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ACQUISITIONS (Tables)
 6 Months Ended
Jun. 30, 2022
Business Combination and Asset Acquisition [Abstract]  
Schedule of business acquisitions by acquisition, equity interest issued or issuable
The following table includes a preliminary allocation of the consideration paid for the fair value of the identifiable tangible and intangible assets acquired and liabilities assumed from Investors:
(in millions, except share and per share data)April 6, 2022
Consideration
CFG common shares issued72,148,855 
CFG share price on April 6, 2022
$42.08 
Fair value of consideration for outstanding common stock$3,036 
Cash paid355 
Consideration related to equity awards19 
Fair value of merger consideration3,410 
Assets acquired
Cash and equivalents287 
Investment securities3,825 
Loans held for sale2,183 
Net loans and leases20,158 
Premises and equipment123 
Core deposit intangible and other intangible assets119 
Other assets882 
Total assets acquired27,577 
Liabilities assumed
Deposits20,217 
Borrowed funds4,097 
Other liabilities652 
Total liabilities assumed24,966 
Less: Net assets2,611 
Goodwill$799 
Schedule of recognized identified assets acquired and liabilities assumed
The following table includes a preliminary allocation of the consideration paid for the fair value of the identifiable tangible and intangible assets acquired and liabilities assumed from Investors:
(in millions, except share and per share data)April 6, 2022
Consideration
CFG common shares issued72,148,855 
CFG share price on April 6, 2022
$42.08 
Fair value of consideration for outstanding common stock$3,036 
Cash paid355 
Consideration related to equity awards19 
Fair value of merger consideration3,410 
Assets acquired
Cash and equivalents287 
Investment securities3,825 
Loans held for sale2,183 
Net loans and leases20,158 
Premises and equipment123 
Core deposit intangible and other intangible assets119 
Other assets882 
Total assets acquired27,577 
Liabilities assumed
Deposits20,217 
Borrowed funds4,097 
Other liabilities652 
Total liabilities assumed24,966 
Less: Net assets2,611 
Goodwill$799 
Schedule of business acquisition
The following table includes the fair value and unpaid principal balance of the loans acquired from Investors:
April 6, 2022
(in millions)Unpaid Principal BalanceFair Value
Commercial and industrial$3,021 $2,902 
Commercial real estate13,310 13,082 
Leases9 9 
Total commercial16,340 15,993 
Residential mortgages3,949 3,887 
Home equity267 274 
Other retail4 4 
Total retail4,220 4,165 
Net loans and leases$20,560 $20,158 
Business acquisition, pro forma information
The following table presents the financial results of Investors included in the Consolidated Statements of Operations from the date of acquisition through June 30, 2022:
(in millions)April 6, 2022 through June 30, 2022
Net interest income$232 
Noninterest income13 
Net income114 
The following table presents unaudited supplemental pro forma financial information as if the Investors acquisition had occurred on January 1, 2021 and includes the impact of (i) amortizing and accreting fair value adjustments associated with loans and leases, (ii) the amortization of recognized intangible assets and the elimination of Investors’ historical amortization of these assets, (iii) the elimination of Investors’ historical accretion and amortization of deferred fees and costs on loans and leases, (iv) the elimination of Investors’ historical accretion and amortization of discounts and premiums on loans and leases, debt securities and long-term borrowed funds and (v) the related estimated income tax effects. The pro forma financial information does not necessarily reflect the results that would have occurred had Citizens acquired Investors on January 1, 2021.
Three Months Ended June 30,Six Months Ended June 30,
(in millions)2022202120222021
Net interest income$1,505 $1,339 $2,866 $2,652 
Noninterest income525 498 1,038 1,029 
Net income(1)
581 737 1,083 1,169 
(1) Excludes the acceleration of one-time executive compensation and Employee Stock Ownership Plan expenses of $122 million incurred by Investors in the first quarter of 2022.
