Citizens Financial Group, Inc. · NYSE:CFG
Citizens Financial — Q3 2018 Earnings Presentation
31 slides from Citizens Financial's earnings presentation, Oct 19, 2018
Slide 1: 3Q18 Financial Results
3Q18 Financial Results October 19, 2018 Exhibit 99.2
Slide 2: Forward-looking statements and use of key performance metrics and non-GAAP financial measures
Forward-looking statements and use of key performance metrics and non-GAAP financial measures This document contains forward-looking statements within the Private Securities Litigation Reform Act of 1995. Statements regarding potential future share repurchases and future dividends are forward-lookin
Slide 3: 3Q18 highlights
Robust capital levels with a common equity tier 1 (“CET1”) ratio of 10.8%; TBV per share of $27.66 remained relatively stable QoQ(1) 3Q18 average deposits increased $4.1 billion, or 4% YoY; average loan-to-deposit ratio of 97.4% Repurchased $400 million of common shares; including common dividends,
Slide 4: Notable Items
Notable Items(1) 3Q18 reported results included $9 million in pre-tax integration costs associated with the August 1, 2018 FAMC acquisition. Please see important information on Key Performance Metrics and Non-GAAP Financial Measures, as applicable, at the beginning and end of this presentation for a
Slide 5: Linked quarter and prior-year quarter results
Linked quarter: Net income available to common stockholders up $11 million, or 3%, and EPS up $0.03, or 3%, reflecting growth in revenue and expense, including the impact of the FAMC acquisition, as well as lower provision expense ROTCE improved 36 bps(1) NII up $27 million, or 2%, reflecting 1% ave
Slide 6: Highlights: 3Q18 Underlying financial summary
4.4% operating leverage Please see important information on Key Performance Metrics and Non-GAAP Financial Measures, as applicable, at the beginning and end of this presentation for an explanation of our use of these metrics and non-GAAP financial measures and their reconciliations to GAAP financial
Slide 7: Net interest income
Highlights Net interest income Linked quarter: NII up $27 million, or 2% Reflects 1% average loan growth and increase in NIM NIM of 3.19% up from 3.18%, and reflected a 1 bp reduction tied to the FAMC acquisition; NIM excluding FAMC of 3.20%(1) Reflects higher loan yields tied to higher rates, parti
Slide 8: Noninterest income
Note: Other income includes bank-owned life insurance and other income. Please see important information on Key Performance Metrics and Non-GAAP Financial Measures, as applicable, at the beginning and end of this presentation for an explanation of our use of these metrics and non-GAAP financial meas
Slide 9: Noninterest expense
â 1% $s in millions Noninterest expense Please see important information on Key Performance Metrics and Non-GAAP Financial Measures, as applicable, at the beginning and end of this presentation for an explanation of our use of these metrics and non-GAAP financial measures and their reconciliations t
Slide 10: Average Loans and Leases
Average Loans and Leases Linked quarter: Average core loans and leases up $1.2 billion, or 1% Core retail up $453 million, with growth in residential mortgage, unsecured and education, partially offset by planned reductions in auto and lower home equity Core commercial loans up $763 million, or 1%,
Slide 11: Average funding and cost of funds
Average funding and cost of funds Highlights $s in billions Average interest-bearing liabilities and DDA Total long-term borrowings Fed funds, repo, ST borrowed funds Term deposits Checking with interest DDA Money market & savings Linked quarter: Total average deposits up $1.9 billion, or 2% Largely
Slide 12: Strong credit-quality trends continue
Strong credit-quality trends continue Allowance for loan and lease losses to nonperforming loans and leases. $s in millions (1) Nonperforming loans Allowance for loan and lease losses Highlights Provision for credit losses, net charge-offs Provision for credit losses Total net c/os Net c/o ratio Cor
Slide 13: Capital and liquidity remain strong
Capital and liquidity remain strong Highlights Capital levels remain at the higher end of the range for regional peers 3Q18 CET1 ratio of 10.8% down 0.4% compared with 2Q18 largely tied to FAMC acquisition and higher stock repurchases(1) LDR of 98.0% compares with 96.9% in 2Q18(3) Fully compliant wi
Slide 14: Strategic initiatives update
