10-QPeriod: Q1 FY2025

CITIZENS FINANCIAL GROUP INC/RI Quarterly Report for Q1 Ended Mar 31, 2025

Filed May 1, 2025For Securities:CFGCFG-PHCFG-PECFG-PI

Summary

Citizens Financial Group, Inc. (CFG) reported its first-quarter 2025 results, showing a net income of $373 million, an increase of $39 million compared to the prior year period, leading to diluted earnings per share of $0.77. While total revenue saw a slight decrease of $24 million to $1.9 billion, primarily due to a 4% drop in net interest income, the company improved its efficiency ratio to 67.91% and saw its Return on Tangible Common Equity (ROTCE) rise to 9.64%. The company also highlighted a 5% increase in tangible book value per common share to $33.97, reflecting effective capital management. Key strategic actions during the quarter included the sale of $1.9 billion of non-core education loans, which is expected to be accretive to key financial metrics. Additionally, CFG issued $750 million in senior notes and repurchased $200 million of its common stock. The company continues to navigate a complex operating environment characterized by interest rate sensitivity, economic uncertainties, and evolving regulatory landscapes, including potential changes to climate disclosure rules and the Community Reinvestment Act framework.

Financial Highlights

36 data points
Beta

Revenue

$1.94B

Net Income

$373.00M

19.3% Net Margin

EPS (Diluted)

$0.77

Total Assets

$220.15B

Cash & Equivalents

$11.54B

Free Cash Flow

-$213.00M

Financial Statements
Beta
Revenue$1.94B
Net Income$373.00M
EPS (Basic)$0.78
EPS (Diluted)$0.77
Shares Outstanding (Basic)438.32M
Shares Outstanding (Diluted)442.20M

Key Highlights

  • 1Net income increased by $39 million to $373 million, with diluted EPS rising to $0.77.
  • 2Total revenue decreased by $24 million to $1.9 billion, driven by a 4% decline in net interest income.
  • 3Efficiency ratio improved to 67.91% from 69.33% year-over-year.
  • 4Return on Tangible Common Equity (ROTCE) increased to 9.64% from 8.86%.
  • 5Tangible book value per common share grew 5% to $33.97.
  • 6Completed the sale of $1.9 billion of non-core education loans, expected to be accretive.
  • 7Issued $750 million in senior notes and repurchased $200 million of common stock during the quarter.

Frequently Asked Questions

The decrease in net interest income for the three months ended March 31, 2025, compared to the same period in 2024, was primarily driven by a 3% decrease in average interest-earning assets, although this was partially offset by a decrease of 3% in average interest-bearing liabilities. Net interest income decreased by $51 million, or 4%, to $1.39 billion.

The sale of $1.9 billion of non-core education loans resulted in a $25 million charge-off, which was covered by existing reserves. This transaction is expected to be accretive to net interest margin, Earnings Per Share (EPS), and Return on Tangible Common Equity (ROTCE).

As of March 31, 2025, Citizens Financial Group (CFG) maintained strong regulatory capital ratios. The Common Equity Tier 1 (CET1) capital ratio was 10.6%, and the Tier 1 capital ratio was 11.9%. For its banking subsidiary, Citizens Bank, National Association (CBNA), the CET1 ratio was 12.3% and the Tier 1 capital ratio was 12.3%. These ratios are well above the required minimums, including buffer requirements.

The company manages interest rate risk through various strategies, including the use of interest rate swaps as part of its Asset Liability Management (ALM) strategy. These swaps help manage exposure to floating-rate assets and wholesale funding, as well as hedge market risk. The company's balance sheet is currently described as slightly asset-sensitive, meaning net interest income would benefit from an increase in interest rates, with exposures kept within management-established limits.