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Citizens Financial Q3 Earnings Match Estimates, Revenues Fall Y/Y
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Citizens Financial Group (CFG - Free Report) has reported third-quarter 2024 adjusted earnings per share (EPS) of 79 cents, which matched the Zacks Consensus Estimate. The bottom line declined from 85 cents reported in the year-ago quarter.
Find the latest earnings estimates and surprises on the Zacks Earnings Calendar.
Capital market fees of $94 million surged 40.3% year over year, driven by growth in bond underwriting and merger and acquisition advisory fees, partially offset by lower loan syndication fees.
Results benefited from a rise in non-interest income, along with reduced expenses. Additionally, a strong capital position was a positive factor. However, lower net interest income (NII) and declining loan and deposit balances were major headwinds.
Net income (GAAP basis) was $382 million, down 11.2% from the prior-year quarter.
CFG’s Revenues and Expenses Fall
Total revenues in the second quarter were $1.9 billion, which missed the Zacks Consensus Estimate of $1.94 billion. Also, the top line declined 5.6% year over year.
Citizens Financial’s NII decreased 10.1% year over year to $1.37 billion due to a lower net interest margin and a decline in average interest-earning assets. Our estimate for NII was $1.38 billion.
The net interest margin (NIM) shrunk 27 basis points to 2.76% on the back of increased funding and swap costs and the impact of building liquidity, partially offset by higher yields on interest-earning assets and the benefit of non-core runoff. Our estimate for NIM was 2.60%.
The non-interest income increased 8.1% to $532 million. The improvement resulted from increased service charges and fees, capital market fees, card fees and wealth fees, securities gain and other income. Our estimate for non-interest income was $556.2 million.
Non-interest expenses decreased 2.6% to $1.26 billion. The decline was due to a fall in salaries and employee benefits costs, outside services costs and lower other operating expenses. Our estimate for the metric was $1.34 billion.
The efficiency ratio of 66.2% in the third quarter increased from 64.2% in the year-ago quarter. A rise in the efficiency ratio reflects lower profitability.
CFG’s Loan & Deposit Balances Decline
As of Sept. 30, 2024, period-end total loans and leases were $141.6 billion, down marginally from the prior-year quarter. Total deposits decreased marginally to $175.2 billion. Our estimates for total loans and deposits were $150.8 billion and $184.6 billion, respectively.
CFG’s Credit Quality Deteriorates
As of Sept. 30, 2024, CFG’s provision for credit losses was $172 million, which remained stable from the year-ago quarter. Our estimate for the metric was $149.1 million.
The allowance for credit losses decreased 1.4% to $2.29 billion.
Further, net charge-offs jumped 25.5% to $192 million. Our estimate for the metric was $180.3 million.
Non-accrual loans and leases were up 28.2% to $1.69 billion. Our estimate for the metric was $1.53 billion.
CFG’s Capital Position Improves
As of Sept.30, 2024, the tier 1 leverage ratio was 9.4%, which remained unchanged from the prior-year quarter.
The common equity tier 1 capital ratio was 10.6% compared with 10.4% at the end of the prior-year quarter. Further, the total capital ratio was 13.9%, up from 13.4% reported in the prior-year quarter.
CFG’s Share Repurchase Update
In the third quarter of 2024, CFG repurchased $325 million of common shares and paid $191 million in common dividends.
Our View on CFG
Citizens Financial’s focus on balance sheet organization plans, strategic and efficiency initiatives, and inorganic growth moves aid its financials. A decline in expenses was another positive. However, a lower NII and a challenging operating backdrop are concerns.
Citizens Financial Group, Inc. Price, Consensus and EPS Surprise
BOK Financial Corporation (BOKF - Free Report) is slated to report third-quarter 2024 results on Oct. 21. It carries a Zacks Rank #3 at present.
The Zacks Consensus Estimate for BOKF’s quarterly earnings has remained unchanged at $2 over the past seven days.
Webster Financial Corporation (WBS - Free Report) is scheduled to release second-quarter 2024 earnings on Oct.17. The company carries a Zacks Rank #3 at present.
The Zacks Consensus Estimate for WBS’ quarterly earnings has moved nearly 1% north to $1.35 per share over the past seven days.
