Citizens Financial Q3 Earnings Match Estimates, Revenues Fall Y/Y
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Citizens Financial Group CFG 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.
