[Management View]
Citizens Financial Group (CFG) management identified an inflection point with net loan growth across commercial, consumer, and private banking segments. Key metrics included EPS of $0.92, up 19% from Q1 2025, and net interest income (NII) growth of 3.3%. Strategic priorities focused on digital transformation leveraging GenAI and AgenTik AI technologies.

[Outlook]
Management projects Q3 NII up 3%-4% sequentially, with net interest margin (NIM) improving by about five basis points. Noninterest income is expected to rise by low single digits, and expenses are projected to increase by approximately 1%-1.5%. The full-year outlook remains unchanged from January guidance.

[Financial Performance]
YoY/QoQ trends showed EPS up $0.15 or 19% from Q1 2025. Net interest income increased 3.3% from Q1 2025, driven by NIM expansion to 2.95%. Noninterest income rose 10% sequentially, led by record quarters in wealth and card segments.

[Q&A Highlights]
Question 1: Bruce, you saw nice loan growth in the quarter. Can you talk about what you're seeing in terms of growth in the private bank and everything else? How are you feeling about sentiment from borrowers for the remainder of the year?
Answer: Bruce Van Saun explained that all three business lines—commercial, consumer, and private banking—reported net loan growth. He noted pent-up demand in the sponsor space and a pickup in line utilization. Brendan Coughlin added that core retail business excluding noncore saw steady high-quality relationship-led growth, particularly in HELOC and mortgage products. Don McCree highlighted broad business optimism and strategic emphasis on private credit lines.

Question 2: Given the potential for a more dovish Fed, what steps are you taking to lock in the higher end of margin expectations?
Answer: John Woods discussed the range of $325 million to $350 million NIM over the medium term, even with significant Fed reductions. He mentioned opportunistic hedging to protect against downside scenarios. Bruce Van Saun added that they are leaving some out years open to benefit from potential higher rate environments.

Question 3: How are you thinking about growth versus optimizing the deposit mix in the second half of the year?
Answer: John Woods emphasized strong low-cost deposit trends and seasonal factors contributing to stable to improving mix. Brendan Coughlin noted outperforming peer averages in retail franchise deposits, allowing flexibility in managing margin and yield. Don McCree mentioned wins in expansion markets and payment side contributing to low-cost deposit growth.

Question 4: Can you elaborate on the reimagining the bank initiative and how it differs from previous top initiatives?
Answer: Bruce Van Saun described the initiative as broader and more complex, leveraging new technologies like GenAI and AgenTik AI. Brendan Coughlin added that the program aims to simplify the business model and improve customer experience, with everything on the table from operating metrics to corporate real estate.

Question 5: What are your updated thoughts on the M&A backdrop and Citizens' potential role in consolidation?
Answer: Bruce Van Saun stated the focus is on driving organic growth and capturing white space left by First Republic. He expressed confidence in the leadership team's ability to integrate and execute attractive opportunities down the road.

Question 6: Can you update us on what you're seeing in the office space and how you're managing the reserve?
Answer: John Woods noted favorable credit trends and the first quarter of charging off against the reserve without needing to reprovide. Don McCree added that the problem properties are well identified and the rest of the book shows positive tailwinds.

Question 7: Is Stablecoin an area of focus in the reimagining the bank initiative?
Answer: Bruce Van Saun clarified that Stablecoin is part of the overall payments strategy, not the reimagining the bank initiative. He mentioned monitoring developments and potential use cases like cross-border payments.

Question 8: Given the momentum in capital markets, is there a case to be made for upping capital to these businesses?
Answer: Bruce Van Saun and Don McCree emphasized that the focus is on OpEx rather than capital allocation, with investments in coverage bankers and key industry verticals.

Question 9: How does the private bank build-out look after hitting the 2025 targets?
Answer: Bruce Van Saun and Brendan Coughlin discussed continuing to add private banking teams and offices, ramping up wealth teams, and maintaining financial guardrails to ensure profitable growth.

[Sentiment Analysis]
Analysts and management exhibited a positive tone, with confidence in strategic initiatives and growth prospects. Management's responses were detailed and optimistic about future performance.

[Quarterly Comparison]
| Metric | Q2 2025 | Q1 2025 | % Change |
|-------------------------|---------|---------|----------|
| EPS | $0.92 | $0.77 | +19% |
| Net Interest Income | +3.3% | - | - |
| Noninterest Income | +10% | - | - |
| Efficiency Ratio | <65% | - | - |
| CET1 Ratio | 10.6% | - | - |
| Loan Growth | +1% | - | - |
| Private Bank Loans | $4.9B | $3.7B | +32% |
| Noninterest-bearing Deposits | 22% | - | - |
| Net Charge-offs | 48 bps | 51 bps | -5.9% |
| Allowance for Credit Losses | 1.59% | - | - |

[Risks and Concerns]
Management acknowledged ongoing market uncertainty affecting M&A deals, tariff-related issues, and competition for loans and deposits. The general office portfolio saw its first decline in ACL coverage, reflecting active utilization of reserves.

[Final Takeaway]
Citizens Financial Group delivered strong Q2 2025 results, with notable loan growth across all business segments and strategic initiatives focused on digital transformation. Management remains optimistic about future performance, supported by favorable credit trends and robust capital markets activity. While competition and market uncertainties persist, CFG's strategic focus on relationship-led growth and innovative technologies positions it well for sustained success.