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FIRST CITIZENS BANCSHARES INC /DE/ (FCNCA)·Q2 2025 Earnings Summary

Executive Summary

  • Adjusted diluted EPS of $44.78 beat S&P Global consensus by ~14.6% as operating leverage and lower deposit costs supported stable NIM ex-PAA; GAAP diluted EPS was $42.36 . EPS consensus for Q2 2025 was $39.09 vs actual $44.78*.
  • Net revenue was $2.37B (GAAP) and $2.21B (adjusted), with net interest income up 2% q/q and noninterest income up 6.7% q/q; adjusted noninterest income rose 7.2% q/q .
  • Deposits grew $0.61B (+0.4% q/q), NIM held at 3.26% while NIM ex-PAA expanded 2 bps to 3.14% on lower deposit costs; loans declined modestly by $89MM (-0.1% q/q) as SVB Commercial fell .
  • Credit quality remained stable: NCO ratio fell to 0.33% (from 0.41% in Q1), though nonaccruals rose to 0.93% of loans on one SVB credit; provision decreased to $115MM .
  • Announced an additional $4.0B share repurchase authorization and repurchased $613MM in Q2; CET1 decreased to 12.12% but remains strong; buyback is a key stock catalyst .

What Went Well and What Went Wrong

What Went Well

  • EPS, ROE and ROA “exceeded our expectations,” with adjusted diluted EPS $44.78 and adjusted ROE/ROA of 11.00%/1.07%; management cited stable headline NIM and expansion of NIM ex-PAA by 2 bps due to lower deposit costs .
  • Solid noninterest income performance, primarily from Rail and Commercial banking segments; adjusted noninterest income up 7.2% q/q to $513MM .
  • Return of capital: repurchased $613MM of Class A shares and announced a new $4.0B share repurchase plan; TBV/share rose to $1,594.38 .
    • “Our team delivered solid financial results... Capital and liquidity positions remained strong, enabling us to return an additional $613 million... [and] approved an additional share repurchase plan... up to $4.0 billion…” — CEO Frank B. Holding, Jr. .

What Went Wrong

  • Loans declined slightly (-$89MM q/q), as SVB Commercial loans fell $289MM (Tech & Healthcare Banking declines) offsetting growth in General and Commercial Banks .
  • Efficiency ratio elevated: GAAP efficiency 63.22% and adjusted 57.92% (well above prior-year adjusted 50.77%), reflecting continued investments and higher personnel/marketing costs .
  • Nonaccrual loans increased to $1.32B (0.93% of loans) due to one SVB nonaccrual; CET1 fell 69 bps q/q to 12.12% (still robust) .

Financial Results

Income statement and EPS (USD Millions unless noted)

MetricQ2 2024Q1 2025Q2 2025
Net Interest Income$1,821 $1,663 $1,695
Noninterest Income (GAAP)$639 $635 $678
Net Revenue (GAAP)$2,460 $2,298 $2,373
Noninterest Income (Adjusted)$479 $479 $513
Noninterest Expense (GAAP)$1,386 $1,493 $1,500
Noninterest Expense (Adjusted)$1,168 $1,277 $1,279
Net Income (GAAP)$707 $483 $575
Net Income to Common (GAAP)$691 $468 $561
Diluted EPS (GAAP, $)$47.54 $34.47 $42.36
Diluted EPS (Adjusted, $)$50.87 $37.79 $44.78

Margins and returns

MetricQ2 2024Q1 2025Q2 2025
NIM (GAAP, %)3.64 3.26 3.26
NIM ex-PAA (%, non-GAAP)3.36 3.12 3.14
Efficiency Ratio (GAAP, %)56.36 64.97 63.22
Efficiency Ratio (Adjusted, %)50.77 59.62 57.92
ROA (%, GAAP)1.30 0.87 1.01
ROA (Adjusted, %)1.39 0.95 1.07
ROE (%, GAAP)13.13 8.79 10.41
ROE (Adjusted, %)14.05 9.64 11.00
ROTCE (Adjusted, %)14.48 9.91 11.30

