Citizens Financial Group, Inc. · NYSE:CFG
Citizens Financial — Morgan Stanley Financials Conference 2017
32 slides from Citizens Financial's conference presentation, Jun 13, 2017
Slide 1: Morgan Stanley Financials Conference
Morgan Stanley Financials Conference June 13, 2017 Don McCree Vice Chairman, Head of Commercial Banking
Slide 2: Forward-looking statements and use of key performance metrics and Non-GAAP financial measures
Forward-looking statements and use of key performance metrics and Non-GAAP financial measures This document contains forward-looking statements within the Private Securities Litigation Reform Act of 1995. Any statement that does not describe historical or current facts is a forward-looking statement
Slide 3: Summary
Summary 1 Part of a solid franchise with leading positions 2 Committed to uptiering leadership and talent 3 Delivering a track record of growth 4 Focused on broadening and deepening client relationships 5 Producing continued momentum in fee income & deposit growth 6 With stable asset quality 7 Drivi
Slide 4: Solid franchise with leading positions in attractive markets
Solid franchise with leading positions in attractive markets 1 Retail presence in 11 states Complemented by select national businesses Dimension(1) Rank(2) Top 5 deposit market share in 9 of 10 largest MSAs(3) Assets: $150.3 billion #12 Loans: $108.1 billion(4) #11 #12 nationally; Manchester, NH: #1
Slide 5: Robust product offerings and balanced business mix
Robust product offerings and balanced business mix 1 Consumer Commercial Retail Deposit Services Corporate Banking Mobile/Online Banking Commercial Real Estate Deep client Extensive Franchise Finance Credit/Debit Card relationships + product set Asset Finance Wealth Management Home
Slide 6: Commercial Banking key lines of business and products
Commercial Banking key lines of business and products 2 Corporate Banking Commercial Steve Woods 32 years’ experience, CFG – 10 years Real Estate Northeast Mid Atlantic Industry Verticals Midwest CRE Jerry Sargent Dan Fitzpatrick Dan Fitzpatrick Offer Accepted Gary Magnuson 35 years’ experience 30 y
Slide 7: Commercial Banking – Solid track record of delivering growth
Commercial Banking – Solid track record of delivering growth 3 Results reflect continued investment in talent, and enhanced product and advisory capabilities Strong loan growth $ billions Recognition $46.5 $46.9 $48.0 $43.8 $45.9 94% Barlow Overall Customer Satisfaction(2) 1Q16 2Q16 3Q16 4Q16 1Q17 D
Slide 8: Commercial Banking Segment
Commercial Banking Segment 3 1Q17 change from Highlights $s in millions 1Q17 4Q16 1Q16 4Q16 1Q16 $ % $ % Net interest income $ 346 $ 347 $ 300 $ (1) — % $ 46 15 % Positive operating leverage has driven Noninterest income 134 122 99 12 10 35 35 37% growth in pre-provision profit YoY Total revenue 4
Slide 9: Broadening & deepening client relationships
Broadening & deepening client relationships 4 Capitalizing on strong satisfaction and share in core markets while developing growth markets Corporate Banking overall client satisfaction(1) Strong client-centric foundation that differentiates on 93% 94% service, expertise and expanding capabilities
Slide 10: Continued growth opportunities in Global and Capital Markets
Continued growth opportunities in Global and Capital Markets 5 Leveraging strong expertise and solutions-based orientation with expanding capabilities $ millions Capital and Global Markets fee income Corporate finance professionals(3) key to $217 solutions-oriented model $161 $167 Added 20 profe
Slide 11: Treasury Solutions & Deposits
Treasury Solutions & Deposits 5 Improving our offering with focus on digital experience, product enhancement, sales effectiveness and client service $ millions Recent investments in platform, products and Treasury Solutions Commercial Banking fees(1) customer-facing talent providing underlying mom
Slide 12: We continue to smartly grow our balance sheet
We continue to smartly grow our balance sheet 6 Total commercial loans(1) $ billions $44.8 $49.2 20% $40.9 Good loan growth with rising yields 3.01% 2.86% 2.78% 2014 2015 2016 Loan yield 18% 18% 19% 5% Return on loan book regulatory capital improving(2) 2014 2015 2016 6.1% 5.3% 5.4% Commer
Slide 13: Strong commitment to driving improving returns & efficiency
Strong commitment to driving improving returns & efficiency 7 Embedding a culture of efficiency and continuous improvement Leveraging each colleague for process improvement ROTCE(1) and ROTA(1) Rigorously managing the balance sheet 13.0% 12.5% 12.9% 13.2% Prospecting priorities established by
Slide 14: Key messages
Key messages Commercial Banking continues to deliver strong growth, reflecting expansion of the franchise Financial results paced by strong loan and deposit growth and build out of fee-based businesses Client satisfaction remains high; comprehensive approach to adding and maintaining quality r
Slide 15: Appendix
Appendix 3% Citizens Financial Group, Inc.”
Slide 16: At Citizens, continue to smartly grow our balance sheet
At Citizens, continue to smartly grow our balance sheet Total loans $ billions $108(1) 16% $99 $94 Good loan growth with rising yields 3.58% 3.34% 3.34% 2014 2015 2016 Loan yield 21% 21% 23% 10% Return on loan book regulatory capital improving(2) 2014 2015 2016 5.8% 5.1% 4.8% 17% Stress lo
Slide 17: Diversified and granular loan mix
Diversified and granular loan mix $56.0 billion $51.7 billion 4Q16 retail portfolio 4Q16 commercial portfolio Business Other Non-Core Out of Banking Non-Core Out of 26% 34% Education Finance 3%3% Home footprint(1,2) Leases 5%2% footprint(1,2) 11% Equity 6% 14% Midwest Credit Cards 28% 12% Midwest 3%
Slide 18: Core commercial portfolio overview
Core commercial portfolio overview Highlights 4Q16 $50.6 billion core commercial portfolio Asset quality relatively stable and has reached by Industry Sector (1) pre-crisis levels All Other(3) Overall credit risk is moderate and compares Retailers 11% Real Estate well with peers Lessors 2% 20% A
Slide 19: Commercial Real Estate line of business overview
Commercial Real Estate line of business overview (1) Highlights 4Q16 $10.0 billion Commercial Real Estate Line of Business Continued progress in uptiering portfolio to by Facility Type by Property Type larger, more well-capitalized institutional Land Hospitality Other CRE collateral and upper midd
Slide 20: Shared National Credit portfolio overview
Shared National Credit portfolio overview Highlights 4Q16 $22.9 billion SNC portfolio Shared National Credits (SNC) $22.9 billion in by Geography Out of outstanding balances footprint CA 7% Well-diversified portfolio with $12 million average Out of Mid-Atlantic TX 6% outstanding balance Footprin
Slide 21: Oil & Gas portfolio overview
Oil & Gas portfolio overview 4Q16 Oil & Gas outstandings Highlights Well-diversified portfolio with ~100 clients Tota l Uti l i zed Cri ti ci zed Nona ccrua l $s i n mi l l i ons O/S % % s ta tus Includes $326 million of corporate aircraft (1) Les s pri ce-s ens i ti ve tota l $ 752 61% 4% $ 2 l
Slide 22: Key performance metrics, Non-GAAP financial measures and reconciliations
Key performance metrics, Non-GAAP financial measures and reconciliations $s in millions, except share, per share and ratio data QUARTERLY TRENDS 1Q17 Change 1Q17 4Q16 3Q16 2Q16 1Q16 4Q16 1Q16 $ % $ % Noninterest inc ome, adjusted: Noninterest income (GAAP) $379 $377 $435 $355 $330 $2 1% $49 15 % Les
Slide 23: Key performance metrics, Non-GAAP financial measures and reconciliations
Key performance metrics, Non-GAAP financial measures and reconciliations $s in millions, except share, per share and ratio data QUARTERLY TRENDS 1Q17 Change 1Q17 4Q16 3Q16 2Q16 1Q16 4Q16 1Q16 $/bps % $/bps % Operating leverage: Total revenue (GAAP) A $1,384 $1,363 $1,380 $1,278 $1,234 $21 1.54 % $15
Slide 24: Key performance metrics, Non-GAAP financial measures and reconciliations
