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First Citizens BancShares (FCNCA) Q3 Earnings call transcript Oct 24, 2024

Daily EarningsMonday, Oct 28, 2024 8:26 pm ET

1min read

FCNCA --

In the latest earnings call, First Citizens BancShares, a leading financial services company, provided insights into its third quarter performance and the challenges faced in the market. The call, led by CEO Frank Holding and CFO Craig Nix, highlighted the company's resilience and strategic initiatives to navigate the market uncertainties.

Financial Highlights and Market Trends

First Citizens reported strong financial results for the third quarter, with adjusted earnings per share of $45.87. The net interest margin remained stable, demonstrating the company's ability to maintain a competitive edge. Deposit growth was observed in the General Bank and SVB commercial balances, showcasing a robust deposit base. The company's confidence in the SVB deposit franchise was evident, emphasizing its competitive advantage in the innovation economy.

Loans declined during the quarter, primarily due to repayments outpacing new loan origination and draw activity. However, the pipeline remains strong, indicating a positive outlook for future growth. The decline in Global Fund Banking loans was offset by mid- to upper single-digit annualized percentage growth in the general and commercial banks, respectively.

Credit Performance and Risk Management

Net charge-offs increased modestly over the second quarter, with most of the increase concentrated in the general office portfolio. The company remains cautious about the elevated losses in this portfolio, which are expected to remain a concern for the remainder of 2024 and into 2025. Despite these challenges, the company's credit remains in good shape, and proactive measures are being taken to identify potential issues early.

Capital and Share Repurchase

First Citizens continued its share repurchase program, purchasing over 350,000 shares of Class A common stock for approximately $700 million in the third quarter. The company's strong capital and liquidity positions, coupled with the progress made under the share repurchase plan, underscore its commitment to returning value to shareholders.

Looking Ahead

The company expects a flat to low single-digit percentage growth in loans and deposits for the fourth quarter, with a focus on business and commercial loan portfolios in the General Bank and growth in the SVB Commercial segment. Despite the challenges, First Citizens remains optimistic about the future, with a plan to maintain a prudent growth strategy and drive long-term growth for its shareholders.

Conclusion

First Citizens BancShares' third quarter earnings call highlighted the company's ability to navigate market challenges and maintain a strong financial position. The company's focus on growth opportunities and risk management, coupled with its strategic initiatives to enhance shareholder value, positions it well for the future. As the company continues to navigate the evolving market landscape, investors and stakeholders will closely watch its performance and strategic moves.

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