In addition, the supplemental pro forma financial information includes non-recurring acquisition-related costs of $268 million and $275 million, respectively, incurred during the three and six months ended June 30, 2022, as summarized in the following table. These costs, along with the $13 million incurred during 2021, are included in the first quarter of 2021 for the purpose of reporting supplemental pro forma financial information presented above.
(in millions)Three Months Ended June 30, 2022Six Months Ended June 30, 2022
Provision for credit losses(1)
$145 $145 
Salaries and employee benefits(2)
61 61 
Outside services(3)
29 36 
Mark-to-market losses on LHFS portfolio(4)
31 31 
Other operating expense2 2 
Total acquisition-related costs$268 $275 
(1) Represents the initial provision for credit losses also recognized through a fair value mark as required by purchase accounting.
(2) Comprised primarily of severance and employee retention costs.
(3) Comprised primarily of technology, legal, advisory, and other professional related fees.
(4) Represents mark-to-market losses on loans acquired from Investors classified as LHFS.
Schedule of changes in the allowance for credit losses
The following table presents PCD loan activity at the date of acquisition:
(in millions)April 6, 2022
Principal balance$4,685 
ALLL at acquisition(101)
Non-credit discount(54)
Purchase price$4,530 
The following table presents a summary of changes in the ACL for the three and six months ended June 30, 2022:
Three Months Ended June 30, 2022Six Months Ended June 30, 2022
(in millions)CommercialRetailTotalCommercialRetailTotal
Allowance for loan and lease losses, beginning of period$778 $942 $1,720 $821 $937 $1,758 
Allowance on PCD loans and leases at acquisition99 2 101 99 2 101 
Charge-offs(1)
(13)(78)(91)(27)(165)(192)
Recoveries3 39 42 6 78 84 
Net charge-offs(10)(39)(49)(21)(87)(108)
Provision expense (benefit) for loans and leases(2)
120 72 192 88 125 213 
Allowance for loan and lease losses, end of period987 977 1,964 987 977 1,964 
Allowance for unfunded lending commitments, beginning of period147 11 158 153 23 176 
Provision expense (benefit) for unfunded lending commitments18 6 24 12 (6)6 
Allowance on PCD unfunded lending commitments at acquisition1 — 1 1 — 1 
Allowance for unfunded lending commitments, end of period166 17 183 166 17 183 
Total allowance for credit losses, end of period$1,153 $994 $2,147 $1,153 $994 $2,147 
(1) For the three and six months ended June 30, 2022, excludes $33 million of charge-offs previously taken by Investors or recognized upon completion of the Investors acquisition under purchase accounting. The initial allowance for loan and lease losses on PCD assets included these amounts and, after charging these amounts off upon acquisition, the net impact for PCD assets was $101 million of additional allowance for loan and lease losses.
(2) Includes $145 million and $169 million of initial provision expense related to non-PCD loans and leases acquired from Investors and HSBC for the three and six months ended June 30, 2022, respectively.
The following table presents a summary of changes in the ACL for the three and six months ended June 30, 2021:
Three Months Ended June 30, 2021Six Months Ended June 30, 2021
(in millions)CommercialRetailTotalCommercialRetailTotal
Allowance for loan and lease losses, beginning of period$1,146 $1,048 $2,194 $1,233 $1,210 $2,443 
Charge-offs(45)(80)(125)(179)(173)(352)
Recoveries4 43 47 34 82 116 
Net charge-offs(41)(37)(78)(145)(91)(236)
Provision expense (benefit) for loans and leases(152)(17)(169)(135)(125)(260)
Allowance for loan and lease losses, end of period953 994 1,947 953 994 1,947 
Allowance for unfunded lending commitments, beginning of period165 13 178 186 41 227 
Provision expense (benefit) for unfunded lending commitments(44)— (44)(65)(28)(93)
Allowance for unfunded lending commitments, end of period121 13 134 121 13 134 
Total allowance for credit losses, end of period$1,074 $1,007 $2,081 $1,074 $1,007 $2,081