			9	%	$	28			13	%	$	466	$	430	$	36			8	%

Net income available to common stockholders	$	243	$	216	$	221	$	213	$	190	$	27			13	%	$	53			28	%	$	459	$	399	$	60			15	%

Net income available to common stockholders, excluding restructuring charges and special items¹	$	243	$	216	$	221	$	213	$	215	$	27			13	%	$	28			13	%	$	459	$	430	$	29			7	%

¹	These are non-GAAP financial measures. For further information on these measures, refer to pages 29-35

CONSOLIDATED BALANCE SHEETS (unaudited)

(dollars in millions)


PERIOD END BALANCES	AS OF															JUNE 30, 2016 CHANGE
	June 30, 2016			Mar 31, 2016			Dec 31, 2015			Sept 30, 2015			June 30, 2015			Mar 31, 2016						June 30, 2015
																$			%			$			%
ASSETS:
Cash and due from banks	$	976		$	839		$	1,099		$	1,067		$	961		$	137			16	%	$	15			2	%
Interest-bearing cash and due from banks		2,679			1,016			1,986			689			1,908			1,663			164			771			40
Interest-bearing deposits in banks		727			534			356			363			186			193			36			541			NM
Securities available for sale, at fair value		18,479			17,964			17,884			18,197			18,662			515			3			(183	)		(1	)
Securities held to maturity		4,973			5,129			5,258			5,285			5,567			(156	)		(3	)		(594	)		(11	)
Other investment securities, at fair value		73			68			70			50			44			5			7			29			66
Other investment securities, at cost		873			896			863			822			861			(23	)		(3	)		12			1
Loans held for sale, at fair value		478			365			325			369			397			113			31			81			20
Other loans held for sale		372			386			40			51			300			(14	)		(4	)		72			24
Loans and leases		103,551			100,991			99,042			97,431			96,538			2,560			3			7,013			7
Less: Allowance for loan and lease losses		(1,246	)		(1,224	)		(1,216	)		(1,201	)		(1,201	)		(22	)		2			(45	)		4

Net loans and leases		102,305			99,767			97,826			96,230			95,337			2,538			3			6,968			7
Derivative assets		1,312			1,068			625			838			665			244			23			647			97
Premises and equipment		551			570			595			560			580			(19	)		(3	)		(29	)		(5	)
Bank-owned life insurance		1,587			1,576			1,564			1,553			1,543			11			1			44			3
Goodwill		6,876			6,876			6,876			6,876			6,876			—			—			—			—
Due from broker		132			161			—			—			939			(29	)		(18	)		(807	)		(86	)
Other assets		2,790			2,862			2,841			2,497			2,425			(72	)		(3	)		365			15

TOTAL ASSETS	$	145,183		$	140,077		$	138,208		$	135,447		$	137,251		$	5,106			4	%	$	7,932			6	%

LIABILITIES AND STOCKHOLDERS’ EQUITY:
LIABILITIES:
Deposits:
Noninterest-bearing	$	27,108		$	27,186		$	27,649		$	27,373		$	26,678		($	78	)		—	%	$	430			2	%
Interest-bearing		79,149			75,420			74,890			74,493			73,937			3,729			5			5,212			7

Total deposits		106,257			102,606			102,539			101,866			100,615			3,651			4			5,642			6
Federal funds purchased and securities sold under agreements to repurchase		717			714			802			1,293			3,784			3			—			(3,067	)		(81	)
Other short-term borrowed funds		2,770			3,300			2,630			5,861			6,762			(530	)		(16	)		(3,992	)		(59	)
Derivative liabilities		1,010			832			485			641			556			178			21			454			82
Deferred taxes, net		961			852			730			637			558			109			13			403			72
Long-term borrowed funds		11,810			10,035			9,886			4,153			3,890			1,775			18			7,920			204
Due to broker		86			276			—			—			—			(190	)		(69	)		86			NM
Other liabilities		1,346			1,497			1,490			1,396			1,500			(151	)		(10	)		(154	)		(10	)

TOTAL LIABILITIES		124,957			120,112			118,562			115,847			117,665			4,845			4			7,292			6
STOCKHOLDERS’ EQUITY:
Preferred stock:
$25.00 par value, 100,000,000 shares authorized		247			247			247			247			247			—			—			—			—
Common stock:
$0.01 par value, 1,000,000,000 shares authorized for each of the periods presented		6			6			6			6			6			—			—			—			—
Additional paid-in capital		18,735			18,730			18,725			18,718			18,714			5			—			21			—
Retained earnings		2,255			2,076			1,913			1,745			1,585			163			8			628			40
Treasury stock, at cost		(858	)		(858	)		(858	)		(857	)		(607	)		—			—			(251	)		41
Accumulated other comprehensive loss		(159	)		(236	)		(387	)		(259	)		(359	)		77			(33	)		200			(56	)

TOTAL STOCKHOLDERS’ EQUITY		20,226			19,965			19,646			19,600			19,586			261			1			640			3

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	145,183		$	140,077		$	138,208		$	135,447		$	137,251		$	5,106			4	%	$	7,932			6	%

Memo: Total tangible common equity¹	$	13,608		$	13,333		$	13,000		$	12,939		$	12,909		$	275			2	%	$	699			5	%

¹	This is a non-GAAP financial measure. For further information on this measure, refer to page 31.

LOANS AND DEPOSITS

(dollars in millions)


PERIOD END BALANCES	AS OF										JUNE 30, 2016 CHANGE
	June 30, 2016		Mar 31, 2016		Dec 31, 2015		Sept 30, 2015		June 30, 2015		Mar 31, 2016						June 30, 2015
											$			%			$			%
LOANS AND LEASES:
Commercial	$	35,927	$	34,671	$	33,264	$	32,726	$	33,027	$	1,256			4	%	$	2,900			9	%
Commercial real estate		9,825		9,406		8,971		8,678		8,157		419			4			1,668			20
Leases		3,805		3,895		3,979		3,865		3,884		(90	)		(2	)		(79	)		(2	)

Total commercial		49,557		47,972		46,214		45,269		45,068		1,585			3			4,489			10

Residential mortgages		13,855		13,345		13,318		12,792		12,253		510			4			1,602			13
Home equity loans		2,177		2,313		2,557		2,842		3,022		(136	)		(6	)		(845	)		(28	)
Home equity lines of credit		14,418		14,526		14,674		14,707		14,917		(108	)		(1	)		(499	)		(3	)
Home equity loans serviced by others¹		860		930		986		1,054		1,126		(70	)		(8	)		(266	)		(24	)
Home equity lines of credit serviced by others¹		273		339		389		441		494		(66	)		(19	)		(221	)		(45	)
Automobile		14,075		13,847		13,828		13,876		13,727		228			2			348			3
Student		5,516		5,006		4,359		3,846		3,355		510			10			2,161			64
Credit card		1,613		1,581		1,634		1,628		1,613		32			2			—			—
Other retail		1,207		1,132		1,083		976		963		75			7			244			25

Total retail		53,994		53,019		52,828		52,162		51,470		975			2			2,524			5

Total loans and leases	$	103,551	$	100,991	$	99,042	$	97,431	$	96,538	$	2,560			3	%	$	7,013			7	%

Loans held for sale	$	478	$	365	$	325	$	369	$	397	$	113			31	%	$	81			20	%
Other loans held for sale²		372		386		40		51		300		(14	)		(4	)		72			24

Loans and loans held for sale	$	104,401	$	101,742	$	99,407	$	97,851	$	97,235	$	2,659			3	%	$	7,166			7	%

DEPOSITS:
Demand	$	27,108	$	27,186	$	27,649	$	27,373	$	26,678	($	78	)		—	%	$	430			2	%
Checking with interest		19,838		18,706		17,921		18,350		17,114		1,132			6			2,724			16
Regular savings		8,841		8,748		8,218		8,011		8,080		93			1			761			9
Money market accounts		37,503		35,513		36,727		35,539		35,735		1,990			6			1,768			5
Term deposits		12,967		12,453		12,024		12,593		13,008		514			4			(41	)		—

Total deposits	$	106,257	$	102,606	$	102,539	$	101,866	$	100,615	$	3,651			4		$	5,642			6

¹	Our Serviced by Others (“SBO”) portfolio consists of purchased loans and lines of credit that were originally serviced by others. We now service a portion of this portfolio internally.

As of June 30, 2016, includes $322 million of troubled debt restructured loans that were transferred from loans and leases to other loans held for sale during the first half of 2016, including $262 million of residential mortgages and $60 million of home equity loans. As of March 31, 2016, includes $373 million of troubled debt restructured loans that were transferred from loans and leases to other loans held for sale on March 31, 2016, including $288 million of residential mortgages and $85 million of home equity loans.

AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS

(dollars in millions)


AVERAGE BALANCES	QUARTERLY TRENDS																											FOR THE SIX MONTHS ENDED JUNE 30,
																2Q16 Change																		2016 Change
	2Q16			1Q16			4Q15			3Q15			2Q15			1Q16						2Q15						2016			2015			2015
																$			%			$			%									$			%
ASSETS:
Interest-bearing cash and due from banks and deposits in banks	$	1,948		$	1,675		$	1,526		$	1,322		$	2,054		$	273			16	%	($	106	)		(5	%)	$	1,811		$	2,073		($	262	)		(13	%)

Taxable investment securities		24,050			23,864			24,129			24,440			25,081			186			1			(1,031	)		(4	)		23,957			25,019			(1,062	)		(4	)
Non-taxable investment securities		9			9			9			9			10			—			—			(1	)		(10	)		9			10			(1	)		(10	)

Total investment securities		24,059			23,873			24,138			24,449			25,091			186			1			(1,032	)		(4	)		23,966			25,029			(1,063	)		(4	)

Investment securities and interest-bearing deposits		26,007			25,548			25,664			25,771			27,145			459			2			(1,138	)		(4	)		25,777			27,102			(1,325	)		(5	)

Commercial		35,622			34,018			33,080			32,832			32,855			1,604			5			2,767			8			34,820			32,386			2,434			8
Commercial real estate		9,649			9,108			8,855			8,406			7,947			541			6			1,702			21			9,379			7,824			1,555			20
Leases		3,863			3,917			3,884			3,936			3,894			(54	)		(1	)		(31	)		(1	)		3,890			3,895			(5	)		—

Total commercial		49,134			47,043			45,819			45,174			44,696			2,091			4			4,438			10			48,089			44,105			3,984			9

Residential mortgages		13,491			13,465			13,030			12,470			11,980			26			—			1,511			13			13,478			11,918			1,560			13
Home equity loans		2,231			2,471			2,751			2,928			3,138			(240	)		(10	)		(907	)		(29	)		2,351			3,234			(883	)		(27	)
Home equity lines of credit		14,477			14,632			14,659			14,813			15,084			(155	)		(1	)		(607	)		(4	)		14,554			15,196			(642	)		(4	)
Home equity loans serviced by others¹		899			958			1,017			1,086			1,134			(59	)		(6	)		(235	)		(21	)		929			1,164			(235	)		(20	)
Home equity lines of credit serviced by others¹		299			340			375			425			469			(41	)		(12	)		(170	)		(36	)		320			495			(175	)		(35	)
Automobile		13,972			13,792			13,824			13,810			13,484			180			1			488			4			13,882			13,210			672			5
Student		5,407			4,852			4,052			3,530			3,029			555			11			2,378			79			5,130			2,827			2,303			81
Credit cards		1,600			1,601			1,625			1,616			1,606			(1	)		—			(6	)		—			1,600			1,621			(21	)		(1	)
Other retail		1,167			1,108			1,047			939			986			59			5			181			18			1,137			1,013			124			12

Total retail		53,543			53,219			52,380			51,617			50,910			324			1			2,633			5			53,381			50,678			2,703			5

Total loans and leases		102,677			100,262			98,199			96,791			95,606			2,415			2			7,071			7			101,470			94,783			6,687			7
Loans held for sale, at fair value		368			306			325			327			308			62			20			60			19			337			275			62			23
Other loans held for sale⁴		440			49			13			128			146			391			NM			294			201			245			119			126			106

Interest-earning assets		129,492			126,165			124,201			123,017			123,205			3,327			3			6,287			5			127,829			122,279			5,550			5
Allowance for loan and lease losses		(1,219	)		(1,212	)		(1,196	)		(1,197	)		(1,198	)		(7	)		1			(21	)		2			(1,216	)		(1,195	)		(21	)		2
Goodwill		6,876			6,876			6,876			6,876			6,876			—			—			—			—			6,876			6,876			—			—
Other noninterest-earning assets		7,030			6,951			6,417			6,407			6,638			79			1			392			6			6,990			6,469			521			8

Total noninterest-earning assets		12,687			12,615			12,097			12,086			12,316			72			1			371			3			12,650			12,150			500			4

TOTAL ASSETS	$	142,179		$	138,780		$	136,298		$	135,103		$	135,521		$	3,399			2	%	$	6,658			5	%	$	140,479		$	134,429		$	6,050			5	%

LIABILITIES AND STOCKHOLDERS’ EQUITY:
LIABILITIES:
Checking with interest	$	19,003		$	17,993		$	17,117		$	16,934		$	16,561		$	1,010			6	%	$	2,442			15	%	$	18,498		$	16,302		$	2,196			13	%
Money market and savings		44,949			44,619			44,575			44,572			42,977			330			1			1,972			5			44,784			42,325			2,459			6
Term deposits		12,581			12,199			12,201			12,730			12,576			382			3			5			—			12,390			12,381			9			—

Total interest-bearing deposits		76,533			74,811			73,893			74,236			72,114			1,722			2			4,419			6			75,672			71,008			4,664			7
Federal funds purchased and securities sold under agreements to repurchase²		974			881			1,635			2,880			4,372			93			11			(3,398	)		(78	)		927			4,489			(3,562	)		(79	)
Other short-term borrowed funds		3,743			3,098			4,964			5,062			6,498			645			21			(2,755	)		(42	)		3,421			6,732			(3,311	)		(49	)
Long-term borrowed funds		10,321			9,894			6,004			4,059			3,902			427			4			6,419			165			10,108			3,916			6,192			158

Total borrowed funds		15,038			13,873			12,603			12,001			14,772			1,165			8			266			2			14,456			15,137			(681	)		(4	)

Total interest-bearing liabilities		91,571			88,684			86,496			86,237			86,886			2,887			3			4,685			5			90,128			86,145			3,983			5
Total demand deposits		27,448			27,170			27,475			26,754			26,419			278			1			1,029			4			27,309			26,089			1,220			5
Other liabilities		3,145			3,112			2,721			2,604			2,592			33			1			553			21			3,128			2,679			449			17

TOTAL LIABILITIES		122,164			118,966			116,692			115,595			115,897			3,198			1			6,267			5			120,565			114,913			5,652			5

STOCKHOLDERS’ EQUITY		20,015			19,814			19,606			19,508			19,624			201			3			391			2			19,914			19,516			398			2

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	142,179		$	138,780		$	136,298		$	135,103		$	135,521		$	3,399			2	%	$	6,658			5	%	$	140,479		$	134,429		$	6,050			5	%

Memo: Total average tangible common equity³	$	13,386		$	13,169		$	12,948		$	12,834		$	12,947		$	217			2	%	$	439			3	%	$	13,277		$	13,277		$	329			3	%

Total deposits (interest-bearing and demand)	$	103,981		$	101,981		$	101,368		$	100,990		$	98,533		$	2,000			2	%	$	5,448			6	%	$	102,981		$	97,097		$	5,884			6	%

¹	Our SBO portfolio consists of purchased loans and lines of credit that were originally serviced by others. We now service a portion of this portfolio internally.

