Growing Economic Fears Hitting First Citizens Bancshares Hard

2025-03-14 09:34:09 ET

Summary

• First Citizens Bancshares (FCNCA) faces challenges due to its commercial focus and rate sensitivity, with weaker loan demand and lower rates both threatening 2025/26 expectations.
• First Citizens has seen above-average spread compression, but fee-based income has been growing well and credit costs appear to be under control.
• Economic uncertainty and potential recession risks lead me to more conservative estimates for 2025-2027, including likely year-over-year contraction in pre-provision profits in 2025.
• First Citizens should be able to grow core earnings at a long-term rate around 4%, supporting a meaningfully higher share price, but there is elevated near-term macro risk.

For a bank that has been generally hitting its marks, the performance of First Citizens Bancshares ( FCNCA ) ( OTCPK:FCNCB ) has been particularly disappointing. While the shares had been doing okay relative to bank indexes since my last update for a little while, and the company has performed well relative to expectations, the shares have weakened sharply since February of this year on growing concerns about the economy....

Read the full article on Seeking Alpha

For further details see: