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1. Company Snapshot

1.a. Company Description

First Citizens BancShares, Inc.operates as the holding company for First-Citizens Bank & Trust Company that provides retail and commercial banking services to individuals, businesses, and professionals.The company's deposit products include checking, savings, money market, and time deposit accounts.


Its loan product portfolio comprises commercial construction and land development, commercial mortgage, commercial and industrial, and lease financing loans, as well as small business administration paycheck protection program loans; and consumer loans, such as residential and revolving mortgage, construction and land development, consumer auto, and other consumer loans.The company also offers treasury services products, cardholder and merchant services, wealth management services, and various other products and services; investment products, including annuities, discount brokerage services, and third-party mutual funds, as well as investment management and advisory services; and defined benefit and defined contribution, insurance, private banking, trust, fiduciary, philanthropy, and special asset services.The company provides its products and services through its branch network, as well as through digital banking, telephone banking, and various ATM networks.


As of December 31, 2021, it operated 529 branches in Arizona, California, Colorado, Florida, Georgia, Kansas, Maryland, Missouri, North Carolina, New Mexico, Oklahoma, Oregon, South Carolina, Tennessee, Texas, Virginia, Washington, Wisconsin, and West Virginia.First Citizens BancShares, Inc.was founded in 1898 and is headquartered in Raleigh, North Carolina.

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1.b. Last Insights on FCNCA

First Citizens BancShares, Inc.'s recent performance was negatively impacted by credit quality pressures, including lower reserve coverage and rising nonaccrual loans. Despite this, the company's Q3 results showed strong earnings and balance sheet growth. A $50 million growth capital facility provided to Lumafield by Silicon Valley Bank, a division of First Citizens Bank, demonstrates the company's commitment to supporting innovative businesses. Additionally, the acquisition of 138 branches from BMO Bank N.A. accelerated the company's national expansion. A "buy" rating was upgraded by an analyst due to solid fundamentals.

1.c. Company Highlights

2. First Citizens BancShares Delivers Strong Q3 Earnings, Exceeds Expectations

First Citizens BancShares reported adjusted earnings per share of $44.62, significantly beating estimates of $41.51, alongside an adjusted ROE of 10.62% and an adjusted ROA of 1.01% for the third quarter. The company's net interest income grew 2.3% sequentially, driven by higher average earning assets and day count, with a net interest margin of 3.26%. The loan growth was 2.5% over the linked quarter, led by SVB Commercial's Global Fund Banking, which increased 10% sequentially. Deposits rose $3.3 billion or 2% sequentially, marking the 7th consecutive quarter of deposit growth. The company returned $900 million to shareholders through share repurchases during the quarter.

Publication Date: Oct -24

📋 Highlights
  • Strong Earnings and Efficiency: Adjusted EPS of $44.62, ROE of 10.62%, and ROA of 1.01% highlight robust profitability and capital efficiency.
  • Net Interest Income Growth: 2.3% sequential NII increase driven by higher earning assets, with a stable NIM of 3.26%.
  • Shareholder Returns: $900M repurchased in Q3, with 7% of the $4B buyback plan completed, targeting $600M–$900M quarterly repurchases.
  • Loan and Deposit Momentum: 2.5% loan growth led by 10% sequential increase in SVB Commercial’s Global Fund Banking, alongside 2% deposit growth for the 7th consecutive quarter.
  • Efficiency and Future Guidance: Adjusted efficiency ratio expected in the upper 50% range in 2025, with full-year NII guidance narrowed to $6.74B–$6.84B and NII troughing in Q1 2026.

Loan and Deposit Growth

The company's loan growth was driven by its SVB Commercial's Global Fund Banking business, which saw a 10% sequential increase. Deposits also rose, with a 2% sequential growth, marking the 7th consecutive quarter of deposit growth. The company's data center lending book is $3.5 billion and is driving growth in loan originations, benefiting from the AI boom in its venture investment and banking businesses, particularly in the tech and healthcare sectors.

Outlook and Guidance

For the fourth quarter, the company expects loans to be in the $143 billion to $146 billion range and deposits in the $161 billion to $165 billion range. Headline net interest income is expected to be relatively stable compared to the third quarter. For the full year, the company tightened its headline net interest income guidance to $6.74 billion to $6.84 billion. The company projects loan accretion to be down by over $200 million for the year compared to 2024 and anticipates net charge-offs in the range of 35 to 45 basis points for the fourth quarter.

Valuation and Return Metrics

With a Price-to-Tangible Book Value (P/TBV) of approximately 1.05, the stock appears to be reasonably valued. The company's Return on Tangible Common Equity (ROTCE) was down about 11% adjusted this quarter. The Net Interest Margin (NIM) stood at 3.26%, indicating a stable outlook for NII if there are two rate cuts in '25 and '26. The Dividend Yield is 0.44%, which may not be particularly attractive to income investors.

Growth Prospects

The company expects growth in 2026 to come from both new client acquisition and utilization uptake, driven by an improving venture investment environment. Analysts estimate next year's revenue growth at 1.8%. The company's expenses are expected to moderate from current levels, rather than decrease, as investments in tech and simplification replace other expenses. The growth outlook is for mid-single digits next year, after a 6% to 7% guide for this year.

