Citizens reports 27% profit growth in Q3

PROVIDENCE – Citizens Financial Group Inc., the holding company for Citizens Bank, on Friday reported a $443 million quarterly profit, or 91 cents per diluted share, up 27 percent from a year earlier.

The $443 million in net income in the third quarter ended Sept. 30 was up from $425 million in the second quarter and $348 million in the third quarter of 2017, or 68 cents per diluted share, the Providence-based bank reported.

Citizens’ revenue totaled $1.6 billion in the third quarter, up 8 percent from a year earlier at $1.4 billion.

The bank’s total assets increased by $3.2 billion in the third quarter for a total of $158.6 billion, up 5 percent from a year earlier. That included a $1.7 billion increase in assets from the company’s acquisition in August of Tennessee-based Franklin American Mortgage Co.

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The company’s net income from interest-bearing assets was $1.1 billion in the quarter, up 8 percent from a year earlier, driven by higher loan yields, the bank said. Noninterest income was $416 million in the quarter, up 9 percent from a year earlier, driven by growth in mortgage banking fees, service charges and fees, trust and investment services fees, other income and card fees, the bank said.

Loans and leases grew by $4.6 billion in the quarter to a total of $114.7 billion, up 4 percent from a year earlier. Nonperforming loans and leases dropped to $832 million in the quarter, down $100 million, or 11 percent, from a year earlier.

Deposits grew by $3.8 billion in the quarter to a total of $117 billion, up 3 percent from a year earlier. The increase included $442 million in deposits tied to the Franklin American Mortgage acquisition and $551 million tied to the launch of Citizens Access, a nationwide digital-deposit platform.

In the consumer banking segment, Citizens reported “continued progress” in wealth management with 18 percent growth in fees, a 23 percent increase in managed money revenue, and a 15 percent increase in assets under management in the quarter, compared with a year earlier.

In the commercial banking segment, Citizens reported average loan growth of 7 percent, driven by the company’s geographic expansion strategies, as well as “the strength in private equity and commercial real estate,” the bank said.

Citizens’ net interest margin, measuring the different between the interest income generated by the bank and the amount of interest paid out to its lenders, improved to 3.19 percent, up one basis point from the second quarter and up 14 basis points from the third quarter last year.

“We are highly pleased that we continue to execute well and deliver strong top-line growth and positive operating leverage, which has powered underlying year-on-year [earnings per share] growth of 37 percent and [return on average tangible common equity] improvement of 13.5 percent,” Citizens Chairman and CEO Bruce Van Saun said in a statement.

“We are doing a good job with balance sheet management, as we remain highly prudent and selective on where we deploy capital to support loan growth, and we are building new deposit-gathering capabilities, such as Citizens Access,” he said. “In addition, we continue to invest in broadening and building our fee-based capabilities, highlighted by the closing of the Franklin American Mortgage acquisition, and in the development of robust technology offerings, including strong digital and data capabilities.”

Scott Blake is a PBN staff writer. Email him at