#United States #Raleigh #Q4 2024 #First Citizens #BancShares

Introduction

On January 24, 2025, First Citizens BancShares, Inc. (Nasdaq: FCNCA) announced its financial results for the fourth quarter of 2024, showcasing noteworthy performance amidst ongoing challenges due to natural disasters like wildfires and hurricanes affecting the West Coast and Southeast regions. Chairman and CEO Frank B. Holding, Jr. expressed optimism about the company's results while reiterating their commitment to supporting impacted communities.

Financial Overview

First Citizens reported a net income of $700 million for Q4 2024, reflecting an increase from the previous quarter's $639 million. Earnings per diluted common share rose to $49.21, up from $43.42 in Q3 2024, marking a significant improvement in profitability.

Adjusted net income, however, showed a decrease to $643 million, down from $675 million in the linked quarter, largely affected by acquisition-related expenses and intangible asset amortization. The highlights of the earnings report also included:
- Loan and Deposit Growth: The company experienced growth across all segments, with total loans reaching $140.22 billion, up 4.4% from the previous quarter.
- Share Repurchase: In a strategic move to enhance shareholder value, the company repurchased 461,583 shares of its Class A common stock for $963 million in Q4.

Net Interest Income Analysis

Net interest income registered at $1.71 billion, which is a decrease from the prior quarter. The decline is primarily attributed to reduced interest income from loans, which dropped by $108 million.
The company noted that the net interest margin decreased to 3.32% from 3.53% in the prior quarter, largely influenced by falling yields on both loans and deposits. These adjustments signal the need for the institution to navigate through fluctuating interest rates while maintaining profitability.

Noninterest Income and Expenses

First Citizens' noninterest income for the quarter increased to $699 million, marking a $49 million rise compared to the previous quarter. The positive performance was supported by a favorable fair value adjustment on marketable equity securities and gains from the sale of leasing equipment.
However, total noninterest expense rose to $1.52 billion, resulting in a noticeable increase from $1.46 billion in Q3 2024, reflecting the costs associated with acquisitions and software impairments that impacted their bottom line.

Balance Sheet Strength

As of December 31, 2024, First Citizens’ balance sheet revealed solid growth metrics:
- Total Deposits: Increased to $155.23 billion, with a 9.6% annualized growth rate.
- Investment Securities: They climbed to $44.09 billion, benefiting from strategic purchases.
- The composition of deposits showed a stable mix primarily supported by customer demand for interest-bearing accounts, despite a decrease in noninterest-bearing deposits.

Challenges of Credit Quality

The company reported an uptick in provisions for credit losses, totaling $155 million due to increased net charge-offs and reduced reserve releases in the current quarter compared to Q3. Despite these challenges, First Citizens has focused on maintaining a strong allowance ratio to mitigate potential risks stemming from deteriorating economic conditions or credit environments. The overall credit quality remains robust, with nonaccrual loans decreasing to $1.18 billion, or 0.84% of total loans, indicating management effectiveness in handling defaults.

Commitment to Corporate Responsibility

In light of the recent natural disasters, First Citizens has not only reported strong financial results but also reiterated its commitment to supporting affected communities. The company allocates resources for recovery efforts, showing that it stands ready to assist in the revitalization of areas devastated by hurricanes and wildfires.

Conclusion

In summary, First Citizens BancShares has demonstrated resilience in challenging market environments, achieving strong earnings in the fourth quarter of 2024 despite fluctuating economic conditions and the adverse impacts of natural disasters. The financial stability and strategic growth initiatives indicate a positive outlook for the bank in the future, while dedication to corporate responsibility showcases its commitment to community support. Investors and stakeholders will be keenly awaiting the details of the company's upcoming earnings call for more insights into future directions and strategies.

For further information, the investors can access the company's conference call and associated materials at First Citizens Investor Relations.