First Citizens BancShares reports record quarter as profits surge and share buyback program thrives

First Citizens BancShares, headquartered in Raleigh, North Carolina, reported record-breaking financial results for the fourth quarter of 2024, driven by robust profit growth and a strategic share buyback program. The company posted a net income of $700 million, up 36% from $514 million in the same period last year. This impressive profit growth trajectory highlights the institution’s ability to thrive amidst a competitive banking landscape and fluctuating market conditions.

On Friday morning, First Citizens’ stock price surged 4.5%, reaching $2,316.47. Earlier in the session, it hit a 52-week high, underlining investor confidence in the bank’s strategic direction. Analysts had projected a quarterly profit of $519.4 million, but First Citizens significantly outperformed expectations.

What Factors Drove First Citizens BancShares’ Strong Financial Performance?

The bank attributed its fourth-quarter success to several key factors, including growth in net interest income, a disciplined share buyback program, and an expanding loan portfolio.

Exceeding Expectations in Earnings and Net Interest Income

Earnings per share (EPS) for the quarter were $49.21, significantly higher than the $34.33 reported in the fourth quarter of 2023. Adjusted EPS stood at $45.10, surpassing analyst expectations of $39.07.

Net interest income, a critical metric for banks, rose to $1.71 billion, exceeding analysts’ estimates of $1.69 billion. This growth was supported by higher loan volumes and a stable funding mix, despite a challenging interest rate environment.

Loan Growth Highlights Resilience

Total loans and leases increased to $140.22 billion, up from $133.3 billion in 2023. This 5.2% annual growth reflects First Citizens’ ability to capitalize on opportunities in commercial and business lending, particularly within its General and Commercial Bank segments.

How Did the Share Buyback Program Enhance Investor Confidence?

A major highlight of the quarter was First Citizens’ ambitious share buyback program. During Q4 2024, the company repurchased 461,583 shares of Class A common stock for $963 million. This move, representing 3.5% of outstanding Class A shares as of September 30, 2024, underscored the bank’s confidence in its long-term profitability.

Frank Holding Jr., Chairman and CEO of First Citizens BancShares, emphasized the importance of the program, stating, “Our solid capital and liquidity positions allowed us to deliver value to shareholders through significant share repurchases. This reflects our unwavering confidence in the strength and stability of our financial model.”

From the inception of the Share Repurchase Program, the bank has repurchased 814,641 shares, representing 6.02% of Class A common shares outstanding. With $1.84 billion remaining under the program as of December 31, 2024, First Citizens is well-positioned to continue rewarding shareholders.

How Is First Citizens Positioned for Long-Term Growth?

The company’s operational strategies, combined with its focus on community impact, position it for sustainable growth. Despite a slight dip in net interest margin to 3.32% (down from 3.53% in Q3 2024), the bank’s funding mix remains robust, with deposits accounting for 80.7% of total funding. Total deposits grew to $155.23 billion, a 9.6% annualized increase, driven by corporate savings and interest-bearing checking accounts.

Non-interest income also rose to $699 million, boosted by gains from equipment leasing and investment securities. Adjusted non-interest income was $516 million, reflecting strength in areas like foreign exchange activity and customer derivative positions.

What Are Analysts Saying About First Citizens’ Performance?

Industry experts have praised the bank’s profit growth trajectory and strategic focus on shareholder returns. “First Citizens BancShares continues to demonstrate a disciplined approach to capital management. Its ability to deliver on both profitability and growth, while executing a significant share buyback program, sets a benchmark in the financial sector,” remarked a senior banking analyst.

The institution’s commitment to stability was further underscored by its strong capital ratios. As of December 31, 2024, the Common Equity Tier 1 risk-based capital ratio was 12.99%, well above regulatory requirements.

How Is First Citizens Supporting Communities Amid Natural Disasters?

In addition to its financial achievements, First Citizens remained committed to supporting communities affected by natural disasters. In response to Hurricanes Helene and Milton, the bank allocated resources to relief and recovery efforts across the West Coast and Southeast regions. This commitment to community impact has long been a cornerstone of First Citizens’ corporate philosophy.

What Does the Future Hold for First Citizens BancShares?

First Citizens BancShares has entered 2025 with strong momentum. Its solid balance sheet, expanding loan portfolio, and disciplined approach to shareholder returns position it as a leader in the U.S. banking industry. As the bank continues to focus on delivering value to shareholders and communities alike, it is poised to navigate the challenges and opportunities of a dynamic financial landscape.

Investors and stakeholders will be watching closely to see how the bank sustains its growth and adapts to evolving market conditions in the year ahead.