FIRST CITIZENS(FCNCP) - 2025 Q1 - Quarterly Results

Executive Summary & Key Financial Highlights Summary Financial Data & Key Metrics This section provides a high-level overview of the company's financial performance and key metrics for the three months ended March 31, 2025, compared to prior periods, covering results of operations, per share data, key performance ratios, select balance sheet items, capital ratios, and asset quality Key Financial Results (Three Months Ended) | Metric | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :----------------------------------- | :------------- | :---------------- | :------------- | | Net interest income (Billions USD) | $1.663 | $1.709 | $1.817 | | Provision for credit losses (Millions USD) | $154 | $155 | $64 | | Net income available to common stockholders (Millions USD) | $468 | $685 | $716 | | Diluted earnings per common share (EPS) | $34.47 | $49.21 | $49.26 | | Return on average assets (ROA) | 0.87 % | 1.25 % | 1.36 % | | Net interest margin (NIM) | 3.26 % | 3.32 % | 3.67 % | Select Balance Sheet Items at Period End | Metric | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :-------------------------- | :------------- | :---------------- | :------------- | | Total loans and leases (Billions USD) | $141.358 | $140.221 | $135.370 | | Total deposits (Billions USD) | $159.325 | $155.229 | $149.609 | | Total risk-based capital ratio | 15.23 % | 15.04 % | 15.66 % | | Nonaccrual loans to total loans and leases | 0.85 % | 0.84 % | 0.79 % | Detailed Financial Statements Income Statement (Unaudited) This section presents the unaudited income statement for the three months ended March 31, 2025, December 31, 2024, and March 31, 2024, detailing interest income and expense, noninterest income and expense, provision for credit losses, and net income Income Statement Highlights (Three Months Ended) | Metric | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :----------------------------------- | :------------- | :---------------- | :------------- | | Total interest income (Billions USD) | $2.895 | $3.001 | $3.084 | | Total interest expense (Billions USD) | $1.232 | $1.292 | $1.267 | | Net interest income (Billions USD) | $1.663 | $1.709 | $1.817 | | Provision for credit losses (Millions USD) | $154 | $155 | $64 | | Noninterest income (Millions USD) | $635 | $699 | $627 | | Noninterest expense (Billions USD) | $1.493 | $1.517 | $1.376 | | Net income available to common stockholders (Millions USD) | $468 | $685 | $716 | | Diluted earnings per common share | $34.47 | $49.21 | $49.26 | - Net interest income decreased by $46 million QoQ (2.7%) and $154 million YoY (8.5%)[2] - Provision for credit losses remained stable QoQ but significantly increased YoY from $64 million to $154 million[2] Balance Sheet (Unaudited) This section provides the unaudited balance sheet as of March 31, 2025, December 31, 2024, and March 31, 2024, outlining assets, liabilities, and stockholders' equity Balance Sheet Highlights (Period End) | Metric | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :----------------------------------- | :------------- | :---------------- | :------------- | | Total assets (Billions USD) | $228.822 | $223.720 | $217.836 | | Loans and leases, net of ALLL (Billions USD) | $139.678 | $138.545 | $133.633 | | Total deposits (Billions USD) | $159.325 | $155.229 | $149.609 | | Noninterest-bearing deposits (Billions USD) | $40.767 | $38.633 | $39.276 | | Total borrowings (Billions USD) | $38.406 | $37.051 | $37.540 | | Total stockholders' equity (Billions USD) | $22.295 | $22.228 | $21.848 | - Total assets increased by $5.1 billion QoQ (2.3%) and $11 billion YoY (5.0%)[3] - Total deposits increased by $4.1 billion QoQ (2.6%) and $9.7 billion YoY (6.5%). Noninterest-bearing deposits saw a QoQ increase of $2.1 billion[3] Average Balance Sheets, Yields and Rates This section details the average balance sheets, yields, and rates for interest-earning assets and interest-bearing liabilities for the three months ended March 31, 2025, December 31, 2024, and March 31, 2024, providing insights into net interest spread and net interest margin Average Balances, Yields, and Rates (Three Months Ended) | Metric | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :----------------------------------- | :------------- | :---------------- | :------------- | | Average Loans and leases (Billions USD) | $139.491 | $138.186 | $132.313 | | Yield on Loans and leases | 6.49 % | 6.69 % | 7.15 % | | Average Total