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

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8-K - 8-K - CITIZENS FINANCIAL GROUP INC/RI	d484755d8k.htm

Exhibit 99.1

LOGO

Citizens Financial Group, Inc.

Financial Supplement

Third Quarter 2017


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		17
Nonperforming Assets		18
Charge-offs, Recoveries and Related Ratios		19
Summary of Changes in the Components of the Allowance for Credit Losses		21

Capital and Ratios		22

Key Performance Metrics, Non-GAAP Financial Measures and Reconciliations		23

The information in this Financial Supplement is preliminary and based on company data available at the time of the earnings presentation. It speaks only as of the particular date or dates included in the accompanying pages. The company does not undertake an obligation to, and disclaims any duty to, update any of the information provided. Any forward-looking statements in this Financial Supplement are subject to the forward-looking statements language contained in the company’s reports filed with the SEC pursuant to the Securities Exchange Act of 1934, which can be found on the SEC’s website (www.sec.gov) or on the company’s website (www.citizensbank.com). The company’s future financial performance is subject to the risks and uncertainties described in its SEC filings.

CONSOLIDATED FINANCIAL HIGHLIGHTS

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


	QUARTERLY TRENDS																											FOR THE NINE MONTHS ENDED SEPT 30,
																3Q17 Change																		2017 Change
	3Q17			2Q17			1Q17			4Q16			3Q16			2Q17						3Q16						2017			2016			2016
																$			%			$			%									$			%
SELECTED OPERATING DATA
Total revenue		$1,443			$1,396			$1,384			$1,363			$1,380			$47			3	%		$63			5	%		$4,223			$3,892			$331			9	%
Noninterest expense		858			864			854			847			867			(6	)		(1	)		(9	)		(1	)		2,576			2,505			71			3

Profit before provision for credit losses		585			532			530			516			513			53			10			72			14			1,647			1,387			260			19
Provision for credit losses		72			70			96			102			86			2			3			(14	)		(16	)		238			267			(29	)		(11	)
NET INCOME		348			318			320			282			297			30			9			51			17			986			763			223			29
Net income, Adjusted¹		348			318			320			282			278			30			9			70			25			986			744			242			33
Net income available to common stockholders		341			318			313			282			290			23			7			51			18			972			749			223			30
Net income available to common stockholders, Adjusted¹		341			318			313			282			271			23			7			70			26			972			730			242			33
PER COMMON SHARE DATA
Basic earnings		$0.68			$0.63			$0.61			$0.55			$0.56			$0.05			8	%		$0.12			21	%		$1.92			$1.43			$0.49			34	%
Diluted earnings		0.68			0.63			0.61			0.55			0.56			0.05			8			0.12			21			1.92			1.42			0.50			35
Basic earnings, Adjusted¹		0.68			0.63			0.61			0.55			0.52			0.05			8			0.16			31			1.92			1.39			0.53			38
Diluted earnings, Adjusted¹		0.68			0.63			0.61			0.55			0.52			0.05			8			0.16			31			1.92			1.39			0.53			38
Cash dividends declared and paid per common share		0.18			0.14			0.14			0.12			0.12			0.04			29			0.06			50			0.46			0.34			0.12			35
Book value per common share		39.76			39.17			38.47			38.09			38.47			0.59			2			1.29			3			39.76			38.47			1.29			3
Tangible book value per common share		27.05			26.61			26.02			25.69			26.20			0.44			2			0.85			3			27.05			26.20			0.85			3
Dividend payout ratio		26	%		22	%		23	%		22	%		22	%		400	bps					400	bps					24	%		24	%		–	bps
COMMON SHARES OUTSTANDING
Average: Basic		500,861,076			506,371,846			509,451,450			512,015,920			519,458,976			(5,510,770	)		(1	%)		(18,597,900	)		(4	%)		505,529,991			525,477,273			(19,947,282	)		(4	%)
Diluted		502,157,384			507,414,122			511,348,200			513,897,085			521,122,466			(5,256,738	)		(1	)		(18,965,082	)		(4	)		507,062,805			527,261,384			(20,198,579	)		(4	)
Common shares at period-end		499,505,285			505,880,851			509,515,646			511,954,871			518,148,345			(6,375,566	)		(1	)		(18,643,060	)		(4	)		499,505,285			518,148,345			(18,643,060	)		(4	)
SHARE PRICE
High		$38.06			$38.01			$39.75			$36.56			$25.11			$0.05			–	%		$12.95			52	%		$39.75			$25.99			$13.76			53	%
Low		31.51			33.13			32.99			24.22			18.58			(1.62	)		(5	)		12.93			70			31.51			18.04			13.47			75
Close		37.87			35.68			34.55			35.63			24.71			2.19			6			13.16			53			37.87			24.71			13.16			53
Market capitalization		18,916			18,050			17,604			18,241			12,803			866			5			6,113			48			18,916			12,803			6,113			48
SEGMENT NET INCOME
Consumer Banking		$122			$118			$95			$92			$92			$4			3	%		$30			33	%		$335			$253			$82			32	%
Commercial Banking		201			187			180			172			162			14			7			39			24			568			459			109			24
Other		25			13			45			18			43			12			92			(18	)		(42	)		83			51			32			63

NET INCOME		$348			$318			$320			$282			$297			$30			9	%		$51			17	%		$986			$763			$223			29	%

¹These are non-GAAP financial measures. For further information on these measures, refer to “Key Performance Metrics, Non-GAAP Financial Measures and Reconciliations” at the end of this document.

CONSOLIDATED FINANCIAL HIGHLIGHTS, CONTINUED

(in millions, except ratio and headcount data)


	QUARTERLY TRENDS																											FOR THE NINE MONTHS ENDED SEPT 30,
																3Q17 Change																		2017 Change
	3Q17			2Q17			1Q17			4Q16			3Q16			2Q17						3Q16						2017			2016			2016
																$/bps			%			$/bps			%									$/bps			%
FINANCIAL RATIOS
Net interest margin		3.05	%		2.97	%		2.96	%		2.90	%		2.84	%		8	bps					21	bps					3.00	%		2.85	%		15	bps
Return on average common equity		6.87			6.48			6.52			5.70			5.82			39	bps					105	bps					6.63			5.08			155	bps
Return on average common equity, Adjusted¹		6.87			6.48			6.52			5.70			5.44			39	bps					143	bps					6.63			4.95			168	bps
Return on average tangible common equity		10.13			9.57			9.68			8.43			8.58			56	bps					155	bps					9.80			7.51			229	bps
Return on average tangible common equity, Adjusted¹		10.13			9.57			9.68			8.43			8.02			56	bps					211	bps					9.80			7.32			248	bps
Return on average total assets		0.92			0.85			0.87			0.76			0.82			7	bps					10	bps					0.88			0.72			16	bps
Return on average total assets, Adjusted¹		0.92			0.85			0.87			0.76			0.77			7	bps					15	bps					0.88			0.70			18	bps
Return on average total tangible assets		0.96			0.89			0.91			0.79			0.86			7	bps					10	bps					0.92			0.75			17	bps
Return on average total tangible assets, Adjusted¹		0.96			0.89			0.91			0.79			0.80			7	bps					16	bps					0.92			0.73			19	bps
Effective income tax rate		32.18			31.13			26.36			31.90			30.46			105	bps					172	bps					30.04			31.87			(183	) bps
Efficiency ratio		59.41			61.94			61.68			62.18			62.88			(253	) bps					(347	) bps					60.99			64.36			(337	) bps
Efficiency ratio, Adjusted¹		59.41			61.94			61.68			62.18			63.31			(253	) bps					(390	) bps					60.99			64.54			(355	) bps
CAPITAL RATIOS - PERIOD END (PRELIMINARY)²
CET1 capital ratio		11.1	%		11.2	%		11.2	%		11.2	%		11.3	%
Tier 1 capital ratio		11.3			11.4			11.4			11.4			11.5
Total capital ratio		13.8			14.0			14.0			14.0			14.2
Tier 1 leverage ratio		9.9			9.9			9.9			9.9			10.1
SELECTED BALANCE SHEET DATA (PERIOD END)
Total assets		$151,356			$151,407			$150,285			$149,520			$147,015			($51	)		–	%		$4,341			3	%		$151,356			$147,015			$4,341			3	%
Loans and leases:
Commercial		52,381			51,888			51,892			51,651			50,389			493			1			1,992			4			52,381			50,389			1,992			4
Retail		57,770			57,158			56,219			56,018			55,078			612			1			2,692			5			57,770			55,078			2,692			5

Total loans and leases		110,151			109,046			108,111			107,669			105,467			1,105			1			4,684			4			110,151			105,467			4,684			4
Deposits		113,235			113,613			112,112			109,804			108,327			(378	)		–			4,908			5			113,235			108,327			4,908			5
Long-term borrowed funds		13,400			13,154			11,780			12,790			11,902			246			2			1,498			13			13,400			11,902			1,498			13
Total stockholders’ equity		20,109			20,064			19,847			19,747			20,181			45			–			(72	)		–			20,109			20,181			(72	)		–
Loans-to-deposits ratio (period-end balances)³		98.36	%		96.60	%		97.03	%		98.62	%		97.85	%		176	bps					51	bps					98.36	%		97.85	%		51	bps
Loans-to-deposits ratio (average balances)³		97.59			99.08			98.81			98.14			98.06			(149	) bps					(47	) bps					98.48			98.74			(26	) bps
Full-time equivalent colleagues		17,696			17,738			17,515			17,639			17,625			(42	)		–			71			–			17,696			17,625			71			–

²U.S. 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 U.S. Basel III standardized transitional approach. U.S. Basel III ratios assume that certain definitions impacting qualifying U.S. Basel III capital will phase in through 2019.

³Includes loans and leases held for sale.

CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

(in millions)


	QUARTERLY TRENDS																						FOR THE NINE MONTHS ENDED SEPT 30,
											3Q17 Change																2017 Change
	3Q17		2Q17		1Q17		4Q16		3Q16		2Q17						3Q16						2017		2016		2016
											$			%			$			%							$			%
INTEREST INCOME:
Interest and fees on loans and leases		$1,096		$1,040		$992		$963		$926		$56			5	%		$170			18	%		$3,128		$2,690		$438			16	%
Interest and fees on loans held for sale		5		4		4		5		4		1			25			1			25			13		10		3			30
Interest and fees on other loans held for sale		3		2		1		–		1		1			50			2			200			6		6		–			–
Investment securities		155		154		160		152		146		1			1			9			6			469		432		37			9
Interest-bearing deposits in banks		5		5		3		2		2		–			–			3			150			13		6		7			117

Total interest income		1,264		1,205		1,160		1,122		1,079		59			5			185			17			3,629		3,144		485			15

INTEREST EXPENSE:
Deposits		123		102		86		76		71		21			21			52			73			311		194		117			60
Federal funds purchased and securities sold under agreements to repurchase		1		–		1		–		1		1			100			–			–			2		2		–			–
Other short-term borrowed funds		7		7		8		7		10		–			–			(3	)		(30	)		22		33		(11	)		(33	)
Long-term borrowed funds		71		70		60		53		52		1			1			19			37			201		143		58			41

Total interest expense		202		179		155		136		134		23			13			68			51			536		372		164			44

Net interest income		1,062		1,026		1,005		986		945		36			4			117			12			3,093		2,772		321			12

NONINTEREST INCOME:
Service charges and fees		131		129		125		132		134		2			2			(3	)		(2	)		385		390		(5	)		(1	)
Card fees		58		59		60		50		52		(1	)		(2	)		6			12			177		153		24			16
Capital markets fees		53		51		48		37		36		2			4			17			47			152		99		53			54
Trust and investment services fees		38		39		39		34		37		(1	)		(3	)		1			3			116		112		4			4
Letter of credit and loan fees		30		31		29		29		28		(1	)		(3	)		2			7			90		83		7			8
Foreign exchange and interest rate products		24		26		27		31		28		(2	)		(8	)		(4	)		(14	)		77		72		5			7
Mortgage banking fees		27		30		23		36		33		(3	)		(10	)		(6	)		(18	)		80		76		4			5
Securities gains, net		2		3		4		3		–		(1	)		(33	)		2			100			9		13		(4	)		(31	)
Other income		18		2		24		25		87		16			NM			(69	)		(79	)		44		122		(78	)		(64	)

Total noninterest income		381		370		379		377		435		11			3			(54	)		(12	)		1,130		1,120		10			1

TOTAL REVENUE		1,443		1,396		1,384		1,363		1,380		47			3			63			5			4,223		3,892		331			9
Provision for credit losses		72		70		96		102		86		2			3			(14	)		(16	)		238		267		(29	)		(11	)
NONINTEREST EXPENSE:
Salaries and employee benefits		436		432		444		420		432		4			1			4			1			1,312		1,289		23			2
Outside services		99		96		91		98		102		3			3			(3	)		(3	)		286		279		7			3
Occupancy		78		79		82		77		78		(1	)		(1	)		–			–			239		230		9			4
Equipment expense		65		64		67		69		65		1			2			–			–			196		194		2			1
Amortization of software		45		45		44		44		46		–			–			(1	)		(2	)		134		126		8			6
Other operating expense		135		148		126		139		144		(13	)		(9	)		(9	)		(6	)		409		387		22			6

Total noninterest expense		858		864		854		847		867		(6	)		(1	)		(9	)		(1	)		2,576		2,505		71			3

Income before income tax expense		513		462		434		414		427		51			11			86			20			1,409		1,120		289			26
Income tax expense		165		144		114		132		130		21			15			35			27			423		357		66			18

NET INCOME		$348		$318		$320		$282		$297		$30			9	%		$51			17	%		$986		$763		$223			29	%

Net income, Adjusted¹		$348		$318		$320		$282		$278		$30			9	%		$70			25	%		$986		$744		$242			33	%

Net income available to common stockholders		$341		$318		$313		$282		$290		$23			7	%		$51			18	%		$972		$749		$223			30	%

Net income available to common stockholders, Adjusted¹		$341		$318		$313		$282		$271		$23			7	%		$70			26	%		$972		$730		$242			33	%

CONSOLIDATED BALANCE SHEETS (unaudited)

(in millions)


PERIOD END BALANCES	AS OF															SEPT 30, 2017 CHANGE
	Sept 30, 2017			June 30, 2017			Mar 31, 2017			Dec 31, 2016			Sept 30, 2016			Jun 30, 2017						Sept 30, 2016
																$			%			$			%
ASSETS:
Cash and due from banks		$781			$904			$882			$955			$915			($123	)		(14	%)		($134	)		(15	%)
Interest-bearing cash and due from banks		1,339			3,263			3,111			2,749			2,000			(1,924	)		(59	)		(661	)		(33	)
Interest-bearing deposits in banks		287			433			351			439			720			(146	)		(34	)		(433	)		(60	)
Securities available for sale, at fair value		19,982			19,257			19,964			19,501			19,425			725			4			557			3
Securities held to maturity		4,823			4,967			4,992			5,071			5,289			(144	)		(3	)		(466	)		(9	)
Other investment securities, at fair value		165			97			101			96			113			68			70			52			46
Other investment securities, at cost		772			794			939			942			877			(22	)		(3	)		(105	)		(12	)
Loans held for sale, at fair value		500			520			448			583			526			(20	)		(4	)		(26	)		(5	)
Other loans held for sale		724			187			221			42			–			537			NM			724			100
Loans and leases		110,151			109,046			108,111			107,669			105,467			1,105			1			4,684			4
Less: Allowance for loan and lease losses		(1,224	)		(1,219	)		(1,224	)		(1,236	)		(1,240	)		(5	)		–			16			1

Net loans and leases		108,927			107,827			106,887			106,433			104,227			1,100			1			4,700			5
Derivative assets¹		596			408			357			627			1,102			188			46			(506	)		(46	)
Premises and equipment		618			600			582			601			540			18			3			78			14
Bank-owned life insurance		1,646			1,636			1,623			1,612			1,600			10			1			46			3
Goodwill		6,887			6,887			6,876			6,876			6,876			–			–			11			–
Due from broker		226			530			–			–			–			(304	)		(57	)		226			100
Other assets		3,083			3,097			2,951			2,993			2,805			(14	)		–			278			10

TOTAL ASSETS		$151,356			$151,407			$150,285			$149,520			$147,015			($51	)		–	%		$4,341			3	%

LIABILITIES AND STOCKHOLDERS’ EQUITY:
LIABILITIES:
Deposits:
Noninterest-bearing		$28,643			$27,814			$27,713			$28,472			$27,292			$829			3	%		$1,351			5	%
Interest-bearing		84,592			85,799			84,399			81,332			81,035			(1,207	)		(1	)		3,557			4

Total deposits		113,235			113,613			112,112			109,804			108,327			(378	)		–			4,908			5
Federal funds purchased and securities sold under agreements to repurchase		453			429			1,093			1,148			900			24			6			(447	)		(50	)
Other short-term borrowed funds		1,505			2,004			2,762			3,211			2,512			(499	)		(25	)		(1,007	)		(40	)
Derivative liabilities¹		242			159			320			659			840			83			52			(598	)		(71	)
Deferred taxes, net		744			740			744			714			994			4			1			(250	)		(25	)
Long-term borrowed funds		13,400			13,154			11,780			12,790			11,902			246			2			1,498			13
Other liabilities		1,668			1,244			1,627			1,447			1,359			424			34			309			23

TOTAL LIABILITIES		131,247			131,343			130,438			129,773			126,834			(96	)		–			4,413			3
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		18,768			18,761			18,751			18,722			18,740			7			–			28			–
Retained earnings		3,442			3,191			2,944			2,703			2,483			251			8			959			39
Treasury stock, at cost		(1,773	)		(1,548	)		(1,418	)		(1,263	)		(1,108	)		(225	)		(15	)		(665	)		(60	)
Accumulated other comprehensive loss		(581	)		(593	)		(683	)		(668	)		(187	)		12			2			(394	)		(211	)

TOTAL STOCKHOLDERS’ EQUITY		20,109			20,064			19,847			19,747			20,181			45			–			(72	)		–

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$151,356			$151,407			$150,285			$149,520			$147,015			($51	)		–	%		$4,341			3	%

Memo: Total tangible common equity		$13,512			$13,463			$13,258			$13,154			$13,576			$49			–	%		($64	)		–	%

¹2017 balances reflect changes in the treatment of variation margin on certain centrally cleared derivatives.

LOANS AND DEPOSITS

(in millions)


PERIOD END BALANCES	AS OF										SEPT 30, 2017 CHANGE
	Sept 30, 2017		June 30, 2017		Mar 31, 2017		Dec 31, 2016		Sept 30, 2016		Jun 30, 2017						Sept 30, 2016
											$			%			$			%
LOANS AND LEASES:
Commercial		$37,706		$37,329		$37,369		$37,274		$36,449		$377			1	%		$1,257			3	%
Commercial real estate		11,426		11,213		10,915		10,624		10,152		213			2			1,274			13
Leases		3,249		3,346		3,608		3,753		3,788		(97	)		(3	)		(539	)		(14	)

Total commercial		52,381		51,888		51,892		51,651		50,389		493			1			1,992			4

Residential mortgages		16,619		16,082		15,389		15,115		14,602		537			3			2,017			14
Home equity loans		1,483		1,606		1,730		1,858		2,027		(123	)		(8	)		(544	)		(27	)
Home equity lines of credit		13,555		13,696		13,812		14,100		14,271		(141	)		(1	)		(716	)		(5	)
Home equity loans serviced by others¹		599		647		698		750		796		(48	)		(7	)		(197	)		(25	)
Home equity lines of credit serviced by others¹		166		182		201		219		238		(16	)		(9	)		(72	)		(30	)
Automobile		13,311		13,449		13,636		13,938		14,063		(138	)		(1	)		(752	)		(5	)
Education²		8,014		7,720		7,242		6,610		5,997		294			4			2,017			34
Credit card		1,754		1,711		1,650		1,691		1,644		43			3			110			7
Other retail		2,269		2,065		1,861		1,737		1,440		204			10			829			58

Total retail		57,770		57,158		56,219		56,018		55,078		612			1			2,692			5

Total loans and leases		$110,151		$109,046		$108,111		$107,669		$105,467		$1,105			1	%		$4,684			4	%


Loans held for sale		$500		$520		$448		$583		$526		($20	)		(4	%)		($26	)		(5	%)
Other loans held for sale		724		187		221		42		–		537				NM		724			100

Loans and leases and loans held for sale		$111,375		$109,753		$108,780		$108,294		$105,993		$1,622			1	%		$5,382			5	%


DEPOSITS:
Demand		$28,643		$27,814		$27,713		$28,472		$27,292		$829			3	%		$1,351			5	%
Checking with interest		21,756		22,497		21,913		20,714		20,573		(741	)		(3	)		1,183			6
Regular savings		9,470		9,542		9,441		8,964		8,797		(72	)		(1	)		673			8
Money market accounts		37,070		38,275		37,833		38,176		38,258		(1,205	)		(3	)		(1,188	)		(3	)
Term deposits		16,296		15,485		15,212		13,478		13,407		811			5			2,889			22

Total deposits		$113,235		$113,613		$112,112		$109,804		$108,327		($378	)		–	%		$4,908			5	%

¹Our 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.

² During first quarter 2017, student loans were renamed to “education” loans.

AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS

(in millions)


	QUARTERLY TRENDS																											FOR THE NINE MONTHS ENDED SEPT 30,
AVERAGE BALANCES																3Q17 Change																		2017 Change
	3Q17			2Q17			1Q17			4Q16			3Q16			2Q17						3Q16						2017			2016			2016
																$			%			$			%									$			%
ASSETS:
Interest-bearing cash and due from banks and deposits in banks		$1,663			$2,081			$1,965			$1,979			$2,121			($418	)		(20	%)		($458	)		(22	%)		$1,902			$1,915			($13	)		(1	%)

Taxable investment securities		25,588			25,732			25,789			25,680			24,961			(144	)		(1	)		627			3			25,702			24,294			1,408			6
Non-taxable investment securities		7			7			7			8			8			–			–			(1	)		(13	)		7			9			(2	)		(22	)

Total investment securities		25,595			25,739			25,796			25,688			24,969			(144	)		(1	)		626			3			25,709			24,303			1,406			6

Investment securities and interest-bearing deposits		27,258			27,820			27,761			27,667			27,090			(562	)		(2	)		168			1			27,611			26,218			1,393			5

Commercial		37,448			37,846			37,517			36,965			35,986			(398	)		(1	)		1,462			4			37,603			35,212			2,391			7
Commercial real estate		11,401			11,086			10,821			10,294			9,905			315			3			1,496			15			11,105			9,555			1,550			16
Leases		3,302			3,557			3,696			3,773			3,813			(255	)		(7	)		(511	)		(13	)		3,517			3,864			(347	)		(9	)

Total commercial		52,151			52,489			52,034			51,032			49,704			(338	)		(1	)		2,447			5			52,225			48,631			3,594			7

Residential mortgages		16,323			15,646			15,285			14,896			14,155			677			4			2,168			15			15,755			13,705			2,050			15
Home equity loans		1,547			1,668			1,793			1,934			2,088			(121	)		(7	)		(541	)		(26	)		1,668			2,263			(595	)		(26	)
Home equity lines of credit		13,608			13,765			13,955			14,188			14,314			(157	)		(1	)		(706	)		(5	)		13,775			14,474			(699	)		(5	)
Home equity loans serviced by others¹		618			668			719			774			837			(50	)		(7	)		(219	)		(26	)		668			898			(230	)		(26	)
Home equity lines of credit serviced by others¹		173			188			207			228			256			(15	)		(8	)		(83	)		(32	)		189			298			(109	)		(37	)
Automobile		13,349			13,574			13,772			13,994			14,053			(225	)		(2	)		(704	)		(5	)		13,563			13,940			(377	)		(3	)
Education²		7,814			7,490			6,837			6,215			5,750			324			4			2,064			36			7,384			5,338			2,046			38
Credit cards		1,738			1,693			1,665			1,654			1,623			45			3			115			7			1,699			1,608			91			6
Other retail		2,163			1,959			1,798			1,619			1,256			204			10			907			72			1,976			1,177			799			68

Total retail		57,333			56,651			56,031			55,502			54,332			682			1			3,001			6			56,677			53,701			2,976			6

Total loans and leases		109,484			109,140			108,065			106,534			104,036			344			–			5,448			5			108,902			102,332			6,570			6
Loans held for sale, at fair value		503			465			510			551			474			38			8			29			6			492			383			109			28
Other loans held for sale		234			162			74			6			69			72			44			165			239			158			185			(27	)		(15	)

Interest-earning assets		137,479			137,587			136,410			134,758			131,669			(108	)		–			5,810			4			137,163			129,118			8,045			6
Allowance for loan and lease losses		(1,220	)		(1,223	)		(1,235	)		(1,234	)		(1,243	)		3			–			23			2			(1,226	)		(1,225	)		(1	)		–
Goodwill		6,887			6,882			6,876			6,876			6,876			5			–			11			–			6,882			6,876			6			–
Other noninterest-earning assets		6,866			6,632			6,735			6,915			7,097			234			4			(231	)		(3	)		6,744			7,026			(282	)		(4	)

TOTAL ASSETS		$150,012			$149,878			$148,786			$147,315			$144,399			$134			–	%		$5,613			4	%		$149,563			$141,795			$7,768			5	%

LIABILITIES AND STOCKHOLDERS’ EQUITY:
LIABILITIES:
Checking with interest		$21,909			$21,751			$20,699			$20,268			$19,997			$158			1	%		$1,912			10	%		$21,457			$19,001			$2,456			13	%
Money market accounts		37,535			36,912			37,874			38,397			37,597			623			2			(62	)		–			37,439			36,673			766			2
Regular savings		9,491			9,458			9,110			8,826			8,779			33			–			712			8			9,355			8,646			709			8
Term deposits		15,971			15,148			14,173			13,191			12,806			823			5			3,165			25			15,104			12,530			2,574			21

Total interest-bearing deposits		84,906			83,269			81,856			80,682			79,179			1,637			2			5,727			7			83,355			76,850			6,505			8
Federal funds purchased and securities sold under agreements to repurchase³		733			808			882			1,024			910			(75	)		(9	)		(177	)		(19	)		807			922			(115	)		(12	)
Other short-term borrowed funds		1,624			2,275			2,963			3,428			2,564			(651	)		(29	)		(940	)		(37	)		2,283			3,133			(850	)		(27	)
Long-term borrowed funds		12,210			13,647			12,412			10,758			10,905			(1,437	)		(11	)		1,305			12			12,755			10,375			2,380			23

Total borrowed funds		14,567			16,730			16,257			15,210			14,379			(2,163	)		(13	)		188			1			15,845			14,430			1,415			10

Total interest-bearing liabilities		99,473			99,999			98,113			95,892			93,558			(526	)		(1	)		5,915			6			99,200			91,280			7,920			9
Total demand deposits		28,041			27,521			28,098			28,443			27,467			520			2			574			2			27,886			27,362			524			2
Other liabilities		2,523			2,452			2,868			3,088			3,317			71			3			(794	)		(24	)		2,613			3,191			(578	)		(18	)

TOTAL LIABILITIES		130,037			129,972			129,079			127,423			124,342			65			–			5,695			5			129,699			121,833			7,866			6

STOCKHOLDERS’ EQUITY		19,975			19,906			19,707			19,892			20,057			69			–			(82	)		–			19,864			19,962			(98	)		–

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$150,012			$149,878			$148,786			$147,315			$144,399			$134			–	%		$5,613			4	%		$149,563			$141,795			$7,768			5	%

Memo: Total average tangible common equity		$13,376			$13,309			$13,115			$13,291			$13,442			$67			1	%		($66	)		–	%		$13,268			$13,332			($64	)		–	%

Total deposits (interest-bearing and demand)		$112,947			$110,790			$109,954			$109,125			$106,646			$2,157			2	%		$6,301			6	%		$111,241			$104,212			$7,029			7	%

¹Our 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 During first quarter 2017, student loans were renamed “education” loans.

³Balances 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.

AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS, CONTINUED

(in millions, except rates)


	QUARTERLY TRENDS																									FOR THE NINE MONTHS ENDED SEPT 30,
AVERAGE ANNUALIZED YIELDS AND RATES	3Q17					2Q17					1Q17					4Q16					3Q16					2017					2016
	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		1.14	%		$5		0.88	%		$5		0.63	%		$3		0.43	%		$2		0.41	%		$2		0.87	%		$13		0.40	%		$6

Taxable investment securities		2.42			155		2.39			154		2.48			160		2.36			152		2.34			146		2.43			469		2.37			432
Non-taxable investment securities		2.60			–		2.60			–		2.60			–		2.60			–		2.60			–		2.60			–		2.60			–

Total investment securities		2.42			155		2.39			154		2.48			160		2.36			152		2.34			146		2.43			469		2.37			432

Investment securities and interest-bearing deposits					160					159					163					154					148					482					438

Commercial		3.61			344		3.40			326		3.33			312		3.22			304		3.14			290		3.45			982		3.10			832
Commercial real estate		3.69			108		3.47			97		3.21			87		2.98			78		2.82			71		3.46			292		2.75			200
Leases		2.54			21		2.50			22		2.47			23		2.32			22		2.43			23		2.50			66		2.44			71

Total commercial		3.56			473		3.35			445		3.24			422		3.11			404		3.02			384		3.39			1,340		2.98			1,103

Residential mortgages		3.57			146		3.57			140		3.55			136		3.46			129		3.59			127		3.57			422		3.65			375
Home equity loans		5.72			22		5.74			24		5.66			25		5.66			28		5.75			30		5.71			71		5.63			95
Home equity lines of credit		3.93			135		3.68			126		3.43			118		3.21			114		3.20			115		3.68			379		3.16			343
Home equity loans serviced by others¹		7.04			11		7.12			11		7.02			13		7.18			13		7.24			16		7.06			35		7.09			49
Home equity lines of credit serviced by others¹		4.05			2		4.24			2		3.75			2		3.17			2		2.47			2		4.00			6		2.21			5
Automobile		3.31			111		3.23			110		3.16			107		3.03			107		2.96			104		3.23			328		2.91			304
Education²		5.36			106		5.26			98		5.23			88		5.11			80		5.10			73		5.29			292		5.06			202
Credit cards		10.69			47		10.71			45		11.16			46		11.14			46		11.24			46		10.85			138		11.24			135
Other retail		7.88			43		8.01			39		7.94			35		9.70			40		9.39			29		7.94			117		9.01			79

Total retail		4.32			623		4.21			595		4.11			570		4.01			559		3.98			542		4.21			1,788		3.95			1,587

Total loans and leases		3.96			1,096		3.80			1,040		3.69			992		3.58			963		3.52			926		3.82			3,128		3.49			2,690
Loans held for sale		3.69			5		3.60			4		3.31			4		3.29			5		3.35			4		3.53			13		3.46			10
Other loans held for sale		4.72			3		5.51			2		6.62			1		6.24			–		6.41			1		5.29			6		4.53			6

Total interest-earning assets		3.64			1,264		3.49			1,205		3.42			1,160		3.30			1,122		3.25			1,079		3.52			3,629		3.23			3,144
INTEREST-BEARING LIABILITIES:
Checking with interest		0.43			23		0.36			20		0.26			13		0.21			10		0.20			9		0.35			56		0.17			24
Money market accounts		0.57			54		0.49			45		0.44			41		0.39			39		0.38			35		0.50			140		0.35			95
Regular savings		0.04			1		0.04			1		0.04			1		0.04			–		0.05			2		0.04			3		0.04			3
Term deposits		1.09			45		0.97			36		0.89			31		0.82			27		0.76			25		0.99			112		0.77			72

Total interest-bearing deposits		0.58			123		0.49			102		0.43			86		0.38			76		0.36			71		0.50			311		0.34			194
Federal funds purchased and securities sold under agreements to repurchase³		0.50			1		0.37			–		0.24			1		0.23			–		0.24			1		0.36			2		0.22			2
Other short-term borrowed funds		1.55			7		1.23			7		1.05			8		0.81			7		1.54			10		1.23			22		1.38			33
Long-term borrowed funds		2.31			71		2.05			70		1.94			60		1.94			53		1.89			52		2.10			201		1.84			143

Total borrowed funds		2.14			79		1.86			77		1.68			69		1.57			60		1.72			63		1.88			225		1.63			178

Total interest-bearing liabilities		0.80			202		0.72			179		0.64			155		0.57			136		0.57			134		0.72			536		0.54			372
INTEREST RATE SPREAD		2.84					2.77					2.78					2.73					2.68					2.80								2.69
NET INTEREST MARGIN		3.05	%				2.97	%				2.96	%				2.90	%				2.84	%				3.00	%							2.85	%
Memo Total deposit costs		0.43	%		$123		0.37	%		$102		0.32	%		$86		0.28	%		$76		0.27	%		$71		0.37	%		$311		0.25	%		$194

¹Our 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 During first quarter 2017, student loans were renamed “education” loans.

³Balances 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

(in millions, except ratio data)


	THIRD QUARTER 2017											SECOND QUARTER 2017												CHANGE
																								3Q17 from 2Q17
	Consumer Banking			Commercial Banking			Other¹		Consolidated			Consumer Banking			Commercial Banking			Other¹			Consolidated			$/bps			%
Net interest income		$674			$354			$34		$1,062			$657			$344			$25			$1,026			$36			4	%
Noninterest income		227			136			18		381			229			130			11			370			11			3

Total revenue		901			490			52		1,443			886			474			36			1,396			47			3
Noninterest expense		648			195			15		858			644			192			28			864			(6	)		(1	)

Profit before provision for credit losses		253			295			37		585			242			282			8			532			53			10
Provision for credit losses		65			–			7		72			60			1			9			70			2			3

Income (loss) before income tax expense (benefit)		188			295			30		513			182			281			(1	)		462			51			11
Income tax expense (benefit)		66			94			5		165			64			94			(14	)		144			21			15

Net income		$122			$201			$25		$348			$118			$187			$13			$318			$30			9	%

Average Balances
Total assets		$60,012			$49,833			$40,167		$150,012			$59,244			$49,731			$40,903			$149,878			$134			–	%
Total loans and leases²		58,679			48,746			2,796		110,221			57,922			48,772			3,073			109,767			454			–
Deposits		75,085			30,751			7,111		112,947			75,107			28,744			6,939			110,790			2,157			2
Interest-earning assets		58,729			48,875			29,875		137,479			57,973			48,923			30,691			137,587			(108	)		–
Key Metrics
Net interest margin		4.55	%		2.88	%		NM		3.05	%		4.54	%		2.82	%		NM			2.97	%		8	bps
Efficiency ratio		71.88			39.39			NM		59.41			72.64			40.48			NM			61.94			(253	) bps
Loans-to-deposits ratio (period-end balances)²		78.59			160.45			NM		98.36			77.16			158.39			NM			96.60			176	bps
Loans-to-deposits ratio (average balances)²		78.15			158.52			NM		97.59			77.12			169.68			NM			99.08			(149)	bps
Return on average total tangible assets		0.81			1.60			NM		0.96			0.80			1.51			NM			0.89			7	bps
Return on average tangible common equity³		8.72			14.06			NM		10.13			8.57			13.37			NM			9.57			56	bps

¹ 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, capital, 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. We approximate that regulatory capital is equivalent to a sustainable target level for common equity tier 1 and then allocate that approximation to the segments based on economic capital.

SEGMENT FINANCIAL HIGHLIGHTS - CONSOLIDATING, CONTINUED

(in millions, except ratio data)


	THIRD QUARTER 2017											THIRD QUARTER 2016												CHANGE
																								3Q17 from 3Q16
	Consumer Banking			Commercial Banking			Other¹		Consolidated			Consumer Banking			Commercial Banking			Other¹			Consolidated			$/bps			%
Net interest income		$674			$354			$34		$1,062			$621			$327			($3	)		$945			$117			12	%
Noninterest income		227			136			18		381			229			123			83			435			(54	)		(12	)

Total revenue		901			490			52		1,443			850			450			80			1,380			63			5
Noninterest expense		648			195			15		858			650			181			36			867			(9	)		(1	)

Profit before provision for credit losses		253			295			37		585			200			269			44			513			72			14
Provision for credit losses		65			–			7		72			57			19			10			86			(14	)		(16	)

Income before income tax expense (benefit)		188			295			30		513			143			250			34			427			86			20
Income tax expense (benefit)		66			94			5		165			51			88			(9	)		130			35			27

Net income		$122			$201			$25		$348			$92			$162			$43			$297			$51			17	%

Average Balances
Total assets		$60,012			$49,833			$40,167		$150,012			$56,689			$47,902			$39,808			$144,399			$5,613			4	%
Total loans and leases²		58,679			48,746			2,796		110,221			55,376			46,611			2,592			104,579			5,642			5
Deposits		75,085			30,751			7,111		112,947			72,141			27,847			6,658			106,646			6,301			6
Interest-earning assets		58,729			48,875			29,875		137,479			55,423			46,666			29,580			131,669			5,810			4
Key Metrics
Net interest margin		4.55	%		2.88	%		NM		3.05	%		4.46	%		2.79	%		NM			2.84	%		21	bps
Efficiency ratio		71.88			39.39			NM		59.41			76.46			40.21			NM			62.88			(347	) bps
Loans-to-deposits ratio (period-end balances)²		78.59			160.45			NM		98.36			77.22			161.45			NM			97.85			51	bps
Loans-to-deposits ratio (average balances)²		78.15			158.52			NM		97.59			76.76			167.38			NM			98.06			(47	) bps
Return on average total tangible assets		0.81			1.60			NM		0.96			0.64			1.35			NM			0.86			10	bps
Return on average tangible common equity³		8.72			14.06			NM		10.13			7.04			12.50			NM			8.58			155	bps

²Includes loans and leases held for sale.

SEGMENT FINANCIAL HIGHLIGHTS - CONSOLIDATING, CONTINUED

(in millions, except ratio data)


	NINE MONTHS ENDED SEPT 30, 2017												NINE MONTHS ENDED SEPT 30, 2016												CHANGE
																									2017 from 2016
	Consumer Banking			Commercial Banking			Other¹			Consolidated			Consumer Banking			Commercial Banking			Other¹			Consolidated			$/bps			%
Net interest income		$1,969			$1,044			$80			$3,093			$1,804			$941			$27			$2,772			$321			12	%
Noninterest income		676			400			54			1,130			656			344			120			1,120			10			1

Total revenue		2,645			1,444			134			4,223			2,460			1,285			147			3,892			331			9
Noninterest expense		1,939			577			60			2,576			1,898			554			53			2,505			71			3

Profit before provision for credit losses		706			867			74			1,647			562			731			94			1,387			260			19
Provision for credit losses		189			20			29			238			169			27			71			267			(29	)		(11	)

Income before income tax expense		517			847			45			1,409			393			704			23			1,120			289			26
Income tax expense		182			279			(38	)		423			140			245			(28	)		357			66			18

Net income		$335			$568			$83			$986			$253			$459			$51			$763			$223			29	%

Average Balances
Total assets		$59,310			$49,604			$40,649			$149,563			$55,825			$46,869			$39,101			$141,795			$7,768			5	%
Total loans and leases²		57,975			48,560			3,017			109,552			54,494			45,532			2,874			102,900			6,652			6
Deposits		74,778			29,496			6,967			111,241			71,627			25,938			6,647			104,212			7,029			7
Interest-earning assets		58,026			48,696			30,441			137,163			54,542			45,611			28,965			129,118			8,045			6
Key Metrics
Net interest margin		4.54	%		2.87	%		NM			3.00	%		4.42	%		2.76	%		NM			2.85	%		15	bps
Efficiency ratio		73.28			39.89			NM			60.99			77.15			43.15			NM			64.36			(337	) bps
Loans-to-deposits ratio (period-end balances)²		78.59			160.45			NM			98.36			77.22			161.45			NM			97.85			51	bps
Loans-to-deposits ratio (average balances)²		77.53			164.63			NM			98.48			76.08			175.54			NM			98.74			(26	) bps
Return on average total tangible assets		0.76			1.53			NM			0.92			0.60			1.31			NM			0.75			17	bps
Return on average tangible common equity³		8.13			13.54			NM			9.80			6.58			12.27			NM			7.51			229	bps

²Includes loans and leases held for sale.

³Operating segments are allocated capital on a risk-adjusted basis considering economic and regulatory capital requirements. We approximate that regulatory capital is equivalent to a sustainable target level for common equity tier 1 and then allocate that approximation to the segments based on economic capital.

SEGMENT FINANCIAL HIGHLIGHTS - CONSUMER BANKING

(in millions, except ratio data)


	QUARTERLY TRENDS																		FOR THE NINE MONTHS ENDED SEPT 30,
CONSUMER BANKING											3Q17 Change												2017 Change
	3Q17		2Q17		1Q17		4Q16		3Q16		2Q17				3Q16				2017		2016		2016
											$/bps		%		$/bps		%						$/bps		%
Net interest income		$674		$657		$638		$639		$621		$17		3%		$53		9%		$1,969		$1,804		$165		9%
Noninterest income		227		229		220		227		229		(2)		(1)		(2)		(1)		676		656		20		3

Total revenue		901		886		858		866		850		15		2		51		6		2,645		2,460		185		8
Noninterest expense		648		644		647		649		650		4		1		(2)		–		1,939		1,898		41		2

Profit before provision for credit losses		253		242		211		217		200		11		5		53		27		706		562		144		26
Provision for credit losses		65		60		64		74		57		5		8		8		14		189		169		20		12

Income before income tax expense		188		182		147		143		143		6		3		45		31		517		393		124		32
Income tax expense		66		64		52		51		51		2		3		15		29		182		140		42		30

Net income		$122		$118		$95		$92		$92		$4		3%		$30		33%		$335		$253		$82		32%

Average Balances
Total assets		$60,012		$59,244		$58,660		$58,066		$56,689		$768		1%		$3,323		6%		$59,310		$55,825		$3,485		6%
Total loans and leases¹		58,679		57,922		57,309		56,711		55,376		757		1		3,303		6		57,975		54,494		3,481		6
Deposits		75,085		75,107		74,133		73,124		72,141		(22)		–		2,944		4		74,778		71,627		3,151		4
Interest-earning assets		58,729		57,973		57,361		56,764		55,423		756		1		3,306		6		58,026		54,542		3,484		6
Key Metrics
Net interest margin		4.55%		4.54%		4.51%		4.47%		4.46%		1 bps				9 bps				4.54%		4.42%		12 bps
Efficiency ratio		71.88		72.64		75.41		74.90		76.46		(76) bps				(458) bps				73.28		77.15		(387) bps
Loans-to-deposits ratio (period-end balances)¹		78.59		77.16		75.66		77.33		77.22		143 bps				137 bps				78.59		77.22		137 bps
Loans-to-deposits ratio (average balances)¹		78.15		77.12		77.31		77.55		76.76		103 bps				139 bps				77.53		76.08		145 bps
Return on average total tangible assets		0.81		0.80		0.66		0.63		0.64		1 bps				17 bps				0.76		0.60		16 bps
Return on average tangible common equity²		8.72		8.57		7.06		6.97		7.04		15 bps				168 bps				8.13		6.58		155 bps

¹Includes loans and leases held for sale.

