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

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8-K - FORM 8-K - CITIZENS FINANCIAL GROUP INC/RI	d695244d8k.htm

Exhibit 99.1

LOGO

Financial Supplement

Fourth Quarter and Full Year 2018


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		18
Nonperforming Assets		19
Charge-offs, Recoveries and Related Ratios		20
Summary of Changes in the Components of the Allowance for Credit Losses		22

Capital and Ratios		23

Key Performance Metrics, Non-GAAP Financial Measures and Reconciliations		24

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																											FULL YEAR
																4Q18 Change																		2018 Change
	4Q18			3Q18			2Q18			1Q18			4Q17			3Q18						4Q17						2018			2017			2017
																$			%			$			%									$			%
SELECTED OPERATING DATA
Total revenue	$	1,593		$	1,564		$	1,509		$	1,462		$	1,484		$	29			2	%	$	109			7	%	$	6,128		$	5,707		$	421			7	%
Noninterest expense		951			910			875			883			898			41			5			53			6			3,619			3,474			145			4

Profit before provision for credit losses		642			654			634			579			586			(12	)		(2	)		56			10			2,509			2,233			276			12
Provision for credit losses		85			78			85			78			83			7			9			2			2			326			321			5			2
NET INCOME		465			443			425			388			666			22			5			(201	)		(30	)		1,721			1,652			69			4
Net income, Underlying¹		474			450			425			388			349			24			5			125			36			1,737			1,312			425			32
Net income available to common stockholders		450			436			425			381			666			14			3			(216	)		(32	)		1,692			1,638			54			3
Net income available to common stockholders, Underlying¹		459			443			425			381			349			16			4			110			32			1,708			1,298			410			32
PER COMMON SHARE DATA
Basic earnings	$	0.96		$	0.92		$	0.88		$	0.78		$	1.35		$	0.04			4	%	($	0.39	)		(29	%)	$	3.54		$	3.26		$	0.28			9	%
Diluted earnings		0.96			0.91			0.88			0.78			1.35			0.05			5			(0.39	)		(29	)		3.52			3.25			0.27			8
Basic earnings, Underlying¹		0.98			0.93			0.88			0.78			0.71			0.05			5			0.27			38			3.57			2.59			0.98			38
Diluted earnings, Underlying¹		0.98			0.93			0.88			0.78			0.71			0.05			5			0.27			38			3.56			2.58			0.98			38
Cash dividends declared and paid per common share		0.27			0.27			0.22			0.22			0.18			—			—			0.09			50			0.98			0.64			0.34			53
Book value per common share		42.87			41.62			41.16			40.64			40.80			1.25			3			2.07			5			42.87			40.80			2.07			5
Tangible book value per common share		28.73			27.66			27.67			27.24			27.48			1.07			4			1.25			5			28.73			27.48			1.25			5
Dividend payout ratio		28	%		29	%		25	%		28	%		13	%		(100	) bps					1,500	bps					28	%		20	%		800	bps
Dividend payout ratio, Underlying¹		27			29			25			28			25			(200	) bps					200	bps					27			25			200	bps
COMMON SHARES OUTSTANDING
Average: Basic		467,338,825			475,957,526			484,744,354			487,500,618			492,149,763			(8,618,701	)		(2	%)		(24,810,938	)		(5	%)		478,822,072			502,157,440			(23,335,368	)		(5	%)
Diluted		469,103,134			477,599,917			486,141,695			489,266,826			493,788,007			(8,496,783	)		(2	)		(24,684,873	)		(5	)		480,430,741			503,685,091			(23,254,350	)		(5	)
Common shares at period-end		466,007,984			474,120,616			484,055,194			487,551,444			490,812,912			(8,112,632	)		(2	)		(24,804,928	)		(5	)		466,007,984			490,812,912			(24,804,928	)		(5	)
SHARE PRICE
High	$	39.69		$	41.76		$	43.62		$	48.23		$	42.93		($	2.07	)		(5	%)	($	3.24	)		(8	%)	$	48.23		$	42.93		$	5.30			12	%
Low		27.62			38.47			38.84			40.80			36.10			(10.85	)		(28	)		(8.48	)		(23	)		27.62			31.51			(3.89	)		(12	)
Close		29.73			38.57			38.90			41.98			41.98			(8.84	)		(23	)		(12.25	)		(29	)		29.73			41.98			(12.25	)		(29	)
Market capitalization		13,854			18,287			18,830			20,467			20,604			(4,433	)		(24	)		(6,750	)		(33	)		13,854			20,604			(6,750	)		(33	)
SEGMENT NET INCOME
Consumer Banking	$	193		$	207		$	197		$	170		$	117		($	14	)		(7	%)	$	76			65	%	$	767		$	452		$	315			70	%
Commercial Banking		241			234			237			215			206			7			3			35			17			927			774			153			20
Other		31			2			(9	)		3			343			29			NM			(312	)		(91	)		27			426			(399	)		(94	)

NET INCOME	$	465		$	443		$	425		$	388		$	666		$	22			5	%	($	201	)		(30	%)	$	1,721		$	1,652		$	69			4	%

¹	These 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																											FULL YEAR
																4Q18 Change																		2018 Change
	4Q18			3Q18			2Q18			1Q18			4Q17			3Q18						4Q17						2018			2017			2017
																$/bps			%			$/bps			%									$/bps			%
FINANCIAL RATIOS
Net interest margin		3.22	%		3.19	%		3.18	%		3.16	%		3.08	%		3	bps					14	bps					3.19	%		3.02	%		17	bps
Return on average common equity		9.16			8.82			8.65			7.83			13.46			34	bps					(430	) bps					8.62			8.35			27	bps
Return on average common equity, Underlying¹		9.33			8.96			8.65			7.83			7.05			37	bps					228	bps					8.69			6.62			207	bps
Return on average tangible common equity		13.85			13.29			12.93			11.71			19.92			56	bps					(607	) bps					12.94			12.35			59	bps
Return on average tangible common equity, Underlying¹		14.11			13.50			12.93			11.71			10.43			61	bps					368	bps					13.06			9.79			327	bps
Return on average total assets		1.17			1.13			1.11			1.04			1.75			4	bps					(58	) bps					1.11			1.10			1	bps
Return on average total assets, Underlying¹		1.19			1.15			1.11			1.04			0.92			4	bps					27	bps					1.12			0.88			24	bps
Return on average total tangible assets		1.22			1.18			1.16			1.08			1.83			4	bps					(61	) bps					1.16			1.15			1	bps
Return on average total tangible assets, Underlying¹		1.24			1.20			1.16			1.08			0.96			4	bps					28	bps					1.17			0.91			26	bps
Effective income tax rate		16.45			23.16			22.58			22.52			(32.40	)		(671	) bps					4,885	bps					21.16			13.62			754	bps
Effective income tax rate, Underlying¹		21.91			23.20			22.58			22.52			33.68			(129	) bps					(1,177	) bps					22.55			32.20			(965	) bps
Efficiency ratio		59.69			58.20			57.95			60.43			60.52			149	bps					(83	) bps					59.06			60.87			(181	) bps
Efficiency ratio, Underlying¹		56.70			57.62			57.95			60.43			58.50			(92	) bps					(180	) bps					58.13			59.96			(183	) bps
CAPITAL RATIOS - PERIOD-END (PRELIMINARY)²
CET1 capital ratio		10.6	%		10.8	%		11.2	%		11.2	%		11.2	%
Tier 1 capital ratio		11.3			11.2			11.6			11.4			11.4
Total capital ratio		13.3			13.4			13.8			13.9			13.9
Tier 1 leverage ratio		10.0			9.9			10.2			10.0			10.0
SELECTED BALANCE SHEET DATA (PERIOD-END)
Total assets	$	160,518		$	158,598		$	155,431		$	153,453		$	152,336		$	1,920			1	%	$	8,182			5	%	$	160,518		$	152,336		$	8,182			5	%
Loans and leases:
Commercial		56,783			55,405			54,888			53,144			52,031			1,378			2			4,752			9			56,783			52,031			4,752			9
Retail		59,877			59,315			58,519			58,281			58,586			562			1			1,291			2			59,877			58,586			1,291			2

Total loans and leases		116,660			114,720			113,407			111,425			110,617			1,940			2			6,043			5			116,660			110,617			6,043			5
Deposits		119,575			117,075			117,073			115,730			115,089			2,500			2			4,486			4			119,575			115,089			4,486			4
Long-term borrowed funds		14,433			15,639			13,641			13,486			11,765			(1,206	)		(8	)		2,668			23			14,433			11,765			2,668			23
Total stockholders’ equity		20,817			20,276			20,467			20,059			20,270			541			3			547			3			20,817			20,270			547			3
Loans-to-deposits ratio (period-end balances)³		97.56	%		97.99	%		96.87	%		96.28	%		96.11	%		(43	) bps					145	bps					97.56	%		96.11	%		145	bps
Loans-to-deposits ratio (average balances)³		98.41			97.38			98.01			97.96			97.10			103	bps					131	bps					97.94			97.69			25	bps
Full-time equivalent colleagues		18,140			18,332			17,699			17,546			17,594			(192	)		(1	)		546			3			18,140			17,594			546			3

¹	These 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.

²	The December 31, 2017 capital ratios reflect the retrospective adoption of FASB ASU 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.

³	In the third quarter of 2018, we revised our method of calculating the loans-to-deposits ratio to exclude loans held for sale. Prior periods have been adjusted to conform with the current period presentation.

CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

(in millions)


	QUARTERLY TRENDS																							FULL YEAR
												4Q18 Change																2018 Change
	4Q18		3Q18		2Q18		1Q18		4Q17			3Q18						4Q17						2018		2017		2017
												$			%			$			%							$			%
INTEREST INCOME
Interest and fees on loans and leases	$	1,347	$	1,287	$	1,230	$	1,146	$	1,121		$	60			5	%	$	226			20	%	$	5,010	$	4,249	$	761			18	%
Interest and fees on loans held for sale		14		14		5		4		5			—			—			9			180			37		18		19			106
Interest and fees on other loans held for sale		1		2		3		4		4			(1	)		(50	)		(3	)		(75	)		10		10		—			—
Investment securities		172		167		165		168		156			5			3			16			10			672		625		47			8
Interest-bearing deposits in banks		8		7		8		6		5			1			14			3			60			29		18		11			61

Total interest income		1,542		1,477		1,411		1,328		1,291			65			4			251			19			5,758		4,920		838			17

INTEREST EXPENSE
Deposits		245		214		181		145		130			31			14			115			88			785		441		344			78
Federal funds purchased and securities sold under agreements to repurchase		2		2		1		1		1			—			—			1			100			6		3		3			100
Other short-term borrowed funds		15		19		14		9		9			(4	)		(21	)		6			67			57		31		26			84
Long-term borrowed funds		108		94		94		82		71			14			15			37			52			378		272		106			39

Total interest expense		370		329		290		237		211			41			12			159			75			1,226		747		479			64

Net interest income		1,172		1,148		1,121		1,091		1,080			24			2			92			9			4,532		4,173		359			9

NONINTEREST INCOME
Service charges and fees		131		131		127		124		131			—			—			—			—			513		516		(3	)		(1	)
Card fees		62		61		60		61		56			1			2			6			11			244		233		11			5
Capital markets fees		45		47		48		39		42			(2	)		(4	)		3			7			179		194		(15	)		(8	)
Trust and investment services fees		43		45		43		40		42			(2	)		(4	)		1			2			171		158		13			8
Mortgage banking fees		51		49		27		25		28			2			4			23			82			152		108		44			41
Letter of credit and loan fees		34		32		32		30		31			2			6			3			10			128		121		7			6
Foreign exchange and interest rate products		34		31		34		27		32			3			10			2			6			126		109		17			16
Securities gains, net		6		3		2		8		2			3			100			4			200			19		11		8			73
Other income		15		17		15		17		40			(2	)		(12	)		(25	)		(63	)		64		84		(20	)		(24	)

Total noninterest income		421		416		388		371		404			5			1			17			4			1,596		1,534		62			4

TOTAL REVENUE		1,593		1,564		1,509		1,462		1,484			29			2			109			7			6,128		5,707		421			7
Provision for credit losses		85		78		85		78		83			7			9			2			2			326		321		5			2
NONINTEREST EXPENSE:
Salaries and employee benefits¹		483		474		453		470		450			9			2			33			7			1,880		1,766		114			6
Outside services		135		107		106		99		118			28			26			17			14			447		404		43			11
Occupancy		92		81		79		81		80			11			14			12			15			333		319		14			4
Equipment expense		74		70		64		67		67			4			6			7			10			275		263		12			5
Amortization of software		50		47		46		46		46			3			6			4			9			189		180		9			5
Other operating expense¹		117		131		127		120		137			(14	)		(11	)		(20	)		(15	)		495		542		(47	)		(9	)

Total noninterest expense		951		910		875		883		898			41			5			53			6			3,619		3,474		145			4

Income before income tax expense (benefit)		557		576		549		501		503			(19	)		(3	)		54			11			2,183		1,912		271			14
Income tax expense (benefit)		92		133		124		113		(163	)		(41	)		(31	)		255			156			462		260		202			78

Net income	$	465	$	443	$	425	$	388	$	666		$	22			5	%	($	201	)		(30	%)	$	1,721	$	1,652	$	69			4	%

Net income, Underlying²	$	474	$	450	$	425	$	388	$	349		$	24			5	%	$	125			36	%	$	1,737	$	1,312	$	425			32	%

Net income available to common stockholders	$	450	$	436	$	425	$	381	$	666		$	14			3	%	($	216	)		(32	%)	$	1,692	$	1,638	$	54			3	%

Net income available to common stockholders, Underlying²	$	459	$	443	$	425	$	381	$	349		$	16			4	%	$	110			32	%	$	1,708	$	1,298	$	410			32	%

As of January 1, 2018, we retrospectively adopted ASU 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which requires the service cost component of net periodic pension and postretirement benefit cost to be reported separately in the Consolidated Statements of Operations from the other components. Prior periods have been adjusted to conform with the current period presentation.

