Citizens Financial Group, Inc. · NYSE:CFG
Citizens Financial — Q1 2019 Earnings Presentation
30 slides from Citizens Financial's earnings presentation, Apr 18, 2019
Slide 1: 1Q19 Financial Results
1Q19 Financial Results April 18, 2019 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 meaning of the Private Securities Litigation Reform Act of 1995. Statements regarding potential future share repurchases and future dividends are
Slide 3: 1Q19 GAAP financial summary
1Q19 GAAP financial summary See page 29 for notes and important information on Key Performance Metrics and Non-GAAP Financial Measures, as applicable, including “Underlying” results. “Underlying” results exclude the impact of notable items described on page 19.
Slide 4: Provision expense stable, with other credit metrics reflecting good credit quality
Provision expense of $85 million was stable, with other credit metrics continuing to reflect good credit quality Overall credit quality remains strong; NPLs of 66 bps of loans decreased 2 bps QoQ and 12 bps YoY NPL coverage ratio of 160% vs. 156% in 4Q18 and 144% in 1Q18 Allowance to loans and lease
Slide 5: 1Q19 Underlying financial summary highlights
Highlights 1Q19 Underlying financial summary(1) Linked quarter: Underlying net income available to common stockholders down 7%, and EPS of $0.93 down 5% NII relatively stable as 1.5% average loan growth was offset by a $20 million decrease tied to day count Underlying noninterest income relatively s
Slide 6: Net interest income highlights
Highlights Net interest income Linked quarter: NII down modestly, reflecting 1.5% average loan growth and stable NIM, partially offset by a $20 million decrease tied to day count FTE basis NIM of 3.25% was stable Reflects higher loan yields, including the benefit of higher short-term interest rates
Slide 7: Underlying noninterest income
Underlying noninterest income(1) Highlights Linked quarter: Underlying noninterest income was up $2 million. Excluding Acquisitions, noninterest income increased $9 million, or 2%, despite seasonality(1) Record capital markets fees of $54 million were up $9 million, or 20%, driven by an increase in
Slide 8: Underlying noninterest expense
$s in millions Underlying noninterest expense(1) Highlights Linked quarter: Underlying noninterest expense was up $26 million, or 3% Underlying salaries and employee benefits increased $31 million, or 6%, given an increase tied to seasonally higher payroll taxes, 401(k) matching and stock-based comp
Slide 9: Average loans and leases
Average loans and leases Highlights YoY Loan Growth á 6% á 3% á 10% Total core Total core retail Total core commercial Total core commercial loans and leases Total core retail loans (2) Linked quarter: Average core loans and leases up $1.8 billion, or 1.6% Core commercial loans up $1.4 billion, or 3
Slide 10: Average deposits
Linked quarter: Total average deposits up $2.6 billion, or 2% Largely reflects growth in term, savings and checking with interest, partially offset by a reduction in demand deposits and money market accounts Citizens Access® raised ~$4.6 billion through quarter end with an average balance of $3.9 bi
Slide 11: Strong credit-quality trends continue
Strong credit-quality trends continue $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 Core c/o ratio Overall credit quality remains strong, reflecting growth in
Slide 12: Capital levels remain at the higher end of the range for regional peers
Capital levels remain at the higher end of the range for regional peers 1Q19 CET1 ratio of 10.5% down 11 bps compared with 4Q18 driven by capital actions, acquisitions and RWA growth(1) LDR of 94.9% compares with 97.6% in 4Q18 Fully compliant with LCR(2) 2018 CCAR plan reflects further commitment to
Slide 13: 1Q19 Strategic initiatives update
1Q19 Strategic initiatives update Balance Sheet Optimization Grow more attractive risk-adjusted return portfolios NIM up 4 bps YoY with benefit driven by BSO efforts, largely offset by impact of DDA migration and other deposit mix items Core education, personal unsecured and merchant financing up 17
Slide 14: 2Q19 outlook
2Q19 outlook Net interest income, net interest margin Noninterest expense Credit trends, tax rate 2Q19 Underlying outlook (includes the impact of acquisitions and excludes expected notable items) Capital Noninterest income $932 million $85 million provision expense 22.4% effective tax rate 1Q19 Unde
Slide 15: Key messages
Key messages Citizens 1Q19 results highlight disciplined execution and continued momentum Delivered EPS growth of 18% YoY, 19% on Underlying basis(1) 13.0% ROTCE, 13.1% on Underlying basis(1) 59.0% efficiency ratio, 58.7% on Underlying basis(1) Operating leverage of 2.6% YoY, 5.0% on Underlying basi
Slide 16: Appendix
Appendix Xx Citizens nancial Group,
Slide 17: Making consistent progress against our financial targets
Making consistent progress against our financial targets Adjusted/ Underlying efficiency ratio(1) ~14 – 16% 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) Jan 2019 Me
Slide 18: Year-over-Year results
Year-over-Year results Pre-provision profit $s in millions Return on average total tangible assets Net income available to common shareholders and EPS $s in millions, except per share data Return on average tangible common equity Period-end loans $s in billions Period-end deposits $s in billions á 6
Slide 19: Notable Items
Notable Items(1) Several items have been excluded from reported results to better reflect Underlying operating results.(1) First quarter 2019 and third and fourth quarter 2018 results reflect notable items related to integration costs primarily tied to the August 1, 2018 Franklin American Mortgage C
Slide 20: Reported noninterest income and noninterest expense summary
Reported noninterest income and noninterest expense summary $s in millions
Slide 21: Key performance metrics, Non-GAAP financial measures and reconciliations
Key performance metrics, Non-GAAP financial measures and reconciliations $s in millions, except share, per share and ratio data
Slide 22: Key performance metrics, Non-GAAP financial measures and 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 financial measures and 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 financial measures and 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 financial measures and 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 financial measures and reconciliations
Key performance metrics, Non-GAAP financial measures and reconciliations $s in millions, except share, per share and ratio data
Slide 27: Non-GAAP reconciliations – Underlying excluding Acquisitions
Key performance metrics, Non-GAAP financial measures and reconciliations – Underlying excluding Acquisitions $s in millions, except share, per share and ratio data
Slide 28: Non-GAAP reconciliations – Underlying excluding Acquisitions
Key performance metrics, Non-GAAP financial measures and reconciliations – Underlying excluding Acquisitions 28 $s in millions, except share, per share and ratio data
Slide 29: Notes on Key Performance Metrics and Non-GAAP Financial Measures
Notes Notes on Key Performance Metrics and Non-GAAP Financial Measures 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
Slide 30: Citizens Financial Group, Inc.
3* Citizens Financial Group, Inc.”
Citizens Financial Group — Q1 2019 Earnings Presentation on 6ix