First Citizens BancShares Reports Third Quarter 2024 Earnings
RALEIGH, N.C., Oct. 24, 2024 /PRNewswire/ -- First Citizens BancShares, Inc. ("BancShares") (NASDAQ:FCNCA) reported earnings for the third quarter of 2024.
Chairman and CEO Frank B. Holding, Jr. said: "We posted another quarter of strong financial results, largely in line with our expectations. Loan growth remained resilient in both the General Bank and Commercial Bank segments, while loans in the SVB Commercial segment declined as Global Fund Banking repayment levels outpaced draw activity. We experienced another quarter of deposit growth, mostly concentrated in our Branch Network, with modest deposit growth in SVB Commercial. The stability of the SVB deposit franchise continues to demonstrate the competitive advantage we maintain in the innovation economy. Credit remained stable and our capital and liquidity positions remained strong. During the third quarter, we repurchased more than 350,000 shares of our Class A common shares for $700 million under the repurchase plan announced in July.
"In the wake of Hurricanes Helene and Milton, our thoughts continue to be with our associates, clients and communities across the Southeast affected by these devastating natural disasters. Our associates responded to these events with resilience, perseverance and determination, allowing us to quickly reopen operations to help our clients and communities in their rebuilding efforts. We are committed to continuing this support moving forward."
FINANCIAL HIGHLIGHTS
Measures referenced "as adjusted" below, as well as net interest income and net interest margin, excluding purchase accounting accretion ("PAA"), are non-GAAP financial measures (refer to the Financial Supplement available at ir.firstcitizens.com or www.sec.gov for a reconciliation of each non-GAAP measure to the most directly comparable GAAP measure).
Net income for the third quarter of 2024 ("current quarter") was $639 million compared to $707 million for the second quarter of 2024 ("linked quarter"). Net income available to common stockholders for the current quarter was $624 million, or $43.42 per diluted common share, a $67 million decrease from $691 million, or $47.54 per diluted common share, in the linked quarter.
Adjusted net income for the current quarter was $675 million compared to $755 million for the linked quarter. Adjusted net income available to common stockholders was $660 million, or $45.87 per diluted common share, a $79 million decrease from $739 million, or $50.87 per diluted common share, in the linked quarter.
Current quarter results were primarily impacted by the following notable items to arrive at adjusted net income available to common stockholders:
Acquisition-related expenses of $46 million,
Intangible asset amortization of $15 million,
Favorable fair value adjustment on marketable equity securities of $9 million,
Realized gain on sales of marketable equity securities of $4 million,
Gain on sale of leasing equipment of $5 million,
Other noninterest expense of $8 million, and
Net impact of $15 million for the tax effect of notable items.
NET INTEREST INCOME AND MARGIN
Net interest income totaled $1.80 billion for the current quarter, a decrease of $25 million from the linked quarter. Net interest income related to PAA was $101 million compared to $140 million in the linked quarter, a decrease of $39 million. Net interest income, excluding PAA, was $1.70 billion compared to $1.68 billion in the linked quarter, an increase of $14 million.
The decrease in net interest income was due to a $33 million increase in interest expense, partially offset by an $8 million increase in interest income.
The increase of $8 million in interest income was due to increases in interest on investment securities and loans of $28 million and $8 million, respectively, which were partially offset by a $28 million decrease in interest on interest-earning deposits at banks.
Higher average balances led to a $46 million increase in loan interest income, which was partially offset by a $38 million decrease in loan PAA income, resulting in an $8 million increase in loan interest income compared to the linked quarter.
Continued purchases of short duration investment securities increased the average balance and interest income for investment securities and decreased the average balance and interest income for interest-earning deposits at banks.
The $33 million increase in interest expense was mostly due to a $29 million increase in interest expense on deposits, primarily related to growth in money market deposits in the Branch Network and savings deposits in the Direct Bank, partially offset by a decrease in the average balance of time deposits.
Net interest margin was 3.53% compared to 3.64% in the linked quarter. Net interest margin, excluding PAA, was 3.33% compared to 3.36% in the linked quarter.
The yield on average interest-earning assets was 6.18%, a decrease of 8 basis points from the linked quarter, primarily due to decreases in the yield on interest-earning deposits at banks and loan accretion, partially offset by a higher yield on investment securities.
The rate paid on average interest-bearing liabilities increased 3 basis points from the linked quarter, primarily due to a higher average rate paid on money market deposits, partially offset by lower average rates paid on all other interest-bearing deposits. While the rate paid on average money market deposits increased compared to the linked quarter, it declined ...