² Operating segments are allocated capital on a risk-adjusted basis considering economic and regulatory capital requirements. We approximate that regulatory capital is equivalent to a sustainable target level for common equity tier 1 and then allocate that approximation to the segments based on economic capital.

SEGMENT FINANCIAL HIGHLIGHTS - COMMERCIAL BANKING

(in millions, except ratio data)


	QUARTERLY TRENDS																		FOR THE NINE MONTHS ENDED SEPT 30,
COMMERCIAL BANKING											3Q17 Change												2017 Change
	3Q17		2Q17		1Q17		4Q16		3Q16		2Q17				3Q16				2017		2016		2016
											$/bps		%		$/bps		%						$/bps		%
Net interest income		$354		$344		$346		$347		$327		$10		3%		$27		8%		$1,044		$941		$103		11%
Noninterest income		136		130		134		122		123		6		5		13		11		400		344		56		16

Total revenue		490		474		480		469		450		16		3		40		9		1,444		1,285		159		12
Noninterest expense		195		192		190		187		181		3		2		14		8		577		554		23		4

Profit before provision for credit losses		295		282		290		282		269		13		5		26		10		867		731		136		19
Provision for credit losses		–		1		19		20		19		(1)		(100)		(19)		(100)		20		27		(7)		(26)

Income before income tax expense		295		281		271		262		250		14		5		45		18		847		704		143		20
Income tax expense		94		94		91		90		88		–		–		6		7		279		245		34		14

Net income		$201		$187		$180		$172		$162		$14		7%		$39		24%		$568		$459		$109		24%

Average Balances
Total assets		$49,833		$49,731		$49,243		$48,024		$47,902		$102		–%		$1,931		4%		$49,604		$46,869		$2,735		6%
Total loans and leases¹		48,746		48,772		48,154		47,010		46,611		(26)		–		2,135		5		48,560		45,532		3,028		7
Deposits		30,751		28,744		28,973		29,410		27,847		2,007		7		2,904		10		29,496		25,938		3,558		14
Interest-earning assets		48,875		48,923		48,283		47,070		46,666		(48)		–		2,209		5		48,696		45,611		3,085		7
Key Metrics
Net interest margin		2.88%		2.82%		2.91%		2.93%		2.79%		6 bps				9 bps				2.87%		2.76%		11 bps
Efficiency ratio		39.39		40.48		39.80		39.83		40.21		(109) bps				(82) bps				39.89		43.15		(326) bps
Loans-to-deposits ratio (period-end balances)¹		160.45		158.39		165.09		166.25		161.45		206 bps				(100) bps				160.45		161.45		(100) bps
Loans-to-deposits ratio (average balances)¹		158.52		169.68		166.20		159.84		167.38		(1,116) bps				(886) bps				164.63		175.54		(1,091) bps
Return on average total tangible assets		1.60		1.51		1.48		1.42		1.35		9 bps				25 bps				1.53		1.31		22 bps
Return on average tangible common equity²		14.06		13.37		13.18		12.94		12.50		69 bps				156 bps				13.54		12.27		127 bps

¹Includes loans and leases held for sale.

SEGMENT FINANCIAL HIGHLIGHTS - OTHER

(in millions)


	QUARTERLY TRENDS																		FOR THE NINE MONTHS ENDED SEPT 30,
OTHER¹											3Q17 Change												2017 Change
	3Q17		2Q17		1Q17		4Q16		3Q16		2Q17				3Q16				2017		2016		2016
											$/bps		%		$/bps		%						$/bps		%
Net interest income		$34		$25		$21		$–		($3)		$9		36%		$37		NM		$80		$27		$53		196%
Noninterest income		18		11		25		28		83		7		64		(65)		(78)		54		120		(66)		(55)

Total revenue		52		36		46		28		80		16		44		(28)		(35)		134		147		(13)		(9)
Noninterest expense		15		28		17		11		36		(13)		(46)		(21)		(58)		60		53		7		13

Profit before provision for credit losses		37		8		29		17		44		29		NM		(7)		(16)		74		94		(20)		(21)
Provision for credit losses		7		9		13		8		10		(2)		(22)		(3)		(30)		29		71		(42)		(59)

Income (loss) before income tax expense (benefit)		30		(1)		16		9		34		31		NM		(4)		(12)		45		23		22		96
Income tax expense (benefit)		5		(14)		(29)		(9)		(9)		19		136		14		156		(38)		(28)		(10)		(36)

Net income		$25		$13		$45		$18		$43		$12		92%		($18)		(42%)		$83		$51		$32		63%

Average Balances
Total assets		$40,167		$40,903		$40,883		$41,225		$39,808		($736)		(2%)		$359		1%		$40,649		$39,101		$1,548		4%
Total loans and leases		2,796		3,073		3,186		3,370		2,592		(277)		(9)		204		8		3,017		2,874		143		5
Deposits		7,111		6,939		6,848		6,591		6,658		172		2		453		7		6,967		6,647		320		5
Interest-earning assets		29,875		30,691		30,766		30,924		29,580		(816)		(3)		295		1		30,441		28,965		1,476		5

¹Includes 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, capital, revenues, provision for credit losses and expenses not attributed to our Consumer Banking or Commercial Banking segments.

SEGMENT FINANCIAL HIGHLIGHTS - CONSOLIDATED

(in millions, except ratio data)


	QUARTERLY TRENDS																		FOR THE NINE MONTHS ENDED SEPT 30,
CONSOLIDATED											3Q17 Change												2017 Change
	3Q17		2Q17		1Q17		4Q16		3Q16		2Q17				3Q16				2017		2016		2016
											$/bps		%		$/bps		%						$/bps		%
Net interest income		$1,062		$1,026		$1,005		$986		$945		$36		4%		$117		12%		$3,093		$2,772		$321		12%
Noninterest income		381		370		379		377		435		11		3		(54)		(12)		1,130		1,120		10		1

Total revenue		1,443		1,396		1,384		1,363		1,380		47		3		63		5		4,223		3,892		331		9
Noninterest expense		858		864		854		847		867		(6)		(1)		(9)		(1)		2,576		2,505		71		3

Profit before provision for credit losses		585		532		530		516		513		53		10		72		14		1,647		1,387		260		19
Provision for credit losses		72		70		96		102		86		2		3		(14)		(16)		238		267		(29)		(11)

Income before income tax expense		513		462		434		414		427		51		11		86		20		1,409		1,120		289		26
Income tax expense		165		144		114		132		130		21		15		35		27		423		357		66		18

Net income		$348		$318		$320		$282		$297		$30		9%		$51		17%		$986		$763		$223		29%

Average Balances
Total assets		$150,012		$149,878		$148,786		$147,315		$144,399		$134		–%		$5,613		4%		$149,563		$141,795		$7,768		5%
Total loans and leases¹		110,221		109,767		108,649		107,091		104,579		454		–		5,642		5		109,552		102,900		6,652		6
Deposits		112,947		110,790		109,954		109,125		106,646		2,157		2		6,301		6		111,241		104,212		7,029		7
Interest-earning assets		137,479		137,587		136,410		134,758		131,669		(108)		–		5,810		4		137,163		129,118		8,045		6
Key Metrics
Net interest margin		3.05%		2.97%		2.96%		2.90%		2.84%		8 bps				21 bps				3.00%		2.85%		15 bps
Efficiency ratio		59.41		61.94		61.68		62.18		62.88		(253) bps				(347) bps				60.99		64.36		(337) bps
Loans-to-deposits ratio (period-end balances)¹		98.36		96.60		97.03		98.62		97.85		176 bps				51 bps				98.36		97.85		51 bps
Loans-to-deposits ratio (average balances)¹		97.59		99.08		98.81		98.14		98.06		(149) bps				(47) bps				98.48		98.74		(26) bps
Return on average total tangible assets		0.96		0.89		0.91		0.79		0.86		7 bps				10 bps				0.92		0.75		17 bps
Return on average tangible common equity		10.13		9.57		9.68		8.43		8.58		56 bps				155 bps				9.80		7.51		229 bps

¹Includes loans and leases held for sale.

CREDIT-RELATED INFORMATION

(in millions)


	AS OF										SEPT 30, 2017 CHANGE
	Sept 30, 2017		June 30, 2017		Mar 31, 2017		Dec 31, 2016		Sept 30, 2016		JUNE 30, 2017						SEPT 30, 2016
											$			%			$			%
CREDIT EXPOSURE:
Loans and leases:
Commercial		$37,706		$37,329		$37,369		$37,274		$36,449		$377			1	%		$1,257			3	%
Commercial real estate		11,426		11,213		10,915		10,624		10,152		213			2			1,274			13
Leases		3,249		3,346		3,608		3,753		3,788		(97	)		(3	)		(539	)		(14	)

Total commercial		52,381		51,888		51,892		51,651		50,389		493			1			1,992			4
Residential mortgages		16,619		16,082		15,389		15,115		14,602		537			3			2,017			14
Home equity loans		1,483		1,606		1,730		1,858		2,027		(123	)		(8	)		(544	)		(27	)
Home equity lines of credit		13,555		13,696		13,812		14,100		14,271		(141	)		(1	)		(716	)		(5	)
Home equity loans serviced by others¹		599		647		698		750		796		(48	)		(7	)		(197	)		(25	)
Home equity lines of credit serviced by others¹		166		182		201		219		238		(16	)		(9	)		(72	)		(30	)
Automobile		13,311		13,449		13,636		13,938		14,063		(138	)		(1	)		(752	)		(5	)
Education²		8,014		7,720		7,242		6,610		5,997		294			4			2,017			34
Credit card		1,754		1,711		1,650		1,691		1,644		43			3			110			7
Other retail		2,269		2,065		1,861		1,737		1,440		204			10			829			58

Total retail		57,770		57,158		56,219		56,018		55,078		612			1			2,692			5

Total loans and leases		110,151		109,046		108,111		107,669		105,467		1,105			1			4,684			4
Derivative receivable:
Derivative receivable - commercial³		588		399		346		621		1,084		189			47			(496	)		(46	)
Derivative receivable - retail		8		9		11		6		18		(1	)		(11	)		(10	)		(56	)

Total derivative receivable		596		408		357		627		1,102		188			46			(506	)		(46	)

Total credit-related assets		110,747		109,454		108,468		108,296		106,569		1,293			1			4,178			4
Lending-related arrangements:
Undrawn commitments to extend credit - commercial		34,871		34,962		34,650		34,005		32,991		(91	)		–			1,880			6
Financial standby letters of credit		2,080		2,053		1,912		1,892		1,980		27			1			100			5
Performance letters of credit		42		41		48		40		40		1			2			2			5
Commercial letters of credit		68		66		43		43		55		2			3			13			24
Marketing rights		41		42		44		44		44		(1	)		(2	)		(3	)		(7	)
Risk participation agreements		20		22		19		19		51		(2	)		(9	)		(31	)		(61	)

Total commercial lending-related arrangements		37,122		37,186		36,716		36,043		35,161		(64	)		–			1,961			6
Undrawn commitments to extend credit - retail		27,063		27,026		28,160		26,867		27,134		37			–			(71	)		–
Residential mortgage loans sold with recourse		7		8		8		8		9		(1	)		(13	)		(2	)		(22	)

Total retail lending-related arrangements		27,070		27,034		28,168		26,875		27,143		36			–			(73	)		–

Total lending-related arrangements		64,192		64,220		64,884		62,918		62,304		(28	)		–			1,888			3

Total credit exposure		$174,939		$173,674		$173,352		$171,214		$168,873		$1,265			1	%		$6,066			4	%

Memo: Total credit exposure by product category
Commercial exposure		$90,091		$89,473		$88,954		$88,315		$86,634		$618			1	%		$3,457			4	%
Retail exposure		84,848		84,201		84,398		82,899		82,239		647			1			2,609			3

Total credit exposure		$174,939		$173,674		$173,352		$171,214		$168,873		$1,265			1	%		$6,066			4	%

¹Our 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 During first quarter 2017, student loans were renamed to “education” loans.

³ 2017 balances reflect changes in the treatment of variation margin on certain centrally cleared derivatives.

CREDIT-RELATED INFORMATION, CONTINUED

(in millions, except ratio data)


	AS OF															SEPT 30, 2017 CHANGE
	Sept 30, 2017			June 30, 2017			Mar 31, 2017			Dec 31, 2016			Sept 30, 2016			June 30, 2017						Sept 30, 2016
																$/bps			%			$/bps			%
NONPERFORMING ASSETS:
Commercial		$297			$376			$367			$322			$334			($79	)		(21	%)		($37	)		(11	%)
Commercial real estate		28			38			46			50			62			(10	)		(26	)		(34	)		(55	)
Leases		–			–			–			15			–			–			–			–			–

Total commercial		325			414			413			387			396			(89	)		(21	)		(71	)		(18	)
Residential mortgages		124			135			142			144			170			(11	)		(8	)		(46	)		(27	)
Home equity loans		76			81			89			98			105			(5	)		(6	)		(29	)		(28	)
Home equity lines of credit		236			235			238			243			249			1			–			(13	)		(5	)
Home equity loans serviced by others¹		26			27			29			32			32			(1	)		(4	)		(6	)		(19	)
Home equity lines of credit serviced by others¹		21			25			30			33			42			(4	)		(16	)		(21	)		(50	)
Automobile		66			55			52			50			55			11			20			11			20
Education²		38			35			38			38			38			3			9			–			–
Credit card		15			15			16			16			16			–			–			(1	)		(6	)
Other retail		5			3			3			4			4			2			67			1			25

Total retail		607			611			637			658			711			(4	)		(1	)		(104	)		(15	)

Nonperforming loans and leases		932			1,025			1,050			1,045			1,107			(93	)		(9	)		(175	)		(16	)

Memo: Accruing loans past due 90 days or more not included above		$30			$24			$26			$26			$24			$6			25			$6			25

Commercial		$–			$–			$–			$–			$–			$–			–	%		$–			–	%
Retail		37			37			45			49			49			–			–			(12	)		(24	)

Other nonperforming assets		37			37			45			49			49			–			–			(12	)		(24	)

Nonperforming assets		$969			$1,062			$1,095			$1,094			$1,156			($93	)		(9	%)		($187	)		(16	%)

NONPERFORMING ASSETS BY PRODUCT CATEGORY:
Commercial		$325			$414			$413			$387			$396			($89	)		(21	%)		($71	)		(18	%)
Retail		644			648			682			707			760			(4	)		(1	)		(116	)		(15	)

Nonperforming assets		$969			$1,062			$1,095			$1,094			$1,156			($93	)		(9	%)		($187	)		(16	%)

ASSET QUALITY RATIOS
Allowance for loan and lease losses to loans and leases		1.11	%		1.12	%		1.13	%		1.15	%		1.18	%		(1	) bps					(7	) bps
Allowance for loan and lease losses to nonperforming loans and leases		131.35			118.98			116.60			118.32			112.03			1,237	bps					1,932	bps
Nonperforming loans and leases to loans and leases		0.85			0.94			0.97			0.97			1.05			(9	) bps					(20	) bps
Nonperforming assets to total assets		0.64			0.70			0.73			0.73			0.79			(6	) bps					(15	) bps

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.

