On January 17, 2025, Citizens Financial Group Inc (CFG, Financial) released its 8-K filing detailing its financial performance for the fourth quarter of 2024. Citizens Financial Group Inc, headquartered in Providence, Rhode Island, is a bank holding company with a strong presence in consumer and commercial banking. The company operates over 1,100 branches across 14 states, primarily in the Northeast, and manages over $220 billion in total assets.

Performance Overview

Citizens Financial Group Inc reported a net income of $401 million for Q4 2024, translating to an earnings per share (EPS) of $0.83. This figure fell short of the analyst estimate of $0.86. However, the company achieved a total revenue of $1,986 million, surpassing the estimated $1,964.04 million. The annual net income for 2024 was $1.5 billion, with an EPS of $3.03, slightly below the annual estimate of $3.04.

Financial Achievements and Challenges

The company reported a Common Equity Tier 1 (CET1) ratio of 10.8% and a loan-to-deposit ratio (LDR) of 79.6%, indicating a strong capital position and liquidity profile. Despite these achievements, CFG faced challenges such as a 1.7% quarter-over-quarter decline in period-end loans, driven by non-core runoff and lower commercial and industrial (C&I) and commercial real estate (CRE) lending. These challenges could impact future growth if not addressed.

Income Statement Highlights

CFG's net interest income increased by 3% quarter-over-quarter, driven by a 10 basis point improvement in net interest margin (NIM) to 2.87%. Noninterest income rose by 6%, primarily due to higher capital markets fees. However, expenses also increased by 3.5%, reflecting investments in the Private Bank and commercial middle market sectors.

Balance Sheet and Cash Flow

CFG's period-end loans and leases stood at $139.2 billion, down from $141.6 billion in the previous quarter. Average deposits remained stable at $174.3 billion, with notable growth in Private Bank deposits. The company's tangible book value per share decreased by 3.6% quarter-over-quarter to $32.34, reflecting the impact of higher long-term rates.

Commentary and Outlook

“We were pleased to post solid performance in Q4 given strong execution of our key initiatives and nice improvement in our net interest margin,” said Chairman and CEO Bruce Van Saun. “Good sequential growth in revenues delivered a return to positive operating leverage, and our balance sheet remains strong with CET1 at 10.8%, LDR below 80% and credit metrics all trending favorably.”

Analysis

Citizens Financial Group Inc's Q4 2024 results highlight a robust revenue performance, driven by improvements in net interest margin and noninterest income. However, the decline in period-end loans and the increase in expenses pose challenges that the company needs to address to sustain growth. The strong capital and liquidity positions provide a solid foundation for future strategic initiatives.

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Explore the complete 8-K earnings release (here) from Citizens Financial Group Inc for further details.