Citizens Financial Q1 Earnings Top Estimates on Fee Income Growth

Citizens Financial Group CFG has reported first-quarter 2025 adjusted earnings per share of 77 cents, which surpassed the Zacks Consensus Estimate of 75 cents. The metric rose 18.4% from the year-ago quarter.Results benefited from a rise in non-interest income, along with reduced expenses. A strong capital position was another positive. However, lower net interest income (NII) and declining loan balances were major headwinds.Net income (GAAP basis) was $373 million, which rose 12% from the prior-year quarter. (See the Zacks Earnings Calendar to stay ahead of market-making news.)CFG’s Revenues & Expenses FallTotal quarterly revenues in the first quarter were $1.94 billion, which missed the Zacks Consensus Estimate by 0.3%. The top line declined 1.2% year over year.Citizens Financial’s NII decreased 4% year over year to $1.39 billion due to a lower net interest margin and a decline in average interest-earning assets. Our estimate for NII was the same as reported. The net interest margin (NIM) shrunk 1 basis point to 2.90% as the impacts of variable-rate asset repricing were largely offset by the benefits of lower funding costs, non-core runoff and fixed-rate asset repricing. Our estimate for NIM was 2.84%.The non-interest income increased 5% year over year to $544 million. The improvement resulted from increased service charges and fees, wealth fees, and mortgage banking income. Our estimate for non-interest income was $562 million.Non-interest expenses decreased 3% to $1.31 billion. The decline was due to a fall in outside services costs, occupancy costs and lower other operating expenses. Our estimate for the metric was $1.34 billion. Underlying non-interest expenses increased 3% from the prior-year quarter.The efficiency ratio of 67.9% in the first quarter decreased from 69.3% in the year-ago quarter. A fall in the efficiency ratio reflects increased profitability.Citizens Financial’s Loan Balance Declines & Deposits RiseAs of March 31, 2025, period-end total loans and leases were $137.6 billion, down 1.1% from the prior-year quarter. Total deposits increased 1.6% to $177.6 billion. Our estimate for total loans and deposits was $139.1 billion and $175 billion, respectively.CFG’s Credit Quality: Mixed BagAs of March 31, 2025, Citizens Financial’s provision for credit losses was $153 million, which declined 10.5% from the year-ago quarter. Our estimate for the metric was $155.9 million.The allowance for credit losses decreased 4% to $2.21 billion.Net charge-offs increased 10% to $200 million. Our estimate for the metric was $188 million.Non-accrual loans and leases rose 8% to $1.58 billion. Our estimate for the metric was $1.59 billion.CFG’s Capital Position ImprovesAs of March 31, 2025, the tier 1 leverage ratio was 9.4%, which increased from 9.3% in the prior-year quarter.The common equity tier 1 capital ratio was 10.6%, unchanged from the prior-year quarter. The total capital ratio was 13.9%, up from 13.8% in the prior-year quarter.Citizens Financial’s Share Repurchase UpdateIn the first quarter of 2025, CFG repurchased $200 million of common shares and paid out $186 million in common dividends.Our View on CFGCitizens Financial’s focus on strategic and efficiency initiatives, and inorganic growth moves aid its financials. A solid liquidity position enables sustainable capital distributions. However, a lower NII and declining loan balances are concerning. Citizens Financial Group, Inc. Price, Consensus and EPS Surprise  Citizens Financial Group, Inc. price-consensus-eps-surprise-chart | Citizens Financial Group, Inc. QuoteCurrently, 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 StocksWintrust Financial Corporation WTFC is scheduled to release first-quarter 2025 earnings on April 21. The Zacks Consensus Estimate for WTFC’s quarterly earnings has been unchanged at $2.52 per share over the past seven days.Bank of Hawaii BOH is scheduled to announce first-quarter 2025 numbers on April 21. Over the past 30 days, the Zacks Consensus Estimate for BOH’s quarterly earnings has been unchanged at 89 cents.Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Wintrust Financial Corporation (WTFC): Free Stock Analysis Report Bank of Hawaii Corporation (BOH): Free Stock Analysis Report Citizens Financial Group, Inc. (CFG): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks