First Citizens BancShares (FCNCA)

Regional banking company First Citizens BancShares (NASDAQGS:FCNC.A) reported Q4 CY2025 results beating Wall Street’s revenue expectations, with sales up 9.5% year on year to $2.44 billion. Its non-GAAP profit of $51.27 per share was 17.1% above analysts’ consensus estimates.

Company Overview

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.

Regional banks, financial institutions operating within specific geographic areas, serve as intermediaries between local depositors and borrowers. They benefit from rising interest rates that improve net interest margins (the difference between loan yields and deposit costs), digital transformation reducing operational expenses, and local economic growth driving loan demand. However, these banks face headwinds from fintech competition, deposit outflows to higher-yielding alternatives, credit deterioration (increasing loan defaults) during economic slowdowns, and regulatory compliance costs. Recent concerns about regional bank stability following high-profile failures and significant commercial real estate exposure present additional challenges.

First Citizens BancShares competes with other regional and national banks including Truist Financial (NYSE:TFC), PNC Financial Services (NYSE:PNC), and U.S. Bancorp (NYSE:USB), while its Silicon Valley Bank division competes with specialized financial institutions serving the innovation sector such as JPMorgan Chase (NYSE:JPM) and Bridge Bank.

In general, banks make money from two primary sources. The first is net interest income, which is interest earned on loans, mortgages, and investments in securities minus interest paid out on deposits. The second source is non-interest income, which can come from bank account, credit card, wealth management, investing banking, and trading fees. Over the last five years, First Citizens BancShares grew its revenue at an incredible 38.5% compounded annual growth rate. Its growth beat the average banking company and shows its offerings resonate with customers.

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 recent performance shows its demand has slowed significantly as its annualized revenue growth of 3.7% over the last two years was well below its five-year trend. 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 reported year-on-year revenue growth of 9.5%, and its $2.44 billion of revenue exceeded Wall Street’s estimates by 9.9%.

Net interest income made up 76.2% of the company’s total revenue during the last five years, meaning lending operations are First Citizens BancShares’s largest source of revenue.

Markets consistently prioritize net interest income growth over fee-based revenue, recognizing its superior quality and recurring nature compared to the more unpredictable non-interest income streams.

Topline growth carries importance, but the overall profitability behind this expansion determines true value creation. For banks, the efficiency ratio captures this relationship by measuring non-interest expenses, including salaries, facilities, technology, and marketing, against total revenue.

Markets understand that a bank’s expense base depends on its revenue mix and what mostly drives share price performance is the change in this ratio, rather than its absolute value. It’s somewhat counterintuitive, but a lower efficiency ratio is better.

Over the last five years, First Citizens BancShares’s efficiency ratio couldn’t build momentum, hanging around 63.5%.

In Q4, First Citizens BancShares’s efficiency ratio was 64.5%, falling short of analysts’ expectations by 176.9 basis points (100 basis points = 1 percentage point). This result was 1.5 percentage points worse than the same quarter last year.

For the next 12 months, Wall Street expects First Citizens BancShares to maintain its trailing one-year ratio with a projection of 63.8%.

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

First Citizens BancShares’s full-year EPS grew at an astounding 35.7% compounded annual growth rate over the last four years, better than the broader banking sector.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

First Citizens BancShares’s flat EPS over the last two years was worse than its 3.7% annualized revenue growth. This tells us the company became less profitable on a per-share basis as it expanded.

Diving into the nuances of First Citizens BancShares’s earnings can give us a better understanding of its performance. First Citizens BancShares’s efficiency ratio has worsened over the last two years. This was the most relevant factor (aside from the revenue impact) behind its lower earnings; taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

In Q4, First Citizens BancShares reported adjusted EPS of $51.27, up from $45.10 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects First Citizens BancShares’s full-year EPS of $178.46 to grow 4.2%.

Banks operate as balance sheet businesses, with profits generated through borrowing and lending activities. Valuations reflect this reality, emphasizing balance sheet strength and long-term book value compounding ability.

This is why we consider tangible book value per share (TBVPS) the most important metric to track for banks. TBVPS represents the real, liquid net worth per share of a bank, excluding intangible assets that have debatable value upon liquidation. 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 36.2% annual clip over the last five years. TBVPS growth has recently decelerated to 11% annual growth over the last two years (from $1,358 to $1,674 per share).

Over the next 12 months, Consensus estimates call for First Citizens BancShares’s TBVPS to grow by 7.8% to $1,805, paltry growth rate.

Leverage is core to a financial firm’s business model (loans funded by deposits). To ensure economic stability and avoid a repeat of the 2008 GFC, regulators require certain levels of capital and liquidity, focusing on the Tier 1 capital ratio.

Tier 1 capital is the highest-quality capital that a firm holds, consisting primarily of common stock and retained earnings, but also physical gold. It serves as the primary cushion against losses and is the first line of defense in times of financial distress.

This capital is divided by risk-weighted assets to derive the Tier 1 capital ratio. Risk-weighted means that cash and US treasury securities are assigned little risk while unsecured consumer loans and equity investments get much higher risk weights, for example.

New regulation after the 2008 financial crisis requires that all firms must maintain a Tier 1 capital ratio greater than 4.5%. On top of this, there are additional buffers based on scale, risk profile, and other regulatory classifications, so that at the end of the day, firms generally must maintain a 7-10% ratio at minimum.

Over the last two years, First Citizens BancShares has averaged a Tier 1 capital ratio of 12.6%, which is considered safe and well capitalized in the event that macro or market conditions suddenly deteriorate.

Return on equity (ROE) reveals the profit generated per dollar of shareholder equity, which represents a key source of bank funding. Banks maintaining elevated ROE levels tend to accelerate wealth creation for shareholders via earnings retention, buybacks, and distributions.

Over the last five years, First Citizens BancShares has averaged an ROE of 24.4%, exceptional for a company operating in a sector where the average shakes out around 7.5% and those putting up 15%+ are greatly admired. This is a bright spot for First Citizens BancShares.

We were impressed by how significantly First Citizens BancShares blew past analysts’ revenue expectations this quarter. We were also glad its EPS outperformed Wall Street’s estimates. Zooming out, we think this was a solid print. The stock remained flat at $2,215 immediately after reporting.

Updated: January 23, 2026 at 6:47 AM EST

Before deciding whether to buy First Citizens BancShares or pass, we urge investors to consider business quality, valuation, and the latest quarterly results.

First Citizens BancShares’s business quality ultimately falls short of our standards. Although its revenue growth was exceptional over the last five years, it’s expected to deteriorate over the next 12 months and its declining net interest margin shows its loan book is becoming less profitable. And while the company’s net interest income growth was exceptional over the last five years, the downside is its estimated net interest income for the next 12 months are weak.

First Citizens BancShares’s P/B ratio based on the next 12 months is 1.2x. This valuation multiple is fair, but we don’t have much faith in the company. We're pretty confident there are superior stocks to buy right now.

Wall Street analysts have a consensus one-year price target of $2,335 on the company (compared to the current share price of $2,215).