Citizens Financial Group, Inc. · NYSE:CFG

Citizens Financial — Q4 2023 Earnings Presentation

28 slides from Citizens Financial's earnings presentation, Jan 18, 2024

1. Slide 1: Financial Supplement Fourth Quarter and Full Year 2023

   Financial Supplement Fourth Quarter and Full Year 2023 1

2. Slide 2: Table of Contents

   Table of Contents Page Consolidated Financial Highlights 3 Consolidated Statements of Operations (unaudited) 5 Consolidated Balance Sheets (unaudited) 6 Loans and Deposits 7 Average Balance Sheets, Annualized Yields and Rates 8 Mortgage Banking Fees 10 Segment Financial Highlights 11 Credit-Related

3. Slide 3: Consolidated Financial Highlights

   CONSOLIDATED FINANCIAL HIGHLIGHTS (dollars in millions, except per share data) QUARTERLY TRENDS FULL YEAR 4Q23 Change 2023 Change 4Q23 3Q23 2Q23 1Q23 4Q22 3Q23 4Q22 2023 2022 2022 $/bps % $/bps % $/bps % SELECTED OPERATING DATA Total revenue $1,988 $2,014 $2,094 $2,128 $2,200 ($26) (1%) ($212) (10%)

4. Slide 4: Consolidated Financial Highlights, Continued

   CONSOLIDATED FINANCIAL HIGHLIGHTS, CONTINUED (dollars in millions, except per share data) QUARTERLY TRENDS FULL YEAR 4Q23 Change 2023 Change 4Q23 3Q23 2Q23 1Q23 4Q22 3Q23 4Q22 2023 2022 2022 $/bps % $/bps % $/bps % FINANCIAL RATIOS Net interest margin 2.90 % 3.03 % 3.16 % 3.29 % 3.29 % (13) bps (39)

5. Slide 5: Consolidated Statements of Operations (unaudited)

   CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (dollars in millions) QUARTERLY TRENDS FULL YEAR 4Q23 Change 2023 Change 4Q23 3Q23 2Q23 1Q23 4Q22 3Q23 4Q22 2023 2022 2022 $ % $ % $ % INTEREST INCOME Interest and fees on loans and leases $2,144 $2,166 $2,132 $2,047 $1,893 ($22) (1%) $251 13% $8,489

6. Slide 6: Consolidated Balance Sheets (unaudited)

   CONSOLIDATED BALANCE SHEETS (unaudited) (dollars in millions, except par value) PERIOD-END BALANCES AS OF DECEMBER 31, 2023 CHANGE Dec 31, 2023 Sept 30, 2023 June 30, 2023 Mar 31, 2023 Dec 31, 2022 September 30, 2023 December 31, 2022 $ % $ % ASSETS Cash and due from banks $1,794 $1,395 $1,689 $1,28

7. Slide 7: Loans and Deposits

   LOANS AND DEPOSITS (dollars in millions) PERIOD-END BALANCES AS OF DECEMBER 31, 2023 CHANGE Dec 31, 2023 Sept 30, 2023 June 30, 2023 Mar 31, 2023 Dec 31, 2022 Sept 30, 2023 December 31, 2022 $ % $ % LOANS AND LEASES Commercial and industrial $43,826 $46,753 $48,038 $50,450 $51,836 ($2,927) (6%) ($8,

8. Slide 8: Average Balance Sheets, Annualized Yields and Rates (4Q23)

   (dollars in millions) QUARTERLY TRENDS 4Q23 Change 4Q23 3Q23 4Q22 3Q23 4Q22 Average Balances Interest Rate Average Balances Interest Rate Average Balances Interest Rate Average Balances Interest Rate Average Balances Interest Rate INTEREST-EARNING ASSETS Interest-bearing cash and due from banks and

9. Slide 9: Average Balance Sheets, Annualized Yields and Rates (Full Year)

   (dollars in millions) FULL YEAR 2023 Change 2023 2022 2022 Average Balances Interest Rate Average Balances Interest Rate Average Balances Interest Rate INTEREST-EARNING ASSETS Interest-bearing cash and due from banks and deposits in banks $8,531 $451 5.22% $6,195 $128 2.04% $2,336 $323 318 bps Taxab

10. Slide 10: Mortgage Banking Fees Summary

    MORTGAGE BANKING FEES SUMMARY (dollars in millions) QUARTERLY TRENDS FULL YEAR 4Q23 Change 2023 Change 4Q23 3Q23 2Q23 1Q23 4Q22 3Q23 4Q22 2023 2022 2022 $/bps % $/bps % $/bps % MORTGAGE BANKING FEES Production revenue $11 $19 $23 $18 $12 ($8) (42%) ($1) (8%) $71 $84 ($13) (15%) Mortgage servicing re

11. Slide 11: Segment Financial Highlights - Consumer Banking

    SEGMENT FINANCIAL HIGHLIGHTS - CONSUMER BANKING (dollars in millions) QUARTERLY TRENDS FULL YEAR CONSUMER BANKING1 4Q23 Change 2023 Change 4Q23 3Q23 2Q23 1Q23 4Q22 3Q23 4Q22 2023 2022 2022 $/bps % $/bps % $/bps % Net interest income $1,086 $1,067 $1,023 $1,011 $1,014 $19 2% $72 7% $4,187 $3,649 $538

12. Slide 12: Segment Financial Highlights - Commercial Banking

    SEGMENT FINANCIAL HIGHLIGHTS - COMMERCIAL BANKING (dollars in millions) QUARTERLY TRENDS FULL YEAR COMMERCIAL BANKING 4Q23 Change 2023 Change 4Q23 3Q23 2Q23 1Q23 4Q22 3Q23 4Q22 2023 2022 2022 $/bps % $/bps % $/bps % Net interest income $551 $560 $584 $597 $595 ($9) (2%) ($44) (7%) $2,292 $2,103 $189

13. Slide 13: Segment Financial Highlights - Non-Core

    SEGMENT FINANCIAL HIGHLIGHTS - NON-CORE (dollars in millions) QUARTERLY TRENDS FULL YEAR NON-CORE1 4Q23 Change 2023 Change 4Q23 3Q23 2Q23 1Q23 4Q22 3Q23 4Q22 2023 2022 2022 $/bps % $/bps % $/bps % Net interest income ($45) ($41) ($28) ($15) $19 ($4) (10%) ($64) NM ($129) $378 ($507) NM Noninterest i

14. Slide 14: Segment Financial Highlights - Other

    SEGMENT FINANCIAL HIGHLIGHTS - OTHER (dollars in millions) QUARTERLY TRENDS FULL YEAR OTHER1,2 4Q23 Change 2023 Change 4Q23 3Q23 2Q23 1Q23 4Q22 3Q23 4Q22 2023 2022 2022 $ % $ % $ % Net interest income ($104) ($64) $9 $50 $67 ($40) (63%) ($171) NM ($109) ($118) $9 8% Noninterest income 39 34 31 28 51

15. Slide 15: Credit-Related Information: Nonaccrual Loans and Leases

    CREDIT-RELATED INFORMATION (dollars in millions) AS OF DECEMBER 31, 2023 CHANGE Dec 31, 2023 Sept 30, 2023 June 30, 2023 Mar 31, 2023 Dec 31, 2022 Sept 30, 2023 December 31, 2022 $/bps/% % $/bps/% % NONACCRUAL LOANS AND LEASES Commercial and industrial $294 $242 $280 $297 $249 $52 21% $45 18% Commer

16. Slide 16: Credit-Related Information: Loans 90 Days or More Past Due

    CREDIT-RELATED INFORMATION, CONTINUED (dollars in millions) AS OF DECEMBER 31, 2023 CHANGE Dec 31, 2023 Sept 30, 2023 June 30, 2023 Mar 31, 2023 Dec 31, 2022 Sept 30, 2023 December 31, 2022 $/bps % $/bps % LOANS AND LEASES 90 DAYS OR MORE PAST DUE AND ACCRUING Commercial and industrial $6 $4 $2 $21

17. Slide 17: Credit-Related Information: Charge-offs and Recoveries

    CREDIT-RELATED INFORMATION, CONTINUED (dollars in millions) QUARTERLY TRENDS FULL YEAR 4Q23 Change 2023 Change 4Q23 3Q23 2Q23 1Q23 4Q22 3Q23 4Q22 2023 2022 2022 $ % $ % $ % CHARGE-OFFS, RECOVERIES AND RELATED RATIOS GROSS CHARGE-OFFS Commercial and industrial $24 $25 $17 $55 $21 ($1) (4%) $3 14 $121

18. Slide 18: Credit-Related Information: Net Charge-off Rates

    CREDIT-RELATED INFORMATION, CONTINUED (dollars in millions) QUARTERLY TRENDS FULL YEAR 4Q23 Change 2023 Change 4Q23 3Q23 2Q23 1Q23 4Q22 3Q23 4Q22 2023 2022 2022 $/bps % $/bps % $/bps % ANNUALIZED NET CHARGE-OFF (RECOVERY) RATES Commercial and industrial 0.18% 0.18% 0.12% 0.40% 0.12% — bps 6 bps 0.23

19. Slide 19: Credit-Related Information: Allowance for Credit Losses

    CREDIT-RELATED INFORMATION, CONTINUED (dollars in millions) QUARTERLY TRENDS FULL YEAR 4Q23 Change 2023 Change 4Q23 3Q23 2Q23 1Q23 4Q22 3Q23 4Q22 2023 2022 2022 $ % $ % $ % SUMMARY OF CHANGES IN THE COMPONENTS OF THE ALLOWANCE FOR CREDIT LOSSES Allowance for loan and lease losses - beginning $2,080

20. Slide 20: Capital and Ratios

    CAPITAL AND RATIOS (dollars in millions) AS OF FULL YEAR DECEMBER 31, 2023 CHANGE 2023 Change Dec 31, 2023 Sept 30, 2023 June 30, 2023 Mar 31, 2023 Dec 31, 2022 Sept 30, 2023 December 31, 2022 2023 2022 2022 $ % $ % $ % CAPITAL RATIOS AND COMPONENTS (PRELIMINARY) CET1 capital $18,358 $18,360 $18,381

21. Slide 21: Non-GAAP Financial Measures and Reconciliations

    NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS (dollars in millions, except per share data) Non-GAAP Financial Measures This document contains non-GAAP financial measures denoted as Underlying. Underlying results for any given reporting period exclude certain items that may occur in that period whi

22. Slide 22: Non-GAAP Financial Measures and Reconciliations, Continued

    NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS, CONTINUED (dollars in millions, except per share data) QUARTERLY TRENDS FULL YEAR 4Q23 Change 2023 Change 4Q23 3Q23 2Q23 1Q23 4Q22 3Q23 4Q22 2023 2022 2022 $ % $ % $ % Noninterest income, Underlying: Noninterest income (GAAP) A $500 $492 $506 $485 $50

23. Slide 23: Non-GAAP Financial Measures and Reconciliations, Continued

    NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS, CONTINUED (dollars in millions, except per share data) QUARTERLY TRENDS FULL YEAR 4Q23 Change 2023 Change 4Q23 3Q23 2Q23 1Q23 4Q22 3Q23 4Q22 2023 2022 2022 $/bps % $/bps % $/bps % Operating leverage: Total revenue (GAAP) C $1,988 $2,014 $2,094 $2,128

24. Slide 24: Non-GAAP Financial Measures and Reconciliations, Continued

    NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS, CONTINUED (dollars in millions, except per share data) QUARTERLY TRENDS FULL YEAR 4Q23 Change 2023 Change 4Q23 3Q23 2Q23 1Q23 4Q22 3Q23 4Q22 2023 2022 2022 $/bps % $/bps % $/bps % Return on average total tangible assets and return on average total tan

25. Slide 25: Non-GAAP Financial Measures and Reconciliations, Continued

    NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS, CONTINUED (dollars in millions, except per share data) QUARTERLY TRENDS FULL YEAR 4Q23 Change 2023 Change 4Q23 3Q23 2Q23 1Q23 4Q22 3Q23 4Q22 2023 2022 2022 $ % $ % $/bps % Other income, Underlying: Other income (GAAP) $20 $18 $23 $17 $36 $2 11% ($16)

26. Slide 26: Non-GAAP Reconciliations - Segments

    NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS - SEGMENTS1 (dollars in millions) FOURTH QUARTER 2023 THIRD QUARTER 2023 Consumer Banking Commercial Banking Non-Core Other Consolidated Consumer Banking Commercial Banking Non-Core Other Consolidated Net income (loss) available to common stockholders:

27. Slide 27: Non-GAAP Reconciliations - Segments, Continued

    NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS - SEGMENTS, CONTINUED1 (dollars in millions) FOURTH QUARTER 2022 Consumer Banking Commercial Banking Non-Core Other Consolidated Net income (loss) available to common stockholders: Net income (loss) A $284 $358 ($23) $34 $653 Less: Preferred stock divi

28. Slide 28: Non-GAAP Reconciliations - Segments, Continued

    NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS - SEGMENTS, CONTINUED1 (dollars in millions) FULL YEAR 2023 2022 Consumer Banking Commercial Banking Non-Core Other Consolidated Consumer Banking Commercial Banking Non-Core Other Consolidated Net income (loss) available to common stockholders: Net inc

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