Citizens Financial Group, Inc. (CFG) Q3 2022 Earnings Call Transcript

Citizens Financial Group, Inc. (NYSE:CFG) Q3 2022 Earnings Conference Call October 19, 2022 9:00 AM ET

Company Participants

Kristin Silberberg - Executive Vice President, Investor Relations

Bruce Van Saun - Chairman & Chief Executive Officer

John Woods - Chief Financial Officer

Brendan Coughlin - Head, Consumer Banking

Don McCree - Head, Commercial Banking

Conference Call Participants

Scott Siefers - Piper Sandler

Erika Najarian - UBS

Matthew O'Connor - Deutsche Bank

Ebrahim Poonawala - Bank of America

Gerard Cassidy - RBC Capital Markets

Brian Wilczynski - Morgan Stanley

Kenneth Usdin - Jefferies

John Pancari - Evercore ISI

Operator

Good morning, everyone, and welcome to the Citizens Financial Group Third Quarter 2022 Earnings Conference Call. My name is Alan, and I'll be your operator today. [Operator Instructions] As a reminder, this event is being recorded.

Now I'll turn the call over to Kristin Silberberg, Executive Vice President, Investor Relations. Kristin, you may begin.

Kristin Silberberg

Thank you, Alan. Good morning, everyone, and thank you for joining us. First, this morning, our Chairman and CEO, Bruce Van Saun; and CFO, John Woods, will provide an overview of our third quarter results. Brendan Coughlin, Head of Consumer Banking; and Don McCree, Head of Commercial Banking, are also here to provide additional color. We will be referencing our third quarter earnings presentation located on our Investor Relations website.

After the presentation, we will be happy to take questions. Our comments today will include forward-looking statements, which are subject to risks and uncertainties that may cause our results to differ materially from expectations. These are outlined for your review on Page 2 of the presentation. We also reference non-GAAP financial measures, so it's important to review our GAAP results on Page 3 of the presentation and the reconciliations in the appendix.

With that, I will hand over to Bruce.

Bruce Van Saun

Thanks, Kristin. Good morning, everyone. Thanks for joining our call today.

We delivered another very strong quarterly result in Q3. Rising rates positively impacted our net interest income and net interest margin. Fees and expenses were broadly stable and credit performance remains excellent. We grew average loans 2% and deposits 1% as our liquidity and funding position remains strong and our CET1 ratio of 9.8% is above the midpoint of our 9.5% to 10% target range.

Our TCE to total asset ratio sits at 6.1%. Performance metrics include a net interest margin of 3.25% and that's up 21 basis points. We had positive sequential operating leverage of 6%. We had hit an efficiency ratio below 55% and our return on tangible common equity was around 18%. We built our credit reserves by $49 million with our ACL at 1.41%, and that's above the 1. 3% day 1 CECL reserve adjusted for the Investors acquisition. Beyond these impressive financial results, we've continued to make good progress in executing our strategic initiatives.