CITIZENS FINANCIAL GROUP, INC.  MANAGEMENT’S DISCUSSION AND ANALYSIS 108 The secondary source of our interest rate risk is driven by longer term rates comprising the rollover or reinvestment risk on fixed rate loans as well as the prepayment risk on mortgage related loans and securities funded by non-rate sensitive deposits and equity.
The primary goal of interest rate risk management is to control exposure to interest rate risk within policy limits approved by the Board.
These limits and guidelines reflect our tolerance for interest rate risk over both shortterm and long-term horizons.
To ensure that exposure to interest rate risk is managed within this risk appetite, we must both measure the exposure and, as necessary, hedge it.
The Treasury Asset and Liability Management team is responsible for measuring, monitoring and reporting on the structural interest rate risk position.
These exposures are reported on a monthly basis to the Asset and Liability Committee (“ALCO”) and at Board meetings.
We measure structural interest rate risk through a variety of metrics intended to quantify both short-term and long-term exposures.
The primary method that we use to quantify interest rate risk is simulation analysis in which we model net interest income from assets, liabilities and hedge derivative positions under various interest rate scenarios over a three-year horizon.
Exposure to interest rate risk is reflected in the variation of forecasted net interest income across scenarios.
Key assumptions in this simulation analysis relate to the behavior of interest rates and spreads, the changes in product balances and the behavior of loan and deposit clients in different rate environments.
The most material of these behavioral assumptions relate to the repricing characteristics and balance fluctuations of deposits with indeterminate (i. e. , non-contractual) maturities as well as the pace of mortgage prepayments.
Assessments are periodically made by running sensitivity analysis of the impact of key assumptions.
The results of these analyses are reported to ALCO.
As the future path of interest rates cannot be known in advance, we use simulation analysis to project net interest income under various interest rate scenarios including a “most likely” (implied forward) scenario as well as a variety of deliberately extreme and perhaps unlikely scenarios.
These scenarios may assume gradual ramping of the overall level of interest rates, immediate shocks to the level of rates and various yield curve twists in which movements in short- or long-term rates predominate.
Generally, projected net interest income in any interest rate scenario is compared to net interest income in a base case where market forward rates are realized.
The table below reports net interest income exposures against a variety of interest rate scenarios.
Our policies involve measuring exposures as a percentage change in net interest income over the next year due to either instantaneous or gradual parallel changes in rates relative to the market implied forward yield curve.
With rates rising from historically low levels due to Federal Open Market Committee rate increases in December 2016, March 2017, June 2017, and December 2017, exposure to falling rates has increased.
While rates have begun to rise off of the very low levels, an instantaneous decline of 2.0% is still not possible.
As the following table illustrates, our balance sheet is asset-sensitive: net interest income would benefit from an increase in interest rates.
Exposure to a decline in interest rates is within limit.
While an instantaneous and severe shift in interest rates was used in this analysis, we believe that any actual shift in interest rates would likely be more gradual and would therefore have a more modest impact as demonstrated in the following table.
The table below presents the sensitivity of net interest income to various parallel yield curve shifts from the market implied forward yield curve:
## Table 0 ##
Asset sensitivity against a 200 basis point gradual increase in rates was 5.1% at December 31, 2017, a decline from 5.9% at December 31, 2016.
The core asset sensitivity is the result of a faster repricing of the loan book relative
CITIZENS FINANCIAL GROUP, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
## Table 1 ##
Potential dilutive common shares are excluded from the computation of diluted EPS in the periods where the effect would be antidilutive.
The diluted EPS computation for the year ended December 31, 2017 excluded 533 average share-based awards because their inclusion would have been antidilutive.
The Company did not have any antidilutive shares for the years ended December 31, 2016 and 2015.
NOTE 24 - REGULATORY MATTERS As a bank holding company, the Company is subject to regulation and supervision by the FRB.
The primary subsidiaries of the Company are its two insured depository institutions CBNA, a national banking association whose primary federal regulator is the OCC, and CBPA, a Pennsylvania-chartered savings bank regulated by the Department of Banking of the Commonwealth of Pennsylvania and supervised by the FDIC, its primary federal regulator.