²	These 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 BALANCE SHEETS (unaudited)

(in millions)


PERIOD-END BALANCES	AS OF															DECEMBER 31, 2018 CHANGE
	Dec 31, 2018			Sept 30, 2018			June 30, 2018			Mar 31, 2018			Dec 31, 2017			Sept 30, 2018						Dec 31, 2017
																$			%			$			%
ASSETS
Cash and due from banks	$	1,081		$	976		$	997		$	1,172		$	987		$	105			11	%	$	94			10	%
Interest-bearing cash and due from banks		2,993			3,015			2,868			2,687			2,045			(22	)		(1	)		948			46
Interest-bearing deposits in banks		148			142			114			142			192			6			4			(44	)		(23	)
Debt securities available for sale, at fair value¹		19,895			20,152			20,157			19,958			20,157			(257	)		(1	)		(262	)		(1	)
Debt securities held to maturity¹		4,165			4,284			4,417			4,555			4,685			(119	)		(3	)		(520	)		(11	)
Equity securities, at fair value¹		181			175			170			172			169			6			3			12			7
Equity securities, at cost¹		834			874			769			748			722			(40	)		(5	)		112			16
Loans held for sale, at fair value		1,219			1,303			521			478			497			(84	)		(6	)		722			145
Other loans held for sale		101			27			189			322			221			74			NM			(120	)		(54	)
Loans and leases		116,660			114,720			113,407			111,425			110,617			1,940			2			6,043			5
Less: Allowance for loan and lease losses		(1,242	)		(1,242	)		(1,253	)		(1,246	)		(1,236	)		—			—			(6	)		—

Net loans and leases		115,418			113,478			112,154			110,179			109,381			1,940			2			6,037			6
Derivative assets		317			173			224			274			617			144			83			(300	)		(49	)
Premises and equipment		791			753			720			687			685			38			5			106			15
Bank-owned life insurance		1,698			1,687			1,677			1,669			1,656			11			1			42			3
Goodwill		6,923			6,946			6,887			6,887			6,887			(23	)		—			36			1
Due from broker		—			—			—			84			6			—			—			(6	)		(100	)
Other assets		4,754			4,613			3,567			3,439			3,429			141			3			1,325			39

TOTAL ASSETS	$	160,518		$	158,598		$	155,431		$	153,453		$	152,336		$	1,920			1	%	$	8,182			5	%

LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES
Deposits:
Noninterest-bearing	$	29,458		$	29,785		$	29,439		$	28,437		$	29,279		($	327	)		(1	%)	$	179			1	%
Interest-bearing		90,117			87,290			87,634			87,293			85,810			2,827			3			4,307			5

Total deposits		119,575			117,075			117,073			115,730			115,089			2,500			2			4,486			4
Federal funds purchased and securities sold under agreements to repurchase²		1,156			374			326			315			815			782			209			341			42
Other short-term borrowed funds		1,653			2,006			1,499			1,494			1,856			(353	)		(18	)		(203	)		(11	)
Derivative liabilities		292			449			425			331			310			(157	)		(35	)		(18	)		(6	)
Deferred taxes, net		573			430			456			475			571			143			33			2			—
Long-term borrowed funds		14,433			15,639			13,641			13,486			11,765			(1,206	)		(8	)		2,668			23
Due to broker		—			381			—			84			—			(381	)		(100	)		—			—
Other liabilities		2,019			1,968			1,544			1,479			1,660			51			3			359			22

TOTAL LIABILITIES		139,701			138,322			134,964			133,394			132,066			1,379			1			7,635			6
STOCKHOLDERS’ EQUITY
Preferred stock:
$25.00 par value, 100,000,000 shares authorized for each of the periods presented		840			543			543			247			247			297			55			593			240
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		18,815			18,816			18,806			18,797			18,781			(1	)		—			34			—
Retained earnings³		5,385			5,062			4,755			4,437			4,164			323			6			1,221			29
Treasury stock, at cost		(3,133	)		(2,833	)		(2,433	)		(2,283	)		(2,108	)		(300	)		(11	)		(1,025	)		(49	)
Accumulated other comprehensive loss³		(1,096	)		(1,318	)		(1,210	)		(1,145	)		(820	)		222			17			(276	)		(34	)

TOTAL STOCKHOLDERS’ EQUITY		20,817			20,276			20,467			20,059			20,270			541			3			547			3

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	160,518		$	158,598		$	155,431		$	153,453		$	152,336		$	1,920			1	%	$	8,182			5	%

Memo: Total tangible common equity	$	13,389		$	13,117		$	13,394		$	13,280		$	13,489		$	272			2	%	($	100	)		(1	%)

As of January 1, 2018, we adopted ASU 2016-01, Financial Instruments, Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, which requires separate presentation of financial assets and financial liabilities by measurement category and form of financial assets on the balance sheet.

²	Balances are net of certain short-term receivables associated with reverse repurchase agreements.

³	The December 31, 2017 balances reflect the retrospective adoption of FASB ASU 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.

LOANS AND DEPOSITS

(in millions)


PERIOD-END BALANCES	AS OF										DECEMBER 31, 2018 CHANGE
	Dec 31, 2018		Sept 30, 2018		June 30, 2018		Mar 31, 2018		Dec 31, 2017		September 30, 2018						December 31, 2017
											$			%			$			%
LOANS AND LEASES
Commercial	$	40,857	$	39,770	$	39,278	$	38,277	$	37,562	$	1,087			3	%	$	3,295			9	%
Commercial real estate		13,023		12,630		12,528		11,775		11,308		393			3			1,715			15
Leases		2,903		3,005		3,082		3,092		3,161		(102	)		(3	)		(258	)		(8	)

Total commercial loans and leases		56,783		55,405		54,888		53,144		52,031		1,378			2			4,752			9

Residential mortgages		18,978		18,493		17,814		17,346		17,045		485			3			1,933			11
Home equity loans		1,073		1,131		1,211		1,298		1,392		(58	)		(5	)		(319	)		(23	)
Home equity lines of credit		12,710		12,863		13,014		13,190		13,483		(153	)		(1	)		(773	)		(6	)
Home equity loans serviced by others¹		399		429		465		504		542		(30	)		(7	)		(143	)		(26	)
Home equity lines of credit serviced by others¹		104		114		124		136		149		(10	)		(9	)		(45	)		(30	)
Automobile		12,106		12,255		12,517		12,794		13,204		(149	)		(1	)		(1,098	)		(8	)
Education		8,900		8,712		8,450		8,324		8,134		188			2			766			9
Credit card		1,991		1,911		1,877		1,808		1,848		80			4			143			8
Other retail		3,616		3,407		3,047		2,881		2,789		209			6			827			30

Total retail loans		59,877		59,315		58,519		58,281		58,586		562			1			1,291			2

Total loans and leases	$	116,660	$	114,720	$	113,407	$	111,425	$	110,617	$	1,940			2	%	$	6,043			5	%


Loans held for sale, at fair value		1,219		1,303		521		478		497		(84	)		(6	)		722			145
Other loans held for sale		101		27		189		322		221		74			NM			(120	)		(54	)

Loans and leases and loans held for sale	$	117,980	$	116,050	$	114,117	$	112,225	$	111,335	$	1,930			2	%	$	6,645			6	%


DEPOSITS
Demand	$	29,458	$	29,785	$	29,439	$	28,437	$	29,279	($	327	)		(1	%)	$	179			1	%
Checking with interest		23,067		22,323		22,775		21,767		22,229		744			3			838			4
Regular savings		12,007		10,523		9,902		9,896		9,518		1,484			14			2,489			26
Money market accounts		35,701		35,613		36,139		38,880		37,454		88			—			(1,753	)		(5	)
Term deposits		19,342		18,831		18,818		16,750		16,609		511			3			2,733			16

Total deposits	$	119,575	$	117,075	$	117,073	$	115,730	$	115,089	$	2,500			2	%	$	4,486			4	%

¹	Our Serviced by Others (“SBO”) portfolio consists of purchased loans and lines of credit that were originally serviced by others.

AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS

(in millions)


	QUARTERLY TRENDS																											FULL YEAR
AVERAGE BALANCES																4Q18 Change																		2018 Change
	4Q18			3Q18			2Q18			1Q18			4Q17			3Q18						4Q17						2018			2017			2017
																$			%			$			%									$			%
ASSETS
Interest-bearing cash and due from banks and deposits in banks	$	1,467		$	1,604		$	1,801		$	1,442		$	1,528		($	137	)		(9	%)	($	61	)		(4	%)	$	1,579		$	1,807		($	228	)		(13	%)

Taxable investment securities		25,081			25,225			25,197			25,433			25,678			(144	)		(1	)		(597	)		(2	)		25,233			25,696			(463	)		(2	)
Non-taxable investment securities		5			6			6			6			6			(1	)		(17	)		(1	)		(17	)		6			7			(1	)		(14	)

Total investment securities		25,086			25,231			25,203			25,439			25,684			(145	)		(1	)		(598	)		(2	)		25,239			25,703			(464	)		(2	)

Investment securities and interest-bearing deposits		26,553			26,835			27,004			26,881			27,212			(282	)		(1	)		(659	)		(2	)		26,818			27,510			(692	)		(3	)

Commercial		40,472			39,592			39,399			37,960			37,713			880			2			2,759			7			39,363			37,631			1,732			5
Commercial real estate		12,900			12,656			12,071			11,549			11,396			244			2			1,504			13			12,299			11,178			1,121			10
Leases		2,938			3,028			3,073			3,114			3,201			(90	)		(3	)		(263	)		(8	)		3,038			3,437			(399	)		(12	)

Total commercial loans and leases		56,310			55,276			54,543			52,623			52,310			1,034			2			4,000			8			54,700			52,246			2,454			5

Residential mortgages		18,713			18,147			17,488			17,162			16,794			566			3			1,919			11			17,883			16,017			1,866			12
Home equity loans		1,101			1,168			1,252			1,342			1,437			(67	)		(6	)		(336	)		(23	)		1,215			1,610			(395	)		(25	)
Home equity lines of credit		12,790			12,925			13,112			13,353			13,501			(135	)		(1	)		(711	)		(5	)		13,043			13,706			(663	)		(5	)
Home equity loans serviced by others¹		411			444			480			520			564			(33	)		(7	)		(153	)		(27	)		463			642			(179	)		(28	)
Home equity lines of credit serviced by others¹		108			118			130			142			156			(10	)		(8	)		(48	)		(31	)		124			181			(57	)		(31	)
Automobile		12,179			12,379			12,657			13,015			13,277			(200	)		(2	)		(1,098	)		(8	)		12,555			13,491			(936	)		(7	)
Education		8,801			8,481			8,374			8,283			8,071			320			4			730			9			8,486			7,557			929			12
Credit cards		1,973			1,909			1,854			1,828			1,803			64			3			170			9			1,891			1,725			166			10
Other retail		3,507			3,124			2,966			2,847			2,537			383			12			970			38			3,113			2,117			996			47

Total retail loans		59,583			58,695			58,313			58,492			58,140			888			2			1,443			2			58,773			57,046			1,727			3

Total loans and leases		115,893			113,971			112,856			111,115			110,450			1,922			2			5,443			5			113,473			109,292			4,181			4
Loans held for sale, at fair value		1,245			1,228			470			420			482			17			1			763			158			844			490			354			72
Other loans held for sale		79			129			195			255			285			(50	)		(39	)		(206	)		(72	)		164			190			(26	)		(14	)

Interest-earning assets		143,770			142,163			140,525			138,671			138,429			1,607			1			5,341			4			141,299			137,482			3,817			3
Allowance for loan and lease losses		(1,241	)		(1,255	)		(1,246	)		(1,236	)		(1,222	)		14			1			(19	)		(2	)		(1,245	)		(1,225	)		(20	)		(2	)
Goodwill		6,946			6,926			6,887			6,887			6,887			20			—			59			1			6,912			6,883			29			—
Other noninterest-earning assets		8,257			7,790			7,087			7,201			7,017			467			6			1,240			18			7,587			6,813			774			11

TOTAL ASSETS	$	157,732		$	155,624		$	153,253		$	151,523		$	151,111		$	2,108			1	%	$	6,621			4	%	$	154,553		$	149,953		$	4,600			3	%

LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES
Checking with interest	$	21,792		$	21,780		$	22,185		$	21,665		$	21,459		$	12			—	%	$	333			2	%	$	21,856		$	21,458		$	398			2	%
Money market accounts		35,929			36,593			36,396			37,084			37,483			(664	)		(2	)		(1,554	)		(4	)		36,497			37,450			(953	)		(3	)
Regular savings		11,220			10,198			9,889			9,627			9,473			1,022			10			1,747			18			10,238			9,384			854			9
Term deposits		19,000			18,764			17,838			16,503			16,470			236			1			2,530			15			18,035			15,448			2,587			17

Total interest-bearing deposits		87,941			87,335			86,308			84,879			84,885			606			1			3,056			4			86,626			83,740			2,886			3
Federal funds purchased and securities sold under agreements to repurchase²		821			643			504			645			685			178			28			136			20			654			776			(122	)		(16	)
Other short-term borrowed funds		1,828			2,239			1,677			1,481			2,432			(411	)		(18	)		(604	)		(25	)		1,808			2,321			(513	)		(22	)
Long-term borrowed funds		14,086			12,793			13,394			13,549			11,658			1,293			10			2,428			21			13,455			12,479			976			8

Total borrowed funds		16,735			15,675			15,575			15,675			14,775			1,060			7			1,960			13			15,917			15,576			341			2

Total interest-bearing liabilities		104,676			103,010			101,883			100,554			99,660			1,666			2			5,016			5			102,543			99,316			3,227			3
Total demand deposits		29,824			29,703			28,834			28,544			28,868			121			—			956			3			29,231			28,134			1,097			4
Other liabilities		2,948			2,769			2,433			2,446			2,712			179			6			236			9			2,651			2,637			14			1

TOTAL LIABILITIES		137,448			135,482			133,150			131,544			131,240			1,966			1			6,208			5			134,425			130,087			4,338			3

STOCKHOLDERS’ EQUITY		20,284			20,142			20,103			19,979			19,871			142			1			413			2			20,128			19,866			262			1

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	157,732		$	155,624		$	153,253		$	151,523		$	151,111		$	2,108			1	%	$	6,621			4	%	$	154,553		$	149,953		$	4,600			3	%

Memo: Total average tangible common equity	$	12,907		$	13,011		$	13,200		$	13,198		$	13,266		($	104	)		(1	%)	($	359	)		(3	%)	$	13,078		$	13,267		($	189	)		(1	%)
Total deposits (interest-bearing and demand)	$	117,765		$	117,038		$	115,142		$	113,423		$	113,753		$	727			1	%	$	4,012			4	%	$	115,857		$	111,874		$	3,983			4	%

¹	Our SBO portfolio consists of purchased loans and lines of credit that were originally serviced by others.

