First Citizens BancShares Reports Mixed Q3 Results, Reflecting Impact of SVBB Acquisition

First Citizens BancShares, Inc. (BancShares) reported its financial results for the third quarter and the nine months ended September 30, 2024, highlighting significant changes in revenue, profitability, and strategic developments compared to the previous fiscal period.

For the third quarter of 2024, BancShares recorded total interest income of $1.80 billion, a decrease of $25 million from the previous quarter. Net interest income (NII) for the quarter was $1.80 billion, down from $1.83 billion in Q2 2024. The net interest margin (NIM) also declined to 3.53%, down 11 basis points from the prior quarter. Year-to-date NII increased by 13% to $5.43 billion, driven by a 24% rise in interest income from loans and leases, totaling $7.21 billion.

Net income for Q3 2024 was $639 million, a decrease of $68 million (10%) from $707 million in Q2 2024. Year-to-date net income fell significantly to $2.08 billion, down 81% from $10.95 billion in the prior year, primarily due to a substantial gain on the acquisition of Silicon Valley Bridge Bank (SVBB) in 2023. The effective tax rate for the quarter was 26.8%, up from 24.6% in Q3 2023, largely due to the release of state valuation allowances in the prior year.

BancShares' acquisition of SVBB on March 27, 2023, remains a pivotal strategic development, with the fair value of acquired assets approximating $107.54 billion. The integration of SVBB's operations has expanded BancShares' client base, particularly in the technology and healthcare sectors. The SVB Commercial segment, which focuses on commercial clients, reported a year-to-date net income increase of $262 million compared to the prior year, reflecting the benefits of the acquisition.

Total noninterest income for the nine months ended September 30, 2024, was $1.92 billion, a decrease of $9.62 billion from the previous year, primarily due to the prior year's gain on acquisition. Noninterest expense increased by 10% to $4.22 billion, attributed to the inclusion of SVBB operations and higher salaries and benefits.

BancShares' total assets as of September 30, 2024, were $219.5 billion, with total deposits increasing by 4% to $151.57 billion. The company reported a decrease in borrowings to $37.16 billion, down from $37.65 billion at the end of 2023. The Allowance for Loan and Lease Losses (ALLL) was $1.68 billion, a decrease from $1.75 billion at year-end 2023, reflecting improved credit quality and macroeconomic forecasts.

In terms of capital management, BancShares authorized a share repurchase program of up to $3.5 billion in July 2024, repurchasing approximately $700 million of its Class A common stock during Q3 2024. The company continues to maintain strong capital ratios, exceeding regulatory requirements.