First Citizens BancShares, Inc. Reports Quarterly Results for the Quarter Ended March 31, 2025
First Citizens BancShares, Inc. (FCNCA) reported its quarterly financial results for the period ended March 31, 2025. The company’s net income was $[insert amount], a decrease of [insert percentage] compared to the same period last year. Total assets increased to $[insert amount], driven by growth in loans and investments. Net interest income rose to $[insert amount], while non-interest income decreased to $[insert amount]. The company’s efficiency ratio improved to [insert percentage], and its common equity tier 1 capital ratio remained strong at [insert percentage]. FCNCA also declared a quarterly dividend of $[insert amount] per share. The company’s management discussed its financial performance and outlook in the MD&A section, highlighting its focus on strategic growth initiatives and risk management.
Recent Events
Debt Issuances In March 2025, the parent company issued $500 million in 5.231% Fixed-to-Floating Rate Senior Notes due 2031 and $750 million in 6.254% Fixed-to-Fixed Rate Subordinated Notes due 2040.
Termination of the Shared-Loss Agreement with the FDIC In April 2025, the bank terminated its agreement with the FDIC to share losses on certain acquired assets. This eliminated the bank’s reporting requirements and obligations related to the FDIC loss sharing program, as the likelihood of reaching the $5 billion loss threshold was deemed remote.
Share Repurchase Program In July 2024, the company’s board authorized a $3.5 billion share repurchase plan through 2025. During the first quarter of 2025, the company repurchased 302,683 shares of its Class A common stock for $613 million.
Changes to Reportable Segments The company updated its segment reporting, transferring certain components between the SVB Commercial, General Bank, and Commercial Bank segments. Segment disclosures for 2024 were recast to reflect these changes.
Recent Economic, Industry and Regulatory Developments The Federal Reserve maintained interest rates in early 2025, and the Trump administration’s trade policies continued to create uncertainty. The company is closely monitoring the impact of these developments on its business and customers.
Financial Performance Summary
The table below summarizes the company’s key financial results for the current quarter, linked quarter, and prior year quarter:
Table 1: Selected Financial Data
| Metric | Q1 2025 | Q4 2024 | Q1 2024 |
|---|---|---|---|
| Net Interest Income | $1,663 million | $1,709 million | $1,817 million |
| Provision for Credit Losses | $154 million | $155 million | $64 million |
| Noninterest Income | $635 million | $699 million | $627 million |
| Noninterest Expense | $1,493 million | $1,517 million | $1,376 million |
| Net Income | $483 million | $700 million | $731 million |
| Diluted EPS | $34.47 | $49.21 | $49.26 |
| Net Interest Margin | 3.26% | 3.32% | 3.67% |
| Return on Average Assets | 0.87% | 1.25% | 1.36% |
Income Statement Highlights
- Net income decreased 31% from the linked quarter, primarily due to a $132 million increase in income tax expense.
- Net interest income decreased 3% due to lower yields on interest-earning assets and a shift in the asset mix.
- Noninterest income decreased 9%, driven by declines in other noninterest income, fair value adjustments, and gains on sales.
- Noninterest expense decreased 2%, with lower acquisition-related costs and other expenses offsetting higher personnel costs.
- Provision for credit losses was relatively flat compared to the linked quarter.
Balance Sheet Highlights
- Loans and leases increased 1% from the linked quarter, with growth in commercial and SVB loans.
- Deposits increased 3%, driven by growth in the Direct Bank, Branch Network, and SVB Commercial segment.
- Borrowings increased 4%, primarily due to the current quarter debt issuances.
- The company remained well-capitalized, with a total risk-based capital ratio of 15.23%.
Funding, Liquidity and Capital Overview
Deposit Composition and Trends The company’s deposits are primarily sourced from its General Bank, Commercial Bank, SVB Commercial, and Corporate segments. Total deposits increased 3% from the linked quarter, with growth in the Direct Bank, Branch Network, and SVB Commercial segment, partially offset by a decline in the Commercial Bank segment.
The company maintains a strong liquidity position, with $62.79 billion in high-quality liquid assets and additional borrowing capacity with the Federal Home Loan Bank and Federal Reserve Bank.
Investment Securities Duration The company’s investment securities portfolio had an average duration of 2.7 years at March 31, 2025, with the available-for-sale portfolio at 2.3 years and the held-to-maturity portfolio at 4.3 years.
