8-K: First Citizens BancShares Reports Solid First Quarter 2025 Earnings, Announces Share Repurchases

First Citizens BancShares reported solid first quarter 2025 earnings, driven by loan and deposit growth, and returned capital to stockholders through share repurchases.

Summary

• First Citizens BancShares (FCNCA) reported a net income of $483 million for the first quarter of 2025, compared to $700 million in the previous quarter.
• Net income available to common stockholders was $468 million, or $34.47 per share, down from $685 million, or $49.21 per share, in the linked quarter.
• Adjusted net income was $528 million, or $37.79 per common share, compared to $643 million, or $45.10 per common share, in the linked quarter.
• Net interest income totaled $1.66 billion, a decrease of $46 million from the linked quarter.
• Loans and leases totaled $141.36 billion, an increase of $1.14 billion (3.3% annualized) since December 31, 2024.
• Deposits totaled $159.33 billion, an increase of $4.10 billion since December 31, 2024 (10.7% annualized growth).
• The company repurchased 302,683 shares of Class A common stock for $613 million during the quarter.
• The estimated total risk-based capital ratio was 15.23%, the Tier 1 risk-based capital ratio was 13.35%, the Common Equity Tier 1 risk-based capital ratio was 12.81%, and the Tier 1 leverage ratio was 9.75% at March 31, 2025.

Sentiment

Score: 6

Explanation: The sentiment is neutral to slightly positive. While net income and some other metrics decreased compared to the previous quarter, the company showed growth in loans and deposits, maintained strong capital and liquidity, and continued to return capital to shareholders. Management's comments are cautiously optimistic.

Positives

• Loan growth in the Commercial Bank and SVB Commercial segments contributed to an increase in total loans and leases.
• Deposit growth, primarily in the Direct Bank and throughout the Branch Network, led to an increase in total deposits.
• Credit remained stable, with net charge-offs declining from the fourth quarter.
• The company maintained strong capital and liquidity positions.
• The company successfully completed the issuance of $500 million of senior unsecured notes and $750 million of subordinated notes.
• Share repurchases returned $613 million of capital to stockholders.

Negatives

• Net income decreased from $700 million in the linked quarter to $483 million in the current quarter.
• Net interest income decreased by $46 million from the linked quarter.
• Noninterest income decreased by $64 million compared to the linked quarter.
• Net interest margin (NIM) compressed from 3.32% to 3.26% compared to the linked quarter.

Risks

• General competitive, economic, political, geopolitical events, natural disasters and market conditions could affect future financial results.
• Changes in competitive pressures among financial institutions and the impacts related to or resulting from previous bank failures, the risks and impacts of future bank failures and other volatility in the banking industry could affect future financial results.
• Public perceptions of business practices, including deposit pricing and acquisition activity, could affect future financial results.
• Fluctuations in interest rates and changes in the quality or composition of the loan or investment portfolio could affect future financial results.
• Actions of government regulators, including interest rate decisions by the Federal Reserve Board, could affect future financial results.
• The impact of any sustained or elevated inflationary environment, cyberattack, information or security breach, or implementation and compliance with current or proposed laws, regulations and regulatory interpretations could affect future financial results.
• The availability of capital and personnel, and the risks associated with previous acquisition transactions, including the acquisition of certain assets and liabilities of Silicon Valley Bridge Bank, N.A. and the previously completed merger with CIT Group Inc., or any future transactions could affect future financial results.

Future Outlook

Management expects continued uncertainty in the current environment but believes the company enters it from a position of strength and is excited about its prospects moving forward.

Management Comments

• Chairman and CEO Frank B. Holding, Jr. said: 'Our first quarter financial results were solid, including loan growth in the Commercial Bank and SVB Commercial segments, as well as deposit growth, primarily in the Direct Bank and throughout our Branch Network.'
• Chairman and CEO Frank B. Holding, Jr. said: 'Credit remained stable with net charge-offs declining from the fourth quarter.'
• Chairman and CEO Frank B. Holding, Jr. said: 'We maintained strong capital and liquidity positions which allowed us to return an additional $613 million of capital to our stockholders through share repurchases.'
• Chairman and CEO Frank B. Holding, Jr. said: 'We also successfully completed the issuance of $500 million of senior unsecured notes and $750 million of subordinated notes.'
• Chairman and CEO Frank B. Holding, Jr. said: 'While we acknowledge uncertainty in the current environment, we enter it from a position of strength and are excited about our prospects moving forward.'

Industry Context

The report reflects the ongoing challenges and adjustments within the banking sector, including interest rate fluctuations, credit quality management, and capital allocation strategies, particularly in the context of recent bank failures and economic uncertainty.

Comparison to Industry Standards

• First Citizens BancShares, with over $200 billion in assets, is a top 20 U.S. financial institution and a member of the Fortune 500TM.
• Comparable companies include regional and national banks such as Truist Financial, PNC Financial Services, and U.S. Bancorp.
• Key metrics to compare include ROA, ROE, efficiency ratio, and capital ratios.
• The company's capital ratios are well above regulatory requirements, indicating a strong capital position.
• The company's loan to deposit ratio of 88.72% is within a reasonable range compared to industry standards.

Stakeholder Impact

• Shareholders benefit from the share repurchase program and dividend payments.
• Employees are impacted by merit-based compensation increases and net staff additions.
• Customers benefit from the company's continued investment in technology and risk infrastructure.
• The company's strong capital and liquidity positions provide stability for depositors and creditors.

Next Steps

• The company will host a conference call on April 24, 2025, to discuss the financial results.
• The company will continue to execute its share repurchase program.
• The company will continue to monitor and manage credit quality and capital ratios.

Key Dates

Keywords

earnings, financial results, net income, loan growth, deposit growth, share repurchase, net interest income, capital ratios, First Citizens BancShares, FCNCA, bank