CITIZENS FINANCIAL GROUP, INC.  MANAGEMENT’S DISCUSSION AND ANALYSIS 68 We operate our business through two business operating segments: Consumer Banking and Commercial Banking.
Segment results are derived from our business-line profitability reporting systems by specifically attributing managed assets, liabilities, capital and their related revenues, provision for credit losses and expenses, including income tax expense.
Residual assets, liabilities, capital and their related revenues, provision for credit losses and expenses are attributed to Other.
For further information, see “—Results of Operations - 2017 compared with 2016 — Business Operating Segments.
” Consumer Banking
## Table 0 ##
(1) Ratios include loans and leases held for sale.
(2) Business operating segments are allocated capital on a risk-adjusted basis considering economic and regulatory capital requirements.
We approximate that regulatory capital is equivalent to a sustainable target level for CET1 capital and then allocate that approximation to the business operating segments based on economic capital.
Consumer Banking net income of $345 million in 2016 increased $83 million, or 32%, from 2015, reflecting an increase in total revenue, partially offset by an increase in noninterest expense.
Consumer Banking total revenue of $3.3 billion in 2016 increased $218 million from 2015, as net interest income increased driven by loan and deposit growth.
Net interest income of $2.4 billion increased 11% from 2015, driven by the benefit of $3.6 billion average loan growth, reflecting growth in education, residential mortgage, auto and other retail loans as well as improved loan yields.
Noninterest income decreased $27 million, or 3%, largely as growth in service charges and fees and mortgage banking fees were more than offset by the impact of a reclassification of card reward costs and lower trust and investment services fees.
Noninterest expense of $2.5 billion in 2016 increased $91 million, or 4%, from $2.5 billion in 2015, driven by higher salaries and benefits, outside services expense, amortization of software and other operating expense, partially offset by the impact of a reclassification of card reward costs.
Provision for credit losses of $243 million in 2016 decreased $9 million, or 4%, from $252 million in 2015, largely reflecting the benefit of lower real estate secured net charge-offs.
consolidated 2005 results of operations was an estimated reduction of gross profit and a corresponding decrease to inventory, at cost, of $5.2 million.
Store pre-opening costs Pre-opening costs related to new store openings and the construction periods are expensed as incurred.
Property and equipment Property and equipment are recorded at cost.
The Company provides for depreciation and amortization on a straight-line basis over the following estimated useful lives:
## Table 1 ##
Improvements of leased properties are amortized over the shorter of the life of the applicable lease term or the estimated useful life of the asset.
Impairment of long-lived assets When indicators of impairment are present, the Company evaluates the carrying value of long-lived assets, other than goodwill, in relation to the operating performance and future cash flows or the appraised values of the underlying assets.
In accordance with SFAS 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” the Company reviews for impairment stores open more than two years for which current cash flows from operations are negative.
Impairment results when the carrying value of the assets exceeds the undiscounted future cash flows over the life of the lease.
The Company’s estimate of undiscounted future cash flows over the lease term is based upon historical operations of the stores and estimates of future store profitability which encompasses many factors that are subject to variability and difficult to predict.
If a long-lived asset is found to be impaired, the amount recognized for impairment is equal to the difference between the carrying value and the asset’s fair value.
The fair value is estimated based primarily upon future cash flows (discounted at the Company’s credit adjusted risk-free rate) or other reasonable estimates of fair market value.
Assets to be disposed of are adjusted to the fair value less the cost to sell if less than the book value.
The Company recorded impairment charges, included in SG&A expense, of approximately $9.4 million in 2006, $0.6 million in 2005 and $0.2 million in 2004 to reduce the carrying value of certain of its stores’ assets as deemed necessary due to negative sales trends and cash flows at these locations.
The majority of the 2006 charges were recorded pursuant to certain strategic initiatives discussed in Note 2.
Other assets Other assets consist primarily of long-term investments, qualifying prepaid expenses, debt issuance costs which are amortized over the life of the related obligations, utility and security deposits, life insurance policies and goodwill.
THE GOLDMAN SACHS GROUP, INC.  AND SUBSIDIARIES Notes to Consolidated Financial Statements The table below presents information about the allowance for credit losses.
## Table 2 ##
In the table above: ‰ Net charge-offs were primarily related to consumer loans and commercial real estate PCI loans for 2018 and primarily related to corporate loans for 2017.
‰ The provision for credit losses was primarily related to consumer loans and corporate loans for 2018 and primarily related to corporate loans and lending commitments, and commercial real estate loans for 2017.
‰ Other represents the reduction to the allowance related to loans and lending commitments transferred to held for sale.
‰ Portfolio level reserves were primarily related to corporate loans and lending commitments, specific loan-level reserves were substantially all related to corporate loans and reserves on PCI loans were related to real estate loans.
‰ Substantially all of the allowance for losses on lending commitments was related to corporate lending commitments.
