PROVIDENCE – Citizens Bank’s holding company Friday reported a 7% increase in second quarter net income from the same period last year, driven by record income from fees from its mortgage, wealth management, and capital markets businesses.
Providence-based Citizens Financial Group Inc. posted net income of $453 million, or 95 cents per diluted share, in the quarter ended June 30, compared with net income of $425 million a year earlier.
Revenue totaled $2 billion in the quarter, an increase of 9.9% from $1.8 billion in the second quarter of 2018. That included $1.6 billion in net interest income, a 12% increase from a year earlier, and $462 million in noninterest income, which rose 19%.
“We are pleased to report another strong quarterly result, paced by good fee income growth, strong expense discipline and solid execution against our strategic initiatives,” said Citizens Chairman and CEO Bruce Van Saun.
“We feel good about our ability to integrate and leverage our recent fee-based acquisitions, and about our continued success with Citizens Access, which provides a springboard for broader digital initiatives,” Van Saun said.
In the second quarter, Citizens posted record income from mortgage fees, which rose 135% from a year earlier; record trust and investment services fees, which rose 23%; and record banking card fees, which rose 9%. Income from capital markets fees also hit a record in the second quarter, rising 19% from a year earlier.
The bank’s total assets increased 5% from $162.7 billion in the quarter from $155.4 billion a year earlier.
Loans and leases, meanwhile, rose 3% to $116.8 billion from $113.4 billion a year earlier.
Commercial loan revenue grew by 7% in the quarter compared to the second quarter last year. Nonperforming loans and leases decreased to 0.66% in the quarter from 0.75% a year earlier.
Commercial loan results reflect strength in commercial and industrial loans, driven by “geographic, product, and client-focused expansion strategies, as well as strength in commercial real estate, partially offset by planned reductions in commercial leases,” Citizens said. “Retail loan growth was driven by mortgage, unsecured and education finance, partially offset by a planned reduction in auto and lower home equity.”
Deposits increased by 5.9% to $124 billion from $117.1 billion in the second quarter last year.
Net interest margin and efficiency ratio were unchanged year-to-year at 3.2% and 58, respectively.
Total borrowed funds decreased by $2.5 billion, or 16.1%, to $13 billion as of June 30, compared with a year earlier.
Citizens, the second-largest consumer bank in Rhode Island behind Bank of America based on market share of deposits, operates 1,100 branches in 11 states, with a network of 2,900 automated teller machines. The bank’s holding company is listed on the New York Stock Exchange.
The bank’s stock increased 4.3% on the day to $36.12 as of 11:54 a.m. following the early morning earnings release.
Scott Blake is a PBN staff writer. Email him at Blake@PBN.com
