Q4 2023 Earnings Summary
Reported on Jan 26, 2024 (Before Market Open)
Pre-Earnings Price$1412.41Last close (Jan 25, 2024)
Post-Earnings Price$1383.00Open (Jan 26, 2024)
Price Change
$-29.41(-2.08%)
- First Citizens BancShares has a substantial cash position (17% of earning assets), which they plan to gradually deploy into higher-yielding assets, potentially boosting net interest income and mitigating asset sensitivity over time.
- The Global Fund Banking segment's loan pipeline increased by $1.5 billion in the fourth quarter, indicating potential growth opportunities as they re-engage more fully with clients and market activities improve.
- Management is bullish on the growth prospects of the SVB segment, expecting that loan growth will lead to increased deposit growth, enhancing overall bank earnings in the long term.
- Declining net interest income due to anticipated rate cuts and higher deposit costs, impacting profitability in 2024. Additionally, the future issuance of $8-$11 billion in long-term debt to meet regulatory requirements will create a headwind for net interest income moving forward.
- Elevated asset sensitivity from outsized cash position at 17% of earning assets, posing risk in a declining rate environment as rates fall. The company aims to reduce cash levels to 10%-12%, but may not achieve this by end of 2024.
- Credit quality concerns with expected elevated net charge-offs in the innovation, general office, and equipment finance portfolios in 2024. Elevated criticized loans in sponsor finance and project finance portfolios may indicate further credit deterioration.
Research analysts covering FIRST CITIZENS BANCSHARES INC /DE/.