Citizens Financial Group in Providence, R.I., combined asset growth and paper gains into a strong boost to the bottom line.
Fourth-quarter profits more than doubled year over year to $666 million thanks to accounting adjustments from the tax law as well as an expanded retail loan book.
However, excluding one-time items, earnings per share were 71 cents, or 9 cents short of the consensus of analysts' estimates compiled by FactSet Research systems.
The $152.3 billion-asset company reported a $317 million benefit tied to the revaluation of its deferred tax liability after the signing of the tax law last month.
Net interest income climbed 10% to $1.1 billion. The net interest margin expanded 18 basis points to 3.08%. Total loans increased 3% to $110 billion, lifted by 5% growth (to $58.6 billion) in the company’s retail lending portfolio, which includes mortgages, student loans and unsecured personal credits.
Noninterest income rose 7% to $404 million as double-digit increases in card, trust and investment fees offset lower revenue from mortgage banking.
Noninterest expenses were $898 million, up 6%, mostly on higher compensation costs. Citizens' efficiency ratio, excluding the one-time items, was 60.5%, improved from 62.1% a year earlier.
The company slashed its provision for credit costs 19% to $83 million.
“We are pleased to report another quarter of strong results to cap what has been an exceptional year for Citizens,” Chairman and Chief Executive Bruce Van Saun, said in a press release Friday announcing the results, noting that the company earned a 10.4% return on tangible common equity.