‰ Allowance for loan losses as a percentage of total gross loans receivable was 1.3% as of December 2018 and 1.2% as of December 2017.
‰ Net charge-offs as a percentage of average total gross loans receivable were 0.5% for 2018 and 0.4% for 2017.
Note 10.
Collateralized Agreements and Financings Collateralized agreements are resale agreements and securities borrowed.
Collateralized financings are repurchase agreements, securities loaned and other secured financings.
The firm enters into these transactions in order to, among other things, facilitate client activities, invest excess cash, acquire securities to cover short positions and finance certain firm activities.
Collateralized agreements and financings are presented on a net-by-counterparty basis when a legal right of setoff exists.
Interest on collateralized agreements, which is included in interest income, and collateralized financings, which is included in interest expense, is recognized over the life of the transaction.
See Note 23 for further information about interest income and interest expense.
The table below presents the carrying value of resale and repurchase agreements and securities borrowed and loaned transactions.
## Table 3 ##
In the table above: ‰ Substantially all resale agreements and all repurchase agreements are carried at fair value under the fair value option.
See Note 8 for further information about the valuation techniques and significant inputs used to determine fair value.
‰ Securities borrowed of $23.14 billion as of December 2018 and $78.19 billion as of December 2017, and securities loaned of $3.24 billion as of December 2018 and $5.36 billion as of December 2017 were at fair value.
Resale and Repurchase Agreements A resale agreement is a transaction in which the firm purchases financial instruments from a seller, typically in exchange for cash, and simultaneously enters into an agreement to resell the same or substantially the same financial instruments to the seller at a stated price plus accrued interest at a future date.
A repurchase agreement is a transaction in which the firm sells financial instruments to a buyer, typically in exchange for cash, and simultaneously enters into an agreement to repurchase the same or substantially the same financial instruments from the buyer at a stated price plus accrued interest at a future date.
Even though repurchase and resale agreements (including “repos- and reverses-to-maturity”) involve the legal transfer of ownership of financial instruments, they are accounted for as financing arrangements because they require the financial instruments to be repurchased or resold before or at the maturity of the agreement.
The financial instruments purchased or sold in resale and repurchase agreements typically include U. S.  government and agency, and investment-grade sovereign obligations.
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations Results of Operations – CNA Financial – (Continued) expense reduction initiatives as compared with the same period in 2003.
Partially offsetting these favorable impacts was $14.0 million of estimated underwriting assessments related to the 2004 Florida hurricanes.
During 2004, additional bad debt provisions for insurance receivables of $150.0 million were recorded as compared to $242.0 million recorded in 2003.
The substantial bad debt provisions for insurance receivables in 2004 and 2003 were primarily related to Professional Employer Organization (“PEO”) accounts.
During 2002, Standard Lines ceased writing coverages for PEO businesses, with the last contracts expiring on June 30, 2003.
In the third quarter of 2003, CNA performed a review of PEO accounts to estimate ultimate losses and the indicated recoveries under retrospective premium or high-deductible provisions of the insurance contracts.
Based on the 2003 analysis of the credit standing of the individual PEO accounts and the amount of collateral held, CNA recorded an increase in the bad debt provision.
In the third quarter of 2004, the review of PEO accounts was updated and the population of accounts reviewed was expanded to include Temporary Help accounts as well.
Payroll audits performed since the last study identified that the exposure base for many accounts was higher than expected.
In addition, recovery estimates were updated based on current credit information on the insured.
Based on the updated study, CNA recorded an estimated bad debt provision of $95.0 million in the third quarter of 2004 for these accounts.
In 2004, the expense ratio was adversely impacted by an additional $55.0 million bad debt provision for insurance receivables.
The primary drivers of the provision were the completion of updated ultimate loss projections on all large account business where the insured is currently in bankruptcy and a comprehensive review of all billed balances that are past due.
The dividend ratio decreased 2.0 points in 2004 as compared with 2003 due to favorable net prior year dividend development of $23.0 million in 2004, as compared to unfavorable net prior year dividend development of $46.0 million in 2003, primarily related to workers compensation products.
The favorable 2004 dividend development was related to a review that was completed in 2004 which indicated dividends were lower than prior expectations based on decreased usage of dividend programs.
Specialty Lines The following table summarizes the results of operations for Specialty Lines for the years ended December 31, 2005, 2004 and 2003.