²	Balances are net of certain short-term receivables associated with reverse repurchase agreements; interest expense includes the full cost of the repurchase agreements and certain hedging costs.

³	This is a non-GAAP financial measure. For further information on this measure, refer to page 30.

⁴

During the first half of 2016, certain troubled debt restructured loans were transferred from loans and leases to other loans held for sale. The average balances of troubled debt restructured loans held in other loans held for sale was $355 million and $179 million during the three and six months ended June 30, 2016, respectively.

AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS, CONTINUED

(dollars in millions, except rates)


	QUARTERLY TRENDS																									FOR THE SIX MONTHS ENDED JUNE 30,
AVERAGE ANNUALIZED YIELDS & RATES	2Q16					1Q16					4Q15					3Q15					2Q15					2016					2015
	Rate			Income/ Expense		Rate			Income/ Expense		Rate			Income/ Expense		Rate			Income/ Expense		Rate			Income/ Expense		Rate			Income/ Expense		Rate			Income/ Expense
INTEREST-EARNING ASSETS:
Interest-bearing deposits in banks		0.39	%	$	2		0.42	%	$	2		0.41	%	$	1		0.44	%	$	2		0.22	%	$	1		0.40	%	$	4		0.20	%	$	2

Taxable investment securities		2.35			141		2.43			145		2.52			153		2.52			154		2.47			155		2.39			286		2.51			314
Non-taxable investment securities		2.60			—		2.60			—		2.60			—		2.60			—		2.60			—		2.60			—		2.60			—

Total investment securities		2.35			141		2.43			145		2.52			153		2.52			154		2.47			155		2.39			286		2.51			314

Investment securities and interest-bearing deposits					143					147					154					156					156					290					316

Commercial		3.09			278		3.08			264		2.92			247		2.89			243		2.83			235		3.08			542		2.83			461
Commercial real estate		2.74			67		2.69			62		2.49			56		2.50			54		2.55			51		2.71			129		2.57			101
Leases		2.45			24		2.44			24		2.44			23		2.45			24		2.56			25		2.45			48		2.55			50

Total commercial		2.97			369		2.95			350		2.80			326		2.78			321		2.75			311		2.96			719		2.76			612

Residential mortgages		3.61			122		3.76			126		3.77			123		3.76			117		3.76			113		3.68			248		3.77			225
Home equity loans		5.64			31		5.51			34		5.30			37		5.32			40		5.43			42		5.57			65		5.41			87
Home equity lines of credit		3.18			115		3.11			113		2.95			109		2.97			111		2.94			110		3.15			228		2.94			221
Home equity loans serviced by others¹		7.11			16		6.94			17		6.94			17		6.93			19		7.04			20		7.02			33		7.06			41
Home equity lines of credit serviced by others¹		2.02			1		2.19			2		2.40			2		2.30			3		2.56			3		2.11			3		2.57			6
Automobile		2.95			103		2.83			97		2.80			98		2.75			95		2.68			90		2.89			200		2.73			179
Student		5.07			69		5.02			60		4.97			51		5.01			45		5.05			38		5.05			129		5.09			71
Credit cards		11.18			44		11.29			45		10.91			45		10.95			44		10.92			44		11.24			89		11.01			88
Other retail		8.94			26		8.66			24		8.08			22		7.72			17		7.61			19		8.80			50		7.60			39

Total retail		3.95			527		3.91			518		3.82			504		3.79			491		3.77			479		3.93			1,045		3.80			957

Total loans and leases		3.48			896		3.46			868		3.34			830		3.32			812		3.30			790		3.47			1,764		3.32			1,569
Loans held for sale		3.41			3		3.70			3		3.44			2		3.69			3		3.41			3		3.54			6		3.36			5
Other loans held for sale		4.00			4		6.64			1		5.93			—		6.96			3		7.79			3		4.26			5		7.43			4

Total interest-earning assets		3.22			1,046		3.23	%		1,019		3.15			986		3.13			974		3.08			952		3.23			2,065		3.10			1,894
INTEREST-BEARING LIABILITIES:
Checking with interest		0.16		$	8		0.14		$	7		0.11		$	5		0.12			5		0.11			5		0.15			15		0.11			9
Money market and savings		0.29			32		0.26			29		1.27			30		0.29			33		0.27			29		0.28			61		0.26			54
Term deposits		0.74			23		0.80			24		0.84			25		0.84			27		0.81			26		0.77			47		0.79			49

Total interest-bearing deposits		0.33			63		0.32			60		0.33			60		0.34			65		0.33			60		0.33			123		0.32			112
Federal funds purchased and securities sold under agreements to repurchase²		0.19			—		0.23			1		0.64			3		0.52			4		0.22			2		0.21			1		0.41			9
Other short-term borrowed funds		1.25			12		1.40			11		1.26			16		1.32			17		1.18			19		1.32			23		1.00			34
Long-term borrowed funds		1.87			48		1.75			43		2.44			37		3.16			32		3.19			31		1.81			91		3.21			63

Total borrowed funds		1.60			60		1.58			55		1.74			56		1.75			53		1.43			52		1.59			115		1.40			106

Total interest-bearing liabilities		0.54			123		0.52			115		0.53			116		0.54			118		0.52			112		0.53			238		0.51			218
INTEREST RATE SPREAD		2.68	%				2.71	%				2.62	%				2.59	%				2.56	%				2.70	%				2.59	%
NET INTEREST MARGIN		2.84					2.86					2.77					2.76					2.72					2.85					2.74
Memo Total deposits costs		0.24			63		0.24			60		0.24			60		0.25			65		0.24			60		0.24			123		0.23			112

¹	Our SBO portfolio consists of purchased loans and lines of credit that were originally serviced by others. We now service a portion of this portfolio internally.

²	Balances are net of certain short-term receivables associated with reverse repurchase agreements; interest expense includes the full cost of the repurchase agreements and certain hedging costs.

SEGMENT FINANCIAL HIGHLIGHTS - CONSOLIDATING

(dollars in millions, except ratios)


	SECOND QUARTER 2016												FIRST QUARTER 2016											CHANGE
																								2Q16 from 1Q16
	Consumer Banking			Commercial Banking			Other¹			Consolidated			Consumer Banking			Commercial Banking			Other¹		Consolidated			$			%
Net interest income	$	602		$	314		$	7		$	923		$	581		$	300		$	23	$	904		$	19			2	%
Noninterest income		219			122			14			355			208			99			23		330			25			8

Total revenue		821			436			21			1,278			789			399			46		1,234			44			4
Noninterest expense		632			186			9			827			616			187			8		811			16			2

Profit before provision for credit losses		189			250			12			451			173			212			38		423			28			7
Provision for credit losses		49			(1	)		42			90			63			9			19		91			(1	)		(1	)

Income (loss) before income tax expense (benefit)		140			251			(30	)		361			110			203			19		332			29			9
Income tax expense (benefit)		50			87			(19	)		118			39			70			—		109			9			8

Net income	$	90		$	164		($	11	)	$	243		$	71		$	133		$	19	$	223		$	20			9	%

Average Balances
Total assets	$	55,660		$	47,388		$	39,131		$	142,179		$	55,116		$	45,304		$	38,360	$	138,780		$	3,399			2	%
Total loans and leases²		54,353			46,073			3,059			103,485			53,744			43,899			2,974		100,617			2,868			3
Deposits		71,863			25,113			7,005			103,981			70,871			24,833			6,277		101,981			2,000			2
Interest-earning assets		54,400			46,170			28,922			129,492			53,793			43,987			28,385		126,165			3,327			3
Key Metrics
Net interest margin		4.45	%		2.74	%		NM			2.84	%		4.35	%		2.74	%		NM		2.86	%		(2	) bps
Efficiency ratio⁴		76.98			42.88			NM			64.71			78.08			46.74			NM		65.66			(95	) bps
Loans-to-deposits ratio (average balances)		75.63			183.46			NM			99.52			75.83			176.78			NM		98.66			86	bps
Return on average total tangible assets⁴		0.65			1.39			NM			0.72			0.52			1.18			NM		0.68			4	bps
Return on average tangible common equity^3,4		7.09			13.04			NM			7.30			5.59			11.19			NM		6.61			69	bps

Includes the financial impact of non-core, liquidating loan portfolios and other non-core assets, our treasury activities, wholesale funding activities, securities portfolio, community development assets and other unallocated assets, liabilities, revenues, provision for credit losses and expenses not attributed to our Consumer Banking or Commercial Banking segments.

²	Includes loans and leases held for sale.

³	Operating segments are allocated capital on a risk-adjusted basis considering economic and regulatory capital requirements.

⁴	These are non-GAAP financial measures. For further information on these measures, refer to pages 29-35.

SEGMENT FINANCIAL HIGHLIGHTS - CONSOLIDATING, (CONTINUED)

(dollars in millions, except ratios)


	SECOND QUARTER 2016												SECOND QUARTER 2015												CHANGE
																									2Q16 from 2Q15
	Consumer Banking			Commercial Banking			Other¹			Consolidated			Consumer Banking			Commercial Banking			Other¹			Consolidated			$			%
Net interest income	$	602		$	314		$	7		$	923		$	544		$	286		$	10		$	840		$	83			10	%
Noninterest income		219			122			14			355			230			108			22			360			(5	)		(1	)

Total revenue		821			436			21			1,278			774			394			32			1,200			78			7
Noninterest expense		632			186			9			827			613			181			47			841			(14	)		(2	)

Profit before provision for credit losses		189			250			12			451			161			213			(15	)		359			92			26
Provision for credit losses		49			(1	)		42			90			60			7			10			77			13			17

Income (loss) before income tax expense (benefit)		140			251			(30	)		361			101			206			(25	)		282			79			28
Income tax expense (benefit)		50			87			(19	)		118			35			71			(14	)		92			26			28

Net income (loss)	$	90		$	164		($	11	)	$	243		$	66		$	135		($	11	)	$	190		$	53			28	%

Average Balances
Total assets	$	55,660		$	47,388		$	39,131		$	142,179		$	52,489		$	42,617		$	40,415		$	135,521		$	6,658			5	%
Total loans and leases²		54,353			46,073			3,059			103,485			51,024			41,467			3,569			96,060			7,425			8
Deposits		71,863			25,113			7,005			103,981			69,963			22,717			5,853			98,533			5,448			6
Interest-earning assets		54,400			46,170			28,922			129,492			51,061			41,535			30,609			123,205			6,287			5
Key Metrics
Net interest margin		4.45	%		2.74	%		NM			2.84	%		4.28	%		2.76	%		NM			2.72	%		12	bps
Efficiency ratio⁴		76.98			42.88			NM			64.71			79.25			46.07			NM			70.02			(531	) bps
Loans-to-deposits ratio (average balances)		75.63			183.46			NM			99.52			72.93			182.54			NM			97.49			203	bps
Return on average total tangible assets⁴		0.65			1.39			NM			0.72			0.51			1.27			NM			0.59			13	bps
Return on average tangible common equity^3,4		7.09			13.04			NM			7.30			5.66			11.69			NM			5.90			140	bps

²	Includes loans and leases held for sale.

³	Operating segments are allocated capital on a risk-adjusted basis considering economic and regulatory capital requirements.

⁴	These are non-GAAP financial measures. For further information on these measures, refer to pages 29-35.

