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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.)
Total 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.
As 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.
As 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.
As 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.
In the first quarter of 2025, CFG repurchased $200 million of common shares and paid out $186 million in common dividends.
Citizens 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-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.
Wintrust 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.
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This article originally published on Zacks Investment Research (zacks.com).
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