FCNCA Stock Forecast & Price Target

First Citizens BancShares has demonstrated significant loan and deposit growth, with demand deposits increasing by 11.6% annualized, primarily attributed to a notable $778 million rise in SVB Commercial deposits, highlighting the bank's ability to attract new clients in the Technology and Healthcare sectors. The bank also reported impressive loan growth of 9.9% on a loan-to-annualized average basis, supported by robust performance in global fund banking, alongside a steady net interest margin (NIM) of 3.26%, which reflects effective cost management amid prevailing rate pressures. Furthermore, the company's strategic positioning is expected to enhance liquidity, support ongoing organic deposit growth, and enable a more efficient balance sheet, bolstering its potential for modest expansion and improved profitability moving forward.

First Citizens BancShares reported a slight decline in loans, decreasing by $89 million or 0.1% sequentially, primarily due to a significant $300 million decrease in the Tech & Healthcare sector, which highlights vulnerabilities in its lending portfolio amidst ongoing sector-specific challenges, particularly in commercial real estate (CRE). Despite a decrease in non-performing loans (NCOs) to their lowest level since 2Q24, these improvements are not sufficient to offset the persistent headwinds and concentration of risk in segments such as General Office and Equipment Finance. Additionally, the company's tightened guidance for net interest income (NII) for the full year, now projected between $6.68 billion and $6.88 billion—down from prior expectations—suggests a downward trend in profitability that may further compound the negative outlook.