SEGMENT FINANCIAL HIGHLIGHTS - CONSOLIDATING, (CONTINUED)

(dollars in millions, except ratios)


	SIX MONTHS ENDED JUNE 30, 2016												SIX MONTHS ENDED JUNE 30, 2015												CHANGE
																									2016 from 2015
	Consumer Banking			Commercial Banking			Other¹			Consolidated			Consumer Banking			Commercial Banking			Other¹			Consolidated			$			%
Net interest income	$	1,183		$	614		$	30		$	1,827		$	1,077		$	562		$	37		$	1,676		$	151			9	%
Noninterest income		427			221			37			685			449			208			50			707			(22	)		(3	)

Total revenue		1,610			835			67			2,512			1,526			770			87			2,383			129			5
Noninterest expense		1,248			373			17			1,638			1,209			354			88			1,651			(13	)		(1	)

Profit (loss) before provision for credit losses		362			462			50			874			317			416			(1	)		732			142			19
Provision for credit losses		112			8			61			181			123			(14	)		26			135			46			34

Income (loss) before income tax expense (benefit)		250			454			(11	)		693			194			430			(27	)		597			96			16
Income tax expense (benefit)		89			157			(19	)		227			67			148			(17	)		198			29			15

Net income (loss)	$	161		$	297		$	8		$	466		$	127		$	282		($	10	)	$	399		$	67			17	%

Average Balances
Total assets	$	55,388		$	46,346		$	38,745		$	140,479		$	52,048		$	42,114		$	40,267		$	134,429		$	6,050			5	%
Total loans and leases²		54,049			44,986			3,017			102,052			50,644			40,857			3,676			95,177			6,875			7
Deposits		71,367			24,973			6,641			102,981			68,747			22,326			6,024			97,097			5,884			6
Interest-earning assets		54,097			45,078			28,654			127,829			50,679			40,943			30,657			122,279			5,550			5
Key Metrics
Net interest margin		4.40	%		2.74	%		NM			2.85	%		4.29	%		2.77	%		NM			2.74	%		11	bps
Efficiency ratio⁴		77.52			44.73			NM			65.18			79.25			46.04			NM			69.27			(409	) bps
Loans-to-deposits ratio (average balances)		75.73			180.14			NM			99.10			73.67			183.00			NM			98.02			108	bps
Return on average total tangible assets⁴		0.58			1.29			NM			0.70			0.49			1.35			NM			0.63			7	bps
Return on average tangible common equity^3,4		6.34			12.14			NM			6.96			5.48			12.41			NM			6.21			75	bps

²	Includes loans and leases held for sale.

³	Operating segments are allocated capital on a risk-adjusted basis considering economic and regulatory capital requirements.

⁴	These are non-GAAP financial measures. For further information on these measures, refer to pages 29-35.

SEGMENT FINANCIAL HIGHLIGHTS - CONSUMER BANKING

(dollars in millions, except ratios)


	QUARTERLY TRENDS																											FOR THE SIX MONTHS ENDED JUNE 30,
CONSUMER BANKING																2Q16 Change																		2016 Change
	2Q16			1Q16			4Q15			3Q15			2Q15			1Q16						2Q15						2016			2015			2015
																$			%			$			%									$			%
Net interest income	$	602		$	581		$	565		$	556		$	544		$	21			4	%	$	58			11	%	$	1,183		$	1,077		$	106			10	%
Noninterest income		219			208			226			235			230			11			5			(11	)		(5	)		427			449			(22	)		(5	)

Total revenue		821			789			791			791			774			32			4			47			6			1,610			1,526			84			6
Noninterest expense		632			616			624			623			613			16			3			19			3			1,248			1,209			39			3

Profit before provision for credit losses		189			173			167			168			161			16			9			28			17			362			317			45			14
Provision for credit losses		49			63			65			64			60			(14	)		(22	)		(11	)		(18	)		112			123			(11	)		(9	)

Income before income tax expense		140			110			102			104			101			30			27			39			39			250			194			56			29
Income tax expense		50			39			35			36			35			11			28			15			43			89			67			22			33

Net income	$	90		$	71		$	67		$	68		$	66		$	19			27	%	$	24			36	%	$	161		$	127		$	34			27	%

Average Balances
Total assets	$	55,660		$	55,116		$	54,065		$	53,206		$	52,489		$	544			1	%	$	3,171			6	%	$	55,388		$	52,048		$	3,340			6	%
Total loans and leases¹		54,353			53,744			52,737			51,886			51,024			609			1			3,329			7			54,049			50,644			3,405			7
Deposits		71,863			70,871			70,939			70,527			69,963			992			1			1,900			3			71,367			68,747			2,620			4
Interest-earning assets		54,400			53,793			52,785			51,928			51,061			607			1			3,339			7			54,097			50,679			3,418			7
Key Metrics
Net interest margin		4.45	%		4.35	%		4.25	%		4.25	%		4.28	%		10	bps					17	bps					4.40	%		4.29	%		11	bps
Efficiency ratio³		76.98			78.08			78.85			78.72			79.25			(110	) bps					(227	) bps					77.52			79.25			(173	) bps
Loans-to-deposits ratio (average balances)		75.63			75.83			74.34			73.57			72.93			(20	) bps					270	bps					75.73			73.67			206	bps
Return on average total tangible assets³		0.65			0.52			0.49			0.49			0.51			13	bps					14	bps					0.59			0.49			9	bps
Return on average tangible common equity^2,3		7.09			5.59			5.50			5.50			5.66			150	bps					143	bps					6.34			5.48			86	bps

¹	Includes loans and leases held for sale.

²	Operating segments are allocated capital on a risk-adjusted basis considering economic and regulatory capital requirements.

³	These are non-GAAP financial measures. For further information on these measures, refer to pages 29-35.

SEGMENT FINANCIAL HIGHLIGHTS - COMMERCIAL BANKING

(dollars in millions, except ratios)


	QUARTERLY TRENDS																											FOR THE SIX MONTHS ENDED JUNE 30,
COMMERCIAL BANKING																2Q16 Change																		2016 Change
	2Q16			1Q16			4Q15			3Q15			2Q15			1Q16						2Q15						2016			2015			2015
																$			%			$			%									$			%
Net interest income	$	314		$	300		$	301		$	299		$	286		$	14			5	%	$	28			10	%	$	614		$	562		$	52			9	%
Noninterest income		122			99			107			100			108			23			23			14			13			221			208			13			6

Total revenue		436			399			408			399			394			37			9			42			11			835			770			65			8
Noninterest expense		186			187			180			175			181			(1	)		(1	)		5			3			373			354			19			5

Profit before provision for credit losses		250			212			228			224			213			38			18			37			17			462			416			46			11
Provision for credit losses		(1	)		9			(2	)		3			7			(10	)		(111	)		(8	)		(114	)		8			(14	)		22			(157	)

Income before income tax expense		251			203			230			221			206			48			24			45			22			454			430			24			6
Income tax expense		87			70			78			76			71			17			24			16			23			157			148			9			6

Net income	$	164		$	133		$	152		$	145		$	135		$	31			23	%	$	29			21	%	$	297		$	282		$	15			5	%

Average Balances
Total assets	$	47,388		$	45,304		$	43,835		$	43,113		$	42,617		$	2,084			5	%	$	4,771			11	%	$	46,346		$	42,114		$	4,232			10	%
Total loans and leases¹		46,073			43,899			42,642			41,993			41,467			2,174			5			4,606			11			44,986			40,857			4,129			10
Deposits		25,113			24,833			24,600			24,604			22,717			280			1			2,396			11			24,973			22,326			2,647			12
Interest-earning assets		46,170			43,987			42,777			42,070			41,535			2,183			5			4,635			11			45,078			40,943			4,135			10
Key Metrics
Net interest margin		2.74	%		2.74	%		2.80	%		2.81	%		2.76	%		—	bps					(2	) bps					2.74	%		2.77	%		(3	) bps
Efficiency ratio³		42.88			46.74			44.02			43.75			46.07			(386	) bps					(319	) bps					44.73			46.04			(131	) bps
Loans-to-deposits ratio (average balances)		183.46			176.78			173.34			170.68			182.54			668	bps					92	bps					180.14			183.00			(286	) bps
Return on average total tangible assets³		1.39			1.18			1.37			1.34			1.27			21	bps					12	bps					1.29			1.35			(6	) bps
Return on average tangible common equity^2,3		13.04			11.19			12.57			12.24			11.69			185	bps					135	bps					12.14			12.41			(27	) bps

¹	Includes loans and leases held for sale.

²	Operating segments are allocated capital on a risk-adjusted basis considering economic and regulatory capital requirements.

³	These are non-GAAP financial measures. For further information on these measures, refer to pages 29-35.

SEGMENT FINANCIAL HIGHLIGHTS - OTHER

(dollars in millions)


	QUARTERLY TRENDS																									FOR THE SIX MONTHS ENDED JUNE 30,
OTHER¹														2Q16 Change																		2016 Change
	2Q16			1Q16		4Q15			3Q15		2Q15			1Q16						2Q15						2016			2015			2015
														$			%			$			%									$			%
Net interest income	$	7		$	23	$	4		$	1	$	10		($	16	)		(70	%)	($	3	)		(30	%)	$	30		$	37		($	7	)		(19	%)
Noninterest income		14			23		29			18		22			(9	)		(39	)		(8	)		(36	)		37			50			(13	)		(26	)

Total revenue		21			46		33			19		32			(25	)		(54	)		(11	)		(34	)		67			87			(20	)		(23	)
Noninterest expense		9			8		6			—		47			1			13			(38	)		(81	)		17			88			(71	)		(81	)

Profit (loss) before provision for credit losses		12			38		27			19		(15	)		(26	)		(68	)		27			180			50			(1	)		51			NM
Provision for credit losses		42			19		28			9		10			23			121			32			NM			61			26			35			135

(Loss) Income before income tax (benefit) expense		(30	)		19		(1	)		10		(25	)		(49	)		NM			(5	)		(20	)		(11	)		(27	)		16			59
Income tax (benefit) expense		(19	)		—		(3	)		3		(14	)		(19	)		NM			(5	)		(36	)		(19	)		(17	)		(2	)		(12	)

Net income (loss)	($	11	)	$	19	$	2		$	7	($	11	)	($	30	)		(158	%)	$	—			—	%	$	8		($	10	)	$	18			180	%

Average Balances
Total assets	$	39,131		$	38,360	$	38,398		$	38,784	$	40,415		$	771			2	%	($	1,284	)		(3	%)	$	38,745		$	40,267		($	1,522	)		(4	%)
Total loans and leases		3,059			2,974		3,158			3,367		3,569			85			3			(510	)		(14	)		3,017			3,676			(659	)		(18	)
Deposits		7,005			6,277		5,829			5,859		5,853			728			12			1,152			20			6,641			6,024			617			10
Interest-earning assets		28,922			28,385		28,639			29,019		30,609			537			2			(1,687	)		(6	)		28,654			30,657			(2,003	)		(7	)

SEGMENT FINANCIAL HIGHLIGHTS - CONSOLIDATED

(dollars in millions, except ratios)


	QUARTERLY TRENDS																											FOR THE SIX MONTHS ENDED JUNE 30,
CONSOLIDATED																2Q16 Change																		2016 Change
	2Q16			1Q16			4Q15			3Q15			2Q15			1Q16						2Q15						2016			2015			2015
																$			%			$			%									$			%
Net interest income	$	923		$	904		$	870		$	856		$	840		$	19			2	%	$	83			10	%	$	1,827		$	1,676		$	151			9	%
Noninterest income		355			330			362			353			360			25			8			(5	)		(1	)		685			707			(22	)		(3	)

Total revenue		1,278			1,234			1,232			1,209			1,200			44			4			78			7			2,512			2,383			129			5
Noninterest expense		827			811			810			798			841			16			2			(14	)		(2	)		1,638			1,651			(13	)		(1	)

Profit before provision for credit losses		451			423			422			411			359			28			7			92			26			874			732			142			19
Provision for credit losses		90			91			91			76			77			(1	)		(1	)		13			17			181			135			46			34

Income before income tax expense		361			332			331			335			282			29			9			79			28			693			597			96			16
Income tax expense		118			109			110			115			92			9			8			26			28			227			198			29			15

Net income	$	243		$	223		$	221		$	220		$	190		$	20			9	%	$	53			28	%	$	466		$	399		$	67			17	%

Average Balances
Total assets	$	142,179		$	138,780		$	136,298		$	135,103		$	135,521		$	3,399			2	%	$	6,658			5	%	$	140,479		$	134,429		$	6,050			5	%
Total loans and leases¹		103,485			100,617			98,537			97,246			96,060			2,868			3			7,425			8			102,052			95,177			6,875			7
Deposits		103,981			101,981			101,368			100,990			98,533			2,000			2			5,448			6			102,981			97,097			5,884			6
Interest-earning assets		129,492			126,165			124,201			123,017			123,205			3,327			3			6,287			5			127,829			122,279			5,550			5
Key Metrics
Net interest margin		2.84	%		2.86	%		2.77	%		2.76	%		2.72	%		(2	) bps					12	bps					2.85	%		2.74	%		11	bps
Efficiency ratio²		64.71			65.66			65.76			66.02			70.02			(95	) bps					(531	) bps					65.18			69.27			(409	) bps
Loans-to-deposits ratio (average balances)		99.52			98.66			97.21			96.29			97.49			86	bps					203	bps					99.10			98.02			108	bps
Return on average total tangible assets²		0.72			0.68			0.67			0.68			0.59			4	bps					13	bps					0.70			0.63			7	bps
Return on average tangible common equity²		7.30			6.61			6.75			6.60			5.90			69	bps					140	bps					6.96			6.21			75	bps

¹	Includes loans and leases held for sale.

²	These are non-GAAP financial measures. For further information on these measures, refer to pages 29-35.

