First Citizens BancShares, Inc. Q1 FY2025 earnings call

• Reported solid financial results aligned with guidance, with adjusted earnings per share of $37.79. - Achieved loan growth in commercial bank and SVB commercial segments, and strong deposit growth. - Credit performance remained stable with net charge-offs at the low end of guidance range. - Maintained strong capital and liquidity positions, repurchased $613 million of capital to shareholders. - Terminated loss share agreement with FDIC, reflecting confidence in SVB portfolio quality. - Continued to advance strategic priorities despite macroeconomic uncertainty.

Loans grew $1.1 billion sequentially, with growth concentrated in the commercial bank and SVB commercial segments. Commercial bank loans increased by $733 million, while SVB commercial loans grew by $440 million. Deposits saw a $4.1 billion sequential increase, concentrated in the direct bank and general bank. Net charge-offs declined to 41 basis points, landing at the low end of the guidance range.

• Second quarter loans expected in the range of $142 to $144 billion, driven by growth in commercial bank and SVB commercial segments. Full year loans guidance reaffirmed at $144 to $147 billion, driven by SVB commercial and commercial bank industry verticals. - Second quarter deposits expected in the range of $158 to $161 billion, full year deposits guidance raised to $163 to $168 billion. - Second quarter headline net interest income expected to be relatively stable, full year headline net interest income guidance lowered to $6.55 to $6.95 billion. - Second quarter net charge-offs expected in the range of 40 to 50 basis points, full year net charge-offs guidance maintained at 35 to 45 basis points.

• Macro-economic environment uncertainty, with tariff announcements and market volatility posing disruptions and making it difficult to quantify impacts on future results. - Credit risk management challenges due to potential economic stress from tariffs, inflation, etc., though loan portfolio diversity is seen as a strength.

Q: Chris McGratty asked about how to reach the 10.5% to 11% CET1 ratio over the next nine months.

A: Assumes ongoing repurchases and an additional repurchase plan in the second half of 2025.

Q: Christopher Marinac inquired about the FDIC's impact on the balance sheet, buybacks, and earnings.

A: FDIC note paydown not anticipated in 2025, and the company remains asset sensitive.

Q: Anthony Elian asked about SVB total client funds growth and credit quality.

A: SVB showed continued execution, and the company is focusing on portfolios exposed to supply chains and tariffs.

Q: Brian Foran questioned about ROTCE and normalized return potential.

A: Focus on ROE, with no speculation on the price-to-tangible multiple, and excess capital is currently a factor.

Q: Ben Gurlinger asked about M&A appetite.

A: M&A remains part of the growth strategy despite focus on share repurchases.

Q: Nicholas Holowko asked about funding and growth areas.

A: Focus on core deposits, with broad growth in various sectors including environmental, global fund banking, and industry verticals