First Citizens Bancshares, Inc. · NASDAQ:FCNCA
First Citizens Bancshares — Q4 2024 Earnings Presentation
55 slides from First Citizens Bancshares's earnings presentation, Jan 24, 2025
Slide 1: Fourth Quarter 2024 Earnings Conference Call
First Citizens BancShares, Inc. Fourth Quarter 2024 Earnings Conference Call January 24, 2025
Slide 2: Agenda
2 Agenda Pages Section I – Fourth Quarter Overview & Strategic Priorities 5–7 Section II – Fourth Quarter 2024 Financial Results 8 – 27 Financial Highlights 9 – 10 Earnings Highlights 11 Net interest income, margin and betas 12 – 14 Noninterest income and expense 15 – 16 Balance Sheet Highlights 17
Slide 3: Important Notices
3 Important Notices Forward Looking Statements This presentation contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 regarding the financial condition, results of operations, business plans, asset quality, future performance, and other str
Slide 4: Glossary of Abbreviations and Acronyms
4 Glossary of Abbreviations and Acronyms The following is a list of certain abbreviations and acronyms used throughout this document. AFS – Available for Sale ID – Investor Dependent ALLL – Allowance for Loan and Lease Losses LFI – Large Financial Institution AOCI – Accumulated Other Comprehensive I
Slide 5: Fourth Quarter Overview & Strategic Priorities
Fourth Quarter Overview & Strategic Priorities Section I
Slide 6: Fourth Quarter 2024 Snapshot
6 Fourth Quarter 2024 Snapshot Key Highlights: Financial Results: ■ Delivered strong return metrics aligned with our Adjusted EPS (1) forecast despite headwinds from a declining policy rate. $45.10 ■ Achieved loan and deposit growth across our operating Adjusted ROE / ROA (1) segments. 11.51% / 1.14
Slide 7: 2025 Strategic Priorities
7 2025 Strategic Priorities Balance Client Talent & Operational Sheet Focus Culture Efficiency Optimization • Expand and grow • Attract, retain and • Enhance processes • Manage our balance our capabilities and develop associates and systems to sheet prudently to products while who align with our red
Slide 8: Fourth Quarter 2024 Financial Results
Fourth Quarter 2024 Financial Results Section II
Slide 9: 4Q24 Financial Results - Takeaways
9 4Q24 Financial Results - Takeaways Deposits grew by $3.7 billion or by 2.4% While NII and NIM declined during the quarter over the linked quarter exceeding our guidance, 1 as anticipated, both were aligned with our 5 driven by growth in all of our operating expectations. segments. Credit quality r
Slide 10: Financial Highlights
10 Financial Highlights 4Q24 3Q24 4Q23 Reported Adjusted Reported Adjusted Reported Adjusted (Non-GAAP) (Non-GAAP) (Non-GAAP) EPS $ 49.21 $ 45.10 $ 43.42 $ 45.87 $ 34.33 $ 46.58 ROE 12.56 % 11.51 % 11.30 % 11.94 % 9.97 % 13.53 % ROTCE (non-GAAP) 12.92 11.84 11.63 12.29 10.32 14.00 ROA 1.25 1.14 1.15
Slide 11: Quarterly Earnings Highlights
11 Quarterly Earnings Highlights ($ in millions) Increase (decrease) Reported 4Q24 vs. 3Q24 4Q24 vs. 4Q23 4Q24 3Q24 4Q23 $ % $ % Net interest income $ 1,709 $ 1,796 $ 1,911 $ (87) (4.9)% $ (202) (10.6)% Noninterest income 699 650 543 49 7.7 156 28.9 Net revenue 2,408 2,446 2,454 (38) (1.6) (46) (1.9
Slide 12: Net interest income and margin
12 Net interest income and margin ($ in millions) $(87) million & (-21 bps) $(68) million & (-17 bps) $1,911 $1,817 $1,821 $1,796 $1,709 $1,717 $1,658 $1,681 $1,695 $1,627 3.86% 3.67% 3.64% 3.53% 3.32% 3.47% 3.35% 3.36% 3.33% 3.16% 4Q23 1Q24 2Q24 3Q24 4Q24 4Q23 1Q24 2Q24 3Q24 4Q24 (1) (1) NII NIM NI
Slide 13: NIM Rollforward
13 NIM Rollforward 3Q24 to 4Q24 (-21 bps) 0.12% 3.53% 3.32% (0.19)% (0.09)% (0.03)% (0.02)% 3Q24 Deposit rate/volume Loan yield FFS yield PAA Earning asset mix 4Q24 4Q23 to 4Q24 (-54 bps) 0.18% 0.04% 0.03% 3.86% (0.31)% 3.32% (0.22)% (0.15)% (0.11)% 4Q23 Investment Debt volume Loan volume FFS volume
Slide 14: Historical and Forecasted Cumulative Deposit Beta
14 Historical and Forecasted Cumulative Deposit Beta Up Cycle Down Cycle Terminal beta 63% 64% 61% 58% 53% 46% 45% 46% 47% 42% 44% 37% 31% 30% 29% 26% 23% 20% 16% 12% 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 - Jul/ 3Q24 - Sep 4Q24 1Q25 Aug Actual cumulative beta Actual cumulative beta IBD Forecast cumulat
Slide 15: Noninterest income
15 Noninterest income ($ in millions) $699 $543 $627 $639 $650 $183 $171 $149 $160 $176 $88 - total $516 $455 notable $478 $479 $474 items $(83) 4Q23 1Q24 2Q24 3Q24 4Q24 (1) (2) Adjusted (Non-GAAP) Notable items Gain on acquisition Highlights 4Q24 vs 3Q24 4Q24 vs 4Q23 Noninterest income increased by
Slide 16: Noninterest expense
16 Noninterest expense ($ in millions) $1,492 $1,517 $1,456 $1,376 $1,386 $227 $249 $357 $218 $222 $1,168 $1,229 $1,268 $1,135 $1,154 4Q23 1Q24 2Q24 3Q24 4Q24 (1) Adjusted (Non-GAAP) Notable items Highlights 4Q24 vs 3Q24 4Q24 vs 4Q23 Noninterest expense increased by $61 million. Noninterest expense
Slide 17: Balance Sheet Highlights
17 Balance Sheet Highlights ($ in millions, except per share data) Increase (decrease) 4Q24 vs 3Q24 (1) 4Q24 vs 4Q23 (1) SELECT PERIOD END BALANCES 4Q24 3Q24 4Q23 $ % $ % Interest-earning deposits at banks $ 21,364 $ 25,640 $ 33,609 $ (4,276) (66.3)% $ (12,245) (36.4)% Investment securities 44,090 3
Slide 18: Loans and Leases
18 Loans and Leases ($ in millions, period end balances) $139,341 $138,695 $140,221 Highlights $133,302 $135,370 $41,968 $39,852 $40,194 4Q24 vs 3Q24 $39,511 $39,846 • Total loans increased $1.5 billion or by 1.1% sequentially (4.4% annualized). The increase in loans was driven by a $676 million inc
Slide 19: 4Q24 Loans and Leases Composition
19 4Q24 Loans and Leases Composition ($ in billions, period end balances) Class Segment Commercial Bank: Commercial Finance ($16.8) Real Estate Finance ($6.4) 2% Equipment Finance ($5.8) 9% 12% Commercial mortgage ($38.1) 27% 29% 4% Commercial Services - Factoring ($2.5) Commercial and industrial ($
Slide 20: Deposits
20 Deposits ($ in millions, period end balances) Highlights $155,229 $149,609 $151,079 $151,574 $145,854 4Q24 vs. 3Q24 • Total deposits increased $3.7 billion or by $38,633 2.4% sequentially (9.6% annualized), $39,276 $40,016 $39,396 driven by a $1.6 billion increase in the $39,799 Direct Bank, a $8
Slide 21: 4Q24 Deposit Composition
21 4Q24 Deposit Composition (period end balances, $ in billions, except average account size) Type Segment General Bank: Branch Network, Wealth & Other ($65.6) Money market & savings ($78.0) 9% 1% Community Association Banking ($7.5) 26% 16% Commercial Bank: Noninterest-bearing demand ($38.6) 42% Co
Slide 22: SVB Commercial Segment Trends
22 SVB Commercial Segment Trends Continued pressure from market challenges remain, but underlying business activity continues to be strong. Total client funds (EOP) Total client funds (Avg) 1% $5.3 billion or 5. 6% $3.9 billion or 4. $95.0 $93.7 $99.0 $93.7 $93.8 $97.7 $92.8 $92.9 $92.4 $93.2 $35.9
