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Citizens Financial Group Inc$35.50$.802.31%

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 Citizens Financial Group, Inc. Reports Fourth Quarter Net Income of $666 Million and Diluted EPS of $1.35
   Friday, January 19, 2018 6:30:07 AM ET

--ROTCE of 19.9%, and Underlying ROTCE of 10.4% in fourth quarter 2017*

--2017 net income of $1.7 billion and $3.25 diluted EPS

--2017 Underlying net income of $1.3 billion up 28% and diluted EPS of $2.58 up 34% from Adjusted 2016*

--Positive operating leverage of 6.8% year on year on an Underlying basis*

Citizens Financial Group, Inc. (CFG OR "CITIZENS" ) today reported fourth quarter net income of $666 million, or $1.35 per diluted common share, compared with fourth quarter 2016 net income of $282 million, or $0.55 per diluted common share. Fourth quarter 2017 Return on Average Tangible Common Equity* ("ROTCE") of 19.9% compares with fourth quarter 2016 of 8.4%. Full year 2017 net income available to common stockholders of $1.64 billion and diluted EPS of $3.25 compares with 2016 net income of $1.03 billion and diluted EPS of $1.97. 2017 ROTCE* of 12.3% compares with 7.7% in 2016.



Fourth quarter 2017 results included a $317 million after-tax net benefit from notable items including a benefit related to the Company’s net deferred tax liability in connection with the December 2017 Tax Legislation, partially offset by investments in our colleagues and communities, as well as a $17 million gain on the sale of a Troubled Debt Restructuring Portfolio offset by other notable items largely associated with our efficiency initiatives ("TDR Transaction II").

                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
Notable items*                                                                                                                                                                                       4Q17                                                                                                                                                                                                                                            FY 2017                                                                                                                                                                                                                          FY 2016
                                                                                         ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                          ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                          ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
($s in millions, except per share data)                                                                  Pre-tax                                       After-tax                                           EPS impact                                                                              Pre-tax                                     After-tax                                         EPS impact                                                                                   Pre-tax                                           After-tax                                         EPS impact
----------------------------------------------                                           --------------------------------------                                          -------------------------------------------------                                          -------------------------------------------------                                          --------------------------------------                     -------------------------------------------------                     -------------------------------------------------                                          -------------------------------------------------                     -------------------------------------------------                     -------------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
2017 Tax Legislation-related notable items*
  Tax Legislation DTL adjustment                                                                            $ --                                                                $    331                                                                                   $   0.67                                                                                   $ --                                           $    331                                                              $   0.66
  Colleague & community investment                                                                    (22 )                                                (13 )                                                                 (0.03 )                                                                           (22 )                           (13 )                                            (0.03 )
----------------------------------------------                                           -------------------- -------------- -                                           -------------------- ------ --------------------                                           -------------------- ------ --------------------                                           -------------------- -------------- -                      -------------------- ------ --------------------                      -------------------- ------ --------------------
Net 2017 Tax Legislation-related notable items                                                              $            (22 )                                                              $    318                                                                                   $   0.64                                                                                   $            (22 )                                         $    318                                                              $   0.63
TDR transaction gain                                                                                        $             17                                                                $     10                                                                                   $   0.02                                                                                   $             17                                           $     10                                                              $   0.02                                                                                   $     64                                                              $     40                                                              $   0.08
Other notable items                                                                                   (18 )                                                (11 )                                                                 (0.02 )                                                                           (18 )                           (11 )                                            (0.02 )                                                                   (33 )                                              (21 )                                            (0.04 )
----------------------------------------------                                           -------------------- -------------- -                                           -------------------- ------ --------------------                                           -------------------- ------ --------------------                                           -------------------- -------------- -                      -------------------- ------ --------------------                      -------------------- ------ --------------------                                           -------------------- ------ --------------------                      -------------------- ------ --------------------                      -------------------- ------ --------------------
TDR gain net of other notable items                                                                         $             (1 )                                                              $     (1 )                                                                                 $  (0.00 )                                                                                 $             (1 )                                         $     (1 )                                                            $  (0.00 )                                                                                 $     31                                                              $     19                                                              $   0.04
1Q17 State tax settlement                                                                                                                                                                                                                                                                                                                                                           --                                                 23                                                                  0.04
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
----------------------------------------------                                           --------------------------------------                                          -------------------------------------------------                                          -------------------------------------------------                                          --------------------------------------                     -------------------------------------------------                     -------------------------------------------------                                          -------------------------------------------------                     -------------------------------------------------                     -------------------------------------------------
Total notable items                                                                                         $            (23 )                                                              $    317                                                                $   0.64                                                                $            (23 )                                         $    340                                           $   0.67                                                                $     31                                           $     19                                           $   0.04  
----------------------------------------------                                           -------------------- -------------- -                                           -------------------- ------ --------------------                                           -------------------- ------ --------------------                                           -------------------- -------------- -                      -------------------- ------ --------------------                      -------------------- ------ --------------------                                           -------------------- ------ --------------------                      -------------------- ------ --------------------                      -------------------- ------ --------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

On an Underlying basis,* fourth quarter 2017 net income available to common stockholders of $349 million, or $0.71 per diluted share, increased 24% and 29%, respectively, from fourth quarter 2016 and increased 2% and 4%, respectively, from third quarter 2017. Underlying fourth quarter 2017 ROTCE* of 10.4% improved from 10.1% in third quarter 2017 and 8.4% in fourth quarter 2016. On an Adjusted/Underlying basis,* full year 2017 net income available to common stockholders of $1.3 billion, increased 28% and diluted EPS of $2.58 increased 34% from 2016 levels. Full year 2017 ROTCE* of 12.3% compares to 7.7% in 2016. On an Adjusted/Underlying basis,* 2017 ROTCE of 9.8% compares with 7.6% in 2016.

Citizens announced today that its board of directors declared a 22% increase in its quarterly cash dividend to $0.22 per common share. The dividend is payable on February 15, 2018 to shareholders of record at the close of business on February 1, 2018.

"We are pleased to report another quarter of strong results to cap what has been an exceptional year for Citizens," said Chairman and Chief Executive Officer Bruce Van Saun. "We are executing well and running the bank better and better, as evidenced by the 6.8% year on year operating leverage, ROTCE reaching 10.4% in the fourth quarter, and consistent progress in delivering well for our customers, colleagues and communities. We enter 2018 with solid momentum, and are pleased to raise our dividend today by a further 22%."

*Please see important information on Key Performance Metrics and Non-GAAP Financial Measures at the end of this release for an explanation of our use of these metrics and non-GAAP financial measures and their reconciliation to GAAP financial measures. 4Q17 after-tax notable items excluded from our "Underlying" results reflect a $10 million gain on a TDR portfolio sale offset by $11 million of other notable items ("TDR Transaction II") and a $331 million benefit relating to the December 2017 Tax Legislation, partially offset by $13 million of other notable items. December 2017 Tax Legislation benefit amounts are estimated as of December 31, 2017 and may be subject to adjustment during 2018. "Underlying" results, as applicable, also exclude a 1Q17 $23 million benefit related to the settlement of certain state tax matters and reclassify 2Q17 results for the pre-tax impact of $26 million of lease asset impairments to reflect their credit-related impact. 3Q16 after-tax notable items excluded from our "Adjusted" results reflect a $19 million gain on a TDR portfolio sale less other notable items ("TDR Transaction"). Where there is a reference to "Adjusted", "Underlying" or "Adjusted/Underlying" results in a paragraph, all measures that follow these references are on the same basis, when applicable. Current reporting-period regulatory capital ratios are preliminary.

Fourth Quarter 2017 vs. Third Quarter 2017

Key Highlights

-- Fourth quarter highlights include ROTCE of 19.9% and Underlying ROTCE* of 10.4%. Underlying results* reflect revenue growth of 2% driven by strength in net interest income given continued loan growth and a three basis point improvement in net interest margin. Provision expense increased modestly from relatively low third quarter levels.

-- Results reflect an efficiency ratio of 61%, which includes the impact of $40 million of notable expense items. On an Underlying basis,* operating leverage was 1.6% and the efficiency ratio improved 91 basis points to 58.5%.

-- Tangible book value per common share of $27.48 increased by 2%. Fully diluted average common shares outstanding decreased by 8.4 million shares.

Results

-- Total revenue of $1.5 billion increased 3% including the $17 million benefit tied to notable items; on an Underlying basis,* total revenue of $1.5 billion increased 2%. -- Net interest income of $1.1 billion increased $18 million, reflecting 1% average loan growth and a three basis point improvement in net interest margin to 3.08% from third quarter levels that included a two basis point benefit tied to higher commercial loan interest recoveries.

-- Net interest margin reflects improved yields on interest-earning assets, including the benefit of higher short-term interest rates and balance sheet optimization, partially offset by higher funding costs.

-- Noninterest income of $404 million increased $23 million, which includes a $17 million benefit from notable items. Underlying noninterest income* of $387 million increased 2%, driven by strength in foreign exchange and interest rate products, trust and investment services fees and other income.

-- Noninterest expense of $898 million increased $40 million, driven by the impact of notable items. On an Underlying basis,* noninterest expense of $858 million was stable, as lower other operating expense and salaries and employee benefits were offset by an increase in outside services, which included costs associated with our strategic initiatives.

-- Provision for credit losses of $83 million increased modestly from relatively low third quarter levels.

-- Efficiency ratio of 60.5%, 58.5% on an Underlying basis,* compares with 59.4% in third quarter 2017; ROTCE of 19.9%, 10.4% on an Underlying basis,* improved from 10.1% in the third quarter 2017.

Balance Sheet

-- Average interest-earning assets increased $950 million, driven by an increase in loans, with particular strength in retail.

-- Average deposits increased $806 million, driven by growth in term and demand, partially offset by a decrease in checking with interest.

-- Nonperforming loans and leases ("NPLs") to total loans and leases ratio of 0.79% improved from 0.85%, reflecting a reduction in commercial NPLs. Allowance coverage of NPLs increased to 142% from 131%.

-- Net charge-offs of 28 basis points increased modestly from third quarter levels.

-- Capital strength remains robust, with a preliminary common equity tier 1 ("CET1") risk-based capital ratio of 11.1%; 11.2% including a pro forma benefit tied to an anticipated FASB accounting standards change related to Tax Legislation.

-- Repurchased 8.8 million shares of common stock in the quarter, and including common dividends, returned $424 million in capital to shareholders.

-- Average loan-to-deposit ratio remained relatively stable at 97.8%; Period-end loan-to-deposit ratio improved to 96.7%.

Fourth Quarter 2017 vs. Fourth Quarter 2016

Key Highlights

-- Fourth quarter results reflect a 136% increase in net income available to common stockholders, which includes the impact of the 2017 Tax Legislation and other notable items. Underlying net income available to common stockholders* increased 24% led by revenue growth of 8%, with a 10% increase in net interest income and 3% increase in noninterest income.

-- Results, including the impact of notable items, reflect operating leverage of 2.9%, efficiency ratio of 61% and ROTCE of 19.9%. On an Underlying basis,* operating leverage of 6.4% reflects continued strong focus on top-line growth and expense management, with a 3.7% improvement in the efficiency ratio to 58.5% and a 2.0% improvement in ROTCE to 10.4%.*

-- Fully diluted average common shares outstanding decreased by 20.1 million shares.

Results

-- Total revenue of $1.5 billion increased $121 million, or 9%; on an Underlying basis,* total revenue increased $104 million, or 8%, driven by strength in both net interest income and noninterest income. -- Net interest income increased 10% given 4% growth in average loans and an 18 basis point improvement in net interest margin.

-- Net interest margin of 3.08% reflects improved loan yields driven by the continued focus on balance sheet optimization and the benefit of higher rates, partially offset by an increase in funding costs.

-- Noninterest income of $404 million increased $27 million, which includes a $17 million benefit tied to notable items. On an Underlying basis,* noninterest income increased 3% driven by strength in trust and investment services fees, card fees and capital markets fees partially offset by lower mortgage banking fees and other income.

-- Noninterest expense increased 6% from fourth quarter 2016 driven by the impact of $40 million of notable items. On an Underlying basis,* noninterest expense increased 1%, largely reflecting higher salaries and employee benefits expense and higher outside services expense, driven by the impact of strategic growth initiatives, partially offset by lower other operating expense, largely due to fraud, legal and regulatory costs.

-- Provision for credit losses decreased $19 million, or 19%, reflecting strong overall portfolio credit quality and lower net charge-offs.

-- ROTCE of 19.9% improved by 11.5%, and Underlying ROTCE of 10.4% improved by 2.0%, from 8.4%.*

Balance Sheet

-- Average interest-earning assets increased $3.7 billion, or 3%, driven by growth in loans and loans held for sale with a 5% increase in retail and a 3% increase in commercial.

-- Average deposits increased $4.6 billion, or 4%, on strength in term, checking with interest, savings and demand deposits.

-- NPLs to total loans and leases ratio of 0.79% improved from 0.97%, reflecting a decrease in retail driven by real estate secured portfolios, as well as a reduction in commercial, largely tied to commodities-related credits. Allowance coverage of NPLs of 142% improved from 118%.

-- Net charge-offs of 28 basis points of loans improved from 39 basis points in fourth quarter 2016, reflecting improved results in commercial and retail.

Full-Year 2017 vs. Full-Year 2016

-- Total revenue of $5.7 billion increased $452 million, or 9%. Adjusted/Underlying revenue growth* of $513 million, or 10%, was driven by an 11% increase in net interest income and a 7% increase in noninterest income. Net interest income results reflect 6% average loan growth and a 16 basis point improvement in net interest margin.

-- Noninterest expense of $3.5 billion increased 4% driven by the impact of notable items. On an Adjusted/Underlying basis,* noninterest expense increased 3%.

-- Efficiency ratio of 60.9% improved 293 basis points. On an Adjusted/Underlying basis, the efficiency ratio of 60.0% improved 396 basis points and positive operating leverage was 6.8%.*

-- Net income available to common stockholders increased 59%. Adjusted/Underlying net income* was up 28%.

-- ROTCE of 12.3% improved by 4.6%. Adjusted/Underlying ROTCE of 9.8% increased by 2.2%.*

-- Capital strength remains robust, with a common equity tier 1 ("CET1") risk-based capital ratio of 11.1%.

-- Average loan-to-deposit ratio remained relatively stable at 98.3%; period-end loan-to-deposit ratio improved to 96.7%.

-- Tangible book value per common share of $27.48 increased by 7%.

-- Returned $1.1 billion to common shareholders including dividends and share repurchases, a 70% increase compared to 2016.

Update on Plan Execution

Consumer Banking

-- Performance paced by solid loan and deposit growth. Strong progress in data analytics and digital strategies, as well as in efforts to further enhance customer journeys and overall experience.

-- Wealth management business continues to build scale and add capabilities highlighted by the launch of SpeciFi(SM), its new digital and investment advisory platform. Continued progress in migrating sales mix toward fee-based products with fee-based investment sales up 70% in 2017.

-- Continued progress on repositioning the mortgage business, with better focus on branches and progress in building out a direct-to-consumer product offering. Conforming mortgages reached 45% of originations in fourth quarter 2017.

Commercial Banking

-- Strong growth in 2017 fee income was paced by record results in Capital Markets, with strong performance in loan syndications, bond underwriting and M&A and advisory fees, and solid growth in card fees.

-- Continued balance sheet and customer growth, with full year 2017 growth of 6% in average loans and loans held for sale compared with full year 2016, reflecting strength in Mid-corporate and Private Equity and Commercial Real Estate, as well as the impact of our geographic expansion strategies, partially offset by a planned reduction in Asset Finance.

Efficiency and balance sheet optimization initiatives

-- TOP IV Program, which includes both efficiency and revenue initiatives, is underway and on track to meet end of 2018 run-rate pre-tax benefit of $95-$110 million.

-- Balance Sheet Optimization initiatives to shift loan portfolio mix to higher-return categories continue to deliver benefits, with an estimated benefit of approximately 8 basis points on net interest margin year over year.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                    Quarterly trends                                                                                                                                                                                                                                                                                                                                                                                            Full Year                                                                                              
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Earnings highlights                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              4Q17 change from                                                                                                                                                                                                                                                          2017 change                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                     -----------------------------------------------------------------------------------------------------------------------------------------------                                                                                                                                                                                                         -----------------------------------------------------------------------------
($s in millions, except per share data)                                                               4Q17                                               3Q17                                      4Q16                                                                                                               3Q17                                                           4Q16                                                                                               2017        2016                             from 2016                         
--------------------------------------------------------------------- -------------------- -------------------- -------------------- ----------------------------------------------------------------------------- -------------------- -------------------------------------------------------- -------------------- -------------------- --------------------------------------------------------                                                                  --------------------------------------------------------------------------------- -------------------------------------------------------------                                                               -------------------- ----- -------------------- -------------------- -------------------- ----- -------------------- -------------------- -----------------------------------------------------------------------------
Earnings                                                                                                                                                                                                                                                                                                                                                                                                                                                                      $                                           $                                                                                 $                                                 $                                                     $        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                     -------------------- -------------- --------------------                          -------------------- -------------- --------------------                                                                    -------------------- -----                                           -------------------- -----                                           -------------------- -------------- --------------------
Net interest income                                                                                                                                     $          1,080                                                                                   $          1,062                                                                                   $            986                                                                                                          $             18                                                                  $             94                                                                                                            $ 4,173                                                              $ 3,758                                                              $            415
Noninterest income                                                                                                                                                   404                                                                                                381                                                                                                377                                                                                                                        23                                                                                27                                                                                                              1,534                                                                1,497                                                                            37
Total revenue                                                                                                                                                      1,484                                                                                              1,443                                                                                              1,363                                                                                                                        41                                                                               121                                                                                                              5,707                                                                5,255                                                                           452
Noninterest expense                                                                                                                                                  898                                                                                                858                                                                                                847                                                                                                                        40                                                                                51                                                                                                              3,474                                                                3,352                                                                           122
Pre-provision profit                                                                                                                                                 586                                                                                                585                                                                                                516                                                                                                                         1                                                                                70                                                                                                              2,233                                                                1,903                                                                           330
Provision for credit losses                                                               83                     72                    102                                                                                  11                                         (19 )                                                                                           321         369                  (48 )
--------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------- --------------------                                                                  -------------------- -------------- --------------------                          -------------------- -------------- --------------------                                                                    -------------------- ----- -------------------- -------------------- -------------------- ----- -------------------- -------------------- -------------------- -------------- --------------------
Net income                                                                                                                                                           666                                                                                                348                                                                                                282                                                                                                                       318                                                                               384                                                                                                              1,652                                                                1,045                                                                           607
Preferred dividends                                                                                                                                       --                                                                                                  7                                                                                     --                                                                                                                        (7 )                                                                  --                                                                                                                 14                                                                   14                                                                --
Net income available to common stockholders                                                    $            666                          $            341                          $            282                                                                                       $            325                                               $            384                                                                                         $ 1,638                        $ 1,031                        $            607  
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After-tax notable Items                                                                  317         --         --                                                                                 317                                         317                                                                          340          19                  321  
--------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------- --------------------                                                                  -------------------- -------------- --------------------                          -------------------- -------------- --------------------                                                                    -------------------- ----- -------------------- -------------------- -------------------- ----- -------------------- -------------------- -------------------- -------------- --------------------
Adjusted/underlying net income available to common stockholders*                               $            349                          $            341                          $            282                                                                                       $              8                                               $             67                                                                                         $ 1,298                        $ 1,012                        $            286  
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Average common shares outstanding
   Basic (in millions)                                                                                                                                             492.1                                                                                              500.9                                                                                              512.0                                                                                                                      (8.7 )                                                                           (19.9 )                                                                                                            502.2                                                                522.1                                                                         (19.9 )
   Diluted (in millions)                                                                                                                                           493.8                                                                                              502.2                                                                                              513.9                                                                                                                      (8.4 )                                                                           (20.1 )                                                                                                            503.7                                                                523.9                                                                         (20.2 )
Diluted earnings per share                                                                     $           1.35                          $           0.68                          $           0.55                                                                                       $           0.67                                               $           0.80                                                                                         $  3.25                        $  1.97                        $           1.28  
--------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------- --------------------                                                                  -------------------- -------------- --------------------                          -------------------- -------------- --------------------                                                                    -------------------- ----- -------------------- -------------------- -------------------- ----- -------------------- -------------------- -------------------- -------------- --------------------
Adjusted/underlying diluted earnings per share*                                                $           0.71                          $           0.68                          $           0.55                                                                                       $           0.03                                               $           0.16                                                                                         $  2.58                        $  1.93                        $           0.65  
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Key performance metrics*
Net interest margin                                                                                                                                                 3.08                                %                                                              3.05                                %                                                              2.90                      %                                                                                                  3                      bps                                                       18                      bps                                                                                      3.02                                %                                2.86                                %                                           16                                           bps
Effective income tax rate                                                                                                                                          (32.4 )                                                                                             32.2                                                                                               31.9                                                                                                                        NM                                                                                NM                                                                                                               13.6                                                                 31.9                                                                            NM
Efficiency ratio                                                                                                                                                      61                                                                                                 59                                                                                                 62                                                                                                                       111                                                                              (166 )                                                                                                               61                                                                   64                                                                          (293 )
Adjusted/underlying efficiency ratio*                                                                                                                                 59                                                                                                 59                                                                                                 62                                                                                                                       (91 )                                                                            (368 )                                                                                                               60                                                                   64                                                                          (396 )
Return on average common equity                                                                                                                                     13.5                                                                                                6.9                                                                                                5.7                                                                                                                       659                                                                               776                                                                                                                8.3                                                                  5.2                                                                           312
Return on average tangible common equity                                                                                                                            19.9                                                                                               10.1                                                                                                8.4                                                                                                                       979                                                                                NM                                                                                                               12.3                                                                  7.7                                                                           461
Adjusted/underlying return on average tangible common equity*                                                                                                       10.4                                                                                               10.1                                                                                                8.4                                                                                                                        30                                                                               200                                                                                                                9.8                                                                  7.6                                                                           219
Return on average total assets                                                                                                                                      1.75                                                                                               0.92                                                                                               0.76                                                                                                                        83                                                                                99                                                                                                               1.10                                                                 0.73                                                                            37
Adjusted/Underlying return on average total tangible assets                             0.96             %                        0.96             %                        0.79   %                                                                                     --                      bps                                                       17                      bps                                                                   0.91             %             0.75             %                                           16                                           bps
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Capital adequacy(1,2)
Common equity tier 1 capital ratio                                                                                                                                  11.1                                %                                                              11.1                                %                                                              11.2                      %                                                                                                                                                                                                                                                                                                    11.1                                %                                11.2                                %
Total capital ratio                                                                                                                                                 13.8                                                                                               13.8                                                                                               14.0                                                                                                                                                                                                                                                                                                                           13.8                                                                 14.0
Tier 1 leverage ratio                                                                    9.9             %                         9.9             %                         9.9   %                                                                                                                                                                                                                                                                                  9.9             %              9.9             %
--------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------- --------------------                                                                                                                                                                                                                                                                                -------------------- ----- -------------------- -------------------- -------------------- ----- -------------------- --------------------
Asset quality(2)
Total nonperforming loans and leases as a % of total loans and leases                                                                                               0.79                                %                                                              0.85                                %                                                              0.97                      %                                                                                                 (6 )                    bps                                                      (18 )                    bps                                                                                      0.79                                %                                0.97                                %                                          (18 )                                         bps
Allowance for loan and lease losses as a % of loans and leases                                                                                                      1.12                                                                                               1.11                                                                                               1.15                                                                                                                         1                                                                                (3 )                                                                                                             1.12                                                                 1.15                                                                            (3 )
Allowance for loan and lease losses as a % of nonperforming loans                                                                                                    142                                                                                                131                                                                                                118                                                                                                                        NM                                                                                NM                                                                                                                142                                                                  118                                                                            NM
and leases
Net charge-offs as a % of average loans and leases                                      0.28             %                        0.24             %                        0.39   %                                                                                                  4                      bps                                                      (11 )                    bps                                                                   0.28             %             0.32             %                                           (4 )                                         bps
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1) Current reporting-period regulatory capital ratios are preliminary. Basel III ratio definitions impacting risk-weighted assets and qualifying Basel III capital fully phase in as of January 1, 2018. 2) Capital adequacy and asset-quality ratios calculated on a period-end basis, except net charge-offs.

