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CFG Stock Up as Q3 Earnings Top Estimates on NII Growth, Dividend Hiked
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Key Takeaways
CFG shares rose nearly 1% in early trading as Q3 EPS jumped 34% to $1.41, beating the $1.38 estimate.
Citizens Financial's NII grew 13% y/y to $1.68 billion, aided by a 19-basis-point expansion in NIM to 3.19%.
CFG hiked its dividend by 13% to 52 cents and expanded its share repurchase authorization to $1.95 billion.
Citizens Financial Group (CFG - Free Report) reported third-quarter 2026 earnings per share (EPS) of $1.41, which surpassed the Zacks Consensus Estimate of $1.38. The metric rose 34% from the year-ago quarter.
CFG shares rose nearly 1% in the early trading session. A full day’s trading session will depict a clearer picture.
Results benefited from a rise in net interest income (NII) and non-interest income. Growth in loan and deposit balances and an improvement in credit quality were also encouraging. However, a rise in expenses and a weaker capital position were major headwinds.
Net income (GAAP basis) was $636 million, which rose 29% from the prior-year quarter.
CFG’s Q3 Revenues & Expenses Rise
Total revenues in the third quarter were $2.32 billion, which missed the Zacks Consensus Estimate of $2.33 billion. The top line rose 10% year over year.
Citizens Financial’s NII rose 13% year over year to $1.68 billion, primarily reflecting a higher net interest margin and a 6% increase in interest-earning assets.
The net interest margin (NIM) expanded 19 basis points year over year to 3.19% on a fully taxable-equivalent basis. This was mainly driven by lower terminated swap impacts, non-core runoff, fixed-rate asset repricing and improved funding costs.
Non-interest income increased 3% year over year to $647 million. The improvement was driven by higher wealth fees, service charges and fees, foreign exchange and derivative products and letter of credit and loan fees. This was partially offset by lower capital markets fees and mortgage banking fees.
Non-interest expenses increased 4% year over year to $1.39 billion. The rise was mainly due to higher salaries and employee benefits, outside services, and equipment and software costs, partially offset by lower other operating expenses.
The efficiency ratio was 60% in the third quarter compared with 63% in the year-ago quarter. A fall in the efficiency ratio reflects improved profitability.
CFG’s Q3 Segment Results
Consumer Banking revenues were $1.71 billion, up 9% year over year. The segment’s net income increased 20% to $461 million.
Commercial Banking revenues rose 4% year over year to $766 million. The segment’s net income increased 16% to $287 million.
Other revenues were negative $154 million compared with negative $189 million in the prior-year quarter. The segment reported a net loss of $112 million, narrower than the year-ago loss of $137 million.
As of Sept. 30, 2026, period-end total loans and leases were $148.2 billion, up 0.5% from the prior quarter, while total deposits declined slightly to $185.2 billion on a sequential basis.
CFG’s Credit Quality Improves
In the third quarter of 2026, Citizens Financial’s provision for credit losses was $125 million, which declined 19% from the year-ago quarter.
The allowance for credit losses decreased 1% year over year to $2.17 billion.
Net charge-offs decreased to $137 million from $162 million in the prior-year quarter.
Non-accrual loans and leases declined 4% year over year to $1.46 billion.
The net charge-off ratio was 0.37%, down from 0.46% in the prior-year quarter. The allowance for credit losses to total loans and leases ratio declined to 1.47% from 1.56% a year ago.
CFG’s Capital Position Weak
As of Sept. 30, 2026, the common equity tier 1 (CET1) capital ratio was 10.5%, down from 10.7% in the prior-year quarter.
The total capital ratio was 13.7%, down from 13.9% in the year-ago quarter. The tier 1 leverage ratio was 9.2%, which decreased from 9.4% in the prior-year quarter.
The tangible common equity ratio was 6.7%, down from 7.4% in the year-ago quarter.
Citizens Financial’s Share Repurchase Update
In the third quarter of 2026, CFG repurchased $125 million of common shares and paid $197 million in common dividends.
Further, the board increased the capacity of its common share repurchase program to $1.95 billion, up $1.3 billion from the $650 million remaining under the previous June 2025 authorization.
The company's board of directors declared a 13% increase in its quarterly common stock dividend to 52 cents per share, payable in the fourth quarter of 2026.