Slide 23: Funding Mix
23 Funding Mix ($ in millions) Period End Balances Increase (decrease) 4Q24 vs. 4Q24 vs. 4Q24 3Q24 2Q24 1Q24 4Q23 3Q24 4Q23 Total deposits $ 155,229 80.7 % $ 151,574 80.3 % $ 151,079 80.1 % $ 149,609 79.9 % $ 145,854 79.5 % $ 3,655 $ 9,375 Securities sold under customer repurchase agreements 367 0.2
Slide 24: Credit Quality Trends and Allowance
24 Credit Quality Trends and Allowance ($ in millions) Net charge-offs & NCO ratio Provision for credit losses $177 $249 $160 $145 $132 $103 $155 0.53% 0.42% 0.46% $117 0.38% $95 0.31% $64 0.47% 0.31% 0.35% 0.37% 0.39% 4Q23 1Q24 2Q24 3Q24 4Q24 4Q23 1Q24 2Q24 3Q24 4Q24 NCO $ QTD NCO ratio YTD NCO rat
Slide 25: Allowance for loan and lease losses
25 Allowance for loan and lease losses ($ in millions) 3Q24 to 4Q24 $1,678 $5 $1 $1,676 $(6) $(1) $(1) 3Q24 Specific reserves Portfolio change Credit quality Loan volume Economic 4Q24 outlook Highlights ALLL Coverage 4.2x 4Q24 vs 3Q24 3.2x • ALLL decreased $2 million compared to the linked quarter r
Slide 26: Capital
26 Capital Risk-based capital ratios Capital ratio rollforward Risk-Based Capital Tier 1 15.75% 15.66% 15.45% 15.36% 15.04% 13.94% 14.00% 13.87% 13.78% Total Tier 1 CET1 Leverage 13.53% December 31, 2023 15.75% 13.94% 13.36% 9.83% Net income 1.70% 1.70% 1.70% 1.23% Change in risk-weighted/average as
Slide 27: Share Repurchase Plan Update
27 Share Repurchase Plan Update In July 2024, we announced a plan to repurchase up to $3.5 billion of Class A common shares. We have completed 51% of the repurchase plan through 1/21/25 Highlights ($ in millions) • We have repurchased 6.44% of Class A $3,500 common shares and 6.00% of total common s
Slide 28: Financial Outlook
Financial Outlook Section III
Slide 29: Key Earnings Estimate Assumptions
29 Key Earnings Estimate Assumptions Metric 4Q24 1Q25 - Projected FY25 - Projected Loans and leases - EOP $140.2 billion $140 billion - $142 billion $144 billion - $147 billion Deposits - EOP $155.2 billion $154 billion - $157 billion $162 billion - $167 billion Zero to four 25 bps cuts in 2025; Int
Slide 30: Appendix
A First Citizens BancShares’ Appendix Section IV
Slide 31: BancShares Balance Sheets (unaudited)
31 BancShares Balance Sheets (unaudited) ($ in millions) Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 ASSETS Cash and due from banks $ 814 $ 862 $ 764 $ 698 $ 908 Interest-earning deposits at banks 21,364 25,640 25,361 30,792 33,609 Securities purchased under agreements to resell
Slide 32: BancShares Income Statements (unaudited)
32 BancShares Income Statements (unaudited) ($ in millions) 4Q24 3Q24 2Q24 1Q24 4Q23 INTEREST INCOME Interest and fees on loans $ 2,322 $ 2,430 $ 2,422 $ 2,354 $ 2,391 Interest on investment securities 377 358 330 282 241 Interest on deposits at banks 302 350 378 448 485 Total interest income 3,001
Slide 33: Noninterest income
33 Noninterest income ($ in millions) 4Q24 Change vs 3Q24 4Q24 3Q24 2Q24 1Q24 4Q23 $ % Rental income on operating lease equipment $ 272 $ 262 $ 259 $ 255 $ 252 $ 10 4.2 % Lending-related fees 68 67 63 59 67 1 — Deposit fees and service charges 58 57 57 58 55 1 2.2 Client investment fees 54 55 54 50
Slide 34: Noninterest expense
34 Noninterest expense ($ in millions) 4Q24 Change vs 3Q24 4Q24 3Q24 2Q24 1Q24 4Q23 $ % Depreciation on operating lease equipment $ 101 $ 99 $ 98 $ 96 $ 96 $ 2 3.3 % Maintenance and other operating lease expenses 55 59 60 45 59 (4) (7.7) Personnel cost 801 788 745 744 714 13 1.7 Net occupancy expens