²	Balances are net of certain short-term receivables associated with reverse repurchase agreements.

AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS, CONTINUED

(in millions, except rates)


	QUARTERLY TRENDS																									FULL YEAR
AVERAGE ANNUALIZED YIELDS AND RATES	4Q18					3Q18					2Q18					1Q18					4Q17					2018					2017
	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		2.05	%	$	8		1.85	%	$	7		1.77	%	$	8		1.61	%	$	6		1.30	%	$	5		1.82	%	$	29		0.96	%	$	18

Taxable investment securities		2.73			172		2.65			167		2.62			165		2.64			168		2.44			156		2.66			672		2.43			625
Non-taxable investment securities		2.60			—		2.60			—		2.60			—		2.60			—		2.60			—		2.60			—		2.60			—

Total investment securities		2.73			172		2.65			167		2.62			165		2.64			168		2.44			156		2.66			672		2.43			625

Investment securities and interest-bearing deposits					180					174					173					174					161					701					643

Commercial		4.25			440		4.14			419		4.07			405		3.77			357		3.65			352		4.06			1,621		3.50			1,334
Commercial real estate		4.77			157		4.56			147		4.39			134		4.11			119		3.80			110		4.47			557		3.55			402
Leases		2.81			20		2.74			21		2.69			21		2.61			20		2.48			20		2.71			82		2.50			86

Total commercial loans and leases		4.30			617		4.16			587		4.06			560		3.77			496		3.61			482		4.08			2,260		3.44			1,822

Residential mortgages		3.67			171		3.62			164		3.57			156		3.56			153		3.57			149		3.60			644		3.57			571
Home equity loans		6.09			17		5.93			18		5.91			18		5.76			19		5.60			20		5.91			72		5.68			91
Home equity lines of credit		4.91			158		4.66			152		4.40			144		4.20			138		3.97			135		4.54			592		3.75			514
Home equity loans serviced by others¹		7.48			8		7.45			8		7.23			9		7.31			9		7.20			11		7.36			34		7.09			46
Home equity lines of credit serviced by others¹		4.56			1		4.89			2		3.62			1		3.98			1		4.32			1		4.23			5		4.07			7
Automobile		3.90			119		3.74			117		3.60			113		3.47			112		3.39			114		3.68			461		3.27			442
Education		5.87			130		5.78			124		5.71			119		5.58			114		5.43			111		5.74			487		5.33			403
Credit cards		10.51			52		10.77			52		10.74			50		10.70			48		10.46			47		10.68			202		10.75			185
Other retail		8.17			74		8.10			63		8.10			60		7.97			56		7.92			51		8.09			253		7.94			168

Total retail loans		4.87			730		4.73			700		4.61			670		4.49			650		4.37			639		4.68			2,750		4.25			2,427

Total loans and leases		4.59			1,347		4.46			1,287		4.34			1,230		4.15			1,146		4.01			1,121		4.39			5,010		3.87			4,249
Loans held for sale, at fair value		4.59			14		4.49			14		4.15			5		3.84			4		3.70			5		4.38			37		3.58			18
Other loans held for sale		5.13			1		6.44			2		6.38			3		6.21			4		5.49			4		6.18			10		5.36			10

Total interest-earning assets		4.24			1,542		4.11			1,477		4.00			1,411		3.85			1,328		3.69			1,291		4.05			5,758		3.56			4,920
INTEREST-BEARING LIABILITIES
Checking with interest		0.75			42		0.67			36		0.61			34		0.48			26		0.41			23		0.63			138		0.37			79
Money market accounts		1.14			104		1.03			95		0.87			79		0.71			65		0.61			58		0.94			343		0.53			198
Regular savings		0.35			10		0.12			3		0.05			1		0.05			1		0.05			1		0.15			15		0.04			4
Term deposits		1.88			89		1.68			80		1.50			67		1.30			53		1.18			48		1.61			289		1.04			160

Total interest-bearing deposits		1.10			245		0.98			214		0.84			181		0.69			145		0.61			130		0.91			785		0.53			441
Federal funds purchased and securities sold under agreements to repurchase²		1.27			2		0.93			2		0.73			1		0.68			1		0.45			1		0.94			6		0.38			3
Other short-term borrowed funds		3.48			15		3.21			19		3.48			14		2.40			9		1.58			9		3.18			57		1.32			31
Long-term borrowed funds		3.01			108		2.94			94		2.77			94		2.44			82		2.42			71		2.79			378		2.17			272

Total borrowed funds		2.98			125		2.90			115		2.78			109		2.36			92		2.19			81		2.76			441		1.96			306

Total interest-bearing liabilities		1.40			370		1.27			329		1.14			290		0.95			237		0.84			211		1.19			1,226		0.75			747
INTEREST RATE SPREAD		2.84					2.84					2.87					2.90					2.85					2.86					2.81
NET INTEREST MARGIN		3.22	%				3.19	%				3.18	%				3.16	%				3.08	%				3.19	%				3.02	%
Memo: Total deposit costs		0.82	%	$	245		0.73	%	$	214		0.63	%	$	181		0.52	%	$	145		0.45	%	$	130		0.68	%	$	785		0.39	%	$	441

¹	Our SBO portfolio consists of purchased loans and lines of credit that were originally serviced by others.

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

SEGMENT FINANCIAL HIGHLIGHTS - CONSOLIDATING

(in millions, except ratio data)


	FOURTH QUARTER 2018												THIRD QUARTER 2018												CHANGE
																									4Q18 from 3Q18
	Consumer Banking			Commercial Banking			Other¹			Consolidated			Consumer Banking			Commercial Banking			Other¹			Consolidated			$/bps			%
Net interest income	$	796		$	384		($	8	)	$	1,172		$	776		$	380		($	8	)	$	1,148		$	24			2	%
Noninterest income		265			140			16			421			258			140			18			416			5			1

Total revenue		1,061			524			8			1,593			1,034			520			10			1,564			29			2
Noninterest expense		723			203			25			951			686			202			22			910			41			5

Profit (loss) before provision for credit losses		338			321			(17	)		642			348			318			(12	)		654			(12	)		(2	)
Provision for credit losses		80			7			(2	)		85			71			14			(7	)		78			7			9

Income (loss) before income tax expense (benefit)		258			314			(15	)		557			277			304			(5	)		576			(19	)		(3	)
Income tax expense (benefit)		65			73			(46	)		92			70			70			(7	)		133			(41	)		(31	)

Net income	$	193		$	241		$	31		$	465		$	207		$	234		$	2		$	443		$	22			5	%

AVERAGE BALANCES
Total assets	$	64,187		$	53,970		$	39,575		$	157,732		$	62,974		$	52,871		$	39,779		$	155,624		$	2,108			1	%
Total loans and leases²		61,920			52,963			2,334			117,217			61,045			51,881			2,402			115,328			1,889			2
Deposits		79,174			30,608			7,983			117,765			78,128			31,224			7,686			117,038			727			1
Interest-earning assets		61,975			53,221			28,574			143,770			61,097			52,137			28,929			142,163			1,607			1
KEY METRICS
Net interest margin		5.09	%		2.86	%		NM			3.22	%		5.04	%		2.89	%		NM			3.19	%		3	bps
Efficiency ratio		68.22			38.73			NM			59.69			66.29			38.83			NM			58.20			149	bps
Loans-to-deposits ratio (period-end balances)³		76.02			172.27			NM			97.56			77.15			169.64			NM			97.99			(43	) bps
Loans-to-deposits ratio (average balances)³		76.91			172.07			NM			98.41			76.79			165.17			NM			97.38			103	bps
Return on average total tangible assets		1.19			1.78			NM			1.22			1.31			1.75			NM			1.18			4	bps

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

²	Includes loans held for sale.

³	In the third quarter of 2018, we revised our method of calculating the loans-to-deposits ratio to exclude loans held for sale. Prior periods have been adjusted to conform with the current period presentation.

SEGMENT FINANCIAL HIGHLIGHTS - CONSOLIDATING, CONTINUED

(in millions, except ratio data)


	FOURTH QUARTER 2018												FOURTH QUARTER 2017												CHANGE
																									4Q18 from 4Q17
	Consumer Banking			Commercial Banking			Other¹			Consolidated			Consumer Banking			Commercial Banking			Other¹			Consolidated			$/bps			%
Net interest income²	$	796		$	384		($	8	)	$	1,172		$	682		$	367		$	31		$	1,080		$	92			9	%
Noninterest income		265			140			16			421			229			138			37			404			17			4

Total revenue		1,061			524			8			1,593			911			505			68			1,484			109			7
Noninterest expense		723			203			25			951			654			195			49			898			53			6

Profit (loss) before provision for credit losses		338			321			(17	)		642			257			310			19			586			56			10
Provision for credit losses		80			7			(2	)		85			76			(1	)		8			83			2			2

Income (loss) before income tax expense (benefit)		258			314			(15	)		557			181			311			11			503			54			11
Income tax expense (benefit)		65			73			(46	)		92			64			105			(332	)		(163	)		255			156

Net income	$	193		$	241		$	31		$	465		$	117		$	206		$	343		$	666		($	201	)		(30	%)

AVERAGE BALANCES
Total assets	$	64,187		$	53,970		$	39,575		$	157,732		$	60,911		$	50,169		$	40,031		$	151,111		$	6,621			4	%
Total loans and leases³		61,920			52,963			2,334			117,217			59,547			48,938			2,732			111,217			6,000			5
Deposits		79,174			30,608			7,983			117,765			75,154			31,514			7,085			113,753			4,012			4
Interest-earning assets		61,975			53,221			28,574			143,770			59,598			49,118			29,713			138,429			5,341			4
KEY METRICS
Net interest margin		5.09	%		2.86	%		NM			3.22	%		4.54	%		2.96	%		NM			3.08	%		14	bps
Efficiency ratio		68.22			38.73			NM			59.69			71.90			38.84			NM			60.52			(83	) bps
Loans-to-deposits ratio (period-end balances)⁴		76.02			172.27			NM			97.56			79.05			151.54			NM			96.11			145	bps
Loans-to-deposits ratio (average balances)⁴		76.91			172.07			NM			98.41			78.80			154.03			NM			97.10			131	bps
Return on average total tangible assets		1.19			1.78			NM			1.22			0.76			1.62			NM			1.83			(61	) bps

We periodically evaluate and refine our methodologies used to allocate items among our business operating segments. In the first quarter of 2018, we enhanced our assumptions for the liquidity and deposit component within our Funds Transfer Pricing (“FTP”) methodology which provides a credit for sources of funds and a charge for the use of funds by each business operating segment. The enhancement largely provides increased credit for the stability of deposit composition, and an increased charge for unused commitments under lending arrangements. Prior periods have not been adjusted for this change.

³	Includes loans held for sale.

⁴	In the third quarter of 2018, we revised our method of calculating the loans-to-deposits ratio to exclude loans held for sale. Prior periods have been adjusted to conform with the current period presentation.