Discussion of Results:

Fourth quarter 2017 results include a net $317 million, or $0.64 per diluted share, after-tax benefit from notable items, including a $331 million after-tax benefit for the adjustment of the company’s net deferred tax liability tied to the December 2017 Tax Legislation, partially offset by other notable items which reflect a $22.5 million investment in our colleagues and the communities we serve. Results also reflect a $17 million gain on the sale of a Troubled Debt Restructuring Portfolio ("TDR Transaction II") that was offset by $18 million of other notable items largely associated with our efficiency and strategic growth initiatives. Fourth quarter 2017 EPS reflects an 8.4 million reduction in fully diluted average common shares outstanding from third quarter 2017 and a 20.1 million reduction from fourth quarter 2016.

Full year 2017 net income available to common stockholders includes a $340 million, or $0.67 per diluted share, after-tax benefit related to notable items compared with an after-tax benefit of $19 million in 2016. For 2017 results, second quarter 2017 impairments on aircraft lease assets of $26 million have been reclassified from income and expense line items to credit-related costs. Adding these costs to provision expense resulted in total 2017 underlying credit-related costs of $347 million. These lease impairments, which largely related to a non-core runoff portfolio, reduced noninterest income by $11 million and increased noninterest expense by $15 million.

All references to Adjusted/Underlying results* exclude the notable items as outlined in the table below.

                                                                                                                                                                                                                                                                                              
Notable items*                                                                                                             4Q17                                                                                     4Q17 change                                                                                                       2017                                                                        2016                                                                                                             Adjusted/Underlying
                                                                                                                                                                                               from 3Q17/4Q16                                                                                                   Underlying                                                                                      Adjusted                                                                                                              2017 vs 2016
($s in millions, except per share data)                                                                                                                                                                                                                                                                                              Impact                                                                                         Impact
----------------------------------------------------------                                           ----------------------------------------------                                             ----------------------------------------------                                                                   --------------------------------------------   --------------------                      ------------------------------------------------------                                                                   ------------------------------------------------------
Notable items
2017 Tax Legislation-related notable items*
  Pre-tax total noninterest expense                                                                                     $    (22 )                                                                                 $    (22 )                                                                                                       $  (22 )                                                                                 $ --                                                                                                         $            (22 )
  After-tax total noninterest expense                                                                                        (13 )                                                                                      (13 )                                                                                                          (13 )                                                                                   --                                                                                                                      (13 )
  Deferred tax liability adjustment - Income taxes                                                        331            331                                                                      331         --                                                                                331  
----------------------------------------------------------                                           -------------------- ------ -------------------- -------------------- -------------------- -------------------- ------ --------------------                                                                 -------------------- ---- -------------------- -------------------- -------------------- -------------------- -------------- --------------------                                                                 -------------------- -------------- --------------------
Total pre-tax 2017 Tax Legislation-related notable items                                                                $    (22 )                                                                                 $    (22 )                                                                                                       $  (22 )                                                                                 $ --                                                                                                         $            (22 )
Total after-tax 2017 Tax Legislation-related notable items                                                              $    318                          $    318                                                                                      $  318                          $ --                                                                                      $            318  
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Other notable items
  Pre-tax noninterest income                                                                                            $     17                                                                                   $     17                                                                                                         $    6                                                                                   $             67                                                                                                         $            (61 )
  After-tax noninterest income                                                                                                10                                                                                         10                                                                                                              3                                                                                                 41                                                                                                                      (38 )
  Pre-tax total noninterest expense                                                                                          (18 )                                                                                      (18 )                                                                                                          (33 )                                                                                              (36 )                                                                                                                      3
  After-tax total noninterest expense                                                                                        (11 )                                                                                      (11 )                                                                                                          (22 )                                                                                              (22 )                                                                                                         --
  Provision for credit losses                                                                                                                                                                                                                                                                                                           26                                                                                     --                                                                                                                       26
  After-tax lease impairment credit-related costs                                                                                                                                                                                        18         --                                                                                 18  
----------------------------------------------------------                                           --------------------------------------------------------------------- -------------------- -------------------------------------------------                                                                -------------------- ---- -------------------- -------------------- -------------------- -------------------- -------------- --------------------                                                                 -------------------- -------------- --------------------
Total pre-tax other notable items                                                                                       $     (1 )                                                                                 $     (1 )                                                                                                       $   (1 )                                                                                 $             31                                                                                                         $            (32 )
1Q17 State tax settlement - income taxes                                                                                                                                                                                                                                                                                                23                                                                                     --                                                                                                                       23
Total after-tax other notable items                                                                                     $     (1 )                                           $     (1 )                                                                                                       $   22                          $             19                                                                                      $              3  
==========================================================                                           ==================== ====== ==================== ==================== ==================== ==================== ====== ====================                                                                 ==================== ==== ==================== ==================== ==================== ==================== ============== ====================                                                                 ==================== ============== ====================
Total pre-tax notable items                                                                                             $    (23 )                                                                                 $    (23 )                                                                                                       $  (23 )                                                                                 $             31                                                                                                         $            (54 )
Total after-tax notable items                                                                                           $    317                          $    317                                                                                      $  340                          $             19                                                                                      $            321  
==========================================================                                           ==================== ====== ==================== ==================== ==================== ==================== ====== ====================                                                                 ==================== ==== ==================== ==================== ==================== ==================== ============== ====================                                                                 ==================== ============== ====================
Adjusted/Underlying diluted EPS*                                                                                        $   0.64                          $   0.64                                                                                      $ 0.67                          $           0.04                                                                                      $           0.63  
----------------------------------------------------------                                           -------------------- ------ -------------------- -------------------- -------------------- -------------------- ------ --------------------                                                                 -------------------- ---- -------------------- -------------------- -------------------- -------------------- -------------- --------------------                                                                 -------------------- -------------- --------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

Fourth quarter 2017 net income available to common stockholders of $666 million increased $325 million, or 95%, from third quarter 2017 and $384 million, or 136%, from fourth quarter 2016. Diluted EPS of $1.35 increased $0.67, or 99%, from third quarter 2017 and $0.80, or 145%, from fourth quarter 2016.

Underlying fourth quarter 2017 net income available to common stockholders* of $349 million increased $8 million, or 2%, with Underlying diluted EPS* of $0.71 up $0.03, or 4%, from third quarter 2017, reflecting continued revenue growth and expense discipline, which drove 1.6% positive operating leverage, a 1% improvement in the efficiency ratio and ROTCE* improvement to 10.4%.

Compared with fourth quarter 2016, fourth quarter 2017 Underlying net income to common stockholders* increased $67 million, or 24%, with diluted EPS up $0.16, or 29%, reflecting 8% revenue growth led by a 10% increase in net interest income and a 3% increase in noninterest income, which coupled with prudent expense management drove 6.4% operating leverage, a 3.7% improvement in the efficiency ratio and 2.0% improvement in ROTCE.*

Full year 2017 net income available to common stockholders of $1.6 billion increased $607 million, or 59%, from 2016, reflecting 9% revenue growth, partially offset by 4% growth in noninterest expense. Full year 2017 diluted EPS of $3.25 increased $1.28, or 65%, and reflects a 20.2 million reduction in average fully diluted shares outstanding.

On an Adjusted/Underlying basis,* full year 2017 net income available to common stockholders of $1.3 billion increased $286 million, or 28%, compared with full year 2016, as 11% growth in net interest income and 7% growth in noninterest income drove a 10% increase in revenue. Our disciplined expense management allowed us to generate operating leverage of 6.8% and led to a 4% reduction in the efficiency ratio. On an Adjusted/Underlying basis, full year 2017 diluted EPS of $2.58 increased $0.65, or 34%, while ROTCE improved by 2.2% to 9.8%.*

                                                                                                                                                                                                                         
Net interest income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   4Q17 change from
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($s in millions)                                                                 4Q17                             3Q17                                  4Q16                                                                                                                                                  3Q17                                                                                                                                         4Q16
--------------------------------------------------------------- -------------------- -------------------- -------------------- ----------------------------------------------- -------------------- -------------------- ----------------------------------------------- -------------------- -------------------- ------------------------------------                                                                 ---------------------------------------------------------------------------------------------------------------------------------------                                                               ---------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                 $                    %                                                                            $         %     
                                                                                                                                                                                                                                                                                                                                                                                                                        -------------------- -------------- -------------------- -------------------- -------------------- -------------- --------------------                                                                -------------------- --- -------------------- -------------------- -------------------- ---- -------------------- --------------------
Interest income:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
Interest and fees on loans and leases and loans held for sale                                                                                     $ 1,130                                                                                   $ 1,104                                                                                   $            968                                                                                     $             26                                                                             2 %                                                                                                      $ 162                                                                  17   %
Investment securities                                                                                                                                 156                                                                                       155                                                                                                152                                                                                                    1                                                                             1                                                                                                            4                                                                   3
Interest-bearing deposits in banks                                          5             5                      2                                                 --                                             --                                                                                         3                                              150
--------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- ----- -------------------- -------------------- -------------------- -------------------- ----- -------------------- -------------------- -------------------- -------------------- -------------- --------------------                                             -------------------- -------------- --------------------                                                                                                                                              -------------------- --- --------------------
Total interest income                                                                    $ 1,291                          $ 1,264                          $          1,122                                                                  $             27                                                          2 %                                                                                                      $ 169                                               15                      %
--------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- ----- -------------------- -------------------- -------------------- -------------------- ----- -------------------- -------------------- -------------------- -------------------- -------------- --------------------                                             -------------------- -------------- --------------------                                                                                                                                              -------------------- --- --------------------
Interest expense:
Deposits                                                                                                                                          $   130                                                                                   $   123                                                                                   $             76                                                                                     $              7                                                                             6 %                                                                                                      $  54                                                                  71                      %
Federal funds purchased and securities sold under agreements to                                                                                         1                                                                                         1                                                                                     --                                                                                       --                          --                                                                                                            1                                                                  NM
repurchase
Other short-term borrowed funds                                                                                                                         9                                                                                         7                                                                                                  7                                                                                                    2                                                                            29                                                                                                            2                                                                  29
Long-term borrowed funds                                                   71            71                     53                                                 --                                             --                                                                                        18                                               34
--------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- ----- -------------------- -------------------- -------------------- -------------------- ----- -------------------- -------------------- -------------------- -------------------- -------------- --------------------                                             -------------------- -------------- --------------------                                                                                                                                              -------------------- --- --------------------
Total interest expense                                                                   $   211                          $   202                          $            136                                                                  $              9                                                          4 %                                                                                                      $  75                                               55                      %
--------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- ----- -------------------- -------------------- -------------------- -------------------- ----- -------------------- -------------------- -------------------- -------------------- -------------- --------------------                                             -------------------- -------------- --------------------                                                                                                                                              -------------------- --- --------------------
Net interest income                                                                      $ 1,080                          $ 1,062                          $            986                                                                  $             18                                                          2 %                                                                                                      $  94                                               10                      %
--------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- ----- -------------------- -------------------- -------------------- -------------------- ----- -------------------- -------------------- -------------------- -------------------- -------------- --------------------                                             -------------------- -------------- --------------------                                                                                                                                              -------------------- --- --------------------
Net interest margin                                                      3.08   %                                            3.05   %                                                     2.90   %                                                          3   bps                                                                                                                                             18   bps
--------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- ----- --------------------                                           -------------------- ----- --------------------                                           -------------------- -------------- --------------------                                             -------------------- -------------- --------------------                                                                                                                                              -------------------- --- --------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

Net interest income of $1.1 billion increased $18 million, or 2%, from third quarter 2017, reflecting loan growth and a three basis point improvement in net interest margin to 3.08% from third quarter levels that included a two basis point benefit from higher commercial loan interest recoveries. The improvement in net interest margin reflects higher interest-earning asset yields tied to higher short-term interest rates and improving loan mix toward higher-return categories, partially offset by higher deposit and funding costs.

Compared to fourth quarter 2016, net interest income increased $94 million, or 10%, reflecting 4% growth in average loans and an 18 basis point improvement in net interest margin. The improvement in net interest margin reflects higher interest-earning asset yields given balance sheet optimization initiatives and higher rates, partially offset by a reduction in Federal Reserve Bank stock dividends and higher deposit and funding costs.

                                                                                                                                                                      
Noninterest Income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                4Q17 change from
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($s in millions)                                            4Q17                                 3Q17                                      4Q16                                                                                                                                                           3Q17                                                                                                        4Q16
------------------------------------------- -------------------- -------------------- -------------------- --------------------------------------------- -------------------- -------------------- -------------------------------------------------------- -------------------- -------------------- ------------------------------------                                                                                    ------------------------------------------------------------------------------------------------------------------                                            -------------------------------------------------------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                       $                  %                                                        $       %  
                                                                                                                                                                                                                                                                                                                                                                                                                              -------------------- -------------- -------------------- -------------------- -------------- --------------------                                             -------------------- -- -------------------- -------------------- --- --------------------
Service charges and fees                                                                                                      $ 131                                                                                   $            131                                                                                   $            132                                                                                                        $ --                        --   %                                           $ (1 )                       (1 )                    %
Card fees                                                                                                                        56                                                                                                 58                                                                                                 50                                                                                                                      (2 )                                                     (3 )                                                                                      6                                            12
Capital markets fees                                                                                                             42                                                                                                 53                                                                                                 37                                                                                                                     (11 )                                                    (21 )                                                                                      5                                            14
Trust and investment services fees                                                                                               42                                                                                                 38                                                                                                 34                                                                                                                       4                                                       11                                                                                        8                                            24
Letter of credit and loan fees                                                                                                   31                                                                                                 30                                                                                                 29                                                                                                                       1                                                        3                                                                                        2                                             7
Foreign exchange and interest rate products                                                                                      32                                                                                                 24                                                                                                 31                                                                                                                       8                                                       33                                                                                        1                                             3
Mortgage banking fees                                                                                                            28                                                                                                 27                                                                                                 36                                                                                                                       1                                                        4                                                                                       (8 )                                         (22 )
Securities gains, net                                                                                                             2                                                                                                  2                                                                                                  3                                                                                                          --                                           --                                                                                       (1 )                                         (33 )
Other income(1)                                      40                     18                     25                                                                                                   22                                   122                                                                    15                         60
------------------------------------------- -------------------- -------------------- -------------------- -------------------- --- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- --------------                                                                                     -------------------- -------------- --------------------                                                                                                      -------------------- -- --------------------
Noninterest income                                                   $ 404                          $            381                          $            377                                                                                                        $             23                                     6   %                                                              $ 27                          7   %
------------------------------------------- -------------------- -------------------- -------------------- -------------------- --- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- --------------                                                                                     -------------------- -------------- --------------------                                                                                                      -------------------- -- --------------------
Notable items*                                                       $  17                          $ --                          $ --                                                                                                        $             17                                   100                                                                                     $ 17                        100
------------------------------------------- -------------------- -------------------- -------------------- -------------------- --- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- --------------                                                                                     -------------------- -------------- --------------------                                                                                                      -------------------- -- --------------------
Adjusted/Underlying noninterest income*                              $ 387                          $            381                          $            377                                                                                                        $              6                                     2   %                                                              $ 10                          3   %
------------------------------------------- -------------------- -------------------- -------------------- -------------------- --- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- --------------                                                                                     -------------------- -------------- --------------------                                                                                                      -------------------- -- --------------------

1) Other income includes bank-owned life insurance and other income.

Noninterest income of $404 million increased $23 million from third quarter 2017, which includes a $17 million benefit from notable items. Underlying noninterest income* of $387 million increased $6 million from third quarter as growth in foreign exchange and interest rate products, trust and investment services fees and other income was partially offset by lower capital markets and seasonally lower card fees. Capital Markets fees decreased $11 million from record third quarter levels, as a decrease in loan syndication and bond underwriting fees was partially offset by an increase in advisory fees. Trust and investment services fees increased $4 million, reflecting an increase in sales volume and productivity, and growth in managed money assets. Foreign exchange and interest rate products increased $8 million, reflecting an increase in demand for variable rate loan hedges relative to third quarter levels that were impacted by the timing of interest-rate moves and seasonality. Other income increased $5 million, reflecting an increase in hedging income and in leasing income, despite the impact of a $3 million impairment write-down on aircraft lease assets. Securities gains were modest and relatively stable with third quarter levels and partially offset the aircraft lease impairment recorded in other income.

Compared to fourth quarter 2016, noninterest income increased $27 million, which includes a $17 million benefit tied to notable items. On an Underlying basis,* noninterest income increased $10 million, or 3%, largely reflecting strength in trust and investment services fees, card fees, capital markets fees and letter of credit and loan fees, partially offset by lower mortgage banking fees. Card fees increased $6 million, reflecting the benefit of revised contract terms for processing fees and an increase in purchase volume. Capital markets fees increased $5 million, driven by the investments made to broaden our capabilities. Trust and investment services fees increased $8 million, reflecting improved sales volume and productivity, an increase in managed money assets and an increase in the number of financial consultants. Letter of credit and loan fees increased $2 million. Mortgage banking fees decreased $8 million from fourth quarter 2016 levels that included improved mortgage servicing rights ("MSR") valuations and higher origination volumes.

                                                                                                                                                        
Noninterest expense                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           4Q17 change from
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($s in millions)                                                    4Q17                           3Q17                           4Q16                                                                                                                                                      3Q17                                                                                                        4Q16
--------------------------------------------------- -------------------- -------------------- -------------------- --------------------------------------------- -------------------- -------------------- --------------------------------------------- -------------------- -------------------- -------------------------                                                                                    --------------------------------------------------------------------------------------------------------------------------------------                                           -------------------------------------------------------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                         $                  %                                                         $      %  
                                                                                                                                                                                                                                                                                                                                                                                                                -------------------- -------------- -------------------- -------------------- -------------- -------------------- --------------------                                           -------------------- --- -------------------- -------------------- -- --------------------
Salaries and employee benefits                                                                                                        $ 449                                                                                   $ 436                                                                                   $ 420                                                                                                        $             13                                     3                      %                                                              $  29                         7   %
Outside services                                                                                                                        118                                                                                      99                                                                                      98                                                                                                                      19                                                       19                                                                                                           20                                           20
Occupancy                                                                                                                                80                                                                                      78                                                                                      77                                                                                                                       2                                                        3                                                                                                            3                                            4
Equipment expense                                                                                                                        67                                                                                      65                                                                                      69                                                                                                                       2                                                        3                                                                                                           (2 )                                         (3 )
Amortization of software                                                                                                                 46                                                                                      45                                                                                      44                                                                                                                       1                                                        2                                                                                                            2                                            5
Other operating expense                                     138         135         139                                                                                                    3                                     2                                                                                        (1 )                                         (1 )
--------------------------------------------------- -------------------- -------------------- -------------------- -------------------- --- -------------------- -------------------- -------------------- -------------------- --- -------------------- -------------------- -------------------- -------------------- ---                                                                                     -------------------- -------------- --------------------                                                                                                                         -------------------- --- --------------------
Noninterest expense                                                          $ 898                          $ 858                          $ 847                                                                                                        $             40                                     5                      %                                                              $  51                         6   %
--------------------------------------------------- -------------------- -------------------- -------------------- -------------------- --- -------------------- -------------------- -------------------- -------------------- --- -------------------- -------------------- -------------------- -------------------- ---                                                                                     -------------------- -------------- --------------------                                                                                                                         -------------------- --- --------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
Adjusted/Underlying salaries and employee benefits*                                                                                   $ 432                                                                                   $ 436                                                                                   $ 420                                                                                                        $             (4 )                                                     (1 )                                       %                                                              $  12                                            3   %
Adjusted/Underlying outside services*                                                                                                   106                                                                                      99                                                                                      98                                                                                                                       7                                                        7                                                                                                            8                                            8
Occupancy                                                                                                                                80                                                                                      78                                                                                      77                                                                                                                       2                                                        3                                                                                                            3                                            4
Equipment expense                                                                                                                        67                                                                                      65                                                                                      69                                                                                                                       2                                                        3                                                                                                           (2 )                                         (3 )
Amortization of software                                                                                                                 46                                                                                      45                                                                                      44                                                                                                                       1                                                        2                                                                                                            2                                            5
Adjusted/Underlying other operating expense*                127         135         139                                                                                                   (8 )                                                     (6 )                                                                                     (12 )                                         (9 )
--------------------------------------------------- -------------------- -------------------- -------------------- -------------------- --- -------------------- -------------------- -------------------- -------------------- --- -------------------- -------------------- -------------------- -------------------- ---                                                                                     -------------------- -------------- --------------------                                                                                                                         -------------------- --- --------------------
Adjusted/Underlying noninterest expense*                                     $ 858                          $ 858                          $ 847                                                                                                        $ --                        --                      %                                                              $  11                         1   %
--------------------------------------------------- -------------------- -------------------- -------------------- -------------------- --- -------------------- -------------------- -------------------- -------------------- --- -------------------- -------------------- -------------------- -------------------- ---                                                                                     -------------------- -------------- --------------------                                                                                                                         -------------------- --- --------------------

Noninterest expense of $898 million increased $40 million from third quarter 2017, reflecting $40 million of notable items. Underlying noninterest expense* remained stable compared to third quarter as increases in outside services, occupancy and equipment expense were offset by decreases in salaries and benefits and other expense. Salaries and benefits expense decreased $4 million, reflecting lower incentives and seasonally lower payroll taxes. Outside services expense increased $7 million, driven by consumer strategic growth initiatives and technology initiatives. Occupancy expense increased $2 million, reflecting seasonality, and equipment expense increased $2 million driven by higher service contract costs. Other operating expense decreased $8 million, driven by lower legal and regulatory costs and lower advertising expense.

Compared with fourth quarter 2016, noninterest expense increased $51 million, driven by a $40 million increase related to notable items. Underlying noninterest expense* increased $11 million from fourth quarter 2016 levels as improvement in other operating expense was more than offset by increases in salaries and benefits, outside services and occupancy expense. Salaries and benefits increased $12 million driven by merit increases and the impact of hiring associated with strategic growth initiatives. Outside services increased $8 million tied to consumer strategic growth initiatives and technology initiatives. Occupancy expense increased $3 million reflecting costs associated with our branch strategy and maintenance. Other operating expense decreased $12 million driven by a reduction in fraud, legal and regulatory costs.

The effective tax rate for fourth quarter 2017 was (32.4)%, which includes a $331 million after-tax benefit for the adjustment of the company’s net deferred tax liability tied to the December 2017 Tax Legislation. Excluding this one-time benefit, the effective tax rate for fourth quarter 2017 was 33.7%, up from the third quarter 2017 effective tax rate of 32.2%, given the impact from our historic tax-credit investment program. The fourth quarter 2016 effective tax rate was 31.9%.

                                                                                                                                                                                                        
Consolidated balance sheet review(1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  4Q17 change from
                                                                                                                                                                                                                                                                                                                                                                                                 -------------------- -------------------- -------------------- ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
($s in millions)                                              4Q17                                 3Q17                                 4Q16                                                                                    3Q17                                                                                                                               4Q16                                                             
------------------------------------------- -------------------- -------------------- -------------------- ------------------------------------------------- -------------------- -------------------- -------------------- ------------------------------------------------- -------------------- -------------------- -------------------- -------------------------------------------------   -------------------- -------------------- -------------------- ---------------------------------------------------------------------------------------------------------------------------------------------------                                           -----------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                            $                %                                                          $              %        
                                                                                                                                                                                                                                                                                                                                                                                                 -------------------- -------------------- -------------------- -------------------- ------ -------------------- -------------------- -------------------- -------------- -------------------- --------------------                                           -------------------- ------ -------------------- -------------------- -------------------- ---------- -------------------- --------------------
Total assets                                                                                                                  $ 152,336                                                                                                        $ 151,356                                                                                                        $ 149,520                                                                                                          $    980                                                          1                      %                                           $  2,816                                                      2   %
Loans and leases and loans held for sale                                                                                        111,335                                                                                                          111,375                                                                                                          108,294                                                                                                               (40 )                                                              --                                                                                                           3,041                                                                         3
Deposits                                                                                                                        115,089                                                                                                          113,235                                                                                                          109,804                                                                                                             1,854                                                                             2                                                                                                           5,285                                                                         5
Average interest-earning assets (quarterly)                                                                                     138,429                                                                                                          137,479                                                                                                          134,758                                                                                                               950                                                                             1                                                                                                           3,671                                                                         3
Stockholders’ equity                                                                                                             20,270                                                                                                           20,109                                                                                                           19,747                                                                                                               161                                                                             1                                                                                                             523                                                                         3
Stockholders’ common equity                                                                                                      20,023                                                                                                           19,862                                                                                                           19,499                                                                                                               161                                                                             1                                                                                                             524                                                                         3
Tangible common equity                                                                                                        $  13,489                                                                                                        $  13,512                                                                                                        $  13,154                                                                                                          $    (23 )                                                              --                      %                        $    335                                                                         3   %
Loan-to-deposit ratio (period-end)(2)                                                                                              96.7                      %                                                                                      98.4                      %                                                                                      98.6                      %                                                                                       (162 )                                         bps                                                                                                                                            (188 )                                         bps
Loans to deposits ratio (avg balances) (2)                                                                                         97.8                                                                                                             97.6                                                                                                             98.1                                                                                                                18                                           bps                                                                                                                                             (37 )                                         bps
Common equity tier 1 capital ratio(3)                                                                                              11.1                                                                                                             11.1                                                                                                             11.2
Total capital ratio(3)                                 13.8   %                             13.8   %                             14.0   %                                                                                                                
------------------------------------------- -------------------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- -------------------- -------------------- ------- --------------------   -------------------- -------------------- -------------------- --------------------------------------------------------------------- -------------------- -------------------------------------------------------- -------------------- -------------------- --------------------------------------------------------------------- -------------------- ----------------------------------------------------

1) Represents period end unless otherwise noted. 2) Includes loans held for sale. 3) Current reporting period regulatory capital ratios are preliminary. Basel III ratios assume that certain definitions impacting risk-weighted assets and qualifying Basel III capital fully phase in as of January 1, 2018.

Total assets of $152.3 billion at December 31, 2017 increased $980 million, or 1%, compared with September 30, 2017. Compared with December 31, 2016, total assets increased $2.8 billion, or 2%, driven by a $3.0 billion increase in loans and leases and loans held for sale.

Average interest-earning assets of $138.4 billion in fourth quarter 2017 were up $950 million compared with third quarter 2017 driven by an increase in loans and leases. Compared with fourth quarter 2016, average interest-earning assets increased $3.7 billion, or 3%, given growth in loans and leases, partially offset by a decrease in investments and interest bearing deposits.

                                                                                                                                                               
Interest-earning assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                4Q17 change from
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($s in millions)                                                 4Q17                               3Q17                               4Q16                                                                                                                                                                        3Q17                                                                                                                                    4Q16
---------------------------------------------- -------------------- -------------------- -------------------- ------------------------------------------------- -------------------- -------------------- ------------------------------------------------- -------------------- -------------------- -----------------------------                                                                                    --------------------------------------------------------------------------------------------------------------------------------------------------                                            -------------------------------------------------------------------------------------------------------------------
Period-end interest-earning assets                                                                                                                                                                                                                                                                                                                                                                                         $                 %                                                          $          %  
                                                                                                                                                                                                                                                                                                                                                                                                                       -------------------- ---- -------------------- -------------------- -------------------- -------------------- -------------- --------------------                                             -------------------- ----- -------------------- -------------------- -------------------- --- --------------------
Investments and interest-bearing deposits                                                                                        $  27,970                                                                                   $  27,368                                                                                   $  28,798                                                                                                        $  602                                         2   %                                                              $  (828 )                         (3 )                    %
Commercial loans and leases                                                                                                         52,031                                                                                      52,381                                                                                      51,651                                                                                                          (350 )                                                                                               (1 )                                                                                       380                                                                  1
Retail loans                                                                                                                        58,586                                                                                      57,770                                                                                      56,018                                                                                                           816                                                                                                  1                                                                                       2,568                                                                  5
Total loans and leases                                                                                                             110,617                                                                                     110,151                                                                                     107,669                                                                                                           466                                                                                     --                                                                                       2,948                                                                  3
Loans held for sale, at fair value                                                                                                     497                                                                                         500                                                                                         583                                                                                                            (3 )                                                                                               (1 )                                                                                       (86 )                                                              (15 )
Other loans held for sale                                                                                                              221                                                                                         724                                                                                          42                                                                                                          (503 )                                                                                              (69 )                                                                                       179                                                                 NM
Total loans and leases and loans held for sale         111,335         111,375         108,294                                                                                        (40 )                                                                                   --                                                                    3,041                                               3
---------------------------------------------- -------------------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- -------------------- -------                                                                                     -------------------- ---- --------------------                                                                                                                                                -------------------- ----- --------------------
Total period-end interest-earning assets                                $ 139,305                          $ 138,743                          $ 137,092                                                                                                        $  562                                                                  --   %                                                              $ 2,213                                               2   %
---------------------------------------------- -------------------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- -------------------- -------                                                                                     -------------------- ---- --------------------                                                                                                                                                -------------------- ----- --------------------
Average interest-earning assets
Investments and interest-bearing deposits                                                                                        $  27,212                                                                                   $  27,258                                                                                   $  27,667                                                                                                        $  (46 )                                                                                   --   %                                                              $  (455 )                                                               (2 )                    %
Commercial loans and leases                                                                                                         52,310                                                                                      52,151                                                                                      51,032                                                                                                           159                                                                                     --                                                                                       1,278                                                                  3
Retail loans                                                                                                                        58,140                                                                                      57,333                                                                                      55,502                                                                                                           807                                                                                                  1                                                                                       2,638                                                                  5
Total loans and leases                                                                                                             110,450                                                                                     109,484                                                                                     106,534                                                                                                           966                                                                                                  1                                                                                       3,916                                                                  4
Loans held for sale, at fair value                                                                                                     482                                                                                         503                                                                                         551                                                                                                           (21 )                                                                                               (4 )                                                                                       (69 )                                                              (13 )
Other loans held for sale                                                                                                              285                                                                                         234                                                                                           6                                                                                                            51                                                                                                 22                                                                                         279                                                                 NM
Total loans and leases and loans held for sale         111,217         110,221         107,091                                                                                        996                                                                               1                                                                    4,126                                               4
---------------------------------------------- -------------------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- -------------------- -------                                                                                     -------------------- ---- --------------------                                                                                                                                                -------------------- ----- --------------------
Total average interest-earning assets                                   $ 138,429                          $ 137,479                          $ 134,758                                                                                                        $  950                                                                               1   %                                                              $ 3,671                                               3   %
---------------------------------------------- -------------------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- -------------------- -------                                                                                     -------------------- ---- --------------------                                                                                                                                                -------------------- ----- --------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

Period-end investments and interest-bearing deposits of $28.0 billion as of December 31, 2017 increased $602 million, or 2%, from September 30, 2017. Compared with December 31, 2016, investments and interest-bearing deposits decreased $828 million, or 3%, largely reflecting a $951 million decrease in interest bearing deposits. At the end of fourth quarter 2017, the average effective duration of the securities portfolio increased to 3.9 years compared with 3.8 years at September 30, 2017, given higher long-term rates that drove a decrease in securities prepayment speeds. At December 31, 2016, the securities portfolio duration was 4.3 years, reflecting the impact of somewhat higher long-term rates and a steeper yield curve, which resulted in a decrease in prepayment speeds.

Period-end loans and leases of $110.6 billion at December 31, 2017 were relatively stable compared to September 30, 2017. Compared to December 31, 2016, period-end loans and leases increased $2.9 billion, or 3%, from $107.7 billion, reflecting a $2.6 billion increase in retail loans and a $380 million increase in commercial loans and leases.

Average loans and leases were up $966 million compared with third quarter 2017 as retail loans increased $807 million and commercial loans and leases increased $159 million. Retail loan growth reflects strength in mortgage, education and other unsecured retail loans, partially offset by lower home equity and auto balances. Commercial loan results largely reflect growth in Mid-corporate and Private Equity, as well as the impact of our geographic expansion strategies, partially offset by a planned reduction in Asset Finance and non-core.

Compared with fourth quarter 2016, average loans and leases increased $3.9 billion, or 4%, reflecting a $2.6 billion increase in retail loans and a $1.3 billion increase in commercial loans and leases. Retail loan growth was driven by education, mortgage and other unsecured retail, partially offset by lower home equity and auto balances. Commercial loan and lease growth was driven by strength in Mid-corporate and Private Equity, Commercial Real Estate and Franchise Finance, as well as the impact of our geographic expansion strategies, partially offset by a planned reduction in Asset Finance, lower line of credit utilization and lower non-core balances.

                                                                                                                                          
Deposits                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              4Q17 change from
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($s in millions)                            4Q17                               3Q17                               4Q16                                                                                                                                                                        3Q17                                                                                                                                               4Q16                                                                   
------------------------- -------------------- -------------------- -------------------- ------------------------------------------------- -------------------- -------------------- ------------------------------------------------- -------------------- -------------------- -----------------------------                                                                                    -----------------------------------------------------------------------------------------------------------------------------------------------------------------------                                           -----------------------------------------------------------------------------------------------------------------------------------------------------------
Period-end deposits                                                                                                                                                                                                                                                                                                                                                                                    $                 %                                                          $           %    
                                                                                                                                                                                                                                                                                                                                                                                                  -------------------- ----- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- --------------------                                           -------------------- ----- -------------------- -------------------- -------------------- -------------------- -- -------------------- --------------------
Demand deposits                                                                                             $  29,279                                                                                   $  28,643                                                                                   $  28,472                                                                                                        $   636                                         2                      %                                                              $   807                             3   %
Checking with interest                                                                                         22,229                                                                                      21,756                                                                                      20,714                                                                                                            473                                                                                                  2                                                                                                          1,515                                                                                      7
Savings                                                                                                         9,518                                                                                       9,470                                                                                       8,964                                                                                                             48                                                                                                  1                                                                                                            554                                                                                      6
Money market accounts                                                                                          37,454                                                                                      37,070                                                                                      38,176                                                                                                            384                                                                                                  1                                                                                                           (722 )                                                                                   (2 )
Term deposits                      16,609          16,296          13,478                                                                                         313                                                                               2                                                                                       3,131                                                                  23
------------------------- -------------------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- -------------------- -------                                                                                     -------------------- ----- --------------------                                                                                                                                                                   -------------------- ----- --------------------
Total period-end deposits                          $ 115,089                          $ 113,235                          $ 109,804                                                                                                        $ 1,854                                                                               2                      %                                                              $ 5,285                                                                   5   %
------------------------- -------------------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- -------------------- -------                                                                                     -------------------- ----- --------------------                                                                                                                                                                   -------------------- ----- --------------------
Average deposits
Demand deposits                                                                                             $  28,868                                                                                   $  28,041                                                                                   $  28,443                                                                                                        $   827                                                                                                  3                      %                                                              $   425                                                                                      1   %
Checking with interest                                                                                         21,459                                                                                      21,909                                                                                      20,268                                                                                                           (450 )                                                                                               (2 )                                                                                                        1,191                                                                                      6
Savings                                                                                                         9,473                                                                                       9,491                                                                                       8,826                                                                                                            (18 )                                                                                   --                                                                                                            647                                                                                      7
Money market accounts                                                                                          37,483                                                                                      37,535                                                                                      38,397                                                                                                            (52 )                                                                                   --                                                                                                           (914 )                                                                                   (2 )
Term deposits                      16,470          15,971          13,191                                                                                         499                                                                               3                                                                                       3,279                                                                  25
------------------------- -------------------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- -------------------- -------                                                                                     -------------------- ----- --------------------                                                                                                                                                                   -------------------- ----- --------------------
Total average deposits                             $ 113,753                          $ 112,947                          $ 109,125                                                                                                        $   806                                                                               1                      %                                                              $ 4,628                                                                   4   %
------------------------- -------------------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- -------------------- -------                                                                                     -------------------- ----- --------------------                                                                                                                                                                   -------------------- ----- --------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

Total period-end deposits of $115.1 billion at December 31, 2017 increased $1.9 billion from September 30, 2017, reflecting an increase in demand deposits, checking with interest, money market accounts and term deposits. Compared with December 31, 2016, period-end total deposits increased $5.3 billion, or 5%, driven by strong growth in term deposits, checking with interest and demand deposits as well as savings, partially offset by a decline in money market accounts.

Fourth quarter 2017 average deposits of $113.8 billion increased $806 million, or 1%, from third quarter 2017, reflecting strong growth in demand and term deposits, partially offset by a decrease in checking with interest. Compared with fourth quarter 2016, average deposits increased $4.6 billion, or 4%, reflecting strong growth in term deposits, checking with interest and savings and modest growth in demand deposits, partially offset by a decline in money market accounts.

                                                                                                                                                                             
Borrowed funds                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            4Q17 change from                                                                                                                                                                                                                      
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($s in millions)                                                                  4Q17                              3Q17                              4Q16                                                                                                                                                                                       3Q17                                                                                                                                                                                       4Q16                                                                                         
--------------------------------------------------------------- -------------------- -------------------- -------------------- ------------------------------------------------ -------------------- -------------------- ------------------------------------------------ -------------------- -------------------- ----------------------------                                                                                    -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                                                -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Period-end borrowed funds                                                                                                                                                                                                                                                                                                                                                                                                                 $                 %                                                                         $                 %    
                                                                                                                                                                                                                                                                                                                                                                                                                                     -------------------- ------ -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --- -------------------- --------------------                                                                -------------------- ------ -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --- -------------------- --------------------
Federal funds purchased and securities sold under agreements to                                                                                   $    815                                                                                   $    453                                                                                   $  1,148                                                                                                        $    362                                 80   %                                                                                                      $   (333 )                              (29 )                    %
repurchase
Other short-term borrowed funds                                                                                                                      1,856                                                                                      1,505                                                                                      3,211                                                                                                             351                                                                                                                                23                                                                                                                               (1,355 )                                                                                                                             (42 )
Long-term borrowed funds                                                11,765         13,400         12,790                                                                                       (1,635 )                                                                                                                             (12 )                                                                                                          (1,025 )                                                                                                                              (8 )
--------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- ------ -------------------- -------------------- -------------------- -------------------- ------ -------------------- -------------------- -------------------- -------------------- ------                                                                                     -------------------- ------ --------------------                                                                                                                                                                                                                       -------------------- ------ --------------------
Total borrowed funds                                                                     $ 14,436                          $ 15,358                          $ 17,149                                                                                                        $   (922 )                                                                                                                              (6 )                    %                                                                                                      $ (2,713 )                                                                                                                             (16 )                    %
--------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- ------ -------------------- -------------------- -------------------- -------------------- ------ -------------------- -------------------- -------------------- -------------------- ------                                                                                     -------------------- ------ --------------------                                                                                                                                                                                                                       -------------------- ------ --------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
Average borrowed funds                                                                   $ 14,775                          $ 14,567                          $ 15,210                                                                                                        $    208                                                                                                              1   %                                                                                                      $   (435 )                                                                                                                              (3 )                    %
--------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- ------ -------------------- -------------------- -------------------- -------------------- ------ -------------------- -------------------- -------------------- -------------------- ------                                                                                     -------------------- ------ --------------------                                                                                                                                                                                                                       -------------------- ------ --------------------

Total borrowed funds of $14.4 billion at December 31, 2017 decreased $922 million from September 30, 2017, reflecting a $1.6 billion decrease in long-term borrowings, primarily Federal Home Loan Bank or "FHLB" borrowings, partially offset by an increase of $713 million in short-term borrowings, reflecting an increase of $362 million in Federal funds purchased and repurchase agreements and an increase of $351 million in other short-term borrowings, primarily short-term FHLB borrowings. Compared with December 31, 2016, total borrowed funds decreased $2.7 billion, or 16%. Short-term borrowings decreased $1.7 billion reflecting a $1.4 billion decrease in other short-term borrowings, primarily short-term FHLB borrowings, and a $333 million decrease in Federal funds purchased and repurchase agreements. Long-term borrowings decreased by $1.0 billion reflecting a decrease of $3.5 billion in long-term FHLB borrowings, partially offset by an increase of $2.5 billion in long-term senior debt.

Average borrowed funds of $14.8 billion were broadly stable with prior periods, increasing $208 million from third quarter 2017 and decreasing $435 million compared with the fourth quarter 2016.