SEGMENT FINANCIAL HIGHLIGHTS

(dollars in millions)


	QUARTERLY TRENDS																							FOR THE SIX MONTHS ENDED JUNE 30,
												2Q16 Change																	2016 Change
	2Q16		1Q16		4Q15		3Q15		2Q15			1Q16						2Q15						2016		2015			2015
												$			%			$			%								$			%
Net interest income:
Consumer Banking	$	602	$	581	$	565	$	556	$	544		$	21			4	%	$	58			11	%	$	1,183	$	1,077		$	106			10	%
Commercial Banking		314		300		301		299		286			14			5			28			10			614		562			52			9
Other		7		23		4		1		10			(16	)		(70	)		(3	)		(30	)		30		37			(7	)		(19	)

Net interest income	$	923	$	904	$	870	$	856	$	840		$	19			2	%	$	83			10	%	$	1,827	$	1,676		$	151			9	%

Noninterest income:
Consumer Banking	$	219	$	208	$	226	$	235	$	230		$	11			5	%	($	11	)		(5	%)	$	427	$	449		($	22	)		(5	%)
Commercial Banking		122		99		107		100		108			23			23			14			13			221		208			13			6
Other		14		23		29		18		22			(9	)		(39	)		(8	)		(36	)		37		50			(13	)		(26	)

Noninterest income	$	355	$	330	$	362	$	353	$	360		$	25			8	%	($	5	)		(1	)%	$	685	$	707		($	22	)		(3	%)

Total revenue:
Consumer Banking	$	821	$	789	$	791	$	791	$	774		$	32			4	%	$	47			6	%	$	1,610	$	1,526		$	84			6	%
Commercial Banking		436		399		408		399		394			37			9			42			11			835		770			65			8
Other		21		46		33		19		32			(25	)		(54	)		(11	)		(34	)		67		87			(20	)		(23	)

Total revenue	$	1,278	$	1,234	$	1,232	$	1,209	$	1,200		$	44			4	%	$	78			7	%	$	2,512	$	2,383		$	129			5	%

Noninterest expense:
Consumer Banking	$	632	$	616	$	624	$	623	$	613		$	16			3	%	$	19			3	%	$	1,248	$	1,209		$	39			3	%
Commercial Banking		186		187		180		175		181			(1	)		(1	)		5			3			373		354			19			5
Other		9		8		6		—		47			1			13			(38	)		(81	)		17		88			(71	)		(81	)

Noninterest expense	$	827	$	811	$	810	$	798	$	841		$	16			2	%	($	14	)		(2	%)	$	1,638	$	1,651		($	13	)		(1	%)

Profit before provision for credit losses:
Consumer Banking	$	189	$	173	$	167	$	168	$	161		$	16			9	%	$	28			17	%	$	362	$	317		$	45			14	%
Commercial Banking		250		212		228		224		213			38			18			37			17			462		416			46			11
Other		12		38		27		19		(15	)		(26	)		(68	)		27			(180	)		50		(1	)		51			NM

Profit before provision for credit losses	$	451	$	423	$	422	$	411	$	359		$	28			7	%	$	92			26	%	$	874	$	732		$	142			19	%

SEGMENT FINANCIAL HIGHLIGHTS, CONTINUED

(dollars in millions)


	QUARTERLY TRENDS																									FOR THE SIX MONTHS ENDED JUNE 30,
														2Q16 Change																		2016 Change
	2Q16			1Q16		4Q15			3Q15		2Q15			1Q16						2Q15						2016			2015			2015
														$			%			$			%									$			%
Provision for credit losses:
Consumer Banking	$	49		$	63	$	65		$	64	$	60		($	14	)		(22	%)	($	11	)		(18	%)	$	112		$	123		($	11	)		(9	%)
Commercial Banking		(1	)		9		(2	)		3		7			(10	)		(111	)		(8	)		(114	)		8			(14	)		22			(157	)
Other		42			19		28			9		10			23			121			32			NM			61			26			35			135

Provision for credit losses	$	90		$	91	$	91		$	76	$	77		($	1	)		(1	%)	$	13			17	%	$	181		$	135		$	46			34	%

Income before income tax expense:
Consumer Banking	$	140		$	110	$	102		$	104	$	101		$	30			27	%	$	39			39	%	$	250		$	194		$	56			29	%
Commercial Banking		251			203		230			221		206			48			24			45			22			454			430			24			6
Other		(30	)		19		(1	)		10		(25	)		(49	)		NM			(5	)		20			(11	)		(27	)		16			(59	)

Income before income tax expense	$	361		$	332	$	331		$	335	$	282		$	29			9	%	$	79			28	%	$	693		$	597		$	96			16	%

Income tax expense:
Consumer Banking	$	50		$	39	$	35		$	36	$	35		$	11			28	%	$	15			43	%	$	89		$	67		$	22			33	%
Commercial Banking		87			70		78			76		71			17			24			16			23			157			148			9			6
Other		(19	)		—		(3	)		3		(14	)		(19	)		100			(5	)		36			(19	)		(17	)		(2	)		12

Income tax expense	$	118		$	109	$	110		$	115	$	92		$	9			8	%	$	26			28	%	$	227		$	198		$	29			15	%

Net income:
Consumer Banking	$	90		$	71	$	67		$	68	$	66		$	19			27	%	$	24			36	%	$	161		$	127		$	34			27	%
Commercial Banking		164			133		152			145		135			31			23			29			21			297			282			15			5
Other		(11	)		19		2			7		(11	)		(30	)		(158	)		—			—			8			(10	)		18			(180	)

Net income	$	243		$	223	$	221		$	220	$	190		$	20			9	%	$	53			28	%	$	466		$	399		$	67			17	%

SEGMENT FINANCIAL HIGHLIGHTS, CONTINUED

(dollars in millions)


	QUARTERLY TRENDS																					FOR THE SIX MONTHS ENDED JUNE 30,
AVERAGE BALANCES											2Q16 Change															2016 Change
	2Q16		1Q16		4Q15		3Q15		2Q15		1Q16					2Q15						2016		2015		2015
											$		%			$			%							$			%
Total assets:
Consumer Banking	$	55,660	$	55,116	$	54,065	$	53,206	$	52,489	$	544		1	%	$	3,171			6	%	$	55,388	$	52,048	$	3,340			6	%
Commercial Banking		47,388		45,304		43,835		43,113		42,617		2,084		5			4,771			11			46,346		42,114		4,232			10
Other		39,131		38,360		38,398		38,784		40,415		771		2			(1,284	)		(3	)		38,745		40,267		(1,522	)		(4	)

Total Assets	$	142,179	$	138,780	$	136,298	$	135,103	$	135,521	$	3,399		2	%	$	6,658			5	%	$	140,479	$	134,429	$	6,050			5	%

Loans and leases¹:
Consumer Banking	$	54,353	$	53,744	$	52,737	$	51,886	$	51,024	$	609		1	%	$	3,329			7	%	$	54,049	$	50,644	$	3,405			7	%
Commercial Banking		46,073		43,899		42,642		41,993		41,467		2,174		5			4,606			11			44,986		40,857		4,129			10
Other		3,059		2,974		3,158		3,367		3,569		85		3			(510	)		(14	)		3,017		3,676		(659	)		(18	)

Total loans and leases	$	103,485	$	100,617	$	98,537	$	97,246	$	96,060	$	2,868		3	%	$	7,425			8	%	$	102,052	$	95,177	$	6,875			7	%

Deposits:
Consumer Banking	$	71,863	$	70,871	$	70,939	$	70,527	$	69,963	$	992		1	%	$	1,900			3	%	$	71,367	$	68,747	$	2,620			4	%
Commercial Banking		25,113		24,833		24,600		24,604		22,717		280		1			2,396			11			24,973		22,326		2,647			12
Other		7,005		6,277		5,829		5,859		5,853		728		12			1,152			20			6,641		6,024		617			10

Total deposits	$	103,981	$	101,981	$	101,368	$	100,990	$	98,533	$	2,000		2	%	$	5,448			6	%	$	102,981	$	97,097	$	5,884			6	%

Interest-earning assets:
Consumer Banking	$	54,400	$	53,793	$	52,785	$	51,928	$	51,061	$	607		1	%	$	3,339			7	%	$	54,097	$	50,679	$	3,418			7	%
Commercial Banking		46,170		43,987		42,777		42,070		41,535		2,183		5			4,635			11			45,078		40,943		4,135			10
Other		28,922		28,385		28,639		29,019		30,609		537		2			(1,687	)		(6	)		28,654		30,657		(2,003	)		(7	)

Total interest-earning assets	$	129,492	$	126,165	$	124,201	$	123,017	$	123,205	$	3,327		3	%	$	6,287			5	%	$	127,829	$	122,279	$	5,550			5	%

¹	Includes loans and leases held for sale.

SEGMENT FINANCIAL HIGHLIGHTS, CONTINUED


	QUARTERLY TRENDS																					FOR THE SIX MONTHS ENDED JUNE 30,
KEY METRICS																2Q16 Change												2016 Change
	2Q16			1Q16			4Q15			3Q15			2Q15			1Q16			2Q15			2016			2015			2015
																bps			bps									bps
Net Interest Margin (NIM)
Consumer Banking		4.45	%		4.35	%		4.25	%		4.25	%		4.28	%		10			17			4.40	%		4.29	%		11
Commercial Banking		2.74			2.74			2.80			2.81			2.76			—			(2	)		2.74			2.77			(3	)
Other		NM			NM			NM			NM			NM			—			—			NM			NM			—
NIM		2.84			2.86			2.77			2.76			2.72			(2	)		12			2.85			2.74			11
Efficiency Ratio³
Consumer Banking		76.98	%		78.08	%		78.85	%		78.72	%		79.25	%		(110	)		(227	)		77.52	%		79.25	%		(173	)
Commercial Banking		42.88			46.74			44.02			43.75			46.07			(386	)		(319	)		44.73			46.04			(131	)
Other		NM			NM			NM			NM			NM			—			—			NM			NM			—
Efficiency Ratio		64.71			65.66			65.76			66.02			70.02			(95	)		(531	)		65.18			69.27			(409	)
Loans to Deposits Ratio (average balance) (LDR)¹
Consumer Banking		75.63	%		75.83	%		74.34	%		73.57	%		72.93	%		(20	)		270			75.73	%		73.67	%		206
Commercial Banking		183.46			176.78			173.34			170.68			182.54			668			92			180.14			183.00			(286	)
Other		NM			NM			NM			NM			NM			—			—			NM			NM			—
LDR		99.52			98.66			97.21			96.29			97.49			86			203			99.10			98.02			108
Return on Average Tangible Assets (ROTA)³
Consumer Banking		0.65	%		0.52	%		0.49	%		0.51	%		0.51	%		13			14			0.58	%		0.49	%		9
Commercial Banking		1.39			1.18			1.37			1.34			1.27			21			12			1.29			1.35			(6	)
Other		NM			NM			NM			NM			NM			—			—			NM			NM			—
ROTA		0.72			0.68			0.67			0.68			0.59			4			13			0.70			0.63			7
Return on Average Tangible Common Equity (ROTCE)^2,3
Consumer Banking		7.09	%		5.59	%		5.50	%		5.67	%		5.66	%		150			143			6.34	%		5.48	%		86
Commercial Banking		13.04			11.19			12.57			12.24			11.69			185			135			12.14			12.41			(27	)
Other		NM			NM			NM			NM			NM			—			—			NM			NM			—
ROTCE		7.30			6.61			6.75			6.60			5.90			69			140			6.96			6.21			75

¹	Includes loans and leases held for sale.

²	Operating segments are allocated capital on a risk-adjusted basis considering economic and regulatory capital requirements.

³	These are non-GAAP financial measures. For further information on these measures, refer to pages 29-35.

CREDIT-RELATED INFORMATION

(dollars in millions)


	AS OF										JUNE 30, 2016 CHANGE
	June 30, 2016		Mar 31, 2016		Dec 31, 2015		Sept 30, 2015		June 30, 2015		Mar 31, 2016						June 30, 2015
											$			%			$			%
CREDIT EXPOSURE:
Commercial	$	35,927	$	34,671	$	33,264	$	32,726	$	33,027	$	1,256			4	%	$	2,900			9	%
Commercial real estate		9,825		9,406		8,971		8,678		8,157		419			4			1,668			20
Leases		3,805		3,895		3,979		3,865		3,884		(90	)		(2	)		(79	)		(2	)

Total commercial		49,557		47,972		46,214		45,269		45,068		1,585			3			4,489			10
Residential mortgages		13,855		13,345		13,318		12,792		12,253		510			4			1,602			13
Home equity loans		2,177		2,313		2,557		2,842		3,022		(136	)		(6	)		(845	)		(28	)
Home equity lines of credit		14,418		14,526		14,674		14,707		14,917		(108	)		(1	)		(499	)		(3	)
Home equity loans serviced by others¹		860		930		986		1,054		1,126		(70	)		(8	)		(266	)		(24	)
Home equity lines of credit serviced by others¹		273		339		389		441		494		(66	)		(19	)		(221	)		(45	)
Automobile		14,075		13,847		13,828		13,876		13,727		228			2			348			3
Student		5,516		5,006		4,359		3,846		3,355		510			10			2,161			64
Credit card		1,613		1,581		1,634		1,628		1,613		32			2			—			—
Other retail		1,207		1,132		1,083		976		963		75			7			244			25

Total retail		53,994		53,019		52,828		52,162		51,470		975			2			2,524			5

Total loans and leases		103,551		100,991		99,042		97,431		96,538		2,560			3			7,013			7
Derivative receivable - commercial		1,297		1,057		619		828		658		240			23			639			97
Derivative receivable - retail		15		11		6		10		7		4			36			8			114

Total derivative receivable		1,312		1,068		625		838		665		244			23			647			97

Total credit-related assets		104,863		102,059		99,667		98,269		97,203		2,804			3			7,660			8
Undrawn commitments to extend credit - commercial		32,018		30,352		30,823		29,751		29,422		1,666			5			2,596			9
Financial standby letters of credit		1,946		1,921		2,010		2,077		2,181		25			1			(235	)		(11	)
Performance letters of credit		37		41		42		45		55		(4	)		(10	)		(18	)		(33	)
Commercial letters of credit		70		63		87		63		59		7			11			11			19
Marketing rights		46		47		47		47		49		(1	)		(2	)		(3	)		(6	)
Risk participation agreements		64		53		26		39		22		11			21			42			191

Total commercial lending-related arrangements		34,181		32,477		33,035		32,022		31,788		1,704			5			2,393			8
Undrawn commitments to extend credit - retail		26,604		26,637		25,701		25,755		26,465		(33	)		—			139			1
Residential mortgage loans sold with recourse		9		10		10		11		12		(1	)		(10	)		(3	)		(25	)

Total retail lending-related arrangements		26,613		26,647		25,711		25,766		26,477		(34	)		—			136			1

Total lending-related arrangements		60,794		59,124		58,746		57,788		58,265		1,670			3			2,529			4

Total credit exposure	$	165,657	$	161,183	$	158,413	$	156,057	$	155,468	$	4,474			3	%	$	10,189			7	%

Memo: Total credit exposure by product category
Commercial exposure	$	85,035	$	81,506	$	79,868	$	78,119	$	77,514	$	3,529			4	%	$	7,521			10	%
Retail exposure		80,622		79,677		78,545		77,938		77,954		945			1			2,668			3

Total credit exposure	$	165,657	$	161,183	$	158,413	$	156,057	$	155,468	$	4,474			3	%	$	10,189			7	%

¹	Our SBO portfolio consists of purchased loans and lines of credit that were originally serviced by others. We now service a portion of this portfolio internally.