SEGMENT FINANCIAL HIGHLIGHTS - CONSOLIDATING, CONTINUED

(in millions, except ratio data)


	FULL YEAR 2018												FULL YEAR 2017												CHANGE
																									2018 from 2017
	Consumer Banking			Commercial Banking			Other¹			Consolidated			Consumer Banking			Commercial Banking			Other¹			Consolidated			$/bps			%
Net interest income²	$	3,064		$	1,497		($	29	)	$	4,532		$	2,651		$	1,411		$	111		$	4,173		$	359			9	%
Noninterest income		973			545			78			1,596			905			538			91			1,534			62			4

Total revenue		4,037			2,042			49			6,128			3,556			1,949			202			5,707			421			7
Noninterest expense		2,723			813			83			3,619			2,593			772			109			3,474			145			4

Profit (loss) before provision for credit losses		1,314			1,229			(34	)		2,509			963			1,177			93			2,233			276			12
Provision for credit losses		289			26			11			326			265			19			37			321			5			2

Income (loss) before income tax expense (benefit)		1,025			1,203			(45	)		2,183			698			1,158			56			1,912			271			14
Income tax expense (benefit)		258			276			(72	)		462			246			384			(370	)		260			202			78

Net income	$	767		$	927		$	27		$	1,721		$	452		$	774		$	426		$	1,652		$	69			4	%

AVERAGE BALANCES
Total assets	$	62,444		$	52,362		$	39,747		$	154,553		$	59,714		$	49,747		$	40,492		$	149,953		$	4,600			3	%
Total loans and leases³		60,691			51,344			2,446			114,481			58,371			48,655			2,946			109,972			4,509			4
Deposits		77,542			30,704			7,611			115,857			74,873			30,005			6,996			111,874			3,983			4
Interest-earning assets		60,743			51,572			28,984			141,299			58,422			48,802			30,258			137,482			3,817			3
KEY METRICS
Net interest margin		5.04	%		2.90	%		NM			3.19	%		4.54	%		2.89	%		NM			3.02	%		17	bps
Efficiency ratio		67.47			39.80			NM			59.06			72.93			39.62			NM			60.87			(181	) bps
Loans-to-deposits ratio (period-end balances)⁴		76.02			172.27			NM			97.56			79.05			151.54			NM			96.11			145	bps
Loans-to-deposits ratio (average balances)⁴		77.42			166.09			NM			97.94			77.49			161.15			NM			97.69			25	bps
Return on average total tangible assets		1.23			1.77			NM			1.16			0.76			1.56			NM			1.15			1	bps

³	Includes loans held for sale.

⁴	In the third quarter of 2018, we revised our method of calculating the loans-to-deposits ratio to exclude loans held for sale. Prior periods have been adjusted to conform with the current period presentation.

SEGMENT FINANCIAL HIGHLIGHTS - CONSUMER BANKING

(in millions, except ratio data)


	QUARTERLY TRENDS																											FULL YEAR
CONSUMER BANKING																4Q18 Change																		2018 Change
	4Q18			3Q18			2Q18			1Q18			4Q17			3Q18						4Q17						2018			2017			2017
																$/bps			%			$/bps			%									$/bps			%
Net interest income¹	$	796		$	776		$	759		$	733		$	682		$	20			3	%	$	114			17	%	$	3,064		$	2,651		$	413			16	%
Noninterest income		265			258			228			222			229			7			3			36			16			973			905			68			8

Total revenue		1,061			1,034			987			955			911			27			3			150			16			4,037			3,556			481			14
Noninterest expense		723			686			658			656			654			37			5			69			11			2,723			2,593			130			5

Profit before provision for credit losses		338			348			329			299			257			(10	)		(3	)		81			32			1,314			963			351			36
Provision for credit losses		80			71			66			72			76			9			13			4			5			289			265			24			9

Income before income tax expense		258			277			263			227			181			(19	)		(7	)		77			43			1,025			698			327			47
Income tax expense		65			70			66			57			64			(5	)		(7	)		1			2			258			246			12			5

Net income	$	193		$	207		$	197		$	170		$	117		($	14	)		(7	%)	$	76			65	%	$	767		$	452		$	315			70	%

AVERAGE BALANCES
Total assets	$	64,187		$	62,974		$	61,232		$	61,348		$	60,911		$	1,213			2	%	$	3,276			5	%	$	62,444		$	59,714		$	2,730			5	%
Total loans and leases²		61,920			61,045			59,830			59,942			59,547			875			1			2,373			4			60,691			58,371			2,320			4
Deposits		79,174			78,128			77,402			75,416			75,154			1,046			1			4,020			5			77,542			74,873			2,669			4
Interest-earning assets		61,975			61,097			59,880			59,994			59,598			878			1			2,377			4			60,743			58,422			2,321			4
KEY METRICS
Net interest margin		5.09	%		5.04	%		5.08	%		4.96	%		4.54	%		5	bps					55	bps					5.04	%		4.54	%		50	bps
Efficiency ratio		68.22			66.29			66.68			68.72			71.90			193	bps					(368	) bps					67.47			72.93			(546	) bps
Loans-to-deposits ratio (period-end balances)³		76.02			77.15			76.56			76.43			79.05			(113	) bps					(303	) bps					76.02			79.05			(303	) bps
Loans-to-deposits ratio (average balances)³		76.91			76.79			76.92			79.14			78.80			12	bps					(189	) bps					77.42			77.49			(7	) bps
Return on average total tangible assets		1.19			1.31			1.29			1.12			0.76			(12	) bps					43	bps					1.23			0.76			47	bps

²	Includes loans held for sale.

³	In the third quarter of 2018, we revised our method of calculating the loans-to-deposits ratio to exclude loans held for sale. Prior periods have been adjusted to conform with the current period presentation.

SEGMENT FINANCIAL HIGHLIGHTS - CONSUMER BANKING, CONTINUED

(in millions, except ratio data)


	QUARTERLY TRENDS																											FULL YEAR
																4Q18 Change																		2018 Change
	4Q18			3Q18			2Q18			1Q18			4Q17			3Q18						4Q17						2018			2017			2017
																$/bps			%			$/bps			%									$/bps			%
MORTGAGE BANKING FEES¹
Production revenue	$	28		$	31		$	18		$	15		$	21		($	3	)		(10	%)	$	7			33	%	$	92		$	84		$	8			10	%
Mortgage servicing revenue		21			16			9			7			6			5			31			15			250			53			22			31			141
MSR valuation changes, net of hedge impact		2			2			—			3			1			—			—			1			100			7			2			5			250

Total mortgage banking fees	$	51		$	49		$	27		$	25		$	28		$	2			4	%	$	23			82	%	$	152		$	108		$	44			41	%

Gain on sale of secondary originations^1,2		0.82	%		0.96	%		2.24	%		2.17	%		2.47	%		(14	) bps					(165	) bps					1.10	%		2.51	%		(141	) bps

RESIDENTIAL REAL ESTATE ORIGINATIONS¹
Retail	$	1,693		$	1,939		$	1,729		$	1,367		$	1,687		($	246	)		(13	%)	$	6			—	%	$	6,728		$	7,177		($	449	)		(6	%)
Third Party		2,880			2,178			—			—			—			702			32			2,880			100			5,058			—			5,058			100

Total	$	4,573		$	4,117		$	1,729		$	1,367		$	1,687		$	456			11	%	$	2,886			171	%	$	11,786		$	7,177		$	4,609			64	%

Originated for sale		80	%		74	%		42	%		45	%		45	%		600	bps					3,500	bps					68	%		41	%		2,700	bps
Originated for investment		20			26			58			55			55			(600	) bps					(3,500	) bps					32			59			(2,700	) bps

Total		100	%		100	%		100	%		100	%		100	%														100	%		100	%

MORTGAGE SERVICING INFORMATION (UPB)¹
Loans serviced for others	$	69,593		$	67,520		$	21,589		$	20,248		$	20,316		$	2,073			3	%	$	49,277			243	%	$	69,593		$	20,316		$	49,277			243	%
Owned loans serviced		18,298			17,709			16,553			15,963			15,598			589			3			2,700			17			18,298			15,598			2,700			17

Total	$	87,891		$	85,229		$	38,142		$	36,211		$	35,914		$	2,662			3	%	$	51,977			145	%	$	87,891		$	35,914		$	51,977			145	%

MSR carrying value^1,3	$	821		$	831		$	217		$	201		$	198		($	10	)		(1	%)	$	623			NM		$	821		$	198		$	623			NM

¹	Beginning in the third quarter of 2018, results reflect the impact of the August 1, 2018 Franklin American Mortgage Company acquisition.

²	In the first quarter 2018, we revised our method of calculating the gain on sale of secondary originations. Prior periods have been adjusted to conform with the current period presentation.

The MSR carrying value as of December 31, 2018 reflects $600 million held at fair value and $221 million held at the lower of cost or market. The MSR carrying value as of September 30, 2018 reflects $612 million held at fair value and $219 million held at the lower of cost or market. The MSR carrying value for all prior periods is at the lower of cost or market.

SEGMENT FINANCIAL HIGHLIGHTS - COMMERCIAL BANKING

(in millions, except ratio data)


	QUARTERLY TRENDS																											FULL YEAR
COMMERCIAL BANKING																4Q18 Change																		2018 Change
	4Q18			3Q18			2Q18			1Q18			4Q17			3Q18						4Q17						2018			2017			2017
																$/bps			%			$/bps			%									$/bps			%
Net interest income¹	$	384		$	380		$	376		$	357		$	367		$	4			1	%	$	17			5	%	$	1,497		$	1,411		$	86			6	%
Noninterest income		140			140			140			125			138			—			—			2			1			545			538			7			1

Total revenue		524			520			516			482			505			4			1			19			4			2,042			1,949			93			5
Noninterest expense		203			202			200			208			195			1			—			8			4			813			772			41			5

Profit before provision for credit losses		321			318			316			274			310			3			1			11			4			1,229			1,177			52			4
Provision for credit losses		7			14			9			(4	)		(1	)		(7	)		(50	)		8			NM			26			19			7			37

Income before income tax expense		314			304			307			278			311			10			3			3			1			1,203			1,158			45			4
Income tax expense		73			70			70			63			105			3			4			(32	)		(30	)		276			384			(108	)		(28	)

Net income	$	241		$	234		$	237		$	215		$	206		$	7			3	%	$	35			17	%	$	927		$	774		$	153			20	%

AVERAGE BALANCES
Total assets	$	53,970		$	52,871		$	52,170		$	50,393		$	50,169		$	1,099			2	%	$	3,801			8	%	$	52,362		$	49,747		$	2,615			5	%
Total loans and leases²		52,963			51,881			51,202			49,285			48,938			1,082			2			4,025			8			51,344			48,655			2,689			6
Deposits		30,608			31,224			30,214			30,766			31,514			(616	)		(2	)		(906	)		(3	)		30,704			30,005			699			2
Interest-earning assets		53,221			52,137			51,404			49,479			49,118			1,084			2			4,103			8			51,572			48,802			2,770			6
KEY METRICS
Net interest margin		2.86	%		2.89	%		2.93	%		2.93	%		2.96	%		(3	) bps					(10	) bps					2.90	%		2.89	%		1	bps
Efficiency ratio		38.73			38.83			38.80			43.07			38.84			(10	) bps					(11	) bps					39.80			39.62			18	bps
Loans-to-deposits ratio (period-end balances)³		172.27			169.64			167.02			160.16			151.54			263	bps					2,073	bps					172.27			151.54			2,073	bps
Loans-to-deposits ratio (average balances)³		172.07			165.17			168.23			158.84			154.03			690	bps					1,804	bps					166.09			161.15			494	bps
Return on average total tangible assets		1.78			1.75			1.82			1.73			1.62			3	bps					16	bps					1.77			1.56			21	bps

²	Includes loans held for sale.

³	In the third quarter of 2018, we revised our method of calculating the loans-to-deposits ratio to exclude loans held for sale. Prior periods have been adjusted to conform with the current period presentation.

SEGMENT FINANCIAL HIGHLIGHTS - OTHER

(in millions)


	QUARTERLY TRENDS																											FULL YEAR
OTHER¹																4Q18 Change																		2018 Change
	4Q18			3Q18			2Q18			1Q18			4Q17			3Q18						4Q17						2018			2017			2017
																$/bps			%			$/bps			%									$/bps			%
Net interest income	($	8	)	($	8	)	($	14	)	$	1		$	31		$	—			—	%	($	39	)		(126	%)	($	29	)	$	111		($	140	)		(126	%)
Noninterest income		16			18			20			24			37			(2	)		(11	)		(21	)		(57	)		78			91			(13	)		(14	)

Total revenue		8			10			6			25			68			(2	)		(20	)		(60	)		(88	)		49			202			(153	)		(76	)
Noninterest expense		25			22			17			19			49			3			14			(24	)		(49	)		83			109			(26	)		(24	)

(Loss) profit before provision for credit losses		(17	)		(12	)		(11	)		6			19			(5	)		(42	)		(36	)		(189	)		(34	)		93			(127	)		(137	)
Provision for credit losses		(2	)		(7	)		10			10			8			5			71			(10	)		(125	)		11			37			(26	)		(70	)

(Loss) income before income tax benefit		(15	)		(5	)		(21	)		(4	)		11			(10	)		(200	)		(26	)		(236	)		(45	)		56			(101	)		(180	)
Income tax benefit		(46	)		(7	)		(12	)		(7	)		(332	)		(39	)		NM			286			86			(72	)		(370	)		298			81

Net income (loss)	$	31		$	2		($	9	)	$	3		$	343		$	29			NM		($	312	)		(91	%)	$	27		$	426		($	399	)		(94	%)

AVERAGE BALANCES
Total assets	$	39,575		$	39,779		$	39,851		$	39,782		$	40,031		($	204	)		(1	%)	($	456	)		(1	%)	$	39,747		$	40,492		($	745	)		(2	%)
Total loans and leases²		2,334			2,402			2,489			2,563			2,732			(68	)		(3	)		(398	)		(15	)		2,446			2,946			(500	)		(17	)
Deposits		7,983			7,686			7,526			7,241			7,085			297			4			898			13			7,611			6,996			615			9
Interest-earning assets		28,574			28,929			29,241			29,198			29,713			(355	)		(1	)		(1,139	)		(4	)		28,984			30,258			(1,274	)		(4	)

²	Includes loans held for sale.

