10-QPeriod: Q3 FY2016

CITIZENS FINANCIAL GROUP INC/RI Quarterly Report for Q3 Ended Sep 30, 2016

Filed November 4, 2016For Securities:CFGCFG-PHCFG-PECFG-PI

Summary

Citizens Financial Group, Inc. (CFG) reported solid financial results for the nine months ended September 30, 2016. Net income available to common stockholders increased by 22% year-over-year to $749 million, driven by higher net interest income and controlled noninterest expense. The company's net interest margin improved to 2.85% due to loan growth and a favorable interest rate environment. Loan and lease balances grew by 7% year-over-year, with notable strength in commercial loans and student loans. Asset quality remained stable, with nonperforming loans as a percentage of total loans at 1.05%. Capital ratios remained robust, well above regulatory minimums under Basel III transitional rules, demonstrating strong capital adequacy. The company also announced a capital plan including planned common dividends and share repurchases, underscoring a commitment to returning capital to shareholders. The company's strategic repositioning, including the transfer of certain non-core assets, is progressing, positioning CFG for continued growth and efficiency.

Financial Highlights

36 data points
Beta

Revenue

$1.38B

Net Income

$297.00M

21.5% Net Margin

EPS (Diluted)

$0.56

Total Assets

$147.01B

Cash & Equivalents

$2.92B

Free Cash Flow

$494.00M

Financial Statements
Beta
Revenue$1.38B
Interest Expense$134.00M
Net Income$297.00M
EPS (Basic)$0.56
EPS (Diluted)$0.56
Shares Outstanding (Basic)519.46M
Shares Outstanding (Diluted)521.12M

Key Highlights

  • 1Net income available to common stockholders increased by 22% to $749 million for the nine months ended September 30, 2016, compared to the same period in 2015.
  • 2Net interest income grew by 9% to $2.77 billion for the nine months ended September 30, 2016, driven by loan growth and an improved net interest margin.
  • 3Total loans and leases increased by 6% to $105.5 billion as of September 30, 2016, reflecting growth in both commercial and retail portfolios.
  • 4Asset quality remained stable, with nonperforming loans as a percentage of total loans at 1.05% as of September 30, 2016.
  • 5Common Equity Tier 1 (CET1) capital ratio was 11.3% as of September 30, 2016, well above regulatory requirements.
  • 6The company executed a capital plan approved by the Federal Reserve, including planned dividends and share repurchases.
  • 7Non-interest income increased by 6% to $1.12 billion for the nine months ended September 30, 2016, supported by gains on a TDR transaction and strength in capital markets and service fees.

Frequently Asked Questions

For the nine months ended September 30, 2016, Citizens Financial Group reported a net income available to common stockholders of $749 million, a 22% increase compared to $612 million in the same period of 2015. This growth was primarily driven by higher net interest income and an improvement in the net interest margin.

The company's total loans and leases increased by 6% to $105.5 billion as of September 30, 2016, from $99.0 billion at the end of 2015. This growth was observed in both the commercial (up 9%) and retail (up 4%) portfolios, with notable increases in student loans and residential mortgages.

Citizens Financial Group maintained strong capital adequacy, with its Common Equity Tier 1 (CET1) capital ratio at 11.3% as of September 30, 2016. This ratio is well above the regulatory minimums set by Basel III transitional rules, indicating a solid capital position.

Non-interest expense increased by 2% to $2.5 billion for the first nine months of 2016. This increase included $36 million in notable items (primarily related to efficiency initiatives and asset finance repositioning). Excluding these notable items, adjusted non-interest expense increased by 3%, reflecting investments in salaries, employee benefits, and technology.