Company: CFG-PE
Filing Date: 2025-02-13
Form Type: 10-K
Source: 0000759944-25-000013
Chunk: 1019

Company: CITIZENS FINANCIAL GROUP INC/RI
Filing Date: 2025-02-13
Form: 10-K
Item: Item 7
Chunk 1019
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 components. A lessee is evaluated from a credit perspective using the same underwriting standards and procedures for a loan borrower. A lessee is expected to make rental payments based on its cash flows and the viability of its operations. Leases are not typically evaluated as collateral-based transactions and, therefore, the lessee’s overall financial strength is the most important credit evaluation factor.

Citizens Financial Group, Inc. | 100

The components of the net investment in direct financing and sales-type leases, before ALLL, are presented below:(dollars in millions)December 31, 2024December 31, 2023Total future minimum lease rentals$916 $942 Estimated residual value of leased equipment (non-guaranteed)231 322 Initial direct costs4 5 Unearned income(124)(121)Total leases$1,027 $1,148 Interest income on direct financing and sales-type leases for the years ended December 31, 2024, 2023 and 2022 was $41 million, $46 million and $46 million, respectively, and is reported within interest and fees on loans and leases in the Consolidated Statements of Operations. A maturity analysis of direct financing and sales-type lease receivables at December 31, 2024 is presented below:Year(dollars in millions)2025$241 2026198 2027177 2028126 202968 Thereafter106 Total undiscounted future minimum lease rentals$916 

NOTE 6 - CREDIT QUALITY AND THE ALLOWANCE FOR CREDIT LOSSES Allowance for Credit Losses    The Company’s estimate of expected credit losses in its loan and lease portfolios is recorded in the ACL and considers extensive historical loss experience, including the impact of loss mitigation and restructuring programs that the Company offers to borrowers experiencing financial difficulty, as well as projected loss severity as a result of loan default. The ACL is maintained at a level the Company believes to be appropriate to absorb expected lifetime credit losses over the contractual life of a loan or lease and on unfunded lending commitments. The determination of the ACL is based on periodic evaluation of loan and lease portfolios and unfunded lending commitments that are not unconditionally cancellable. A number of relevant underlying factors, including key assumptions and the evaluation of quantitative and qualitative information, are considered.Key assumptions used in the ACL measurement process include the use of a two-year reasonable and supportable economic forecast period followed by a one-year reversion period to historical credit