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Information Classification: INTERNAL
October 2017
October 18 – 19, 2017 Boston, MA
CFG Advisory Board Agenda and Presentations
Information Classification: INTERNAL October 3, 2017 2
Citizens Commercial Banking Advisory Board Agenda Wednesday October 18, 2017 Boston Marriott Copley Place, Boston, MA Dinner: State Room Boston, Cityside Room 60 State Street, Boston, MA Subject Lead Time
Organize / finish prep work / Set up welcome desk at hotel Tim Lantzy, Ashley Lundh and Carlton Williams 12 noon
– 3:00pm
Check in lobby area Receive materials for meetings
All attendees Materials available for each attendee at check-in area
3:00pm - 5:00pm
Shuttle to Dinner Shuttle departs promptly at 5:15pm to State Room for dinner 5:00pm – 5:15pm
Reception – State Room All attendees 5:30pm
Welcome and introduction of guest speaker – State Room
Jerry Sargent and Larry Aubin welcome guests Jerry Sargent introduces dinner speaker
6:15pm
Dinner Speaker – State Room James (Jim) E. Rooney President & CEO, Greater Boston Chamber of Commerce
6:30pm
Dinner – State Room Dinner served 7:00pm
Next day instructions Jerry Sargent and Carlton Williams 8:45pm
Adjourn, Shuttle to Hotel Shuttle departs promptly at 9:00pm 9:00pm
Post-Dinner Discussion Hotel lounge area
Any interested attendees 9:15pm
Information Classification: INTERNAL October 3, 2017 3
Citizens Commercial Banking Advisory Board Agenda Thursday October 19, 2017 Boston Marriott Copley Place, Boston, MA Boylston Room (unless otherwise noted) Subject Lead Time
Breakfast All Attendees with Bruce Van Saun, CEO of Citizens Bank 7:30am Welcome & Opening Comments Review action items / updates
Jerry Sargent, Northeast Region Head (Co-Chair) Larry Aubin, President, Aubin Corporation (Co-Chair) 8:15am
Q217 Earnings Review and Business Updates
Don McCree, Head of Commercial Banking Steve Woods, Head of Corporate Banking Ted Swimmer, Head of Corporate Finance & Capital Markets Gary Magnuson, Head of Commercial Real Estate
8:30am
Risk Environment (Credit Conditions) Rob Allen, Chief Credit Officer, Commercial Banking 9:30am
Consumer Bank Update Brad Conner, Head of Consumer Bank 10:00am
Break All Attendees 10:45am
Executive Session Advisory Board members only (and Carlton Williams, CFG) 11:00am
Internal Discussion Room TBD
CFG attendees only 11:00am
Lunch and Executive Session / Feedback All Attendees / Board Roundtable 12:00pm
Current Banking Regulation (and influence on Citizens Bank) Steve Gannon, General Counsel Citizens Bank 1:30pm
Closing Remarks Jerry Sargent and Larry Aubin 2:30pm
Adjourn All Attendees 2:45pm
4 Information Classification: INTERNAL October 3, 2017
Advisory Board Member Listing
External Members
1. Alan Guttman, MidAtlantic Region 2. Baiju Shah, Midwest Region 3. David Hirsch, Northeast Region 4. Dian Taylor, MidAtlantic Region 5. Douglass Karp, Commercial Real Estate 6. Eugene Chaiken, MidAtlantic Region 7. Jim Conway, Northeast Region 8. John Morison, Northeast Region 9. Kevin Washington, Midwest Region 10. Lawrence Aubin, Northeast Region 11. Paul Glantz, Midwest Region 12. Regina Pisa, Northeast Region 13. Sharmain Matlock-Turner, MidAtlantic Region 14. Sam Heleba, Northeast Region
Internal Members
1. Don McCree 2. Steve Woods 3. Ralph Della Ratta 4. Ted Swimmer 5. Gary Magnuson 6. Jerry Sargent 7. Dan Fitzpatrick 8. Brian Peters 9. Chapin Bates 10. Joe Giampetroni 11. Peter Smyth 12. Carlton Williams
Information Classification: INTERNAL
October 2017
Don McCree Vice Chairman and Head of Commercial Banking
CFG Advisory Board
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Commercial: Four strategic imperatives support our strategy
Deepening Product and Advisory Capabilities
Coverage Intensity
Balance Sheet Management
Execution Excellence / Efficient Client-Centric Delivery Model
We strive to be the “Lead Bank” for our target clients by delivering thought leadership
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Commercial: We’ve made strong progress on our initiatives…
Colleagues Industry Expertise Structured Finance Western Reserve Partners
Treasury Solutions FX Options Balance Sheet Relationship Manager
Enablement
40+ product launches /upgrades in past 2 years Treasury Solutions
re-platform in development
1st Offensive ABL Debtor-in-Position and Exit Facility ($60MM)
Supporting Commercial & Retail
Corporate Finance & Advisory alignment
Cash Management sector focus
New Liquidity Sales Team & Escrow Specialist
Attracting talent from top tier banks
New Associate RM role
6th annual Commercial Banking Development class commenced
Bus. Resource Groups
Recycling of Capital
Customer Profitability
