PROVIDENCE – Citizens Financial Group Inc. brought in a $314 million third-quarter profit amid record revenues, the company reported on Friday.
The parent company for Citizens Bank’s third-quarter earnings represent a 30% decrease from the $449 million in profit for the third quarter of 2019. However, profit margins have increased since taking a nosedive when COVID-19 pandemic; the latest quarterly earnings are 24% higher than the prior quarter and more than 800% above first-quarter earnings.
Profits were driven by a record $1.8 billion in quarterly revenue, reflecting income from fees for mortgage banking, investment services, card and letter of credit loans.
At the same time, the company continues to shore up its provisions for possible bad loans, adding $428 million in quarterly provisions for credit losses.
Earnings per diluted share 68 cents, compared with 97 cents a year ago.
The $1.8 billion in revenue represents a 9% year-over-year increase over the $1.6 billion reported in quarter three of 2019. This was driven primarily by the $654 million in non-interest income, a 33% jump over a year ago, based upon record mortgage banking fees, higher service charges and card fees partially offset by a decrease in foreign exchange and interest rate products, the company stated.
Net interest income – the difference between interest earned on assets like loans, mortgages and securities and interest paid out to customer deposits – declined 1% to $1.1 billion amid continued low interest rates and a decrease in interest-earning assets.
The low interest rate environment also impacted the net interest margin, which declined 28 basis points year-over-year to 2.82%.
Noninterest expense ticked up 2% to $988 million, including a 15% year-over-year increase in equipment and software sales expenses.
Quarterly assets stood at $179.2 billion, an increase of 9% from a year ago reflecting an 84% spike in the value of loans held for sale driven largely by the $4.7 billion in Paycheck Protection Program loans. The $124.1 billion in total loans and leases ticked up 5% over the prior year.
Total deposits stood at $142.9 billion, a 15% increase, reflecting growth in demand deposits, money market accounts, savings and checking with interest partially offset by a decrease in term deposits.
“Citizens continues to rise to the occasion, meeting the unique challenges present in 2020 and delivering well for all of our stakeholders,” said Chairman and CEO Bruce Van Saun. “We continue to demonstrate the strong resilience and diversification of our business model, while helping our customers, colleagues and communities get through this difficult environment.”
Nancy Lavin is a PBN staff writer. You may reach her at Lavin@PBN.com.
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