3. NewsRoom

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Spending and Saving Better in the New Year: Americans will spend an average of $4,700 to achieve their New Year's Resolutions

Dec -04

Source: prnewswire.com

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First Look: CME outage, Black Friday shifts, AI job impact

Nov -28

Source: gurufocus.com

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First Citizens Names Snow Holding Middle Market Banking Leader for Northeastern United States

Nov -20

Source: prnewswire.com

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Lumafield Secures $50 Million Growth Capital Facility from Silicon Valley Bank

Nov -20

Source: prnewswire.com

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Bronte Capital Management Pty Ltd. Has $47,000 Position in First Citizens BancShares, Inc. $FCNCA

Nov -20

Source: defenseworld.net

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First Citizens Bank Purchases Office Building in San Francisco

Nov -19

Source: prnewswire.com

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Silicon Valley Bank Appoints Megan Scheffel Head of Life Science and Healthcare Banking

Nov -18

Source: prnewswire.com

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Peregrine Energy Solutions Secures Funding to support a $317 Million Battery Energy Storage Project Currently Under Construction

Nov -13

Source: prnewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.80%)

6. Segments

General Banking

Expected Growth: 2.5%

General Banking is less likely to experience high growth due to its traditional nature, but it remains stable and is less volatile. The expected growth is slightly lower than the global hypothesis due to the mature market and competition.

Silicon Valley Banking

Expected Growth: 4.0%

Silicon Valley Banking is expected to grow faster than the global average due to the high growth potential of the tech industry. The demand for specialized banking services is increasing as the industry expands.

Commercial Banking

Expected Growth: 3.0%

Commercial Banking is expected to grow slightly above the global average due to the ongoing demand for corporate lending and treasury services. The growth is supported by the overall economic conditions and corporate activities.

Corporate

Expected Growth: 3.5%

Corporate is expected to grow faster than the global average due to the increasing demand for investment banking and treasury services. The growth is supported by the ongoing corporate activities and market conditions.

Rail

Expected Growth: 2.0%

Rail is expected to grow at a slower rate than the global average due to the mature nature of the industry and the potential for fluctuations in demand. The growth is supported by the ongoing demand for rail transportation, but is limited by the industry's maturity.

7. Detailed Products

Commercial Banking

First Citizens BancShares, Inc. offers a range of commercial banking products and services to businesses, including cash management, payroll services, and trade finance.

Consumer Banking

The company provides consumer banking products and services, including checking and savings accounts, credit cards, mortgages, and personal loans.

Wealth Management

First Citizens BancShares, Inc. offers wealth management services, including investment management, financial planning, and trust services.

Mortgage Banking

The company provides mortgage banking services, including origination, servicing, and securitization of mortgage loans.

Treasury Management

First Citizens BancShares, Inc. offers treasury management services, including cash management, account reconciliation, and fraud prevention.

Capital Markets

The company provides capital markets services, including underwriting, advisory services, and trading of securities.

8. First Citizens BancShares, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

First Citizens BancShares, Inc. operates in a traditional banking industry where substitutes such as credit unions, online banks, and fintech companies exist. However, the company's diversified financial services and strong customer relationships mitigate the threat.

Bargaining Power Of Customers

The company has a large customer base and a wide range of financial services, which reduces the bargaining power of individual customers. Additionally, customers are often locked into long-term relationships with the bank, reducing their ability to negotiate.

Bargaining Power Of Suppliers

The company has a large and diversified supplier base, which reduces the bargaining power of any individual supplier. Additionally, the company has a strong financial position, which allows it to negotiate favorable terms with suppliers.

Threat Of New Entrants

The banking industry is heavily regulated, and new entrants face significant barriers to entry, including high capital requirements and regulatory hurdles. This reduces the threat of new entrants.

Intensity Of Rivalry

The banking industry is highly competitive, with many established players competing for market share. First Citizens BancShares, Inc. faces intense rivalry from other banks and financial institutions, particularly in its core markets.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 62.50%
Debt Cost 18.19%
Equity Weight 37.50%
Equity Cost 7.58%
WACC 14.21%
Leverage 166.64%

11. Quality Control: First Citizens BancShares, Inc. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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OpenBank

A-Score: 7.0/10

Value: 7.7

Growth: 6.9

Quality: 6.7

Yield: 8.0

Momentum: 6.0

Volatility: 6.7

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PNC Financial Services Group

A-Score: 6.9/10

Value: 5.8

Growth: 6.0

Quality: 6.6

Yield: 8.0

Momentum: 6.0

Volatility: 9.0

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Westamerica

A-Score: 6.8/10

Value: 5.9

Growth: 6.3

Quality: 8.0

Yield: 7.0

Momentum: 5.0

Volatility: 8.7

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M&T Bank

A-Score: 6.6/10

Value: 6.6

Growth: 5.6

Quality: 6.8

Yield: 6.0

Momentum: 6.0

Volatility: 8.7

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Truist

A-Score: 5.8/10

Value: 4.8

Growth: 2.8

Quality: 5.5

Yield: 8.0

Momentum: 6.0

Volatility: 8.0

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First Citizens BancShares

A-Score: 4.9/10

Value: 6.1

Growth: 9.8

Quality: 4.9

Yield: 0.0

Momentum: 2.5

Volatility: 6.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

1961.18$

Current Price

1961.18$

Potential

-0.00%

Expected Cash-Flows