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Citizens Financial Group CFG has reported second-quarter 2025 adjusted earnings per share of 92 cents, which surpassed the Zacks Consensus Estimate of 88 cents. The metric rose 12.2% from the year-ago quarter.
Results have benefited from a rise in non-interest income and net interest income (NII). The increase in loan balance was encouraging. However, a rise in expenses and declining deposit balances were major headwinds.
Net income (GAAP basis) was $436 million, which rose 11.2% from the prior-year quarter.
Total quarterly revenues in the second quarter were $2.04 billion, which topped the Zacks Consensus Estimate by 1.5%. The top line rose 3.8% year over year.
Citizens Financial’s NII rose 2% year over year to $1.44 billion, driven by higher net interest margin and a rise in average interest-earning assets. Our estimate for NII was the same as reported.
The net interest margin (NIM) expanded 5 basis points year over year to 2.95%, given lower deposit costs and favorable fixed-rate asset repricing. Our estimate for NIM was 2.87%.
The non-interest income increased 8% year over year to $600 million. The improvement resulted from increased capital markets fees, wealth fees, card fees and mortgage banking income. Our estimate for non-interest income was $566 million.
Non-interest expenses increased 1% year over year to $1.32 billion. The rise was due to higher other operating expenses and technology, and vendor-related costs. Our estimate for the metric was $1.33 billion. Underlying non-interest expenses increased 4% from the prior-year quarter.
The efficiency ratio of 64.8% in the second quarter decreased from 66.3% in the year-ago quarter. A fall in the efficiency ratio reflects increased profitability.
As of June 30, 2025, period-end total loans and leases were $139.3 billion, up 1.2% from the prior-year quarter. Total deposits declined 1.4% to $175.1 billion. Our estimate for total loans and deposits was $140.3 billion and $178.6 billion, respectively.
As of June 30, 2025, Citizens Financial’s provision for credit losses was $164 million, which declined 9.9% from the year-ago quarter. Our estimate for the metric was $142 million.
The allowance for credit losses decreased 4% year over year to $2.21 billion.
Net charge-offs decreased 9% to $167 million. Our estimate for the metric was $193.1 million.
Non-accrual loans and leases declined marginally to $1.52 billion. Our estimate for the metric was $1.64 billion.
As of June 30, 2025, the tier 1 leverage ratio was 9.4%, unchanged from the prior-year quarter.
The common equity tier 1 capital ratio was 10.6%, down from 10.7% in the prior-year quarter. The total capital ratio was 13.8%, down from 14% in the prior-year quarter.
In the second quarter of 2025, CFG repurchased $200 million of common shares and paid out $185 million in common dividends.
Citizens Financial’s focus on strategic and efficiency initiatives, and inorganic growth moves aids its financials. A solid liquidity position enables sustainable capital distributions. However, a rise in expenses and declining deposit 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. Quote
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.
Bank of Hawaii BOH is scheduled to announce second-quarter 2025 numbers on July 28.
Over the past seven days, the Zacks Consensus Estimate for BOH’s quarterly earnings has been unchanged at $1.04 per share. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Huntington Bancshares Inc. HBAN is slated to report second-quarter 2025 results on July 18.
Over the past seven days, the Zacks Consensus Estimate for HBAN’s quarterly earnings has been revised 8.6% upward to 38 cents per share.
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This article originally published on Zacks Investment Research (zacks.com).
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