Citizens Financial’s Guidance
For the fourth quarter of 2026, CFG expects NII to increase approximately 2.5-3% sequentially, while non-interest income is projected to rise 4-5%.
The company expects NIM to be between 3.23% and 3.26% in the fourth quarter of 2026.
Non-interest expenses are expected to increase approximately 1% from the third-quarter level.
Net charge-offs are projected to remain stable or decline slightly from 37 basis points in the third quarter. The CET1 ratio is expected to be approximately 10.6-10.7%.
The company plans to repurchase approximately $200 million worth of shares in the fourth quarter. The tax rate is expected to be nearly 22%.
For the medium term, CFG expects NIM to reach 3.30-3.50% by the fourth quarter of 2027.
The company remains focused on its Reimagine the Bank program, targeting approximately $100 million in pre-tax run-rate benefits by the end of 2026, $225 million by the end of 2027 and more than $450 million by the end of 2028.
Our View on CFG
Citizens Financial’s solid third-quarter results reflect growth in NII and fee income, along with improved efficiency and credit quality. Growth in loan and deposit balances on a year-over-year basis was another positive.
The company continues to execute well on its strategic initiatives. Strong Private Bank growth, record Wealth fees, continued progress on the Reimagine the Bank program and investments in technology and artificial intelligence are expected to support its performance through 2026 and 2027.
The Private Bank contributed 16 cents to third-quarter EPS, reflecting continued momentum. Management remains well positioned to achieve a return on average tangible common equity of 16-18% by the end of 2027. However, elevated expenses and a weaker capital position remain near-term headwinds.
Citizens Financial Group, Inc. Price, Consensus and EPS Surprise
Fifth Third Bancorp (FITB - Free Report) is scheduled to release third-quarter 2026 earnings on Oct. 19.
The Zacks Consensus Estimate for FITB’s quarterly earnings has been unchanged at $1.09 per share over the past seven days. This indicates a 17.2% rise from the prior-year reported number.
BOK Financial Corporation (BOKF - Free Report) is also slated to report third-quarter 2026 results on Oct. 19.
Over the past seven days, the Zacks Consensus Estimate for BOKF’s quarterly earnings has been unchanged at $2.54 per share. This implies a 14.4% rise from the prior-year reported number.
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CFG Stock Up as Q3 Earnings Top Estimates on NII Growth, Dividend Hiked
Key Takeaways
Citizens Financial Group (CFG - Free Report) reported third-quarter 2026 earnings per share (EPS) of $1.41, which surpassed the Zacks Consensus Estimate of $1.38. The metric rose 34% from the year-ago quarter.
CFG shares rose nearly 1% in the early trading session. A full day’s trading session will depict a clearer picture.
Results benefited from a rise in net interest income (NII) and non-interest income. Growth in loan and deposit balances and an improvement in credit quality were also encouraging. However, a rise in expenses and a weaker capital position were major headwinds.
Net income (GAAP basis) was $636 million, which rose 29% from the prior-year quarter.
CFG’s Q3 Revenues & Expenses Rise
Total revenues in the third quarter were $2.32 billion, which missed the Zacks Consensus Estimate of $2.33 billion. The top line rose 10% year over year.
Citizens Financial’s NII rose 13% year over year to $1.68 billion, primarily reflecting a higher net interest margin and a 6% increase in interest-earning assets.
The net interest margin (NIM) expanded 19 basis points year over year to 3.19% on a fully taxable-equivalent basis. This was mainly driven by lower terminated swap impacts, non-core runoff, fixed-rate asset repricing and improved funding costs.
Non-interest income increased 3% year over year to $647 million. The improvement was driven by higher wealth fees, service charges and fees, foreign exchange and derivative products and letter of credit and loan fees. This was partially offset by lower capital markets fees and mortgage banking fees.
Non-interest expenses increased 4% year over year to $1.39 billion. The rise was mainly due to higher salaries and employee benefits, outside services, and equipment and software costs, partially offset by lower other operating expenses.
The efficiency ratio was 60% in the third quarter compared with 63% in the year-ago quarter. A fall in the efficiency ratio reflects improved profitability.
CFG’s Q3 Segment Results
Consumer Banking revenues were $1.71 billion, up 9% year over year. The segment’s net income increased 20% to $461 million.
Commercial Banking revenues rose 4% year over year to $766 million. The segment’s net income increased 16% to $287 million.