Under the U. S.  Basel III capital framework, the Company and its banking subsidiaries must meet specific minimum requirements for the following ratios: common equity tier 1 capital, tier 1 capital, total capital, and tier 1 leverage.
In addition, the Company must not be subject to a written agreement, order or capital directive with any of its regulators.
Failure to meet minimum capital requirements can result in the initiation of certain actions that, if undertaken, could have a material effect on the Company’s Consolidated Financial Statements.
On December 22, 2017, President Trump signed the 2017 Tax Legislation which included a reduction in the corporate tax rate from 35% to 21% For Citizens, this required a revaluation of the Company’s net deferred tax liability with a corresponding adjustment to current tax expense, and resulted in a $331 million net tax benefit.
Included in this net tax benefit was $145 million of expense related to the revaluation of the Company’s deferred tax assets associated with unrealized losses in AOCI.
FASB standards in-place at December 31, 2017 required the Company to revalue all deferred taxes, including those related to balances in AOCI, through current tax expense.
As a result, the Company’s unrealized loss balance in AOCI was not revalued to reflect the new corporate tax rate.
This impact, commonly referred to as the “stranded tax effect”, was taken under consideration by FASB in January 2018 to address concerns primarily raised by banking institutions, including distortion of net income and regulatory capital.
In February 2018, to address the “stranded tax effect”, FASB issued ASU 2018-02, Income StatementReporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which provides entities the election to reclassify the difference between the new and old corporate tax rates resulting from the 2017 Tax Legislation between retained earnings and AOCI for fiscal years beginning after December 15, 2018, with early adoption permitted.
The Company has retrospectively adopted ASU 2018-02, elected to reclassify $145 million between AOCI and retained earnings, including indirect impacts from the decreased federal tax effect on future state tax benefits, and reflected this reclassification in the Company’s 2017 Consolidated Financial Statements, included in this report.
CITIZENS FINANCIAL GROUP, INC.  MANAGEMENT’S DISCUSSION AND ANALYSIS 66 Noninterest Income The following table presents the significant components of our noninterest income:
## Table 2 ##
(1) In first quarter 2017, certain prior period noninterest income amounts reported in the Consolidated Statement of Operations were reclassified to enhance transparency and provide additional granularity, particularly with regard to fee income related to customer activity.
These changes had no effect on net income as previously reported.
(2) Includes net securities impairment losses on securities available for sale recognized in earnings, bank-owned life insurance income and other income.
Noninterest income of $1.5 billion in 2016, increased $75 million, or 5%, compared to 2015, largely driven by a $67 million pre-tax benefit from notable items in other income.
Excluding the impact of these items, adjusted noninterest income* increased $8 million, or 1%, as strength in capital markets fees, service charges and fees and mortgage fees were partially offset by the impact of a reclassification of card reward costs, lower securities gains and trust and investment services fees.
Capital market fees increased $32 million reflecting underlying business momentum and the benefit of enhanced product capabilities.
Service charges increased $22 million, driven by both improved pricing and volume.
Mortgage banking fees increased $11 million from 2015 levels that included higher MSR valuation gains driven by increased secondary origination volume and wider margins.
Card fees decreased $29 million from 2015 results, which were $28 million higher given the reclassification of card reward costs.
Provision for Credit Losses Provision for credit losses of $369 million increased $67 million, or 22%, from $302 million in 2015, largely reflecting the impact of higher commercial net charge-offs, primarily in commodities-related portfolios and commercial real estate driven by the impact of a reduction in recoveries as well as the impact of loan growth.2016 results reflected a $34 million reserve build compared to an $18 million reserve build in 2015, as the impact of loan growth was partially offset by loan mix shifts into higher quality retail products.
The provision for loan and lease losses is the result of a detailed analysis performed to estimate an appropriate and adequate ALLL.
The total provision for credit losses includes the provision for loan and lease losses as well as the provision for unfunded commitments.
Refer to “—Analysis of Financial Condition — Allowance for Credit Losses and Nonperforming Assets” for more information.
Noninterest Expense The following table presents the significant components of our noninterest expense:
## Table 3 ##
appropriate statistical bases.
Total expense for repairs and maintenance incurred was $2.5 billion for 2015, $2.4 billion for 2014, and $2.3 billion for 2013.