Slide 35: Loan Portfolios in Focus
35 Loan Portfolios in Focus ($ in billions, as of December 31, 2024) CRE Portfolio Composition % of total Balance loans Total Loans Multi-Family $ 5.7 4.1 % Medical Office 3.7 2.6 General Office 2.5 1.8 Legacy-CIT Portfolio 0.9 0.6 Other 1.6 1.1 Industrial/Warehouse 3.6 2.6 Retail 2.0 1.4 Hotel/Mote
Slide 36: General Office CRE Portfolio
36 General Office CRE Portfolio (as of December 31, 2024) Geographic Diversification General Office Top 5 MSAs Portfolio Metrics CA ($ in millions) Other 23% 26% Los Angeles $ 411 % of total loans 1.8 % Total Boston $ 196 General % of CRE loans 10.8 % Charlotte $ 112 VA Office 4% $2.5 B TX Phoenix $
Slide 37: SVB Investor Dependent Portfolio
37 SVB Investor Dependent Portfolio (as of December 31, 2024) Portfolio Characteristics Portfolio Metrics • Early Stage - Loans to development-stage innovation companies Early Stage Growth Stage with $0-5 million in revenues. • Growth Stage - Loans to mid and later-stage innovation companies Loan ba
Slide 38: Estimated Liquidity Available for Uninsured Deposits
38 Estimated Liquidity Available for Uninsured Deposits ($ in millions) December 31, 2024 September 30, 2024 December 31, 2023 Liquid assets: Available cash $ 20,545 $ 24,705 $ 32,693 High quality liquid securities 38,794 33,654 24,591 Total liquid assets (a) $ 59,339 $ 58,359 $ 57,284 Contingent li
Slide 39: Debt Securities Overview
39 Debt Securities Overview ($ in millions, period end balances) (1) 4Q24 (1) Duration in Carrying value (2) % of Portfolio Yield (3) years AFS Portfolio U.S. Treasury $ 13,903 32 % 4.25 % 1.2 Government agency 77 — 4.55 0.3 Commercial mortgage-backed securities 3,666 8 4.13 2.3 Residential mortgage
Slide 40: Average Balances and Yields
40 Average Balances and Yields ($ in millions) Change vs. 4Q24 3Q24 4Q23 3Q24 4Q23 Avg. Income / Yield / Avg. Income / Yield / Avg. Income / Yield / Avg. Income / Yield / Avg. Income / Yield / Balance Expense Rate Balance Expense Rate Balance Expense Rate Balance Expense Rate Balance Expense Rate Lo
Slide 41: Commercial Bank Segment
41 Commercial Bank Segment ($ in millions) Increase (decrease) 4Q24 vs. 3Q24 4Q24 vs. 4Q23 Income Statement 4Q24 3Q24 4Q23 $ % $ % Net interest income $ 277 $ 274 $ 271 $ 3 0.9 % $ 6 1.9 % Rental income on operating lease equipment 55 57 57 (2) (2.3) (2) (3.1) Less: depreciation on operating lease e
Slide 42: General Bank Segment
42 General Bank Segment ($ in millions) Increase (decrease) 4Q24 vs. 3Q24 4Q24 vs. 4Q23 Income Statement 4Q24 3Q24 4Q23 $ % $ % Net interest income $ 783 $ 768 $ 691 $ 15 2.1 % $ 92 13.3 % Noninterest income 166 149 138 17 11.9 28 21.0 Net revenue 949 917 829 32 3.6 120 14.6 Noninterest expense 497
Slide 43: SVB Commercial Segment
43 SVB Commercial Segment ($ in millions) Increase (decrease) 4Q24 vs. 3Q24 4Q24 vs. 4Q23 Income Statement 4Q24 3Q24 4Q23 $ % $ % Net interest income $ 568 $ 583 $ 519 $ (15) (2.6)% $ 49 9.4 % Noninterest income 150 139 135 11 7.6 15 11.5 Net revenue 718 722 654 (4) (0.7) 64 9.9 Noninterest expense
Slide 44: Rail Segment
44 Rail Segment ($ in millions) Increase (decrease) 4Q24 vs. 3Q24 4Q24 vs. 4Q23 Income Statement 4Q24 3Q24 4Q23 $ % $ % Net interest expense $ (50) $ (48) $ (42) $ (2) 6.3 % $ (8) 21.2 % Rental income on operating lease equipment 217 205 195 12 6.0 % 22 11.2 % Less: depreciation on operating lease e