²During first quarter 2017, student loans were renamed “education” loans.

CREDIT-RELATED INFORMATION, CONTINUED

(in millions)


	QUARTERLY TRENDS																											FOR THE NINE MONTHS ENDED SEPT 30,
																3Q17 Change																		2017 Change
	3Q17			2Q17			1Q17			4Q16			3Q16			2Q17						3Q16						2017			2016			2016
																$			%			$			%									$			%
CHARGE-OFFS, RECOVERIES AND RELATED RATIOS
GROSS CHARGE-OFFS:
Commercial		$3			$24			$20			$19			$20			($21	)		(88	%)		($17	)		(85	%)		$47			$37			$10			27	%
Commercial real estate		9			–			4			1			10			9			100			(1	)		(10	)		13			13			–			–
Leases		–			–			–			6			3			–			–			(3	)		(100	)		–			3			(3	)		(100	)

Total commercial		12			24			24			26			33			(12	)		(50	)		(21	)		(64	)		60			53			7			13
Residential mortgages		3			3			3			6			4			–			–			(1	)		(25	)		9			15			(6	)		(40	)
Home equity loans		4			3			2			3			7			1			33			(3	)		(43	)		9			13			(4	)		(31	)
Home equity lines of credit		8			9			10			10			9			(1	)		(11	)		(1	)		(11	)		27			33			(6	)		(18	)
Home equity loans serviced by others¹		3			4			5			9			9			(1	)		(25	)		(6	)		(67	)		12			29			(17	)		(59	)
Home equity lines of credit serviced by others¹		1			1			3			2			3			–			–			(2	)		(67	)		5			10			(5	)		(50	)
Automobile		46			41			44			50			39			5			12			7			18			131			110			21			19
Education²		13			14			13			16			11			(1	)		(7	)		2			18			40			36			4			11
Credit card		15			15			16			15			14			–			–			1			7			46			43			3			7
Other retail		15			14			13			15			16			1			7			(1	)		(6	)		42			42			–			–

Total retail		108			104			109			126			112			4			4			(4	)		(4	)		321			331			(10	)		(3	)

Total gross charge-offs		$120			$128			$133			$152			$145			($8	)		(6	%)		($25	)		(17	%)		$381			$384			($3	)		(1	%)

GROSS RECOVERIES:
Commercial		$12			$7			$5			$8			$5			$5			71	%		$7			140	%		$24			$13			$11			85	%
Commercial real estate		–			3			–			2			9			(3	)		(100	)		(9	)		(100	)		3			10			(7	)		(70	)
Leases		–			–			–			–			–			–			–			–			–			–			–			–			–

Total commercial		12			10			5			10			14			2			20			(2	)		(14	)		27			23			4			17
Residential mortgages		2			2			1			2			2			–			–			–			–			5			7			(2	)		(29	)
Home equity loans		4			3			3			3			10			1			33			(6	)		(60	)		10			15			(5	)		(33	)
Home equity lines of credit		4			4			4			4			7			–			–			(3	)		(43	)		12			14			(2	)		(14	)
Home equity loans serviced by others¹		5			5			4			4			5			–			–			–			–			14			15			(1	)		(7	)
Home equity lines of credit serviced by others¹		2			2			2			1			2			–			–			–			–			6			5			1			20
Automobile		18			19			18			16			15			(1	)		(5	)		3			20			55			49			6			12
Education²		3			3			4			2			3			–			–			–			–			10			9			1			11
Credit card		2			2			2			2			2			–			–			–			–			6			6			–			–
Other retail		3			3			3			4			2			–			–			1			50			9			10			(1	)		(10	)

Total retail		43			43			41			38			48			–			–			(5	)		(10	)		127			130			(3	)		(2	)

Total gross recoveries		$55			$53			$46			$48			$62			$2			4	%		($7	)		(11	%)		$154			$153			$1			1	%

NET CHARGE-OFFS (RECOVERIES):
Commercial		($9	)		$17			$15			$11			$15			($26	)		(153	%)		($24	)		(160	%)		$23			$24			($1	)		(4	%)
Commercial real estate		9			(3	)		4			(1	)		1			12			NM			8			NM			10			3			7			233
Leases		–			–			–			6			3			–			–			(3	)		(100	)		–			3			(3	)		(100	)

Total commercial		–			14			19			16			19			(14	)		(100	)		(19	)		(100	)		33			30			3			10
Residential mortgages		1			1			2			4			2			–			–			(1	)		(50	)		4			8			(4	)		(50	)
Home equity loans		–			–			(1	)		–			(3	)		–			–			3			100			(1	)		(2	)		1			50
Home equity lines of credit		4			5			6			6			2			(1	)		(20	)		2			100			15			19			(4	)		(21	)
Home equity loans serviced by others¹		(2	)		(1	)		1			5			4			(1	)		(100	)		(6	)		(150	)		(2	)		14			(16	)		(114	)
Home equity lines of credit serviced by others¹		(1	)		(1	)		1			1			1			–			–			(2	)		(200	)		(1	)		5			(6	)		(120	)
Automobile		28			22			26			34			24			6			27			4			17			76			61			15			25
Education²		10			11			9			14			8			(1	)		(9	)		2			25			30			27			3			11
Credit card		13			13			14			13			12			–			–			1			8			40			37			3			8
Other retail		12			11			10			11			14			1			9			(2	)		(14	)		33			32			1			3

Total retail		65			61			68			88			64			4			7			1			2			194			201			(7	)		(3	)

Total net charge-offs (recoveries)		$65			$75			$87			$104			$83			($10	)		(13	%)		($18	)		(22	%)		$227			$231			($4	)		(2	%)

¹Our 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 During first quarter 2017, student loans were renamed “education” loans.

CREDIT-RELATED INFORMATION, CONTINUED

(in millions, except rates)


	QUARTERLY TRENDS																											FOR THE NINE MONTHS ENDED SEPT 30,
																3Q17 Change																		2017 Change
	3Q17			2Q17			1Q17			4Q16			3Q16			2Q17						3Q16						2017			2016			2016
																$/bps			%			$/bps			%									$/bps			%
ANNUALIZED NET CHARGE-OFF (RECOVERY) RATES

Commercial		(0.09	%)		0.17	%		0.17	%		0.13	%		0.16	%		(26	) bps					(25	) bps					0.08	%		0.09	%		(1	) bps

Commercial real estate		0.33			(0.10	)		0.14			(0.08	)		0.05			43	bps					28	bps					0.12			0.05			7	bps

Leases		–			–			–			0.65			0.30			–	bps					(30	) bps					–			0.10			(10	) bps

Total commercial		0.01			0.10			0.15			0.13			0.15			(9	) bps					(14	) bps					0.09			0.08			1	bps

Residential mortgages		0.03			0.02			0.06			0.10			0.05			1	bps					(2	) bps					0.03			0.07			(4	) bps

Home equity loans		(0.05	)		0.07			(0.21	)		(0.02	)		(0.36	)		(12	) bps					31	bps					(0.07	)		(0.09	)		2	bps

Home equity lines of credit		0.12			0.16			0.17			0.19			0.07			(4	) bps					5	bps					0.15			0.17			(2	) bps

Home equity loans serviced by others¹		(0.99	)		(0.58	)		0.37			2.36			1.88			(41	) bps					(287	) bps					(0.37	)		2.13			(250	) bps

Home equity lines of credit serviced by others¹		(2.51	)		(1.87	)		2.25			2.34			1.84			(64	) bps					(435	) bps					(0.59	)		2.10			(269	) bps

Automobile		0.83			0.65			0.77			0.96			0.69			18	bps					14	bps					0.75			0.59			16	bps

Education²		0.48			0.56			0.55			0.86			0.59			(8	) bps					(11	) bps					0.53			0.68			(15	) bps

Credit card		2.93			3.20			3.36			3.15			2.84			(27	) bps					9	bps					3.16			3.03			13	bps

Other retail		2.13			2.29			2.30			2.61			3.74			(16	) bps					(161	) bps					2.23			3.63			(140	) bps

Total retail		0.44			0.44			0.49			0.63			0.47			–	bps					(3	) bps					0.46			0.50			(4	) bps

Total loans and leases		0.24	%		0.28	%		0.33	%		0.39	%		0.32	%		(4	) bps					(8	) bps					0.28	%		0.30	%		(2	) bps

Memo: Average loans:

Commercial		$37,448			$37,846			$37,517			$36,965			$35,986			($398	)		(1	%)		$1,462			4	%		37,603			$35,212			$2,391			7	%

Commercial real estate		11,401			11,086			10,821			10,294			9,905			315			3			1,496			15			11,105			9,555			1,550			16

Leases		3,302			3,557			3,696			3,773			3,813			(255	)		(7	)		(511	)		(13	)		3,517			3,864			(347	)		(9	)

Total commercial		52,151			52,489			52,034			51,032			49,704			(338	)		(1	)		2,447			5			52,225			48,631			3,594			7

Residential mortgages		16,323			15,646			15,285			14,896			14,155			677			4			2,168			15			15,755			13,705			2,050			15

Home equity loans		1,547			1,668			1,793			1,934			2,088			(121	)		(7	)		(541	)		(26	)		1,668			2,263			(595	)		(26	)

Home equity lines of credit		13,608			13,765			13,955			14,188			14,314			(157	)		(1	)		(706	)		(5	)		13,775			14,474			(699	)		(5	)

Home equity loans serviced by others¹		618			668			719			774			837			(50	)		(7	)		(219	)		(26	)		668			898			(230	)		(26	)

Home equity lines of credit serviced by others¹		173			188			207			228			256			(15	)		(8	)		(83	)		(32	)		189			298			(109	)		(37	)

Automobile		13,349			13,574			13,772			13,994			14,053			(225	)		(2	)		(704	)		(5	)		13,563			13,940			(377	)		(3	)

Education²		7,814			7,490			6,837			6,215			5,750			324			4			2,064			36			7,384			5,338			2,046			38

Credit card		1,738			1,693			1,665			1,654			1,623			45			3			115			7			1,699			1,608			91			6

Other retail		2,163			1,959			1,798			1,619			1,256			204			10			907			72			1,976			1,177			799			68

Total retail		57,333			56,651			56,031			55,502			54,332			682			1			3,001			6			56,677			53,701			2,976			6

Total loans and leases		$109,484			$109,140			$108,065			$106,534			$104,036			$344			–	%		$5,448			5	%		$108,902			$102,332			$6,570			6	%

¹Our 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 During first quarter 2017, student loans were renamed “education” loans.

CREDIT-RELATED INFORMATION, CONTINUED

(in millions)


	QUARTERLY TRENDS																								FOR THE NINE MONTHS ENDED SEPT 30,
													3Q17 Change																2017 Change
	3Q17		2Q17			1Q17		4Q16		3Q16			2Q17						3Q16						2017		2016		2016
													$			%			$			%							$			%
SUMMARY OF CHANGES IN THE COMPONENTS OF THE ALLOWANCE FOR CREDIT LOSSES
Allowance for loan and lease losses - beginning		$1,219		$1,224			$1,236		$1,240		$1,246			($5	)		–	%		($27	)		(2	%)		$1,236		$1,216		$20			2	%
Charge-offs:
Commercial		12		24			24		26		33			(12	)		(50	)		(21	)		(64	)		60		53		7			13
Retail		108		104			109		126		112			4			4			(4	)		(4	)		321		331		(10	)		(3	)

Total charge-offs		120		128			133		152		145			(8	)		(6	)		(25	)		(17	)		381		384		(3	)		(1	)
Recoveries:
Commercial		12		10			5		10		14			2			20			(2	)		(14	)		27		23		4			17
Retail		43		43			41		38		48			–			–			(5	)		(10	)		127		130		(3	)		(2	)

Total recoveries		55		53			46		48		62			2			4			(7	)		(11	)		154		153		1			1

Net charge-offs		65		75			87		104		83			(10	)		(13	)		(18	)		(22	)		227		231		(4	)		(2	)
Provision for loan and lease losses:
Commercial		24		(25	)		9		24		(2	)		49			196			26			NM			8		89		(81	)		(91	)
Retail		46		95			66		76		79			(49	)		(52	)		(33	)		(42	)		207		166		41			25

Total provision for loan and lease losses		70		70			75		100		77			–			–			(7	)		(9	)		215		255		(40	)		(16	)

Allowance for loan and lease losses - ending		$1,224		$1,219			$1,224		$1,236		$1,240			$5			–	%		($16	)		(1	%)		$1,224		$1,240		($16	)		(1	%)

Reserve for unfunded lending commitments - beginning		$93		$93			$72		$70		$61			$–			–	%		$32			52	%		$72		$58		$14			24	%
Provision for unfunded lending commitments		2		–			21		2		9			2			100			(7	)		(78	)		23		12		11			92

Reserve for unfunded lending commitments - ending		$95		$93			$93		$72		$70			$2			2	%		$25			36	%		$95		$70		$25			36	%

Total allowance for credit losses - ending		$1,319		$1,312			$1,317		$1,308		$1,310			$7			1	%		$9			1	%		$1,319		$1,310		$9			1	%

CAPITAL AND RATIOS

(in millions, except ratio data)