Other revenues were negative $154 million compared with negative $189 million in the prior-year quarter. The segment reported a net loss of $112 million, narrower than the year-ago loss of $137 million.
CFG’s Loan Balance Up, Deposits Decline Sequentially
As of Sept. 30, 2026, period-end total loans and leases were $148.2 billion, up 0.5% from the prior quarter, while total deposits declined slightly to $185.2 billion on a sequential basis.
CFG’s Credit Quality Improves
In the third quarter of 2026, Citizens Financial’s provision for credit losses was $125 million, which declined 19% from the year-ago quarter.
The allowance for credit losses decreased 1% year over year to $2.17 billion.
Net charge-offs decreased to $137 million from $162 million in the prior-year quarter.
Non-accrual loans and leases declined 4% year over year to $1.46 billion.
The net charge-off ratio was 0.37%, down from 0.46% in the prior-year quarter. The allowance for credit losses to total loans and leases ratio declined to 1.47% from 1.56% a year ago.
CFG’s Capital Position Weak
As of Sept. 30, 2026, the common equity tier 1 (CET1) capital ratio was 10.5%, down from 10.7% in the prior-year quarter.
The total capital ratio was 13.7%, down from 13.9% in the year-ago quarter. The tier 1 leverage ratio was 9.2%, which decreased from 9.4% in the prior-year quarter.
The tangible common equity ratio was 6.7%, down from 7.4% in the year-ago quarter.
Citizens Financial’s Share Repurchase Update
In the third quarter of 2026, CFG repurchased $125 million of common shares and paid $197 million in common dividends.
Further, the board increased the capacity of its common share repurchase program to $1.95 billion, up $1.3 billion from the $650 million remaining under the previous June 2025 authorization.
The company's board of directors declared a 13% increase in its quarterly common stock dividend to 52 cents per share, payable in the fourth quarter of 2026.
Citizens Financial’s Guidance
For the fourth quarter of 2026, CFG expects NII to increase approximately 2.5-3% sequentially, while non-interest income is projected to rise 4-5%.
The company expects NIM to be between 3.23% and 3.26% in the fourth quarter of 2026.
Non-interest expenses are expected to increase approximately 1% from the third-quarter level.
Net charge-offs are projected to remain stable or decline slightly from 37 basis points in the third quarter. The CET1 ratio is expected to be approximately 10.6-10.7%.
The company plans to repurchase approximately $200 million worth of shares in the fourth quarter. The tax rate is expected to be nearly 22%.
For the medium term, CFG expects NIM to reach 3.30-3.50% by the fourth quarter of 2027.
The company remains focused on its Reimagine the Bank program, targeting approximately $100 million in pre-tax run-rate benefits by the end of 2026, $225 million by the end of 2027 and more than $450 million by the end of 2028.
Our View on CFG
Citizens Financial’s solid third-quarter results reflect growth in NII and fee income, along with improved efficiency and credit quality. Growth in loan and deposit balances on a year-over-year basis was another positive.
The company continues to execute well on its strategic initiatives. Strong Private Bank growth, record Wealth fees, continued progress on the Reimagine the Bank program and investments in technology and artificial intelligence are expected to support its performance through 2026 and 2027.
The Private Bank contributed 16 cents to third-quarter EPS, reflecting continued momentum. Management remains well positioned to achieve a return on average tangible common equity of 16-18% by the end of 2027. However, elevated expenses and a weaker capital position remain near-term headwinds.
Citizens Financial Group, Inc. Price, Consensus and EPS Surprise
Citizens Financial Group, Inc. price-consensus-eps-surprise-chart | Citizens Financial Group, Inc. Quote
Currently, Citizens Financial carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Release Dates of Other Banks
Fifth Third Bancorp (FITB - Free Report) is scheduled to release third-quarter 2026 earnings on Oct. 19.
The Zacks Consensus Estimate for FITB’s quarterly earnings has been unchanged at $1.09 per share over the past seven days. This indicates a 17.2% rise from the prior-year reported number.
BOK Financial Corporation (BOKF - Free Report) is also slated to report third-quarter 2026 results on Oct. 19.
Over the past seven days, the Zacks Consensus Estimate for BOKF’s quarterly earnings has been unchanged at $2.54 per share. This implies a 14.4% rise from the prior-year reported number.