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CITIZENS FINANCIAL GROUP REPORTS SECOND QUARTER EARNINGS INCREASE OF 142 PERCENT, CONTINUED STRENGTH IN ASSET QUALITY, CAPITAL

 PROVIDENCE, R.I., May 5 /PRNewswire/ -- Citizens Financial Group, Inc. ("Citizens") reported a 142 percent increase in net income in the second quarter of Fiscal Year 1993 ending March 31, earning $7.5 million compared to the $3.1 million earned in the quarter ending March 31, 1992.
 For the six months ending March 31, Citizens had net income of $17.6 million, a 133 percent, or $10.0 million increase over the $7.6 million reported for the comparable half year ending March 31, 1992. For the twelve months of Fiscal Year 1992 which ended September 30, Citizens reported earnings of $17.5 million.
 Citizens' capital ratios remained strong and at levels well in excess of federal requirements. At March 31, the tangible capital ratio was 6.96 percent, and the total risk-based capital ratio was 12.13 percent, compared to federal minimum standards of 3 percent and 8 percent, respectively.
 The earnings increase was attributed by the company to continuing strong mortgage banking activity, and increase in net interest income, an increase in income from fee-generating businesses, and a reduction in the provision for possible credit losses.
 For the 12 months ending March 31, assets grew 14.9 percent to $4.72 billion, making Citizens approximately the 92nd largest bank holding company in the nation. Citizens on April 13 announced a definitive agreement to acquire The Boston Five Bancorp. Upon completion of that purchase, expected within the next six to nine months, Citizens' assets will grow to approximately $6.4 billion and rank approximately 75th in the nation. With the addition of Boston Five's mortgage portfolio, Citizens' mortgage banking subsidiary, Gulf States Mortgage Co., Inc., will grow to approximately $8 billion in mortgage servicing, putting it among the 50 largest mortgage companies in the country.
 Meanwhile, nonperforming loans and leases, and nonperforming assets continued to decline, to $55.0 million and $79.2 million, respectively, at quarter end. Reserve coverage for problem loans and leases had grown to 85.1 percent at March 31, compared to the 51.8 percent set aside March 31, 1992.
 "The success of Citizens' consumer-oriented products has given us the strength to outpace the sluggish regional economy and provide the earnings and capital that allows us to accomplish transactions like The Boston Five." said Citizens Chairman, President and Chief Executive Officer Lawrence K. Fish.
 "Our performance in our core business combined with the continuing decline in problem loans and the related reduction in our provisioning for them allow us to grow from a position of strength and stability," Fish added.
 Net interest income for the quarter ending March 31 was $39.6 million, compared to $33.6 million reported for the same period in 1992, an increase of $6.0 million, or 18.1 percent. For the first six months of the fiscal year, net interest income was $80.1 million, an increase of $12.6 million, or 18.7 percent, over the $67.5 million reported for the first six months of Fiscal Year 1992.
 For the quarter, noninterest income was $17.4 million, a $3.9 million, or 28.7 percent, increase over the $13.5 million reported for the comparable quarter last year. At the half year, the company reported noninterest income of $36.8 million, compared to $27.9 million for the six months ending March 31, 1992, and $8.9 million, or 31.9 percent, increase. Continuing strength in the performance of Citizens' mortgage banking operation and an increase in other fee-based businesses contributed to the rise in noninterest income.
 The provision for credit losses was $5.2 million for the quarter, down 25.3 percent from the $7.0 million set aside at March 31, 1992. For the six-month period, the provision was $10.4 million, a decrease of $4.3 million from the $14.7 million set aside at the half-way point in Fiscal 1992. The continuing reduction in the provision was attributed to the steady stabilization of the loan portfolio and a reduction in charge-offs for bad loans.
 At March 31, nonperforming loans and leases (NPLs) were $55.0 million, or 2.0 percent of total loans, a $23.6 million decline from the March 31, 1992 NPL total of $78.6 million, or 3.1 percent of total loans. Nonperforming assets (NPAs) of $79.2 million at March 31 represented 1.7 percent of total assets, a decline of $19.0 million from the March 31, 1992 NPA total of $98.2 million, or 2.4 percent of total assets.
