2Q‘26 Earnings: Strong Growth Trends Offset Modest Funding Costs Pressures

Research evidence excerpt

2Q‘26 Earnings: Strong Growth Trends Offset Modest Funding Costs Pressures

USA | Large-Cap & Mid-Cap Banks

Citizens Financial Group EquityJulyResearch16, 2026

TARGET CHANGE2Q'26 Earnings: Strong Growth Trends Offset

RATING BUYModest Funding Cost Pressures

PRICE $73.97^

Citizens delivered a solid quarter, driven by fee and NII strength, while providing

an incrementally positive FY26 outlook. NIM of 3.17% was modestly below PRICE TARGET | % TO PT $90.00 ($85.00) | +22%

our 3.18% estimate and consensus of 3.19%, though stronger average earning 52W HIGH-LOW $72.94 - $45.91

asset growth supported an NII beat. The NIM miss was partly driven by higher FLOAT (%) | ADV MM (USD) 99.1% | 360.23

funding costs, with IB deposit costs up 4 bps Q/Q. Fee income also topped MARKET CAP $31.3B

expectations, led by continued strength in capital markets and wealth. TICKER CFG ^Prior trading day's closing price unless otherwise

noted.

Key trends. Core EPS of $1.30 beat our estimate of $1.25 and consensus of $1.24, and core PPNR

of $889 mn was above our forecast ($866 mn) and consensus ($864 mn). Loan (avg) growth was

FY (Dec) CHANGE TO JEFe JEF vs CONS

8% ann. (vs. our 4% forecast), with broad-based strength across commercial, retail, and the private

2026 2027 2026 2027

bank, while deposit (avg) growth of 5% ann. modestly lagged our 8% forecast. Expenses remained

well controlled despite stronger revenue generation, supporting robust positive operating leverage EPS* +1% NA +1% NM

of 640 bps. Credit quality also remained favorable, with stable NCOs and lower NPAs. Management REV* <1% NM +1% +1%

additionally introduced its NEXT branch optimization initiative, targeting $20-$30 bn of incremental

deposits over the next decade. 2026 ($) Q1A Q2A Q3 Q4 FY

REV* 2,168.0 2,283.0 2,341.7 2,382.8 9,175.5