CFG-PH — Citizens Financial Group, Inc.

Summary of CFG-PH Q4 2025 Earnings Call

1. Key Financial Results and Metrics

• Earnings Per Share (EPS): Q4 EPS increased to $1.13, up 8% sequentially and 36% year-over-year. Full-year EPS was $3.86, reflecting a 19% increase from 2024.
• Net Interest Income (NII): Increased by 9% year-over-year, with a net interest margin (NIM) expansion of 20 basis points, reaching 3.07%.
• Fees: Grew by 8% year-over-year, driven by strong performance in capital markets and wealth management.
• Operating Leverage: Positive operating leverage of 1.3% sequentially and 5.2% year-over-year.
• Credit Quality: Provision for credit losses decreased by $25 million year-over-year, with net charge-offs at 43 basis points, down from 46 basis points in the previous quarter.
• Capital Return: Returned $326 million to shareholders in Q4, with a full-year return of $1.4 billion, representing 80% of 2025 earnings.

2. Strategic Updates and Business Highlights

• Private Bank Performance: Contributed $0.10 to Q4 EPS, with deposits of $4.145 billion, client assets of $10 billion, and loans of $7.2 billion. The business achieved a 25% return on equity (ROE) for the year.
• Non-Core Asset Reduction: Successfully reduced non-core assets from $6.9 billion to $2.5 billion.
• Reimagine the Bank Initiative: Launched to enhance customer experience and drive revenue growth through 50 initiatives aimed at improving efficiency and productivity.
• Expansion in New Markets: Continued growth in the New York City Metro and corporate banking sectors.

3. Forward Guidance and Outlook

• 2026 Expectations: Projecting NII growth of 10% to 12%, with continued NIM expansion and loan growth. Fee income expected to rise by 6% to 8%.
• Expense Management: Anticipated expense growth of 4.5%, maintaining investments in the private bank while achieving significant positive operating leverage.
• Credit Outlook: Continued improvement expected, with net charge-offs projected in the mid to high 30 basis points.
• Capital Management: CET1 ratio targeted between 10.5% and 10.6%, with share repurchases of $700 million to $850 million planned for 2026.

4. Bad News, Challenges, or Points of Concern

• Expense Growth: Expenses increased by 4.6% in 2025, slightly above the initial guidance of 4%, primarily due to higher incentive compensation.
• Market Competition: The competitive landscape for deposits is intensifying, impacting deposit betas, which are now projected in the high 40s compared to previous expectations in the low to mid-50s.
• Regulatory Environment: While the regulatory outlook is currently favorable, uncertainties remain regarding future stress tests and capital requirements.

5. Notable Q&A Insights

• Reimagine the Bank Initiative: Management indicated that the initiative aims to deliver a 2% increase in ROTCE, with a focus on balancing investment and reinvestment of benefits.
• Loan Growth Strategy: Confidence in loan growth stems from the reduction of non-core assets and strong demand in private banking and commercial sectors.
• Fee Income Outlook: Guidance for fee growth was described as conservative, with expectations for capital markets to perform strongly despite some uncertainty regarding M&A activity.
• Private Bank Expansion: Management emphasized the importance of quality over speed in expanding private banking locations, with plans to continue adding teams strategically.

This summary encapsulates CFG-PH's financial performance, strategic initiatives, future outlook, and key concerns, providing a comprehensive overview of the earnings call.