BUSINESS OPERATING SEGMENTS

9 Months Ended

Sep. 30, 2022

Segment Reporting [Abstract]

BUSINESS OPERATING SEGMENTS

NOTE 18 - BUSINESS OPERATING SEGMENTS

Citizens is managed by its Chief Executive Officer on a segment basis. The Company’s two business operating segments are Consumer Banking and Commercial Banking. The business segments are determined based on the products and services provided, or the type of customer served. Each segment has a segment head who reports directly to the Chief Executive Officer. The Chief Executive Officer has final authority over resource allocation decisions and performance assessment. The business segments reflect this management structure and the manner in which financial information is currently evaluated by the Chief Executive Officer. For more information on the Company’s business operating segments, as well as Other non-segment operations, see Note 26 in the Company’s 2021 Form 10-K.

	As of and for the Three Months Ended September 30, 2022
(in millions)	Consumer Banking	Commercial Banking	Other	Consolidated
Net interest income	$1,085	$559	$21	$1,665
Noninterest income	270	213	29	512
Total revenue	1,355	772	50	2,177
Noninterest expense	863	325	53	1,241
Profit (loss) before provision (benefit) for credit losses	492	447	(3)	936
Provision (benefit) for credit losses	62	12	49	123
Income (loss) before income tax expense (benefit)	430	435	(52)	813
Income tax expense (benefit)	111	101	(35)	177
Net income (loss)	$319	$334	($17)	$636
Total average assets	$89,560	$80,067	$55,846	$225,473

	As of and for the Three Months Ended September 30, 2021
(in millions)	Consumer Banking	Commercial Banking	Other	Consolidated
Net interest income	$919	$428	($202)	$1,145
Noninterest income	315	168	31	514
Total revenue	1,234	596	(171)	1,659
Noninterest expense	749	226	36	1,011
Profit (loss) before provision (benefit) for credit losses	485	370	(207)	648
Provision (benefit) for credit losses	35	15	(83)	(33)
Income (loss) before income tax expense (benefit)	450	355	(124)	681
Income tax expense (benefit)	114	81	(44)	151
Net income (loss)	$336	$274	($80)	$530
Total average assets	$75,070	$56,702	$54,336	$186,108

	As of and for the Nine Months Ended September 30, 2022
(in millions)	Consumer Banking	Commercial Banking	Other	Consolidated
Net interest income	$2,937	$1,509	($129)	$4,317
Noninterest income	807	647	50	1,504
Total revenue	3,744	2,156	(79)	5,821
Noninterest expense	2,528	905	219	3,652
Profit (loss) before provision (benefit) for credit losses	1,216	1,251	(298)	2,169
Provision (benefit) for credit losses	150	34	158	342
Income (loss) before income tax expense (benefit)	1,066	1,217	(456)	1,827
Income tax expense (benefit)	273	271	(137)	407
Net income (loss)	$793	$946	($319)	$1,420
Total average assets	$85,375	$73,344	$53,003	$211,722

	As of and for the Nine Months Ended September 30, 2021
(in millions)	Consumer Banking	Commercial Banking	Other	Consolidated
Net interest income	$2,679	$1,268	($561)	$3,386
Noninterest income	949	516	76	1,541
Total revenue	3,628	1,784	(485)	4,927
Noninterest expense	2,250	679	91	3,020
Profit (loss) before provision (benefit) for credit losses	1,378	1,105	(576)	1,907
Provision (benefit) for credit losses	139	150	(675)	(386)
Income (loss) before income tax expense (benefit)	1,239	955	99	2,293
Income tax expense (benefit)	315	205	(16)	504
Net income (loss)	$924	$750	$115	$1,789
Total average assets	$75,317	$57,318	$51,756	$184,391

Citizens utilizes a FTP system to eliminate the effect of interest rate risk from the segments’ net interest income. This risk is centrally managed within the Treasury function and reported in Other non-segment operations. The FTP methodology provides a funds credit for sources of funds and a funds charge for the use of funds by each segment. The sum of the interest income/expense and FTP charges/credits for each segment is its designated net interest income. The offset to these FTP charges and credits is recorded in Other non-segment operations.

Effective January 1, 2022, the Company refined its FTP credit methodology for deposits provided by each business segment. The rationale for this FTP refinement is to better estimate the net interest income resulting from the strong growth in deposits caused by the COVID government stimulus. This resulted in lower net interest income, primarily in Consumer, offset by an increase in Other. Prior periods have not been restated.

There have been no other significant changes in the management accounting practices utilized by the Company regarding the basis of presentation for segment results as discussed in Note 26 in the Company’s 2021 Form 10-K.