FIRST CITIZENS BANCSHARES INC /DE/ Q2 FY2024 earnings call

• Delivered solid financial results with peer-leading return on assets, net interest margin, etc.
• Board approved a $3.5 billion share repurchase plan.
• Included in Fortune 500 for the first time.
• Focus on business segment performance, with General Bank having positive loan trends and deposit growth, Commercial Bank having loan growth in specific verticals but CRE challenges, SVB Commercial having loan and deposit growth.
• Strategic priorities on maturing risk management framework and regulatory environment.

General Bank: Saw positive loan trends with resilient business and commercial loan growth in branch network, strong growth in SBA, SVB private and wealth channels; deposit growth in branch network exceeded expectations. Commercial Bank: Strong loan growth in specialized industry verticals (project financing for energy and data centers), but CRE volume challenged by higher-for-longer rates; equipment finance loss rates expected to decline. SVB Commercial: Achieved quarter-over-quarter loan growth in global fund banking; client funds and deposits increased, but innovation economy turnaround too early to call, with guarded deposit growth outlook.

• Plan to repurchase shares up to $3.5 billion to manage CET-1 ratio to 10.5% by end of 2025.
• Loans expected to grow high single-digit annualized in Q3, full year loans in $143 billion to $146 billion range.
• Deposits expected to be up in Q3, full year deposits in $153 billion to $155 billion range.
• NII full year in $7.2 billion to $7.3 billion range, adjusted non-interest income in $1.85 billion to $1.9 billion range, adjusted efficiency ratio in low 50% range.

• Margin compression due to potential interest rate cuts.
• Continued stress in CRE, especially general office sector.
• Uncertainty in innovation economy affecting portfolios.
• Deposit pressures and competition.

Q: Steven Alexopoulos asked about front-loading stock buybacks and NII outlook.

A: Frank Holding said plan is methodical with heavier emphasis on last half of 2024; Frank discussed NII projections based on rate cut scenarios.

Q: Christopher Marinac asked about capital levels and venture capital space.

A: Frank Holding talked about CET-1 ratio targets; Mark (unidentified) said venture investment outlook mixed with big investments but unclear translation to growth.

Q: Casey Haire asked about loan to deposit ratio and asset sensitivity.

A: Frank Holding and Tom Eklund discussed loan to deposit ratio progress and asset sensitivity mitigation efforts