Company: CFG-PE
Filing Date: 2025-08-04
Form Type: 10-Q
Source: 0000759944-25-000108
Chunk: 266

Company: CITIZENS FINANCIAL GROUP INC/RI
Filing Date: 2025-08-04
Form: 10-Q
Item: Part I, Item 2
Chunk 266
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 interest rate swap agreements designed primarily to hedge a portion of its floating-rate assets and liabilities. All of these swaps are deemed highly effective cash flow hedges. From time to time, the Company may also enter into certain interest rate option agreements that utilize interest rate floors and/or caps. Option premiums paid and received are excluded from the assessment of hedge effectiveness and are amortized over the life of the instruments.

Citizens Financial Group, Inc. | 64

During the first quarter of 2025, the Company entered into a cash flow hedge with a notional amount of $1.5 billion to manage the variability in cash flows related to the sale of Non-Core education loans, which will settle ratably each quarter throughout 2025. During the second quarter of 2025, the Company terminated $582 million of this cash flow hedge in conjunction with the quarterly settlement of the education loan sale. The following table presents the pre-tax net gains (losses) recorded in the Consolidated Statements of Operations and in the Consolidated Statements of Comprehensive Income related to derivative instruments designated as cash flow hedges:Three Months Ended June 30,Six Months Ended June 30,(dollars in millions)2025202420252024Pre-tax net gains (losses) recognized in OCI$113 ($177)$397 ($727)Pre-tax net gains (losses) reclassified from AOCI into interest income(196)(232)(398)(435)Pre-tax net gains (losses) reclassified from AOCI into noninterest income(1)— (1)— Pre-tax net gains (losses) reclassified from AOCI into interest expense(1)— (1)— Using the June 30, 2025 interest rate curve, the Company estimates that $546 million in pre-tax net losses related to cash flow hedge strategies will be reclassified from AOCI to earnings over the next 12 months. These losses could differ from amounts recognized due to changes in interest rates, hedge de-designations or the addition of other hedges after June 30, 2025.Derivatives Not Designated As Hedging InstrumentsThe Company offers derivatives to customers in connection with their risk management needs consisting primarily of interest rate, foreign exchange, and commodity contracts. Market risk exposure from customer transactions is primarily managed by entering into a variety of hedging transactions with third-party dealers. Gains and losses on customer-related derivatives are reported in Foreign exchange and derivatives products in the Consolidated Statements of Operations.During the