Fee income, deposit growth highlight Citizens' 1Q

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Citizens Financial Group in Providence, R.I., reported strong growth in loans and fee income and continued its digital deposit-gathering efforts in the first quarter.

Net income for the $160.5 billion-asset Citizens totaled $439 million in the first quarter, up 13% from the year-earlier period. Earnings per share of 92 cents exceeded the mean estimate of analysts polled by Fact Set Research Systems by 3 cents.

“During the quarter we closed on the acquisitions of wealth management and M&A advisory firms, we began the rollout of our new cash management platform, and we launched four more fintech partnerships,” Chairman and CEO Bruce Van Saun said in a press release Thursday. “We continue to balance well our need to deliver improving near-term results with the imperative of adhering to a thoughtful long-term strategy."

Net interest income increased 6% to $1.2 billion, and the net interest margin expanded 4 basis points to 3.23%.

Total loans and leases increased 6% to $117.6 billion, with growth happening across most of its loan categories. Commercial loans rose 8% to $41.5 billion, and commercial real estate rose 14% to $13.4 billion. Residential mortgages increased 11% to $19.2 billion, and education loans rose 11% to $9.2 billion. Home equity lending, however, fell on a year-over-year basis.

Noninterest income rose 15% to $428 million. Most of the bank’s fee businesses improved, except for service charges and card fees. Capital markets fees increased 38% to $54 million, for instance, and mortgage banking fees increased 72% to $43 million.

Total deposits rose 7% to $123.9 billion, driven by growth in term deposits, savings and checking with interest. Deposits in Citizens Access, its digital only brand launched in mid-2018, totaled $4.6 billion in the first quarter, compared with $3 billion at the end of 2018.

Noninterest expenses increased 6% to $937 million. Salaries and employee benefits rose 8% to $509 million, and equipment and software expenses increased 11% to $125 million.

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Earnings Regional banks Commercial lending Capital markets Fee income Deposits Citizens Financial