CLO (Collateralized Loan Obligation)
Salesforce.com Mobile
Commercial Priority Services
Enhanced Account Planning
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…which is resulting in measurable success
2017 Barlow scores: • 96% for overall satisfaction • 96% for satisfaction with RM
(Peer banks 89% and 92%, respectively)
Q3 ‘17 Bookrunner Rankings
Middle Market Overall:
• 8th by Volume • 7th by # of Deals
Middle Market Sponsored:
• 5th by Volume • 4th by # of Deals
Net Income
Loan Balances
Deposit Balances
Efficiency Ratio
“Best Commercial Bank - 2017”
“50 Most Important People in Commercial Real Estate - 2017” Gary Magnuson and Patrick Burns
“Cross Border Deal of the Year” & Oaklins’ “Deal of the Year - 2017” – WRP
“2017 Women of Influence” – Kim Kashon
Non-Interest Income
Year-Over-Year Results June 30, 2017
“40 Under 40 Awards - 2017” Brian Baker and Dan Bolger
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Deals Done - Commercial Banking September 2017
Source: Commercial Banking Line of Business leaders
Taking the Lead Cap Markets Fees Cash and Deposits Drive Cross-Sell
22 Leadership Positions
Including 15 Lead Left and 7 Joint Lead Arranger Roles
High Yield Bonds $350M Bond Fees
Swap
$235M Revenue
$12MM Capital Markets fees
$ 9.1MM MCIV $ 1.7MM Middle Market $ 1.2MM CRE
$51MM New DDA
$130MM New DDA
Card Solution $204 Annual Revenue
$45MM New DDA
E-Payables $415M Revenue
Community Dev Lending $22.5MM Construction Loan
$4.1MM
Bond & Equity fees
Information Classification: CONFIDENTIAL
October 2017
CFG Advisory Board
Rob Allen Executive Vice President and Chief Credit Officer
Information Classification: CONFIDENTIAL
October 2017
Information Classification: CONFIDENTIAL
October 2017
The last official recession began in December 2007 and it wasn’t even a “traditional” recession given the unique drivers
We haven’t seen a “normal” recession since 2001. Before that? 1990. And then 1980….
The U.S. has not seen double digit inflation since 1981 and the last time it averaged over 5% in a year was in 1990
In 1984, 30-Year Fixed mortgages were over 14% and the most recent peak was 6.75% in 2008
Remember when?
Information Classification: CONFIDENTIAL
October 2017
We have been living for over seven years in the financial equivalent of the land of rainbows and unicorns
Low (essentially zero) inflation
Low interest rates
Slow but steady economic growth
Low unemployment
Information Classification: CONFIDENTIAL
October 2017
If the economy is so good, why aren’t companies borrowing more? Increasing risk appetite from non-bank lenders and overall lack of loan
demand has created the easiest (and cheapest) credit market in history.
How are the debt capital markets changing and how is it impacting the Middle Market?
o The rise of “economic” lenders versus traditional “relationship”
bankers is changing the lending landscape permanently. o Banks have clean balance sheets and are aggressively pursuing
growth in both the Commercial and Retail markets but will they stretch too far?
What will be the catalyst to change this dynamic (for better or worse)?
Information Classification: CONFIDENTIAL
October 2017
CFG Advisory Board
Brad Conner Vice Chairman and Head of Consumer Banking
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Consumer Banking Landscape
Key Industry Trends
Challenges Unique to Citizens Bank
solutions
Digitization Customer behaviors Regulation Emerging role of FinTechs
Complex infrastructure RBS ownership/Investment history Fee businesses Distinct Advantages for Citizens Bank
Student Lending Apple/Merchant Financing Mass Affluent/Affluent Customer Segments
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Strategic priorities will drive our agenda for customers
Deliver a differentiated value proposition for Mass Affluent and Affluent
Re-position our physical and virtual distribution for the future
Grow Consumer Banking, prioritizing primary banking relationships
Deliver frictionless customer experiences while reducing risk and cost
Make break-out investments where we have or can build differentiated capabilities
Improve balance sheet position, with heavy focus on deposit growth
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We’re making great progress
Network Transformation Partnerships SpeciFi Digital
Advisor Customer Journeys
Colleague Development
Peer-to-peer payments
Delivering for Shareholders Serving Customers
solutions
• Net income up 31%
• Strong loan &
deposit growth
• Returns nearing 10%
Information Classification: INTERNAL
October 2017
Steve Gannon Executive Vice President and General Counsel
CFG Advisory Board
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