RALEIGH, N.C. - First Citizens BancShares, Inc. (NASDAQ:FCNCA) reported its earnings for the second quarter of 2024 and revealed a significant share repurchase initiative. The financial holding company announced that its Board of Directors has approved a plan to repurchase up to $3.5 billion of its Class A common shares. The repurchase program is expected to commence in the third quarter of 2024.
The company's second-quarter financial results showed a net income of $707 million, a decrease from $731 million in the first quarter of the year. Net income available to common stockholders for the quarter stood at $691 million, or $47.54 per diluted common share, down from $716 million, or $49.26 per diluted common share, in the previous quarter.
Adjusted net income for the quarter was reported at $755 million compared to the first quarter's $784 million. The adjusted figures account for several notable items, including acquisition-related expenses, intangible asset amortization, and a gain on the sale of leasing equipment.
Net interest income for the quarter increased modestly to $1.82 billion, up $4 million from the first quarter, driven by a rise in interest on loans and investment securities. The net interest margin, however, decreased slightly to 3.64% from 3.67%.
Noninterest income saw a small increase to $639 million, with client investment fees contributing to this growth. Noninterest expenses rose to $1.39 billion, up $10 million from the first quarter, mainly due to higher equipment and operating lease expenses.
The balance sheet summary highlighted loans and leases totaling $139.34 billion as of June 30, 2024, marking a 2.9% growth since March 31, 2024. Deposits also grew to $151.08 billion, with notable increases in the SVB Commercial and General Bank segments.
Credit losses provision increased to $95 million from $64 million in the first quarter, while net charge-offs rose to $132 million, representing 0.38% of average loans. Nonaccrual loans increased to $1.14 billion, or 0.82% of loans.
The company maintains robust capital ratios, with liquid assets at $56.91 billion as of June 30, 2024. A dividend of $1.64 per share of common stock was declared and paid during the quarter.
This information is based on a press release statement.
In other recent news, First Citizens BancShares has been a focal point for several analysts. Jefferies initiated coverage on the bank's stock with a Buy rating, emphasizing its growth potential and expectations for increased capital returns in 2024. DA Davidson revised its price target for the bank to $1,850, citing robust earnings per share and core pre-provision net revenue, influenced by lower credit costs and increases in loans and deposits.
Keefe, Bruyette & Woods also increased the bank's stock target to $2,100, reflecting confidence in the bank's strong performance and capital return strategy. The firm upgraded its earnings estimates for First Citizens BancShares for 2024 and 2025.
However, Piper Sandler downgraded the bank from Overweight to Neutral, following the announcement of a share repurchase plan, suggesting the potential for significant gains has largely diminished despite positive performance trends.
DA Davidson further increased the bank's price target to $1,650, acknowledging growth following the integration of SIVB, despite potential rate cuts and increased credit costs. Lastly, Barclays initiated coverage on First Citizens BancShares with an Equal-weight rating and a price target of $1,850, recognizing the bank's strategic focus on book value growth.
These are recent developments that investors should consider in their evaluation of First Citizens BancShares.
InvestingPro Insights
As First Citizens BancShares, Inc. (NASDAQ:FCNCA) embarks on a significant share repurchase program and navigates through its quarterly financials, there are several key metrics and insights from InvestingPro that investors may find valuable. According to the latest data, FCNCA boasts a robust market capitalization of $26.85 billion, reflecting its substantial presence in the financial sector. The company's Price to Earnings (P/E) ratio stands at 10.34, indicating how much investors are willing to pay for a dollar of earnings, which is a crucial metric for valuation.
InvestingPro Tips reveal that FCNCA has a strong track record of rewarding its shareholders, having raised its dividend for 7 consecutive years and maintained dividend payments for an impressive 39 consecutive years. This consistency is a testament to the company's financial stability and commitment to returning value to its shareholders. Moreover, the stock is trading near its 52-week high, which could signal confidence in the company's current strategy and future outlook.
Despite some analysts revising their earnings downwards for the upcoming period, FCNCA has shown a strong return over the last month, with a 1 Month Price Total Return of 13.98%. This performance may interest investors looking for companies with recent positive momentum. Additionally, with the next earnings date set for July 25, 2024, investors will be keenly watching how the company's strategies and market conditions influence its financial results.
For those interested in exploring more about First Citizens BancShares' financial health and future prospects, there are 11 additional InvestingPro Tips available at https://www.investing.com/pro/FCNCA. To access these insights and more detailed analysis, use coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription. This offer could provide investors with valuable tools to make more informed decisions in the dynamic financial markets.
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