10-QPeriod: Q3 FY2019

CITIZENS FINANCIAL GROUP INC/RI Quarterly Report for Q3 Ended Sep 30, 2019

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

Summary

Citizens Financial Group, Inc. (CFG) reported its third-quarter 2019 results, showing a slight increase in net income to $449 million, up 1% from the prior year, while diluted earnings per share rose 7% to $0.97. Total revenue grew 5% to $1.6 billion, driven by a significant 19% increase in noninterest income, primarily from mortgage banking and card fees. However, net interest margin contracted by 10 basis points to 3.10% due to higher funding costs and securities premium amortization, partially offset by stronger asset yields. Noninterest expense increased by 7% due to investments in growth initiatives and higher salaries and employee benefits. The company's CET1 capital ratio stood at 10.3%, remaining well above regulatory minimums. For the first nine months of 2019, net income increased by 7% to $1.3 billion, with diluted EPS up 10% to $2.83. Total revenue also saw a 7% increase to $4.9 billion, supported by growth in both net interest income and noninterest income. The bank maintained a strong balance sheet with total assets of $164.4 billion and total deposits of $124.7 billion, up 4% from the prior year-end. The overall credit quality remained strong, with nonperforming loans and leases decreasing slightly. The company continued to return capital to shareholders through dividends and share repurchases.

Financial Highlights

38 data points
Beta

Revenue

$1.64B

Net Income

$449.00M

27.4% Net Margin

EPS (Diluted)

$0.97

Total Assets

$164.36B

Cash & Equivalents

$3.84B

Free Cash Flow

$393.00M

Financial Statements
Beta
Revenue$1.64B
Interest Expense$393.00M
Net Income$449.00M
EPS (Basic)$0.97
EPS (Diluted)$0.97
Shares Outstanding (Basic)445.70M
Shares Outstanding (Diluted)447.13M

Key Highlights

  • 1Net income for Q3 2019 increased by 1% year-over-year to $449 million.
  • 2Diluted earnings per share grew by 7% to $0.97 in Q3 2019.
  • 3Total revenue increased by 5% to $1.6 billion in Q3 2019, driven by a 19% surge in noninterest income.
  • 4Net interest margin declined by 10 basis points to 3.10% in Q3 2019 due to increased funding costs.
  • 5Noninterest expense rose by 7% in Q3 2019, reflecting investments in growth and higher personnel costs.
  • 6The CET1 capital ratio was 10.3% as of September 30, 2019, exceeding regulatory requirements.
  • 7Total deposits grew by 4% year-over-year to $124.7 billion, indicating strong customer confidence.

Frequently Asked Questions

Citizens Financial Group's net income increased by 1% to $449 million, and diluted earnings per share grew by 7% to $0.97 in the third quarter of 2019 compared to the same period in 2018.

Revenue grew by 5% to $1.6 billion, primarily driven by a significant 19% increase in noninterest income. This growth was largely attributed to strong performance in mortgage banking fees and card fees.

As of September 30, 2019, Citizens Financial Group's Common Equity Tier 1 (CET1) capital ratio was 10.3%, which is comfortably above the regulatory minimum requirements.

Overall credit quality remained strong. Nonperforming loans and leases slightly decreased, and the allowance for loan and lease losses as a percentage of loans and leases increased slightly to 1.07%, indicating prudent credit risk management.