CREDIT-RELATED INFORMATION, CONTINUED

(dollars in millions, except ratios)


	AS OF															JUNE 30, 2016 CHANGE
	June 30, 2016			Mar 31, 2016			Dec 31, 2015			Sept 30, 2015			June 30, 2015			Mar 31, 2016						June 30, 2015
																$			%			$			%
NONPERFORMING ASSETS:
Commercial	$	277		$	284		$	71		$	88		$	83		($	7	)		(2	%)	$	194			234	%
Commercial real estate		70			86			77			42			42			(16	)		(19	)		28			67
Leases		—			—			—			—			—			—			—			—			—

Total commercial		347			370			148			130			125			(23	)		(6	)		222			178
Residential mortgages^{2, 3}		174			174			331			324			329			—			—			(155	)		(47	)
Home equity loans^{2, 4}		104			99			135			144			151			5			5			(47	)		(31	)
Home equity lines of credit⁴		251			261			272			270			292			(10	)		(4	)		(41	)		(14	)
Home equity loans serviced by others⁵		33			37			38			39			44			(4	)		(11	)		(11	)		(25	)
Home equity lines of credit serviced by others⁵		38			38			32			31			26			—			—			12			46
Automobile		43			42			42			38			30			1			2			13			43
Student		37			40			41			39			35			(3	)		(8	)		2			6
Credit card		14			16			16			15			14			(2	)		(13	)		—			—
Other retail		3			2			5			4			4			1			50			(1	)		(25	)

Total retail		697			709			912			904			925			(12	)		(2	)		(228	)		(25	)

Nonperforming loans and leases¹		1,044			1,079			1,060			1,034			1,050			(35	)		(3	)		(6	)		(1	)

Accruing loans past due 90 days or more not included above	$	26		$	32		$	—		$	—		$	—
Accruing loans past due 90 days or more included above		—			—			9			15			8
Commercial		1			1			1			1			1			—			—			—			—
Retail		47			47			45			38			37			—			—			10			27

Other nonperforming assets		48			48			46			39			38			—			—			10			26

Nonperforming assets	$	1,092		$	1,127		$	1,106		$	1,073		$	1,088		($	35	)		(3	)%	$	4			—	%

NONPERFORMING ASSETS BY PRODUCT CATEGORY:
Commercial	$	348		$	371		$	149		$	131		$	126		($	23	)		(6	%)	$	222			176	%
Retail		744			756			957			942			962			(12	)		(2	)		(218	)		(23	)

Nonperforming assets	$	1,092		$	1,127		$	1,106		$	1,073		$	1,088		($	35	)		(3	%)	$	4			—	%

ASSET QUALITY RATIOS
Allowance for loan and lease losses to loans and leases		1.20	%		1.21	%		1.23	%		1.23	%		1.24	%		(1	) bps					(4	) bps
Allowance for loan and lease losses to nonperforming loans and leases¹		119.27			113.43			114.64			116.12			114.37			(584	) bps					490	bps
Nonperforming loans and leases to loans and leases¹		1.01			1.07			1.07			1.06			1.09			(6	) bps					(8	) bps
Nonperforming assets to total assets¹		0.75			0.80			0.80			0.79			0.79			(5	) bps					(4	) bps

¹	Nonperforming loans and leases included loans and leases on nonaccrual. Nonperforming loans and leases for periods prior to March 31, 2016 included loans and leases on nonaccrual and loans and leases accruing and 90 days or more past due.

Nonperforming balances at June 30, 2016 excluded $71 million of troubled debt restructured loans held for sale, including $54 million of residential mortgages and $17 million of home equity loans. On March 31, 2016, $97 million of previously nonperforming troubled debt restructured loans were transferred from loans and leases to other loans held for sale.

Nonperforming balances at June 30, 2016 excluded $15 million of first lien residential mortgage loans that are 100% guaranteed by the Federal Housing Administration and $34 million of guaranteed residential mortgage loans sold to GNMA for which the Company has the right but not the obligation to repurchase.

⁴	Restated September 30, 2015 and June 30, 2015 to conform to the current presentation.

⁵	Our SBO portfolio consists of purchased loans and lines of credit that were originally serviced by others. We now service a portion of this portfolio internally.

CREDIT-RELATED INFORMATION, CONTINUED

(dollars in millions)


	QUARTERLY TRENDS																										FOR THE SIX MONTHS ENDED JUNE 30,
CHARGE-OFFS, RECOVERIES AND RELATED RATIOS															2Q16 Change																	2016 Change
	2Q16			1Q16			4Q15			3Q15			2Q15		1Q16						2Q15						2016		2015			2015
															$			%			$			%								$			%
GROSS CHARGE-OFFS:
Commercial	$	4		$	13		$	3		$	10		$	12	($	9	)		(69	%)	($	8	)		(67	%)	$	17	$	17		$	—			—	%
Commercial real estate		3			—			1			1			3		3			100			—			—			3		4			(1	)		(25	)
Leases		—			—			—			—			—		—			—			—			—			—		—			—			—

Total commercial		7			13			4			11			15		(6	)		(46	)		(8	)		(53	)		20		21			(1	)		(5	)
Residential mortgages		5			6			5			5			6		(1	)		(17	)		(1	)		(17	)		11		12			(1	)		(8	)
Home equity loans		3			3			11			8			6		—			—			(3	)		(50	)		6		15			(9	)		(60	)
Home equity lines of credit		11			13			9			11			17		(2	)		(15	)		(6	)		(35	)		24		39			(15	)		(38	)
Home equity loans serviced by others¹		11			9			9			8			7		2			22			4			57			20		15			5			33
Home equity lines of credit serviced by others¹		4			3			4			3			3		1			33			1			33			7		7			—			—
Automobile		32			39			39			31			24		(7	)		(18	)		8			33			71		47			24			51
Student		14			11			14			12			15		3			27			(1	)		(7	)		25		25			—			—
Credit card		15			14			14			14			16		1			7			(1	)		(6	)		29		31			(2	)		(6	)
Other retail		11			15			15			17			12		(4	)		(27	)		(1	)		(8	)		26		24			2			8

Total retail		106			113			120			109			106		(7	)		(6	)		—			—			219		215			4			2

Total gross charge-offs	$	113		$	126		$	124		$	120		$	121	($	13	)		(10	%)	($	8	)		(7	%)	$	239	$	236		$	3			1	%

GROSS RECOVERIES:
Commercial	$	5		$	3		$	4		$	3		$	5	$	2			67	%	$	—			—	%	$	8	$	11		($	3	)		(27	%)
Commercial real estate		—			1			3			3			3		(1	)		(100	)		(3	)		100			1		25			(24	)		(96	)
Leases		—			—			—			—			—		—			—			—			—			—		—			—			—

Total commercial		5			4			7			6			8		1			25			(3	)		(38	)		9		36			(27	)		(75	)
Residential mortgages		2			3			4			3			2		(1	)		(33	)		—			—			5		5			—			—
Home equity loans		3			2			4			3			2		1			50			1			50			5		4			1			25
Home equity lines of credit		4			3			4			3			6		1			33			(2	)		(33	)		7		11			(4	)		(36	)
Home equity loans serviced by others¹		6			4			4			5			5		2			50			1			20			10		8			2			25
Home equity lines of credit serviced by others¹		2			1			2			2			2		1			100			—			—			3		4			(1	)		(25	)
Automobile		17			17			15			14			11		—			—			6			55			34		20			14			70
Student		3			3			3			3			3		—			—			—			—			6		6			—			—
Credit card		2			2			2			2			2		—			—			—			—			4		4			—			—
Other retail		4			4			2			4			2		—			—			2			100			8		6			2			33

Total retail		43			39			40			39			35		4			10			8			23			82		68			14			21

Total gross recoveries	$	48		$	43		$	47		$	45		$	43	$	5			12	%	$	5			12	%	$	91	$	104		($	13	)		(13	%)

NET CHARGE-OFFS (RECOVERIES):
Commercial	($	1	)	$	10		($	1	)	$	7		$	7	($	11	)		(110	%)	($	8	)		(114	%)	$	9	$	6		$	3			50	%
Commercial real estate		3			(1	)		(2	)		(2	)		—		4			NM			3			100			2		(21	)		23			110
Leases		—			—			—			—			—		—			—			—			—			—		—			—			—

Total commercial		2			9			(3	)		5			7		(7	)		(78	)		(5	)		(71	)		11		(15	)		26			173
Residential mortgages		3			3			1			2			4		—			—			(1	)		(25	)		6		7			(1	)		(14	)
Home equity loans		—			1			7			5			4		(1	)		(100	)		(4	)		(100	)		1		11			(10	)		(91	)
Home equity lines of credit		7			10			5			8			11		(3	)		(30	)		(4	)		(36	)		17		28			(11	)		(39	)
Home equity loans serviced by others¹		5			5			5			3			2		—			—			3			150			10		7			3			43
Home equity lines of credit serviced by others¹		2			2			2			1			1		—			—			1			100			4		3			1			33
Automobile		15			22			24			17			13		(7	)		(32	)		2			15			37		27			10			37
Student		11			8			11			9			12		3			38			(1	)		(8	)		19		19			—			—
Credit card		13			12			12			12			14		1			8			(1	)		(7	)		25		27			(2	)		(7	)
Other retail		7			11			13			13			10		(4	)		(36	)		(3	)		(30	)		18		18			—			—

Total retail		63			74			80			70			71		(11	)		(15	)		(8	)		(11	)		137		147			(10	)		(7	)

Total net charge-offs (recoveries)	$	65		$	83		$	77		$	75		$	78	($	18	)		(22	%)	($	13	)		(17	%)	$	148	$	132		$	16			12	%

¹	Our SBO portfolio consists of purchased loans and lines of credit that were originally serviced by others. We now service a portion of this portfolio internally.

CREDIT-RELATED INFORMATION, CONTINUED

(dollars in millions, except rates)


	QUARTERLY TRENDS																											FOR THE SIX MONTHS ENDED JUNE 30,
																2Q16 Change																		2016 Change
	2Q16			1Q16			4Q15			3Q15			2Q15			1Q16						2Q15						2016			2015			2015
																$			%			$			%									$			%
ANNUALIZED NET CHARGE-OFF (RECOVERY) RATES:
Commercial		(0.01	%)		0.12	%		(0.01	%)		0.08	%		0.10	%		(13	) bps					(11	) bps					0.05	%		0.04	%		1	bps
Commercial real estate		0.11			(0.01	)		0.11			(0.11	)		(0.03	)		12	bps					14	bps					0.05			(0.54	)		59	bps
Leases		—			—			—			—			—			—	bps					—	bps					—			—			—	bps
Total commercial		0.01			0.08			(0.03	)		0.04			0.07			(7	) bps					(6	) bps					0.05			(0.07	)		12	bps
Residential mortgages		0.08			0.09			0.05			0.05			0.14			(1	) bps					(6	) bps					0.08			0.12			(4	) bps
Home equity loans		0.01			0.06			1.07			0.60			0.56			(5	) bps					(55	) bps					0.03			0.69			(66	) bps
Home equity lines of credit		0.19			0.26			0.12			0.21			0.29			(7	) bps					(10	) bps					0.22			0.37			(15	) bps
Home equity loans serviced by others¹		2.47			2.03			1.81			1.12			0.70			44	bps					177	bps					2.25			1.10			115	bps
Home equity lines of credit serviced by others¹		2.35			2.09			1.99			1.23			0.89			26	bps					146	bps					2.21			1.24			97	bps
Automobile		0.41			0.65			0.71			0.50			0.38			(24	) bps					3	bps					0.53			0.40			13	bps
Student		0.83			0.64			1.07			1.07			1.56			19	bps					(73	) bps					0.74			1.36			(62	) bps
Credit card		3.19			3.07			2.98			2.96			3.36			12	bps					(17	) bps					3.13			3.31			(18	) bps
Other retail		3.00			4.18			4.38			5.56			4.42			(118	) bps					(142	) bps					3.58			3.85			(27	) bps
Total retail		0.48			0.55			0.60			0.54			0.56			(7	) bps					(8	) bps					0.51			0.58			(7	) bps
Total loans and leases		0.25	%		0.33	%		0.31	%		0.31	%		0.33	%		(8	) bps					(8	) bps					0.29	%		0.28	%		1	bps
Memo: Average loans:
Commercial	$	35,622		$	34,018		$	33,080		$	32,832		$	32,855		$	1,604			5	%	$	2,767			8	%	$	34,820		$	32,386		$	2,434			8	%
Commercial real estate		9,649			9,108			8,855			8,406			7,947			541			6			1,702			21			9,379			7,824			1,555			20
Leases		3,863			3,917			3,884			3,936			3,894			(54	)		(1	)		(31	)		(1	)		3,890			3,895			(5	)		—

Total commercial		49,134			47,043			45,819			45,174			44,696			2,091			4			4,438			10			48,089			44,105			3,984			9
Residential mortgages		13,491			13,465			13,030			12,470			11,980			26			—			1,511			13			13,478			11,918			1,560			13
Home equity loans		2,231			2,471			2,751			2,928			3,138			(240	)		(10	)		(907	)		(29	)		2,351			3,234			(883	)		(27	)
Home equity lines of credit		14,477			14,632			14,659			14,813			15,084			(155	)		(1	)		(607	)		(4	)		14,554			15,196			(642	)		(4	)
Home equity loans serviced by others¹		899			958			1,017			1,086			1,134			(59	)		(6	)		(235	)		(21	)		929			1,164			(235	)		(20	)
Home equity lines of credit serviced by others¹		299			340			375			425			469			(41	)		(12	)		(170	)		(36	)		320			495			(175	)		(35	)
Automobile		13,972			13,792			13,824			13,810			13,484			180			1			488			4			13,882			13,210			672			5
Student		5,407			4,852			4,052			3,530			3,029			555			11			2,378			79			5,130			2,827			2,303			81
Credit card		1,600			1,601			1,625			1,616			1,606			(1	)		—			(6	)		—			1,600			1,621			(21	)		(1	)
Other retail		1,167			1,108			1,047			939			986			59			5			181			18			1,137			1,013			124			12

Total retail		53,543			53,219			52,380			51,617			50,910			324			1			2,633			5			53,381			50,678			2,703			5

Total loans and leases	$	102,677		$	100,262		$	98,199		$	96,791		$	95,606		$	2,415			2	%	$	7,071			7	%	$	101,470		$	94,783		$	6,687			7	%

¹	Our SBO portfolio consists of purchased loans and lines of credit that were originally serviced by others. We now service a portion of this portfolio internally.