SEGMENT FINANCIAL HIGHLIGHTS - CONSOLIDATED

(in millions, except ratio data)


	QUARTERLY TRENDS																											FULL YEAR
CONSOLIDATED																4Q18 Change																		2018 Change
	4Q18			3Q18			2Q18			1Q18			4Q17			3Q18						4Q17						2018			2017			2017
																$/bps			%			$/bps			%									$/bps			%
Net interest income	$	1,172		$	1,148		$	1,121		$	1,091		$	1,080		$	24			2	%	$	92			9	%	$	4,532		$	4,173		$	359			9	%
Noninterest income		421			416			388			371			404			5			1			17			4			1,596			1,534			62			4

Total revenue		1,593			1,564			1,509			1,462			1,484			29			2			109			7			6,128			5,707			421			7
Noninterest expense		951			910			875			883			898			41			5			53			6			3,619			3,474			145			4

Profit before provision for credit losses		642			654			634			579			586			(12	)		(2	)		56			10			2,509			2,233			276			12
Provision for credit losses		85			78			85			78			83			7			9			2			2			326			321			5			2

Income before income tax expense (benefit)		557			576			549			501			503			(19	)		(3	)		54			11			2,183			1,912			271			14
Income tax expense (benefit)		92			133			124			113			(163	)		(41	)		(31	)		255			156			462			260			202			78

Net income	$	465		$	443		$	425		$	388		$	666		$	22			5	%	($	201	)		(30	%)	$	1,721		$	1,652		$	69			4	%

AVERAGE BALANCES
Total assets	$	157,732		$	155,624		$	153,253		$	151,523		$	151,111		$	2,108			1	%	$	6,621			4	%	$	154,553		$	149,953		$	4,600			3	%
Total loans and leases¹		117,217			115,328			113,521			111,790			111,217			1,889			2			6,000			5			114,481			109,972			4,509			4
Deposits		117,765			117,038			115,142			113,423			113,753			727			1			4,012			4			115,857			111,874			3,983			4
Interest-earning assets		143,770			142,163			140,525			138,671			138,429			1,607			1			5,341			4			141,299			137,482			3,817			3
KEY METRICS
Net interest margin		3.22	%		3.19	%		3.18	%		3.16	%		3.08	%		3	bps					14	bps					3.19	%		3.02	%		17	bps
Efficiency ratio		59.69			58.20			57.95			60.43			60.52			149	bps					(83	) bps					59.06			60.87			(181	) bps
Loans-to-deposits ratio (period-end balances)²		97.56			97.99			96.87			96.28			96.11			(43	) bps					145	bps					97.56			96.11			145	bps
Loans-to-deposits ratio (average balances)²		98.41			97.38			98.01			97.96			97.10			103	bps					131	bps					97.94			97.69			25	bps
Return on average total tangible assets		1.22			1.18			1.16			1.08			1.83			4	bps					(61	) bps					1.16			1.15			1	bps

¹	Includes loans held for sale.

²	In the third quarter of 2018, we revised our method of calculating the loans-to-deposits ratio to exclude loans held for sale. Prior periods have been adjusted to conform with the current period presentation.

CREDIT-RELATED INFORMATION

(in millions)


	AS OF										DECEMBER 31, 2018 CHANGE
	Dec 31, 2018		Sept 30, 2018		June 30, 2018		Mar 31, 2018		Dec 31, 2017		Sept 30, 2018						Dec 31, 2017
											$			%			$			%
CREDIT EXPOSURE
Loans and leases:
Commercial	$	40,857	$	39,770	$	39,278	$	38,277	$	37,562	$	1,087			3	%	$	3,295			9	%
Commercial real estate		13,023		12,630		12,528		11,775		11,308		393			3			1,715			15
Leases		2,903		3,005		3,082		3,092		3,161		(102	)		(3	)		(258	)		(8	)

Total commercial loans and leases		56,783		55,405		54,888		53,144		52,031		1,378			2			4,752			9
Residential mortgages		18,978		18,493		17,814		17,346		17,045		485			3			1,933			11
Home equity loans		1,073		1,131		1,211		1,298		1,392		(58	)		(5	)		(319	)		(23	)
Home equity lines of credit		12,710		12,863		13,014		13,190		13,483		(153	)		(1	)		(773	)		(6	)
Home equity loans serviced by others¹		399		429		465		504		542		(30	)		(7	)		(143	)		(26	)
Home equity lines of credit serviced by others¹		104		114		124		136		149		(10	)		(9	)		(45	)		(30	)
Automobile		12,106		12,255		12,517		12,794		13,204		(149	)		(1	)		(1,098	)		(8	)
Education		8,900		8,712		8,450		8,324		8,134		188			2			766			9
Credit card		1,991		1,911		1,877		1,808		1,848		80			4			143			8
Other retail		3,616		3,407		3,047		2,881		2,789		209			6			827			30

Total retail loans		59,877		59,315		58,519		58,281		58,586		562			1			1,291			2

Total loans and leases		116,660		114,720		113,407		111,425		110,617		1,940			2			6,043			5

Derivative receivable:
Derivative receivable - commercial		303		166		217		268		611		137			83			(308	)		(50	)
Derivative receivable - retail		14		7		7		6		6		7			100			8			133

Total derivative receivable		317		173		224		274		617		144			83			(300	)		(49	)

Total credit-related assets		116,977		114,893		113,631		111,699		111,234		2,084			2			5,743			5

Lending-related arrangements:
Undrawn commitments to extend credit - commercial		41,757		38,982		37,657		35,915		35,745		2,775			7			6,012			17
Financial standby letters of credit		1,926		1,934		1,974		1,966		2,036		(8	)		—			(110	)		(5	)
Performance letters of credit		146		131		120		109		47		15			11			99			211
Commercial letters of credit		53		74		56		43		53		(21	)		(28	)		—			—
Marketing rights		37		37		39		41		41		—			—			(4	)		(10	)
Risk participation agreements		19		14		14		18		16		5			36			3			19

Total commercial lending-related arrangements		43,938		41,172		39,860		38,092		37,938		2,766			7			6,000			16
Undrawn commitments to extend credit - retail		27,796		27,747		27,732		27,192		27,214		49			—			582			2
Residential mortgage loans sold with recourse		5		6		6		6		7		(1	)		(17	)		(2	)		(29	)

Total retail lending-related arrangements		27,801		27,753		27,738		27,198		27,221		48			—			580			2

Total lending-related arrangements		71,739		68,925		67,598		65,290		65,159		2,814			4			6,580			10

Total credit exposure	$	188,716	$	183,818	$	181,229	$	176,989	$	176,393	$	4,898			3	%	$	12,323			7	%

Memo: Total credit exposure by product:
Commercial exposure	$	101,024	$	96,743	$	94,965	$	91,504	$	90,580	$	4,281			4	%	$	10,444			12	%
Retail exposure		87,692		87,075		86,264		85,485		85,813		617			1			1,879			2

Total credit exposure	$	188,716	$	183,818	$	181,229	$	176,989	$	176,393	$	4,898			3	%	$	12,323			7	%

¹	Our SBO portfolio consists of purchased loans and lines of credit that were originally serviced by others.

CREDIT-RELATED INFORMATION, CONTINUED

(in millions, except ratio data)


	AS OF															DECEMBER 31, 2018 CHANGE
	Dec 31, 2018			Sept 30, 2018			June 30, 2018			Mar 31, 2018			Dec 31, 2017			Sept 30, 2018						Dec 31, 2017
																$/bps			%			$/bps			%
NONPERFORMING ASSETS
Commercial	$	194		$	228		$	249		$	244		$	238		($	34	)		(15	%)	($	44	)		(18	%)
Commercial real estate		7			30			31			30			27			(23	)		(77	)		(20	)		(74	)
Leases		—			—			—			—			—			—			—			—			—

Total commercial loans and leases		201			258			280			274			265			(57	)		(22	)		(64	)		(24	)
Residential mortgages		136			136			119			128			128			—			—			8			6
Home equity loans		50			53			59			66			72			(3	)		(6	)		(22	)		(31	)
Home equity lines of credit		231			221			225			235			233			10			5			(2	)		(1	)
Home equity loans serviced by others¹		17			19			19			23			25			(2	)		(11	)		(8	)		(32	)
Home equity lines of credit serviced by others¹		15			16			17			17			18			(1	)		(6	)		(3	)		(17	)
Automobile		81			67			62			60			70			14			21			11			16
Education		38			38			40			41			38			—			—			—			—
Credit card		20			17			17			18			17			3			18			3			18
Other retail		8			7			7			6			5			1			14			3			60

Total retail loans		596			574			565			594			606			22			4			(10	)		(2	)

Nonperforming loans and leases		797			832			845			868			871			(35	)		(4	)		(74	)		(8	)

Other nonperforming assets - Retail		34			31			29			34			36			3			10			(2	)		(6	)

Nonperforming assets	$	831		$	863		$	874		$	902		$	907		($	32	)		(4	%)	($	76	)		(8	%)

NONPERFORMING ASSETS BY PRODUCT
Commercial	$	201		$	258		$	280		$	274		$	265		($	57	)		(22	%)	($	64	)		(24	%)
Retail		630			605			594			628			642			25			4			(12	)		(2	)

Total nonperforming assets	$	831		$	863		$	874		$	902		$	907		($	32	)		(4	%)	($	76	)		(8	%)


ASSET QUALITY RATIOS
Allowance for loan and lease losses to loans and leases		1.06	%		1.08	%		1.10	%		1.12	%		1.12	%		(2	) bps					(6	) bps
Allowance for loan and lease losses to nonperforming loans and leases		155.99			149.29			148.20			143.60			141.96			670	bps					NM
Nonperforming loans and leases to loans and leases		0.68			0.73			0.75			0.78			0.79			(5	) bps					(11	) bps
Nonperforming assets to total assets		0.52			0.54			0.56			0.59			0.60			(2	) bps					(8	) bps

¹	Our SBO portfolio consists of purchased loans and lines of credit that were originally serviced by others.

CREDIT-RELATED INFORMATION, CONTINUED

(in millions)


	QUARTERLY TRENDS																											FULL YEAR
																4Q18 Change																		2018 Change
	4Q18			3Q18			2Q18			1Q18			4Q17			3Q18						4Q17						2018			2017			2017
																$			%			$			%									$			%
CHARGE-OFFS, RECOVERIES AND RELATED RATIOS
GROSS CHARGE-OFFS
Commercial	$	17		$	14		$	14		$	3		$	15		$	3			21	%	$	2			13	%	$	48		$	62		($	14	)		(23	%)
Commercial real estate		—			4			—			—			—			(4	)		(100	)		—			—			4			13			(9	)		(69	)
Leases		—			—			—			—			—			—			—			—			—			—			—			—			—

Total commercial loans and leases		17			18			14			3			15			(1	)		(6	)		2			13			52			75			(23	)		(31	)
Residential mortgages		2			2			2			2			2			—			—			—			—			8			11			(3	)		(27	)
Home equity loans		1			1			1			3			2			—			—			(1	)		(50	)		6			11			(5	)		(45	)
Home equity lines of credit		6			6			7			7			7			—			—			(1	)		(14	)		26			34			(8	)		(24	)
Home equity loans serviced by others¹		3			1			2			3			3			2			200			—			—			9			15			(6	)		(40	)
Home equity lines of credit serviced by others¹		1			1			1			1			—			—			—			1			100			4			5			(1	)		(20	)
Automobile		37			39			36			46			50			(2	)		(5	)		(13	)		(26	)		158			181			(23	)		(13	)
Education		17			17			19			15			19			—			—			(2	)		(11	)		68			59			9			15
Credit card		17			17			18			16			15			—			—			2			13			68			61			7			11
Other retail		30			25			20			20			18			5			20			12			67			95			60			35			58

Total retail loans		114			109			106			113			116			5			5			(2	)		(2	)		442			437			5			1

Total gross charge-offs	$	131		$	127		$	120		$	116		$	131		$	4			3	%	$	—			—	%	$	494		$	512		($	18	)		(4	%)

GROSS RECOVERIES
Commercial	$	6		$	2		$	2		$	5		$	13		$	4			200	%	($	7	)		(54	%)	$	15		$	37		($	22	)		(59	%)
Commercial real estate		3			—			—			1			—			3			100			3			100			4			3			1			33
Leases		—			—			—			—			—			—			—			—			—			—			—			—			—

Total commercial loans and leases		9			2			2			6			13			7			NM			(4	)		(31	)		19			40			(21	)		(53	)
Residential mortgages		1			1			1			2			1			—			—			—			—			5			6			(1	)		(17	)
Home equity loans		2			2			4			3			3			—			—			(1	)		(33	)		11			13			(2	)		(15	)
Home equity lines of credit		4			4			4			4			4			—			—			—			—			16			16			—			—
Home equity loans serviced by others¹		4			4			3			4			4			—			—			—			—			15			18			(3	)		(17	)
Home equity lines of credit serviced by others¹		2			2			2			1			1			—			—			1			100			7			7			—			—
Automobile		15			16			18			18			18			(1	)		(6	)		(3	)		(17	)		67			73			(6	)		(8	)
Education		4			4			4			4			5			—			—			(1	)		(20	)		16			15			1			7
Credit card		2			2			3			1			1			—			—			1			100			8			7			1			14
Other retail		3			4			3			3			3			(1	)		(25	)		—			—			13			12			1			8

Total retail loans		37			39			42			40			40			(2	)		(5	)		(3	)		(8	)		158			167			(9	)		(5	)

Total gross recoveries	$	46		$	41		$	44		$	46		$	53		$	5			12	%	($	7	)		(13	%)	$	177		$	207		($	30	)		(14	%)

NET CHARGE-OFFS (RECOVERIES)
Commercial	$	11		$	12		$	12		($	2	)	$	2		($	1	)		(8	%)	$	9			NM		$	33		$	25		$	8			32	%
Commercial real estate		(3	)		4			—			(1	)		—			(7	)		(175	)		(3	)		100			—			10			(10	)		(100	)
Leases		—			—			—			—			—			—			—			—			—			—			—			—			—

Total commercial loans and leases		8			16			12			(3	)		2			(8	)		(50	)		6			NM			33			35			(2	)		(6	)
Residential mortgages		1			1			1			—			1			—			—			—			—			3			5			(2	)		(40	)
Home equity loans		(1	)		(1	)		(3	)		—			(1	)		—			—			—			—			(5	)		(2	)		(3	)		(150	)
Home equity lines of credit		2			2			3			3			3			—			—			(1	)		(33	)		10			18			(8	)		(44	)
Home equity loans serviced by others¹		(1	)		(3	)		(1	)		(1	)		(1	)		2			67			—			—			(6	)		(3	)		(3	)		(100	)
Home equity lines of credit serviced by others¹		(1	)		(1	)		(1	)		—			(1	)		—			—			—			—			(3	)		(2	)		(1	)		(50	)
Automobile		22			23			18			28			32			(1	)		(4	)		(10	)		(31	)		91			108			(17	)		(16	)
Education		13			13			15			11			14			—			—			(1	)		(7	)		52			44			8			18
Credit card		15			15			15			15			14			—			—			1			7			60			54			6			11
Other retail		27			21			17			17			15			6			29			12			80			82			48			34			71

Total retail loans		77			70			64			73			76			7			10			1			1			284			270			14			5

Total net charge-offs (recoveries)	$	85		$	86		$	76		$	70		$	78		($	1	)		(1	%)	$	7			9	%	$	317		$	305		$	12			4	%

¹	Our SBO portfolio consists of purchased loans and lines of credit that were originally serviced by others.

