10-QPeriod: Q2 FY2019

CITIZENS FINANCIAL GROUP INC/RI Quarterly Report for Q2 Ended Jun 30, 2019

Filed August 6, 2019For Securities:CFGCFG-PHCFG-PECFG-PI

Summary

Citizens Financial Group, Inc. (CFG) reported solid performance for the second quarter and first half of 2019, demonstrating growth in revenue, net income, and earnings per share compared to the prior year. Key drivers included strong noninterest income growth, up 19% year-over-year for the quarter, and a 4% increase in net interest income. While noninterest expense also rose by 9% due to investments in growth initiatives, the company managed its efficiency ratio to remain relatively stable on an underlying basis. Loan and deposit growth were also positive, with average loans increasing 4% and average deposits up 7% year-over-year for the quarter. Capital and liquidity positions remained strong, well above regulatory minimums, providing a stable foundation for future operations and capital returns to shareholders.

Financial Highlights

38 data points
Beta

Revenue

$1.63B

Net Income

$453.00M

27.8% Net Margin

EPS (Diluted)

$0.95

Total Assets

$162.75B

Cash & Equivalents

$3.04B

Free Cash Flow

$105.00M

Financial Statements
Beta
Revenue$1.63B
Interest Expense$414.00M
Net Income$453.00M
EPS (Basic)$0.95
EPS (Diluted)$0.95
Shares Outstanding (Basic)458.15M
Shares Outstanding (Diluted)459.30M

Key Highlights

  • 1Net income increased by 7% to $453 million in Q2 2019 compared to $425 million in Q2 2018.
  • 2Diluted earnings per share rose by 8% to $0.95 in Q2 2019 from $0.88 in Q2 2018.
  • 3Total revenue grew by 8% to $1.6 billion in Q2 2019 compared to $1.5 billion in Q2 2018.
  • 4Net interest income increased by 4% to $1.2 billion in Q2 2019, supported by loan growth and stable net interest margin.
  • 5Noninterest income surged by 19% to $462 million in Q2 2019, driven by mortgage banking, capital markets, trust and investment services, and card fees.
  • 6Average loans and leases increased by 4% to $117.8 billion in Q2 2019 compared to Q2 2018.
  • 7Average deposits increased by 7% to $123.2 billion in Q2 2019 compared to Q2 2018.

Frequently Asked Questions

Citizens Financial Group reported a 7% increase in net income to $453 million in the second quarter of 2019, up from $425 million in the same period of 2018. Diluted earnings per share also grew by 8% to $0.95 from $0.88.

Total revenue increased by 8% year-over-year, driven by a 4% growth in net interest income to $1.2 billion and a significant 19% increase in noninterest income to $462 million. This noninterest income growth was primarily attributed to higher mortgage banking fees, capital markets fees, trust and investment services fees, and card fees.

Noninterest expense increased by 9% to $951 million in Q2 2019, largely reflecting investments in growth initiatives. However, on an underlying (non-GAAP) basis, the efficiency ratio remained stable at 58.0%, indicating that the company is managing costs effectively relative to income despite these investments.

The company saw healthy growth in both loans and deposits. Average loans and leases increased by 4% to $117.8 billion in Q2 2019 compared to the prior year, with growth seen in both commercial and retail segments. Average deposits also grew by 7% to $123.2 billion, primarily in term deposits, savings, and checking accounts with interest.