Citizens Financial Q4 Earnings Beat Estimates on Fee Income Growth

Citizens Financial Group CFG has reported fourth-quarter 2024 adjusted earnings per share (EPS) of 85 cents, which surpassed the Zacks Consensus Estimate of 83 cents. The bottom line remained unchanged from the year-ago quarter.Find the latest earnings estimates and surprises on the Zacks Earnings Calendar.For 2024, adjusted EPS was $3.25, which beat the Zacks Consensus Estimate of $3.2. However, this compares unfavorably with $3.88 reported in the year-ago quarter.Capital market fees of $121 million rose 39.1% year over year, driven by higher loan syndication and merger and acquisition 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 $401 million, which increased significantly from $189 million reported in the prior-year quarter.For 2024, the company reported net income (GAAP basis) of $1.5 billion, which decreased 6.2% year over year.CFG’s Revenues and Expenses FallTotal quarterly revenues in the second quarter were $1.99 billion, which surpassed the Zacks Consensus Estimate of $1.96 billion. However, the top line declined marginally year over year.Full-year revenues aggregated to $7.81 billion, which decreased 5% year over year. Nonetheless, the top line beat the Zacks Consensus Estimate of $7.79 billion. Citizens Financial’s NII decreased 5.1% year over year to $1.41 billion due to a lower net interest margin and a decline in average interest-earning assets. Our estimate for NII was $1.4 billion. The net interest margin (NIM) shrunk four basis points to 2.86% on the back of increased funding and swap costs and deposit migration, which were partially offset by the benefit of fixed-rate asset repricing and Non-Core run-off. Our estimate for NIM was 2.68%.The non-interest income increased 14.8% to $574 million. The improvement resulted from increased service charges and fees, capital market fees, card fees and wealth fees, and mortgage banking income. Our estimate for non-interest income was $548.8 million. Non-interest expenses decreased 18.4% to $1.32 billion. The decline was due to a fall in equipment and software costs, outside services costs, occupancy costs and lower other operating expenses. Our estimate for the metric was $1.33 billion.Underlying non-interest expenses increased 2% to $1.29 billion from the prior-year quarter. The efficiency ratio of 66.3% in the fourth quarter decreased from 81.1% in the year-ago quarter. A fall in the efficiency ratio reflects increased profitability.CFG’s Loan & Deposit Balances DeclineAs of Dec. 31, 2024, period-end total loans and leases were $139.2 billion, down 1.7% from the prior-year quarter. Total deposits decreased marginally to $174.8 billion. Our estimates for total loans and deposits were $149.1 billion and $179.4 billion, respectively.CFG’s Credit Quality: Mixed BagAs of Dec. 31, 2024, CFG’s provision for credit losses was $162 million, which declined 5.3% from the year-ago quarter. Our estimate for the metric was $135 million.The allowance for credit losses decreased 2.5% to $2.26 billion.Net charge-offs increased 10.5% to $189 million. Our estimate for the metric was $194 million. Non-accrual loans and leases were up 22% to $1.67 billion. Our estimate for the metric was $1.61 billion.CFG’s Capital Position ImprovesAs of Dec. 31, 2024, the tier 1 leverage ratio was 9.4%, which increased from 9.3% reported in the prior-year quarter.The common equity tier 1 capital ratio was 10.8% compared with 10.6% at the end of the prior-year quarter. Further, the total capital ratio was 14%, up from 13.7% reported in the prior-year quarter.CFG’s Share Repurchase UpdateIn the fourth quarter of 2024, CFG repurchased $225 million of common shares and paid $188 million in common dividends.Our View on CFGCitizens Financial’s focus on BSO plans, strategic and efficiency initiatives, and inorganic growth moves aid its financials. A solid liquidity position enables sustainable capital distributions. However, a lower NII, declining loan and deposit balances are concerns. 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 fourth-quarter 2024 earnings on Jan. 31. The company carries a Zacks Rank #2 (Buy) at present.The Zacks Consensus Estimate for WTFC’s quarterly earnings has remained unchanged at $2.52 per share over the past seven days.Commerce Bancshares, Inc. CBSH is scheduled to release fourth-quarter 2024 earnings on Jan. 22. The company carries a Zacks Rank #3 at present.The Zacks Consensus Estimate for CBSH’s quarterly earnings has moved downward to 94 cents per share over the past seven days.Just Released: Zacks Top 10 Stocks for 2025Hurry – you can still get in early on our 10 top tickers for 2025. Handpicked by Zacks Director of Research Sheraz Mian, this portfolio has been stunningly and consistently successful. From inception in 2012 through November, 2024, the Zacks Top 10 Stocks gained +2,112.6%, more than QUADRUPLING the S&P 500’s +475.6%. Sheraz has combed through 4,400 companies covered by the Zacks Rank and handpicked the best 10 to buy and hold in 2025. You can still be among the first to see these just-released stocks with enormous potential. See New Top 10 Stocks >>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 Commerce Bancshares, Inc. (CBSH): Free Stock Analysis Report Wintrust Financial Corporation (WTFC): Free Stock Analysis Report Citizens Financial Group, Inc. (CFG): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks