Citizens reports increase in profit, revenue in 3Q

BRUCE VAN Saun, chairman and CEO of Citizens Financial Group Inc., said he is "pleased to report another very strong quarter of improved financial performance.” / PBN FILE PHOTO/ MICHAEL SALERNO
BRUCE VAN Saun, chairman and CEO of Citizens Financial Group Inc., said he is "pleased to report another very strong quarter of improved financial performance.” / PBN FILE PHOTO/ MICHAEL SALERNO

PROVIDENCE – Citizens Financial Group Inc. on Friday reported third quarter profit growing 35 percent to $297 million, or 56 cents per share, compared with $220 million, or 40 cents per share, during the same period last year.
The Providence-based company also reported year-over-year revenue growing 14.1 percent to $1.38 billion for the quarter ending Sept. 30 compared with $1.2 billion a year ago.
“We are pleased to report another very strong quarter of improved financial performance with good revenue growth, robust positive operating leverage and further progress across all of our key strategic initiatives,” said chairman and CEO Bruce Van Saun, in prepared remarks.
The third quarter results largely benefited from a $19 million after-tax sale of troubled debt in mortgages and home equity. The company had its first open-market buyback program since becoming fully independent, purchasing 11 million shares of common stock, returning $313 million to shareholders, including dividends. The company reported a positive operating leverage year over year of 5.5 percent.
Revenue was fueled by a 10 percent increase in net interest income, reflecting loan growth and an 8-point improvement on the bank’s net interest margin totaling 2.84 percent for the quarter. Total loans and leases and loans held for sale grew 8.32 percent to $106 billion. Total nonperforming loans and leases as a percentage of total loans and leases fell 1 point to 1.05 percent, while allowance for loans and lease losses as a percentage of total loans and leases fell 5 points to 1.18 percent. The growth was slight offset year over year due to lower long-term rates and a decrease in the Federal Reserve Bank stock dividends, according to the company. Citizens, for the fourth quarter, expects loans to grow 1.5-2 percent and its net interest margin to remain relatively stable compared with third quarter results.
At the same time, noninterest income grew 23.2 percent to $435 million, thanks largely to the gain realized through the sale of troubled debt. The company realized strong gains in service charges and fees, capital market fees and mortgage banking fees, which were partially offset by year-over-year reductions in credit card fees, and trust and investment services fees. Citizens expects noninterest income to remain relatively stable for the upcoming quarter compared with the third quarter.
Total assets grew 8.54 percent to $147 billion. Total deposits grew 6.34 percent to $108.3 billion.
During the quarter, Citizens added 47 mortgage loan officers and 11 financial consultants, growing the team to 500 mortgage originators and 350 financial consultants.

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