REGULATORY MATTERS

12 Months Ended

Dec. 31, 2022

Mortgage Banking [Abstract]

REGULATORY MATTERS

NOTE 25 - REGULATORY MATTERS

As a BHC and FHC, Citizens is subject to regulation and supervision by the FRB. Our banking subsidiary, CBNA, is a national banking association primarily regulated by the OCC.

Under the current U.S. Basel III capital framework, the Company and CBNA must meet the following specific minimum requirements: CET1 capital ratio of 4.5%, tier 1 capital ratio of 6.0%, total capital ratio of 8.0% and tier 1 leverage ratio of 4.0%. As a BHC the Company’s SCB of 3.4% is imposed on top of the three minimum risk-based capital ratios listed above and a CCB of 2.5% is imposed on top of the three minimum risk-based capital ratios listed above for CBNA. The Company’s SCB will be re-calibrated with each biennial supervisory stress test and updated annually to reflect the Company’s planned common stock dividends. In addition, the Company must not be subject to a written agreement, order or capital directive with any of its regulators. Failure to meet minimum capital requirements can result in the initiation of certain actions that, if undertaken, could have a material effect on the Company’s Consolidated Financial Statements.

The following table presents the capital ratios for the Company and CBNA under the U.S. Basel III Standardized rules. The Company and CBNA have both declared as an “AOCI opt-out” institution, which means they are not required to recognize the AOCI impact of net unrealized gains and losses on debt securities and accumulated net gains and losses on cash flow hedges and certain defined benefit pension plan assets in regulatory capital. In addition, both entities elected to delay the estimated impact of CECL on regulatory capital for a two-year period ending December 31, 2021, followed by a three-year transition period ending December 31, 2024, to phase-in the aggregate amount of the capital benefit provided during the initial two-year delay.

	Actual			Required Minimum Capital
(in millions, except ratio data)	Amount	Ratio		Amount	Ratio(1)
As of December 31, 2022
CET1 capital
CFG	$18,574	10.0	%	$14,633	7.9	%
CBNA	20,669	11.2		12,935	7.0
Tier 1 capital
CFG	20,588	11.1		17,411	9.4
CBNA	20,669	11.2		15,706	8.5
Total capital
CFG	23,755	12.8		21,116	11.4
CBNA	23,534	12.7		19,402	10.5
Tier 1 leverage
CFG	20,588	9.3		8,831	4.0
CBNA	20,669	9.4		8,807	4.0
As of December 31, 2021
CET1 capital
CFG	$15,656	9.9	%	$12,548	7.9	%
CBNA	17,039	10.7		11,099	7.0
Tier 1 capital
CFG	17,670	11.1		14,930	9.4
CBNA	17,039	10.7		13,477	8.5
Total capital
CFG	20,244	12.7		18,107	11.4
CBNA	19,600	12.4		16,648	10.5
Tier 1 leverage
CFG	17,670	9.7		7,272	4.0
CBNA	17,039	9.4		7,251	4.0

(1) Represents minimum requirement under the current capital framework plus the SCB of 3.4% and CCB of 2.5% for CFG and CBNA, respectively. The SCB and CCB are not applicable to the Tier 1 leverage ratio.

The Company’s capital distributions are subject to the oversight of the FRB. Under the FRB’s SCB framework failure to maintain risk-based capital ratios above respective minimum requirements including the SCB would result in graduated restrictions on the Company’s ability to make certain discretionary bonus payments and capital distributions, including common stock dividends and share repurchases. The timing and amount of future dividends and share repurchases will depend on various factors, including the Company’s capital position, financial performance, capital impacts of strategic initiatives, market conditions, receipt of required regulatory approvals and other regulatory considerations. All future capital distributions are subject to consideration and approval by the Board of Directors prior to execution. See Note 17 for more information regarding the Company’s common stock repurchases and dividends.

Dividends payable by CBNA are limited to the lesser of the amount calculated under a “recent earnings” test and an “undivided profits” test. Under the recent earnings test, a dividend may not be paid if the total of all dividends declared by a bank in any calendar year is in excess of current year net income plus retained net income for the two preceding years, less any required transfers to surplus, unless the national bank obtains the approval of the OCC. Under the undivided profits test, a dividend may not be paid in excess of the entity’s “undivided profits” (generally, accumulated net profits that have not been paid out as dividends or transferred to surplus). Federal banking regulatory agencies have issued policy statements which provide that FDIC-insured depository institutions and their holding companies should generally pay dividends out of their current operating earnings only.