8-KOther EventsExhibits & Filings

CITIZENS FINANCIAL GROUP INC/RI 8-K Report, Corporate Update (Jul 22, 2019)

Filed July 22, 2019For Securities:CFGCFG-PHCFG-PECFG-PI

Summary

Citizens Financial Group, Inc. (CFG) reported solid second quarter 2019 results, with net income of $453 million, a 7% increase year-over-year, and diluted earnings per share of $0.95, up 8% from the prior year. These results demonstrate continued operational strength and effective execution of the company's growth strategies. The bank also highlighted strong momentum in fee income, with record results across several key areas including mortgage banking, capital markets, trust and investment services, and card fees. In addition to robust earnings, CFG announced a 13% increase in its quarterly common stock dividend to $0.36 per share, signaling confidence in future performance and commitment to returning capital to shareholders. The company also authorized a significant increase in its share repurchase program, planning to buy back up to $1.275 billion in common stock over the next four quarters. This dual approach to capital return underscores management's focus on enhancing shareholder value.

Key Highlights

  • 1Net income increased 7% year-over-year to $453 million, with diluted EPS up 8% to $0.95.
  • 2Total revenue grew 8% year-over-year to $1.63 billion, driven by a 19% increase in noninterest income and a 4% increase in net interest income.
  • 3Strong fee income momentum with record results in mortgage banking, capital markets, trust and investment services, and card fees.
  • 4Quarterly common stock dividend increased by 13% to $0.36 per share.
  • 5New share repurchase authorization of up to $1.275 billion over four quarters, a 25% increase from the prior year.
  • 6Tangible book value per common share increased 12% year-over-year to $30.88.
  • 7Loan-to-deposit ratio improved to 94.2% at period-end, indicating a stronger liquidity position.

Frequently Asked Questions

Revenue growth was primarily driven by a significant 19% increase in noninterest income, which benefited from record results in mortgage banking, capital markets fees, trust and investment services fees, and card fees. Net interest income also contributed positively, increasing by 4% due to loan growth and a stable net interest margin.

Citizens Financial Group is returning capital through two main avenues: an increased quarterly dividend and an expanded share repurchase program. The quarterly dividend was raised by 13% to $0.36 per share, and the company authorized a $1.275 billion share repurchase program for the upcoming year, which is 25% higher than the previous authorization.

The company reported that overall credit quality remains strong. Nonperforming loans and leases decreased year-over-year, and the ratio of nonperforming loans to total loans improved. While net charge-offs increased due to some commercial loan seasoning and specific losses, the allowance for loan and lease losses remained robust relative to nonperforming loans.

The second quarter 2019 results included a net $5 million after-tax reduction from notable items, primarily related to integration costs associated with the acquisition of Franklin American Mortgage Company (FAMC). These items are excluded from 'Underlying' results to provide a clearer view of ongoing operational performance.