It has been about a month since the last earnings report for Citizens Financial Group (CFG Quick QuoteCFG - Free Report) . Shares have added about 6.9% in that time frame, outperforming the S&P 500.

But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Citizens Financial Group due for a pullback? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent drivers for Citizens Financial Group, Inc. before we dive into how investors and analysts have reacted as of late.

Citizens Financial Beats Q3 Estimates on Solid NII, Fee Income Growth

Citizens Financial reported third-quarter 2025 adjusted earnings per share (EPS) of $1.05, which surpassed the Zacks Consensus Estimate of $1.02 per share. The metric rose 32.9% from the year-ago quarter.

Results benefited from a rise in non-interest income and net interest income. The increase in loan and deposit balances was also encouraging. However, a rise in expenses was a major headwind. 

Net income (GAAP basis) was $494 million, which rose 29% from the prior-year quarter.

Revenues & Expenses Rise

Total revenues in the third quarter were $2.12 billion, which topped the Zacks Consensus Estimate by 0.9%. The top line rose 11% year over year.

Citizens Financial’s NII rose 9% year over year to $1.49 billion, driven by higher net interest margin. 

The net interest margin (NIM) expanded 23 basis points year over year to 3%, driven by time-based benefits of non-core runoff and terminated swap impacts, as well as fixed-rate asset repricing benefits. Non-interest income increased 18% year over year to $630 million, led by higher capital markets fees and wealth fees. 

Non-interest expenses increased 6% year over year to $1.33 billion. The rise was primarily due to higher salaries and employee benefits, an increase in other operating expenses, and investment in technology. Underlying non-interest expenses increased 7% from the prior-year quarter.

The efficiency ratio of 63% in the third quarter decreased from 66.2% in the year-ago quarter. A fall in the efficiency ratio reflects increased profitability.

Loan Balance & Deposits Up Sequentially

As of Sept. 30, 2025, period-end total loans and leases were $140.9 billion, up 1% from the prior quarter. Total deposits rose 3% to $180 billion.

Credit Quality Improves

As of Sept. 30, 2025, Citizens Financial’s provision for credit losses was $154 million, which declined 10% from the year-ago quarter.

The allowance for credit losses decreased 4% year over year to $2.2 billion.

Net charge-offs decreased 16% on a year-over-year basis to $162 million. 

Non-accrual loans and leases declined 10% from the year-ago quarter to $1.52 billion.

Capital Position: Mixed Bag

As of Sept. 30, 2025, the tier 1 leverage ratio was 9.4%, unchanged from the prior-year quarter.

The common equity tier 1 capital ratio was 10.7%, up from 10.6% in the prior-year quarter. The total capital ratio was 13.9%, unchanged from the prior-year quarter.

Outlook

Q4 2025 (Underlying Basis)

Management expects NII of 2.5-3%, whereas it reported $1.5 million in the third quarter of 2025.

Non-interest income is anticipated to be unchanged from the $630 million reported in the third quarter of 2025.

Adjusted non-interest expenses are projected to be stable to up slightly from the third-quarter 2025 level of $1.34 billion.

The net charge-off ratio is targeted to be in the low 40s.

The CET1 ratio is envisioned to be stable in the fourth quarter of 2025 compared with the 10.7% reported in the previous quarter.

The company expects to repurchase $125 million worth of shares in the fourth quarter.

The tax rate is expected to be 22.5%.

2025 Outlook (Underlying Basis)

Management expects NII to be up 3-5% from $5.6 billion in 2024.

NIM is expected to be 3%, up from 2.85% recorded in 2024.

Average loans are projected to be down 2-3% from $139.2 billion in 2024.

Average earnings assets are forecasted to be down 1% from $198.1 billion in 2024.

Non-interest income is anticipated to be up 8-10% from $2.6 billion reported in 2024.

Adjusted non-interest expenses are projected to be up 4% from $5.1 billion in 2024.

Net charge-offs are suggested to be in the high 40 bps.

The CET1 ratio is envisioned to be around 10.5-10.75%.

The tax rate is expected to be around 21%.

Medium-Term Target

Management expects the CET1 ratio to converge to the 10.0-10.5% range.

The company now targets NIM in the range of 3.25–3.50%, up from its previous expectations of 3.25–3.40%

The efficiency ratio is projected to be around the mid-50’s.

The company is expected to reach a dividend payout ratio of approximately 35-40%.

Management expects a return on average tangible common shareholders’ equity to be around 16-18%. The execution of the target will be supported by the company’s strategic initiatives as well as the NII tailwinds expected from 2025 to 2027.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a upward trend in estimates revision.

VGM Scores

Currently, Citizens Financial Group has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. However, the stock was allocated a score of B on the value side, putting it in the second quintile for value investors.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, Citizens Financial Group has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.