Balance sheet and credit KPIs

MetricQ2 2024Q1 2025Q2 2025
Loans & Leases (Period End, $MM)139,341 141,358 141,269
Deposits (Period End, $MM)151,079 159,325 159,935
CET1 Ratio (%)13.33 12.81 12.12
Nonaccrual Loans / Loans (%)0.82 0.85 0.93
Net Charge-off Ratio (%)0.38 0.41 0.33
ALLL / Loans (%)1.22 1.19 1.18
TBV per Common Share ($)1,443.92 1,553.06 1,594.38
Cost of Deposits (%)2.64 2.32 2.27

Estimates vs Actuals (S&P Global)

MetricQ2 2024Q1 2025Q2 2025
Primary EPS Consensus Mean ($)44.82*37.69*39.09*
Primary EPS Actual ($)50.87 37.79 44.78
Revenue Consensus Mean ($MM)2,255.83*2,216.52*2,206.56*
Revenue Actual ($MM)2,365.00*2,144.00*2,258.00*

Values with * retrieved from S&P Global.

Segment Breakdown (PPNR, USD Millions)

Segment PPNR (non-GAAP)Q2 2024Q1 2025Q2 2025
General Bank381 387 408
Commercial Bank200 143 184
SVB Commercial318 246 238
Rail27 30 25
Corporate148 (1) 18

Guidance Changes

MetricPeriodPrevious Guidance (Q1 2025 IP)Current Guidance (Q2 2025 IP)Change
Loans & Leases (EOP, $B)Q3 2025—$141–$144 New
Loans & Leases (EOP, $B)FY 2025$144–$147 $143–$146 Lowered
Deposits (EOP, $B)Q3 2025—$159–$162 New
Deposits (EOP, $B)FY 2025$163–$168 $161–$166 Lowered
Net Interest Income ($B)Q3 2025—$1.66–$1.76 New
Net Interest Income ($B)FY 2025$6.55–$6.95 $6.68–$6.88 Narrowed
Adjusted Noninterest Income ($B)Q3 2025$0.48–$0.51 $0.48–$0.51 Maintained
Adjusted Noninterest Income ($B)FY 2025$1.95–$2.05 $1.97–$2.05 Raised lower bound
Adjusted Noninterest Expense ($B)Q3 2025$1.28–$1.31 $1.28–$1.32 Slightly raised upper bound
Adjusted Noninterest Expense ($B)FY 2025$5.05–$5.20 $5.10–$5.20 Raised lower bound
Net Charge-off Ratio (bps)Q3 202540–50 35–45 Lowered
Net Charge-off Ratio (bps)FY 202535–45 35–45 Maintained
Effective Tax Rate (%)Q3 202525–26 25–26 Maintained
Interest Rate AssumptionsFY 20250–4 cuts, FFR 3.25–4.50% 0–2 cuts in 2H25, FFR 3.75–4.50% More conservative

Earnings Call Themes & Trends

Note: Q2 2025 call transcript was not available in our source set; current-period themes reflect the Q2 investor presentation and press release. Prior mentions reflect Q4 2024 and Q1 2025 transcripts.

TopicQ4 2024 Mentions (Q-2)Q1 2025 Mentions (Q-1)Current Period (Q2 2025)Trend
Deposit betas & NIMNIM compression on rate cuts; deposit costs declining NIM 3.26%; deposit cost down; deposit beta peaked; down-cycle betas 35–45% NIM flat at 3.26; NIM ex-PAA +2 bps; deposit cost 2.27% Stabilizing
SVB client funds & VC activitySVB deposits and total client funds up; VC uptick but dominated by large deals Total client funds up; cautious outlook amid volatility SVB deposits +$0.78B q/q; client funds up; Tech & Healthcare pressure persists Mixed
Share repurchases & CET1 planOngoing buyback; manage CET1 ex-SLA to 10.5–11% in 2025 Manage CET1 to 10.5–11% by end of Q1’26; next buyback in 2H25 $613MM repurchase and new $4.0B authorization; CET1 12.12% Ongoing execution
Credit stress areasGeneral office, investor dependent, small-ticket leasing noted Investor dependent and office remain elevated; NCO guide 35–45 bps NCO q/q down to 0.33%; nonaccrual uptick from one SVB credit Gradual improvement
Tariffs/macroNoted uncertainties, higher/lower rate scenarios Monitoring tariff impact; portfolios of focus: textile, footwear, retail, auto, equipment finance Outlook assumes 0–2 cuts in 2H25; macro caution embedded Cautious