                                                                                                                                                                                                           
Capital                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            4Q17 change from
                                                                                                                                                                                                                                                                                                                                                                                                    -------------------- -------------------- -------------------- ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                 4Q17                                3Q17                                4Q16                                                                                              3Q17                                                                                                                                                    4Q16                                                                       
($s and shares in millions except per share data)
------------------------------------------------- -------------------- -------------------- -------------------- --------------------------  -------------------- -------------------- -------------------- -------------------- --------------------------  -------------------- -------------------- -------------------- -------------------- --------------------------  --------------------   -------------------- -------------------- -------------------- --------------------------------------------------------------------------------------------------------------------------------------------        -------------------- -------------------- -------------------- ----------------------------------------------------------------------------------------------------------------------------------------        --------------------
Period-end capital                                                                                                                                                                                                                                                                                                                                                                                             $                  %                    $                %        
                                                                                                                                                                                                                                                                                                                                                                                                    -------------------- -------------------- -------------------- -------------------- ------ -------------------- -------------------- -------------------- -------------------- -------------- -------------------- --------------------                                           -------------------- ------ -------------------- -------------------- -------------------- -------------------- ---------- -------------------- --------------------
Stockholders’ equity                                                                                                                $ 20,270                                                                                                        $ 20,109                                                                                                        $ 19,747                                                                                                          $    161                                         1                      %                                                              $    523                                     3   %
Stockholders’ common equity                                                                                                           20,023                                                                                                          19,862                                                                                                          19,499                                                                                                               161                                                                                                  1                                                                                                             524                                                                                              3
Tangible common equity                                                                                                                13,489                                                                                                          13,512                                                                                                          13,154                                                                                                               (23 )                                                                                   --                                                                                                             335                                                                                              3
Tangible book value per common share                                                                                                $  27.48                                                                                                        $  27.05                                                                                                        $  25.69                                                                                                          $   0.43                                                                                                  2                                                                                                        $   1.79                                                                                              7
Common shares - at end of period                                                                                                       490.8                                                                                                           499.5                                                                                                           512.0                                                                                                              (8.7 )                                                                                               (2 )                                                                                                         (21.1 )                                                                                           (4 )
Common shares - average (diluted)                                                                                                      493.8                                                                                                           502.2                                                                                                           513.9                                                                                                              (8.4 )                                                                                               (2 )                                       %                                                                 (20.1 )                                                                                           (4 )                    %
Common equity tier 1 capital ratio(1,2)                                                                                                 11.1                                         %                                                                  11.1                      %                                                                                     11.2                      %
Total capital ratio(1,2)                                                                                                                13.8                                                                                                            13.8                                                                                                            14.0
Tier 1 leverage ratio(1,2)                                   9.9                      %          9.9                      %          9.9   %                                                                                                                                                          
------------------------------------------------- -------------------- -------------------- -------------------- -------------------- ------ -------------------- -------------------- -------------------- -------------------- -------------------- ------ -------------------- -------------------- -------------------- -------------------- -------------------- ------ --------------------   -------------------- -------------------- -------------------- --------------------------------------------------------------------- -------------------- -------------------- --------------------------------------------------------                                           --------------------------------------------------------------------- -------------------- -------------------- ----------------------------------------------------

1) Current reporting-period regulatory capital ratios are preliminary. 2) Basel III ratio definitions impacting risk-weighted assets and qualifying Basel III capital fully phase in as of January 1, 2018.

At December 31, 2017, our Basel III capital ratios on a transitional basis remained well in excess of applicable regulatory requirements. Our CET1 capital ratio of 11.1%at December 31, 2017 compares with 11.1% at September 30, 2017 and 11.2% at December 31, 2016.

Additionally, we expect to record a benefit for an anticipated FASB accounting change related to Tax Legislation that will be applicable to calendar 2017. The pro forma impact of this change would increase the CET1 ratio to 11.2% from 11.1%. Our total capital ratio of 13.8% at December 31, 2017 compares with 13.8% at September 30, 2017 and 14.0% at December 31, 2016. Our capital ratios continue to reflect progress against our objective of aligning our capital profile to be consistent with that of peer regional banks, while maintaining a strong capital base to support our growth aspirations, strategy and risk appetite. Tangible book value per common share of $27.48 increased 2% compared with third quarter 2017 and 7% compared with fourth quarter 2016.

During the fourth quarter 2017, the company repurchased 8.8 million shares of common stock at a weighted-average price of $38.18, and including common dividends, returned $424 million to shareholders. These results compare with $315 million returned to common shareholders in third quarter 2017 and $242 million in fourth quarter 2016.

In 2017, the company repurchased 22.4 million shares of common stock at a weighted-average price of $36.67, and including common dividends, returned $1.14 billion to common shareholders. Comparables for 2016 were repurchases of 17.3 million shares of common stock at a weighted-average price of $24.81, and including common dividends, $671 million returned to common shareholders.

Citizens also announced today that its board of directors declared a 22% increase in its quarterly cash dividend to $0.22 per common share.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
Credit quality review                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         4Q17 change from
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($s in millions)                                                                      4Q17                               3Q17                               4Q16                                                                                                                                                              3Q17                                                                                                                                                                                                         4Q16
-------------------------------------------------------------------- -------------------- -------------------- -------------------- ----------------------------------------------- -------------------- -------------------- -------------------- ----------------------------------------------- -------------------- -------------------- -------------------- -----------------------------------------------                                                                  ------------------------------------------------------------------------------------------------------------------------------------------------------------------                                                               ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       $                %                                                                               $                        %          
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   -------------------- --- -------------------- -------------------- -------------------- -------------------- -------------------- ---------- --------------------                                                                -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- --------------------
Nonperforming loans and leases                                                                                                                         $   871                                                                                                        $   932                                                                                                        $ 1,045                                                                                                          $ (61 )                                                                                             (7 )                                       %                                                              $           (174 )                                                                                                (17 )                    %
Net charge-offs                                                                                                                                             78                                                                                                             65                                                                                                            104                                                                                                             13                                                                                                                  20                                                                                                                     (26 )                                                                                                                   (25 )
Provision for credit losses                                                                                                                                 83                                                                                                             72                                                                                                            102                                                                                                             11                                                                                                                  15                                                                                                                     (19 )                                                                                                                   (19 )
Allowance for loan and lease losses                                                                                                                    $ 1,236                                                                                                        $ 1,224                                                                                                        $ 1,236                                                                                                          $  12                                                                                                                   1                      %                                                              $ --                                                                                                          --   %
Total nonperforming loans and leases                                                                                                                      0.79                      %                                                                                    0.85                      %                                                                                    0.97                      %                                                                                      (6 )                                         bps                                                                                                                                                                                           (18 )                                         bps
as a % of total loans and leases
Net charge-offs as % of total loans and leases                                                                                                            0.28                                                                                                           0.24                                                                                                           0.39                                                                                                              4                                           bps                                                                                                                                                                                           (11 )                                         bps
Allowance for loan and lease losses as a % of total loans and leases                                                                                      1.12                      %                                                                                    1.11                      %                                                                                    1.15                      %                                                                                       1                                           bps                                                                                                                                                                                            (3 )                                         bps
Allowance for loan and lease losses as a % of nonperforming loans            142.0   %                          131.4   %                          118.3   %          NM                                            NM                             
and leases
-------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- ----- -------------------- -------------------- -------------------- -------------------- -------------------- ----- -------------------- -------------------- -------------------- -------------------- -------------------- ----- --------------------   -------------------- -------------------- -------------------- -------------------- --- -------------------- -------------------- -------------------- -------------------- -------------------- ------------------------------  -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------------- ----------------------------------  --------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

Overall credit quality remains strong, reflecting growth in high quality retail loans and broadly stable risk profile in commercial portfolios. Nonperforming loans and leases of $871 million decreased $61 million, or 7%, from September 30, 2017, primarily reflecting a decrease in commercial, driven by payoffs. Compared to December 31, 2016, nonperforming loans and leases decreased $174 million, or 17%, reflecting a $122 million decrease in commercial, driven by a reduction in nonperforming commodities-related credits, and a $52 million decrease in retail, largely in real-estate secured categories. The nonperforming loans and leases to total loans and leases ratio of 0.79% at December 31, 2017 improved six basis points from 0.85% at September 30, 2017 and improved 18 basis points from 0.97% at December 31, 2016.

Net charge-offs of $78 million increased $13 million from third quarter 2017, reflecting an $2 million increase in commercial and an $11 million increase in retail largely driven by seasonality in auto and education, as well as growth in the retail unsecured portfolio. Compared with fourth quarter 2016, net charge-offs decreased $26 million, reflecting a $14 million decrease in commercial net charge-offs and a $12 million decrease in retail net charge-offs. Fourth quarter 2017 net charge-offs of 28 basis points of average loans and leases compares with 24 basis points in third quarter 2017 and 39 basis points in fourth quarter 2016.

Allowance for loan and lease losses of $1.2 billion increased slightly compared to third quarter 2017, primarily reflecting growth and seasoning in the consumer unsecured portfolio. Allowance for loan and lease losses is stable compared with fourth quarter 2016 levels, reflecting strong overall credit quality that helped offset reserves to fund year-over-year loan growth.

The ratio of the allowance for loan and lease losses to total loans and leases was 1.12% as of December 31, 2017, which was stable compared with 1.11% as of September 30, 2017 and down modestly from 1.15% as of December 31, 2016.

The allowance for loan and lease losses to nonperforming loans and leases ratio of 142% as of December 31, 2017 compares to 131% as of September 30, 2017, and 118% as of December 31, 2016, reflecting the decrease in nonperforming loans.

Additional Segment Detail:

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
Consumer Banking Segment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     4Q17 change from
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
($s in millions)                                          4Q17                                    3Q17                                    4Q16                                                                                                                                                3Q17                                                                                                                                                                                  4Q16
------------------------------------- -------------------- -------------------- -------------------- ---------------------------------------------------- -------------------- -------------------- -------------------- ---------------------------------------------------- -------------------- -------------------- -------------------- --------------------------------                                          -------------------- -------------------- -------------------- ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                           --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                  $                    %                                                          $                %      
                                                                                                                                                                                                                                                                                                                                                                                                                       -------------------- -------------------- -------------------- -------------------- ------ -------------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- --------------------                                           -------------------- ------ -------------------- -------------------- -------------------- -------------------- -------------------- ------ -------------------- --------------------
Net interest income                                                                                                     $        682                                                                                                        $        674                                                                                                        $        639                                                                                                                             $      8                                                                                                    1                      %                                                              $     43                                                                                            7   %
Noninterest income                                   229                  227                  227                                                        2                                                                                                    1                                                                                            2                                                                                            1
------------------------------------- -------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------------------- -------------------- ----------                                           -------------------- -------------------- -------------------- -------------------- ------ --------------------                                                                                                                                                                                        -------------------- ------ --------------------
Total revenue                                                                                                                    911                                                                                                                 901                                                                                                                 866                                                                                                                                   10                                                                                                                       1                                                                                                              45                                                                                                               5
Noninterest expense                                  654                  648                  649                                                        6                                                                                                    1                                                                                            5                                                                                            1
------------------------------------- -------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------------------- -------------------- ----------                                           -------------------- -------------------- -------------------- -------------------- ------ --------------------                                                                                                                                                                                        -------------------- ------ --------------------
Pre-provision profit                                                                                                             257                                                                                                                 253                                                                                                                 217                                                                                                                                    4                                                                                                                       2                                                                                                              40                                                                                                              18
Provision for credit losses                           76                   65                   74                                                       11                                                                                                   17                                                                                            2                                                                                            3
------------------------------------- -------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------------------- -------------------- ----------                                           -------------------- -------------------- -------------------- -------------------- ------ --------------------                                                                                                                                                                                        -------------------- ------ --------------------
Income before income tax expense                                                                                                 181                                                                                                                 188                                                                                                                 143                                                                                                                                   (7 )                                                                                                                    (4 )                                                                                                            38                                                                                                              27
Income tax expense                                    64                   66                   51                                                       (2 )                                                                                                                    (3 )                                                                                         13                                                                                           25
------------------------------------- -------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------------------- -------------------- ----------                                           -------------------- -------------------- -------------------- -------------------- ------ --------------------                                                                                                                                                                                        -------------------- ------ --------------------
Net income                                                     $        117                            $        122                            $         92                                                                    $     (5 )                                                                                                                    (4 )                                       %                                                              $     25                                                                                           27                      %
------------------------------------- -------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------------------- -------------------- ----------                                           -------------------- -------------------- -------------------- -------------------- ------ --------------------                                                                                                                                                                                        -------------------- ------ --------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
Average balances                                                                                                                                                                                                                                                                                                                                      
------------------------------------- -------------------- -------------------- -------------------- ---------------------------------------------------- -------------------- -------------------- -------------------- ---------------------------------------------------- -------------------- -------------------- -------------------- --------------------------------                     -------------------- -------------------- -------------------- -------------------- -------------------------------------------------                                                                                                                                                                                       -------------------------------------------------
Total loans and leases (1)                                                                                              $     59,547                                                                                                        $     58,679                                                                                                        $     56,711                                                                                                                             $    868                                                                                                                       1                      %                                                              $  2,836                                                                                                               5                      %
Total deposits                                                 $     75,154                            $     75,085                            $     73,124                                                                    $     69                                                                                       --                      %                                                              $  2,030                                                                                            3                      %
------------------------------------- -------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------------------- -------------------- ----------                                           -------------------- -------------------- -------------------- -------------------- ------ --------------------                                                                                                                                                                                        -------------------- ------ --------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
Key performance metrics*                                                                                                                                                                                                                                                                                                                                                                    
------------------------------------- -------------------- -------------------- -------------------- ----------------------------------------------------                      -------------------- -------------------- ----------------------------------------------------                      -------------------- -------------------- ----------------------------------------------------                      -------------------- -------------------- -------------------- -------------------------------------------------                                                                                                                                                                                       -------------------------------------------------
ROTCE (2)                                                                                                                        8.3                      %                                                                                          8.7                      %                                                                                          7.0                      %                                                                                                           (43 )                                         bps                                                                                                                                                                                       132                                           bps
Efficiency ratio                                                                                                                  72                      %                                                                                           72                      %                                                                                           75                      %                                                                                                             2                                           bps                                                                                                                                                                                      (300 )                                         bps
Loan-to-deposit ratio (period-end)(1)               79.5   %                                78.6   %                                77.3   %                                90                        bps                                                                                                                                                                    216                        bps
------------------------------------- -------------------- -------------------- -------------------- -------------------- ---------- --------------------                      -------------------- -------------------- -------------------- ---------- --------------------                      -------------------- -------------------- -------------------- ---------- --------------------                      -------------------- -------------------- -------------------- -------------------- ------ --------------------                                                                                                                                                                                        -------------------- ------ --------------------

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

Consumer Banking net income of $117 million in fourth quarter 2017 decreased $5 million, or 4%, from third quarter 2017 reflecting after-tax notable items of $5 million included in noninterest expense primarily associated with our strategic growth initiatives. Excluding these notable items, Consumer Banking net income of $122 million in fourth quarter 2017 was stable with third quarter 2017 and increased $30 million compared with fourth quarter 2016.* Net interest income increased $8 million, or 1%, compared with third quarter 2017 reflecting growth in mortgage, education and unsecured retail loan balances as well as the benefit of improved loan yields, partially offset by an increase in deposit costs. Noninterest income increased $2 million, or 1%, as higher trust and investment services fees were partially offset by seasonally lower card fees. Noninterest expense increased $6 million from third quarter 2017, given the impact of $9 million of notable items tied to growth initiatives largely in outside services, which includes costs tied to strategic growth initiatives.* Results also include an increase in occupancy and other operating expense, offset by seasonally lower marketing spend and salary and benefits expense. Excluding notable items, noninterest expense decreased $3 million from third quarter 2017.* Provision for credit losses increased $11 million from third quarter 2017, reflecting higher net charge-offs largely driven by seasonality in auto and education, as well as an increase for unsecured primarily tied to portfolio seasoning.

Compared with fourth quarter 2016, net income increased $25 million, or 27%, reflecting a $45 million increase in total revenue and a $5 million increase in noninterest expense. Excluding notable items, Consumer Banking net income increased $30 million compared with fourth quarter 2016.* Net interest income increased $43 million, or 7%, as improved loan yields and a $2.8 billion increase in average loans, driven by growth in mortgage, education and unsecured retail loan balances, were partially offset by an increase in deposit costs. Noninterest income was up 1% compared with fourth quarter 2016, largely reflecting higher trust and investment fees and card fees, partially offset by lower mortgage banking fees.

Compared to fourth quarter 2016, noninterest expense increased $5 million reflecting an increase in outside services and in salaries and benefits associated with growth initiatives, along with higher FDIC expense. These increases were partially offset by lower fraud and other losses. Excluding the notable items, noninterest expense decreased $4 million compared with fourth quarter 2016.* Provision for credit losses was stable compared with fourth quarter 2016, as higher consumer unsecured and education net charge-offs were partially offset by lower home equity and mortgage net charge-offs.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
Commercial Banking Segment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               4Q17 change from
                                                                                                                                                                                                                                                                                                                                                                                                                         -------------------- -------------------- -------------------- ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
($s in millions)                                                  4Q17                                               3Q17                                      4Q16                                                                                                                         3Q17                                                                                                                                                                                  4Q16                                                                               
------------------------------------- -------------------- -------------------- -------------------- --------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------------------------------------------- -------------------- -------------------- -------------------- ----------------------------------------------------   -------------------- -------------------- -------------------- ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                          -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                        $                        %                                                          $               %     
                                                                                                                                                                                                                                                                                                                                                                                                                         -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- --------------------                                           -------------------- ------ -------------------- -------------------- -------------------- -------------------- -------------------- ---- -------------------- --------------------
Net interest income                                                                                                     $    367                                                                                                                             $            354                                                                                                        $        347                                                                                                          $             13                                                                                                    4   %                                                                                 $     20                                                                                          6   %
Noninterest income                               138                        136                  122                          2                                                                                                    1                                                                                           16                                                                                         13
------------------------------------- -------------------- -------------------- -------------------- -------------------- ------ -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------------- ---------- --------------------   -------------------- -------------------- -------------------- -------------------- -------------- --------------------                                                                                                                                                                                        -------------------- ------ --------------------
Total revenue                                                                                                                505                                                                                                                                          490                                                                                                                 469                                                                                                                        15                                                                                                                       3                                                                                                              36                                                                                                             8
Noninterest expense                              195                        195                  187             --                                                                                       --                                                                                            8                                                                                          4
------------------------------------- -------------------- -------------------- -------------------- -------------------- ------ -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------------- ---------- --------------------   -------------------- -------------------- -------------------- -------------------- -------------- --------------------                                                                                                                                                                                        -------------------- ------ --------------------
Pre-provision profit                                                                                                         310                                                                                                                                          295                                                                                                                 282                                                                                                                        15                                                                                                                       5                                                                                                              28                                                                                                            10
Provision for credit losses                       (1 )                              --                   20                         (1 )                                                                                                                    NM                                                                                          (21 )                                                                                                        (105 )
------------------------------------- -------------------- -------------------- -------------------- -------------------- ------ -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------------- ---------- --------------------   -------------------- -------------------- -------------------- -------------------- -------------- --------------------                                                                                                                                                                                        -------------------- ------ --------------------
Income before income tax expense                                                                                             311                                                                                                                                          295                                                                                                                 262                                                                                                                        16                                                                                                                       5                                                                                                              49                                                                                                            19
Income tax expense                               105                         94                   90                         11                                                                                                   12                                                                                           15                                                                                         17
------------------------------------- -------------------- -------------------- -------------------- -------------------- ------ -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------------- ---------- --------------------   -------------------- -------------------- -------------------- -------------------- -------------- --------------------                                                                                                                                                                                        -------------------- ------ --------------------
Net income                                                     $    206                              $            201                            $        172                              $              5                                                                                                    2                      %                                                                                 $     34                                                                                         20   %
------------------------------------- -------------------- -------------------- -------------------- -------------------- ------ -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------------- ---------- --------------------   -------------------- -------------------- -------------------- -------------------- -------------- --------------------                                                                                                                                                                                        -------------------- ------ --------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
Average balances                                                                                                                                                                                                                                                                                                                                                
------------------------------------- -------------------- -------------------- -------------------- --------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------------------------------------------- -------------------- -------------------- -------------------- ----------------------------------------------------   -------------------- -------------------- -------------------- ---------------------------------------------------------                                                                                                                                                                                       -------------------------------------------------
Total loans and leases (1)                                                                                              $ 48,938                                                                                                                             $         48,746                                                                                                        $     47,010                                                                                                          $            192                                                                                                          --                      %                                                                                 $  1,928                                                                                                             4   %
Total deposits                                                 $ 31,514                              $         30,751                            $     29,410                              $            763                                                                                                    2                      %                                                                                 $  2,104                                                                                          7   %
------------------------------------- -------------------- -------------------- -------------------- -------------------- ------ -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------------- ---------- --------------------   -------------------- -------------------- -------------------- -------------------- -------------- --------------------                                                                                                                                                                                        -------------------- ------ --------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
Key performance metrics*                                                                                                                                                                                                                                                                                                                                                                              
------------------------------------- -------------------- -------------------- -------------------- ---------------------------------------------------------------------                      -------------------- -------------------- --------------------------------------------------------                      -------------------- -------------------- ----------------------------------------------------   -------------------- -------------------- -------------------- ---------------------------------------------------------                                                                                                                                                                                       -------------------------------------------------
ROTCE (2)                                                                                                                   14.1                                           %                                                                                             14.1                      %                                                                                         12.9                      %                                                                                                  9                                           bps                                                                                                                                                                                       121                                           bps
Efficiency ratio                                                                                                              39                                           %                                                                                               39                      %                                                                                           40                      %                                                                                                (55 )                                         bps                                                                                                                                                                                       (99 )                                         bps
Loan-to-deposit ratio (period-end)(1)          152.8     %                                   160.5   %                               166.3   %                   (768 )                                         bps                                                                                                                                                                     NM  
------------------------------------- -------------------- -------------------- -------------------- -------------------- ------ -------------------- --------------------                      -------------------- -------------------- -------------------- -------------- --------------------                      -------------------- -------------------- -------------------- ---------- --------------------   -------------------- -------------------- -------------------- -------------------- -------------- --------------------                                                                                                                                                                                        -------------------- ------ --------------------

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

Commercial Banking net income of $206 million for fourth quarter 2017 increased $5 million, or 2%, versus third quarter 2017 driven by higher net interest income and noninterest income. Net interest income increased $13 million, or 4%, versus third quarter 2017, reflecting strong deposit balance growth. Modest loan growth reflects growth in Mid-corporate, Private Equity and the impact of geographic expansion strategies, partially offset by planned runoff in the Asset Finance portfolio. Noninterest income increased 1% compared with third quarter 2017 as higher foreign exchange and interest rate products, leasing fees and letter of credit fees offset lower capital markets fees from record levels in third quarter 2017. Noninterest expense was stable. Fourth quarter 2017 provision for credit losses remained stable versus third quarter 2017.