	AS OF																		FOR THE NINE MONTHS ENDED SEPT 30,
											SEPT 30, 2017 CHANGE												2017 Change
	Sept 30, 2017		June 30, 2017		Mar 31, 2017		Dec 31, 2016		Sept 30, 2016		June 30, 2017				Sept 30, 2016				2017		2016		2016
											$		%		$		%						$		%
CAPITAL RATIOS AND COMPONENTS (PRELIMINARY)¹:
CET1 capital		$14,093		$14,057		$13,941		$13,822		$13,763		$36		–%		$330		2%
Tier 1 capital		14,340		14,304		14,188		14,069		14,010		36		–		330		2
Total capital		17,560		17,586		17,475		17,347		17,290		(26)		–		270		2
Risk-weighted assets		127,203		125,774		124,881		123,857		121,612		1,429		1		5,591		5
Adjusted average assets²		144,500		144,404		143,430		141,677		138,425		96		–		6,075		4
CET1 capital ratio		11.1%		11.2%		11.2%		11.2%		11.3%
Tier 1 capital ratio		11.3		11.4		11.4		11.4		11.5
Total capital ratio		13.8		14.0		14.0		14.0		14.2
Tier 1 leverage ratio		9.9		9.9		9.9		9.9		10.1
Pro forma Basel III fully phased-in common equity tier 1 capital ratio		11.1		11.2		11.1		11.1		11.3
TANGIBLE COMMON EQUITY (PERIOD-END):
Common stockholders’ equity		$19,862		$19,817		$19,600		$19,499		$19,934		$45		–%		($72)		–%		$19,862		$19,934		($72)		–%
Less: Goodwill		6,887		6,887		6,876		6,876		6,876		–		–		11		–		6,887		6,876		11		–
Less: Other intangible assets		2		2		–		1		1		–		–		1		100		2		1		1		100
Add: Deferred tax liabilities³		539		535		534		532		519		4		1		20		4		539		519		20		4

Total tangible common equity		$13,512		$13,463		$13,258		$13,154		$13,576		$49		–%		($64)		–%		$13,512		$13,576		($64)		–%

TANGIBLE COMMON EQUITY (AVERAGE):
Common stockholders’ equity		$19,728		$19,659		$19,460		$19,645		$19,810		$69		–%		($82)		–%		$19,617		$19,715		($98)		–%
Less: Goodwill		6,887		6,882		6,876		6,876		6,876		5		–		11		–		6,882		6,876		6		–
Less: Other intangible assets		2		2		–		1		1		–		–		1		100		2		2		–		–
Add: Deferred tax liabilities³		537		534		531		523		509		3		1		28		6		535		495		40		8

Total tangible common equity		$13,376		$13,309		$13,115		$13,291		$13,442		$67		1%		($66)		–%		$13,268		$13,332		($64)		–%

INTANGIBLE ASSETS (PERIOD-END):
Goodwill		$6,887		$6,887		$6,876		$6,876		$6,876		$–		–%		$11		–%		$6,887		$6,876		$11		–%
Other intangible assets		2		2		–		1		1		–		–		1		100		2		1		1		100

Total intangible assets		$6,889		$6,889		$6,876		$6,877		$6,877		$–		—%		$12		–%		$6,889		$6,877		$12		–%

¹U.S. 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 U.S. Basel III standardized transitional approach. U.S. Basel III ratios assume that certain definitions impacting qualifying U.S.Basel III capital will phase in through 2019.

² 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.

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

KEY PERFORMANCE METRICS, NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

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

Key Performance Metrics:

Our management team uses key performance metrics (KPMs) to gauge our performance and progress over time in achieving our strategic and operational goals and also in comparing our performance against our peers. We have established the following financial targets, in addition to others, as KPMs, which are utilized by our management in measuring our progress against financial goals and as a tool in helping assess performance for compensation purposes. These KPMs can largely be found in our periodic reports which are filed with the Securities and Exchange Commission, and are supplemented from time to time with additional information in connection with our quarterly earnings releases.

Our key performance metrics include:

Return on average tangible common equity (ROTCE);

Return on average total tangible assets (ROTA);

Efficiency ratio;

Operating leverage; and

Common equity tier 1 capital ratio (U.S. Basel III Standardized fully phased-in basis).

In establishing goals for these KPMs, we determined that they would be measured on a management-reporting basis, or an operating basis, which we refer to externally as “Adjusted” or “Underlying” results. We believe that these “Adjusted” or “Underlying” results provide the best representation of our financial progress toward these goals as they exclude items that our management does not consider indicative of our on-going financial performance. KPMs that contain “Adjusted” or “Underlying” results are considered non-GAAP financial measures.

Non-GAAP Financial Measures:

This document contains non-GAAP financial measures. The following tables present reconciliations of our non-GAAP measures. These reconciliations exclude “Adjusted” or “Underlying” items, which are included, where applicable, in the financial results presented in accordance with GAAP. “Adjusted” or “Underlying” results, which are non-GAAP measures, exclude certain items, as applicable, that may occur in a reporting period which management does not consider indicative of on-going financial performance.

The non-GAAP measures presented in the following tables include reconciliations to the most directly comparable GAAP measures and are: “noninterest income”, “total revenue”, “noninterest expense”, “pre-provision profit”, “total credit-related costs”, “income before income tax expense”, “income tax expense”, “effective income tax rate”, “net income”, “net income available to common stockholders”, “other income”, “salaries and employee benefits”, “outside services”, “amortization of software expense”, “other operating expense”, “net income per average common share”, “return on average common equity” and “return on average total assets”.

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 our “Adjusted” or “Underlying” results in any period do not reflect our operational performance in that period and, accordingly, it is useful to consider our GAAP results and our “Adjusted” or “Underlying” results together. We believe this presentation also increases comparability of period-to-period results.

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.

KEY PERFORMANCE METRICS, NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS (CONTINUED)

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


		QUARTERLY TRENDS																							FOR THE NINE MONTHS ENDED SEPT 30,
													3Q17 Change																	2017 Change
		3Q17		2Q17		1Q17		4Q16		3Q16			2Q17						3Q16						2017		2016			2016
													$			%			$			%								$			%
Noninterest income, Adjusted:
Noninterest income (GAAP)			$381		$370		$379		$377		$435			$11			3	%		($54	)		(12	%)		$1,130		$1,120			$10			1	%
Less: Notable items			–		–		–		–		67			–			–			(67	)		(100	)		–		67			(67	)		(100	)

Noninterest income, Adjusted (non-GAAP)			$381		$370		$379		$377		$368			$11			3	%		$13			4	%		$1,130		$1,053			$77			7	%

Total revenue, Adjusted:
Total revenue (GAAP)	A		$1,443		$1,396		$1,384		$1,363		$1,380			$47			3	%		$63			5	%		$4,223		$3,892			$331			9	%
Less: Notable items			–		–		–		–		67			–			–			(67	)		(100	)		–		67			(67	)		(100	)

Total revenue, Adjusted (non-GAAP)	B		$1,443		$1,396		$1,384		$1,363		$1,313			$47			3	%		$130			10	%		$4,223		$3,825			$398			10	%

Noninterest expense, Adjusted:
Noninterest expense (GAAP)	C		$858		$864		$854		$847		$867			($6	)		(1	%)		($9	)		(1	%)		$2,576		$2,505			$71			3	%
Less: Notable items			–		–		–		–		36			–			–			(36	)		(100	)		–		36			(36	)		(100	)

Noninterest expense, Adjusted (non-GAAP)	D		$858		$864		$854		$847		$831			($6	)		(1	%)		$27			3	%		$2,576		$2,469			$107			4	%

Pre-provision profit:
Total revenue (GAAP)	A		$1,443		$1,396		$1,384		$1,363		$1,380			$47			3	%		$63			5	%		$4,223		$3,892			$331			9	%
Less: Noninterest expense (GAAP)	C		858		864		854		847		867			(6	)		(1	)		(9	)		(1	)		2,576		2,505			71			3

Pre-provision profit (GAAP)			$585		$532		$530		$516		$513			$53			10	%		$72			14	%		$1,647		$1,387			$260			19	%

Pre-provision profit, Adjusted:
Total revenue, Adjusted (non-GAAP)	B		$1,443		$1,396		$1,384		$1,363		$1,313			$47			3	%		$130			10	%		$4,223		$3,825			$398			10	%
Less: Noninterest expense, Adjusted (non-GAAP)	D		858		864		854		847		831			(6	)		(1	)		27			3			2,576		2,469			107			4

Pre-provision profit, Adjusted (non-GAAP)			$585		$532		$530		$516		$482			$53			10	%		$103			21	%		$1,647		$1,356			$291			21	%

Income before income tax expense, Adjusted:
Income before income tax expense (GAAP)			$513		$462		$434		$414		$427			$51			11	%		$86			20	%		$1,409		$1,120			$289			26	%
Less: Income before income tax expense (benefit) related to notable items			–		–		–		–		31			–			–			(31	)		(100	)		–		31			(31	)		(100	)

Income before income tax expense, Adjusted (non-GAAP)			$513		$462		$434		$414		$396			$51			11	%		$117			30	%		$1,409		$1,089			$320			29	%

Income tax expense, Adjusted:
Income tax expense (GAAP)			$165		$144		$114		$132		$130			$21			15	%		$35			27	%		$423		$357			$66			18	%
Less: Income tax expense (benefit) related to notable items			–		–		–		–		12			–			–			(12	)		(100	)		–		12			(12	)		(100	)

Income tax expense, Adjusted (non-GAAP)			$165		$144		$114		$132		$118			$21			15	%		$47			40	%		$423		$345			$78			23	%

Net income, Adjusted:
Net income (GAAP)	E		$348		$318		$320		$282		$297			$30			9	%		$51			17	%		$986		$763			$223			29	%
Add: Notable items, net of income tax expense (benefit)			–		–		–		–		(19	)		–			–			19			100			–		(19	)		19			100

Net income, Adjusted (non-GAAP)	F		$348		$318		$320		$282		$278			$30			9	%		$70			25	%		$986		$744			$242			33	%

Net income available to common stockholders, Adjusted:
Net income available to common stockholders (GAAP)	G		$341		$318		$313		$282		$290			$23			7	%		$51			18	%		$972		$749			$223			30	%
Add: Notable items, net of income tax expense (benefit)			–		–		–		–		(19	)		–			–			19			100			–		(19	)		19			100

Net income available to common stockholders, Adjusted (non-GAAP)	H		$341		$318		$313		$282		$271			$23			7	%		$70			26	%		$972		$730			$242			33	%

KEY PERFORMANCE METRICS, NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS (CONTINUED)

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


		QUARTERLY TRENDS																											FOR THE NINE MONTHS ENDED SEPT 30,
																	3Q17 Change																		2017 Change
		3Q17			2Q17			1Q17			4Q16			3Q16			2Q17						3Q16						2017			2016			2016
																	$/bps			%			$/bps			%									$/bps			%
Operating leverage:
Total revenue (GAAP)	A		$1,443			$1,396			$1,384			$1,363			$1,380			$47			3.37	%		$63			4.57	%		$4,223			$3,892			$331			8.50	%
Less: Noninterest expense (GAAP)	C		858			864			854			847			867			(6)			(0.69)			(9)			(1.04)			2,576			2,505			71			2.83

Operating leverage																					4.06	%					5.61	%											5.67	%

Operating leverage, Adjusted:
Total revenue, Adjusted (non-GAAP)	B		$1,443			$1,396			$1,384			$1,363			$1,313			$47			3.37	%		$130			9.90	%		$4,223			$3,825			$398			10.41	%
Less: Noninterest expense, Adjusted (non-GAAP)	D		858			864			854			847			831			(6)			(0.69)			27			3.25			2,576			2,469			107			4.33

Operating leverage, Adjusted (non-GAAP)																					4.06	%					6.65	%											6.08	%

Efficiency ratio and efficiency ratio, Adjusted:
Efficiency ratio	C/A		59.41	%		61.94	%		61.68	%		62.18	%		62.88	%		(253)	bps					(347) bps						60.99	%		64.36	%		(337)	bps
Efficiency ratio, Adjusted (non-GAAP)	D/B		59.41			61.94			61.68			62.18			63.31			(253)	bps					(390) bps						60.99			64.54			(355)	bps
Return on average common equity and return on average common equity, Adjusted:
Average common equity (GAAP)	I		$19,728			$19,659			$19,460			$19,645			$19,810			$69			–	%		($82)			–	%		$19,617			$19,715			($98)			–	%
Return on average common equity	G/I		6.87	%		6.48	%		6.52	%		5.70	%		5.82	%		39	bps					105	bps					6.63	%		5.08	%		155	bps
Return on average common equity, Adjusted (non-GAAP)	H/I		6.87			6.48			6.52			5.70			5.44			39	bps					143	bps					6.63			4.95			168	bps
Return on average tangible common equity and return on average tangible common equity, Adjusted:
Average common equity (GAAP)	I		$19,728			$19,659			$19,460			$19,645			$19,810			$69			–	%		($82)			–	%		$19,617			$19,715			($98)			–	%
Less: Average goodwill (GAAP)			6,887			6,882			6,876			6,876			6,876			5			–			11			–			6,882			6,876			6			–
Less: Average other intangibles (GAAP)			2			2			–			1			1			–			–			1			100			2			2			–			–
Add: Average deferred tax liabilities related to goodwill (GAAP)			537			534			531			523			509			3			1			28			6			535			495			40			8

Average tangible common equity	J		$13,376			$13,309			$13,115			$13,291			$13,442			$67			1	%		($66)			–	%		$13,268			$13,332			($64)			–	%

Return on average tangible common equity	G/J		10.13	%		9.57	%		9.68	%		8.43	%		8.58	%		56	bps					155	bps					9.80	%		7.51	%		229	bps
Return on average tangible common equity, Adjusted (non-GAAP)	H/J		10.13			9.57			9.68			8.43			8.02			56	bps					211	bps					9.80			7.32			248	bps
Return on average total assets and return on average total assets, Adjusted:
Average total assets (GAAP)	K		$150,012			$149,878			$148,786			$147,315			$144,399			$134			–	%		$5,613			4	%		$149,563			$141,795			$7,768			5	%
Return on average total assets	E/K		0.92	%		0.85	%		0.87	%		0.76	%		0.82	%		7	bps					10	bps					0.88	%		0.72	%		16	bps
Return on average total assets, Adjusted (non-GAAP)	F/K		0.92			0.85			0.87			0.76			0.77			7	bps					15	bps					0.88			0.70			18	bps
Return on average total tangible assets and return on average total tangible assets, Adjusted:
Average total assets (GAAP)	K		$150,012			$149,878			$148,786			$147,315			$144,399			$134			–	%		$5,613			4	%		$149,563			$141,795			$7,768			5	%
Less: Average goodwill (GAAP)			6,887			6,882			6,876			6,876			6,876			5			–			11			–			6,882			6,876			6			–
Less: Average other intangibles (GAAP)			2			2			–			1			1			–			–			1			100			2			2			–			–
Add: Average deferred tax liabilities related to goodwill (GAAP)			537			534			531			523			509			3			1			28			6			535			495			40			8