CREDIT-RELATED INFORMATION, CONTINUED

(in millions, except rates)


	QUARTERLY TRENDS																											FULL YEAR
																4Q18 Change																		2018 Change
	4Q18			3Q18			2Q18			1Q18			4Q17			3Q18						4Q17						2018			2017			2017
																$/bps			%			$/bps			%									$/bps			%
ANNUALIZED NET CHARGE-OFF (RECOVERY) RATES
Commercial		0.11	%		0.13	%		0.12	%		(0.02	%)		0.02	%		(2	) bps					9	bps					0.08	%		0.07	%		1	bps
Commercial real estate		(0.11	)		0.11			—			(0.02	)		(0.01	)		(22	) bps					(10	) bps					—			0.09			(9	) bps
Leases		—			—			—			(0.01	)		—			—	bps					—	bps					—			—			—	bps
Total commercial loans and leases		0.05			0.12			0.09			(0.02	)		0.01			(7	) bps					4	bps					0.06			0.07			(1	) bps
Residential mortgages		0.01			0.02			0.02			—			0.01			(1	) bps					—	bps					0.01			0.03			(2	) bps
Home equity loans		(0.21	)		(0.50	)		(0.71	)		0.04			(0.40	)		29	bps					19	bps					(0.34	)		(0.14	)		(20	) bps
Home equity lines of credit		0.07			0.04			0.10			0.10			0.07			3	bps					—	bps					0.08			0.13			(5	) bps
Home equity loans serviced by others¹		(1.45	)		(2.03	)		(1.53	)		(0.62	)		(0.92	)		58	bps					(53	) bps					(1.38	)		(0.49	)		(89	) bps
Home equity lines of credit serviced by others¹		(3.87	)		(4.97	)		(3.33	)		0.31			(1.01	)		110	bps					(286	) bps					(2.81	)		(0.68	)		(213	) bps
Automobile		0.71			0.76			0.57			0.87			0.95			(5	) bps					(24	) bps					0.73			0.80			(7	) bps
Education		0.59			0.61			0.72			0.53			0.75			(2	) bps					(16	) bps					0.61			0.59			2	bps
Credit card		3.09			3.06			3.36			3.22			2.95			3	bps					14	bps					3.18			3.10			8	bps
Other retail		3.07			2.64			2.31			2.40			2.50			43	bps					57	bps					2.63			2.31			32	bps
Total retail loans		0.51			0.47			0.44			0.50			0.52			4	bps					(1	) bps					0.48			0.47			1	bps
Total loans and leases		0.29	%		0.30	%		0.27	%		0.26	%		0.28	%		(1	) bps					1	bps					0.28	%		0.28	%		—	bps
Memo: Average loans:
Commercial	$	40,472		$	39,592		$	39,399		$	37,960		$	37,713		$	880			2	%	$	2,759			7	%	$	39,363		$	37,631		$	1,732			5	%
Commercial real estate		12,900			12,656			12,071			11,549			11,396			244			2			1,504			13			12,299			11,178			1,121			10
Leases		2,938			3,028			3,073			3,114			3,201			(90	)		(3	)		(263	)		(8	)		3,038			3,437			(399	)		(12	)

Total commercial loans and leases		56,310			55,276			54,543			52,623			52,310			1,034			2			4,000			8			54,700			52,246			2,454			5
Residential mortgages		18,713			18,147			17,488			17,162			16,794			566			3			1,919			11			17,883			16,017			1,866			12
Home equity loans		1,101			1,168			1,252			1,342			1,437			(67	)		(6	)		(336	)		(23	)		1,215			1,610			(395	)		(25	)
Home equity lines of credit		12,790			12,925			13,112			13,353			13,501			(135	)		(1	)		(711	)		(5	)		13,043			13,706			(663	)		(5	)
Home equity loans serviced by others¹		411			444			480			520			564			(33	)		(7	)		(153	)		(27	)		463			642			(179	)		(28	)
Home equity lines of credit serviced by others¹		108			118			130			142			156			(10	)		(8	)		(48	)		(31	)		124			181			(57	)		(31	)
Automobile		12,179			12,379			12,657			13,015			13,277			(200	)		(2	)		(1,098	)		(8	)		12,555			13,491			(936	)		(7	)
Education		8,801			8,481			8,374			8,283			8,071			320			4			730			9			8,486			7,557			929			12
Credit card		1,973			1,909			1,854			1,828			1,803			64			3			170			9			1,891			1,725			166			10
Other retail		3,507			3,124			2,966			2,847			2,537			383			12			970			38			3,113			2,117			996			47

Total retail loans		59,583			58,695			58,313			58,492			58,140			888			2			1,443			2			58,773			57,046			1,727			3

Total loans and leases	$	115,893		$	113,971		$	112,856		$	111,115		$	110,450		$	1,922			2	%	$	5,443			5	%	$	113,473		$	109,292		$	4,181			4	%

¹	Our SBO portfolio consists of purchased loans and lines of credit that were originally serviced by others.

CREDIT-RELATED INFORMATION, CONTINUED

(in millions)


	QUARTERLY TRENDS																									FULL YEAR
														4Q18 Change																2018 Change
	4Q18			3Q18		2Q18		1Q18			4Q17			3Q18						4Q17						2018		2017		2017
														$			%			$			%							$			%
SUMMARY OF CHANGES IN THE COMPONENTS OF THE ALLOWANCE FOR CREDIT LOSSES
Allowance for loan and lease losses - beginning	$	1,242		$	1,253	$	1,246	$	1,236		$	1,224		($	11	)		(1	%)	$	18			1	%	$	1,236	$	1,236	$	—			—	%
Charge-offs:
Commercial		17			18		14		3			15			(1	)		(6	)		2			13			52		75		(23	)		(31	)
Retail		114			109		106		113			116			5			5			(2	)		(2	)		442		437		5			1

Total charge-offs		131			127		120		116			131			4			3			—			—			494		512		(18	)		(4	)
Recoveries:
Commercial		9			2		2		6			13			7			NM			(4	)		(31	)		19		40		(21	)		(53	)
Retail		37			39		42		40			40			(2	)		(5	)		(3	)		(8	)		158		167		(9	)		(5	)

Total recoveries		46			41		44		46			53			5			12			(7	)		(13	)		177		207		(30	)		(14	)

Net charge-offs		85			86		76		70			78			(1	)		(1	)		7			9			317		305		12			4
Provision for loan and lease losses:
Commercial		(9	)		8		16		23			49			(17	)		(213	)		(58	)		(118	)		38		57		(19	)		(33	)
Retail		94			67		67		57			41			27			40			53			129			285		248		37			15

Total provision for loan and lease losses		85			75		83		80			90			10			13			(5	)		(6	)		323		305		18			6

Allowance for loan and lease losses - ending	$	1,242		$	1,242	$	1,253	$	1,246		$	1,236		$	—			—	%	$	6			—	%	$	1,242	$	1,236	$	6			—	%

Reserve for unfunded lending commitments - beginning	$	91		$	88	$	86	$	88		$	95		$	3			3	%	($	4	)		(4	%)	$	88	$	72	$	16			22	%
Provision for unfunded lending commitments		—			3		2		(2	)		(7	)		(3	)		(100	)		7			100			3		16		(13	)		(81	)

Reserve for unfunded lending commitments - ending	$	91		$	91	$	88	$	86		$	88		$	—			—	%	$	3			3	%	$	91	$	88	$	3			3	%

Total allowance for credit losses - ending	$	1,333		$	1,333	$	1,341	$	1,332		$	1,324		$	—			—	%	$	9			1	%	$	1,333	$	1,324	$	9			1	%

Memo: Total allowance for credit losses by product:
Commercial	$	781		$	798	$	803	$	797		$	773		($	17	)		(2	%)	$	8			1	%	$	781	$	773	$	8			1	%
Retail		552			535		538		535			551			17			3			1			—			552		551		1			—

Total allowance for credit losses	$	1,333		$	1,333	$	1,341	$	1,332		$	1,324		$	—			—	%	$	9			1	%	$	1,333	$	1,324	$	9			1	%

CAPITAL AND RATIOS

(in millions, except ratio data)


	AS OF																											FULL YEAR
																DECEMBER 31, 2018 CHANGE																2018 Change
	Dec 31, 2018			Sept 30, 2018			June 30, 2018			Mar 31, 2018			Dec 31, 2017			Sept 30, 2018						Dec 31, 2017						2018		2017		2017
																$			%			$			%							$			%
CAPITAL RATIOS AND COMPONENTS (PRELIMINARY)¹
CET1 capital	$	14,485		$	14,435		$	14,604		$	14,425		$	14,309		$	50			—	%	$	176			1	%
Tier 1 capital		15,325			14,978			15,147			14,672			14,556			347			2			769			5
Total capital		18,157			17,810			18,056			17,905			17,781			347			2			376			2
Risk-weighted assets		136,202			133,249			130,621			129,066			127,692			2,953			2			8,510			7
Adjusted average assets²		153,026			150,717			148,341			146,441			145,601			2,309			2			7,425			5
CET1 capital ratio		10.6	%		10.8	%		11.2	%		11.2	%		11.2	%
Tier 1 capital ratio		11.3			11.2			11.6			11.4			11.4
Total capital ratio		13.3			13.4			13.8			13.9			13.9
Tier 1 leverage ratio		10.0			9.9			10.2			10.0			10.0
TANGIBLE COMMON EQUITY (PERIOD-END)
Common stockholders’ equity	$	19,977		$	19,733		$	19,924		$	19,812		$	20,023		$	244			1	%	($	46	)		—	%	$	19,977	$	20,023	($	46	)		—	%
Less: Goodwill		6,923			6,946			6,887			6,887			6,887			(23	)		—			36			1			6,923		6,887		36			1
Less: Other intangible assets		31			33			2			2			2			(2	)		(6	)		29			NM			31		2		29			NM
Add: Deferred tax liabilities³		366			363			359			357			355			3			1			11			3			366		355		11			3

Total tangible common equity	$	13,389		$	13,117		$	13,394		$	13,280		$	13,489		$	272			2	%	($	100	)		(1	%)	$	13,389	$	13,489	($	100	)		(1	%)

TANGIBLE COMMON EQUITY (AVERAGE)
Common stockholders’ equity	$	19,521		$	19,599		$	19,732		$	19,732		$	19,624		($	78	)		—	%	($	103	)		(1	%)	$	19,645	$	19,618	$	27			—	%
Less: Goodwill		6,946			6,926			6,887			6,887			6,887			20			—			59			1			6,912		6,883		29			—
Less: Other intangible assets		32			22			2			2			2			10			45			30			NM			14		2		12			NM
Add: Deferred tax liabilities³		364			360			357			355			531			4			1			(167	)		(31	)		359		534		(175	)		(33	)

Total tangible common equity	$	12,907		$	13,011		$	13,200		$	13,198		$	13,266		($	104	)		(1	%)	($	359	)		(3	%)	$	13,078	$	13,267	($	189	)		(1	%)

INTANGIBLE ASSETS (PERIOD-END)
Goodwill	$	6,923		$	6,946		$	6,887		$	6,887		$	6,887		($	23	)		—	%	$	36			1	%	$	6,923	$	6,887	$	36			1	%
Other intangible assets		31			33			2			2			2			(2	)		(6	)		29			NM			31		2		29			NM

Total intangible assets	$	6,954		$	6,979		$	6,889		$	6,889		$	6,889		($	25	)		—	%	$	65			1	%	$	6,954	$	6,889	$	65			1	%

¹	The December 31, 2017 capital ratios reflect the retrospective adoption of FASB ASU 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.

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

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

KEY PERFORMANCE METRICS, NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

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

Key Performance Metrics:

Our Management uses certain key performance metrics (KPMs) to gauge our progress against strategic and operational goals, as well as to compare our performance against peers. The KPMs are referred to in our Registration Statements on Form S-1 and our external financial reports filed with the Securities and Exchange Commission. The KPMs 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.

