Citizens Financial Group, Inc.

Good morning, everyone, and welcome to Citizens Financial Group First Quarter 2021 Earnings Conference Call. My name is Alan, and I'll be your operator 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 first quarter 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 is also here to provide additional colour. John McCree, Head of Commercial Banking who usually joins us has a personal conflict today. 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.

Thanks Kristen. Good morning everyone. Thanks for joining our call today. We're pleased to get off to a good start to 2021 as our business model continues to demonstrate strength, diversification, and resilience, notwithstanding continuing impacts from the pandemic. We continue to focus on taking good care of customers, highlighted by $1.8 billion of PPP loans in the latest round of the program. We've kept our colleagues safe and productive, and we continue to drive benefits to our communities through various grants and strong levels of volunteerism. Our strategic initiatives remain on track and will lead to increasing differentiation and growth in franchise value versus peers over time. Our financial headlines are terrific, though they're flattered by a large reserve release given the improved economic outlook. We delivered underlying Q1 EPS of $1.41. and ROTCE of 17.6%, while our CET1 ratio grew to 10.1%, and our liquidity remains elevated with an 81% quarter-end loan-to-deposit ratio. The first half of the year can be thought of as a transition period for us in terms of PPNR as the record levels of mortgage revenues normalize. While we are still seeing strong levels of originations, both refi and purchase, elevated margins have been returning to historical levels as industry capacity has expanded and competition has intensified. We currently expect mortgage revenues broadly to bottom in Q2 and then stabilize in the second half. During the first quarter, we saw strength in capital markets and wealth fees, which partially offset the drop in mortgage fees. This should continue into Q2, and we should start to see loan growth pick up as well, which provides a further offset. The outlook for the second half PPNR is strengthening as we expect loan growth plus a stabilized NIM given the steeper curve to help deliver top-line growth. This combined with strong pull-through of our top benefits and overall expense discipline should result in healthy levels of positive operating leverage in Q3, Q4, and the second half, along with return to solid PPNR growth. The outlook for credit also continues to brighten. With a negative provision of $140 million in the first quarter, our ACL ratio XPPP loans is now 2.03%. This compares with our day one ACL upon CECL adoption of 1.47%, so there's likely still more to go on reserve for leasing, assuming the economic outlook continues to firm and clarify. All of our credit trends continue to be favorable, both on the consumer and commercial side. We've moved our charge-off guidance for full year 2021 to to 35 to 45 basis points from the initial guidance of 50 to 65 basis points. So to sum up, we feel we're off to a great start. The economic outlook continues to improve, and we are executing well on the initiatives that will position us over time as a top performing bank. With that, I'll turn it over to John.