interest-earning assets (Billions USD) | $206.028 | $204.779 | $198.587 | | Yield on Total interest-earning assets | 5.68 % | 5.83 % | 6.23 % | | Average Total interest-bearing liabilities (Billions USD) | $154.622 | $151.657 | $145.641 | | Rate on Total interest-bearing liabilities | 3.22 % | 3.39 % | 3.49 % | | Net interest spread | 2.46 % | 2.44 % | 2.74 % | | Net interest margin (NIM) | 3.26 % | 3.32 % | 3.67 % | - The yield on total interest-earning assets decreased by 15 basis points QoQ, while the rate on total interest-bearing liabilities decreased by 17 basis points QoQ[12] - Net interest margin (NIM) declined by 6 basis points QoQ and 41 basis points YoY[12] Loan, Deposit, and Asset Quality Analysis Loans and Leases by Class This section provides a breakdown of the loan and lease portfolio by commercial, consumer, and SVB segments at period end, highlighting changes in composition over time Loans and Leases by Class (End of Period) | Loan Class | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :----------------------------------- | :------------- | :---------------- | :------------- | | Total commercial (Billions USD) | $72.540 | $71.799 | $67.601 | | Total consumer (Billions USD) | $28.147 | $28.228 | $27.923 | | Total SVB (Billions USD) | $40.671 | $40.194 | $39.846 | | Total loans and leases (Billions USD) | $141.358 | $140.221 | $135.370 | - Total loans and leases increased by $1.1 billion QoQ (0.8%) and $6 billion YoY (4.4%)[11] - Commercial loans grew by $741 million QoQ, primarily driven by commercial construction and owner-occupied commercial mortgages. SVB loans also increased by $477 million QoQ, mainly in global fund banking[11] Deposits by Type This section details the composition of deposits by type (noninterest-bearing, checking with interest, money market, savings, and time deposits) at period end, showing shifts in funding mix Deposits by Type (End of Period) | Deposit Type | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :----------------------------------- | :------------- | :---------------- | :------------- | | Noninterest-bearing demand (Billions USD) | $40.767 | $38.633 | $39.276 | | Checking with interest (Billions USD) | $23.041 | $25.343 | $24.244 | | Money market (Billions USD) | $37.705 | $35.722 | $31.399 | | Savings (Billions USD) | $45.817 | $42.278 | $37.682 | | Time (Billions USD) | $11.995 | $13.253 | $17.008 | | Total deposits (Billions USD) | $159.325 | $155.229 | $149.609 | - Total deposits increased by $4.1 billion QoQ, with noninterest-bearing demand deposits growing by $2.1 billion and savings deposits increasing by $3.5 billion[11] - Time deposits continued their downward trend, decreasing by $1.2 billion QoQ[11] Credit Quality and Allowance for Loan and Lease Losses (ALLL) This section provides key credit quality indicators, including nonaccrual loans, net charge-offs, and the allowance for loan and lease losses (ALLL) ratio, reflecting the health of the loan portfolio Credit Quality Metrics (Three Months Ended) | Metric | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :----------------------------------- | :------------- | :---------------- | :------------- | | Nonaccrual loans at period end (Billions USD) | $1.206 | $1.184 | $1.074 | | Ratio of nonaccrual loans to total loans | 0.85 % | 0.84 % | 0.79 % | | Net charge-offs (Millions USD) | ($144) | ($160) | ($103) | | Net charge-off ratio | 0.41 % | 0.46 % | 0.31 % | | ALLL to loans ratio at period end | 1.19 % | 1.20 % | 1.28 % | | Provision for loan and lease losses (Millions USD) | $148 | $158 | $93 | - Nonaccrual loans increased slightly by $22 million QoQ, with the ratio to total loans remaining relatively stable at 0.85%[11] - Net charge-offs decreased by $16 million QoQ, leading to a lower net charge-off ratio of 0.41%[11] Non-GAAP Reconciliations and Adjusted Performance Notable Items Impact This section explains and quantifies the impact of "Notable Items" on GAAP financial measures, which are excluded from adjusted (non-GAAP) measures to enhance understanding of operations and comparability, including certain recurring noncash items and infrequent transactions Impact of Notable Items on Adjusted Measures (Three Months Ended) | Metric | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :----------------------------------- | :------------- | :---------------- | :------------- | | Impact on adjusted noninterest income (Millions USD) | ($156) | ($183) | ($149) | | Impact on adjusted noninterest expense (Millions USD) | ($216) | ($249) | ($222) | | Impact on adjusted pre-tax income (Millions USD) | $60 | $66 | $73 | | Impact on adjusted net income (Millions USD) | $45 | ($57) | $53 | | Impact on adjusted diluted EPS | $3.32 | ($4.11) | $3.66 | - Notable items primarily include rental income and depreciation on operating lease equipment, acquisition-related expenses, and impairment of capitalized software[4][5][6] - The income tax impact for Q4 2024 includes a change in estimated state income tax rates after filing the first income tax returns that included the SVBB Acquisition[7] Adjusted Income Statements This section presents condensed income statements adjusted for notable items, providing a non-GAAP view of the company's financial performance by excluding specific infrequent or non-cash transactions Adjusted Income Statement Highlights (Three Months Ended) | Metric | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :----------------------------------- | :------------- | :---------------- | :------------- | | Adjusted noninterest income (Millions USD) | $479 | $516 | $478 | | Adjusted noninterest expense (Billions USD) | $1.277 | $1.268 | $1.154 | | Adjusted net income (Millions USD) | $528 | $643 | $784 | | Adjusted net income available to common stockholders (Millions USD) | $513 | $628 | $769 | | Adjusted diluted EPS | $37.79 | $45.10 | $52.92 | - Adjusted net income available to common stockholders decreased by $115 million QoQ (18.3%) and $256 million YoY (33.3%)[10] - Adjusted diluted EPS decreased by $7.31 QoQ (16.2%) and $15.13 YoY (28.6%)[10] Non-GAAP Reconciliations of Key Metrics This section provides detailed reconciliations of various GAAP financial measures to their corresponding non-GAAP adjusted measures, offering a clearer view of underlying operational performance by excluding the impact of notable items Net Income and EPS Reconciliation This sub-section reconciles GAAP net income and EPS to adjusted net income and EPS, showing the impact of notable items on these core profitability metrics Net Income and EPS Reconciliation (Three Months Ended) | Metric | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :----------------------------------- | :------------- | :---------------- | :------------- | | Net income (GAAP) (Millions USD) | $483 | $700 | $731 | | Adjusted net income (non-GAAP) (Millions USD) | $528 | $643 | $784 | | Net income available to common stockholders (GAAP) (Millions USD) | $468 | $685 | $716 | | Adjusted net income available to common stockholders (non-GAAP) (Millions USD) | $513 | $628 | $769 | | Diluted EPS (GAAP) | $34.47 | $49.21 | $49.26 | | Adjusted diluted EPS (non-GAAP) | $37.79 | $45.10 | $52.92 | Noninterest Income and Expense Reconciliation This sub-section reconciles GAAP noninterest income and expense to adjusted noninterest income and expense, isolating the effects of notable items Noninterest Income and Expense Reconciliation (Three Months Ended) | Metric | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :----------------------------------- | :------------- | :---------------- | :------------- | | Noninterest income (GAAP) (Millions USD) | $635 | $699 | $627 | | Adjusted noninterest income (non-GAAP) (Millions USD) | $479 | $516 | $478 | | Noninterest expense (GAAP) (Billions USD) | $1.493 | $1.517 | $1.376 | | Adjusted noninterest expense (non-GAAP) (Billions USD) | $1.277 | $1.268 | $1.154 | PPNR Reconciliation This sub-section reconciles GAAP net income to Pre-Tax, Pre-Provision Net Revenue (PPNR) and Adjusted PPNR, providing a measure of profitability before taxes and credit losses, and excluding notable items PPNR Reconciliation (Three Months Ended) | Metric | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :----------------------------------- | :------------- | :---------------- | :------------- | | PPNR (non-GAAP) (Millions USD) | $805 | $891 | $1.068 | | Adjusted PPNR (non-GAAP) (Millions USD) | $865 | $957 | $1.141 | ROA Reconciliation This sub-section reconciles GAAP Return on Average Assets (ROA) to Adjusted ROA and PPNR ROA, providing profitability metrics relative to assets, both on a GAAP and adjusted basis ROA Reconciliation (Three Months Ended) | Metric | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :----------------------------------- | :------------- | :---------------- | :------------- | | ROA (GAAP) | 0.87 % | 1.25 % | 1.36 % | | Adjusted ROA (non-GAAP) | 0.95 % | 1.14 % | 1.46 % | | PPNR ROA (non-GAAP) | 1.45 % | 1.58 % | 1.99 % | | Adjusted