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Citizens Financial Q4'18 net interest income boosted by higher loans, NIM

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Citizens Financial Q4'18 net interest income boosted by higher loans, NIM

Providence, R.I.-based Citizens Financial Group Inc. on Jan. 18 reported 2018 fourth-quarter net income applicable to common shares of $450 million, or 96 cents per share, compared to net income of $666 million, or $1.35 per share, in the year-ago quarter.

The S&P Global Market Intelligence consensus estimate for GAAP EPS for the recent quarter was 95 cents.

The recent quarter's results include a net $9 million or 2 cent-per-share posttax reduction from notable items, which includes integration costs related to the Franklin American Mortgage Co. Inc. acquisition and other noninterest expenses.

Excluding these items, underlying net income available to common shares for the quarter was $459 million, or 98 cents per share, compared to $349 million, or 71 cents per share, a year earlier. The company received a net $317 million posttax benefit in the fourth quarter of 2017.

Net interest income increased $92 million year over year to $1.17 billion, boosted by average loan growth of 5% and an improvement in net interest margin to 3.22% from 3.08%.

Total loans and leases for the quarter ticked up 2% from the prior quarter and rose 5% compared to the same period in 2017 to $116.66 billion. Total period-end deposits rose 2% from the third quarter and increased 4% compared to the year-ago period to $119.58 billion.

For full-year 2018, the company reported net income of $1.69 billion, or $3.52 per share, compared to net income of $1.64 billion, or $3.25 per share, in the previous year. Full-year 2018 results include a net $16 million posttax reduction from notable items, while full-year 2017 results included a net $340 million posttax benefit.

Citizens Financial's board also increased the company's quarterly cash dividend to 32 cents per share from the previous dividend of 27 cents per share. The dividend will be payable on Feb. 14 to shareholders of record as of Jan. 31.

During the fourth quarter, the company repurchased 8.25 million common shares at a weighted-average price of $36.38.

The company's Tapping Our Potential V Program is also on track to meet run-rate pretax benefit of $90 million to $100 million by the end of 2019.