Compared with fourth quarter 2016, net income increased $34 million, or 20%, driven by a $36 million increase in total revenue and a $21 million reduction in provision expense, partially offset by an $8 million increase in noninterest expense. Compared to fourth quarter 2016, net interest income increased $20 million, or 6%, as the benefit of 4% average loan and lease growth and improved loan yields was partially offset by higher deposit costs. Average loans and leases increased $1.9 billion, driven by strength in Mid-corporate, Private Equity, Commercial Real Estate and Franchise Finance, as well as the impact of our geographic expansion strategies, partially offset by planned runoff in the Asset Finance portfolio and the impact of lower line utilization. Compared to fourth quarter 2016, noninterest income increased $16 million, or 13%, reflecting strength in capital markets, letter of credit and loan fees and card fees. Noninterest expense increased $8 million, or 4%, reflecting higher salaries and benefits expense and outside services, partially offset by lower legal and regulatory expense. Provision for credit losses decreased $21 million from higher fourth quarter 2016 levels largely tied to commodities-related credits.

                                                                                                                                                                                                                     
Other(1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              4Q17 change from
                                                                                                                                                                                                                                                                                                                                                                                                                                   -------------------- -------------------- ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
($s in millions)                                                              4Q17                                           3Q17                                              4Q16                                                                                                                                                 3Q17                                                                                                                                                          4Q16
------------------------------------------------- -------------------- -------------------- -------------------- --------------------------------------------------------------------- -------------------- -------------------- ---------------------------------------------------- -------------------- -------------------- ---------------------------------------------------------                                          -------------------- -------------------- ------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                           ------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                            $                  %                                                              $                      %        
                                                                                                                                                                                                                                                                                                                                                                                                                                   -------------------- -------------------- -------------------- ------ -------------------- -------------------- -------------------- -------------------- -------------- -------------------- --------------------                                           -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------- --------------------
Net interest income                                                                                                                 $     31                                                                                                        $         34                                                                                   $ --                                                                                                                             $     (3 )                                      (9 )                                       %                                                              $             31                                        NM
Noninterest income                                            37                   18                     28                                                       19                                                                             106                                                                                                    9                                                                              32
------------------------------------------------- -------------------- -------------------- -------------------- -------------------- ------ -------------------- -------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------------------- -------------- --------------------                                           -------------------- -------------------- -------------------- ------ --------------------                                                                                                                                                                   -------------------- -------------- --------------------
Total revenue                                                                                                                             68                                                                                                                  52                                                                                                 28                                                                                                                                   16                                                                                                 31                                                                                                                      40                                                                                                143
Noninterest expense                                           49                   15                     11                                                       34                                                                              NM                                                                                                   38                                                                              NM
------------------------------------------------- -------------------- -------------------- -------------------- -------------------- ------ -------------------- -------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------------------- -------------- --------------------                                           -------------------- -------------------- -------------------- ------ --------------------                                                                                                                                                                   -------------------- -------------- --------------------
Pre-provision profit (loss)                                                                                                               19                                                                                                                  37                                                                                                 17                                                                                                                                  (18 )                                                                                              (49 )                                                                                                                     2                                                                                                 12
Provision for credit losses                                    8                    7                      8                                                        1                                                                              14                                                                                       --                                                                  --
------------------------------------------------- -------------------- -------------------- -------------------- -------------------- ------ -------------------- -------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------------------- -------------- --------------------                                           -------------------- -------------------- -------------------- ------ --------------------                                                                                                                                                                   -------------------- -------------- --------------------
Income (loss) before income tax expense (benefit)                                                                                         11                                                                                                                  30                                                                                                  9                                                                                                                                  (19 )                                                                                              (63 )                                                                                                                     2                                                                                                 22
Income tax expense (benefit)                                (332 )                                     5                     (9 )                                                                                                            (337 )                                                                                               NM                                                                                                 (323 )                                                                                               NM
------------------------------------------------- -------------------- -------------------- -------------------- -------------------- ------ -------------------- -------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------------------- -------------- --------------------                                                                                     -------------------- ------ --------------------                                                                                                                                                                   -------------------- -------------- --------------------
Net income (loss)                                                          $    343                            $         25                          $             18                                                                    $    318                                                                              NM                                                                                                        $            325                                                                              NM
------------------------------------------------- -------------------- -------------------- -------------------- -------------------- ------ -------------------- -------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------------------- -------------- --------------------                                           -------------------- -------------------- -------------------- ------ --------------------                                                                                                                                                                   -------------------- -------------- --------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
Average balances                                                                                                                                                                                                                                                                                                                                                                                    
------------------------------------------------- -------------------- -------------------- -------------------- --------------------------------------------------------------------- -------------------- -------------------- ---------------------------------------------------- -------------------- -------------------- ---------------------------------------------------------                                          -------------------- -------------------- -------------------------------------------------                                                                                                                                                                  ---------------------------------------------------------
Total loans and leases (2)                                                                                                          $  2,732                                                                                                        $      2,796                                                                                   $          3,370                                                                                                                             $    (64 )                                                                                               (2 )                                       %                                                              $           (638 )                                                                                              (19 )                    %
Total deposits                                                             $  7,085                            $      7,111                          $          6,591                                                                    $    (26 )                                                                                   --                      %                                                              $            494                                                                               7   %
------------------------------------------------- -------------------- -------------------- -------------------- -------------------- ------ -------------------- -------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------------------- -------------- --------------------                                           -------------------- -------------------- -------------------- ------ --------------------                                                                                                                                                                   -------------------- -------------- --------------------

1) Includes the financial impact of non-core, liquidating loan portfolios and other non-core assets, our treasury activities, wholesale funding activities, securities portfolio, community development assets and other unallocated assets, liabilities, capital, revenues, provision for credit losses and expenses, including income tax expense, not attributed to our Consumer Banking or Commercial Banking segments. 2) Includes held for sale.

Other net income of $343 million in fourth quarter 2017 versus third quarter 2017 increased by $318 million, driven primarily by the $331 million deferred tax liability benefit tied to the 2017 Tax Legislation. Net interest income decreased $3 million, or 9%, driven by higher funding costs. Noninterest income increased $19 million, driven primarily by $17 million pre-tax, or $10 million after-tax, of notable items related to the gain on the sale of the TDR Transaction II.* Noninterest expense increased $34 million, driven primarily by $31 million of notable items, which included $12.5 million related to our one-time colleague bonus, $10 million in charitable contributions expense and $9 million related to our efficiency initiatives. Provision expense increased $1 million related to non-core net charge-offs, partially offset by a lower reserve build versus third quarter 2017. Income tax expense included the $331 million deferred tax liability benefit tied to the 2017 Tax Legislation and the impact of $7 million tied to historic tax credit investment costs.

Other net income in fourth quarter 2017 increased $325 million versus fourth quarter 2016, driven primarily by the deferred tax liability benefit notable item tied to the 2017 Tax Legislation.* Net interest income increased $31 million, driven by residual funds transfer pricing and higher investment portfolio income versus fourth quarter 2016 levels, partially offset by higher funding costs, non-core portfolio run-off and the lower benefit of swaps. Noninterest income increased $9 million and included $17 million of pre-tax notable items related to the TDR Transaction II gain which more than offset lower leasing income and other net gains. Noninterest expense increased $38 million, driven primarily by notable items recorded in fourth quarter 2017. Provision expense was stable versus fourth quarter 2016.

Corresponding Financial Tables and Information

Investors are encouraged to review the foregoing summary and discussion of Citizens’ earnings and financial condition in conjunction with the detailed financial tables and other information available on the Investor Relations portion of the company’s website at www.citizensbank.com/about-us.

Conference Call

CFG management will host a live conference call today with details as follows:

Time: 9:00 am ET

Dial-in: (800) 553-5275, conference ID 432751

Webcast/Presentation: The live webcast will be available at http://investor.citizensbank.com under Events & Presentations.

Replay Information: A replay of the conference call will be available beginning at 11:00 am ET on January 19 through

February 19, 2018. Please dial (800) 475-6701 and enter access code 432751. The webcast replay will be available at http://investor.citizensbank.com under Events & Presentations.

About Citizens Financial Group, Inc.

Citizens Financial Group, Inc. is one of the nation’s oldest and largest financial institutions, with $152.3 billion in assets as of December 31, 2017. Headquartered in Providence, Rhode Island, Citizens offers a broad range of retail and commercial banking products and services to individuals, small businesses, middle-market companies, large corporations and institutions. Citizens helps its customers reach their potential by listening to them and by understanding their needs in order to offer tailored advice, ideas and solutions. In Consumer Banking, Citizens provides an integrated experience that includes mobile and online banking, a 24/7 customer contact center and the convenience of approximately 3,300 ATMs and approximately 1,150 branches in 11 states in the New England, Mid-Atlantic and Midwest regions. Consumer Banking products and services include a full range of banking, lending, savings, wealth management and small business offerings. In Commercial Banking, Citizens offers corporate, institutional and not-for-profit clients a full range of wholesale banking products and services, including lending and deposits, capital markets, treasury services, foreign exchange and interest rate products, and asset finance. More information is available at www.citizensbank.com or visit us on Twitter, LinkedIn or Facebook.

Key Performance Metrics and Non-GAAP Financial Measures and Reconciliations

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

Key Performance Metrics:

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

Our key performance metrics include:

Return on average tangible common equity (ROTCE);

Return on average total tangible assets (ROTA);

Efficiency ratio;

Operating leverage; and

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

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

Non-GAAP Financial Measures:

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

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

We believe these non-GAAP measures provide useful information to investors because these are among the measures used by our management team to evaluate our operating performance and make day-to-day operating decisions. In addition, we believe our "Adjusted" or "Underlying" results in any period do not reflect our operational performance in that period and, accordingly, it is useful to consider our GAAP results and our "Adjusted" or "Underlying" results together. We believe this presentation also increases comparability of period-to-period results.

Other companies may use similarly titled non-GAAP financial measures that are calculated differently from the way we calculate such measures. Accordingly, our non-GAAP financial measures may not be comparable to similar measures used by other companies. We caution investors not to place undue reliance on such non-GAAP measures, but instead to consider them with the most directly comparable GAAP measure. Non-GAAP financial measures have limitations as analytical tools, and should not be considered in isolation, or as a substitute for our results as reported under GAAP.

 
Key performance metrics, non-GAAP financial measures and
reconciliations
(in millions, except share, per-share and ratio data)
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                                                    QUARTERLY TRENDS                                                                                                                                                                                                                                                                                                                                                                                                                                                                          FULL YEAR
                                                                                                                                                                               ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                                                                    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        4Q17 Change                                                                                                                                                                                                                                                                                                                                                                                            2017 Change
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                                                                                                                                                                                                                                                                  --------------------------------------------------------------------------------------------------
                                                                                                                                                                                               4Q17                                                                                    3Q17                                                                                2Q17                                                                                               1Q17                                                                                    4Q16                                                                                                                           3Q17                                                                                                                                   4Q16                                                                                                                                               2017                                                                            2016                                                                                                                 2016
                                                                                                                                                                               ------------------------------------                                                               --------------                                                           ------------------------------------                                                               ------------------------------------                                                               --------------                                                                ----------------------------------------------------------------------------------------------------------------                     ---------------------------------------------------------------------------------------------------------------------                                                                                    ------ --------------------                                                                -------------- --------------------                                                                --------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 $                                                                                    %                                               $                                                                                         %                                                                                                                                                                                                                                                                                             $                                                                   %
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               -------------------------------------                                                         ------------------                     ------------------------------------                                                               ------------------                                                                                                                                                                                                                                                                                  ----- --------------------                                                                --------
Noninterest income, Adjusted/Underlying:
Noninterest income (GAAP)                                                                                                                                                                $404                                                                                               $381                                                                     $370                                                                                               $379                                                                                               $377                                                                            $23                                                                                            6 %                                  $27                                                                                                  7 %                                                                                      $1,534                                                                                             $1,497                                                                                       $37                                                                                        2 %
Less: Notable items                                                                                                                                                                        17                                                                  --                                                                      (11 )                                                                                   --                                                                  --                                                                             17                                                                       100                                     17                                                                             100                                                                                             6                                                                              67                                                                    (61 )                                                                                    (91 )
                                                                                                                                                                               -------------- --------------------                                                                --------------                                                           -------------- --------------------                                                                -------------- --------------------                                                                --------------                                                                --------------- --------------------                                                                                                 -------------- --------------------                                                                                                                                                                      ------ --------------------                                                                -------------- --------------------                                                                ----- --------------------
Noninterest income, Adjusted/Underlying (non-GAAP)                                                                                                                                       $387                                                                            $381                                                                     $381                                                                            $379                                                                            $377                                                                             $6                                                                         2 %                                  $10                                                                               3 %                                                                                      $1,528                                                                          $1,430                                                                    $98                                                                     7 %
                                                                                                                                                                               ============== ====================                                                                ==============                                                           ============== ====================                                                                ============== ====================                                                                ==============                                                                =============== ====================                                                                                                 ============== ====================                                                                                                                                                                      ====== ====================                                                                ============== ====================                                                                ===== ====================
Total revenue, Adjusted/Underlying:
Total revenue (GAAP)                                                                                                                A                                                  $1,484                                                                                             $1,443                                                                   $1,396                                                                                             $1,384                                                                                             $1,363                                                                            $41                                                                                            3 %                                 $121                                                                                                  9 %                                                                                      $5,707                                                                                             $5,255                                                                                      $452                                                                                        9 %
Less: Notable items                                                                                                                                                                        17                                                                  --                                                                      (11 )                                                                                   --                                                                  --                                                                             17                                                                       100                                     17                                                                             100                                                                                             6                                                                              67                                                                    (61 )                                                                                    (91 )
                                                                                                                                                                               -------------- --------------------                                                                --------------                                                           -------------- --------------------                                                                -------------- --------------------                                                                --------------                                                                --------------- --------------------                                                                                                 -------------- --------------------                                                                                                                                                                      ------ --------------------                                                                -------------- --------------------                                                                ----- --------------------
Total revenue, Adjusted/Underlying (non-GAAP)                                                                                       B                                                  $1,467                                                                          $1,443 $--                                                   $1,407                                                                          $1,384                                                                          $1,363                                                                            $24                                                                         2 %                                 $104                                                                               8 %                                                                                      $5,701                                                                          $5,188                                                                   $513                                                                    10 %
                                                                                                                                                                               ============== ====================                                                                ==============                                                           ============== ====================                                                                ============== ====================                                                                ==============                                                                =============== ====================                                                                                                 ============== ====================                                                                                                                                                                      ====== ====================                                                                ============== ====================                                                                ===== ====================
Noninterest expense, Adjusted/Underlying:
Noninterest expense (GAAP)                                                                                                          C                                                    $898                                                                                               $858                                                                     $864                                                                                               $854                                                                                               $847                                                                            $40                                                                                            5 %                                  $51                                                                                                  6 %                                                                                      $3,474                                                                                             $3,352                                                                                      $122                                                                                        4 %
Less: Notable items                                                                                                                                                                        40                                                                  --                                                                       15                                                                  --                                                                  --                                                                             40                                                                       100                                     40                                                                             100                                                                                            55                                                                              36                                                                     19                                                                    53
                                                                                                                                                                               -------------- --------------------                                                                --------------                                                           -------------- --------------------                                                                -------------- --------------------                                                                --------------                                                                --------------- --------------------                                                                                                 -------------- --------------------                                                                                                                                                                      ------ --------------------                                                                -------------- --------------------                                                                ----- --------------------
Noninterest expense, Adjusted/Underlying (non-GAAP)                                                                                 D                                                    $858                                                                            $858                                                                     $849                                                                            $854                                                                            $847                                                                $--                                                            -- %                                  $11                                                                               1 %                                                                                      $3,419                                                                          $3,316                                                                   $103                                                                     3 %
                                                                                                                                                                               ============== ====================                                                                ==============                                                           ============== ====================                                                                ============== ====================                                                                ==============                                                                =============== ====================                                                                                                 ============== ====================                                                                                                                                                                      ====== ====================                                                                ============== ====================                                                                ===== ====================
Pre-provision profit:
Total revenue (GAAP)                                                                                                                A                                                  $1,484                                                                                             $1,443                                                                   $1,396                                                                                             $1,384                                                                                             $1,363                                                                            $41                                                                                            3 %                                 $121                                                                                                  9 %                                                                                      $5,707                                                                                             $5,255                                                                                      $452                                                                                        9 %
Less: Noninterest expense (GAAP)                                                                                                    C                                                     898                                                                             858                                                                      864                                                                             854                                                                             847                                                                             40                                                                         5                                     51                                                                               6                                                                                         3,474                                                        3,352                                                                    122                                                                     4
                                                                                                                                                                               -------------- --------------------                                                                --------------                                                           -------------- --------------------                                                                -------------- --------------------                                                                --------------                                                                --------------- --------------------                                                                                                 -------------- --------------------                                                                                                                                                                      ------ -------------------- --------------------                                           -------------- --------------------                                                                ----- --------------------
Pre-provision profit (GAAP)                                                                                                                                                              $586                                                                            $585                                                                     $532                                                                            $530                                                                            $516                                                                             $1                                                            -- %                                  $70                                                                              14 %                                                                                      $2,233                                                       $1,903                                                                   $330                                                                    17 %
                                                                                                                                                                               ============== ====================                                                                ==============                                                           ============== ====================                                                                ============== ====================                                                                ==============                                                                =============== ====================                                                                                                 ============== ====================                                                                                                                                                                      ====== ==================== ====================                                           ============== ====================                                                                ===== ====================
Pre-provision profit, Adjusted/Underlying:
Total revenue, Adjusted/Underlying (non-GAAP)                                                                                       B                                                  $1,467                                                                                             $1,443                                                                   $1,407                                                                                             $1,384                                                                                             $1,363                                                                            $24                                                                                            2 %                                 $104                                                                                                  8 %                                                                                      $5,701                                                                                             $5,188                                                                                      $513                                                                                       10 %
Less: Noninterest expense, Adjusted/Underlying (non-GAAP)                                                                           D                                                     858                                                                             858                                                                      849                                                                             854                                                                             847                                                                 --                                                            --                                     11                                                                               1                                                                                         3,419                                                                           3,316                                                                    103                                                                     3
                                                                                                                                                                               -------------- --------------------                                                                --------------                                                           -------------- --------------------                                                                -------------- --------------------                                                                --------------                                                                --------------- --------------------                                                                                                 -------------- --------------------                                                                                                                                                                      ------ --------------------                                                                -------------- --------------------                                                                ----- --------------------
Pre-provision profit, Adjusted/Underlying (non-GAAP)                                                                                                                                     $609                                                                            $585                                                                     $558                                                                            $530                                                                            $516                                                                            $24                                                                         4 %                                  $93                                                                              18 %                                                                                      $2,282                                                                          $1,872                                                                   $410                                                                    22 %
                                                                                                                                                                               ============== ====================                                                                ==============                                                           ============== ====================                                                                ============== ====================                                                                ==============                                                                =============== ====================                                                                                                 ============== ====================                                                                                                                                                                      ====== ====================                                                                ============== ====================                                                                ===== ====================
Total credit-related costs, Adjusted/Underlying:
Provision for credit losses (GAAP)                                                                                                                                                        $83                                                                                                $72                                                                      $70                                                                                                $96                                                                                               $102                                                                            $11                                                                                           15 %                                 ($19 )                                                                                              (19 %)                                                                                       $321                                                                                               $369                                                                                      ($48 )                                                                                    (13 %)
Add: Lease impairment credit-related costs                                                                                                                                     --                                                                  --                                                                       26                                                                  --                                                                  --                                                                 --                                                            --                         --                                                                  --                                                                                            26                                                                  --                                                                     26                                                                   100
                                                                                                                                                                               -------------- --------------------                                                                --------------                                                           -------------- --------------------                                                                -------------- --------------------                                                                --------------                                                                --------------- --------------------                                                                                                 -------------- --------------------                                                                                                                                                                      ------ --------------------                                                                -------------- --------------------                                                                ----- --------------------
Total credit-related costs, Adjusted/Underlying (non-GAAP)                                                                                                                                $83                                                                             $72                                                                      $96                                                                             $96                                                                            $102                                                                            $11                                                                        15 %                                 ($19 )                                                                                              (19 %)                                                                                       $347                                                                            $369                                                                   ($22 )                                                                                     (6 %)
                                                                                                                                                                               ============== ====================                                                                ==============                                                           ============== ====================                                                                ============== ====================                                                                ==============                                                                =============== ====================                                                                                                 ============== ====================                                                                                                                                                                      ====== ====================                                                                ============== ====================                                                                ===== ====================
Income before income tax expense, Adjusted/Underlying:
Income before income tax expense (GAAP)                                                                                             E                                                    $503                                                                                               $513                                                                     $462                                                                                               $434                                                                                               $414                                                                           ($10 )                                                                                         (2 %)                                 $89                                                                                                 21 %                                                                                      $1,912                                                                                             $1,534                                                                                      $378                                                                                       25 %
Less: Income before income tax expense (benefit) related to notable                                                                                                                       (23 )                                                                                   --                                                           --                                                                  --                                                                  --                                                                            (23 )                                                                                       (100 )                                  (23 )                                                                                             (100 )                                                                                         (23 )                                                                                               31                                                                    (54 )                                                                                   (174 )
items
                                                                                                                                                                               -------------- --------------------                                                                --------------                                                           -------------- --------------------                                                                -------------- --------------------                                                                --------------                                                                --------------- --------------------                                                                                                 -------------- --------------------                                                                                                                                                                      ------ --------------------                                                                -------------- --------------------                                                                ----- --------------------
Income before income tax expense, Adjusted/Underlying (non-GAAP)                                                                    F                                                    $526                                                                            $513                                                                     $462                                                                            $434                                                                            $414                                                                            $13   --                                                        3 %                                 $112                                                                              27 %                                                                                      $1,935                                                                          $1,503                                                                   $432                                                                    29 %
                                                                                                                                                                               ============== ====================                                                                ==============                                                           ============== ====================                                                                ============== ====================                                                                ==============                                                                =============== ====================                                                                                                 ============== ====================                                                                                                                                                                      ====== ====================                                                                ============== ====================                                                                ===== ====================
Income tax expense, Adjusted/Underlying:
Income tax expense (GAAP)                                                                                                           G                                                   ($163 )                                                                                             $165                                                                     $144                                                                                               $114                                                                                               $132                                                                          ($328 )                                                                                       (199 %)                               ($295 )                                                                                             (223 %)                                                                                       $260                                                                                               $489                                                                                     ($229 )                                                                                    (47 %)
Less: Income tax expense (benefit) related to notable/Underlying                                                                                                                         (340 )                                                                                   --                                                           --                                                                             (23 )                                                                                   --                                                                           (340 )                                                                                       (100 )                                 (340 )                                                                                             (100 )                                                                                        (363 )                                                                                               12                                                                   (375 )                                                                                     NM
items
                                                                                                                                                                               -------------- --------------------                                                                --------------                                                           -------------- --------------------                                                                -------------- --------------------                                                                --------------                                                                --------------- --------------------                                                                                                 -------------- --------------------                                                                                                                                                                      ------ --------------------                                                                -------------- --------------------                                                                ----- --------------------
Income tax expense, Adjusted/Underlying (non-GAAP)                                                                                  H                                                    $177                                                                            $165                                                                     $144                                                                            $137                                                                            $132                                                                            $12   --                                                        7 %                                  $45                                                                              34 %                                                                                        $623                                                                            $477                                                                   $146                                                                    31 %
                                                                                                                                                                               ============== ====================                                                                ==============                                                           ============== ====================                                                                ============== ====================                                                                ==============                                                                =============== ====================                                                                                                 ============== ====================                                                                                                                                                                      ====== ====================                                                                ============== ====================                                                                ===== ====================
Net income, Adjusted/Underlying:
Net income (GAAP)                                                                                                                   I                                                    $666                                                                                               $348                                                                     $318                                                                                               $320                                                                                               $282                                                                           $318                                                                                           91 %                                 $384                                                                                                136 %                                                                                      $1,652                                                                                             $1,045                                                                                      $607                                                                                       58 %
Add: Notable items, net of income tax expense (benefit)                                                                                                                                  (317 )                                                                                   --                                                           --                                                                             (23 )                                                                                   --                                                                           (317 )                                                                                       (100 )                                 (317 )                                                                                             (100 )                                                                                        (340 )                                                                                              (19 )                                                                                    (321 )                                                                                     NM
                                                                                                                                                                               -------------- --------------------                                                                --------------                                                           -------------- --------------------                                                                -------------- --------------------                                                                --------------                                                                --------------- --------------------                                                                                                 -------------- --------------------                                                                                                                                                                      ------ --------------------                                                                -------------- --------------------                                                                ----- --------------------
Net income, Adjusted/Underlying (non-GAAP)                                                                                          J                                                    $349                                                                            $348                                                                     $318                                                                            $297                                                                            $282                                                                             $1                                                            -- %                                  $67                                                                              24 %                                                                                      $1,312                                                                          $1,026                                                                   $286                                                                    28 %
                                                                                                                                                                               ============== ====================                                                                ==============                                                           ============== ====================                                                                ============== ====================                                                                ==============                                                                =============== ====================                                                                                                 ============== ====================                                                                                                                                                                      ====== ====================                                                                ============== ====================                                                                ===== ====================
Net income available to common stockholders,
Adjusted/Underlying:
Net income available to common stockholders (GAAP)                                                                                  K                                                    $666                                                                                               $341                                                                     $318                                                                                               $313                                                                                               $282                                                                           $325                                                                                           95 %                                 $384                                                                                                136 %                                                                                      $1,638                                                                                             $1,031                                                                                      $607                                                                                       59 %
Add: Notable items, net of income tax expense (benefit)                                                                                                                                  (317 )                                                                                   --                                                           --                                                                             (23 )                                                                                   --                                                                           (317 )                                                                                       (100 )                                 (317 )                                                                                             (100 )                                                                                        (340 )                                                                                              (19 )                                                                                    (321 )                                                                                     NM
                                                                                                                                                                               -------------- --------------------                                                                --------------                                                           -------------- --------------------                                                                -------------- --------------------                                                                --------------                                                                --------------- --------------------                                                                                                 -------------- --------------------                                                                                                                                                                      ------ --------------------                                                                -------------- --------------------                                                                ----- --------------------
Net income available to common stockholders, Adjusted/Underlying                                                                    L                                                    $349                                                                            $341                                                                     $318                                                                            $290                                                                            $282                                                                             $8                                                                         2 %                                  $67                                                                              24 %                                                                                      $1,298                                                                          $1,012                                                                   $286                                                                    28 %
(non-GAAP)
                                                                                                                                                                               ============== ====================                                                                ==============                                                           ============== ====================                                                                ============== ====================                                                                ==============                                                                =============== ====================                                                                                                 ============== ====================                                                                                                                                                                      ====== ====================                                                                ============== ====================                                                                ===== ====================
 