<table><tr><td></td><td colspan="2">As of and for the Year Ended December 31,</td><td></td><td></td></tr><tr><td>(dollars in millions)</td><td>2016</td><td>2015</td><td>Change</td><td>Percent</td></tr><tr><td>Net interest income</td><td>$2,443</td><td>$2,198</td><td>$245</td><td>11%</td></tr><tr><td>Noninterest income</td><td>883</td><td>910</td><td>-27</td><td>-3</td></tr><tr><td>Total revenue</td><td>3,326</td><td>3,108</td><td>218</td><td>7</td></tr><tr><td>Noninterest expense</td><td>2,547</td><td>2,456</td><td>91</td><td>4</td></tr><tr><td>Profit before provision for credit losses</td><td>779</td><td>652</td><td>127</td><td>19</td></tr><tr><td>Provision for credit losses</td><td>243</td><td>252</td><td>-9</td><td>-4</td></tr><tr><td>Income before income tax expense</td><td>536</td><td>400</td><td>136</td><td>34</td></tr><tr><td>Income tax expense</td><td>191</td><td>138</td><td>53</td><td>38</td></tr><tr><td>Net income</td><td>$345</td><td>$262</td><td>$83</td><td>32</td></tr><tr><td>Loans and loans held for sale (year-end)</td><td>$57,383</td><td>$53,344</td><td>$4,039</td><td>8</td></tr><tr><td>Average Balances:</td><td></td><td></td><td></td><td></td></tr><tr><td>Total assets</td><td>$56,388</td><td>$52,848</td><td>$3,540</td><td>7%</td></tr><tr><td>Loans and leases and loans held for sale</td><td>55,052</td><td>51,484</td><td>3,568</td><td>7</td></tr><tr><td>Deposits</td><td>72,003</td><td>69,748</td><td>2,255</td><td>3</td></tr><tr><td>Interest-earning assets</td><td>55,101</td><td>51,525</td><td>3,576</td><td>7</td></tr><tr><td>Key Performance Metrics:</td><td></td><td></td><td></td><td></td></tr><tr><td>Net interest margin</td><td>4.43%</td><td>4.27%</td><td>16bps</td><td>—</td></tr><tr><td>Efficiency ratio</td><td>76.57</td><td>79.02</td><td>-245 bps</td><td>—</td></tr><tr><td>Period-end loans to deposits ratio<sup>-1</sup></td><td>77.33</td><td>74.53</td><td>280bps</td><td>—</td></tr><tr><td>Average loans to average deposits ratio<sup>-1</sup></td><td>76.46</td><td>73.81</td><td>265bps</td><td>—</td></tr><tr><td>Return on average total tangible assets</td><td>0.61</td><td>0.50</td><td>11bps</td><td>—</td></tr><tr><td>Return on average tangible common equity<sup>-2</sup></td><td>6.68</td><td>5.53</td><td>115bps</td><td>—</td></tr></table>
<table><tr><td>Land improvements</td><td>20</td></tr><tr><td>Buildings</td><td>39-40</td></tr><tr><td>Furniture, fixtures and equipment</td><td>3-10</td></tr></table>
<table><tr><td></td><td colspan="2">Year Ended December 2018</td><td colspan="2">Year Ended December 2017</td></tr><tr><td><i>$ in millions</i></td><td>Loans Receivable</td><td>Lending Commitments</td><td>Loans Receivable</td><td>Lending Commitments</td></tr><tr><td colspan="4">Changes in the allowance for credit losses</td><td></td></tr><tr><td>Beginning balance</td><td>$ 803</td><td>$274</td><td>$ 509</td><td>$212</td></tr><tr><td>Net charge-offs</td><td>-337</td><td>–</td><td>-203</td><td>–</td></tr><tr><td>Provision</td><td>654</td><td>20</td><td>574</td><td>83</td></tr><tr><td>Other</td><td>-54</td><td>-8</td><td>-77</td><td>-21</td></tr><tr><td> Ending balance</td><td>$1,066</td><td>$286</td><td>$ 803</td><td>$274</td></tr><tr><td colspan="4">Allowance for losses by impairment methodology</td><td></td></tr><tr><td>Specific</td><td>$ 102</td><td>$ 3</td><td>$ 119</td><td>$ 14</td></tr><tr><td>Portfolio</td><td>848</td><td>283</td><td>518</td><td>260</td></tr><tr><td>PCI</td><td>116</td><td>–</td><td>166</td><td>–</td></tr><tr><td> Total</td><td>$1,066</td><td>$286</td><td>$ 803</td><td>$274</td></tr></table>
<table><tr><td></td><td colspan="2">As of December</td></tr><tr><td><i>$ in millions</i></td><td> 2018</td><td>2017</td></tr><tr><td>Resale agreements</td><td> $139,258</td><td>$120,822</td></tr><tr><td>Securities borrowed</td><td> $135,285</td><td>$190,848</td></tr><tr><td>Repurchase agreements</td><td> $ 78,723</td><td>$ 84,718</td></tr><tr><td>Securities loaned</td><td> $ 11,808</td><td>$ 14,793</td></tr></table>

Question: If Noninterest expense develops with the same growth rate in 2016, what will it reach in 2017? (in million)
Answer: 2641.37174