 Noninterest expense for the quarter ending March 31 was $39.7 million, compared to $34.7 million for the quarter ending March 31, 1992. For the half year, noninterest expenses were $78.0 million, compared to $68.3 million for the same six-month period in Fiscal 1992.
 The asset total of $4.72 billion at March 31 compares to $4.11 billion in assets at March 31, 1992, a $611 million, or 14.9 percent, increase in assets.
 Total deposits at March 31 were $3.80 billion, up $539 million from the $3.26 billion in deposits at March 31, 1992.
 Citizens Financial Group, Inc., a wholly owned subsidiary of The Royal Bank of Scotland plc, is comprised of Citizens Savings Bank and Citizens Trust Company, operating jointly as Citizens Bank with 48 branch offices in Rhode Island; Citizens Bank of Massachusetts, which has 11 branch offices in southeastern Massachusetts; and Gulf States Mortgage Co., Inc., a Georgia-based corporation headquartered in Atlanta with 16 offices in the eastern United States.
 CITIZENS FINANCIAL GROUP, INC.
 CONSOLIDATED BALANCE SHEETS
 MARCH 31,
 ($ in thousands)
 Percent
 1993 1992 Inc./(Dec.)
 Assets:
 Cash and due from banks $137,993 148,424 (7.0)
 Interest-bearing deposits 65,611 42,361 54.9
 Federal funds sold 247,899 157,500 57.4
 Other short-term investments 249,774 19,972 ---
 Investment securities 887,403 908,376 (2.3)
 Loans and leases:
 Mortgage:
 Consumer 1,249,989 1,064,174 17.5
 Commercial 388,856 391,785 (0.7)
 Commercial 374,777 412,590 (9.2)
 Consumer 677,248 619,025 9.4
 Lease financing 33,827 32,529 4.0
 Other 28,780 18,761 53.4
 Total loans and leases 2,753,477 2,538,864 8.5
 Less: reserve for possible
 credit losses 46,765 40,693 14.9
 Net loans and leases 2,706,712 2,498,171 8.3
 Mortgages held for sale 123,779 99,486 24.4
 Premises and equipment 85,030 85,877 (1.0)
 Accrued interest receivable 23,610 26,657 (11.4)
 Goodwill and other intangibles 60,205 58,464 3.0
 Trading account securities 52,216 1,975 ---
 Other assets 79,108 61,444 28.7
 Total $4,719,340 $4,108,707 14.9
 Liabilities and Stockholders' Equity:
 Deposits:
 Demand $465,604 $388,231 19.9
 Savings 3,276,327 2,784,603 17.7
 Other time 53,874 84,029 (35.9)
 Total deposits 3,795,805 3,256,863 16.5
 Short-term borrowings 469,783 418,319 12.3
 Long-term borrowings 39,219 47,757 (17.9)
 Other liabilities 67,622 61,486 10.0
 Total liabilities 4,372,429 3,784,425 15.5
 Stockholders' Equity:
 Common stock 1 cent par value,
 1,000 shares authorized, issued
 and outstanding --- --- ---
 Capital surplus 156,404 156,404 ---
 Retained earnings 190,507 167,878 13.5
 Total stockholders' equity 346,911 324,282 7.0
 Total $4,719,340 $4,108,707 14.9
 CITIZENS FINANCIAL GROUP, INC.
 CONSOLIDATED STATEMENTS OF INCOME
 Three Months Six Months
 Ended March 31, Ended March 31,
 ($ in thousands) 1993 1992 1993 1992
 Interest Income:
 Loans and leases $57,903 $58,557 $118,325 $121,627
 Investments 16,044 15,551 32,267 32,548
 Total interest income 73,947 74,108 150,592 154,175
 Interest expense 34,319 40,565 70,446 86,672
 Net interest income 39,628 33,543 80,146 67,503
 Provision for credit
 losses 5,226 7,000 10,414 14,714
 Net interest income after
 provision for credit
 losses 34,402 26,543 69,732 52,789
 Noninterest income:
 Mortgage banking 6,554 4,211 12,350 8,329
 Gains on portfolio
 securities 1,809 1,810 6,612 5,156
 All other noninterest
 income 9,006 7,467 17,839 14,426
 Total noninterest
 income 17,369 13,488 36,801 27,911
 Noninterest expense 39,647 34,773 77,966 68,253
 Income before taxes 12,124 5,258 28,567 12,447
 Applicable income taxes 4,597 2,148 10,918 4,884
 Net income $7,527 $3,110 $17,649 $7,563
 Post-tax return on
 average assets 0.68 pct 0.31 pct 0.78 pct 0.38 pct
 Post-tax return on
 average equity 8.90 pct 3.88 pct 10.44 pct 4.72 pct
 Interest rate
 spread (a) 3.27 pct 3.00 pct 3.34 pct 3.05 pct
 Interest rate
 margin (a) 3.79 pct 3.62 pct 3.84 pct 3.70 pct
 /NOTE TO EDITORS: (a) Fully taxable equivalent basis. The financial information contained herein has been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP)./
 -0- 5/5/93
 /CONTACT: Ken Hogberg, 401-456-7570, or James R. Dorsey, 401-455-5934, both of Citizens Financial Group, Inc./


CO: Citizens Financial Group, Inc. ST: Rhode Island IN: FIN SU: ERN

DJ -- NE005 -- 4811 05/05/93 11:06 EDT
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