First Citizens BancShares delivered a mixed first quarter, with revenue falling short of Wall Street expectations while adjusted earnings per share came in well above consensus. Management attributed the revenue shortfall primarily to lower interest rates impacting net interest income. CEO Frank Holding highlighted that “lower rates were a headwind, but we saw strong deposit growth,” pointing to solid client activity in technology, health care, and global fund banking. The company also benefited from disciplined expense management, with operating costs declining due to the completion of several large technology and risk management initiatives.

Is now the time to buy FCNCA? Find out in our full research report (it’s free for active Edge members).

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From First Citizens BancShares’s Q1 Earnings Call

• Christopher McGratty (KBW): Asked about the new CET1 capital target and the impact of the Basel III proposal. CFO Craig Nix explained the new 10-10.5% target and noted that buyback pace will slow as the company approaches this range.
• Casey Haire (Autonomous Research): Inquired about the sustainability of deposit growth in SVB and direct bank segments. Management stated they expect moderate SVB growth and continued direct bank expansion, but warned of potential outflows in some client accounts.
• Casey Haire (Autonomous Research): Asked about the uptick in nonperforming loans (NPLs). Chief Credit Officer Andrew Giangrave attributed the increase to three specific credits and said resolutions are underway, with NPLs expected to decline as issues are addressed.
• Anthony Elian (JPMorgan): Requested details on software industry loan and deposit exposure post-SVB acquisition. Management disclosed $8.1 billion in software loans and described the portfolio as diversified and increasingly focused on AI-native and late-stage companies.
• Bernard Von Gizycki (Deutsche Bank): Questioned deposit competition and pricing. Management described deposit competition as intense, with brokered deposits currently offering lower all-in costs than direct bank channels, and committed to ongoing funding cost optimization.

Catalysts in Upcoming Quarters

In the coming quarters, our team will closely monitor (1) the pace and sustainability of deposit and loan growth in both the global fund banking and direct bank segments, (2) the progression of the unified brand transition and its operational impact, and (3) management’s ability to manage funding costs amid fierce deposit competition. We are also watching for signs of stabilization in net interest margin and early efficiency gains from technology investments.

First Citizens BancShares currently trades at $1,972, down from $2,046 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free).

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