CREDIT-RELATED INFORMATION, CONTINUED

(dollars in millions)


	QUARTERLY TRENDS																								FOR THE SIX MONTHS ENDED JUNE 30,
													2Q16 Change																	2016 Change
SUMMARY OF CHANGES IN THE COMPONENTS OF THE ALLOWANCE FOR CREDIT LOSSES	2Q16		1Q16		4Q15			3Q15		2Q15			1Q16						2Q15						2016		2015			2015
													$			%			$			%								$			%
Allowance for loan and lease losses - beginning	$	1,224	$	1,216	$	1,201		$	1,201	$	1,202		$	8			1	%	$	22			2	%	$	1,216	$	1,195		$	21			2	%
Charge-offs:
Commercial		7		13		4			11		15			(6	)		(46	)		(8	)		(53	)		20		21			(1	)		(5	)
Retail		106		113		120			109		106			(7	)		(6	)		—			—			219		215			4			2

Total charge-offs		113		126		124			120		121			(13	)		(10	)		(8	)		(7	)		239		236			3			1
Recoveries:
Commercial		5		4		7			6		8			1			25			(3	)		(38	)		9		36			(27	)		(75	)
Retail		43		39		40			39		35			4			10			8			23			82		68			14			21

Total recoveries		48		43		47			45		43			5			12			5			12			91		104			(13	)		(13	)

Net charge-offs		65		83		77			75		78			(18	)		(22	)		(13	)		(17	)		148		132			16			12
Provision for loan and lease losses:
Commercial		45		46		18			15		(6	)		(1	)		(2	)		51			NM			91		6			85			NM
Retail		42		45		74			58		83			(3	)		(7	)		(41	)		(49	)		87		134			(47	)		(35	)

Total provision for loan and lease losses		87		91		92			73		77			(4	)		(4	)		10			13			178		140			38			27
Sale/Other		—		—		—			2		—			—			—			—			—			—		(2	)		2			(100	)

Allowance for loan and lease losses - ending	$	1,246	$	1,224	$	1,216		$	1,201	$	1,201		$	22			2	%	$	45			4	%	$	1,246	$	1,201		$	45			4	%

Reserve for unfunded lending commitments - beginning	$	58	$	58	$	59		$	56	$	56		$	—			—	%	$	2			4	%	$	58	$	61		($	3	)		(5	%)
Provision for unfunded lending commitments		3		—		(1	)		3		—			3			100			3			100			3		(5	)		8			(160	)

Reserve for unfunded lending commitments - ending	$	61	$	58	$	58		$	59	$	56		$	3			5	%	$	5			9	%	$	61	$	56		$	5			9	%

Total allowance for credit losses - ending	$	1,307	$	1,282	$	1,274		$	1,260	$	1,257		$	25			2	%	$	50			4	%	$	1,307	$	1,257		$	50			4	%

CREDIT-RELATED INFORMATION, CONTINUED

(dollars in millions)


	AS OF										JUNE 30, 2016 CHANGE
	June 30, 2016		Mar 31, 2016		Dec 31, 2015		Sept 30, 2015		June 30, 2015		Mar 31, 2016						June 30, 2015
ALLOWANCE COMPONENTS											$			%			$			%
ALLOWANCE FOR CREDIT LOSSES
Individually evaluated	$	52	$	42	$	36	$	23	$	21	$	10			24	%	$	31			148	%
Formula-based evaluation		685		649		618		611		600		36			6			85			14

Total commercial		737		691		654		634		621		46			7			116			19
Individually evaluated		79		82		101		104		107		(3	)		(4	)		(28	)		(26	)
Formula-based evaluation		491		509		519		522		529		(18	)		(4	)		(38	)		(7	)

Total retail		570		591		620		626		636		(21	)		(4	)		(66	)		(10	)

Total allowance for credit losses	$	1,307	$	1,282	$	1,274	$	1,260	$	1,257	$	25			2	%	$	50			4	%

CAPITAL AND RATIOS

(dollars in millions, except ratios)


	AS OF																											FOR THE SIX MONTHS ENDED JUNE 30,
																JUNE 30, 2016 CHANGE																2016 Change
	June 30, 2016			Mar 31, 2016			Dec 31, 2015			Sept 30, 2015			June 30, 2015			Mar 31, 2016						June 30, 2015						2016		2015		2015
																$			%			$			%							$			%
CAPITAL RATIOS AND COMPONENTS¹ (PRELIMINARY)
CET1 capital	$	13,768		$	13,570		$	13,389		$	13,200		$	13,270		$	198			1	%	$	498			4	%
Tier 1 capital		14,015			13,817			13,636			13,447			13,517			198			1			498			4
Total capital		17,823			17,587			17,505			17,307			17,123			236			1			700			4
Risk-weighted assets		119,492			116,591			114,084			112,277			112,131			2,901			2			7,361			7
Adjusted average assets²		136,301			132,951			130,455			129,334			129,505			3,350			3			6,796			5
CET1 capital ratio		11.5	%		11.6	%		11.7	%		11.8	%		11.8	%
Tier 1 capital ratio		11.7			11.9			12.0			12.0			12.1
Total capital ratio		14.9			15.1			15.3			15.4			15.3
Tier 1 leverage ratio		10.3			10.4			10.5			10.4			10.4
Pro forma Basel III fully phased-in common equity tier 1 capital ratio⁴		11.5			11.6			11.7			11.7			11.8
TANGIBLE COMMON EQUITY (period-end):
Common stockholders’ equity	$	19,979		$	19,718		$	19,399		$	19,353		$	19,339		$	261			1	%	$	640			3	%	$	19,979	$	19,339	$	640			3	%
Less: Goodwill		6,876			6,876			6,876			6,876			6,876			—			—			—			—			6,876		6,876		—			—
Less: Other intangible assets		2			3			3			3			4			(1	)		(33	)		(2	)		(50	)		2		4		(2	)		(50	)
Add: Deferred tax liabilities³		507			494			480			465			450			13			3			57			13			507		450		57			13

Total tangible common equity⁴	$	13,608		$	13,333		$	13,000		$	12,939		$	12,909		$	275			2	%	$	699			5	%	$	13,608	$	12,909	$	699			5	%

TANGIBLE COMMON EQUITY (average):
Common stockholders’ equity	$	19,768		$	19,567		$	19,359		$	19,261		$	19,391		$	201			1	%	$	377			2	%	$	19,667	$	19,399	$	268			1	%
Less: Goodwill		6,876			6,876			6,876			6,876			6,876			—			—			—			—			6,876		6,876		—			—
Less: Other intangible assets		2			3			3			4			5			(1	)		(33	)		(3	)		(60	)		2		5		(3	)		(60	)
Add: Deferred tax liabilities³		496			481			468			453			437			15			3			59			14			488		430		58			13

Total tangible common equity⁴	$	13,386		$	13,169		$	12,948		$	12,834		$	12,947		$	217			2	%	$	439			3	%	$	13,277	$	12,948	$	329			3	%

INTANGIBLE ASSETS (period-end):
Goodwill	$	6,876		$	6,876		$	6,876		$	6,876		$	6,876		$	—			—	%	$	—			—	%	$	6,876	$	6,876	$	—			—	%
Other intangible assets		2			3			3			3			4			(1	)		(33	)		(2	)		(50	)		2		4		(2	)		(50	)

Total intangible assets	$	6,878		$	6,879		$	6,879		$	6,879		$	6,880		($	1	)		—	%	($	2	)		—	%	$	6,878	$	6,880	($	2	)		—	%

¹	Basel III transitional rules for institutions applying the standardized approach to calculating risk-weighted assets became effective January 1, 2015. The capital ratios and associated components are prepared using the Basel III standardized transitional approach.

Adjusted average assets include quarterly average assets, less deductions for disallowed goodwill and other intangibles assets, net of deferred tax liabilities related to tax deductible goodwill, and the accumulated other comprehensive income impact related to the adoption of post-retirement benefit plan guidance under GAAP.

³	Deferred tax liabilities relate to tax-deductible goodwill, which is netted against goodwill when calculating tangible common equity.

⁴	These are non-GAAP financial measures. For further information on these measures, refer to pages 30-31.

PER-SHARE RELATED INFORMATION

(dollars in millions, except per share and ratio data)


	QUARTERLY TRENDS																											FOR THE SIX MONTHS ENDED JUNE 30,
																2Q16 Change																		2016 Change
	2Q16			1Q16			4Q15			3Q15			2Q15			1Q16						2Q15						2016			2015			2015
EARNINGS PER SHARE DATA																$			%			$			%									$			%
Basic earnings per share:
Net income	$	243		$	223		$	221		$	220		$	190		$	20			9	%	$	53			28	%	$	466		$	399		$	67			17	%
Less: Preferred stock dividends		—			7			—			7			—			(7	)		(100	)		—			—			7			—			7			100

Net income available to common stockholders	$	243		$	216		$	221		$	213		$	190		$	27			13	%	$	53			28	%	$	459		$	399		$	60			15	%

Net income available to common stockholders excluding restructuring charges and special items¹	$	243		$	216		$	221		$	213		$	215		$	27			13	%	$	28			13	%	$	459		$	430		$	29			7	%

Total weighted-average basic shares outstanding		528,968,330			528,070,648			527,648,630			530,985,255			537,729,248			897,682			—			(8,760,918	)		(2	)		528,519,489			541,986,653			(13,467,164	)		(2	)
Net income per share - basic	$	0.46		$	0.41		$	0.42		$	0.40		$	0.35		$	0.05			12	%	$	0.11			31	%	$	0.87		$	0.74		$	0.13			18	%
Net income per share, excluding restructuring charges and special items - basic¹	$	0.46		$	0.41		$	0.42		$	0.40		$	0.40		$	0.05			12	%	$	0.06			15	%	$	0.87		$	0.79		$	0.08			10	%
Diluted earnings per share:
Net income applicable to common stockholders	$	243		$	216		$	221		$	213		$	190		$	27			13		$	53			28		$	459		$	399		$	60			15
Add: Restructuring charges and special items, net of income tax expense		—			—			—			—			25			—			—			(25	)		(100	)		—			31			(31	)		(100	)

Net income applicable to common stockholders, excluding restructuring charges and special items¹	$	243		$	216		$	221		$	213		$	215		$	27			13	%	$	28			13	%	$	459		$	430		$	29			7	%

Total weighted-average basic shares outstanding		528,968,330			528,070,648			527,648,630			530,985,255			537,729,248			897,682			—			(8,760,918	)		(2	)		528,519,489			541,986,653			(13,467,164	)		(2	)
Add: Weighted-average dilutive shares		1,396,873			2,375,540			2,627,043			2,412,903			2,180,118			(978,667	)		(41	)		(783,245	)		(36	)		1,877,382			2,817,615			(940,233	)		(33	)

Total weighted-average diluted shares outstanding		530,365,203			530,446,188			530,275,673			533,398,158			539,909,366			(80,985	)		—			(9,544,163	)		(2	)		530,396,871			544,804,268			(14,407,397	)		(3	)
Net income per share - diluted	$	0.46		$	0.41		$	0.42		$	0.40		$	0.35		$	0.05			12	%	$	0.11			31	%	$	0.87		$	0.73		$	0.14			19	%
Net income per share, excluding restructuring charges and special items - diluted¹	$	0.46		$	0.41		$	0.42		$	0.40		$	0.40		$	0.05			12	%	$	0.06			15	%	$	0.87		$	0.79		$	0.08			10	%
COMMON SHARES OUTSTANDING
Common shares - at end of period		529,094,976			528,933,727			527,774,428			527,636,510			537,149,717			161,249			—	%		(8,054,741	)		(1	%)		529,094,976			537,149,717			(8,054,741	)		(1	%)
Cash dividends declared and paid per share	$	0.12		$	0.10		$	0.10		$	0.10		$	0.10		$	0.02			20		$	0.02			20		$	0.22		$	0.20		$	0.02			10
Book value per share	$	37.76		$	37.28		$	36.76		$	36.68		$	36.00		$	0.48			1		$	1.76			5		$	37.76		$	36.00		$	1.76			5
Tangible book value per share¹	$	25.72		$	25.21		$	24.63		$	24.52		$	24.03		$	0.51			2		$	1.69			7		$	25.72		$	24.03		$	1.69			7
Dividend payout ratio		26	%		24	%		24	%		25	%		28	%		200	bps					(200	) bps					25	%		27	%		(200	) bps
SHARE PRICE
High	$	24.24		$	25.99		$	27.17		$	28.18		$	28.71		($	1.75	)		(7	%)	($	4.47	)		(16	%)	$	25.99		$	28.71		($	2.72	)		(9	%)
Low		18.34			18.04			22.48			21.14			24.03			0.30			2			(5.69	)		(24	)		18.04			22.67			(4.63	)		(20	)
Close		19.98			20.95			26.19			23.86			27.31			(0.97	)		(5	)		(7.33	)		(27	)		19.98			27.31			(7.33	)		(27	)
Market Capitalization		10,571			11,081			13,822			12,589			14,670			(510	)		(5	)		(4,099	)		(28	)		10,571			14,670			(4,099	)		(28	)

¹	These are non-GAAP financial measures. For further information on these measures, refer to pages 29-35.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS (Excluding restructuring charges and special items)

(dollars in millions, except per-share data)

This document contains non-GAAP financial measures. The table below presents reconciliations of certain non-GAAP measures. These reconciliations exclude restructuring charges and/or special items, which are 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 presented below include reconciliations to the most directly comparable GAAP measures and are: “noninterest income”, “total revenue”, “ noninterest expense”, “pre-provision profit”, “income before income tax expense”, “income tax expense”, “net income”, “net income available to common stockholders”, “salaries and employee benefits”, “outside services”, “occupancy”, “equipment expense”, “other operating expense”, “net income per average common share”, “return on average common equity” and “return on average total assets”. In addition, we present computations for “tangible book value per common share”, “return on average tangible common equity”, “return on average total tangible assets”, “efficiency ratio” 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.


