CFG Q4 Earnings Beat Estimates on NII & Fee Income Growth, Stock Up

Core Viewpoint - Citizens Financial Group (CFG) reported strong fourth-quarter 2025 earnings, with earnings per share (EPS) of $1.13, exceeding estimates and reflecting a 32.9% year-over-year increase [1][9] Financial Performance - Net income on a GAAP basis for Q4 2025 was $528 million, up 31.6% from the previous year [2] - Total revenues for Q4 reached $2.16 billion, surpassing estimates by 0.4% and increasing 8.6% year over year [4] - Full-year 2025 earnings per share were $3.86, exceeding the consensus estimate and up from $3.03 in 2024 [3] Income Sources - Net interest income (NII) rose 8.8% year over year to $1.54 billion, driven by an improved net interest margin [4][5] - Non-interest income increased by 8% year over year to $620 million, attributed to higher service charges, capital markets fees, and wealth fees [5] Expenses and Efficiency - Non-interest expenses rose 2.1% year over year to $1.34 billion, primarily due to increased salaries and operational costs [6] - The efficiency ratio improved to 62.2% in Q4 from 66.3% in the previous year, indicating enhanced profitability [6] Loan and Deposit Growth - Total loans and leases as of December 31, 2025, were $142.7 billion, up 1.3% from the prior quarter, while total deposits increased 1.8% to $183.3 billion [7] Credit Quality - Provision for credit losses decreased by 15.4% year over year to $137 million, with the allowance for credit losses down 3.4% to $2.2 billion [8] - Net charge-offs fell 17.9% year over year to $155 million, and non-accrual loans declined 9.6% to $1.5 billion [10] Capital Position - As of December 31, 2025, the tier 1 leverage ratio remained at 9.4%, while the common equity tier 1 capital ratio decreased to 10.6% from 10.8% [11] Shareholder Actions - In Q4 2025, CFG repurchased $125 million of common shares and distributed $201 million in common dividends [12] Overall Assessment - CFG's fourth-quarter results demonstrate balanced growth in net interest income and fees, improved efficiency, and stable credit quality, although concerns remain regarding expense pressures and capital position [13]