CITIZENS FINANCIAL GROUP INC/RI Q1 FY2025 earnings call

• Highlights: NIM expansion, core loan growth, resilient fees, favorable credit trends, share repurchases. Sold $1.9 billion in purchased student loans, which is accretive. Private Bank growth: $8.7B deposits, $5.2B AUM. - Strategic Initiatives: Progress in New York City Metro, private capital, payments; Private Bank added teams in Florida, Southern California, New Jersey. - Macro Environment: Uncertainty due to policy decisions, but corporate and consumer borrowers in good shape. Reaffirmed EPS estimate, with potential for second half pickup.

Net Interest Income: NIM expanded 3 basis points to 2.90%. Net interest income was in line with expectations, driven by margin expansion and deposit cost performance. Noninterest Income: Down 3.5% linked-quarter due to seasonality in capital markets, but wealth fees were a record. M&A and DCM pipelines were strong. Loans: Period-end and average loans down slightly due to non-core transaction and auto runoff; excluding non-core, loans up ~1%. Private Bank loans up ~$550 million to $3.7 billion. Deposits: Period-end deposits up ~$3 billion or 2%, driven by low-cost growth in Private Bank and Consumer. Credit: Net charge-offs 58 basis points, excluding non-core impact 51 basis points; allowance for credit losses stable at 1.61%.

• Second Quarter: Net interest income up ~3% (5bps margin improvement), noninterest income mid- to high-single-digits, expenses stable, CET1 10.5%-10.75%. - Full Year: Reaffirmed EPS estimate; medium-term NIM trajectory to power ROTCE improvement; NIM projected to be 3.05%-3.10% in 4Q '25, 3.15%-3.30% in 4Q '26, 3.25%-3.50% in 2027.

• Macro Uncertainty: Pushout in capital markets fees, slower loan growth, higher credit provision. - Offsets: Better funding costs, greater share repurchases, cost transformation.

Q: On balance sheet growth, loan demand, line utilization, pre-tariff inventory build.

A: John, Don, Brendan discuss loan growth drivers (line utilization, working capital, Private Bank growth, HELOC growth).

Q: Capital, buybacks, trade-off with weaker loan growth.

A: John, Bruce discuss capital position, buyback flexibility based on RWA and uncertainty.

Q: Capital markets outlook, fee guide, deal closing confidence.

A: Bruce, Don, John discuss diversified fees, M&A pipeline, deal offsets.

Q: Interest rates, NIM outlook, hedging.

A: John, Bruce discuss NIM sensitivity to rates, hedging, terminal rate scenarios.

Q: Reserve, non-core runoff, CRE portfolio.

A: John, Bruce, Brendan discuss reserve scenarios, non-core runoff benefits, CRE portfolio reserves.

Q: Fee categories (service charges, overdraft, credit card).

A: Brendan discusses service charges growth, stable overdraft, credit card pause for new products.

Q: Non-core loan sale, C&I portfolio credit.

A: Bruce, Don discuss non-core sale pros, C&I portfolio credit stability.

Q: Fee income guidance, Fed funds rate impact.

A: John, Bruce discuss fee income drivers, Fed funds rate impact on NIM.

Q: Loan growth, NBFI credit risk.

A: John, Don, Brendan discuss loan growth sources, NBFI credit risk management.

Q: Non-core loan sale benefit to NIM.

A: John, Bruce discuss non-core sale inclusion in January guide, NIM benefit.