Slide 45: Corporate
45 Corporate ($ in millions) Increase (decrease) 4Q24 vs. 3Q24 4Q24 vs. 4Q23 Income Statement 4Q24 3Q24 4Q23 $ % $ % Net interest income $ 131 $ 219 $ 472 $ (88) (40.1)% $ (341) (72.2)% Noninterest income 17 22 (67) (5) (21.1) 84 (126.8) Net revenue 148 241 405 (93) (38.4) (257) (63.6) Noninterest e
Slide 46: Purchase accounting marks
46 Purchase accounting marks ($ in millions) December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 Loans and leases (including off balance sheet exposure) (1) Beginning balance - unamortized fair value mark $ (1,746) $ (1,857) $ (2,005) $ (2,173) $ (2,378) Other 12 4 3
Slide 47: Non-GAAP Reconciliations
Non-GAAP Reconciliations Section V
Slide 48: Notable Items
48 Notable Items (1) ($ in millions, except per share data) 4Q24 3Q24 2Q24 1Q24 4Q23 (2) (7) Rental income on operating lease equipment $ (152) $ (158) $ (158) $ (141) $ (155) Realized gain on sale of investment securities, net (2) (4) — — — Fair value adjustment on marketable equity securities, net
Slide 49: Non-GAAP Reconciliations
49 Non-GAAP Reconciliations ($ in millions, except share and per share data) Non-GAAP Reconciliations 4Q24 3Q24 4Q23 Net income and EPS Net income (GAAP) a $ 700 639 514 Preferred stock dividends 15 15 15 Net income available to common stockholders (GAAP) b 685 624 499 Total notable items, after inc
Slide 50: Non-GAAP Reconciliations
50 Non-GAAP Reconciliations ($ in millions) Non-GAAP Reconciliations 4Q24 3Q24 4Q23 PPNR Net income (GAAP) a $ 700 639 514 Plus: provision for credit losses 155 117 249 Plus: income tax expense 36 234 199 PPNR (non-GAAP) l $ 891 990 962 Impact of notable items 66 51 269 Adjusted PPNR (non-GAAP) m $
Slide 51: Non-GAAP Reconciliations
51 Non-GAAP Reconciliations ($ in millions) Non-GAAP Reconciliations 4Q24 3Q24 4Q23 ROE and ROTCE Annualized net income available to common stockholders s = b annualized $ 2,727 2,483 1,980 Annualized adjusted net income available to common stockholders t = e annualized $ 2,499 2,623 2,687 Average s
Slide 52: Non-GAAP Reconciliations
52 Non-GAAP Reconciliations ($ in millions, except share and per share data) Non-GAAP Reconciliations 4Q24 3Q24 4Q23 Book value and tangible book value per common share Common shares outstanding at period end bb 13,717,621 14,179,208 14,520,118 Book value per share x/bb $ 1,556.16 1,547.81 1,403.12
Slide 53: Non-GAAP Reconciliations
53 Non-GAAP Reconciliations ($ in millions) Non-GAAP Reconciliations 4Q24 3Q24 4Q23 PPNR: Commercial Bank Segment Segment net income (GAAP) $ 85 110 24 Plus: provision for credit losses 79 29 164 Plus: income tax expense 20 41 14 PPNR (non-GAAP) $ 184 180 202 PPNR: General Bank Segment Segment net i
Slide 54: Non-GAAP Reconciliations
54 Non-GAAP Reconciliations ($ in millions) Non-GAAP Reconciliations 4Q24 3Q24 4Q23 Total Risk Based Capital Ratio Total risk based capital ratio (GAAP) 15.04 % 15.36 % Less: impact of FDIC Shared Loss Agreement 0.77 0.85 Adjusted total risk based capital ratio (non-GAAP) 14.27 % 14.51 % CET1 Capita
Slide 55: Non-GAAP Reconciliations
55 Non-GAAP Reconciliations ($ in millions) Non-GAAP Reconciliations 4Q24 3Q24 4Q23 Income tax expense Income tax expense (GAAP) $ 36 234 199 Impact of notable items (1) 123 15 90 Adjusted income tax expense (non-GAAP) $ 159 249 289 Effective tax rate Effective tax rate (GAAP) 4.88 % 26.76 % 27.93 %
First Citizens BancShares — Q4 2024 Earnings Presentation on 6ix