		QUARTERLY TRENDS																						FOR THE SIX MONTHS ENDED JUNE 30,
													2Q16 Change																2016 Change
		2Q16		1Q16		4Q15		3Q15		2Q15			1Q16					2Q15						2016		2015			2015
													$		%			$			%								$			%
Noninterest income, excluding special items:
Noninterest income (GAAP)		$	355	$	330	$	362	$	353	$	360		$	25		8	%	($	5	)		(1	%)	$	685	$	707		($	22	)		(3	%)
Less: Special items			—		—		—		—		—			—		—			—			—			—		—			—			—

Noninterest income, excluding special items (non-GAAP)		$	355	$	330	$	362	$	353	$	360		$	25		8	%	($	5	)		(1	%)	$	685	$	707		($	22	)		(3	%)

Total revenue, excluding special items:
Total revenue (GAAP)	A	$	1,278	$	1,234	$	1,232	$	1,209	$	1,200		$	44		4	%	$	78			7	%	$	2,512	$	2,383		$	129			5	%
Less: Special items			—		—		—		—		—			—		—			—			—			—		—			—			—

Total revenue, excluding special items (non-GAAP)	B	$	1,278	$	1,234	$	1,232	$	1,209	$	1,200		$	44		4	%	$	78			7	%	$	2,512	$	2,383		$	129			5	%

Noninterest expense, excluding restructuring charges and special items:
Noninterest expense (GAAP)	C	$	827	$	811	$	810	$	798	$	841		$	16		2	%	($	14	)		(2	%)	$	1,638	$	1,651		($	13	)		(1	%)
Less: Restructuring charges and special items			—		—		—		—		40			—		—			(40	)		(100	)		—		50			(50	)		(100	)

Noninterest expense, excluding restructuring charges and special items (non-GAAP)	D	$	827	$	811	$	810	$	798	$	801		$	16		2	%	$	26			3	%	$	1,638	$	1,601		$	37			2	%

Pre-provision profit, excluding restructuring charges and special items:
Total revenue, excluding restructuring charges and special items (non-GAAP)		$	1,278	$	1,234	$	1,232	$	1,209	$	1,200		$	44		4	%	$	78			7	%	$	2,512	$	2,383		$	129			5	%
Less: Noninterest expense, excluding restructuring charges and special items (non-GAAP)			827		811		810		798		801			16		2			26			3			1,638		1,601			37			2

Pre-provision profit, excluding restructuring charges and special items (non-GAAP)		$	451	$	423	$	422	$	411	$	399		$	28		7	%	$	52			13	%	$	874	$	782		$	92			12	%

Income before income tax expense, excluding restructuring charges and special items:
Income before income tax expense (GAAP)		$	361	$	332	$	331	$	335	$	282		$	29		9	%	$	79			28	%	$	693	$	597		$	96			16	%
Less: Income before income tax (benefit) related to restructuring charges and special items (GAAP)			—		—		—		—		(40	)		—		—			40			(100	)		—		(50	)		50			(100	)

Income before income tax expense, excluding restructuring charges and special items (non-GAAP)		$	361	$	332	$	331	$	335	$	322		$	29		9	%	$	39			12	%	$	693	$	647		$	46			7	%

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS (Excluding restructuring charges and special items) (CONTINUED)

(dollars in millions, except per-share data)


		QUARTERLY TRENDS																											FOR THE SIX MONTHS ENDED JUNE 30,
																	2Q16 Change																		2016 Change
		2Q16			1Q16			4Q15			3Q15			2Q15			1Q16						2Q15						2016			2015			2015
																	$			%			$			%									$			%
Income tax expense, excluding restructuring charges and special items:
Income tax expense (GAAP)		$	118		$	109		$	110		$	115		$	92		$	9			8	%	$	26			28	%	$	227		$	198		$	29			15	%
Less: Income tax (benefit) related to restructuring charges and special items (GAAP)			—			—			—			—			(15	)		—			—			15			(100	)		—			(19	)		19			(100	)

Income tax expense, excluding restructuring charges and special items (non-GAAP)		$	118		$	109		$	110		$	115		$	107		$	9			8	%	$	11			10	%	$	227		$	217		$	10			5	%

Net income, excluding restructuring charges and special items:
Net income (GAAP)	E	$	243		$	223		$	221		$	220		$	190		$	20			9	%	$	53			28	%	$	466		$	399		$	67			17	%
Add: Restructuring charges and special items, net of income tax expense (benefit)			—			—			—			—			25			—			—			(25	)		(100	)		—			31			(31	)		(100	)

Net income, excluding restructuring charges and special items (non-GAAP)	F	$	243		$	223		$	221		$	220		$	215		$	20			9	%	$	28			13	%	$	466		$	430		$	36			8	%

Net income available to common stockholders (GAAP), excluding restructuring charges and special items:
Net income available to common stockholders (GAAP)	G	$	243		$	216		$	221		$	213		$	190		$	27			13	%	$	53			28	%	$	459		$	399		$	60			15	%
Add: Restructuring charges and special items, net of income tax expense (benefit)			—			—			—			—			25			—			—			(25	)		(100	)		—			31			(31	)		(100	)

Net income available to common stockholders, excluding restructuring charges and special items (non-GAAP)	H	$	243		$	216		$	221		$	213		$	215		$	27			13	%	$	28			13	%	$	459		$	430		$	29			7	%

Return on average common equity, excluding restructuring charges and special items:
Average common equity (GAAP)	I	$	19,768		$	19,567		$	19,359		$	19,261		$	19,391		$	201			1	%	$	377			2	%	$	19,667		$	19,399		$	268			1	%
Return on average common equity, excluding restructuring charges and special items (non-GAAP)	H/I		4.94	%		4.45	%		4.51	%		4.40	%		4.45	%		49	bps					49	bps					4.70	%		4.47	%		23	bps
Return on average tangible common equity and return on average tangible common equity, excluding restructuring charges and special items:
Average common equity (GAAP)	I	$	19,768		$	19,567		$	19,359		$	19,261		$	19,391		$	201			1	%	$	377			2	%	$	19,667		$	19,399		$	268			1	%
Less: Average goodwill (GAAP)			6,876			6,876			6,876			6,876			6,876			—			—			—			—			6,876			6,876			—			—
Less: Average other intangibles (GAAP)			2			3			3			4			5			(1	)		(33	)		(3	)		(60	)		2			5			(3	)		(60	)
Add: Average deferred tax liabilities related to goodwill (GAAP)			496			481			468			453			437			15			3			59			14			488			430			58			13

Average tangible common equity (non-GAAP)	J	$	13,386		$	13,169		$	12,948		$	12,834		$	12,947		$	217			2	%	$	439			3	%	$	13,277		$	12,948		$	329			3	%

Return on average tangible common equity (non-GAAP)	G/J		7.30	%		6.61	%		6.75	%		6.60	%		5.90	%		69	bps					140	bps					6.96	%		6.21	%		75	bps
Return on average tangible common equity, excluding restructuring charges and special items (non-GAAP)	H/J		7.30	%		6.61	%		6.75	%		6.60	%		6.67	%		69	bps					63	bps					6.96	%		6.70	%		26	bps
Return on average total assets, excluding restructuring charges and special items:
Average total assets (GAAP)	K	$	142,179		$	138,780		$	136,298		$	135,103		$	135,521		$	3,399			2	%	$	6,658			5	%	$	140,479		$	134,429		$	6,050			5	%
Return on average total assets, excluding restructuring charges and special items (non-GAAP)	F/K		0.69	%		0.65	%		0.64	%		0.65	%		0.64	%		4	bps					5	bps					0.67	%		0.65	%		2	bps
Return on average total tangible assets and return on average total tangible assets, excluding restructuring charges and special items:
Average total assets (GAAP)	K	$	142,179		$	138,780		$	136,298		$	135,103		$	135,521		$	3,399			2	%	$	6,658			5	%	$	140,479		$	134,429		$	6,050			5	%
Less: Average goodwill (GAAP)			6,876			6,876			6,876			6,876			6,876			—			—			—			—			6,876			6,876			—			—
Less: Average other intangibles (GAAP)			2			3			3			4			5			(1	)		(33	)		(3	)		(60	)		2			5			(3	)		(60	)
Add: Average deferred tax liabilities related to goodwill (GAAP)			496			481			468			453			437			15			3			59			14			488			430			58			13

Average tangible assets (non-GAAP)	L	$	135,797		$	132,382		$	129,887		$	128,676		$	129,077		$	3,415			3	%	$	6,720			5	%	$	134,089		$	127,978		$	6,111			5	%

Return on average total tangible assets (non-GAAP)	E/L		0.72	%		0.68	%		0.67	%		0.68	%		0.59	%		4	bps					13	bps					0.70	%		0.63	%		7	bps
Return on average total tangible assets, excluding restructuring charges and special items (non-GAAP)	F/L		0.72	%		0.68	%		0.67	%		0.68	%		0.67	%		4	bps					5	bps					0.70	%		0.68	%		2	bps

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS (Excluding restructuring charges and special items) (CONTINUED)

(dollars in millions, except per-share data)


		QUARTERLY TRENDS																											FOR THE SIX MONTHS ENDED JUNE 30,
																	2Q16 Change																		2016 Change
		2Q16			1Q16			4Q15			3Q15			2Q15			1Q16						2Q15						2016			2015			2015
																	$			%			$			%									$			%
Efficiency ratio and efficiency ratio, excluding restructuring charges and special items:
Efficiency ratio (non-GAAP)	C/A		64.71	%		65.66	%		65.76	%		66.02	%		70.02	%		(95	) bps					(531	) bps					65.18	%		69.27	%		(409	) bps
Efficiency ratio, excluding restructuring charges and special items (non-GAAP)	D/B		64.71	%		65.66	%		65.76	%		66.02	%		66.70	%		(95	) bps					(199	) bps					65.18	%		67.17	%		(199	) bps
Tangible book value per common share:
Common shares - at end of period (GAAP)	M		529,094,976			528,933,727			527,774,428			527,636,510			537,149,717			161,249			—	%		(8,054,741	)		(1	%)		529,094,976			537,149,717			(8,054,741	)		(1	%)
Common stockholders’ equity (GAAP)		$	19,979		$	19,718		$	19,399		$	19,353		$	19,339		$	261			1		$	640			3		$	19,979		$	19,339		$	640			3
Less: Goodwill (GAAP)			6,876			6,876			6,876			6,876			6,876			—			—			—			—			6,876			6,876			—			—
Less: Other intangible assets (GAAP)			2			3			3			3			4			(1	)		(33	)		(2	)		(50	)		2			4			(2	)		(50	)
Add: Deferred tax liabilities related to goodwill (GAAP)			507			494			480			465			450			13			3			57			13			507			450			57			13

Tangible common equity (non-GAAP)	N	$	13,608		$	13,333		$	13,000		$	12,939		$	12,909		$	275			2	%	$	699			5	%	$	13,608		$	12,909		$	699			5	%

Tangible book value per common share (non-GAAP)	N/M	$	25.72		$	25.21		$	24.63		$	24.52		$	24.03		$	0.51			2	%	$	1.69			7	%	$	25.72		$	24.03		$	1.69			7	%
Net income per average common share - basic and diluted, excluding restructuring charges and special items:
Average common shares outstanding - basic (GAAP)	O		528,968,330			528,070,648			527,648,630			530,985,255			537,729,248			897,682			—	%		(8,760,918	)		(2	%)		528,519,489			541,986,653			(13,467,164	)		(2	%)
Average common shares outstanding - diluted (GAAP)	P		530,365,203			530,446,188			530,275,673			533,398,158			539,909,366			(80,985	)		—			(9,544,163	)		(2	)		530,396,871			544,804,268			(14,407,397	)		(3	)
Net income available to common stockholders (GAAP)	G	$	243		$	216		$	221		$	213		$	190		$	27			13		$	53			28		$	459		$	399		$	60			15
Net income per average common share - basic (GAAP)	G/O		0.46			0.41			0.42			0.40			0.35			0.05			12			0.11			31			0.87			0.74			0.13			18
Net income per average common share - diluted (GAAP)	G/P		0.46			0.41			0.42			0.40			0.35			0.05			12			0.11			31			0.87			0.73			0.14			19
Net income available to common stockholders, excluding restructuring charges and special items (non-GAAP)	H		243			216			221			213			215			27			13			28			13			459			430			29			7
Net income per average common share - basic, excluding restructuring charges and special items (non-GAAP)	H/O		0.46			0.41			0.42			0.40			0.40			0.05			12			0.06			15			0.87			0.79			0.08			10
Net income per average common share - diluted, excluding restructuring charges and special items (non-GAAP)	H/P		0.46			0.41			0.42			0.40			0.40			0.05			12			0.06			15			0.87			0.79			0.08			10
Pro forma Basel III fully phased-in common equity tier 1 capital ratio¹:
Common equity tier 1 (regulatory)		$	13,768		$	13,570		$	13,389		$	13,200		$	13,270
Less: Change in DTA and other threshold deductions (GAAP)			1			1			2			2			3

Pro forma Basel III fully phased-in common equity tier 1 (non-GAAP)	Q	$	13,767		$	13,569		$	13,387		$	13,198		$	13,267

