Citizens Financial Group, Inc.

Good morning, everyone, and welcome to the Citizens Financial Group fourth quarter and full year earnings conference call. My name is Ivy, 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. I'll now turn the call over to Levin Thomas, Senior Vice President, Investor Relations. Levin, you may begin.

Thank you, Ivy. Good morning, everyone, and thank you for joining us. I'm stepping in today for Kristen, who is out sick. First this morning, our Chairman and CEO, Bruce Van Son, and CFO, John Woods, will provide an overview of our fourth quarter and full year 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 fourth quarter and full year 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 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 reconciliations in the appendix. And with that, I will hand it over to Bruce.

Okay, thanks, Thomas. Good morning, everyone, and thanks for joining our call today. We were pleased to finish the year with a strong quarter as our financial results reflect good sequential revenue growth led by NIM expansion and capital markets fees, positive operating leverage, favorable credit trends, and a robust balance sheet across capital, liquidity, and LDR. We are still seeing subdued loan demand, but we've more than compensated for that with 10 basis points of NIM expansion that drove sequential NAI growth of 3%. Fees grew sequentially by 6%, paced by capital markets and mortgage. While expense growth was 3.5%, paced by hiring in private bank, private wealth, and commercial middle market, we still delivered positive operating leverage of around 50 basis points. Our credit trends are looking favorable, with NPAs down sequentially, criticized assets trending down, and no surprises in charge-offs as we work through our CRE office portfolio. Given these trends and the contraction in loan balances, we added $162 million to our provision against $189 million in charge-offs, and our ACL to loan ratio increased slightly to 1.62%. We currently expect that the credit trends should continue and that we should be able to see credit costs come down in 2025. We continue to repurchase shares in the quarter, 225 million, bringing the full year total to 1.05 billion. We repurchased 28 million shares in 2024, or 6% of the beginning of year balance. With respect to execution of our key initiatives, We made further progress across the private bank, our New York City metro strategy, serving private capital, and growing our payments business. BSO efforts saw a reduction in non-core loans of $4.2 billion in 2024, with a remaining balance of $6.9 billion. We are looking for opportunities to accelerate the rundown, so stay tuned on that. In addition, we made further progress in exiting low returning relationships in C&I and in reducing overall CRE loans. Our top nine program was executed well, delivering $150 million in annualized Q4 run rate benefits, and we've launched top 10 with a target benefit of $100 million. The private bank private wealth progress is worth spotlighting. The business continues to ramp up nicely, growing the customer base and hitting all financial targets. We reached $7 billion in deposits, $3.1 billion in loans, and $4.7 billion in AUM, and we were profitable in the quarter. We are confident in our ability to meet or exceed our goal of having this business be 5% accretive to our bottom line in 2025. And we added a banking team to Southern California in Q4, And this morning, we announced an additional wealth team in South Florida. For the full year 2024, we hit most line items in our beginning of year guide. That's shown on slide 34, with the exception of balance sheet volume. That said, we were able to repurchase more shares given the lack of loan demand. Turning to our 2025 outlook, we expect solid growth in NII given further NIM expansion. and a resumption of modest net loan growth. Fees should grow nicely, paced by capital markets and wealth. We have confidence in this revenue outlook, so we'll step up investments in OpEx and CapEx to support key growth initiatives. We anticipate attractive positive operating leverage for the full year of around 1.5%. Credit costs are projected to improve year-on-year, and we expect to see reserve releases continue throughout the year. We will manage our set one ratio above the high end of our 10 to 10.5% range, given ongoing uncertainty, but we expect to continue with regular share repurchases. We've included some slides on our medium term outlook and how the drag from our legacy swap portfolio will dissipate with time. We remain confident in our ability to achieve our medium term 16 to 18% ROTC target. Exciting time for citizens. Our strategy rests on a transformed consumer bank, the best positioned super regional commercial bank, and the aspiration to have the premier bank-owned private bank. We've made steady progress and will continue to execute with the financial and operating discipline you've come to expect from us. I'd like to end my remarks by thanking our colleagues for rising to the occasion and delivering a great effort in 2024. We know we can count on you again this year. So with that, let me turn it over to John.