Management Commentary

  • “Our team delivered solid financial results in the second quarter through revenue growth and positive credit performance... [and] approved an additional share repurchase plan... up to $4.0 billion...” — Frank B. Holding, Jr., Chairman & CEO .
  • “EPS, ROE and ROA results exceeded our expectations... NIM, ex-PAA expanded by 2 basis points driven primarily by lower deposit costs... Deposits grew by $0.6 billion...” — Q2 investor presentation highlights .
  • “We intend to manage CET1 towards the 10.5% to 11% range by the end of the first quarter of '26... [and] implement another repurchase plan in the back half of 2025.” — Craig Nix, CFO (Q1 call) .
  • “We are asset sensitive, and we'd anticipate staying that way.” — Craig Nix, CFO (Q1 call) .

Q&A Highlights

Note: Q2 2025 Q&A not available; highlights reflect Q1/Q4 context.

  • Share repurchase trajectory and CET1 targets: CFO outlined path to 10.5–11% CET1 by Q1’26 and a second-half 2025 buyback plan .
  • Funding mix and NII trajectory: Baseline of three/four cuts; NII expected to trough around Q1’26; strive to grow core deposit funding to low-to-mid 90% over time .
  • SVB total client funds outlook: Continued execution despite innovation economy headwinds; growth tied to VC investment normalization .
  • Tariffs/supply-chain exposures: Monitoring textiles, footwear, retail, auto, equipment finance, innovation portfolios; early to quantify impacts .
  • FDIC purchase money note: No near-term paydown expected; potential in 2026 if curve supports .

Estimates Context

  • EPS: Q2 2025 Primary EPS consensus $39.09 vs actual $44.78 — a clear beat*. Q1 2025 was essentially in line ($37.69 vs $37.79)*.
  • Revenue: Q2 2025 consensus $2,206.6MM vs actual $2,258.0MM — modest beat*. Prior-year Q2 2024 consensus $2,255.8MM vs actual $2,365.0MM — beat*.

Values with * retrieved from S&P Global.

Key Takeaways for Investors

  • EPS beat and stable NIM ex-PAA suggest core earnings power is resilient even as accretion rolls down; watch deposit cost trends and borrowings rates for further margin support .
  • Deposit growth and strong liquidity (liquid assets $63.6B, liquidity/uninsured deposits 159%) de-risk funding; continued Direct Bank and SVB momentum are key drivers .
  • Credit normalization underway: NCOs trending lower, but office and investor-dependent remain watch points; nonaccrual uptick tied to one SVB credit .
  • Capital deployment is a catalyst: $613MM repurchased in Q2 and new $4.0B authorization provide visible support; CET1 at 12.12% gives flexibility .
  • Outlook tightened: FY NII narrowed to $6.68–$6.88B and deposit/loan ranges modestly lowered; near-term guide embeds macro caution and fewer rate cuts .
  • Segment dynamics: General Bank and Commercial Bank PPNR improved; SVB Commercial PPNR down q/q on lower NII; Rail continues to benefit from repricing .
  • Actionable: Lean into capital return narrative and monitor deposit cost trajectory; evaluate sensitivity to macro (rate path, VC activity) given SVB exposure and guidance conservatism .
Note: The Q2 2025 earnings call transcript was not available in our document set; current-period commentary reflects the 8-K press release and investor presentation (EX-99.1/99.2/99.3). 

Non-GAAP: Adjusted results exclude notable items (net of tax: $32MM in Q2 2025) including lease-related adjustments, acquisition-related expenses, intangible amortization, and other items; see reconciliations **[798941_0000798941-25-000034_ex_993financialsupplement-.htm:9]**.