ZACKSยท2025-07-17 18:10Core Viewpoint - Citizens Financial Group (CFG) reported strong second-quarter 2025 adjusted earnings per share of 92 cents, exceeding estimates and reflecting a 12.2% year-over-year increase, driven by higher non-interest income and net interest income (NII) [1][9] Financial Performance - Net income on a GAAP basis was $436 million, marking an 11.2% increase from the prior-year quarter [2] - Total revenues for the quarter reached $2.04 billion, surpassing estimates by 1.5% and showing a 3.8% year-over-year growth [3][9] - NII increased by 2% year over year to $1.44 billion, supported by a higher net interest margin and an increase in average interest-earning assets [3] - The net interest margin (NIM) expanded by 5 basis points year over year to 2.95%, attributed to lower deposit costs and favorable fixed-rate asset repricing [4] - Non-interest income rose 8% year over year to $600 million, driven by increased capital markets fees, wealth fees, card fees, and mortgage banking income [4] Expense Management - Non-interest expenses increased by 1% year over year to $1.32 billion, primarily due to higher operating expenses and technology-related costs [5] - The efficiency ratio improved to 64.8%, down from 66.3% in the year-ago quarter, indicating enhanced profitability [5] Loan and Deposit Trends - As of June 30, 2025, total loans and leases were $139.3 billion, up 1.2% from the prior-year quarter, while total deposits declined by 1.4% to $175.1 billion [6][9] Credit Quality - The provision for credit losses was $164 million, a decline of 9.9% from the year-ago quarter, with net charge-offs decreasing by 9% to $167 million [7] - The allowance for credit losses decreased by 4% year over year to $2.21 billion, and non-accrual loans and leases slightly declined to $1.52 billion [7] Capital Position - As of June 30, 2025, the tier 1 leverage ratio remained stable at 9.4%, while the common equity tier 1 capital ratio decreased to 10.6% from 10.7% in the prior-year quarter [8][10] Shareholder Returns - In Q2 2025, CFG repurchased $200 million of common shares and distributed $185 million in common dividends [11]