Regional banking company First Citizens BancShares (NASDAQGS:FCNC.A) announced better-than-expected revenue in Q2 CY2025, but sales fell by 3.5% year on year to $2.37 billion. Its GAAP profit of $42.36 per share was 8.3% above analysts’ consensus estimates.
Net Interest Income: $1.70 billion vs analyst estimates of $1.69 billion (6.9% year-on-year decline, in line)
Net Interest Margin: 3.3% vs analyst estimates of 3.2% (38 basis point year-on-year decrease, 3.5 bps beat)
Revenue: $2.37 billion vs analyst estimates of $2.35 billion (3.5% year-on-year decline, 0.9% beat)
Efficiency Ratio: 63.2% vs analyst estimates of 59.3% (3.9 percentage point miss)
EPS (GAAP): $42.36 vs analyst estimates of $39.13 (8.3% beat)
Market Capitalization: $27.7 billion
With roots dating back to 1898 and a significant expansion through its 2023 acquisition of Silicon Valley Bank, First Citizens BancShares (NASDAQGS:FCNC.A) is a bank holding company that provides financial services to individuals and businesses through its First-Citizens Bank & Trust Company subsidiary.
Net interest income and and fee-based revenue are the two pillars supporting bank earnings. The former captures profit from the gap between lending rates and deposit costs, while the latter encompasses charges for banking services, credit products, wealth management, and trading activities.
Over the last five years, First Citizens BancShares grew its revenue at an incredible 40% compounded annual growth rate. Its growth beat the average bank company and shows its offerings resonate with customers, a helpful starting point for our analysis.
First Citizens BancShares Quarterly Revenue
Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.
We at StockStory place the most emphasis on long-term growth, but within financials, a half-decade historical view may miss recent interest rate changes, market returns, and industry trends. First Citizens BancShares’s annualized revenue growth of 19.3% over the last two years is below its five-year trend, but we still think the results suggest healthy demand.
First Citizens BancShares Year-On-Year Revenue Growth
Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.
This quarter, First Citizens BancShares’s revenue fell by 3.5% year on year to $2.37 billion but beat Wall Street’s estimates by 0.9%.
Net interest income made up 67.5% of the company’s total revenue during the last five years, meaning lending operations are First Citizens BancShares’s largest source of revenue.
First Citizens BancShares Quarterly Net Interest Income as % of Revenue
Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.
While banks generate revenue from multiple sources, investors view net interest income as the cornerstone – its predictable, recurring characteristics stand in sharp contrast to the volatility of non-interest income.
Banks profit by intermediating between depositors and borrowers, making them fundamentally balance sheet-driven enterprises. Market participants emphasize balance sheet quality and sustained book value growth when evaluating these institutions.
This explains why tangible book value per share (TBVPS) stands as the premier banking metric. TBVPS strips away questionable intangible assets, revealing concrete per-share net worth that investors can trust. Other (and more commonly known) per-share metrics like EPS can sometimes be murky due to M&A or accounting rules allowing for loan losses to be spread out.
First Citizens BancShares’s TBVPS grew at an incredible 37.2% annual clip over the last five years. TBVPS growth has recently decelerated to 12.8% annual growth over the last two years (from $1,253 to $1,594 per share).
First Citizens BancShares Quarterly Tangible Book Value per Share
Over the next 12 months, Consensus estimates call for First Citizens BancShares’s TBVPS to grow by 6.8% to $1,703, mediocre growth rate.
It was encouraging to see First Citizens BancShares beat analysts’ EPS expectations this quarter. We were also happy its revenue narrowly outperformed Wall Street’s estimates. Overall, this print had some key positives. The stock remained flat at $2,130 immediately following the results.