Key performance metrics, non-GAAP financial measures and
reconciliations (continued)
(in millions, except share, per-share and ratio data)
                                                                                                                                                                                                                                                                                                                    QUARTERLY TRENDS                                                                                                                                                                                                                                                                                                                                                                                         FULL YEAR
                                                                                                                                                                              ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                                                                    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     4Q17 Change                                                                                                                                                                                                                                                                                                                                                                                   2017 Change
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                                                                                                                                                                                                                    ---------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                           4Q17                                                                                         3Q17                                                                                         2Q17                                                                                            1Q17                                                                                            4Q16                                                                                                                                             3Q17                                                                                                                                     4Q16                                                                                                                                                               2017                                               2016                                                                                                                                             2016
                                                                                                                                                                              ------------------------------                                                               ------------------------------                                                               ------------------------------                                                               ------------------------------------                                                               ------------------------------                                                               ---------------------------------------------------------------------------------------------------------------------------------------                                                               -------------------------------------------------------------------------------------------------------------------------------                                                                                    ------------------------------                     ------------------------------                                                               ---------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     $/bps                                       %                                                                                            $/bps                                   %                                                                                                                                                                                                                                                                     $/bps                            %        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     ------------------------------------                                                               ------------------------------------                                                               ----------------------------                                                               ------------------------------------                                                                                                                                                                                                                                    ------------------------------------                                                               -------------- --------------------
Operating leverage:
Total revenue (GAAP)                                                                                                              A                                             $1,484                                                                                       $1,443                                                                                       $1,396                                                                                             $1,384                                                                                       $1,363                                                                                                $41                                                                                               2.86 %                                                                                     $121                                                                                               8.93 %                                                                                                          $5,707                                             $5,255                                                                                               $452                                                                                               8.61 %
Less: Noninterest expense (GAAP)                                                                                                  C                                                898                                                                                          858                                                                                          864                                                                                                854                                                                                          847                                                                                                 40                                                                                               4.79                                                                      51                                                                                               6.03                                                                                          3,474                                              3,352                                                                                                122                                                                                               3.63  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        -------------- --------------------                                                                                                                                                           -------------- --------------------                                                                                                                                                                                                                                                                                                                                        -------------- --------------------
Operating leverage                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               (1.93 %)                                                                                                                                                                                       2.90 %                                                                                                                                                                                                                                                                                                                                                                     4.98 %
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        ============== ====================                                                                                                                                                           ============== ====================                                                                                                                                                                                                                                                                                                                                        ============== ====================
Operating leverage, Adjusted/Underlying:
Total revenue, Adjusted/Underlying (non-GAAP)                                                                                     B                                             $1,467                                                                                       $1,443                                                                                       $1,407                                                                                             $1,384                                                                                       $1,363                                                                                                $24                                                                                               1.68 %                                                                                     $104                                                                                               7.67 %                                                                                                          $5,701                                             $5,188                                                                                               $513                                                                                               9.90 %
Less: Noninterest expense, Adjusted/Underlying (non-GAAP)                                                                         D                                                858                                                                                          858                                                                                          849                                                                                                854                                                                                          847                                                                                     --                                                                                               0.12                                                                      11                                                                                               1.31                                                                                          3,419                                              3,316                                                                                                103                                                                                               3.10  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        -------------- --------------------                                                                                                                                                           -------------- --------------------                                                                                                                                                                                                                                                                                                                                        -------------- --------------------
Operating leverage, Adjusted/Underlying (non-GAAP)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                1.56 %                                                                                                                                                                                        6.36 %                                                                                                                                                                                                                                                                                                                                                                     6.80 %
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        ============== ====================                                                                                                                                                           ============== ====================                                                                                                                                                                                                                                                                                                                                        ============== ====================
Efficiency ratio and efficiency ratio, Adjusted/Underlying:
Efficiency ratio                                                                                                                 C/A                                             60.52 %                                                                                      59.41 %                                                                                      61.94 %                                                                                            61.68 %                                                                                      62.18 %                                                                                              111                                                                                     bps                                                                                                  (166 )                                                                                   bps                                                                                                                        60.87 %                                            63.80 %                                                                                             (293 )                                                                                   bps
Efficiency ratio, Adjusted/Underlying (non-GAAP)                                                                                 D/B                                             58.50                                                                                        59.41                                                                                        60.36                                                                                              61.68                                                                                        62.18                                                                                                (91 )                                                                                   bps                                                                                                  (368 )                                                                                   bps                                                                                                                        59.96                                              63.92                                                                                               (396 )                                                                                   bps
Effective income tax rate and effective income tax rate,
Adjusted/Underlying:
Effective income tax rate                                                                                                        G/E                                            (32.40 %)                                                                                     32.18 %                                                                                      31.13 %                                                                                            26.36 %                                                                                      31.90 %                                                                                               NM                                                                                                                                                                                            NM                                                                                                                                                                                                                13.62 %                                            31.88 %                                                                                               NM
Effective income tax rate, Adjusted/Underlying                                                                                   H/F                                             33.68                                                                                        32.18                                                                                        31.13                                                                                              31.56                                                                                        31.90                                                                                                150                                                                                     bps                                                                                                   178                                                                                     bps                                                                                                                        32.20                                              31.74                                                                                                 46                                                                                     bps
Return on average common equity and return on average common
equity, Adjusted/Underlying:
Average common equity (GAAP)                                                                                                      M                                            $19,624                                                                                      $19,728                                                                                      $19,659                                                                                            $19,460                                                                                      $19,645                                                                                              ($104 )                                                                                               (1 %)                                                                                    ($21 )                                                                                   -- %                                                                                                         $19,618                                            $19,698                                                                                               ($80 )                                                                                   -- %
Return on average common equity                                                                                                  K/M                                             13.46 %                                                                                       6.87 %                                                                                       6.48 %                                                                                             6.52 %                                                                                       5.70 %                                                                                              659                                                                                     bps                                                                                                   776                                                                                     bps                                                                                                                         8.35 %                                             5.23 %                                                                                              312                                                                                     bps
Return on average common equity, Adjusted/Underlying (non-GAAP)                                                                  L/M                                              7.05                                                                                         6.87                                                                                         6.48                                                                                               6.05                                                                                         5.70                                                                                                 18                                                                                     bps                                                                                                   135                                                                                     bps                                                                                                                         6.62                                               5.14                                                                                                148                                                                                     bps
Return on average tangible common equity and return on average
tangible common equity, Adjusted/Underlying:
Average common equity (GAAP)                                                                                                      M                                            $19,624                                                                                      $19,728                                                                                      $19,659                                                                                            $19,460                                                                                      $19,645                                                                                              ($104 )                                                                                               (1 %)                                                                                    ($21 )                                                                                   -- %                                                                                                         $19,618                                            $19,698                                                                                               ($80 )                                                                                   -- %
Less: Average goodwill (GAAP)                                                                                                                                                    6,887                                                                                        6,887                                                                                        6,882                                                                                              6,876                                                                                        6,876                                                                                     --                                                                                     --                                                                                         11                                                                                     --                                                                                                             6,883                                              6,876                                                                                                  7                                                                                     --
Less: Average other intangibles (GAAP)                                                                                                                                               2                                                                                            2                                                                                            2                                                                                     --                                                                                            1                                                                                     --                                                                                     --                                                                                          1                                                                                                100                                                                                                                 2                                                  2                                                                                     --                                                                                     --
Add: Average deferred tax liabilities related to goodwill (GAAP)                                                                                                                   531                                                                       537                                                                       534                                                                             531                                                                       523                                                                              (6 )                                                                                               (1 )                                                                                        8                                                                               2                                                                                                               534                             502                                                                              32                                                                               6
                                                                                                                                                                              -------- --------------------                                                                -------- --------------------                                                                -------- --------------------                                                                -------------- --------------------                                                                -------- --------------------                                                                -------------- --------------------                                                                                                                                                                   ------ --------------------                                                                                                                                                                                        -------- --------------------                      -------- --------------------                                                                -------------- --------------------
Average tangible common equity                                                                                                    N                                            $13,266                                                                   $13,376                                                                   $13,309                                                                         $13,115                                                                   $13,291                                                                           ($110 )                                                                                               (1 %)                                                                                    ($25 )                                                                                   -- %                                                                                                         $13,267                         $13,322                                                                            ($55 )                                                                                   -- %
                                                                                                                                                                              ======== ====================                                                                ======== ====================                                                                ======== ====================                                                                ============== ====================                                                                ======== ====================                                                                ============== ====================                                                                                                                                                                   ====== ====================                                                                                                                                                                                        ======== ====================                      ======== ====================                                                                ============== ====================
Return on average tangible common equity                                                                                         K/N                                             19.92 %                                                                                      10.13 %                                                                                       9.57 %                                                                                             9.68 %                                                                                       8.43 %                                                                                              979                                                                                     bps                                                                                                    NM                                                                                     bps                                                                                                                        12.35 %                                             7.74 %                                                                                              461                                                                                     bps
Return on average tangible common equity, Adjusted/Underlying                                                                    L/N                                             10.43                                                                                        10.13                                                                                         9.57                                                                                               8.98                                                                                         8.43                                                                                                 30                                                                                     bps                                                                                                   200                                                                                     bps                                                                                                                         9.79                                               7.60                                                                                                219                                                                                     bps
(non-GAAP)
Return on average total assets and return on average total
assets, Adjusted/Underlying:
Average total assets (GAAP)                                                                                                       O                                           $151,111                                                                                     $150,012                                                                                     $149,878                                                                                           $148,786                                                                                     $147,315                                                                                             $1,099                                                                                                  1 %                                                                                   $3,796                                                                                                  3 %                                                                                                        $149,953                                           $143,183                                                                                             $6,770                                                                                                  5 %
Return on average total assets                                                                                                   I/O                                              1.75 %                                                                                       0.92 %                                                                                       0.85 %                                                                                             0.87 %                                                                                       0.76 %                                                                                               83                                                                                     bps                                                                                                    99                                                                                     bps                                                                                                                         1.10 %                                             0.73 %                                                                                               37                                                                                     bps
Return on average total assets, Adjusted/Underlying (non-GAAP)                                                                   J/O                                              0.92                                                                                         0.92                                                                                         0.85                                                                                               0.81                                                                                         0.76                                                                                     --                                                                                     bps                                                                                                    16                                                                                     bps                                                                                                                         0.88                                               0.72                                                                                                 16                                                                                     bps
Return on average total tangible assets and return on average
total tangible assets, Adjusted/Underlying:
Average total assets (GAAP)                                                                                                       O                                           $151,111                                                                                     $150,012                                                                                     $149,878                                                                                           $148,786                                                                                     $147,315                                                                                             $1,099                                                                                                  1 %                                                                                   $3,796                                                                                                  3 %                                                                                                        $149,953                                           $143,183                                                                                             $6,770                                                                                                  5 %
Less: Average goodwill (GAAP)                                                                                                                                                    6,887                                                                                        6,887                                                                                        6,882                                                                                              6,876                                                                                        6,876                                                                                     --                                                                                     --                                                                                         11                                                                                     --                                                                                                             6,883                                              6,876                                                                                                  7                                                                                     --
Less: Average other intangibles (GAAP)                                                                                                                                               2                                                                                            2                                                                                            2                                                                                     --                                                                                            1                                                                                     --                                                                                     --                                                                                          1                                                                                                100                                                                                                                 2                                                  2                                                                                     --                                                                                     --
Add: Average deferred tax liabilities related to goodwill (GAAP)                                                                                                                   531                                                                       537                                                                       534                                                                             531                                                                       523                                                                              (6 )                                                                                               (1 )                                                                                        8                                                                               2                                                                                                               534                             502                                                                              32                                                                               6
                                                                                                                                                                              -------- --------------------                                                                -------- --------------------                                                                -------- --------------------                                                                -------------- --------------------                                                                -------- --------------------                                                                -------------- --------------------                                                                                                                                                                   ------ --------------------                                                                                                                                                                                        -------- --------------------                      -------- --------------------                                                                -------------- --------------------
Average tangible assets                                                                                                           P                                           $144,753                                                                  $143,660                                                                  $143,528                                                                        $142,441                                                                  $140,961                                                                          $1,093                                                                               1 %                                                                                   $3,792                                                                               3 %                                                                                                        $143,602                        $136,807                                                                          $6,795                                                                               5 %
                                                                                                                                                                              ======== ====================                                                                ======== ====================                                                                ======== ====================                                                                ============== ====================                                                                ======== ====================                                                                ============== ====================                                                                                                                                                                   ====== ====================                                                                                                                                                                                        ======== ====================                      ======== ====================                                                                ============== ====================
Return on average total tangible assets                                                                                          I/P                                              1.83 %                                                                                       0.96 %                                                                                       0.89 %                                                                                             0.91 %                                                                                       0.79 %                                                                                               87                                                                                     bps                                                                                                   104                                                                                     bps                                                                                                                         1.15 %                                             0.76 %                                                                                               39                                                                                     bps
Return on average total tangible assets, Adjusted/Underlying                                                                     J/P                                              0.96                                                                                         0.96                                                                                         0.89                                                                                               0.85                                                                                         0.79                                                                                     --                                                                                     bps                                                                                                    17                                                                                     bps                                                                                                                         0.01                                               0.75                                                                                                 16                                                                                     bps
(non-GAAP)
                                                                                                                                                                                                                                      
Key performance metrics, non-GAAP financial measures and
reconciliations (continued)
(in millions, except share, per-share and ratio data)
 