Assets held under capital leases are recorded at the lower of the net present value of the minimum lease payments or the fair value of the leased asset at the inception of the lease.
Amortization expense is computed using the straight-line method over the shorter of the estimated useful lives of the assets or the period of the related lease.13.
Accounts Payable and Other Current Liabilities
## Table 4 ##
[a] Beginning in 2015, the timing of the dividend declaration and payable dates was aligned to occur within the same quarter.
The 2015 dividends paid amount includes the fourth quarter 2014 dividend of $438 million, which was paid on January 2, 2015, the first quarter 2015 dividend of $484 million, which was paid on March 30, 2015, the second quarter 2015 dividend of $479 million, which was paid on June 30, 2015, the third quarter 2015 dividend of $476 million, which was paid on September 30, 2015, as well as the fourth quarter 2015 dividend of $467 million, which was paid on December 30, 2015.14.
Financial Instruments Strategy and Risk – We may use derivative financial instruments in limited instances for other than trading purposes to assist in managing our overall exposure to fluctuations in interest rates and fuel prices.
We are not a party to leveraged derivatives and, by policy, do not use derivative financial instruments for speculative purposes.
Derivative financial instruments qualifying for hedge accounting must maintain a specified level of effectiveness between the hedging instrument and the item being hedged, both at inception and throughout the hedged period.
We formally document the nature and relationships between the hedging instruments and hedged items at inception, as well as our riskmanagement objectives, strategies for undertaking the various hedge transactions, and method of assessing hedge effectiveness.
Changes in the fair market value of derivative financial instruments that do not qualify for hedge accounting are charged to earnings.
We may use swaps, collars, futures, and/or forward contracts to mitigate the risk of adverse movements in interest rates and fuel prices; however, the use of these derivative financial instruments may limit future benefits from favorable interest rate and fuel price movements.
Market and Credit Risk – We address market risk related to derivative financial instruments by selecting instruments with value fluctuations that highly correlate with the underlying hedged item.
We manage credit risk related to derivative financial instruments, which is minimal, by requiring high credit standards for counterparties and periodic settlements.
At December 31, 2015, and 2014, we were not required to provide collateral, nor had we received collateral, relating to our hedging activities.
Interest Rate Fair Value Hedges – We manage our overall exposure to fluctuations in interest rates by adjusting the proportion of fixed and floating rate debt instruments within our debt portfolio over a given period.
We generally manage the mix of fixed and floating rate debt through the issuance of targeted amounts of each as debt matures or as we require incremental borrowings.
We employ derivatives, primarily swaps, as one of the tools to obtain the targeted mix.
In addition, we also obtain flexibility in managing interest costs and the interest rate mix within our debt portfolio by evaluating the issuance of and managing outstanding callable fixed-rate debt securities.
Swaps allow us to convert debt from fixed rates to variable rates and thereby hedge the risk of changes in the debt’s fair value attributable to the changes in interest rates.
We account for swaps as fair value hedges using the short-cut method; therefore, we do not record any ineffectiveness within our

Tables referenced above, in order (Table 0 first):
