CITIZENS FINANCIAL GROUP INCRI
For the period ended Mar 31, 2024. Filed May 6, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2024 · Filed May 6, 2024
Extracted filing text, with the paragraph anchors used by the comparison.
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Net Interest Income
Net interest income is our largest source of revenue and is the difference between the interest earned on interest-earning assets (generally loans and investment securities) and the interest expense incurred in connection with interest-bearing liabilities (generally deposits and borrowed funds). The level of net interest income is primarily a function of the difference between the effective yield on our average interest-earning assets and the effective cost of our interest-bearing liabilities. These factors are influenced by the pricing and mix of interest-earning assets and interest-bearing liabilities which, in turn, are impacted by external factors such as economic conditions, competition for loans and deposits, the monetary policy of the FRB and market interest rates. For further discussion, refer to the “Market Risk” and “Risk Governance” sections of our 2023 Form 10-K.
| Table 2: Major Components of Net Interest Income | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Three Months Ended March 31, | ||||||||||||||
| 2024 · 2023 · Change | ||||||||||||||
| (dollars in millions) · AverageBalances · Income/Expense · Yields/Rates · AverageBalances · Income/Expense · Yields/Rates · AverageBalances · Yields/Rates (bps) | ||||||||||||||
| Assets | ||||||||||||||
| Interest-bearing cash and due from banks and deposits in banks | $10,268 | $140 | 5.39% | $5,899 | $69 | 4.65% | $4,369 | 74 bps | ||||||
| Taxable investment securities | 43,904 | 399 | 3.63 | 38,953 | 266 | 2.74 | 4,951 | 89 | ||||||
| Non-taxable investment securities | 1 | — | 2.60 | 2 | — | 2.68 | (1) | (8) | ||||||
| Total investment securities | 43,905 | 399 | 3.63 | 38,955 | 266 | 2.74 | 4,950 | 89 | ||||||
| Commercial and industrial | 44,577 | 635 | 5.64 | 53,429 | 747 | 5.60 | (8,852) | 4 | ||||||
| Commercial real estate | 29,265 | 468 | 6.32 | 28,892 | 416 | 5.75 | 373 | 57 | ||||||
| Total commercial | 73,842 | 1,103 | 5.91 | 82,321 | 1,163 | 5.65 | (8,479) | 26 | ||||||
| Residential mortgages | 31,384 | 283 | 3.60 | 30,075 | 250 | 3.33 | 1,309 | 27 | ||||||
| Home equity | 15,080 | 298 | 7.94 | 14,073 | 240 | 6.92 | 1,007 | 102 | ||||||
| Automobile | 7,758 | 82 | 4.25 | 11,937 | 119 | 4.04 | (4,179) | 21 | ||||||
| Education | 11,816 | 156 | 5.31 | 12,796 | 154 | 4.88 | (980) | 43 | ||||||
| Other retail | 4,942 | 129 | 10.54 | 5,290 | 121 | 9.25 | (348) | 129 | ||||||
| Total retail | 70,980 | 948 | 5.36 | 74,171 | 884 | 4.81 | (3,191) | 55 | ||||||
| Total loans and leases | 144,822 | 2,051 | 5.64 | 156,492 | 2,047 | 5.25 | (11,670) | 39 | ||||||
| Loans held for sale, at fair value | 850 | 14 | 6.37 | 1,009 | 15 | 5.87 | (159) | 50 | ||||||
| Other loans held for sale | 223 | 6 | 10.72 | 197 | 5 | 9.98 | 26 | 74 | ||||||
| Interest-earning assets | 200,068 | 2,610 | 5.20 | 202,552 | 2,402 | 4.76 | (2,484) | 44 | ||||||
| Noninterest-earning assets | 20,702 | 20,159 | 543 | |||||||||||
| Total assets | $220,770 | $222,711 | ($1,941) | |||||||||||
| Liabilities and Stockholders’ Equity | ||||||||||||||
| Checking with interest | $32,302 | $109 | 1.35% | $35,974 | $97 | 1.09% | ($3,672) | 26 | ||||||
| Money market | 52,926 | 445 | 3.38 | 49,942 | 287 | 2.33 | 2,984 | 105 | ||||||
| Savings | 27,745 | 121 | 1.76 | 29,460 | 79 | 1.09 | (1,715) | 67 | ||||||
| Term | 26,447 | 312 | 4.74 | 12,839 | 87 | 2.72 | 13,608 | 202 | ||||||
| Total interest-bearing deposits | 139,420 | 987 | 2.85 | 128,215 | 550 | 1.74 | 11,205 | 111 | ||||||
| Short-term borrowed funds | 498 | 7 | 5.53 | 542 | 6 | 4.97 | (44) | 56 | ||||||
| Long-term borrowed funds | 13,664 | 174 | 5.08 | 17,780 | 203 | 4.55 | (4,116) | 53 | ||||||
| Total borrowed funds | 14,162 | 181 | 5.09 | 18,322 | 209 | 4.57 | (4,160) | 52 | ||||||
| Total interest-bearing liabilities | 153,582 | 1,168 | 3.05 | 146,537 | 759 | 2.09 | 7,045 | 96 | ||||||
| Demand deposits | 36,684 | 46,135 | (9,451) | |||||||||||
| Other noninterest-bearing liabilities | 6,791 | 6,323 | 468 | |||||||||||
| Total liabilities | 197,057 | 198,995 | (1,938) | |||||||||||
| Stockholders’ equity | 23,713 | 23,716 | (3) | |||||||||||
| Total liabilities and stockholders’ equity | $220,770 | $222,711 | ($1,941) | |||||||||||
| Interest rate spread | 2.15% | 2.67% | (52) | |||||||||||
| Net interest income and net interest margin | $1,442 | 2.90% | $1,643 | 3.29% | (39) | |||||||||
| Net interest income and net interest margin, FTE(1) | $1,446 | 2.91% | $1,647 | 3.30% | (39) | |||||||||
| Memo: Total deposits (interest-bearing and demand) | $176,104 | $987 | 2.25% | $174,350 | $550 | 1.28% | $1,754 | 97 | bps | |||||
(1) Net interest income and net interest margin is presented on a FTE basis using the federal statutory tax rate of 21%. The FTE impact is predominantly attributable to commercial and industrial loans for the periods presented.
Net interest income decreased $201 million, or 12%, for the three months ended March 31, 2024, compared to the same period in 2023, reflecting lower net interest margin and a 1% decline in average interest-earning assets.
Net interest margin on a FTE basis decreased 39 basis points for the three months ended March 31, 2024, compared to the same period in 2023, reflecting higher funding costs, swap impacts and the impact of building liquidity, partially offset by higher interest-earning-asset yields and the benefit of Non-Core portfolio runoff.
Average interest-earning assets decreased $2.5 billion, or 1%, for the three months ended March 31, 2024, compared to the same period in 2023, driven by a decline in total loans and leases, partially offset by an increase in investment securities and cash held in interest-bearing deposits.
Average deposits increased $1.8 billion, or 1%, for the three months ended March 31, 2024, compared to the same period in 2023, reflecting growth in retail and Private Bank deposits.
Average total borrowed funds decreased $4.2 billion for the three months ended March 31, 2024, compared to the same period in 2023, reflecting a decline in FHLB advances driven by Non-Core portfolio runoff, partially offset by an increase in secured borrowings collateralized by auto loans.
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