US Subsidiary's Quarterly Results
Royal Bank of Scotland Group PLC
28 January 2000
Results of The Royal Bank of Scotland Group's U.S. Subsidiary Citizens
Financial Group, Inc. for the quarter ended 31 December 1999.
The Royal Bank of Scotland Group plc is pleased to attach a copy of the
results of its U.S. subsidiary, Citizens Financial Group, Inc. for the quarter
ended 31 December 1999.
The financial information contained in the attached has been prepared in
accordance with accounting principles generally accepted in the United States
of America ('U.S. GAAP'). Citizens' profits before taxation for the quarter
ended 31 December 1999 based on U.K. GAAP and U.S. GAAP were as follows:-
Quarter to 31 December Year ended 31
December
1999 1998 1999
1998
(in millions) $m $m $m $m
U.K. GAAP 92.1 93.8 92.1 93.8
U.S. GAAP 83.0 81.9 83.0 81.9
Contact: Summer Rice 001 401 456 7635
Citizens Reports 38% Increase in First Quarter Operating Earnings
PROVIDENCE, RI -- Citizens Financial Group, Inc. ('Citizens') today reported
operating income of $70.2 million for the quarter ended December 31, 1999, 38%
higher than the same period last year. This quarter includes the results of
the recently acquired commercial banking business of State Street Bank. After
including $16.8 million of one-time acquisition expenses, net income for the
quarter was $53.4 million, compared to $50.8 million reported for the same
quarter in the prior year. Citizens fiscal year-end is September 30.
At December 31, 1999 total assets were $23.2 billion for the four-state bank
holding company, compared to $18.4 billion in 1998. Citizens completed the
purchase of State Street Bank's commercial banking business on October 1,
1999, acquiring assets of $2.7 billion. The acquisition of UST Corp. which was
completed January 11, 2000 added assets of $5.7 billion, bringing total assets
to $29 billion. Citizens is now among the 35 largest bank holding companies
in the U.S.
Excluding loans purchased from State Street, Citizens had strong organic
growth in its commercial loan and lease portfolios (23%) and consumer loan
portfolios (20%). Deposits also increased significantly, with growth in
checking accounts (13%), checking with interest (14%) and savings accounts
(7%), also exclusive of the State Street Bank purchase.
'The last quarter was a milestone for Citizens Financial Group. We completed
the acquisition of State Street's commercial banking business in October,
experienced very strong organic loan and deposit growth, and completed the UST
acquisition on January 11. This strong internal growth and the consummation
of these two strategic acquisitions gives us tremendous momentum. We are
wonderfully positioned to serve the business and retail customers of our New
England franchise,' said Lawrence K. Fish, Chairman, President, and CEO of
Citizens Financial Group, Inc.
Net interest income for the quarter was $197.0 million, up 22 percent from
$162.0 million in the first quarter of fiscal year 1999. Increases in net
interest income are due to organic loan and deposit growth as well as the
loans and deposits purchased from State Street Bank. Noninterest expenses
increased $34 million from the year ago quarter, with most of the expense
increase related to State Street, either the one-time $16.8 million
acquisition expense or the recurring expenses associated with the business.
The increase in noninterest expense, excluding State Street was 4% over the
prior year.
Citizens Financial Group, Inc. is a $29.0 billion financial services company
(including the January 11, 2000 purchase of UST Corp.) headquartered in
Providence, RI. It operates as Citizens Bank in Connecticut, Massachusetts,
New Hampshire and Rhode Island. Citizens is a wholly owned subsidiary of The
Royal Bank of Scotland plc. With more than 330 branches and more than 800
ATMs in Connecticut, Massachusetts, New Hampshire, and Rhode Island, Citizens
is the second largest bank holding company in New England.
CITIZENS FINANCIAL GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
THREE MONTHS ENDED
DECEMBER 31
(In Thousands) 1999 1998
Interest Income $388,476 $300,549
Interest Expense 191,516 138,530
---------- ---------
Net interest income 196,960 162,019
Provision for credit losses 7,000 4,013
---------- ---------
Net Interest Income after
provision 189,960 158,006
For credit losses
---------- ---------
Noninterest Income 61,485 58,494
Noninterest Expense 168,431 134,612
---------- ---------
Income before Taxes 83,014 81,888
Income Taxes 29,635 31,056
---------- ---------
Net Income $53,379 $50,832
---------- ---------
CITIZENS FINANCIAL GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited)
DECEMBER 31
(In Thousands) 1999 1998
Assets
------
Cash and due from banks $570,387 $511,940
Federal funds sold and other
Short-term investments 44,973 216,086
Securities 7,201,509 6,591,072
Loans and leases: 13,425,589 9,924,663
Less: Allowance for
possible credit losses 224,447 180,619
---------- ---------
Net loans and leases 13,201,142 9,744,044
---------- ---------
Goodwill and core deposit 946,040 613,328
intangible
Other assets 1,216,503 745,526
----------- -----------
Total assets $23,180,554 $18,421,996
=========== ===========
Liabilities and Stockholder's
Equity
-------------------------------
Deposits $15,609,675 $14,249,943
Borrowed funds 5,433,023 2,084,661
Other liabilities 258,514 216,647
----------- -----------
Total liabilities 21,301,212 16,551,251
----------- -----------
Stockholder's Equity 1,879,342 1,870,745
----------- -----------
Total Liabilities and $23,180,554 $18,421,996
Stockholder's Equity
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