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.

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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 Fall

Total 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 Decline

As 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 Bag

As 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 Improves

As 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 Update

In the fourth quarter of 2024, CFG repurchased $225 million of common shares and paid $188 million in common dividends.

Our View on CFG

Citizens 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. 

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

Wintrust 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.

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Commerce Bancshares, Inc. (CBSH) : Free Stock Analysis Report

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