How did Citizens perform in the second quarter of 2025?

Citizens reported net income of $436 million and diluted EPS of $0.92, up from $0.77 in the prior quarter and $0.78 a year earlier. Pre-provision profit rose 16% sequentially to $718 million, and the efficiency ratio improved to 64.8%. No notable items affected either 1Q25 or 2Q25.

What drove the improvement in net interest income and margin?

NII increased 3.3% QoQ to $1.437 billion, and NIM rose 5 bps to 2.95% (FTE). Management attributed this to time-based benefits from Non-Core runoff, a smaller terminated swap impact, lower deposit costs and favorable fixed-rate asset repricing. Management expects NIM to reach roughly 3.05-3.10% in 4Q25 and 3.25-3.50% over the medium term.

Are there any risks or pressures investors should watch?

Capital markets fees were held back by several large M&A deals that slipped into July, and mortgage and other income are expected to decline in 3Q25 per the outlook. Commercial real estate remains a focus, with General Office exposure of $2.7 billion carrying 11.8% reserve coverage. The total ACL ratio also edged down slightly, to 1.59% from 1.61%.

What is the capital return outlook?

Citizens repurchased $200 million of common stock and paid $185 million in common dividends in 2Q25. The board raised the repurchase program capacity to $1.5 billion on June 12, 2025, and management expects roughly $75 million in share repurchases in 3Q25. The quarterly dividend is $0.42 per share, payable August 14, 2025. The CET1 ratio is expected to be modestly lower in 3Q25, though that is stated as a company outlook rather than a certainty.

What is the Private Bank contributing to results?

The Private Bank contributed $0.06 to 2Q25 EPS, up $0.02 from the prior quarter. Management targets a 5%+ earnings contribution to total CFG in 2025 and a return on equity of roughly 20-24% for FY2025. The business has added wealth teams and expanded its footprint, and management expects AUM to reach roughly $11 billion by year-end 2025.

CFG 8-K: Earnings & Results & Regulation FD

01—Abstract

Summary

Summary of the 8-K filed July 17, 2025. Cited figures are marked; the original filing is the authoritative source.

Citizens Financial Group (CFG) reported second quarter 2025 net income of $436 million^a, or $0.92 diluted EPS, up from $0.77 in the first quarter and $0.78 a year earlier (underlying EPS of $0.82 in 2Q24, which excluded $32 million of pre-tax notable items).

Pre-provision profit rose 16% sequentially to $718 million^b, driven by net interest income up 3.3% to $1.437 billion on a 5 bp expansion in net interest margin to 2.95% (FTE basis) and noninterest income up 10% to $600 million. Expenses were essentially flat quarter over quarter at $1.319 billion, producing roughly 5% positive operating leverage and an efficiency ratio of 64.8%, down from 67.9%. There were no notable items in either 1Q25 or 2Q25.

Credit trends improved. Net charge-offs were 48 bps, versus 58 bps in the prior quarter (which included a 7 bp hit from the Non-Core education loan sale), and nonaccrual loans fell 4% to $1.5 billion^c. The allowance for credit losses was 1.59% of loans, and coverage of nonaccrual loans was 145%.

Capital remained solid, with a CET1 ratio of 10.6% (about 9.1% adjusted for removal of the AOCI opt-out) and tangible book value per share up 4% to $35.23^d. The company repurchased $200 million of stock and paid $185 million in common dividends, and the board raised its repurchase authorization to $1.5 billion. Management guided to 3Q25 NII up roughly 3-4%, noninterest income up low single digits, and expenses up about 1-1.5%, and it reaffirmed its FY2025 outlook.

It also flagged a multi-year 'Reimagining the Bank' transformation program. For investors, the key drivers are NIM expansion from Non-Core runoff and swap roll-offs, Private Bank growth (contributing $0.06 to EPS), and disciplined expenses. Watch-points include softer capital markets fees, which were pushed out by delayed M&A closings into July, and ongoing commercial real estate and General Office exposure, which carries 11.8% reserve coverage.

02—Key points

Key Highlights

Diluted EPS of $0.92 vs. $0.77 in 1Q25 (+19%) and $0.78 in 2Q24 (+18%); net income of $436 million, up 17% sequentially
Pre-provision profit of $718 million, up 16% QoQ, with positive operating leverage of about 5% and efficiency ratio improving to 64.8% from 67.9%
Net interest margin expanded 5 bps to 2.95% (FTE); NII rose 3.3% QoQ to $1.437 billion on Non-Core runoff, lower swap drag and lower deposit costs
Noninterest income up 10% QoQ to $600 million, led by mortgage banking fees (+24%), wealth fees (+9%) and card fees (+8%); capital markets fees rose 5% but were held back by M&A deals slipping into July
Credit improved: net charge-offs of 48 bps (vs. 58 bps in 1Q25), nonaccrual loans down 4% to $1.5 billion, and ACL coverage steady at 1.59%
Capital strong: CET1 ratio of 10.6%, TBV per share up 4% to $35.23, $385 million returned in the quarter, and buyback authorization raised to $1.5 billion
Management guided 3Q25 NII up ~3-4% with NIM up ~5 bps, expenses up ~1-1.5%, and reaffirmed FY2025 guidance; quarterly dividend declared at $0.42 per share

03—Questions

Frequently Asked Questions

How did Citizens perform in the second quarter of 2025?
Citizens reported net income of $436 million and diluted EPS of $0.92, up from $0.77 in the prior quarter and $0.78 a year earlier. Pre-provision profit rose 16% sequentially to $718 million, and the efficiency ratio improved to 64.8%. No notable items affected either 1Q25 or 2Q25.
What drove the improvement in net interest income and margin?
NII increased 3.3% QoQ to $1.437 billion, and NIM rose 5 bps to 2.95% (FTE). Management attributed this to time-based benefits from Non-Core runoff, a smaller terminated swap impact, lower deposit costs and favorable fixed-rate asset repricing. Management expects NIM to reach roughly 3.05-3.10% in 4Q25 and 3.25-3.50% over the medium term.
Are there any risks or pressures investors should watch?
Capital markets fees were held back by several large M&A deals that slipped into July, and mortgage and other income are expected to decline in 3Q25 per the outlook. Commercial real estate remains a focus, with General Office exposure of $2.7 billion carrying 11.8% reserve coverage. The total ACL ratio also edged down slightly, to 1.59% from 1.61%.
What is the capital return outlook?
Citizens repurchased $200 million of common stock and paid $185 million in common dividends in 2Q25. The board raised the repurchase program capacity to $1.5 billion on June 12, 2025, and management expects roughly $75 million in share repurchases in 3Q25. The quarterly dividend is $0.42 per share, payable August 14, 2025. The CET1 ratio is expected to be modestly lower in 3Q25, though that is stated as a company outlook rather than a certainty.
What is the Private Bank contributing to results?
The Private Bank contributed $0.06 to 2Q25 EPS, up $0.02 from the prior quarter. Management targets a 5%+ earnings contribution to total CFG in 2025 and a return on equity of roughly 20-24% for FY2025. The business has added wealth teams and expanded its footprint, and management expects AUM to reach roughly $11 billion by year-end 2025.

04—Continue

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