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                         QUARTERLY TRENDS                                                                                                                                                                                                                                                                                                                                                                                                                                          FULL YEAR
                                                                                                                                                                                    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                                                                    ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    4Q17 Change                                                                                                                                                                                                                                                                                                                                             2017 Change
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                                                                                                                                                                                    -----------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                  4Q17                                                                                            3Q17                                                                                            2Q17                                                                                              1Q17                                                                                             4Q16                                                                                                                      3Q17                                                                                                                                                             4Q16                                                                                                                                               2017                                                    2016                                                                                                      2016
                                                                                                                                                                                    ---------------------------------                                                               ---------------------------------                                                               ---------------------------------                                                               ------------------------------------                                                               ---------------------------------                                                               ------------------------------------------------------------------------------------                                                               -----------------------------------------------------------------------------------------------------------------                                                                                    -----------                                             -----------                                             -----------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               $/bps                                          %                                                                                      $/bps                                                                 %                                                                                                                                                                                                                           $/bps                                                                 %        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       ---------------------                           -------------- --------------------                                                                ---------------------------------                                            -------------- --------------------                                                                                                                                                                                                     ---------------------------------                                            -------------- --------------------
Tangible book value per common share:
Common shares - at end of period (GAAP)                                                                                               Q                                             490,812,912                                                                                     499,505,285                                                                                     505,880,851                                                                                        509,515,646                                                                                     511,954,871                                                                                         (8,692,373 )                                            (2 %)                                                                                  (21,141,959 )                                                                            (4 %)                                                                                                       490,812,912                                             511,954,871                                             (21,141,959 )                                                                            (4 %)
Common stockholders’ equity (GAAP)                                                                                                                                                      $20,023                                                                                         $19,862                                                                                         $19,817                                                                                            $19,600                                                                                         $19,499                                                                                               $161                                               1                                                                                            $524                                                                               3                                                                                                              $20,023                                                 $19,499                                                    $524                                                                               3
Less: Goodwill (GAAP)                                                                                                                                                                     6,887                                                                                           6,887                                                                                           6,887                                                                                              6,876                                                                                           6,876                                                                                     --                                  --                                                                                              11                                                                  --                                                                                                                6,887                                                   6,876                                                      11                                                                  --
Less: Other intangible assets (GAAP)                                                                                                                                                          2                                                                                               2                                                                                               2                                                                                     --                                                                                               1                                                                                     --                                  --                                                                                               1                                                                             100                                                                                                                    2                                                       1                                                       1                                                                             100
Add: Deferred tax liabilities related to goodwill (GAAP)                                                                                                                                    355                                                                          539                                                                          535                                                                             534                                                                          532                                                                            (184 )                                           (34 )                                                                                          (177 )                                                                           (33 )                                                                                                                355                                                     532                                                    (177 )                                                                           (33 )
                                                                                                                                                                                    ----------- --------------------                                                                ----------- --------------------                                                                ----------- --------------------                                                                -------------- --------------------                                                                ----------- --------------------                                                                -------------- -----                                                                                                                               ----------- --------------------                                                                                                                                                                     -----------                                             -----------                                             ----------- --------------------
Tangible common equity                                                                                                                R                                                 $13,489                                                                      $13,512                                                                      $13,463                                                                         $13,258                                                                      $13,154                                                                            ($23 )                                -- %                                                                                          $335                                                            3 %                                                                                                            $13,489                                                 $13,154                                                    $335                                                            3 %
                                                                                                                                                                                    =========== ====================                                                                =========== ====================                                                                =========== ====================                                                                ============== ====================                                                                =========== ====================                                                                ============== =====                                                                                                                               =========== ====================                                                                                                                                                                     ===========                                             ===========                                             =========== ====================
Tangible book value per common share                                                                                                 R/Q                                                 $27.48                                                                                          $27.05                                                                                          $26.61                                                                                             $26.02                                                                                          $25.69                                                                                              $0.43                                               2 %                                                                                         $1.79                                                                               7 %                                                                                                             $27.48                                                  $25.69                                                   $1.79                                                                               7 %
Net income per average common share - basic and diluted,
Adjusted/Underlying:
Average common shares outstanding - basic (GAAP)                                                                                      S                                             492,149,763                                                                                     500,861,076                                                                                     506,371,846                                                                                        509,451,450                                                                                     512,015,920                                                                                         (8,711,313 )                                            (2 %)                                                                                  (19,866,157 )                                                                            (4 %)                                                                                                       502,157,440                                             522,093,545                                             (19,936,105 )                                                                            (4 %)
Average common shares outstanding - diluted (GAAP)                                                                                    T                                             493,788,007                                                                                     502,157,384                                                                                     507,414,122                                                                                        511,348,200                                                                                     513,897,085                                                                                         (8,369,377 )                                            (2 )                                                                                   (20,109,078 )                                                                            (4 )                                                                                                        503,685,091                                             523,930,718                                             (20,245,627 )                                                                            (4 )
Net income available to common stockholders (GAAP)                                                                                    K                                                    $666                                                                                            $341                                                                                            $318                                                                                               $313                                                                                            $282                                                                                               $325                                              95                                                                                            $384                                                                             136                                                                                                               $1,638                                                  $1,031                                                    $607                                                                              59
Net income per average common share - basic (GAAP)                                                                                   K/S                                                   1.35                                                                                            0.68                                                                                            0.63                                                                                               0.61                                                                                            0.55                                                                                               0.67                                              99                                                                                            0.80                                                                             145                                                                                                                 3.26                                                    1.97                                                    1.29                                                                              65
Net income per average common share - diluted (GAAP)                                                                                 K/T                                                   1.35                                                                                            0.68                                                                                            0.63                                                                                               0.61                                                                                            0.55                                                                                               0.67                                              99                                                                                            0.80                                                                             145                                                                                                                 3.25                                                    1.97                                                    1.28                                                                              65
Net income available to common stockholders, Adjusted/Underlying                                                                      L                                                     349                                                                                             341                                                                                             318                                                                                                290                                                                                             282                                                                                                  8                                               2                                                                                              67                                                                              24                                                                                                                1,298                                                   1,012                                                     286                                                                              28
(non-GAAP)
Net income per average common share - basic, Adjusted/Underlying                                                                     L/S                                                   0.71                                                                                            0.68                                                                                            0.63                                                                                               0.57                                                                                            0.55                                                                                               0.03                                               4                                                                                            0.16                                                                              29                                                                                                                 2.59                                                    1.94                                                    0.65                                                                              34
(non-GAAP)
Net income per average common share - diluted, Adjusted/Underlying                                                                   L/T                                                   0.71                                                                                            0.68                                                                                            0.63                                                                                               0.57                                                                                            0.55                                                                                               0.03                                               4                                                                                            0.16                                                                              29                                                                                                                 2.58                                                    1.93                                                    0.65                                                                              34
(non-GAAP)
Dividend payout ratio and divident payout ratio,
Adjusted/Underlying
Cash dividends declared and paid per common share                                                                                     U                                                    0.18                                                                                            0.18                                                                                            0.14                                                                                               0.14                                                                                            0.12                                                                                           --                                                 --                                                                                            0.06                                                                              50                                                                                            0.64                                                    0.46                                                                         0.18                                                         39  
Dividend payout ratio                                                                                                              U/(K/S)                                                   13 %                                                                                            26 %                                                                                            22 %                                                                                               23 %                                                                                            22 %                                                                                        NM                                                                             bps                                                  (900 )                                           bps                                                                                                           20 %                                                    23 %                                                                       (300 )                                                      bps
Dividend payout ratio, Adjusted/Underlying (non-GAAP)                                                                              U/(L/S)                                                   25                                                                                              26                                                                                              22                                                                                                 25                                                                                              22                                                                                                     (100 ) bps                                                                                                                                   300                                             bps                                                                                                           25                                                      24                                                                          100                                                        bps

1) Per the final transition provision rule issued by banking regulators on November 21, 2017, U.S. Basel III ratio definitions impacting risk weighed assets and qualifying U.S. Basel III capital will be fully phased-in as of January 1, 2018.

                                                                                                                                                                                                                                                                                                                                                                                                      
Key performance metrics, non-GAAP financial measures and
reconciliations (continued)
(in millions, except share, per-share and ratio data)
                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                        QUARTERLY TRENDS                                                                                                                                                                                                                                                                                                                                                                                                                                                                   FULL YEAR
                                                                                                                                                   ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                                                                    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             4Q17 Change                                                                                                                                                                                                                                                                                                                                                                                                                                                     2017 Change
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                                                                                                                                                                                                                                ----------------------------------------------------------------------------------------------------------------------
                                                                                                                                                        4Q17                                                                          3Q17                                                                                     2Q17                                                                                    1Q17                                                                          4Q16                                                                                                                             3Q17                                                                                                                                                                                4Q16                                                                                                                                                  2017                                                                          2016                                                                                                                              2016
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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                $                                                                                         %                                                                              $                                                                                 %                                                                                                                                                                                                                                                                          $                                                                                          %
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              ------------------------------------                                                               ------------------                                                               -------------- --------------------                                                                ------------------                                                                                                                                                                                                                                                -------------------------------------                                                               ------------------
Other income, Adjusted/Underlying
Other income (GAAP)                                                                                                                                           $40                                                                           $18                                                                            $2                                                                                                $24                                                                           $25                                                                           $22                                                                                                122 %                                                                            $15                                                                                                 60 %                                                                                                 $84                                                                          $147                                                                           ($63 )                                                                                              (43 %)
Less: Notable items                                                                                                                                            17                                                                --                                                                           (11 )                                                                                   --                                                                --                                                                            17                                                                             100                                                                               17                                                                             100                                                                                                     6                                                                            67                                                                            (61 )                                                                                              (91 )
                                                                                                                                                   --------------                                                                --------------                                                                -------------- --------------------                                                                --------------                                                                --------------                                                                -------------- --------------------                                                                                                                                                 -------------- --------------------                                                                                                                                                                      --------------                                                                --------------                                                                --------------- --------------------
Other income, Adjusted/Underlying (non-GAAP)                                                                                                                  $23                                                                           $18                                                                           $13                                                                             $24                                                                           $25                                                                            $5                                                                              28 %                                                                            ($2 )                                                                                               (8 %)                                                                                                $78                                                                           $80                                                                            ($2 )                                                                                               (3 %)
                                                                                                                                                   ==============                                                                ==============                                                                ============== ====================                                                                ==============                                                                ==============                                                                ============== ====================                                                                                                                                                 ============== ====================                                                                                                                                                                      ==============                                                                ==============                                                                =============== ====================
Salaries and employee benefits, Adjusted/Underlying:
Salaries and employee benefits (GAAP)                                                                                                                        $449                                                                          $436                                                                          $432                                                                                               $444                                                                          $420                                                                           $13                                                                                                  3 %                                                                            $29                                                                                                  7 %                                                                                              $1,761                                                                        $1,709                                                                            $52                                                                                                  3 %
Less: Notable items                                                                                                                                            17                                                                --                                                                --                                                                  --                                                                --                                                                            17                                                                             100                                                                               17                                                                             100                                                                                                    17                                                                            11                                                                              6                                                                              55
                                                                                                                                                   --------------                                                                --------------                                                                -------------- --------------------                                                                --------------                                                                --------------                                                                -------------- --------------------                                                                                                                                                 -------------- --------------------                                                                                                                                                                      --------------                                                                --------------                                                                --------------- --------------------
Salaries and employee benefits, Adjusted/Underlying (non-GAAP)                                                                                               $432                                                                          $436                                                                          $432                                                                            $444                                                                          $420                                                                           ($4 )                                                                                               (1 %)                                                                           $12                                                                               3 %                                                                                              $1,744                                                                        $1,698                                                                            $46                                                                               3 %
                                                                                                                                                   ==============                                                                ==============                                                                ============== ====================                                                                ==============                                                                ==============                                                                ============== ====================                                                                                                                                                 ============== ====================                                                                                                                                                                      ==============                                                                ==============                                                                =============== ====================
Outside services, Adjusted/Underlying:
Outside services (GAAP)                                                                                                                                      $118                                                                           $99                                                                           $96                                                                                                $91                                                                           $98                                                                           $19                                                                                                 19 %                                                                            $20                                                                                                 20 %                                                                                                $404                                                                          $377                                                                            $27                                                                                                  7 %
Less: Notable items                                                                                                                                            12                                                                --                                                                --                                                                  --                                                                --                                                                            12                                                                             100                                                                               12                                                                             100                                                                                                    12                                                                             8                                                                              4                                                                              50
                                                                                                                                                   --------------                                                                --------------                                                                -------------- --------------------                                                                --------------                                                                --------------                                                                -------------- --------------------                                                                                                                                                 -------------- --------------------                                                                                                                                                                      --------------                                                                --------------                                                                --------------- --------------------
Outside services, Adjusted/Underlying (non-GAAP)                                                                                                             $106                                                                           $99                                                                           $96                                                                             $91                                                                           $98                                                                            $7                                                                               7 %                                                                             $8                                                                               8 %                                                                                                $392                                                                          $369                                                                            $23                                                                               6 %
                                                                                                                                                   ==============                                                                ==============                                                                ============== ====================                                                                ==============                                                                ==============                                                                ============== ====================                                                                                                                                                 ============== ====================                                                                                                                                                                      ==============                                                                ==============                                                                =============== ====================
Occupancy, Adjusted/Underlying:
Occupancy (GAAP)                                                                                                                                              $80                                                                           $78                                                                           $79                                                                                                $82                                                                           $77                                                                            $2                                                                                                  3 %                                                                             $3                                                                                                  4 %                                                                                                $319                                                                          $307                                                                            $12                                                                                                  4 %
Less: Notable items                                                                                                                                --                                                                --                                                                --                                                                  --                                                                --                                                                --                                                                  --                                                                   --                                                                  --                                                                                        --                                                                --                                                                 --                                                                  --
                                                                                                                                                   --------------                                                                --------------                                                                -------------- --------------------                                                                --------------                                                                --------------                                                                -------------- --------------------                                                                                                                                                 -------------- --------------------                                                                                                                                                                      --------------                                                                --------------                                                                --------------- --------------------
Occupancy, Adjusted/Underlying (non-GAAP)                                                                                                                     $80                                                                           $78                                                                           $79                                                                             $82                                                                           $77                                                                            $2                                                                               3 %                                                                             $3                                                                               4 %                                                                                                $319                                                                          $307                                                                            $12                                                                               4 %
                                                                                                                                                   ==============                                                                ==============                                                                ============== ====================                                                                ==============                                                                ==============                                                                ============== ====================                                                                                                                                                 ============== ====================                                                                                                                                                                      ==============                                                                ==============                                                                =============== ====================
Equipment expense, Adjusted/Underlying:
Equipment expense (GAAP)                                                                                                                                      $67                                                                           $65                                                                           $64                                                                                                $67                                                                           $69                                                                            $2                                                                                                  3 %                                                                            ($2 )                                                                                               (3 %)                                                                                               $263                                                                          $263                                                                $--                                                                                     -- %
Less: Notable items                                                                                                                                --                                                                --                                                                --                                                                  --                                                                --                                                                --                                                                  --                                                                   --                                                                  --                                                                                        --                                                                --                                                                 --                                                                  --
                                                                                                                                                   --------------                                                                --------------                                                                -------------- --------------------                                                                --------------                                                                --------------                                                                -------------- --------------------                                                                                                                                                 -------------- --------------------                                                                                                                                                                      --------------                                                                --------------                                                                --------------- --------------------
Equipment expense, Adjusted/Underlying (non-GAAP)                                                                                                             $67                                                                           $65                                                                           $64                                                                             $67                                                                           $69                                                                            $2                                                                               3 %                                                                            ($2 )                                                                                               (3 %)                                                                                               $263                                                                          $263                                                                $--                                                                  -- %
                                                                                                                                                   ==============                                                                ==============                                                                ============== ====================                                                                ==============                                                                ==============                                                                ============== ====================                                                                                                                                                 ============== ====================                                                                                                                                                                      ==============                                                                ==============                                                                =============== ====================
Amortization of software, Adjusted/Underlying:
Amortization of software (GAAP)                                                                                                                               $46                                                                           $45                                                                           $45                                                                                                $44                                                                           $44                                                                            $1                                                                                                  2 %                                                                             $2                                                                                                  5 %                                                                                                $180                                                                          $170                                                                            $10                                                                                                  6 %
Less: Notable items                                                                                                                                --                                                                --                                                                --                                                                  --                                                                --                                                                --                                                                  --                                                                   --                                                                  --                                                                                        --                                                                             3                                                                             (3 )                                                                                             (100 )
                                                                                                                                                   --------------                                                                --------------                                                                -------------- --------------------                                                                --------------                                                                --------------                                                                -------------- --------------------                                                                                                                                                 -------------- --------------------                                                                                                                                                                      --------------                                                                --------------                                                                --------------- --------------------
Amortization of software, Adjusted/Underlying (non-GAAP)                                                                                                      $46                                                                           $45                                                                           $45                                                                             $44                                                                           $44                                                                            $1                                                                               2 %                                                                             $2                                                                               5 %                                                                                                $180                                                                          $167                                                                            $13                                                                               8 %
                                                                                                                                                   ==============                                                                ==============                                                                ============== ====================                                                                ==============                                                                ==============                                                                ============== ====================                                                                                                                                                 ============== ====================                                                                                                                                                                      ==============                                                                ==============                                                                =============== ====================
Other operating expense, Adjusted/Underlying:
Other operating expense (GAAP)                                                                                                                               $138                                                                          $135                                                                          $148                                                                                               $126                                                                          $139                                                                            $3                                                                                                  2 %                                                                            ($1 )                                                                                               (1 %)                                                                                               $547                                                                          $526                                                                            $21                                                                                                  4 %
Less: Notable items                                                                                                                                            11                                                                --                                                                            15                                                                  --                                                                --                                                                            11                                                                             100                                                                               11                                                                             100                                                                                                    26                                                                            14                                                                             12                                                                              86
                                                                                                                                                   --------------                                                                --------------                                                                -------------- --------------------                                                                --------------                                                                --------------                                                                -------------- --------------------                                                                                                                                                 -------------- --------------------                                                                                                                                                                      --------------                                                                --------------                                                                --------------- --------------------
Other operating expense, Adjusted/Underlying (non-GAAP)                                                                                                      $127                                                                          $135                                                                          $133                                                                            $126                                                                          $139                                                                           ($8 )                                                                                               (6 %)                                                                          ($12 )                                                                                               (9 )%                                                                                               $521                                                                          $512                                                                             $9                                                                               2 %
                                                                                                                                                   ==============                                                                ==============                                                                ============== ====================                                                                ==============                                                                ==============                                                                ============== ====================                                                                                                                                                 ============== ====================                                                                                                                                                                      ==============                                                                ==============                                                                =============== ====================
 
 
Key performance metrics, non-GAAP financial measures and
reconciliations - Segments
(in millions, except ratio data)
                                                                                                                                                                                                                                                                                                                                                                                 
