First Citizens BancShares (FCNCA, Financial) reported a solid performance in its first quarter, underpinned by growth in key banking segments. The company's Common Equity Tier 1 (CET1) capital ratio stood at an impressive 12.81%, demonstrating robust financial health. Additionally, net charge-offs were recorded at 0.41%, indicating stable credit conditions and a decline from the previous quarter.
The organization experienced notable loan expansion within its Commercial Bank and SVB Commercial segments. This growth was accompanied by an increase in deposits, primarily attributed to the Direct Bank and the branch network. Such results reflect positive customer engagement and trust in the bank's offerings.
First Citizens also focused on shareholder returns by repurchasing shares valued at $613 million, highlighting confidence in its fiscal strategies. To strengthen its financial structure further, the bank successfully issued $500 million in senior unsecured notes and $750 million in subordinated notes. These measures collectively reinforce the bank's liquidity and capital positions.
Despite acknowledging the uncertainties in the broader economic landscape, First Citizens remains optimistic about its future prospects, positioning itself advantageously for any challenges ahead.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 12 analysts, the average target price for First Citizens BancShares Inc (FCNCA, Financial) is $2,292.33 with a high estimate of $2,568.00 and a low estimate of $2,000.00. The average target implies an upside of 29.52% from the current price of $1,769.81. More detailed estimate data can be found on the First Citizens BancShares Inc (FCNCA) Forecast page.
Based on the consensus recommendation from 14 brokerage firms, First Citizens BancShares Inc's (FCNCA, Financial) average brokerage recommendation is currently 2.3, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for First Citizens BancShares Inc (FCNCA, Financial) in one year is $2107.93, suggesting a upside of 19.1% from the current price of $1769.81. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the First Citizens BancShares Inc (FCNCA) Summary page.
FCNCA Key Business Developments
Release Date: January 24, 2025
- Adjusted Earnings Per Share (EPS): $45.10
- Return on Equity (ROE): 11.51%
- Return on Assets (ROA): 1.14%
- Adjusted Efficiency Ratio: 57%
- Net Interest Margin (NIM): 3.32%
- NIM excluding Accretion: 3.16%
- Loan Growth: $1.5 billion or 1.1% sequentially
- Deposit Growth: $3.7 billion or 2.4% sequentially
- Share Repurchase: 6.44% of Class A common stock
- Common Equity Tier 1 (CET1) Capital Ratio: 12.99%
- Allowance Ratio: 1.2%
- Net Charge-Off Ratio: Expected 40 to 50 basis points in Q1 2025
- Adjusted Noninterest Income: Increased 9% sequentially
- Adjusted Noninterest Expense: Increased 3.1% sequentially
- Effective Tax Rate: Estimated 25% to 26% for 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- First Citizens BancShares Inc (FCNCA, Financial) reported strong fourth-quarter results with adjusted earnings per share of $45.10, exceeding expectations.
- The company achieved loan and deposit growth across all operating segments, indicating robust business performance.
- SVB had a successful quarter with improvements in VC investment activity, contributing to loan and deposit growth.
- The company repurchased an additional 3.5% of its Class A common stock, enhancing shareholder value.
- First Citizens BancShares Inc (FCNCA) maintained strong capital and liquidity positions, supporting balance sheet growth and strategic initiatives.
Negative Points
- Headline net interest income declined from the third quarter due to lower yields on loans and overnight investments.
- The company experienced a sequential contraction in net interest margin (NIM) by 21 basis points.
- Adjusted noninterest expense increased by 3.1% sequentially, driven by higher personnel and technology costs.
- Net charge-offs increased slightly, with higher losses in the commercial finance business due to idiosyncratic losses.
- The company anticipates continued stress in certain portfolios, including investor-dependent and office sectors, which may impact credit quality.