Established targets for the KPMs are based on Management-reporting results which are currently referred to by the Company as “Underlying” results. In historical periods, these results may have been referred to as “Adjusted” or “Adjusted/Underlying” results. We believe that Underlying results, which exclude notable items, provide the best representation of our underlying financial progress toward the KPMs as the results exclude items that our Management does not consider indicative of our on-going financial performance. We have consistently shown investors our KPMs on a Management-reporting basis since our initial public offering in September of 2014. KPMs that reflect Underlying results are considered non-GAAP financial measures.

Non-GAAP Financial Measures:

This document contains non-GAAP financial measures denoted as Underlying results. In historical periods, these results may have been referred to as Adjusted or Adjusted/Underlying results. Underlying results for any given reporting period exclude certain items that may occur in that period which Management does not consider indicative of the Company’s on-going financial performance. We believe these non-GAAP financial measures provide useful information to investors because they are used by our Management to evaluate our operating performance and make day-to-day operating decisions. In addition, we believe our Underlying results in any given reporting period reflect our on-going financial performance in that period and, accordingly, are useful to consider in addition to our GAAP financial results. We further believe the presentation of Underlying results increases comparability of period-to-period results. The following tables present reconciliations of our non-GAAP measures to the most directly comparable GAAP financial measures.

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 such companies. We caution investors not to place undue reliance on such non-GAAP financial measures, but to consider them with the most directly comparable GAAP measures. Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as a substitute for our results reported under GAAP.

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

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


		QUARTERLY TRENDS																									FULL YEAR
															4Q18 Change																		2018 Change
		4Q18			3Q18			2Q18		1Q18		4Q17			3Q18						4Q17						2018			2017			2017
															$			%			$			%									$			%
Noninterest income, Underlying:
Noninterest income (GAAP)		$	421		$	416		$	388	$	371	$	404		$	5			1	%	$	17			4	%	$	1,596		$	1,534		$	62			4	%
Less: Notable items			(5	)		—			—		—		17			(5	)		(100	)		(22	)		(129	)		(5	)		6			(11	)		(183	)

Noninterest income, Underlying (non-GAAP)		$	426		$	416		$	388	$	371	$	387		$	10			2	%	$	39			10	%	$	1,601		$	1,528		$	73			5	%

Total revenue, Underlying:
Total revenue (GAAP)	A	$	1,593		$	1,564		$	1,509	$	1,462	$	1,484		$	29			2	%	$	109			7	%	$	6,128		$	5,707		$	421			7	%
Less: Notable items			(5	)		—			—		—		17			(5	)		(100	)		(22	)		(129	)		(5	)		6			(11	)		(183	)

Total revenue, Underlying (non-GAAP)	B	$	1,598		$	1,564		$	1,509	$	1,462	$	1,467		$	34			2	%	$	131			9	%	$	6,133		$	5,701		$	432			8	%

Noninterest expense, Underlying:
Noninterest expense (GAAP)	C	$	951		$	910		$	875	$	883	$	898		$	41			5	%	$	53			6	%	$	3,619		$	3,474		$	145			4	%
Less: Notable items			45			9			—		—		40			36			NM			5			13			54			55			(1	)		(2	)

Noninterest expense, Underlying (non-GAAP)	D	$	906		$	901		$	875	$	883	$	858		$	5			1	%	$	48			6	%	$	3,565		$	3,419		$	146			4	%

Pre-provision profit:
Total revenue (GAAP)	A	$	1,593		$	1,564		$	1,509	$	1,462	$	1,484		$	29			2	%	$	109			7	%	$	6,128		$	5,707		$	421			7	%
Less: Noninterest expense (GAAP)	C		951			910			875		883		898			41			5			53			6			3,619			3,474			145			4

Pre-provision profit (GAAP)		$	642		$	654		$	634	$	579	$	586		($	12	)		(2	%)	$	56			10	%	$	2,509		$	2,233		$	276			12	%

Pre-provision profit, Underlying:
Total revenue, Underlying (non-GAAP)	B	$	1,598		$	1,564		$	1,509	$	1,462	$	1,467		$	34			2	%	$	131			9	%	$	6,133		$	5,701		$	432			8	%
Less: Noninterest expense, Underlying (non-GAAP)	D		906			901			875		883		858			5			1			48			6			3,565			3,419			146			4

Pre-provision profit, Underlying (non-GAAP)		$	692		$	663		$	634	$	579	$	609		$	29			4	%	$	83			14	%	$	2,568		$	2,282		$	286			13	%

Total credit-related costs, Underlying:
Provision for credit losses (GAAP)		$	85		$	78		$	85	$	78	$	83		$	7			9	%	$	2			2	%	$	326		$	321		$	5			2	%
Add: Notable items			—			—			—		—		—			—			—			—			—			—			26			(26	)		(100	)

Total credit-related costs, Underlying (non-GAAP)		$	85		$	78		$	85	$	78	$	83		$	7			9	%	$	2			2	%	$	326		$	347		($	21	)		(6	%)

Income before income tax expense, Underlying:
Income before income tax expense (GAAP)	E	$	557		$	576		$	549	$	501	$	503		($	19	)		(3	%)	$	54			11	%	$	2,183		$	1,912		$	271			14	%
Less: Income (expense) before income tax expense (benefit) related to notable items			(50	)		(9	)		—		—		(23	)		(41	)		NM			(27	)		(117	)		(59	)		(23	)		(36	)		(157	)

Income before income tax expense, Underlying (non-GAAP)	F	$	607		$	585		$	549	$	501	$	526		$	22			4	%	$	81			15	%	$	2,242		$	1,935		$	307			16	%

Income tax expense, Underlying:
Income tax expense (benefit) (GAAP)	G	$	92		$	133		$	124	$	113	($	163	)	($	41	)		(31	%)	$	255			156	%	$	462		$	260		$	202			78	%
Less: Income tax expense (benefit) related to notable items			(41	)		(2	)		—		—		(340	)		(39	)		NM			299			88			(43	)		(363	)		320			88

Income tax expense, Underlying (non-GAAP)	H	$	133		$	135		$	124	$	113	$	177		($	2	)		(1	%)	($	44	)		(25	%)	$	505		$	623		($	118	)		(19	%)

Net income, Underlying:
Net income (GAAP)	I	$	465		$	443		$	425	$	388	$	666		$	22			5	%	($	201	)		(30	%)	$	1,721		$	1,652		$	69			4	%
Add: Notable items, net of income tax expense (benefit)			9			7			—		—		(317	)		2			29			326			103			16			(340	)		356			105

Net income, Underlying (non-GAAP)	J	$	474		$	450		$	425	$	388	$	349		$	24			5	%	$	125			36	%	$	1,737		$	1,312		$	425			32	%

Net income available to common stockholders, Underlying:
Net income available to common stockholders (GAAP)	K	$	450		$	436		$	425	$	381	$	666		$	14			3	%	($	216	)		(32	%)	$	1,692		$	1,638		$	54			3	%
Add: Notable items, net of income tax expense (benefit)			9			7			—		—		(317	)		2			29			326			103			16			(340	)		356			105

Net income available to common stockholders, Underlying (non-GAAP)	L	$	459		$	443		$	425	$	381	$	349		$	16			4	%	$	110			32	%	$	1,708		$	1,298		$	410			32	%

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

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


		QUARTERLY TRENDS																											FULL YEAR
																	4Q18 Change																		2018 Change
		4Q18			3Q18			2Q18			1Q18			4Q17			3Q18						4Q17						2018			2017			2017
																	$/bps			%			$/bps			%									$/bps			%
Operating leverage:
Total revenue (GAAP)	A	$	1,593		$	1,564		$	1,509		$	1,462		$	1,484		$	29			1.78	%	$	109			7.30	%	$	6,128		$	5,707		$	421			7.37	%
Less: Noninterest expense (GAAP)	C		951			910			875			883			898			41			4.39			53			5.82			3,619			3,474			145			4.18

Operating leverage																					(2.61	%)					1.48	%											3.19	%

Operating leverage, Underlying:
Total revenue, Underlying (non-GAAP)	B	$	1,598		$	1,564		$	1,509		$	1,462		$	1,467		$	34			2.08	%	$	131			8.89	%	$	6,133		$	5,701		$	432			7.58	%
Less: Noninterest expense, Underlying (non-GAAP)	D		906			901			875			883			858			5			0.44			48			5.53			3,565			3,419			146			4.30

Operating leverage, Underlying (non-GAAP)																					1.64	%					3.36	%											3.28	%

Efficiency ratio and efficiency ratio, Underlying:
Efficiency ratio	C/A		59.69	%		58.20	%		57.95	%		60.43	%		60.52	%		149	bps					(83	) bps					59.06	%		60.87	%		(181	) bps
Efficiency ratio, Underlying (non-GAAP)	D/B		56.70			57.62			57.95			60.43			58.50			(92	) bps					(180	) bps					58.13			59.96			(183	) bps
Effective income tax rate and effective income tax rate, Underlying:
Effective income tax rate	G/E		16.45	%		23.16	%		22.58	%		22.52	%		(32.40	%)		(671	) bps					4,885	bps					21.16	%		13.62	%		754	bps
Effective income tax rate, Underlying (non-GAAP)	H/F		21.91			23.20			22.58			22.52			33.68			(129	) bps					(1,177	) bps					22.55			32.20			(965	) bps
Return on average common equity and return on average common equity, Underlying:
Average common equity (GAAP)	M	$	19,521		$	19,599		$	19,732		$	19,732		$	19,624		($	78	)		—	%	($	103	)		(1	%)	$	19,645		$	19,618		$	27			—	%
Return on average common equity	K/M		9.16	%		8.82	%		8.65	%		7.83	%		13.46	%		34	bps					(430	) bps					8.62	%		8.35	%		27	bps
Return on average common equity, Underlying (non-GAAP)	L/M		9.33			8.96			8.65			7.83			7.05			37	bps					228	bps					8.69			6.62			207	bps
Return on average tangible common equity and return on average tangible common equity, Underlying:
Average common equity (GAAP)	M	$	19,521		$	19,599		$	19,732		$	19,732		$	19,624		($	78	)		—	%	($	103	)		(1	%)	$	19,645		$	19,618		$	27			—	%
Less: Average goodwill (GAAP)			6,946			6,926			6,887			6,887			6,887			20			—			59			1			6,912			6,883			29			—
Less: Average other intangibles (GAAP)			32			22			2			2			2			10			45			30			NM			14			2			12			NM
Add: Average deferred tax liabilities related to goodwill (GAAP)			364			360			357			355			531			4			1			(167	)		(31	)		359			534			(175	)		(33	)

Average tangible common equity	N	$	12,907		$	13,011		$	13,200		$	13,198		$	13,266		($	104	)		(1	%)	($	359	)		(3	%)	$	13,078		$	13,267		($	189	)		(1	%)

Return on average tangible common equity	K/N		13.85	%		13.29	%		12.93	%		11.71	%		19.92	%		56	bps					(607	) bps					12.94	%		12.35	%		59	bps
Return on average tangible common equity, Underlying (non-GAAP)	L/N		14.11			13.50			12.93			11.71			10.43			61	bps					368	bps					13.06			9.79			327	bps
Return on average total assets and return on average total assets, Underlying:
Average total assets (GAAP)	O	$	157,732		$	155,624		$	153,253		$	151,523		$	151,111		$	2,108			1	%	$	6,621			4	%	$	154,553		$	149,953		$	4,600			3	%
Return on average total assets	I/O		1.17	%		1.13	%		1.11	%		1.04	%		1.75	%		4	bps					(58	) bps					1.11	%		1.10	%		1	bps
Return on average total assets, Underlying (non-GAAP)	J/O		1.19			1.15			1.11			1.04			0.92			4	bps					27	bps					1.12			0.88			24	bps
Return on average total tangible assets and return on average total tangible assets, Underlying:
Average total assets (GAAP)	O	$	157,732		$	155,624		$	153,253		$	151,523		$	151,111		$	2,108			1	%	$	6,621			4	%	$	154,553		$	149,953		$	4,600			3	%
Less: Average goodwill (GAAP)			6,946			6,926			6,887			6,887			6,887			20			—			59			1			6,912			6,883			29			—
Less: Average other intangibles (GAAP)			32			22			2			2			2			10			45			30			NM			14			2			12			NM
Add: Average deferred tax liabilities related to goodwill (GAAP)			364			360			357			355			531			4			1			(167	)		(31	)		359			534			(175	)		(33	)

Average tangible assets	P	$	151,118		$	149,036		$	146,721		$	144,989		$	144,753		$	2,082			1	%	$	6,365			4	%	$	147,986		$	143,602		$	4,384			3	%

Return on average total tangible assets	I/P		1.22	%		1.18	%		1.16	%		1.08	%		1.83	%		4	bps					(61	) bps					1.16	%		1.15	%		1	bps
Return on average total tangible assets, Underlying (non-GAAP)	J/P		1.24			1.20			1.16			1.08			0.96			4	bps					28	bps					1.17			0.91			26	bps