Strategic initiatives update Balance Sheet Optimization Grow more attractive risk-adjusted return portfolios NIM up 15 bps YoY excluding FAMC; ~5 bps of this is from our BSO efforts excluding FAMC(1) Core Education, personal unsecured and merchant financing up 20% YoY Industry Verticals’ loans up 19
Slide 15: Balancing investment for long-term with need to deliver consistently improving results
Balancing investment for long-term with need to deliver consistently improving results Commercial Consumer Investing in enhanced data analytics capabilities to enable increased personalization, improved insights, and stronger customer value propositions Creating a partner ecosystem with FinTechs to
Slide 16: Making consistent progress against our financial goals
Making consistent progress against our financial goals Adjusted/ Underlying efficiency ratio(1) ~13 - 15% Key Indicators Adjusted/ Underlying ROTCE(1) EPS Adjusted/Underlying diluted EPS(1) Common equity tier 1 ratio(2) (3) Underlying results(1) Reported results(1) Adjusted results(1) Please see imp
Slide 17: 4Q18 outlook
4Q18 outlook Net interest income, net interest margin Noninterest expense Credit trends, tax rate 4Q18 Underlying outlook (excludes expected notable items) Capital, liquidity and funding Noninterest income $901 million; $876 million excluding FAMC $78 million provision expense 23.2% effective tax ra
Slide 18: Key messages
Key messages Strong 3Q18 results demonstrate continuing disciplined execution Driving attractive top-line growth coupled with strong expense management Delivered Underlying EPS growth of 37% YoY, with Underlying ROTCE improvement to 13.5%(1) Underlying operating leverage excluding FAMC of 4.4% YoY(1
Slide 19: Appendix
Appendix 3% Citizens Fanci Grup re
Slide 20: Year-over-year results
Year-over-year results Excludes loans held for sale. Please see important information on Key Performance Metrics and Non-GAAP Financial Measures, as applicable, at the beginning and end of this presentation for an explanation of our use of these metrics and non-GAAP financial measures and their reco
Slide 21: Linked-quarter results
13.5% 1.20% Linked-quarter results Net income available to common shareholders and EPS $s in millions, except per share data Return on average tangible common equity(2) NI á 3% Underlying á 4% Underlying á 128 bps EPS á 3% Underlying á 6% 10.4% $443 $0.93 $0.91 $0.88 GAAP results Underlying results(
Slide 22: Key performance metrics, Non-GAAP reconciliations
Key performance metrics, Non-GAAP financial measures and reconciliations $s in millions, except share, per share and ratio data
Slide 23: Key performance metrics, Non-GAAP reconciliations
Key performance metrics, Non-GAAP financial measures and reconciliations $s in millions, except share, per share and ratio data
Slide 24: Key performance metrics, Non-GAAP reconciliations
Key performance metrics, Non-GAAP financial measures and reconciliations $s in millions, except share, per share and ratio data
Slide 25: Key performance metrics, Non-GAAP reconciliations
Key performance metrics, Non-GAAP financial measures and reconciliations $s in millions, except share, per share and ratio data
Slide 26: Key performance metrics, Non-GAAP reconciliations
Key performance metrics, Non-GAAP financial measures and reconciliations $s in millions, except share, per share and ratio data
Slide 27: Key performance metrics, Non-GAAP reconciliations – Underlying excluding FAMC
Key performance metrics, Non-GAAP financial measures and reconciliations – Underlying excluding FAMC $s in millions, except share, per share and ratio data
Slide 28: Key performance metrics, Non-GAAP reconciliations – Underlying excluding FAMC
Key performance metrics, Non-GAAP financial measures and reconciliations – Underlying excluding FAMC $s in millions, except share, per share and ratio data
Slide 29: Key performance metrics, Non-GAAP reconciliations – Underlying excluding FAMC
Key performance metrics, Non-GAAP financial measures and reconciliations – Underlying excluding FAMC $s in millions, except share, per share and ratio data
Slide 30: Key performance metrics, Non-GAAP reconciliations – Underlying excluding FAMC
Key performance metrics, Non-GAAP financial measures and reconciliations – Underlying excluding FAMC $s in millions, except share, per share and ratio data
Slide 31: Citizens Financial Group, Inc.
3* Citizens Financial Group, Inc.”
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