PPNR ROA (non-GAAP) | 1.56 % | 1.70 % | 2.12 % | ROE and ROTCE Reconciliation This sub-section reconciles GAAP Return on Average Common Equity (ROE) to Adjusted ROE and Return on Average Tangible Common Equity (ROTCE), providing insights into profitability relative to equity, including tangible equity ROE and ROTCE Reconciliation (Three Months Ended) | Metric | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :----------------------------------- | :------------- | :---------------- | :------------- | | ROE (GAAP) | 8.79 % | 12.56 % | 13.97 % | | Adjusted ROE (non-GAAP) | 9.64 % | 11.51 % | 15.01 % | | ROTCE (non-GAAP) | 9.04 % | 12.92 % | 14.42 % | | Adjusted ROTCE (non-GAAP) | 9.91 % | 11.84 % | 15.50 % | Tangible Common Equity and Book Value Reconciliation This sub-section reconciles GAAP common equity and book value per share to tangible common equity and tangible book value per common share, providing a view of equity excluding goodwill and other intangible assets Tangible Common Equity and Book Value Reconciliation (Period End) | Metric | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :----------------------------------- | :------------- | :---------------- | :------------- | | Tangible common equity (non-GAAP) (Billions USD) | $20.834 | $20.752 | $20.326 | | Tangible book value per common share (non-GAAP) | $1553.06 | $1512.77 | $1398.88 | | Tangible common equity to tangible assets (non-GAAP) | 9.13 % | 9.30 % | 9.36 % | Efficiency Ratio Reconciliation This sub-section reconciles the GAAP efficiency ratio to the adjusted efficiency ratio, providing a measure of operational efficiency excluding the impact of notable items Efficiency Ratio Reconciliation (Three Months Ended) | Metric | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :----------------------------------- | :------------- | :---------------- | :------------- | | Efficiency ratio (GAAP) | 64.97 % | 63.01 % | 56.30 % | | Adjusted efficiency ratio (non-GAAP) | 59.62 % | 56.98 % | 50.29 % | Rental Income on Operating Lease Equipment Reconciliation This sub-section reconciles GAAP rental income on operating lease equipment to adjusted rental income, by deducting direct expenses like depreciation and maintenance Rental Income on Operating Lease Equipment Reconciliation (Three Months Ended) | Metric | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :----------------------------------- | :------------- | :---------------- | :------------- | | Rental income on operating lease equipment (Millions USD) | $270 | $272 | $255 | | Adjusted rental income on operating lease equipment (Millions USD) | $114 | $120 | $114 | Net Interest Income & Net Interest Margin Reconciliation This sub-section reconciles GAAP net interest income and net interest margin to figures excluding purchase accounting accretion (PAA), providing a view of core net interest performance Net Interest Income & NIM Reconciliation (Three Months Ended) | Metric | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :----------------------------------- | :------------- | :---------------- | :------------- | | Net interest income (GAAP) (Billions USD) | $1.663 | $1.709 | $1.817 | | Net interest income, excluding PAA (non-GAAP) (Billions USD) | $1.588 | $1.627 | $1.658 | | NIM (GAAP) | 3.26 % | 3.32 % | 3.67 % | | NIM, excluding PAA (non-GAAP) | 3.12 % | 3.16 % | 3.35 % | | Loan PAA (Millions USD) | $84 | $90 | $163 | - Loan PAA decreased by $6 million QoQ and $79 million YoY, contributing to the changes in net interest income and NIM[18] Income Tax Expense and Effective Tax Rate Reconciliation This sub-section reconciles GAAP income tax expense and effective tax rate to adjusted figures, accounting for the impact of notable items and discrete tax adjustments Income Tax Expense and Effective Tax Rate Reconciliation (Three Months Ended) | Metric | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :----------------------------------- | :------------- | :---------------- | :------------- | | Income tax expense (GAAP) (Millions USD) | $168 | $36 | $273 | | Adjusted income tax expense (non-GAAP) (Millions USD) | $183 | $159 | $293 | | Effective tax rate (GAAP) | 25.82 % | 4.88 % | 27.20 % | | Adjusted effective tax rate (non-GAAP) | 25.71 % | 19.89 % | 27.18 % | - The adjusted effective tax rate for Q4 2024 was significantly lower at 19.89%, primarily due to the impact of a change in estimated state income tax rates after filing the first income tax returns that included the SVBB Acquisition[18]