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Citizens Financial Q3 Earnings Match Estimates, Revenues Fall Y/Y
Citizens Financial Group (CFG - Free Report) has reported third-quarter 2024 adjusted earnings per share (EPS) of 79 cents, which matched the Zacks Consensus Estimate. The bottom line declined from 85 cents reported in the year-ago quarter.
Find the latest earnings estimates and surprises on the Zacks Earnings Calendar.
Capital market fees of $94 million surged 40.3% year over year, driven by growth in bond underwriting and merger and acquisition advisory fees, partially offset by lower loan syndication fees.
Results benefited from a rise in non-interest income, along with reduced expenses. Additionally, a strong capital position was a positive factor. However, lower net interest income (NII) and declining loan and deposit balances were major headwinds.
Net income (GAAP basis) was $382 million, down 11.2% from the prior-year quarter.
CFG’s Revenues and Expenses Fall
Total revenues in the second quarter were $1.9 billion, which missed the Zacks Consensus Estimate of $1.94 billion. Also, the top line declined 5.6% year over year.
Citizens Financial’s NII decreased 10.1% year over year to $1.37 billion due to a lower net interest margin and a decline in average interest-earning assets. Our estimate for NII was $1.38 billion.
The net interest margin (NIM) shrunk 27 basis points to 2.76% on the back of increased funding and swap costs and the impact of building liquidity, partially offset by higher yields on interest-earning assets and the benefit of non-core runoff. Our estimate for NIM was 2.60%.
The non-interest income increased 8.1% to $532 million. The improvement resulted from increased service charges and fees, capital market fees, card fees and wealth fees, securities gain and other income. Our estimate for non-interest income was $556.2 million.
Non-interest expenses decreased 2.6% to $1.26 billion. The decline was due to a fall in salaries and employee benefits costs, outside services costs and lower other operating expenses. Our estimate for the metric was $1.34 billion.
The efficiency ratio of 66.2% in the third quarter increased from 64.2% in the year-ago quarter. A rise in the efficiency ratio reflects lower profitability.
CFG’s Loan & Deposit Balances Decline
As of Sept. 30, 2024, period-end total loans and leases were $141.6 billion, down marginally from the prior-year quarter. Total deposits decreased marginally to $175.2 billion. Our estimates for total loans and deposits were $150.8 billion and $184.6 billion, respectively.
CFG’s Credit Quality Deteriorates
As of Sept. 30, 2024, CFG’s provision for credit losses was $172 million, which remained stable from the year-ago quarter. Our estimate for the metric was $149.1 million.
The allowance for credit losses decreased 1.4% to $2.29 billion.
Further, net charge-offs jumped 25.5% to $192 million. Our estimate for the metric was $180.3 million.
Non-accrual loans and leases were up 28.2% to $1.69 billion. Our estimate for the metric was $1.53 billion.
CFG’s Capital Position Improves
As of Sept.30, 2024, the tier 1 leverage ratio was 9.4%, which remained unchanged from the prior-year quarter.
The common equity tier 1 capital ratio was 10.6% compared with 10.4% at the end of the prior-year quarter. Further, the total capital ratio was 13.9%, up from 13.4% reported in the prior-year quarter.
CFG’s Share Repurchase Update
In the third quarter of 2024, CFG repurchased $325 million of common shares and paid $191 million in common dividends.
Our View on CFG
Citizens Financial’s focus on balance sheet organization plans, strategic and efficiency initiatives, and inorganic growth moves aid its financials. A decline in expenses was another positive. However, a lower NII and a challenging operating backdrop are concerns.
Citizens Financial Group, Inc. Price, Consensus and EPS Surprise
Citizens Financial Group, Inc. price-consensus-eps-surprise-chart | Citizens Financial Group, Inc. Quote
Currently, Citizens Financial carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Dates & Expectations of Bank Stocks
BOK Financial Corporation (BOKF - Free Report) is slated to report third-quarter 2024 results on Oct. 21. It carries a Zacks Rank #3 at present.
The Zacks Consensus Estimate for BOKF’s quarterly earnings has remained unchanged at $2 over the past seven days.
Webster Financial Corporation (WBS - Free Report) is scheduled to release second-quarter 2024 earnings on Oct.17. The company carries a Zacks Rank #3 at present.
The Zacks Consensus Estimate for WBS’ quarterly earnings has moved nearly 1% north to $1.35 per share over the past seven days.