Average tangible assets	L		$143,660			$143,528			$142,441			$140,961			$138,031			$132			–	%		$5,629			4	%		$143,214			$135,412			$7,802			6	%

Return on average total tangible assets	E/L		0.96	%		0.89	%		0.91	%		0.79	%		0.86	%		7	bps					10	bps					0.92	%		0.75	%		17	bps
Return on average total tangible assets, Adjusted (non-GAAP)	F/L		0.96			0.89			0.91			0.79			0.80			7	bps					16	bps					0.92			0.73			19	bps

KEY PERFORMANCE METRICS, NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS (CONTINUED)

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


		QUARTERLY TRENDS																											FOR THE NINE MONTHS ENDED SEPT 30,
																	3Q17 Change																2017 Change
		3Q17			2Q17			1Q17			4Q16			3Q16			2Q17						3Q16						2017		2016		2016
																	$/bps			%			$/bps			%							$/bps			%
Tangible book value per common share:
Common shares - at end of period (GAAP)	M		499,505,285			505,880,851			509,515,646			511,954,871			518,148,345			(6,375,566	)		(1	%)		(18,643,060	)		(4	%)		499,505,285		518,148,345		(18,643,060	)		(4	%)
Common stockholders’ equity (GAAP)			$19,862			$19,817			$19,600			$19,499			$19,934			$45			–			($72	)		–			$19,862		$19,934		($72	)		–
Less: Goodwill (GAAP)			6,887			6,887			6,876			6,876			6,876			–			–			11			–			6,887		6,876		11			–
Less: Other intangible assets (GAAP)			2			2			–			1			1			–			–			1			100			2		1		1			100
Add: Deferred tax liabilities related to goodwill (GAAP)			539			535			534			532			519			4			1			20			4			539		519		20			4

Tangible common equity	N		$13,512			$13,463			$13,258			$13,154			$13,576			$49			–	%		($64	)		–	%		$13,512		$13,576		($64	)		–	%

Tangible book value per common share	N/M		$27.05			$26.61			$26.02			$25.69			$26.20			$0.44			2	%		$0.85			3	%		$27.05		$26.20		$0.85			3	%
Net income per average common share - basic and diluted, Adjusted:
Average common shares outstanding - basic (GAAP)	O		500,861,076			506,371,846			509,451,450			512,015,920			519,458,976			(5,510,770	)		(1	%)		(18,597,900	)		(4	%)		505,529,991		525,477,273		(19,947,282	)		(4	%)
Average common shares outstanding - diluted (GAAP)	P		502,157,384			507,414,122			511,348,200			513,897,085			521,122,466			(5,256,738	)		(1	)		(18,965,082	)		(4	)		507,062,805		527,261,384		(20,198,579	)		(4	)
Net income available to common stockholders (GAAP)	G		$341			$318			$313			$282			$290			$23			7			$51			18			$972		$749		$223			30
Net income per average common share - basic (GAAP)	G/O		0.68			0.63			0.61			0.55			0.56			0.05			8			0.12			21			1.92		1.43		0.49			34
Net income per average common share - diluted (GAAP)	G/P		0.68			0.63			0.61			0.55			0.56			0.05			8			0.12			21			1.92		1.42		0.50			35
Net income available to common stockholders, Adjusted (non-GAAP)	H		341			318			313			282			271			23			7			70			26			972		730		242			33
Net income per average common share - basic, Adjusted (non-GAAP)	H/O		0.68			0.63			0.61			0.55			0.52			0.05			8			0.16			31			1.92		1.39		0.53			38
Net income per average common share - diluted, Adjusted (non-GAAP)	H/P		0.68			0.63			0.61			0.55			0.52			0.05			8			0.16			31			1.92		1.39		0.53			38
Pro forma U.S. Basel III fully phased-in common equity tier 1 capital ratio¹:
Common equity tier 1 capital (regulatory)			$14,093			$14,057			$13,941			$13,822			$13,763
Less: Change in DTA and other threshold deductions (GAAP)			–			–			–			–			–

Pro forma Basel III fully phased-in common equity tier 1 capital	Q		$14,093			$14,057			$13,941			$13,822			$13,763

Risk-weighted assets (regulatory general risk weight approach)			$127,203			$125,774			$124,881			$123,857			$121,612
Add: Net change in credit and other risk-weighted assets (regulatory)			251			249			247			244			228

Pro forma Basel III standardized approach risk-weighted assets	R		$127,454			$126,023			$125,128			$124,101			$121,840

Pro forma Basel III fully phased-in common equity tier 1 capital ratio¹	Q/R		11.1	%		11.2	%		11.1	%		11.1	%		11.3	%

¹U.S. Basel III ratios assume certain definitions impacting qualifying U.S. 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.

KEY PERFORMANCE METRICS, NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS (CONTINUED)

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


	QUARTERLY TRENDS																						FOR THE NINE MONTHS ENDED SEPT 30,
											3Q17 Change																2017 Change
	3Q17		2Q17		1Q17		4Q16		3Q16		2Q17						3Q16						2017		2016		2016
											$			%			$			%							$			%
Other income, Adjusted
Other income (GAAP)		$18		$2		$24		$25		$87		$16			NM			($69	)		(79	%)		$44		$122		($78	)		(64	%)
Less: Notable items		–		–		–		–		67		–			–			(67	)		(100	)		–		67		(67	)		(100	)

Other income, Adjusted (non-GAAP)		$18		$2		$24		$25		$20		$16			NM			($2	)		(10	%)		$44		$55		($11	)		(20	%)

Salaries and employee benefits, Adjusted:
Salaries and employee benefits (GAAP)		$436		$432		$444		$420		$432		$4			1	%		$4			1	%		$1,312		$1,289		$23			2	%
Less: Notable items		–		–		–		–		11		–			–			(11	)		(100	)		–		11		(11	)		(100	)

Salaries and employee benefits, Adjusted (non-GAAP)		$436		$432		$444		$420		$421		$4			1	%		$15			4	%		$1,312		$1,278		$34			3	%

Outside services, Adjusted:
Outside services (GAAP)		$99		$96		$91		$98		$102		$3			3	%		($3	)		(3	%)		$286		$279		$7			3	%
Less: Notable items		–		–		–		–		8		–			–			(8	)		(100	)		–		8		(8	)		(100	)

Outside services, Adjusted (non-GAAP)		$99		$96		$91		$98		$94		$3			3	%		$5			5	%		$286		$271		$15			6	%

Occupancy, Adjusted:
Occupancy (GAAP)		$78		$79		$82		$77		$78		($1	)		(1	%)		$–			–	%		$239		$230		$9			4	%
Less: Notable items		–		–		–		–		–		–			–			–			–			–		–		–			–

Occupancy, Adjusted (non-GAAP)		$78		$79		$82		$77		$78		($1	)		(1	%)		$–			–	%		$239		$230		$9			4	%

Equipment expense, Adjusted:
Equipment expense (GAAP)		$65		$64		$67		$69		$65		$1			2	%		$–			–	%		$196		$194		$2			1	%
Less: Notable items		–		–		–		–		–		–			–			–			–			–		–		–			–

Equipment expense, Adjusted (non-GAAP)		$65		$64		$67		$69		$65		$1			2	%		$–			–	%		$196		$194		$2			1	%

Amortization of software, Adjusted:
Amortization of software (GAAP)		$45		$45		$44		$44		$46		$–			–	%		($1	)		(2	%)		$134		$126		$8			6	%
Less: Notable items		–		–		–		–		3		–			–			(3	)		(100	)		–		3		(3	)		(100	)

Amortization of software, Adjusted (non-GAAP)		$45		$45		$44		$44		$43		$–			–	%		$2			5	%		$134		$123		$11			9	%

Other operating expense, Adjusted:
Other operating expense (GAAP)		$135		$148		$126		$139		$144		($13	)		(9	%)		($9	)		(6	%)		$409		$387		$22			6	%
Less: Notable items		–		–		–		–		14		–			–			(14	)		(100	)		–		14		(14	)		(100	)

Other operating expense, Adjusted (non-GAAP)		$135		$148		$126		$139		$130		($13	)		(9	%)		$5			4	%		$409		$373		$36			10	%

KEY PERFORMANCE METRICS, NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS - SEGMENTS

(in millions, except ratio data)


		THIRD QUARTER 2017											SECOND QUARTER 2017
		Consumer Banking			Commercial Banking			Other		Consolidated			Consumer Banking			Commercial Banking			Other		Consolidated
Net income available to common stockholders:
Net income (GAAP)	A		$122			$201			$25		$348			$118			$187			$13		$318
Less: Preferred stock dividends			–			–			7		7			–			–			–		–

Net income available to common stockholders	B		$122			$201			$18		$341			$118			$187			$13		$318

Return on average tangible common equity:
Average common equity (GAAP)			$5,565			$5,685			$8,478		$19,728			$5,519			$5,617			$8,523		$19,659
Less: Average goodwill (GAAP)			–			–			6,887		6,887			–			–			6,882		6,882
Average other intangibles (GAAP)			–			–			2		2			–			–			2		2
Add: Average deferred tax liabilities related to goodwill (GAAP)			–			–			537		537			–			–			534		534

Average tangible common equity	C		$5,565			$5,685			$2,126		$13,376			$5,519			$5,617			$2,173		$13,309

Return on average tangible common equity	B/C		8.72	%		14.06	%		NM		10.13	%		8.57	%		13.37	%		NM		9.57	%
Return on average total tangible assets:
Average total assets (GAAP)			$60,012			$49,833			$40,167		$150,012			$59,244			$49,731			$40,903		$149,878
Less: Average goodwill (GAAP)			–			–			6,887		6,887			–			–			6,882		6,882
Average other intangibles (GAAP)			–			–			2		2			–			–			2		2
Add: Average deferred tax liabilities related to goodwill (GAAP)			–			–			537		537			–			–			534		534

Average tangible assets	D		$60,012			$49,833			$33,815		$143,660			$59,244			$49,731			$34,553		$143,528

Return on average total tangible assets	A/D		0.81	%		1.60	%		NM		0.96	%		0.80	%		1.51	%		NM		0.89	%
Efficiency ratio:
Noninterest expense (GAAP)	E		$648			$195			$15		$858			$644			$192			$28		$864
Net interest income (GAAP)			674			354			34		1,062			657			344			25		1,026
Noninterest income (GAAP)			227			136			18		381			229			130			11		370

Total revenue (GAAP)	F		$901			$490			$52		$1,443			$886			$474			$36		$1,396

Efficiency ratio	E/F		71.88	%		39.39	%		NM		59.41	%		72.64	%		40.48	%		NM		61.94	%

KEY PERFORMANCE METRICS, NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS - SEGMENTS (CONTINUED)

(in millions, except ratio data)


		FIRST QUARTER 2017											FOURTH QUARTER 2016
		Consumer Banking			Commercial Banking			Other		Consolidated			Consumer Banking			Commercial Banking			Other		Consolidated
Net income available to common stockholders:
Net income (GAAP)	A		$95			$180			$45		$320			$92			$172			$18		$282
Less: Preferred stock dividends			–			–			7		7			–			–			–		–

Net income available to common stockholders	B		$95			$180			$38		$313			$92			$172			$18		$282

Return on average tangible common equity:
Average common equity (GAAP)			$5,460			$5,528			$8,472		$19,460			$5,275			$5,278			$9,092		$19,645
Less: Average goodwill (GAAP)			–			–			6,876		6,876			–			–			6,876		6,876
Average other intangibles (GAAP)			–			–			–		–			–			–			1		1
Add: Average deferred tax liabilities related to goodwill (GAAP)			–			–			531		531			–			–			523		523

Average tangible common equity	C		$5,460			$5,528			$2,127		$13,115			$5,275			$5,278			$2,738		$13,291

Return on average tangible common equity	B/C		7.06	%		13.18	%		NM		9.68	%		6.97	%		12.94	%		NM		8.43	%
Return on average total tangible assets:
Average total assets (GAAP)			$58,660			$49,243			$40,883		$148,786			$58,066			$48,024			$41,225		$147,315
Less: Average goodwill (GAAP)			–			–			6,876		6,876			–			–			6,876		6,876
Average other intangibles (GAAP)			–			–			–		–			–			–			1		1
Add: Average deferred tax liabilities related to goodwill (GAAP)			–			–			531		531			–			–			523		523

Average tangible assets	D		$58,660			$49,243			$34,538		$142,441			$58,066			$48,024			$34,871		$140,961

Return on average total tangible assets	A/D		0.66	%		1.48	%		NM		0.91	%		0.63	%		1.42	%		NM		0.79	%
Efficiency ratio:
Noninterest expense (GAAP)	E		$647			$190			$17		$854			$649			$187			$11		$847
Net interest income (GAAP)			638			346			21		1,005			639			347			–		986
Noninterest income (GAAP)			220			134			25		379			227			122			28		377

Total revenue (GAAP)	F		$858			$480			$46		$1,384			$866			$469			$28		$1,363

Efficiency ratio	E/F		75.41	%		39.80	%		NM		61.68	%		74.90	%		39.83	%		NM		62.18	%

KEY PERFORMANCE METRICS, NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS - SEGMENTS (CONTINUED)

(in millions, except ratio data)


		THIRD QUARTER 2016
		Consumer Banking			Commercial Banking			Other		Consolidated
Net income available to common stockholders:
Net income (GAAP)	A		$92			$162			$43		$297
Less: Preferred stock dividends			–			–			7		7

Net income available to common stockholders	B		$92			$162			$36		$290

Return on average tangible common equity:
Average common equity (GAAP)			$5,190			$5,172			$9,448		$19,810
Less: Average goodwill (GAAP)			–			–			6,876		6,876
Average other intangibles (GAAP)			–			–			1		1
Add: Average deferred tax liabilities related to goodwill (GAAP)			–			–			509		509

Average tangible common equity	C		$5,190			$5,172			$3,080		$13,442

Return on average tangible common equity	B/C		7.04	%		12.50	%		NM		8.58	%
Return on average total tangible assets:
Average total assets (GAAP)			$56,689			$47,902			$39,808		$144,399
Less: Average goodwill (GAAP)			–			–			6,876		6,876
Average other intangibles (GAAP)			–			–			1		1
Add: Average deferred tax liabilities related to goodwill (GAAP)			–			–			509		509

