2023-04-19 11:07:07 ET
Citizens Financial ( NYSE: CFG ) stock fell as much as 4.8% on Wednesday after the company lowered its guidance for the year and reported Q1 earnings slightly below estimates.
Net interest income in 2023 is projected to be ~$6.31B-$6.43B, up 5%-7% Y/Y vs. prior outlook of $6.67B-$6.85B. Citizens ( CFG ) expects 2023 noninterest income to increase mid-single digits Y/Y vs. prior outlook of 7%-9% growth.
Q2 NII is estimated to be ~$1.59B, down ~3% from Q1, while noninterest income is expected to increase mid to high single digits from Q1's $485M.
Citizens ( CFG ) reported Q1 adj. EPS of $1.10 vs. $1.07 in Q1 2022. Revenue rose 29.1% Y/Y to $2.13B.
NII increased 43.2% Y/Y to $1.64B, but was 3.1% lower than Q4 given lower day count and slightly lower interest-earning assets. Provision for credit losses rose to $168M from $132M in Q4 and $3M in Q1 2022.
Period-end deposits totaled $172.2B vs. $180.7B in Q4 and $158.8B in Q1 2022. Citizens ( CFG ) said deposits were broadly stable in March.
Consumer deposits are ~67% of its deposit base, and ~68% of total deposits are insured by the FDIC or secured. Citizens ( CFG ) is focused on initiatives that will have deposits stabilize/grow modestly from Q1 levels.
"Mixed quarter – marked by NII upside, but deposits declined a bit more than expected," said Evercore ISI. "Credit normalization is gaining steam, albeit still contained. Outlook a net negative – mainly on lower NII and fees."
Citizens ( CFG ) also declared $0.42 quarterly dividend.
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Citizens Financial stock falls over 4% after FY guidance cut, Q1 earnings miss