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CITIZENS FINANCIAL GROUP REPORTS QUARTERLY EARNINGS OF $4.5 MILLION

CITIZENS FINANCIAL GROUP REPORTS QUARTERLY EARNINGS OF $4.5 MILLION
 PROVIDENCE, R.I., Jan. 24 /PRNewswire/ -- Citizens Financial Group, Inc. ("Citizens"), a wholly owned subsidiary of The Royal Bank of Scotland plc, reported net income of $4.5 million for the quarter ended Dec. 31, 1991, approximating the prior year comparable quarter. George Graboys, president and chief executive officer, noted, "The company's earnings matched last year's level for the comparable period despite the effects of a lingering recession." He added, "Citizens' expanded market presence within the state of Rhode Island, which resulted from the acquisition of selected assets and liabilities of Bank of New England--Old Colony ("Old Colony") one year ago, had a positive impact on this quarter's earnings performance."
 For the three months ended Dec. 31, 1991, net interest income increased $6.7 million primarily from the acquisition of assets and liabilities from Old Colony. Non-interest income was up $6.5 million on increased income from service operations, mortgage banking, trust operations, and other income, and a $3.4 million gain on the sale of investment portfolio securities. These improvements were offset by higher provision for loan losses (up $4.1 million) and increased non-interest expenses (up $9.6 million). The latter reflects the expanded company.
 Consolidated assets equalled $4.0 billion at Dec. 31, 1991, as compared to $3.9 billion 12 months previously. Total loans and leases of $2.5 billion were 6 percent below the level of one year ago, while total deposits, at $3.2 billion, were 6 percent higher than the level of one year ago. Citizen's portfolio of short-term investments and investment securities increased by $0.2 billion, representing 26 percent of total assets at Dec. 31, 1991, compared to 20 percent 12 months prior. This balance sheet restructuring resulted from strong core deposit growth coupled with weak loan demand.
 At Dec. 31, 1991, Citizens' consolidated non-performing loans and leases totaled $72.5 million or 2.9 percent of loans and leases, down from the Sept. 30, 1991, level of $81.5 million or 3.2 percent. Citizens' consolidated reserve for possible losses of $40.2 million provided 55.5 percent coverage of these nonperforming loans and leases. Total non-performing assets of $94.1 million represented 3.7 percent of total assets, down from the Sept. 30, 1991 level of $97.8 million or 3.8 percent.
 At Dec. 31, 1991, total stockholder's equity of $321 million represented 8.1 percent of consolidated assets. At statement date the risk adjusted capital ratio was 13.2 percent and the Tier 1 ratio was 11.9 percent, well above the current regulatory guideline levels of 7.25 percent and 3.25 percent, respectively.
 Citizens Financial Group, Inc. became a wholly owned subsidiary of The Royal Bank of Scotland Group plc in December 1988. At that time, Citizens changed its fiscal year end to that of its parent (Sept. 30).
 Citizens Financial Group, Inc. is comprised of Citizens Savings Bank and Citizens Trust Company, which operate jointly as Citizens Bank through 49 branch office in Rhode Island; Citizens Bank of Massachusetts (formerly Fairhaven Savings Bank) which has four branches in southeastern Massachusetts; and Gulf States Mortgage Co., Inc., which is a Georgia corporation based in Atlanta with 11 offices in the southeastern United States.
 CITIZENS FINANCIAL GROUP, INC. (a wholly owned subsidiary of The Royal Bank of Scotland Group plc)
 CONSOLIDATED STATEMENTS OF INCOME
 (000's omitted)
 Three Months Ended Dec. 31: 1991 1990
 Interest income:
 Loans & leases $63,070 $60,643
 Investments 16,997 13,034
 Total interest income 80,067 73,677
 Interest expense 46,107 46,439
 Net interest income 33,960 27,238
 Provision for losses 7,714 3,650
 Net interest income after
 provision for losses 26,246 23,588
 Non-interest income:
 Mortgage banking 4,047 3,286
 Gains (losses) on portfolio
 securities 3,346 (92)
 All other non-interest income 7,067 4,735
 Total non-interest income 14,460 7,929
 Non-interest expense 33,517 23,962
 Income before taxes 7,189 7,555
 Applicable income taxes 2,736 3,014
 Net income $4,453 $4,541
 Post-tax return on average assets 0.45 pct. 0.58 pct.
 Post-tax return on average equity 5.55 pct. 5.66 pct.
 Interest rate spread-(a) 3.11 pct. 2.86 pct.
 Interest rate margin-(a) 3.79 pct. 3.86 pct.
 ----
 (a)-Fully taxable equivalent basis.
 NOTE: The financial information contained herein has been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP).
 Consolidated Balance Sheets
 Dec. 31, 1991
 (OOO's omitted)
 Percent
 Assets: 1991 1990 Increase(Decrease)
 Cash and due
 from banks $156,609 178,503 (12.3)
 Interest bearing
 deposits 235,221 92,948 153.1
 Federal funds sold 239,725 174,350 37.5
 Investment
 securities 545,661 505,260 8.0
 Loans and leases:
 Mortgage
 Consumer 1,020,357 986,491 3.4
 Commercial 397,948 439,348 (9.4)
 Commercial 410,813 496,419 (17.2)
 Consumer 646,432 718,165 (10.0)
 Other 19,880 22,323 (10.9)
 Lease financing 28,207 27,291 3.4
 Total loans
 and leases 2,523,637 2,690,037 (6.2)
 Less: reserve
 for possible
 losses 40,222 41,784 (3.7)
 Net loans and
 leases 2,483,415 2,648,253 (6.2)
 Mortgages held
 for sale 70,425 38,525 82.8
 Premises and
 equipment 87,054 88,366 (1.5)
 Accrued interest
 receivable 27,309 31,181 (12.4)
 Other assets 119,945 108,028 11.0
 Total $3,965,364 $3,865,414 2.6
 Liabilities and stockholder's equity
 Deposits:
 Demand $391,115 332,657 17.6
 Savings 2,776,904 2,448,108 13.4
 Other time 72,186 265,474 (72.8)
 Total deposits 3,240,205 3,046,239 6.4
 Short-term
 borrowings 300,697 344,707 (12.8)
 Long-term
 borrowings 51,784 107,479 (51.8)
 Other liabilities 51,697 50,679 2.0
 Total
 liabilities 3,644,383 3,549,104 2.7
 Stockholder's
 equity:
 Common stock $.01
 par value, 1,000
 shares authorized,
 issued and
 outstanding --- --- ---
 Capital surplus 156,404 156,404 ---
 Retained earnings 164,768 163,981 0.5
 Net unrealized
 loss on
 marketable equity
 securities (191) (4,075) 95.3
 Total stockholder's
 equity 320,981 316,310 1.5
 Total $3,965,364 $3,865,414 2.6
 -0- 1/24/92
 /CONTACT: Robert C. Sanderson Jr., 401-456-7447, or Kenneth E. Hogberg, 401-456-7570, of Citizens Financial Group/ CO: Citizens Financial Group, Inc. ST: Rhode Island IN: FIN SU: ERN


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