First Citizens reels in profits as loans and deposits grow

Adobe Stock

First Citizens BancShares' profits surged in the fourth quarter, reflecting both a large upswing in fee income and a reduction in credit-loss provisions.

The $200 billion-asset parent company of First Citizens Bank generated net income of $700 million for the three-month period ended Dec. 31, it reported Friday. That's a 36% increase compared with the year-ago quarter.

Earnings per share of $49.21 easily topped analysts' estimates. Analysts surveyed by S&P Capital IQ had expected the company to report $37.69 per share.

"In 2024, we delivered pure leading returns to our shareholders and maintained strong capital and liquidity positions, all while increasing our capabilities as a large financial institution," Chief Financial Officer Craig Nix told analysts Friday during the earnings call. "As we enter 2025, I'm excited about the opportunities we have to drive continued long-term value for our shareholders."

Fee income was $699 million, up 29% year over year as First Citizens reeled in more business from its railcar unit and higher international and lending-related syndication fees, it said. 

Its provision for credit losses dropped to $155 million for the quarter, compared with $249 million in the year-ago period.

Loans and deposits grew across all segments, including the Silicon Valley Bank business that First Citizens acquired nearly two years ago. SVB commercial loans increased 1.7% year over year to $40.2 million. At the end of December, such loans accounted for 29% of the loan book.

Overall, loans totaled $140.2 million during the quarter, up nearly 5.2% from the year-ago quarter. Deposits grew at an even faster clip, coming in at $155.2 million, up 6.4% year over year.

First Citizens doubled in size with the March 2023 acquisition of a significant portion of SVB, whose bank-run-related failure earlier that month destabilized the industry and forced banks to take extraordinary measures to secure their deposit bases and calm customers.

The Raleigh, North Carolina-based company has since been working to steady the SVB unit and integrate it into the overall business. It hasn't been the easiest path, in part because of sluggish loan growth in the SVB segment and the challenge of holding onto former SVB customers.

There were some wins in the fourth quarter. Despite the ongoing slowdown in venture capital — which was crucial to SVB's role in banking the innovation economy — average total client funds grew to $97.7 billion during the quarter, from $93.7 billion in the prior-year quarter, and occurring at the same time that U.S. venture-capital investments rose, First Citizens said. 

2024 Top-Performing Banks

How First Citizens became the top-performing big bank

The North Carolina-based bank doubled in size in 2022 and again last year, when it acquired the failed Silicon Valley Bank. It has used consistency to outperform peers.

By Catherine Leffert

August 21

First Citizens is projecting a 6% increase in deposits for full-year 2025, even as it plans to shift a high-yielding SVB deposit product off the balance sheet in the first quarter, executives said. 

Loan growth, meanwhile, is projected to be about 3% for the entire year, largely stemming from more loans in the commercial banking segment. SVB commercial loans are also expected to increase this year, but the company remains cautious "on the absolute level of growth," Nix said.

The company continues to prepare for becoming a Category III bank, which are banks that have more than $250 billion of assets. Specifically, it is investing in technology and risk improvements.

Though First Citizens historically has been acquisitive, it seems as though it will stay on the sidelines, at least for now. 

"We are an opportunistic crowd … but we are not making any projections in that area," Chairman and CEO Frank Holding Jr. said on the call.