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
                                                                                                                                                                                                                                                                                                                       FOURTH QUARTER 2017                                                                                                                                                                                                                                                                                                                                                            THIRD QUARTER 2017
                                                                                                                                                                               --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                                                ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                             Consumer                                                                       Commercial                                                              Other                                                                     Consolidated                                                                                 Consumer                                                                       Commercial                                                              Other                                                                                Consolidated
                                                                                                                                                                                              Banking                                                                                            Banking                                                                                                                                                                                                                                                                             Banking                                                                                            Banking
                                                                                                                                                                               ----------------------------------  --------------------                                           ----------------------------------  --------------------                                           --------------                                                                -------------- --------------------                                                                ----------------------------------  --------------------                                           ----------------------------------  --------------------                                           --------------                                                                ----------------------------------
Net income available to common stockholders:
Net income (GAAP)                                                                                                                  A                                                     $117                                                                                               $206                                                                                               $343                                                                          $666                                                                                               $122                                                                                               $201                                                                                                $25                                                                          $348
Less: Preferred stock dividends                                                                                                                                                --                                                                  --                                                                  --                                                                --                                                                  --                                                                  --                                                                               7                                                                             7  
                                                                                                                                                                               -------------- --------------------                                                                -------------- --------------------                                                                --------------                                                                -------------- --------------------                                                                -------------- --------------------                                                                -------------- --------------------                                                                --------------                                                                -------------- --------------------
Net income available to common stockholders                                                                                        B                                                     $117                                                                            $206                                                                            $343                                                                          $666                                                                            $122                                                                            $201                                                                             $18                                                                          $341  
                                                                                                                                                                               ============== ====================                                                                ============== ====================                                                                ==============                                                                ============== ====================                                                                ============== ====================                                                                ============== ====================                                                                ==============                                                                ============== ====================
Return on average tangible common equity:
Average common equity (GAAP)                                                                                                                                                           $5,606                                                                                             $5,756                                                                                             $8,262                                                                       $19,624                                                                                             $5,565                                                                                             $5,685                                                                                             $8,478                                                                       $19,728
 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)                                                                                                              --                                                                  --                                                                             531                                                                           531                                                                  --                                                                  --                                                                             537                                                                           537  
                                                                                                                                                                               -------------- --------------------                                                                -------------- --------------------                                                                --------------                                                                -------------- --------------------                                                                -------------- --------------------                                                                -------------- --------------------                                                                --------------                                                                -------------- --------------------
Average tangible common equity                                                                                                     C                                                   $5,606                                                                          $5,756                                                                          $1,904                                                                       $13,266                                                                          $5,565                                                                          $5,685                                                                          $2,126                                                                       $13,376  
                                                                                                                                                                               ============== ====================                                                                ============== ====================                                                                ==============                                                                ============== ====================                                                                ============== ====================                                                                ============== ====================                                                                ==============                                                                ============== ====================
Return on average tangible common equity                                                                                          B/C                                                    8.29 %                                                                                            14.15 %                                                                                               NM                                                                         19.92 %                                                                                             8.72 %                                                                                            14.06 %                                                                                               NM                                                                         10.13 %
Return on average total tangible assets:
Average total assets (GAAP)                                                                                                                                                           $60,911                                                                                            $50,169                                                                                            $40,031                                                                      $151,111                                                                                            $60,012                                                                                            $49,833                                                                                            $40,167                                                                      $150,012
 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)                                                                                                              --                                                                  --                                                                             531                                                                           531                                               --                                                                  --                                                                             537                                                                           537  
                                                                                                                                                                               -------------- --------------------                                                                -------------- --------------------                                                                --------------                                                                -------------- -------------------- --------------------                                           -------------- --------------------                                                                -------------- --------------------                                                                --------------                                                                -------------- --------------------
Average tangible assets                                                                                                            D                                                  $60,911                                                                         $50,169                                                                         $33,673                                                                      $144,753                                                      $60,012                                                                         $49,833                                                                         $33,815                                                                      $143,660  
                                                                                                                                                                               ============== ====================                                                                ============== ====================                                                                ==============                                                                ============== ==================== ====================                                           ============== ====================                                                                ============== ====================                                                                ==============                                                                ============== ====================
Return on average total tangible assets                                                                                           A/D                                                    0.76 %                                                                                             1.62 %                                                                                               NM                                                                          1.83 %                                                                                             0.81 %                                                                                             1.60 %                                                                                               NM                                                                          0.96 %
Efficiency ratio:
Noninterest expense (GAAP)                                                                                                         E                                                     $654                                                                                               $195                                                                                                $49                                                                          $898                                                                                               $648                                                                                               $195                                                                                                $15                                                                          $858
Net interest income (GAAP)                                                                                                                                                                682                                                                                                367                                                                                                 31                                                                         1,080                                                                                                674                                                                                                354                                                                                                 34                                                                         1,062
Noninterest income (GAAP)                                                                                                                                                                 229                                                                             138                                                                              37                                                                           404                                                                             227                                                                             136                                                                              18                                                                           381  
                                                                                                                                                                               -------------- --------------------                                                                -------------- --------------------                                                                --------------                                                                -------------- --------------------                                                                -------------- --------------------                                                                -------------- --------------------                                                                --------------                                                                -------------- --------------------
Total revenue (GAAP)                                                                                                               F                                                     $911                                                                            $505                                                                             $68                                                                        $1,484                                                                            $901                                                                            $490                                                                             $52                                                                        $1,443  
                                                                                                                                                                               ============== ====================                                                                ============== ====================                                                                ==============                                                                ============== ====================                                                                ============== ====================                                                                ============== ====================                                                                ==============                                                                ============== ====================
Efficiency ratio                                                                                                                  E/F                                                   71.90 %                                                                                            38.84 %                                                                                               NM                                                                         60.52 %                                                                                            71.88 %                                                                                            39.39 %                                                                                               NM                                                                         59.41 %
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
                                                                                                                                                                                                                                                                                                                       SECOND QUARTER 2017                                                                                                                                                                                                                                                                                                                                                            FIRST QUARTER 2017
                                                                                                                                                                               --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                                                ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                             Consumer                                                                       Commercial                                                              Other                                                                     Consolidated                                                                                 Consumer                                                                       Commercial                                                              Other                                                                                Consolidated
                                                                                                                                                                                              Banking                                                                                            Banking                                                                                                                                                                                                                                                                             Banking                                                                                            Banking
                                                                                                                                                                               ----------------------------------  --------------------                                           ----------------------------------  --------------------                                           --------------                                                                -------------- --------------------                                                                ----------------------------------  --------------------                                           ----------------------------------  --------------------                                           --------------                                                                ----------------------------------
Net income available to common stockholders:
Net income (GAAP)                                                                                                                  A                                                     $118                                                                                               $187                                                                                                $13                                                                          $318                                                                                                $95                                                                                               $180                                                                                                $45                                                                          $320
Less: Preferred stock dividends                                                                                                                                                --                                                                  --                                                                  --                                                                --                                                                  --         --                                           --                                                                               7                                                                             7  
                                                                                                                                                                               -------------- --------------------                                                                -------------- --------------------                                                                --------------                                                                -------------- --------------------                                                                -------------- --------------------                                                                -------------- --------------------                                                                --------------                                                                -------------- --------------------
Net income available to common stockholders                                                                                        B                                                     $118                                                                            $187                                                                             $13                                                                          $318                                                                             $95                                                                            $180                                                                             $38                                                                          $313  
                                                                                                                                                                               ============== ====================                                                                ============== ====================                                                                ==============                                                                ============== ====================                                                                ============== ====================                                                                ============== ====================                                                                ==============                                                                ============== ====================
Return on average tangible common equity:
Average common equity (GAAP)                                                                                                                                                           $5,519                                                                                             $5,617                                                                                             $8,523                                                                       $19,659                                                                                             $5,460                                                                                             $5,528                                                                                             $8,472                                                                       $19,460
 Less: Average goodwill (GAAP)                                                                                                                                                 --                                                                                     --                                                                                              6,882                                                                         6,882                                                                                     --                                                                                     --                                                                                              6,876                                                                         6,876
          Average other intangibles (GAAP)                                                                                                                                     --                                                                                     --                                                                                                  2                                                                             2                                                                                     --                                                                                     --                                                                                     --                                                                --
 Add: Average deferred tax liabilities related to goodwill (GAAP)                                                                                                              --                                                                  --                                                                             534                                                                           534                                                                  --                                                                  --                                                                             531                                                                           531  
                                                                                                                                                                               -------------- --------------------                                                                -------------- --------------------                                                                --------------                                                                -------------- --------------------                                                                -------------- --------------------                                                                -------------- --------------------                                                                --------------                                                                -------------- --------------------
Average tangible common equity                                                                                                     C                                                   $5,519                                                                          $5,617                                                                          $2,173                                                                       $13,309                                                                          $5,460                                                                          $5,528                                                                          $2,127                                                                       $13,115  
                                                                                                                                                                               ============== ====================                                                                ============== ====================                                                                ==============                                                                ============== ====================                                                                ============== ====================                                                                ============== ====================                                                                ==============                                                                ============== ====================
Return on average tangible common equity                                                                                          B/C                                                    8.57 %                                                                                            13.37 %                                                                                               NM                                                                          9.57 %                                                                                             7.06 %                                                                                            13.18 %                                                                                               NM                                                                          9.68 %
Return on average total tangible assets:
Average total assets (GAAP)                                                                                                                                                           $59,244                                                                                            $49,731                                                                                            $40,903                                                                      $149,878                                                                                            $58,660                                                                                            $49,243                                                                                            $40,883                                                                      $148,786
 Less: Average goodwill (GAAP)                                                                                                                                                 --                                                                                     --                                                                                              6,882                                                                         6,882                                                                                     --                                                                                     --                                                                                              6,876                                                                         6,876
          Average other intangibles (GAAP)                                                                                                                                     --                                                                                     --                                                                                                  2                                                                             2                                                                                     --                                                                                     --                                                                                     --                                                                --
 Add: Average deferred tax liabilities related to goodwill (GAAP)                                                                                                              --                                                                  --                                                                             534                                                                           534                                               --                                                                  --                                                                             531                                                                           531  
                                                                                                                                                                               -------------- --------------------                                                                -------------- --------------------                                                                --------------                                                                -------------- -------------------- --------------------                                           -------------- --------------------                                                                -------------- --------------------                                                                --------------                                                                -------------- --------------------
Average tangible assets                                                                                                            D                                                  $59,244                                                                         $49,731                                                                         $34,553                                                                      $143,528                                                      $58,660                                                                         $49,243                                                                         $34,538                                                                      $142,441  
                                                                                                                                                                               ============== ====================                                                                ============== ====================                                                                ==============                                                                ============== ==================== ====================                                           ============== ====================                                                                ============== ====================                                                                ==============                                                                ============== ====================
Return on average total tangible assets                                                                                           A/D                                                    0.80 %                                                                                             1.51 %                                                                                               NM                                                                          0.89 %                                                                                             0.66 %                                                                                             1.48 %                                                                                               NM                                                                          0.91 %
Efficiency ratio:
Noninterest expense (GAAP)                                                                                                         E                                                     $644                                                                                               $192                                                                                                $28                                                                          $864                                                                                               $647                                                                                               $190                                                                                                $17                                                                          $854
Net interest income (GAAP)                                                                                                                                                                657                                                                                                344                                                                                                 25                                                                         1,026                                                                                                638                                                                                                346                                                                                                 21                                                                         1,005
Noninterest income (GAAP)                                                                                                                                                                 229                                                                             130                                                                              11                                                                           370                                                                             220                                                                             134                                                                              25                                                                           379  
                                                                                                                                                                               -------------- --------------------                                                                -------------- --------------------                                                                --------------                                                                -------------- --------------------                                                                -------------- --------------------                                                                -------------- --------------------                                                                --------------                                                                -------------- --------------------
Total revenue (GAAP)                                                                                                               F                                                     $886                                                                            $474                                                                             $36                                                                        $1,396                                                                            $858                                                                            $480                                                                             $46                                                                        $1,384  
                                                                                                                                                                               ============== ====================                                                                ============== ====================                                                                ==============                                                                ============== ====================                                                                ============== ====================                                                                ============== ====================                                                                ==============                                                                ============== ====================
Efficiency ratio                                                                                                                  E/F                                                   72.64 %                                                                                            40.48 %                                                                                               NM                                                                         61.94 %                                                                                            75.41 %                                                                                            39.80 %                                                                                               NM                                                                         61.68 %
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
                                                                                                                                                                                                                                                                                                                       FOURTH QUARTER 2016                                                                                                                                         
                                                                                                                                                                               --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                             Consumer                                                                       Commercial                                                              Other                                                                     Consolidated   
                                                                                                                                                                                              Banking                                                                                            Banking
                                                                                                                                                                               ----------------------------------  --------------------                                           ----------------------------------  --------------------                                           --------------                                                                -------------- --------------------
Net income available to common stockholders:
Net income (GAAP)                                                                                                                  A                                                      $92                                                                                               $172                                                                                                $18                                                                          $282
Less: Preferred stock dividends                                                                                                                                                --                                                                  --                                                                  --                                                                --  
                                                                                                                                                                               -------------- --------------------                                                                -------------- --------------------                                                                --------------                                                                -------------- --------------------
Net income available to common stockholders                                                                                        B                                                      $92                                                                            $172                                                                             $18                                                                          $282  
                                                                                                                                                                               ============== ====================                                                                ============== ====================                                                                ==============                                                                ============== ====================
Return on average tangible common equity:
Average common equity (GAAP)                                                                                                                                                           $5,275                                                                                             $5,278                                                                                             $9,092                                                                       $19,645
 Less: Average goodwill (GAAP)                                                                                                                                                 --                                                                                     --                                                                                              6,876                                                                         6,876
          Average other intangibles (GAAP)                                                                                                                                     --                                                                                     --                                                                                                  1                                                                             1
 Add: Average deferred tax liabilities related to goodwill (GAAP)                                                                                                              --                                                                  --                                                                             523                                                                           523  
                                                                                                                                                                               -------------- --------------------                                                                -------------- --------------------                                                                --------------                                                                -------------- --------------------
Average tangible common equity                                                                                                     C                                                   $5,275                                                                          $5,278                                                                          $2,738                                                                       $13,291  
                                                                                                                                                                               ============== ====================                                                                ============== ====================                                                                ==============                                                                ============== ====================
Return on average tangible common equity                                                                                          B/C                                                    6.97 %                                                                                            12.94 %                                                                                               NM                                                                          8.43 %
Return on average total tangible assets:
Average total assets (GAAP)                                                                                                                                                           $58,066                                                                                            $48,024                                                                                            $41,225                                                                      $147,315
 Less: Average goodwill (GAAP)                                                                                                                                                 --                                                                                     --                                                                                              6,876                                                                         6,876
          Average other intangibles (GAAP)                                                                                                                                     --                                                                                     --                                                                                                  1                                                                             1
 Add: Average deferred tax liabilities related to goodwill (GAAP)                                                                                                              --                                                                  --                                                                             523                                                                           523    
                                                                                                                                                                               -------------- --------------------                                                                -------------- --------------------                                                                --------------                                                                -------------- -------------------- --------------------
Average tangible assets                                                                                                            D                                                  $58,066                                                                         $48,024                                                                         $34,871                                                                      $140,961    
                                                                                                                                                                               ============== ====================                                                                ============== ====================                                                                ==============                                                                ============== ==================== ====================
Return on average total tangible assets                                                                                           A/D                                                    0.63 %                                                                                             1.42 %                                                                                               NM                                                                          0.79 %
Efficiency ratio:
Noninterest expense (GAAP)                                                                                                         E                                                     $649                                                                                               $187                                                                                                $11                                                                          $847
Net interest income (GAAP)                                                                                                                                                                639                                                                                                347                                                                                     --                                                                           986
Noninterest income (GAAP)                                                                                                                                                                 227                                                                             122                                                                              28                                                                           377  
                                                                                                                                                                               -------------- --------------------                                                                -------------- --------------------                                                                --------------                                                                -------------- --------------------
Total revenue (GAAP)                                                                                                               F                                                     $866                                                                            $469                                                                             $28                                                                        $1,363  
                                                                                                                                                                               ============== ====================                                                                ============== ====================                                                                ==============                                                                ============== ====================
Efficiency ratio                                                                                                                  E/F                                                   74.90 %                                                                                            39.83 %                                                                                               NM                                                                         62.18 %
                                                                                                                                                                                                                                                                                                                       
 
Key performance metrics, non-GAAP financial measures and
reconciliations - Segments, continued
(in millions, except ratio data)
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
                                                                                                                                                                                                                                                                                                                                                                                                                    FULL YEAR
                                                                                                                                                                               ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                                                                                                                        2017                                                                                                                                                                                                                                                                                                                                                    2016                                                                                                                                           
                                                                                                                                                                               --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                                                --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                             Consumer                                                                       Commercial                                                                              Other                                                                         Consolidated                                                                                      Consumer                                                                       Commercial                                                                              Other                                                                          Consolidated
                                                                                                                                                                                              Banking                                                                                            Banking                                                                                                                                                                                                                                                                Banking                                                                                            Banking
                                                                                                                                                                               ----------------------------------  --------------------                                           ----------------------------------                                                                 -------                                                                ----------------------------                                                                 ----------------------------------  --------------------                                           ----------------------------------                                                                 -------                                                                ------------------------------
Net income available to common stockholders:
Net income (GAAP)                                                                                                                  A                                                     $452                                                                                               $774                                                                                        $426                                                                  $1,652                                                                                               $345                                                                                               $631                                                                                         $69                                                                    $1,045
Less: Preferred stock dividends                                                                                                                                                --                                                                  --                                                                       14                                                                      14                                                                  --                                                                  --                                                                       14                                                                        14  
                                                                                                                                                                               -------------- --------------------                                                                -------------- --------------------                                                                -------                                                                -------- --------------------                                                                -------------- --------------------                                                                -------------- --------------------                                                                -------                                                                ---------- --------------------
Net income available to common stockholders                                                                                        B                                                     $452                                                                            $774                                                                     $412                                                                  $1,638                                                                            $345                                                                            $631                                                                      $55                                                                    $1,031  
                                                                                                                                                                               ============== ====================                                                                ============== ====================                                                                =======                                                                ======== ====================                                                                ============== ====================                                                                ============== ====================                                                                =======                                                                ========== ====================
Return on average tangible common equity:
Average common equity (GAAP)                                                                                                                                                           $5,538                                                                                             $5,647                                                                                      $8,433                                                                 $19,618                                                                                             $5,166                                                                                             $5,071                                                                                      $9,461                                                                   $19,698
 Less: Average goodwill (GAAP)                                                                                                                                                 --                                                                                     --                                                                                       6,883                                                                   6,883                                                                                     --                                                                                     --                                                                                       6,876                                                                     6,876
          Average other intangibles (GAAP)                                                                                                                                     --                                                                                     --                                                                                           2                                                                       2                                                                                     --                                                                                     --                                                                                           2                                                                         2
 Add: Average deferred tax liabilities related to goodwill (GAAP)                                                                                                              --                                                                  --                                                                      534                                                                     534                                                                  --                                                                  --                                                                      502                                                                       502  
                                                                                                                                                                               -------------- --------------------                                                                -------------- --------------------                                                                -------                                                                -------- --------------------                                                                -------------- --------------------                                                                -------------- --------------------                                                                -------                                                                ---------- --------------------
Average tangible common equity                                                                                                     C                                                   $5,538                                                                          $5,647                                                                   $2,082                                                                 $13,267                                                                          $5,166                                                                          $5,071                                                                   $3,085                                                                   $13,322  
                                                                                                                                                                               ============== ====================                                                                ============== ====================                                                                =======                                                                ======== ====================                                                                ============== ====================                                                                ============== ====================                                                                =======                                                                ========== ====================
Return on average tangible common equity                                                                                          B/C                                                    8.17 %                                                                                            13.70 %                                                                                        NM                                                                   12.35 %                                                                                             6.68 %                                                                                            12.44 %                                                                                        NM                                                                      7.74 %
Return on average total tangible assets:
Average total assets (GAAP)                                                                                                                                                           $59,714                                                                                            $49,747                                                                                     $40,492                                                                $149,953                                                                                            $56,388                                                                                            $47,159                                                                                     $39,636                                                                  $143,183
 Less: Average goodwill (GAAP)                                                                                                                                                 --                                                                                     --                                                                                       6,883                                                                   6,883                                                                                     --                                                                                     --                                                                                       6,876                                                                     6,876
          Average other intangibles (GAAP)                                                                                                                                     --                                                                                     --                                                                                           2                                                                       2                                                                                     --                                                                                     --                                                                                           2                                                                         2
 Add: Average deferred tax liabilities related to goodwill (GAAP)                                                                                                              --                                                                  --                                                                      534                                                                     534                                                                  --                                                                  --                                                                      502                                                                       502  
                                                                                                                                                                               -------------- --------------------                                                                -------------- --------------------                                                                -------                                                                -------- --------------------                                                                -------------- --------------------                                                                -------------- --------------------                                                                -------                                                                ---------- --------------------
Average tangible assets                                                                                                            D                                                  $59,714                                                                         $49,747                                                                  $34,141                                                                $143,602                                                                         $56,388                                                                         $47,159                                                                  $33,260                                                                  $136,807  
                                                                                                                                                                               ============== ====================                                                                ============== ====================                                                                =======                                                                ======== ====================                                                                ============== ====================                                                                ============== ====================                                                                =======                                                                ========== ====================
Return on average total tangible assets                                                                                           A/D                                                    0.76 %                                                                                             1.56 %                                                                                        NM                                                                    1.15 %                                                                                             0.61 %                                                                                             1.34 %                                                                                        NM                                                                      0.76 %
Efficiency ratio:
Noninterest expense (GAAP)                                                                                                         E                                                   $2,593                                                                                               $772                                                                                        $109                                                                  $3,474                                                                                             $2,547                                                                                               $741                                                                                         $64                                                                    $3,352
Net interest income (GAAP)                                                                                                                                                              2,651                                                                                              1,411                                                                                         111                                                                   4,173                                                                                              2,443                                                                                              1,288                                                                                          27                                                                     3,758
Noninterest income (GAAP)                                                                                                                                                                 905                                                                             538                                                                       91                                                                   1,534                                                                             883                                                                             466                                                                      148                                                                     1,497  
                                                                                                                                                                               -------------- --------------------                                                                -------------- --------------------                                                                -------                                                                -------- --------------------                                                                -------------- --------------------                                                                -------------- --------------------                                                                -------                                                                ---------- --------------------
Total revenue (GAAP)                                                                                                               F                                                   $3,556                                                                          $1,949                                                                     $202                                                                  $5,707                                                                          $3,326                                                                          $1,754                                                                     $175                                                                    $5,255  
                                                                                                                                                                               ============== ====================                                                                ============== ====================                                                                =======                                                                ======== ====================                                                                ============== ====================                                                                ============== ====================                                                                =======                                                                ========== ====================
Efficiency ratio                                                                                                                  E/F                                                   72.93 %                                                                                            39.62 %                                                                                        NM                                                                   60.87 %                                                                                            76.57 %                                                                                            42.26 %                                                                                        NM                                                                     63.80 %

Forward-Looking Statements

This document contains forward-looking statements within the Private Securities Litigation Reform Act of 1995. Any statement that does not describe historical or current facts is a forward-looking statement. These statements often include the words "believes," "expects," "anticipates," "estimates," "intends," "plans," "goals," "targets," "initiatives," "potentially," "probably," "projects," "outlook" or similar expressions or future conditional verbs such as "may," "will," "should," "would," and "could."

Forward-looking statements are based upon the current beliefs and expectations of management, and on information currently available to management. Our statements speak as of the date hereof, and we do not assume any obligation to update these statements or to update the reasons why actual results could differ from those contained in such statements in light of new information or future events. We caution you, therefore, against relying on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance. While there is no assurance that any list of risks and uncertainties or risk factors is complete, important factors that could cause actual results to differ, materially, from those in the forward-looking statements include the following, without limitation:

-- negative economic conditions that adversely affect the general economy, housing prices, the job market, consumer confidence and spending habits which may affect, among other things, the level of nonperforming assets, charge-offs and provision expense;

-- the rate of growth in the economy and employment levels, as well as general business and economic conditions;

-- our ability to implement our strategic plan, including the cost savings and efficiency components, and achieve our indicative performance targets;

-- our ability to remedy regulatory deficiencies and meet supervisory requirements and expectations;

-- liabilities and business restrictions resulting from litigation and regulatory investigations;

-- our capital and liquidity requirements (including under regulatory capital standards, such as the Basel III capital standards) and our ability to generate capital internally or raise capital on favorable terms;

-- the effect of changes in interest rates on our net interest income, net interest margin and our mortgage originations, mortgage servicing rights and mortgages held for sale;

-- changes in interest rates and market liquidity, as well as the magnitude of such changes, which may reduce interest margins, impact funding sources and affect the ability to originate and distribute financial products in the primary and secondary markets;

-- the effect of changes in the level of checking or savings account deposits on our funding costs and net interest margin;

-- financial services reform and other current, pending or future legislation or regulation that could have a negative effect on our revenue and businesses, including the Dodd-Frank Act and other legislation and regulation relating to bank products and services;

-- a failure in or breach of our operational or security systems or infrastructure, or those of our third party vendors or other service providers, including as a result of cyber-attacks; and

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

In addition to the above factors, we also caution that the amount and timing of any future common stock dividends or share repurchases will depend on our financial condition, earnings, cash needs, regulatory constraints, capital requirements (including requirements of our subsidiaries), and any other factors that our board of directors deems relevant in making such a determination. Therefore, there can be no assurance that we will pay any dividends to holders of our common stock, or as to the amount of any such dividends.

More information about factors that could cause actual results to differ materially from those described in the forward-looking statements can be found under "Risk Factors" in Part I, Item 1A in our Annual Report on Form 10-K for the year ended December 31, 2016, filed with the United States Securities and Exchange Commission on February 24, 2017.

Note: Percentage changes, per share amounts and ratios presented in this document are calculated using whole dollars.

CFG-IR

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20180119005195r1&sid=cmtx6&distro=nx&lang=en

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SOURCE: Citizens Financial Group, Inc.

Citizens Financial Group, Inc. 
Media: 
Peter Lucht , 781-655-2289 
or 
Investors: 
Ellen A. Taylor, 203-900-6854


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