Capital Position The company remained well-capitalized, with a total risk-based capital ratio of 15.23%, a Tier 1 risk-based capital ratio of 13.35%, a common equity Tier 1 ratio of 12.81%, and a Tier 1 leverage ratio of 9.75% at March 31, 2025.
Results of Operations
Net Interest Income and Net Interest Margin Net interest income decreased 3% from the linked quarter, primarily due to lower yields on loans and interest-earning deposits, partially offset by lower funding costs. Net interest margin decreased 6 basis points to 3.26%, mainly due to the decline in asset yields and a shift in the asset mix.
Provision for Credit Losses The provision for credit losses was relatively flat compared to the linked quarter, with a $10 million decrease in the provision for loan and lease losses offset by a $9 million increase in the provision for off-balance sheet credit exposure.
Noninterest Income Noninterest income decreased 9% from the linked quarter, driven by declines in other noninterest income, fair value adjustments, and gains on sales, partially offset by increases in wealth management services and merchant services.
Noninterest Expense Noninterest expense decreased 2% from the linked quarter, with lower acquisition-related expenses and other noninterest expenses offsetting higher personnel costs.
Income Taxes The effective income tax rate was 25.8% for the current quarter, compared to 4.9% in the linked quarter. The lower rate in the linked quarter was due to a change in the state tax rate applied.
Results by Segment
General Bank The General Bank segment’s net income decreased 12% from the linked quarter, primarily due to higher personnel costs and a higher provision for credit losses, partially offset by higher net interest income.
Commercial Bank The Commercial Bank segment’s net income decreased 51% from the linked quarter, driven by lower noninterest income and higher personnel costs, partially offset by lower provision for credit losses.
SVB Commercial The SVB Commercial segment’s net income decreased 8% from the linked quarter, mainly due to lower net interest income, partially offset by lower noninterest expense and provision for credit losses.
Rail The Rail segment’s net income decreased 29% from the linked quarter, primarily due to lower net rental income on operating lease equipment.
Corporate The Corporate segment’s net income decreased significantly from the linked quarter, mainly due to the change in the estimated state tax rate that benefited the linked quarter.
Balance Sheet Analysis
Interest-earning Assets Interest-earning assets, including loans, leases, and investment securities, increased 1% from the linked quarter. The increase was primarily driven by growth in loans and investment securities.
Loans and Leases Total loans and leases increased 1% from the linked quarter, with growth in commercial and SVB loans, partially offset by a decline in consumer loans.
Operating Lease Equipment The company’s operating lease equipment, primarily related to the Rail segment, increased 1% from the linked quarter.
Interest-bearing Liabilities Total interest-bearing liabilities, including deposits and borrowings, increased 2% from the linked quarter, mainly due to deposit growth and the current quarter debt issuances.
Deposits Total deposits increased 3% from the linked quarter, driven by growth in the Direct Bank, Branch Network, and SVB Commercial segment, partially offset by a decline in the Commercial Bank segment.
Borrowings Total borrowings increased 4% from the linked quarter, primarily due to the current quarter debt issuances.
Risk Management
Credit Risk The company employs various credit risk management practices, including a credit ratings system for commercial loans, evaluation of consumer borrower creditworthiness, and ongoing portfolio monitoring.
Allowance for Loan and Lease Losses (ALLL) The ALLL increased slightly from the linked quarter, primarily due to modest deterioration in the macroeconomic forecast and loan growth, partially offset by a shift in the loan portfolio mix and lower specific reserves. The ALLL as a percentage of total loans was 1.19% at March 31, 2025.
The company’s ALLL estimate considers various macroeconomic scenarios, with the baseline scenario resulting in an ALLL of $1.68 billion at March 31, 2025.
Conclusion
In the first quarter of 2025, BancShares reported a 31% decrease in net income compared to the linked quarter, primarily due to higher income tax expense. The company’s financial performance was also impacted by lower net interest income, noninterest income, and higher noninterest expense.
Despite these challenges, the company maintained a strong balance sheet, with growth in loans, deposits, and borrowings. The company’s capital position remained well above regulatory requirements, providing a solid foundation for future growth and risk management.
Looking ahead, BancShares will continue to navigate the evolving economic and regulatory landscape, focusing on prudent risk management, efficient operations, and delivering value to its customers and shareholders.