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

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


		QUARTERLY TRENDS																											FULL YEAR
																	4Q18 Change																		2018 Change
		4Q18			3Q18			2Q18			1Q18			4Q17			3Q18						4Q17						2018			2017			2017
																	$/bps			%			$/bps			%									$/bps			%
Tangible book value per common share:
Common shares - at period-end (GAAP)	Q		466,007,984			474,120,616			484,055,194			487,551,444			490,812,912			(8,112,632	)		(2	%)		(24,804,928	)		(5	%)		466,007,984			490,812,912			(24,804,928	)		(5	%)
Common stockholders’ equity (GAAP)		$	19,977		$	19,733		$	19,924		$	19,812		$	20,023		$	244			1		($	46	)		—		$	19,977		$	20,023		($	46	)		—
Less: Goodwill (GAAP)			6,923			6,946			6,887			6,887			6,887			(23	)		—			36			1			6,923			6,887			36			1
Less: Other intangible assets (GAAP)			31			33			2			2			2			(2	)		(6	)		29			NM			31			2			29			NM
Add: Deferred tax liabilities related to goodwill (GAAP)			366			363			359			357			355			3			1			11			3			366			355			11			3

Tangible common equity	R	$	13,389		$	13,117		$	13,394		$	13,280		$	13,489		$	272			2	%	($	100	)		(1	%)	$	13,389		$	13,489		($	100	)		(1	%)

Tangible book value per common share	R/Q	$	28.73		$	27.66		$	27.67		$	27.24		$	27.48		$	1.07			4	%	$	1.25			5	%	$	28.73		$	27.48		$	1.25			5	%
Net income per average common share - basic and diluted and net income per average common share - basic and diluted, Underlying:
Average common shares outstanding - basic (GAAP)	S		467,338,825			475,957,526			484,744,354			487,500,618			492,149,763			(8,618,701	)		(2	%)		(24,810,938	)		(5	%)		478,822,072			502,157,440			(23,335,368	)		(5	%)
Average common shares outstanding - diluted (GAAP)	T		469,103,134			477,599,917			486,141,695			489,266,826			493,788,007			(8,496,783	)		(2	)		(24,684,873	)		(5	)		480,430,741			503,685,091			(23,254,350	)		(5	)
Net income per average common share - basic (GAAP)	K/S	$	0.96		$	0.92		$	0.88		$	0.78		$	1.35		$	0.04			4		($	0.39	)		(29	)	$	3.54		$	3.26		$	0.28			9
Net income per average common share - diluted (GAAP)	K/T		0.96			0.91			0.88			0.78			1.35			0.05			5			(0.39	)		(29	)		3.52			3.25			0.27			8
Net income per average common share - basic, Underlying (non-GAAP)	L/S		0.98			0.93			0.88			0.78			0.71			0.05			5			0.27			38			3.57			2.59			0.98			38
Net income per average common share - diluted, Underlying (non-GAAP)	L/T		0.98			0.93			0.88			0.78			0.71			0.05			5			0.27			38			3.56			2.58			0.98			38
Dividend payout ratio and dividend payout ratio, Underlying:
Cash dividends declared and paid per common share	U	$	0.27		$	0.27		$	0.22		$	0.22		$	0.18		$	—			—	%	$	0.09			50	%	$	0.98		$	0.64		$	0.34			53	%
Dividend payout ratio	U/(K/S)		28	%		29	%		25	%		28	%		13	%		(100	) bps					1,500	bps					28	%		20	%		800	bps
Dividend payout ratio, Underlying (non-GAAP)	U/(L/S)		27			29			25			28			25			(200	) bps					200	bps					27			25			200	bps

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

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


	QUARTERLY TRENDS																							FULL YEAR
												4Q18 Change																	2018 Change
	4Q18			3Q18		2Q18		1Q18		4Q17		3Q18						4Q17						2018			2017		2017
												$/bps			%			$/bps			%								$/ bps			%
Mortgage banking fees, Underlying:
Mortgage banking fees (GAAP)	$	51		$	49	$	27	$	25	$	28	$	2			4	%	$	23			82	%	$	152		$	108	$	44			41	%
Less: Notable items		(4	)		—		—		—		—		(4	)		(100	)		(4	)		(100	)		(4	)		—		(4	)		(100	)

Mortgage banking fees, Underlying (non-GAAP)	$	55		$	49	$	27	$	25	$	28	$	6			12	%	$	27			96	%	$	156		$	108	$	48			44	%

Other income, Underlying:
Other income (GAAP)	$	15		$	17	$	15	$	17	$	40	($	2	)		(12	%)	($	25	)		(63	%)	$	64		$	84	($	20	)		(24	%)
Less: Notable items		(1	)		—		—		—		17		(1	)		(100	)		(18	)		(106	)		(1	)		6		(7	)		(117	)

Other income, Underlying (non-GAAP)	$	16		$	17	$	15	$	17	$	23	($	1	)		(6	%)	($	7	)		(30	%)	$	65		$	78	($	13	)		(17	%)

Salaries and employee benefits, Underlying¹:
Salaries and employee benefits (GAAP)¹	$	483		$	474	$	453	$	470	$	450	$	9			2	%	$	33			7	%	$	1,880		$	1,766	$	114			6	%
Less: Notable items		6			5		—		—		17		1			20			(11	)		(65	)		11			17		(6	)		(35	)

Salaries and employee benefits, Underlying (non-GAAP)¹	$	477		$	469	$	453	$	470	$	433	$	8			2	%	$	44			10	%	$	1,869		$	1,749	$	120			7	%

Outside services, Underlying:
Outside services (GAAP)	$	135		$	107	$	106	$	99	$	118	$	28			26	%	$	17			14	%	$	447		$	404	$	43			11	%
Less: Notable items		19			1		—		—		12		18			NM			7			58			20			12		8			67

Outside services, Underlying (non-GAAP)	$	116		$	106	$	106	$	99	$	106	$	10			9	%	$	10			9	%	$	427		$	392	$	35			9	%

Occupancy, Underlying:
Occupancy (GAAP)	$	92		$	81	$	79	$	81	$	80	$	11			14	%	$	12			15	%	$	333		$	319	$	14			4	%
Less: Notable items		16			—		—		—		—		16			100			16			100			16			—		16			100

Occupancy, Underlying (non-GAAP)	$	76		$	81	$	79	$	81	$	80	($	5	)		(6	%)	($	4	)		(5	%)	$	317		$	319	($	2	)		(1	%)

Equipment expense, Underlying:
Equipment expense (GAAP)	$	74		$	70	$	64	$	67	$	67	$	4			6	%	$	7			10	%	$	275		$	263	$	12			5	%
Less: Notable items		3			—		—		—		—		3			100			3			100			3			—		3			100

Equipment expense, Underlying (non-GAAP)	$	71		$	70	$	64	$	67	$	67	$	1			1	%	$	4			6	%	$	272		$	263	$	9			3	%

Other operating expense, Underlying¹:
Other operating expense (GAAP)¹	$	117		$	131	$	127	$	120	$	137	($	14	)		(11	%)	($	20	)		(15	%)	$	495		$	542	($	47	)		(9	%)
Less: Notable items		1			3		—		—		11		(2	)		(67	)		(10	)		(91	)		4			26		(22	)		(85	)

Other operating expense, Underlying (non-GAAP)¹	$	116		$	128	$	127	$	120	$	126	($	12	)		(9	%)	($	10	)		(8	%)	$	491		$	516	($	25	)		(5	%)

As of January 1, 2018, we retrospectively adopted ASU 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which requires the service cost component of net periodic pension and postretirement benefit cost to be reported separately in the Consolidated Statements of Operations from the other components. Prior periods have been adjusted to conform with the current period presentation.

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

(in millions, except ratio data)


		FOURTH QUARTER 2018												THIRD QUARTER 2018												SECOND QUARTER 2018
		Consumer Banking			Commercial Banking			Other			Consolidated			Consumer Banking			Commercial Banking			Other			Consolidated			Consumer Banking			Commercial Banking			Other			Consolidated
Net income (loss) available to common stockholders:
Net income (loss)	A	$	193		$	241		$	31		$	465		$	207		$	234		$	2		$	443		$	197		$	237		($	9	)	$	425
Less: Preferred stock dividends			—			—			15			15			—			—			7			7			—			—			—			—

Net income (loss) available to common stockholders	B	$	193		$	241		$	16		$	450		$	207		$	234		($	5	)	$	436		$	197		$	237		($	9	)	$	425

Return on average total tangible assets:
Average total assets (GAAP)		$	64,187		$	53,970		$	39,575		$	157,732		$	62,974		$	52,871		$	39,779		$	155,624		$	61,232		$	52,170		$	39,851		$	153,253
Less: Average goodwill (GAAP)			—			—			6,946			6,946			—			—			6,926			6,926			—			—			6,887			6,887
Average other intangibles (GAAP)			—			—			32			32			—			—			22			22			—			—			2			2
Add: Average deferred tax liabilities related to goodwill (GAAP)			—			—			364			364			—			—			360			360			—			—			357			357

Average tangible assets	C	$	64,187		$	53,970		$	32,961		$	151,118		$	62,974		$	52,871		$	33,191		$	149,036		$	61,232		$	52,170		$	33,319		$	146,721

Return on average total tangible assets	A/C		1.19	%		1.78	%		NM			1.22	%		1.31	%		1.75	%		NM			1.18	%		1.29	%		1.82	%		NM			1.16	%
Efficiency ratio:
Noninterest expense (GAAP)	D	$	723		$	203		$	25		$	951		$	686		$	202		$	22		$	910		$	658		$	200		$	17		$	875
Net interest income (GAAP)			796			384			(8	)		1,172			776			380			(8	)		1,148			759			376			(14	)		1,121
Noninterest income (GAAP)			265			140			16			421			258			140			18			416			228			140			20			388

Total revenue (GAAP)	E	$	1,061		$	524		$	8		$	1,593		$	1,034		$	520		$	10		$	1,564		$	987		$	516		$	6		$	1,509

Efficiency ratio	D/E		68.22	%		38.73	%		NM			59.69	%		66.29	%		38.83	%		NM			58.20	%		66.68	%		38.80	%		NM			57.95	%


		FIRST QUARTER 2018												FOURTH QUARTER 2017
		Consumer Banking			Commercial Banking			Other			Consolidated			Consumer Banking			Commercial Banking			Other		Consolidated
Net income (loss) available to common stockholders:
Net income	A	$	170		$	215		$	3		$	388		$	117		$	206		$	343	$	666
Less: Preferred stock dividends			—			—			7			7			—			—			—		—

Net income (loss) available to common stockholders	B	$	170		$	215		($	4	)	$	381		$	117		$	206		$	343	$	666

Return on average total tangible assets:
Average total assets (GAAP)		$	61,348		$	50,393		$	39,782		$	151,523		$	60,911		$	50,169		$	40,031	$	151,111
Less: Average goodwill (GAAP)			—			—			6,887			6,887			—			—			6,887		6,887
Average other intangibles (GAAP)			—			—			2			2			—			—			2		2
Add: Average deferred tax liabilities related to goodwill (GAAP)			—			—			355			355			—			—			531		531

Average tangible assets	C	$	61,348		$	50,393		$	33,248		$	144,989		$	60,911		$	50,169		$	33,673	$	144,753

Return on average total tangible assets	A/C		1.12	%		1.73	%		NM			1.08	%		0.76	%		1.62	%		NM		1.83	%
Efficiency ratio:
Noninterest expense (GAAP)	D	$	656		$	208		$	19		$	883		$	654		$	195		$	49	$	898
Net interest income (GAAP)			733			357			1			1,091			682			367			31		1,080
Noninterest income (GAAP)			222			125			24			371			229			138			37		404

Total revenue (GAAP)	E	$	955		$	482		$	25		$	1,462		$	911		$	505		$	68	$	1,484

Efficiency ratio	D/E		68.72	%		43.07	%		NM			60.43	%		71.90	%		38.84	%		NM		60.52	%

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

(in millions, except ratio data)


		FULL YEAR
		2018												2017
		Consumer Banking			Commercial Banking			Other			Consolidated			Consumer Banking			Commercial Banking			Other		Consolidated
Net income (loss) available to common stockholders:
Net income	A	$	767		$	927		$	27		$	1,721		$	452		$	774		$	426	$	1,652
Less: Preferred stock dividends			—			—			29			29			—			—			14		14

Net income (loss) available to common stockholders	B	$	767		$	927		($	2	)	$	1,692		$	452		$	774		$	412	$	1,638

Return on average total tangible assets:
Average total assets (GAAP)		$	62,444		$	52,362		$	39,747		$	154,553		$	59,714		$	49,747		$	40,492	$	149,953
Less: Average goodwill (GAAP)			—			—			6,912			6,912			—			—			6,883		6,883
Average other intangibles (GAAP)			—			—			14			14			—			—			2		2
Add: Average deferred tax liabilities related to goodwill (GAAP)			—			—			359			359			—			—			534		534

Average tangible assets	D	$	62,444		$	52,362		$	33,180		$	147,986		$	59,714		$	49,747		$	34,141	$	143,602

Return on average total tangible assets	A/D		1.23	%		1.77	%		NM			1.16	%		0.76	%		1.56	%		NM		1.15	%
Efficiency ratio:
Noninterest expense (GAAP)	E	$	2,723		$	813		$	83		$	3,619		$	2,593		$	772		$	109	$	3,474
Net interest income (GAAP)			3,064			1,497			(29	)		4,532			2,651			1,411			111		4,173
Noninterest income (GAAP)			973			545			78			1,596			905			538			91		1,534

Total revenue (GAAP)	F	$	4,037		$	2,042		$	49		$	6,128		$	3,556		$	1,949		$	202	$	5,707

Efficiency ratio	E/F		67.47	%		39.80	%		NM			59.06	%		72.93	%		39.62	%		NM		60.87	%

CITIZENS FINANCIAL GROUP INC/RI - FORM 8-K - EX-99.1 - January 22, 2019

Attached files

CITIZENS FINANCIAL GROUP INC/RI Reports