<table><tr><td></td><td colspan="2">Estimated % Change inNet Interest Income over 12 Months December 31,</td></tr><tr><td>Basis points</td><td>2017</td><td>2016</td></tr><tr><td>Instantaneous Change in Interest Rates</td><td></td><td></td></tr><tr><td>+200</td><td>9.6%</td><td>11.3%</td></tr><tr><td>+100</td><td>4.9</td><td>5.6</td></tr><tr><td>-100</td><td>-5.9</td><td>-6.9</td></tr><tr><td>Gradual Change in Interest Rates</td><td></td><td></td></tr><tr><td>+200</td><td>5.1</td><td>5.9</td></tr><tr><td>+100</td><td>2.7</td><td>3.1</td></tr><tr><td>-100</td><td>-1.8</td><td>-3.0</td></tr></table>
<table><tr><td></td><td colspan="3">Year Ended December 31,</td></tr><tr><td>(in millions, except share and per-share data)</td><td>2017</td><td>2016</td><td>2015</td></tr><tr><td>Numerator (basic and diluted):</td><td></td><td></td><td></td></tr><tr><td>Net income</td><td>$1,652</td><td>$1,045</td><td>$840</td></tr><tr><td>Less: Preferred stock dividends</td><td>14</td><td>14</td><td>7</td></tr><tr><td>Net income available to common stockholders</td><td>$1,638</td><td>$1,031</td><td>$833</td></tr><tr><td>Denominator:</td><td></td><td></td><td></td></tr><tr><td>Weighted-average common shares outstanding - basic</td><td>502,157,440</td><td>522,093,545</td><td>535,599,731</td></tr><tr><td>Dilutive common shares: share-based awards</td><td>1,527,651</td><td>1,837,173</td><td>2,621,167</td></tr><tr><td>Weighted-average common shares outstanding - diluted</td><td>503,685,091</td><td>523,930,718</td><td>538,220,898</td></tr><tr><td>Earnings per common share:</td><td></td><td></td><td></td></tr><tr><td>Basic</td><td>$3.26</td><td>$1.97</td><td>$1.55</td></tr><tr><td>Diluted</td><td>3.25</td><td>1.97</td><td>1.55</td></tr></table>
<table><tr><td></td><td colspan="2">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>Service charges and fees<sup>-1</sup></td><td>$522</td><td>$500</td><td>$22</td><td>4%</td></tr><tr><td>Card fees</td><td>203</td><td>232</td><td>-29</td><td>-13</td></tr><tr><td>Capital markets fees<sup>-1</sup></td><td>136</td><td>104</td><td>32</td><td>31</td></tr><tr><td>Trust and investment services fees</td><td>146</td><td>157</td><td>-11</td><td>-7</td></tr><tr><td>Letter of credit and loan fees<sup>-1</sup></td><td>112</td><td>110</td><td>2</td><td>2</td></tr><tr><td>Foreign exchange and interest rate products<sup>-1</sup></td><td>103</td><td>90</td><td>13</td><td>14</td></tr><tr><td>Mortgage banking fees</td><td>112</td><td>101</td><td>11</td><td>11</td></tr><tr><td>Securities gains, net</td><td>16</td><td>29</td><td>-13</td><td>-45</td></tr><tr><td>Other income<sup>-1(2)</sup></td><td>147</td><td>99</td><td>48</td><td>48</td></tr><tr><td>Noninterest income</td><td>$1,497</td><td>$1,422</td><td>$75</td><td>5%</td></tr></table>
<table><tr><td></td><td colspan="2">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>Salaries and employee benefits</td><td>$1,709</td><td>$1,636</td><td>$73</td><td>4%</td></tr><tr><td>Outside services</td><td>377</td><td>371</td><td>6</td><td>2</td></tr><tr><td>Occupancy</td><td>307</td><td>319</td><td>-12</td><td>-4</td></tr><tr><td>Equipment expense</td><td>263</td><td>257</td><td>6</td><td>2</td></tr><tr><td>Amortization of software</td><td>170</td><td>146</td><td>24</td><td>16</td></tr><tr><td>Other operating expense</td><td>526</td><td>530</td><td>-4</td><td>-1</td></tr><tr><td>Noninterest expense</td><td>$3,352</td><td>$3,259</td><td>$93</td><td>3%</td></tr></table>
<table><tr><td>Millions</td><td>Dec. 31, 2015</td><td>Dec. 31, 2014</td></tr><tr><td>Accounts payable</td><td>$743</td><td>$877</td></tr><tr><td>Income and other taxes payable</td><td>434</td><td>412</td></tr><tr><td>Accrued wages and vacation</td><td>391</td><td>409</td></tr><tr><td>Interest payable</td><td>208</td><td>178</td></tr><tr><td>Accrued casualty costs</td><td>181</td><td>249</td></tr><tr><td>Equipment rents payable</td><td>105</td><td>100</td></tr><tr><td>Dividends payable [a]</td><td>-</td><td>438</td></tr><tr><td>Other</td><td>550</td><td>640</td></tr><tr><td>Total accounts payable and other current liabilities</td><td>$2,612</td><td>$3,303</td></tr></table>

Question: What will Service charges and fees be like in 2017 if it develops with the same increasing rate as current? (in million)
Answer: 544.968
Reasoning program: subtract(522,500), divide(#0,500), add(const_1,#1), multiply(522,#2)