DEF: First Citizens BancShares Details 2025 Performance, Governance

First Citizens BancShares' latest proxy statement reveals a decline in 2025 net income and EPS, alongside robust loan and deposit growth, strong capital, and key governance updates for its upcoming 2026 Annual Meeting.

Summary

• Net income for 2025 was $2.21 billion, a $571 million decrease from $2.78 billion in 2024.
• Earnings per diluted common share for 2025 was $165.24, down $24.17 from $189.41 in 2024.
• Return on average assets was 0.96% in 2025, compared to 1.26% in 2024, and return on average common equity was 10.03% in 2025, down from 12.68% in 2024.
• Net interest income decreased by $329 million to $6.81 billion in 2025, with net interest margin declining 29 basis points to 3.25%.
• Noninterest income increased by $112 million to $2.73 billion in 2025, driven by rental income, wealth management, and international/deposit fees.
• Total loans and leases grew 5.5% to $147.93 billion, and total deposits grew 4.1% to $161.58 billion at December 31, 2025.
• The common equity Tier 1 ratio remained strong at 11.15% at year-end 2025, and the company returned $3.03 billion to stockholders through share repurchases.
• The 2026 Annual Meeting of Stockholders will be held virtually on May 4, 2026, to vote on director elections, executive compensation, independent accountants, and a stockholder proposal on faith-based employee resource groups.

Sentiment

Score: 6

Explanation: StockSavvy.ai views this as a mixed filing. While recent profitability metrics show a decline, the company demonstrates strong underlying business growth, robust capital and liquidity, and a commitment to long-term value creation, as evidenced by its historical TSR outperformance against peers.

Positives

• Noninterest income increased by $112 million to $2.73 billion in 2025, driven by strong utilization rates in the rail business, growth in wealth management income, and increased international and deposit fees.
• Total loans and leases grew by $7.71 billion, or 5.5%, to $147.93 billion at December 31, 2025, primarily from the Commercial Bank segment.
• Total deposits increased by $6.35 billion, or 4.1%, to $161.58 billion at December 31, 2025, with broad-based growth across segments, notably the Direct Bank.
• Maintained a solid capital position with a common equity Tier 1 ratio of 11.15% at December 31, 2025.
• Returned $3.03 billion of capital to stockholders through the repurchase of approximately 1.58 million shares of Class A Common during 2025.
• Liquidity remained strong with $56.01 billion in liquid assets, representing approximately 24% of total assets, at December 31, 2025.
• Long-Term Incentive Plan (LTIP) awards for the 2023-2025 performance period were paid at the maximum 150% of Target Amounts, exceeding the Stretch performance level of 48.0% TBV+D Growth Rate.
• Merger Performance Plan (MPP) awards for 2025 related to the SVB Acquisition were paid at the Maximum level due to the achievement of performance objectives.
• The company's Total Shareholder Return (TSR) over the five-year period (2021-2025) significantly outperformed the KBW Nasdaq Bank Total Return Index.

Negatives

• Net income for 2025 decreased by $571 million to $2.21 billion from $2.78 billion in 2024.
• Earnings per diluted common share for 2025 decreased by $24.17 to $165.24 from $189.41 in 2024.
• Return on average assets declined to 0.96% in 2025 from 1.26% in 2024.
• Return on average common equity declined to 10.03% in 2025 from 12.68% in 2024.
• Net interest income decreased by $329 million to $6.81 billion in 2025 from $7.14 billion in 2024, primarily due to lower yields on interest-earning assets, lower average balance of interest-bearing deposits, and lower purchase accounting accretion.
• Net interest margin decreased by 29 basis points to 3.25% in 2025 from 3.54% in 2024.
• Noninterest expense was higher in 2025, only partially offset by higher noninterest income.
• Net charge-offs increased by six basis points to 0.45% of average loans during 2025 from 2024.
• The allowance for credit losses as a percentage of total loans decreased by 14 basis points to 1.06% at December 31, 2025, from 1.20% at December 31, 2024.

Risks

• Inherent business risks for a financial institution subject to extensive banking industry regulation.
• Human capital management risks, including workforce planning, talent acquisition, retention, and engagement.
• Technology and cyber risks, including information security, cybersecurity, data management, and operational resiliency against disruptions like cyberattacks or natural disasters.
• Operational risk exposures, including financial loss or reputational impacts from inadequate or failed internal processes, staffing, systems, or technology.
• Compensation risk, ensuring incentive arrangements do not encourage imprudent risk-taking.
• Potential for management's influence to diminish the effectiveness of independent directors, mitigated by the Lead Independent Director role and independent committees.
• Reputational, human capital, operational, and legal risks of failing to allow faith-based Employee Resource Groups, as highlighted by a stockholder proposal (though the Board recommends against it).

Future Outlook

The company aims to build lasting financial security that grows with the greatest ambitions of its clients, colleagues, and communities, committing to integrating sustainable practices into its strategy and operations. Its shortand long-term strategy includes supporting clients in the sustainability and energy space. The pending acquisition of select BMO Bank N.A. branches is expected to expand reach into new markets and add a solid deposit base, consistent with a measured approach to growth, relationship-driven service, and disciplined risk posture. No further Merger Performance Plan award opportunities are expected to be granted with respect to the SVB Acquisition.

Management Comments

• We aim to build lasting financial security that grows with the greatest ambitions of our clients, colleagues, and communities.
• For more than 125 years, we have served the financial needs of our clients and communities and provided a place for our associates to grow in their careers.
• Through the decades, we have maintained a strong balance sheet and solid capital and liquidity, and have operated with prudent risk management.
• Our strategy is anchored on being the bank clients trust and turn to at every stage of their financial journeys.
• We have built resilience through disciplined underwriting and a balanced portfolio, enabling us to support clients through all economic cycles.
• Our story is built on more than a century of service, and we are committed to carrying forward the same values that have guided us: we put clients first, embrace differences, respect and have empathy for one another, collaborate as a team, and are forward-looking.
• Our ability to attract, retain, and develop associates is critical to our success.
• We strive to ensure we have the right talent in the right jobs and with the right skills to fulfill our strategic objectives.
• We value diversity – in people, in the markets we serve, and in the products and services we offer.
• We aspire to foster an environment where all associates are free of harassment and discrimination and where all associates, including associates of religious faith, are treated fairly and can freely express their views, including their religious views, perform at their best, and help the company meet its strategic objectives.

Industry Context

StockSavvy.ai notes that First Citizens BancShares, as a top 20 U.S. financial institution with over $200 billion in assets, operates within a highly regulated banking industry. Its recognition by Forbes in 2025 as one of America's Best Banks and Most Trusted Companies, coupled with its status as a large family-led bank, highlights a unique market position emphasizing stability and long-term discipline. The company's strategic expansion, such as the pending BMO Bank N.A. branch acquisition, aligns with broader industry trends of consolidation and market penetration among regional banks seeking to enhance deposit bases and geographic reach, while its robust risk management framework is critical for navigating the extensive regulatory landscape.

Comparison to Industry Standards

• The company's Total Shareholder Return (TSR) over the five-year period (2021-2025) significantly outperformed the KBW Nasdaq Bank Total Return Index, with a $100 investment growing to $378 for the company compared to $196 for the peer group by 2025, indicating strong long-term shareholder value creation relative to the broader banking sector.
• The common equity Tier 1 ratio of 11.15% at December 31, 2025, demonstrates a solid capital position, generally above regulatory minimums and competitive within the industry for a bank of its size.
• The 2025 return on average assets (0.96%) and return on average common equity (10.03%) represent declines from 2024 (1.26% and 12.68% respectively), suggesting a potential underperformance relative to prior year results and requiring benchmarking against peer averages in the banking sector to assess relative standing.
• Net charge-offs at 0.45% of average loans in 2025, an increase of six basis points from 2024, indicate a slight deterioration in asset quality that warrants comparison with peer banks to evaluate its relative health.

Management Changes

Corporate Governance

Related Party Transactions

• FCB has banking transactions, including loans, in the ordinary course of business with certain directors, nominees, executive officers, principal stockholders, and their affiliates.
• Wealth Services provided to The Fidelity Bank and Southern Bank and Trust Company (related to Holding family members) totaled $244,331 and $483,368 respectively in 2025.
• Southern Customer Credit Cards program with Southern Bank and Trust Company, where FCB issues cards and pays Southern a program fee of approximately $230,000 in 2025, while FCB received approximately $2.3 million in interest/fees. Override Accounts are collateralized by Southern's assets with a Setoff Limit of $600,000.
• Southern Purchasing Cards program with Southern Bank and Trust Company, with a $1 million credit limit, fully collateralized, and a potential revenue share rebate of up to approximately $9,000 for 2025.
• Lease of excess branch space to Twin States Farming, Inc. (controlled by Holding family members) for $2,425 monthly as of September 1, 2025, totaling $28,625 for 2025.
• Real estate sales through Lee & Associates, where James Bailey (Mr. Holding's son-in-law) was the broker, resulting in total sales commission of $478,890 for four properties sold as of February 28, 2026.
• Lease of branch office from a company controlled by Ely Perry (Mr. Holding's brother-in-law) for $4,679 monthly, totaling $56,144 plus $2,558 variable costs in 2025.
• Payments to BlackRock, Inc. of approximately $4.9 million in fees for a risk and portfolio management system in 2025, and received approximately $20.1 million in service and revenue-sharing fees from BlackRock in 2025, with a new agreement for additional revenue-sharing fees entered in 2025.
• Director Ellen R. Alemany purchased 300 Series D depositary shares for $300,000 in an offering on the same terms as unaffiliated third parties.
• Several immediate family members of directors and executive officers are employed by FCB in non-executive officer positions with 2025 compensation exceeding $120,000, including Perry H. Bailey ($404,650), Peter M. Bristow, Jr. ($244,158), John Patrick Connell ($255,032), H. Collier Connell ($238,734), Lewis R. Holding II ($252,976), Joseph L. Ward ($272,041), and Caroline E. Ward ($176,952).