Risk-weighted assets (regulatory general risk weight approach)		$	119,492		$	116,591		$	114,084		$	112,277		$	112,131
Add: Net change in credit and other risk-weighted assets (regulatory)			228			232			244			243			247

Basel III standardized approach risk-weighted assets (non-GAAP)	R	$	119,720		$	116,823		$	114,328		$	112,520		$	112,378

Pro forma Basel III fully phased-in common equity tier 1 capital ratio (non-GAAP)¹	Q/R		11.5	%		11.6	%		11.7	%		11.7	%		11.8	%

¹	Basel III ratios assume certain definitions impacting qualifying Basel III capital, which otherwise will phase in through 2019, are fully phased-in. Ratios also reflect the required US Standardized methodology for calculating RWAs, effective January 1, 2015.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS (Excluding restructuring charges and special items) (CONTINUED)

(dollars in millions, except per-share data)


	QUARTERLY TRENDS																							FOR THE SIX MONTHS ENDED JUNE 30,
												2Q16 Change																2016 Change
	2Q16		1Q16		4Q15			3Q15		2Q15		1Q16						2Q15						2016		2015		2015
												$			%			$			%							$			%
Salaries and employee benefits, excluding restructuring charges and special items:
Salaries and employee benefits (GAAP)	$	432	$	425	$	402		$	404	$	411	$	7			2	%	$	21			5	%	$	857	$	830	$	27			3	%
Less: Restructuring charges and special items		—		—		(2	)		—		6		—			—			(6	)		(100	)		—		5		(5	)		(100	)

Salaries and employee benefits, excluding restructuring charges and special items (non-GAAP)	$	432	$	425	$	404		$	404	$	405	$	7			2	%	$	27			7	%	$	857	$	825	$	32			4	%

Outside services, excluding restructuring charges and special items:
Outside services (GAAP)	$	86	$	91	$	104		$	89	$	99	($	5	)		(5	%)	($	13	)		(13	%)	$	177	$	178	($	1	)		(1	%)
Less: Restructuring charges and special items		—		—		2			—		16		—			—			(16	)		(100	)		—		24		(24	)		(100	)

Outside services, excluding restructuring charges and special items (non-GAAP)	$	86	$	91	$	102		$	89	$	83	($	5	)		(5	%)	$	3			4	%	$	177	$	154	$	23			15	%

Occupancy, excluding restructuring charges and special items:
Occupancy (GAAP)	$	76	$	76	$	74		$	75	$	90	$	—			—	%	($	14	)		(16	%)	$	152	$	170	($	18	)		(11	%)
Less: Restructuring charges and special items		—		—		—			—		15		—			—			(15	)		(100	)		—		17		(17	)		(100	)

Occupancy, excluding restructuring charges and special items (non-GAAP)	$	76	$	76	$	74		$	75	$	75	$	—			—	%	$	1			1	%	$	152	$	153	($	1	)		(1	)%

Equipment expense, excluding restructuring charges and special items:
Equipment expense (GAAP)	$	64	$	65	$	67		$	62	$	65	($	1	)		(2	%)	($	1	)		(2	%)	$	129	$	128	$	1			1	%
Less: Restructuring charges and special items		—		—		—			—		—		—			—			—			—			—		1		(1	)		(100	)

Equipment expense, excluding restructuring charges and special items (non-GAAP)	$	64	$	65	$	67		$	62	$	65	($	1	)		(2	%)	($	1	)		(2	%)	$	129	$	127	$	2			2	%

Other operating expense, excluding restructuring charges and special items:
Other operating expense (GAAP)	$	128	$	115	$	125		$	133	$	139	$	13			11	%	($	11	)		(8	%)	$	243	$	272	($	29	)		(11	%)
Less: Restructuring charges and special items		—		—		—			—		3		—			—			(3	)		(100	)		—		3		(3	)		(100	)

Other operating expense, excluding restructuring charges and special items (non-GAAP)	$	128	$	115	$	125		$	133	$	136	$	13			11	%	($	8	)		(6	%)	$	243	$	269	($	26	)		(10	%)

Restructuring charges and special expense items include:
Restructuring charges	$	—	$	—	$	—		$	—	$	25	$	—			—	%	($	25	)		(100	%)	$	—	$	26	($	26	)		(100	%)
Special items		—		—		—			—		15		—			—			(15	)		(100	)		—		24		(24	)		(100	)

Restructuring charges and special expense items	$	—	$	—	$	—		$	—	$	40	$	—			—	%	($	40	)		(100	%)	$	—	$	50	($	50	)		(100	%)

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS - SEGMENTS

(dollars in millions)


		THREE MONTHS ENDED JUNE 30,												THREE MONTHS ENDED MAR 31,											THREE MONTHS ENDED DEC 31,
		2016												2016											2015
		Consumer Banking			Commercial Banking			Other			Consolidated			Consumer Banking			Commercial Banking			Other		Consolidated			Consumer Banking			Commercial Banking			Other		Consolidated
Net income (GAAP)	A	$	90		$	164		($	11	)	$	243		$	71		$	133		$	19	$	223		$	67		$	152		$	2	$	221
Less: Preferred stock dividends			—			—			—			—			—			—			7		7			—			—			—		—

Net income available to common stockholders	B	$	90		$	164		($	11	)	$	243		$	71		$	133		$	12	$	216		$	67		$	152		$	2	$	221

Return on average tangible common equity
Average common equity (GAAP)		$	5,110		$	5,040		$	9,618		$	19,768		$	5,089		$	4,790		$	9,688	$	19,567		$	4,831		$	4,787		$	9,741	$	19,359
Less: Average goodwill (GAAP)			—			—			6,876			6,876			—			—			6,876		6,876			—			—			6,876		6,876
Average other intangibles (GAAP)			—			—			2			2			—			—			3		3			—			—			3		3
Add: Average deferred tax liabilities related to goodwill (GAAP)			—			—			496			496			—			—			481		481			—			—			468		468

Average tangible common equity (non-GAAP)	C	$	5,110		$	5,040		$	3,236		$	13,386		$	5,089		$	4,790		$	3,290	$	13,169		$	4,831		$	4,787		$	3,330	$	12,948

Return on average tangible common equity (non-GAAP)	B/C		7.09	%		13.04	%		NM			7.30	%		5.59	%		11.19	%		NM		6.61	%		5.50	%		12.57	%		NM		6.75	%
Return on average total tangible assets
Average total assets (GAAP)		$	55,660		$	47,388		$	39,131		$	142,179		$	55,116		$	45,304		$	38,360	$	138,780		$	54,065		$	43,835		$	38,398	$	136,298
Less: Average goodwill (GAAP)			—			—			6,876			6,876			—			—			6,876		6,876			—			—			6,876		6,876
Average other intangibles (GAAP)			—			—			2			2			—			—			3		3			—			—			3		3
Add: Average deferred tax liabilities related to goodwill (GAAP)			—			—			496			496			—			—			481		481			—			—			468		468

Average tangible assets (non-GAAP)	D	$	55,660		$	47,388		$	32,749		$	135,797		$	55,116		$	45,304		$	31,962	$	132,382		$	54,065		$	43,835		$	31,987	$	129,887

Return on average total tangible assets (non-GAAP)	A/D		0.65	%		1.39	%		NM			0.72	%		0.52	%		1.18	%		NM		0.68	%		0.49	%		1.37	%		NM		0.67	%
Efficiency ratio
Noninterest expense (GAAP)	E	$	632		$	186		$	9		$	827		$	616		$	187		$	8	$	811		$	624		$	180		$	6	$	810
Net interest income (GAAP)			602			314			7			923			581			300			23		904			565			301			4		870
Noninterest income (GAAP)			219			122			14			355			208			99			23		330			226			107			29		362

Total revenue	F	$	821		$	436		$	21		$	1,278		$	789		$	399		$	46	$	1,234		$	791		$	408		$	33	$	1,232

Efficiency ratio (non-GAAP)	E/F		76.98	%		42.88	%		NM			64.71	%		78.08	%		46.74	%		NM		65.66	%		78.85	%		44.02	%		NM		65.76	%

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS - SEGMENTS (CONTINUED)

(dollars in millions)


		THREE MONTHS ENDED SEPT 30,											THREE MONTHS ENDED JUNE 30,
		2015											2015
		Consumer Banking			Commercial Banking			Other		Consolidated			Consumer Banking			Commercial Banking			Other			Consolidated
Net income (loss) (GAAP)	A	$	68		$	145		$	7	$	220		$	66		$	135		($	11	)	$	190
Less: Preferred stock dividends			—			—			7		7			—			—			—			—

Net income available to common stockholders	B	$	68		$	145		$	—	$	213		$	66		$	135		($	11	)	$	190

Return on average tangible common equity
Average common equity (GAAP)		$	4,791		$	4,722		$	9,748	$	19,261		$	4,681		$	4,625		$	10,085		$	19,391
Less: Average goodwill (GAAP)			—			—			6,876		6,876			—			—			6,876			6,876
Average other intangibles (GAAP)			—			—			4		4			—			—			5			5
Add: Average deferred tax liabilities related to goodwill (GAAP)			—			—			453		453			—			—			437			437

Average tangible common equity (non-GAAP)	C	$	4,791		$	4,722		$	3,321	$	12,834		$	4,681		$	4,625		$	3,641		$	12,947

Return on average tangible common equity (non-GAAP)	B/C		5.67	%		12.24	%		NM		6.60	%		5.66	%		11.69	%		NM			5.90	%
Return on average total tangible assets
Average total assets (GAAP)		$	53,206		$	43,113		$	38,784	$	135,103		$	52,489		$	42,617		$	40,415		$	135,521
Less: Average goodwill (GAAP)			—			—			6,876		6,876			—			—			6,876			6,876
Average other intangibles (GAAP)			—			—			4		4			—			—			5			5
Add: Average deferred tax liabilities related to goodwill (GAAP)			—			—			453		453			—			—			437			437

Average tangible assets (non-GAAP)	D	$	53,206		$	43,113		$	32,357	$	128,676		$	52,489		$	42,617		$	33,971		$	129,077

Return on average total tangible assets (non-GAAP)	A/D		0.51	%		1.34	%		NM		0.68	%		0.51	%		1.27	%		NM			0.59	%
Efficiency ratio
Noninterest expense (GAAP)	E	$	623		$	175		$	—	$	798		$	613		$	181		$	47		$	841
Net interest income (GAAP)			556			299			1		856			544			286			10			840
Noninterest income (GAAP)			235			100			18		353			230			108			22			360

Total revenue	F	$	791		$	399		$	19	$	1,209		$	774		$	394		$	32		$	1,200

Efficiency ratio (non-GAAP)	E/F		78.72	%		43.75	%		NM		66.02	%		79.25	%		46.07	%		NM			70.02	%

NON-GAAP MEASURES - SEGMENTS (CONTINUED)

(dollars in millions)


		FOR THE SIX MONTHS ENDED JUNE 30,
		2016											2015
		Consumer Banking			Commercial Banking			Other		Consolidated			Consumer Banking			Commercial Banking			Other			Consolidated
Net income (loss) (GAAP)	A	$	161		$	297		$	8	$	466		$	127		$	282		($	10	)	$	399
Less: Preferred stock dividends			—			—			7		7			—			—			—			—

Net income available to common stockholders	B	$	161		$	297		$	1	$	459		$	127		$	282		($	10	)	$	399

Return on average tangible common equity
Average common equity (GAAP)		$	5,099		$	4,915		$	9,653	$	19,667		$	4,665		$	4,576		$	10,158		$	19,399
Less: Average goodwill (GAAP)			—			—			6,876		6,876			—			—			6,876			6,876
Average other intangibles (GAAP)			—			—			2		2			—			—			5			5
Add: Average deferred tax liabilities related to goodwill (GAAP)			—			—			488		488			—			—			430			430

Average tangible common equity (non-GAAP)	C	$	5,099		$	4,915		$	3,263	$	13,277		$	4,665		$	4,576		$	3,707		$	12,948

Return on average tangible common equity (non-GAAP)	B/C		6.34	%		12.14	%		NM		6.96	%		5.48	%		12.41	%		NM			6.21	%
Return on average total tangible assets
Average total assets (GAAP)		$	55,388		$	46,346		$	38,745	$	140,479		$	52,048		$	42,114		$	40,267		$	134,429
Less: Average goodwill (GAAP)			—			—			6,876		6,876			—			—			6,876			6,876
Average other intangibles (GAAP)			—			—			2		2			—			—			5			5
Add: Average deferred tax liabilities related to goodwill (GAAP)			—			—			488		488			—			—			430			430

Average tangible assets (non-GAAP)	D	$	55,388		$	46,346		$	32,355	$	134,089		$	52,048		$	42,114		$	33,816		$	127,978

Return on average total tangible assets (non-GAAP)	A/D		0.58	%		1.29	%		NM		0.70	%		0.49	%		1.35	%		NM			0.63	%
Efficiency ratio
Noninterest expense (GAAP)	E	$	1,248		$	373		$	17	$	1,638		$	1,209		$	354		$	88		$	1,651
Net interest income (GAAP)			1,183			614			30		1,827			1,077			562			37			1,676
Noninterest income (GAAP)			427			221			37		685			449			208			50			707

Total revenue	F	$	1,610		$	835		$	67	$	2,512		$	1,526		$	770		$	87		$	2,383

Efficiency ratio (non-GAAP)	E/F		77.52	%		44.73	%		NM		65.18	%		79.25	%		46.04	%		NM			69.27	%

FORWARD-LOOKING STATEMENTS

This document contains forward-looking statements within the Private Securities Litigation Reform Act of 1995. Statements regarding potential future share repurchases and future dividends are forward-looking statements. Also, 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; and

•

management’s ability to identify and manage these and other risks.

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 filed with the United States Securities and Exchange Commission on February 26, 2016.

CITIZENS FINANCIAL GROUP INC/RI - FORM 8-K - EX-99.1 - July 25, 2016

Attached files

CITIZENS FINANCIAL GROUP INC/RI Reports