Citizens Financial Group Redeems Series D Preferred Stock

Citizens Financial Group Inc . (NYSE:CFG) has officially redeemed all outstanding shares of its 6.350% Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series D, as of Monday. The redemption was part of a broader restructuring of the company's stock, which also included the filing of a Restated Certificate of Incorporation with the Delaware Secretary of State.

This move, effective as of July 8, 2024, saw the elimination of all matters concerning the Series D Preferred Stock from the company's Amended and Restated Certificate of Incorporation. The details of this corporate action were outlined in a Certificate of Elimination and are included in the company's latest 8-K filing with the Securities and Exchange Commission (SEC).

In conjunction with the redemption of Series D Preferred Stock, Citizens Financial Group has integrated the previously filed Certificate of Designations for its 7.375% Fixed-Rate Non-Cumulative Perpetual Preferred Stock, Series H, into the Restated Certificate of Incorporation. This integration also took effect on July 8, 2024.

The company's restructuring of its capital does not affect its common stock (CFG), which continues to be listed on the New York Stock Exchange. Citizens Financial Group, a state commercial bank headquartered in Providence, Rhode Island, has not disclosed the financial impact of this redemption.

The SEC filing, dated July 9, 2024, confirms that these changes to the company's stock structure are part of its ongoing corporate governance and capital management strategies. The filing includes both the Certificate of Elimination and the Restated Certificate of Incorporation as exhibits.

Citizens Financial Group, incorporated in Delaware and with a fiscal year ending on December 31, is known for providing a range of financial services. The recent amendments to its Articles of Incorporation and the redemption of preferred stock reflect the company's efforts to streamline its equity portfolio and potentially optimize its capital structure.

In other recent news, Citizens Financial Group announced strong first quarter results, reporting a net interest margin of 2.91% and fee growth of 3%. The company repurchased $300 million in shares, maintaining a robust Common Equity Tier 1 (CET1) ratio of 10.6%. However, non-accrual loans rose by 8%.

In leadership transitions, Citizens Financial Group announced the resignation of Jack Read, the Corporate Controller and Chief Accounting Officer, effective August 7, 2024. John F. Woods will take over on an interim basis. The company also strengthened its Florida market presence by appointing Jim Weiss as the new Florida market president.

Analysts have provided recent feedback on Citizens Financial Group. Deutsche Bank reaffirmed its Buy rating on the company, slightly adjusting its earnings forecast for the second quarter. Piper Sandler upgraded the company's stock rating to 'Overweight' from 'Neutral', citing a solid capital base. Argus and Citi also increased their price targets for the company.

Despite a slight downturn in loan activity in the second quarter, Citizens Financial Group's net interest income (NII), fees, expenses, credit quality, and capital metrics remained stable. The company hinted at robust share buybacks due to lower capital being channeled into loans. These recent developments reflect the company's strategic initiatives and financial stability.

InvestingPro Insights

In light of Citizens Financial Group's strategic capital restructuring, current metrics from InvestingPro provide valuable context for investors evaluating the company's financial standing. As of Q1 2024, Citizens Financial Group boasts a market capitalization of approximately $16.49 billion and a Price/Earnings (P/E) ratio of 12.95, reflecting investor expectations of the company's earnings potential. Adjusting for the last twelve months, the P/E ratio slightly improves to 12.64. Despite a revenue decline of 6.07% over the last twelve months, the company's operating income margin remains robust at 24.39%, indicating efficient management and profitability.

InvestingPro Tips highlight that analysts have revised their earnings estimates upwards for the upcoming period, signaling confidence in the company's financial prospects. Additionally, Citizens Financial Group has a track record of maintaining dividend payments for 11 consecutive years, with a notable dividend yield of 4.73% as of the latest data, which is particularly appealing to income-focused investors. Moreover, with shares trading near their 52-week high and a price that is 97.32% of this peak, the company’s stock performance reflects a positive market sentiment.

For investors seeking a deeper dive into Citizens Financial Group's financial outlook, there are additional InvestingPro Tips available. Use coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, providing access to these expert insights and helping inform your investment decisions.

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