Citizens Financial Group, Inc.

Good morning, everyone, and welcome to the Citizens Financial Group fourth quarter and full year 2020 earnings conference call. My name is Alan, and I'll be your operator for today. Currently, all participants are in a listen-only mode. Following the presentation, we will conduct a brief question and answer session. As a reminder, this event is being recorded. Now I'll turn the call over to Kristen Silberberg, Executive Vice President, Investor Relations. Kristen, you may begin.

Thank you, Alan. Good morning, everyone, and thank you for joining us. First this morning, our Chairman and CEO, Bruce Van Saan, and CFO, John Woods, will provide an overview of fourth quarter and full year results, referencing our presentation, which you can find on our Investor Relations website. After the presentation, we'll be happy to take questions. Brendan Coughlin, Head of Consumer Banking, and Don McCree, Head of Commercial Banking, are also here to provide additional colour. 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 two of the presentation. We also reference non-GAAP financial measures, so it's important to review our GAAP results on page three of the presentation and the reconciliation in the appendix. With that, I will hand over to Bruce.

Okay, thanks, Kristen. Good morning, everyone, and thanks for joining our call today. We are pleased with the financial performance that we delivered for the fourth quarter and for the full year as we proved adaptable and resilient given the unprecedented challenges of 2020. We continue to demonstrate the diversification and resilience of our business model as our mortgage and capital markets businesses delivered strong fourth quarter performance. We remain highly focused on taking care of customers with our retail branches open and our teams working on the next round of PPP loans. We feel we're managing our risk well, and we continue to make progress on our strategic initiatives, which will position us well for future growth and for franchise value. I'll comment briefly on a few of the financial headlines, and then I'll let John take you through the details. Our underlying Q4 EPS was $1.04. Our ROTCE was 12.9%. Both are up from a year ago quarter, and we delivered 2% operating leverage year-on-year. Note that the full-year operating leverage was 4%, and our PPNR growth was 12%. 2.4 credit provision was $124 million versus $110 million a year ago on a pre-seizal basis, as the normalization of provision to more front book origination levels helped drive our strong returns. On the capital front, we maintained a strong ACL ratio of 2.24% of ex-PPP loans, and our CET1 ratio was 10%. This strong capital and reserve position gives us a great deal of capital management flexibility in 2021. We announced a $750 million share purchase authorization today and will commence activity during the quarter. We also will look to put our capital and ample liquidity position to work in finding attractive opportunities for loan growth. Our credit metrics all are trending favorable with NCOs, NPAs, and criticized assets all lower in the quarter and a further drop in customers in forbearance. We continue to allocate additional reserves to the industry segments most affected by the pandemic and lockdowns, and we feel that our coverage overall is very strong. With respect to our guidance for 2021, we assume a steadily improving economy and and GDP growth of around 5%. Relative to current consensus, we see slightly higher revenue, expenses, and PPNR, as well as much better performance on credit. We see NCOs at 50 to 65 basis points for 2021, which is relative to 56 basis points in 2020. Provision will be less than charge-offs, though how big the reserve release will be is dependent on the path of economic recovery. Big picture, we will transition to slightly lower PPR in 2021, given our outperformance in mortgage in 2020, but this will be more than made up for by lower credit costs as our earnings and returns bounce back towards pre-COVID levels. So all in all, a very strong year of execution and delivery for all stakeholders by citizens in 2020, and we feel we are well positioned to do well in 2021 and continue our journey towards becoming a top-performing bank. I'd like to end my remarks by thanking our colleagues for rising to the occasion and delivering a great effort in 2020. We know we can count on you again in the new year. With that, I'll turn it over to John.