CFG-PH — Citizens Financial Group, Inc.

Summary of Citizens Financial Group (CFG-PH) Q2 2026 Earnings Call

1. Key Financial Results and Metrics

• Earnings Per Share (EPS): $1.30, a 15% increase sequentially and a 41% increase year-on-year.
• Return on Tangible Common Equity (ROTCE): Improved to 13.9%, up from 12.2% in Q1 2026.
• Net Interest Income (NII): Increased by 4.4% sequentially and 14% year-on-year, driven by net interest margin (NIM) expansion and loan growth.
• Fee Revenues: Up 8% sequentially and 9% year-on-year, with record capital markets performance and strong wealth management fees.
• Expenses: Managed tightly, up about 1% linked quarter, resulting in an efficiency ratio of 61%.
• Loan Growth: Average loans increased by 2% linked quarter, with period-end loans up 3%.
• Deposits: Average deposits increased by 1%, with spot deposits up $1.6 billion, primarily from the private bank.

2. Strategic Updates and Business Highlights

• Private Bank Growth: The private bank contributed $0.15 to EPS, representing 11.5% of total EPS, with strong deposit and loan growth.
• Reimagine the Bank Initiative: Progressing well, focusing on technology adoption and operational efficiency, with expectations of significant long-term financial benefits.
• Branch Optimization Strategy (NEXT): Aimed at enhancing branch locations and adding specialists to drive retail household and deposit growth.
• Capital Markets Performance: Achieved record revenues, with strong momentum in loan syndications and bond underwriting.

3. Forward Guidance and Outlook

• Q3 2026 Guidance: Expect NII to increase by 2.5% to 3.5%, with stable expenses and charge-offs.
• Full-Year Outlook: Tracking favorably against guidance, with revenue trending above initial expectations and positive operating leverage anticipated.
• Long-Term ROTCE Target: Aiming for 16% to 18% ROTCE by the end of 2027, supported by continued NIM expansion and growth in the private bank.

4. Bad News, Challenges, or Points of Concern

• Credit Quality Monitoring: While credit trends are favorable, ongoing monitoring of the macroeconomic environment is necessary.
• Commercial Real Estate (CRE) Portfolio: Continued planned reductions in CRE, with expectations of further paydowns affecting growth.
• Deposit Competition: Slight uptick in deposit costs noted, though management remains confident in maintaining positive NIM progression.

5. Notable Q&A Insights

• Deposit Costs: Management expects stability in deposit costs despite recent increases, with confidence in maintaining low-cost deposit growth.
• Loan Growth Outlook: While Q2 saw strong loan growth, expectations for Q3 may be tempered due to pull-forward dynamics.
• Private Bank Strategy: Emphasis on sustainable growth in loans and deposits, with a target loan-to-deposit ratio of 60% to 70%.
• Market Conditions: Management expressed optimism about the M&A pipeline and broader economic conditions, suggesting potential for increased deal activity in the middle market.

Overall, CFG-PH reported strong financial performance in Q2 2026, driven by robust revenue growth and effective expense management, while outlining a positive outlook for the remainder of the year and beyond. However, challenges related to credit quality and deposit competition remain on the radar.