Average tangible assets	D		$56,689			$47,902			$33,440		$138,031

Return on average total tangible assets	A/D		0.64	%		1.35	%		NM		0.86	%
Efficiency ratio:
Noninterest expense (GAAP)	E		$650			$181			$36		$867
Net interest income (GAAP)			621			327			(3)		945
Noninterest income (GAAP)			229			123			83		435

Total revenue (GAAP)	F		$850			$450			$80		$1,380

Efficiency ratio	E/F		76.46	%		40.21	%		NM		62.88	%

KEY PERFORMANCE METRICS, NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS - SEGMENTS (CONTINUED)

(in millions, except ratio data)


		FOR THE NINE MONTHS ENDED SEPT 30,
		2017											2016
		Consumer Banking			Commercial Banking			Other		Consolidated			Consumer Banking			Commercial Banking			Other		Consolidated
Net income available to common stockholders:
Net income (GAAP)	A		$335			$568			$83		$986			$253			$459			$51		$763
Less: Preferred stock dividends			–			–			14		14			–			–			14		14

Net income available to common stockholders	B		$335			$568			$69		$972			$253			$459			$37		$749

Return on average tangible common equity:
Average common equity (GAAP)			$5,515			$5,611			$8,491		$19,617			$5,130			$5,001			$9,584		$19,715
Less: Average goodwill (GAAP)			–			–			6,882		6,882			–			–			6,876		6,876
Average other intangibles (GAAP)			–			–			2		2			–			–			2		2
Add: Average deferred tax liabilities related to goodwill (GAAP)			–			–			535		535			–			–			495		495

Average tangible common equity	C		$5,515			$5,611			$2,142		$13,268			$5,130			$5,001			$3,201		$13,332

Return on average tangible common equity	B/C		8.13	%		13.54	%		NM		9.80	%		6.58	%		12.27	%		NM		7.51	%
Return on average total tangible assets:
Average total assets (GAAP)			$59,310			$49,604			$40,649		$149,563			$55,825			$46,869			$39,101		$141,795
Less: Average goodwill (GAAP)			–			–			6,882		6,882			–			–			6,876		6,876
Average other intangibles (GAAP)			–			–			2		2			–			–			2		2
Add: Average deferred tax liabilities related to goodwill (GAAP)			–			–			535		535			–			–			495		495

Average tangible assets	D		$59,310			$49,604			$34,300		$143,214			$55,825			$46,869			$32,718		$135,412

Return on average total tangible assets	A/D		0.76	%		1.53	%		NM		0.92	%		0.60	%		1.31	%		NM		0.75	%
Efficiency ratio:
Noninterest expense (GAAP)	E		$1,939			$577			$60		$2,576			$1,898			$554			$53		$2,505
Net interest income (GAAP)			1,969			1,044			80		3,093			1,804			941			27		2,772
Noninterest income (GAAP)			676			400			54		1,130			656			344			120		1,120

Total revenue (GAAP)	F		$2,645			$1,444			$134		$4,223			$2,460			$1,285			$147		$3,892

Efficiency ratio	E/F		73.28	%		39.89	%		NM		60.99	%		77.15	%		43.15	%		NM		64.36	%

KEY PERFORMANCE METRICS, NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS - UNDERLYING RESULTS

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


		QUARTERLY TRENDS																								FOR THE NINE MONTHS ENDED SEPT 30,
														3Q17 Change																		2017 Change
		3Q17			2Q17			1Q17			3Q16			2Q17						3Q16						2017			2016			2016
														$/bps			%			$/bps			%									$/bps			%
Noninterest income, Underlying:
Noninterest income (GAAP)			$381			$370			$379			$435			$11			3	%		($54	)		(12	%)		$1,130			$1,120			$10			1	%
Less: Lease impairment credit-related costs			–			(11	)		–			–			11			100			–			–			(11	)		–			(11	)		(100	)

Noninterest income, Underlying (non-GAAP)			$381			$381			$379			$435			$ –			–	%		($54	)		(12	%)		$1,141			$1,120			$21			2	%

Total revenue, Underlying:
Total revenue (GAAP)	A		$1,443			$1,396			$1,384			$1,380			$47			3	%		$63			5	%		$4,223			$3,892			$331			9	%
Less: Lease impairment credit-related costs			–			(11	)		–			–			11			100			–			–			(11	)		–			(11	)		(100	)

Total revenue, Underlying (non-GAAP)	B		$1,443			$1,407			$1,384			$1,380			$36			3	%		$63			5	%		$4,234			$3,892			$342			9

Noninterest expense, Underlying:
Noninterest expense (GAAP)	C		$858			$864			$854			$867			($6	)		(1	%)		($9	)		(1	%)		$2,576			$2,505			$71			3	%
Less: Lease impairment credit-related costs			–			15			–			–			(15	)		(100	)		–			–			15			–			15			100

Noninterest expense, Underlying (non-GAAP)	D		$858			$849			$854			$867			$9			1	%		($9	)		(1	%)		$2,561			$2,505			$56			2

Pre-provision profit, Underlying:
Pre-provision profit (GAAP)			$585			$532			$530			$513			$53			10	%		$72			14	%		$1,647			$1,387			$260			19	%
Less: Lease impairment credit-related costs			–			(26	)		–			–			26			100			–			–			(26	)		–			(26	)		(100	)

Pre-provision profit, Underlying (non-GAAP)			$585			$558			$530			$513			$27			5	%		$72			14	%		$1,673			$1,387			$286			21	%

Total credit-related costs, Underlying:
Provision for credit losses (GAAP)			$72			$70			$96			$86			$2			3	%		($14	)		(16	%)		$238			$267			($29	)		(11	%)
Add: Lease impairment credit-related costs			–			26			–			–			(26	)		(100	)		–			–			26			–			26			100

Total credit-related costs, Underlying (non-GAAP)			$72			$96			$96			$86			($24	)		(25	%)		($14	)		(16	%)		$264			$267			($3	)		(1	%)

Income before income tax expense (GAAP)	E		$513			$462			$434			$427			$51			11	%		$86			20	%		$1,409			$1,120			$289			26	%
Income tax expense and effective income tax rate, Underlying:
Income tax expense (GAAP)	F		$165			$144			$114			$130			$21			15	%		$35			27	%		$423			$357			$66			18	%
Less: Settlement of certain state tax matters			–			–			(23	)		–			–			–			–			–			(23	)		–			(23	)		(100	)

Income tax expense, Underlying (non-GAAP)	G		$165			$144			$137			$130			$21			15	%		$35			27	%		$446			$357			$89			25	%

Effective income tax rate (GAAP)	F/E		32.18	%		31.13	%		26.36	%		30.46	%		105	bps					172	bps					30.04	%		31.87	%		(183	) bps
Effective income tax rate, Underlying (non-GAAP)	G/E		32.18			31.13			31.56			30.46			105	bps					172	bps					31.65			31.87			(22	) bps
Net income, Underlying:
Net income (GAAP)	H		$348			$318			$320			$297			$30			9	%		$51			17	%		$986			$763			$223			29	%
Less: Settlement of certain state tax matters			–			–			23			–			–			–			–			–			23			–			23			100

Net income, Underlying (non-GAAP)	I		$348			$318			$297			$297			$30			9	%		$51			17	%		$963			$763			$200			26	%

Net income available to common stockholders, Underlying:
Net income available to common stockholders (GAAP)	J		$341			$318			$313			$290			$23			7	%		$51			18	%		$972			$749			$223			30	%
Less: Settlement of certain state tax matters			–			–			23			–			–			–			–			–			23			–			23			100

Net income available to common stockholders, Underlying (non-GAAP)	K		$341			$318			$290			$290			$23			7	%		$51			18	%		$949			$749			$200			27	%

KEY PERFORMANCE METRICS, NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS - UNDERLYING RESULTS (CONTINUED)

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


		QUARTERLY TRENDS																								FOR THE NINE MONTHS ENDED SEPT 30,
														3Q17 Change																		2017 Change
		3Q17			2Q17			1Q17			3Q16			2Q17						3Q16						2017			2016			2016
														$/bps			%			$/bps			%									$/bps			%
Operating leverage:
Total revenue (GAAP)	A		$1,443			$1,396			$1,384			$1,380			$47			3.37	%		$63			4.57	%		$4,223			$3,892			$331			8.50	%
Less: Noninterest expense (GAAP)	C		858			864			854			867			(6	)		(0.69	)		(9	)		(1.04	)		2,576			2,505			71			2.83

Operating leverage																		4.06	%					5.61	%											5.67	%

Operating leverage, Underlying:
Total revenue, Underlying (non-GAAP)	B		$1,443			$1,407			$1,384			$1,380			$36			2.56	%		$63			4.57	%		$4,234			$3,892			$342			8.79	%
Less: Noninterest expense, Underlying (non-GAAP)	D		858			849			854			867			9			1.06			(9	)		(1.04	)		2,561			2,505			56			2.24

Operating leverage, Underlying (non-GAAP)																		1.50	%					5.61	%											6.55	%

Efficiency ratio and efficiency ratio, Underlying:
Efficiency ratio	C/A		59.41	%		61.94	%		61.68	%		62.88	%		(253	) bps					(347	) bps					60.99	%		64.36	%		(337	) bps
Efficiency ratio, Underlying (non-GAAP)	D/B		59.41			60.36			61.68			62.88			(95	) bps					(347	) bps					60.47			64.36			(389	) bps
Return on average common equity and return on average common equity, Underlying:
Average common equity (GAAP)	L		$19,728			$19,659			$19,460			$19,810			$69			–	%		($82	)		–	%		$19,617			$19,715			($98	)		–	%
Return on average common equity	J/L		6.87	%		6.48	%		6.52	%		5.82	%		39	bps					105	bps					6.63	%		5.08	%		155	bps
Return on average common equity, Underlying (non-GAAP)	K/L		6.87			6.48			6.05			5.82			39	bps					105	bps					6.47			5.08			139	bps
Return on average tangible common equity and return on average tangible common equity, Underlying:
Average common equity (GAAP)	L		$19,728			$19,659			$19,460			$19,810			$69			–	%		($82	)		–	%		$19,617			$19,715			($98	)		–	%
Less: Average goodwill (GAAP)			6,887			6,882			6,876			6,876			5			–			11			–			6,882			6,876			6			–
Less: Average other intangibles (GAAP)			2			2			–			1			–			–			1			100			2			2			–			–
Add: Average deferred tax liabilities related to goodwill (GAAP)			537			534			531			509			3			1			28			6			535			495			40			8

Average tangible common equity	M		$13,376			$13,309			$13,115			$13,442			$67			1	%		($66	)		–	%		$13,268			$13,332			($64	)		–	%

Return on average tangible common equity	J/M		10.13	%		9.57	%		9.68	%		8.58	%		56	bps					155	bps					9.80	%		7.51	%		229	bps
Return on average tangible common equity, Underlying (non-GAAP)	K/M		10.13			9.57			8.98			8.58			56	bps					155	bps					9.57			7.51			206	bps
Return on average total assets and return on average total assets, Underlying:
Average total assets (GAAP)	N		$150,012			$149,878			$148,786			$144,399			$134			–	%		$5,613			4	%		$149,563			$141,795			$7,768			5	%
Return on average total assets	H/N		0.92	%		0.85	%		0.87	%		0.82	%		7	bps					10	bps					0.88	%		0.72	%		16	bps
Return on average total assets, Underlying (non-GAAP)	I/N		0.92			0.85			0.81			0.82			7	bps					10	bps					0.86			0.72			14	bps

KEY PERFORMANCE METRICS, NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS - UNDERLYING RESULTS (CONTINUED)

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


		QUARTERLY TRENDS																								FOR THE NINE MONTHS ENDED SEPT 30,
														3Q17 Change																		2017 Change
		3Q17			2Q17			1Q17			3Q16			2Q17						3Q16						2017			2016			2016
														$/bps			%			$/bps			%									$/bps			%
Return on average total tangible assets and return on average total tangible assets, Underlying:
Average total assets (GAAP)	N		$150,012			$149,878			$148,786			$144,399			$134			–	%		$5,613			4	%		$149,563			$141,795			$7,768			5	%
Less: Average goodwill (GAAP)			6,887			6,882			6,876			6,876			5			–			11			–			6,882			6,876			6			–
Less: Average other intangibles (GAAP)			2			2			–			1			–			–			1			100			2			2			–			–
Add: Average deferred tax liabilities related to goodwill (GAAP)			537			534			531			509			3			1			28			6			535			495			40			8

Average tangible assets	O		$143,660			$143,528			$142,441			$138,031			$132			–	%		$5,629			4	%		$143,214			$135,412			$7,802			6	%

Return on average total tangible assets	H/O		0.96	%		0.89	%		0.91	%		0.86	%		7	bps					10	bps					0.92	%		0.75	%		17	bps
Return on average total tangible assets, Underlying (non-GAAP)	I/ O		0.96			0.89			0.85			0.86			7	bps					10	bps					0.90			0.75			15	bps
Net income per average common share -basic and diluted, Underlying:
Average common shares outstanding - basic (GAAP)	P		500,861,076			506,371,846			509,451,450			519,458,976			(5,510,770	)		(1	%)		(18,597,900	)		(4	%)		505,529,991			525,477,273			(19,947,282	)		(4	%)
Average common shares outstanding - diluted (GAAP)	Q		502,157,384			507,414,122			511,348,200			521,122,466			(5,256,738	)		(1	)		(18,965,082	)		(4	)		507,062,805			527,261,384			(20,198,579	)		(4	)
Net income available to common stockholders (GAAP)	J		$341			$318			$313			$290			$23			7			$51			18			$972			$749			$223			30
Net income per average common share - basic (GAAP)	J/ P		0.68			0.63			0.61			0.56			0.05			8			0.12			21			1.92			1.43			0.49			34
Net income per average common share - diluted (GAAP)	J/ Q		0.68			0.63			0.61			0.56			0.05			8			0.12			21			1.92			1.42			0.50			35
Net income available to common stockholders, Underlying (non-GAAP)	K		341			318			290			290			23			7			51			18			949			749			200			27
Net income per average common share - basic, Underlying (non-GAAP)	K/P		0.68			0.63			0.57			0.56			0.05			8			0.12			21			1.88			1.43			0.45			31
Net income per average common share - diluted, Underlying (non-GAAP)	K/Q		0.68			0.63			0.57			0.56			0.05			8			0.12			21			1.87			1.42			0.45			32

CITIZENS FINANCIAL GROUP INC/RI - FORM 8-K - EX-99.1 - October 30, 2017

Attached files

CITIZENS FINANCIAL GROUP INC/RI Reports