- While Citizens posted a good double-digit beat on pre-provision profits, that was undone by a higher than expected provision expense, as Citizens added more to its reserves.
- Charge-offs jumped significantly and both the NPA ratio and NCO ratio are noticeably worse than peers'; Citizens believes it is near the peak of commercial losses, but that's to be determined.
- Citizens still has some meaningful cost leverage opportunities, particularly in the consumer business, but investors are going to have to wait a little while longer for more details.
- My bullish argument on Citizens is less about Citizen's superiority (it's not), but an underappreciated self-help story and better full-cycle core earnings that the Street seems to expect.
For further details see:
Weaker Credit Numbers Don't Help The Bullish Citizens Financial Argument