Key performance metrics, Non-GAAP financial measures and reconciliations $s in millions, except share, per share and ratio data QUARTERLY TRENDS 1Q17 Change 1Q17 4Q16 3Q16 2Q16 1Q16 4Q16 1Q16 $/bps % $/bps % Tangible book value per c ommon share: Common shares - at end of period (GAAP) M 509,515,646
Slide 25: Key performance metrics, Non-GAAP financial measures and reconciliations
Key performance metrics, Non-GAAP financial measures and reconciliations $s in millions, except share, per share and ratio data QUARTERLY TRENDS 1Q17 Change 1Q17 4Q16 3Q16 2Q16 1Q16 4Q16 1Q16 $ % $ % Other inc ome, adjusted Other income (GAAP) $24 $25 $87 $15 $20 ($1) (4%) $4 20 % Less: Notable item
Slide 26: Key performance metrics, Non-GAAP financial measures and reconciliations
Key performance metrics, Non-GAAP financial measures and reconciliations $s in millions, except share, per share and ratio data FULL Y EAR 2016 Change 2016 2015 2014 2015 $ % Noninterest inc ome, adjusted: Noninterest income (GAAP) $1,497 $1,422 $1,678 $75 5% Less: Special items — — 288 — — Less: No
Slide 27: Key performance metrics, Non-GAAP financial measures and reconciliations
Key performance metrics, Non-GAAP financial measures and reconciliations FULL Y EAR $s in millions, except share, per share and ratio data 2016 Change 2016 2015 2014 2015 $/bps % Operating leverage: Total revenue (GAAP) A $5,255 $4,824 $431 8.93 % Less: Noninterest expense (GAAP) C 3,352 3,259 93 2.
Slide 28: Key performance metrics, Non-GAAP financial measures and reconciliations
Key performance metrics, Non-GAAP financial measures and reconciliations $s in millions, except share, per share and ratio data FULL Y EAR 2016 Change 2016 2015 2014 2015 $/bps % Tangible book value per c ommon share: Common shares - at end of period (GAAP) Q 511,954,871 527,774,428 545,884,519 (15,
Slide 29: Key performance metrics, Non-GAAP financial measures and reconciliations
Key performance metrics, Non-GAAP financial measures and reconciliations $s in millions, except share, per share and ratio data THREE MONTHS ENDED MAR 31, THREE MONTHS ENDED DEC 31, THREE MONTHS ENDED SEPT 30, 2017 2016 2016 Consumer Commerc ial Other Consolidated Consumer Commerc ial Other Consolid
Slide 30: Key performance metrics, Non-GAAP financial measures and reconciliations
Key performance metrics, Non-GAAP financial measures and reconciliations QUARTERLY TRENDS $s in millions, except share, per share and ratio data 1Q17 Change 1Q17 4Q16 1Q16 4Q16 1Q16 $/bps % $/bps % Inc ome before inc ome tax expense (GAAP) A $434 $414 $332 $20 4.8 % $102 30.7 % Inc ome tax expense a
Slide 31: Key performance metrics, Non-GAAP financial measures and reconciliations
Key performance metrics, Non-GAAP financial measures and reconciliations $s in millions, except share, per share and ratio data FOR THE THREE MONTHS ENDED MAR. 31, DEC. 31, SEP. 30, JUNE 30, MAR. 31, DEC. 31, SEP. 30, JUNE 30, MAR. 31, DEC. 31, SEP. 30, JUNE 30, MAR. 31, DEC. 31, SEP. 30, 2017 2016
Slide 32: Citizens Financial Group, Inc.
3< Citizens Financial Group, Inc.”
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