Stakeholder Impact

• Shareholders are impacted by the decline in 2025 profitability metrics (net income, EPS, ROAA, ROAE) but benefit from strong loan and deposit growth, robust capital management, and significant capital returns through share repurchases. The company's long-term TSR outperformance relative to peers also benefits shareholders.
• Employees (associates) are affected by the company's human resources approach, including well-being programs, learning and development opportunities, internal career mobility, and a values-based culture. The stockholder proposal regarding faith-based Employee Resource Groups directly addresses employee inclusion and workplace culture.
• Customers and clients benefit from the company's client-centric and relationship-based approach, offering deep sector expertise, tailored solutions, and a broad platform. Strategic expansions, such as the pending BMO Bank N.A. branch acquisition, aim to enhance service reach and deposit offerings.
• Communities are positively impacted by the company's long history of charitable giving and associate volunteerism, supporting affordable housing, financial education, economic development, and health and human services.
• Regulatory authorities are engaged through the company's adherence to extensive banking regulations and its robust Risk Management Framework, which includes oversight by various board committees.

Next Steps

• The 2026 Annual Meeting of Stockholders will be held virtually on Monday, May 4, 2026, at 9:00 a.m. EDT.
• Stockholders will vote on the election of 12 directors for one-year terms.
• Stockholders will cast a non-binding advisory vote to approve compensation paid to named executive officers.
• Stockholders will vote on the ratification of KPMG LLP as independent accountants for 2026.
• Stockholders will vote on a proposal requesting a report on faith-based employee resource groups (Board recommends AGAINST).
• Lorie K. Rupp, Chief Risk Officer, intends to retire effective June 1, 2026.
• New Long-Term Incentive Plan (LTIP) cash performance opportunities for the 2026-2028 performance period have been approved.
• No new Merger Performance Plan (MPP) award opportunities are approved for 2026, but the plan remains available for future merger or acquisition activity, with no further SVB Acquisition MPP awards expected.
• The company has a pending acquisition of select BMO Bank N.A. branches.
• Stockholder recommendations for director candidates for the 2027 Annual Meeting must be received by November 23, 2026.
• Stockholder proposals for inclusion in the 2027 proxy materials must be received by November 23, 2026.
• Written notice of stockholder proposals (not for inclusion) or director nominations from the floor for the 2027 Annual Meeting must be received between December 23, 2026, and February 6, 2027.

Key Dates

Recommendation

The company's 2025 financial performance shows a notable decline in profitability metrics such as net income, EPS, and net interest margin compared to the prior year, which is a concern. However, these declines are partially offset by strong loan and deposit growth, robust capital and liquidity positions, and effective capital return to shareholders through share repurchases. Furthermore, the company's long-term Total Shareholder Return has significantly outperformed its peer group, indicating a strong track record of value creation. The strategic positioning, disciplined risk management, and ongoing M&A activity (like the pending BMO branch acquisition) suggest future growth potential. Given the mixed short-term financial results against a backdrop of strong fundamentals and long-term outperformance, a 'hold' recommendation is appropriate for investors to monitor the execution of strategic initiatives and the trajectory of profitability.

Keywords

First Citizens BancShares, FCNCA, Proxy Statement, SEC Filing, Financial Performance, Executive Compensation, Corporate Governance, Banking Industry, Risk Management, Shareholder Meeting, Director Election, Net Income, EPS, Loans, Deposits, Capital Ratio, Liquidity, Share Repurchase, Say-on-Pay, KPMG LLP, Employee Resource Groups, BMO Bank N.A. acquisition, SVB Acquisition