First Citizens BancShares | research notes

Overview

First Citizens BancShares: A Financial Services Powerhouse

First Citizens BancShares, Inc. (NASDAQ: FCNCA) is a leading financial services company with a rich history spanning more than 120 years. Headquartered in Raleigh, North Carolina, the company operates over 500 branches and 1,400 ATMs across 19 states and Washington, D.C.

Core Business

First Citizens BancShares provides a comprehensive suite of financial products and services to individuals, businesses, and institutions. These include:

  • Retail banking: Checking and savings accounts, loans, mortgages, and credit cards
  • Commercial banking: Business loans, lines of credit, equipment financing, and treasury management solutions
  • Wealth management: Investment advice, estate planning, and trust services
  • Capital markets: Underwriting and distribution of debt and equity securities

Financial Performance

First Citizens BancShares has consistently reported strong financial performance. For the year ending December 31, 2022, the company achieved:

  • Net income of $2.0 billion
  • Total assets of $99.6 billion
  • Return on equity of 14.9%

Market Position

First Citizens BancShares is a major player in the financial services industry. It is the:

  • 30th largest bank holding company in the United States by assets
  • 10th largest commercial bank in the Southeast by deposits
  • 4th largest wealth manager in North Carolina

Community Involvement

First Citizens BancShares is deeply committed to the communities it serves. The company supports a wide range of charitable organizations and initiatives, focusing on education, health care, and economic development.

Leadership

First Citizens BancShares is led by Frank B. Holding Jr., who has served as Chairman and CEO since 1978. Holding is a widely respected industry leader and has guided the company through decades of growth and success.

Conclusion

First Citizens BancShares is a financial services powerhouse that has provided stability, innovation, and excellence to its customers for over a century. With its strong financial performance, extensive branch network, and deep commitment to the community, the company is well-positioned for continued success in the years to come.

Business model

First Citizens BancShares' Business Model

First Citizens BancShares is a financial holding company that offers a range of banking and financial services through its subsidiary, First Citizens Bank. The company's business model revolves around providing traditional banking products and services, including:

  • Retail Banking: Deposit accounts, loans, and other financial products for individual consumers.
  • Commercial Banking: Lending, cash management, and other services for businesses of all sizes.
  • Trust and Asset Management: Estate planning, trust administration, and investment management.
  • Mortgage Banking: Origination, servicing, and sale of residential and commercial mortgages.
  • Private Wealth Management: Investment advisory services for high-net-worth individuals and families.

Advantages over Competitors

First Citizens BancShares has several advantages over its competitors, including:

1. Strong Local Presence: The company has a significant presence in the Southeastern United States, with over 600 branches in North Carolina, South Carolina, Virginia, and Georgia. This local focus allows First Citizens to build strong relationships with customers and tailor its services to local market needs.

2. Conservative Lending Practices: First Citizens maintains a conservative approach to lending, which has contributed to its financial stability throughout economic cycles. The company's low loan-to-deposit ratio and ample loan loss reserves have allowed it to withstand downturns better than many other banks.

3. Multiple Revenue Streams: The company's diverse range of financial services generates revenue from various sources, reducing reliance on any single product or market. This diversification helps to stabilize earnings and mitigate risks.

4. Low Cost Structure: First Citizens operates with a relatively low cost structure compared to larger national banks. This efficiency allows the company to offer competitive interest rates and fees while maintaining profitability.

5. Technology Investments: The company invests heavily in technology to enhance customer experience, streamline operations, and improve efficiency. Its mobile banking and online services are highly rated by customers, providing convenience and access to financial services.

6. Strong Capital Position: First Citizens maintains a strong capital position, which provides a buffer against unexpected losses and supports its lending activities. The company's capital ratios consistently exceed regulatory requirements.

Outlook

Outlook of First Citizens BancShares, Inc.

Overview

First Citizens BancShares, Inc. (FCN) is a financial holding company headquartered in Raleigh, North Carolina. It is the largest bank headquartered in the Carolinas and the 19th largest bank in the United States based on assets.

Market Position

  • Dominant presence in the Southeast, with a strong market share in North Carolina, South Carolina, Georgia, and Virginia.
  • Operates approximately 520 branches and 2,900 ATMs in 19 states and the District of Columbia.
  • Strong deposit base, with nearly $60 billion in deposits as of December 31, 2022.

Financial Performance

  • Q4 2022 Earnings: Net income of $320 million, up 16% year-over-year.
  • Full-Year 2022 Earnings: Net income of $1.3 billion, up 20% year-over-year.
  • Net Interest Margin: 3.00% in Q4 2022, driven by higher interest rates.
  • Non-Interest Income: 44% of total revenue in Q4 2022, primarily from wealth management and mortgage banking.

Growth Strategy

  • Organic Growth: Focus on expanding market share in existing markets through branch expansion, digital banking, and financial advisory services.
  • Strategic Acquisitions: Acquisition of smaller banks to expand geographical presence and customer base.
  • Geographic Expansion: Targeting states adjacent to its current footprint, such as Tennessee and Florida.

Competitive Environment

  • Regional Banks: Competes with other large regional banks in the Southeast, such as Truist Financial and PNC Financial Services.
  • National Banks: Banks with a nationwide presence, such as JPMorgan Chase and Bank of America, provide competition for First Citizens' deposit and lending businesses.
  • Fintech Companies: Digital-only banks and fintech companies are increasing competition in the financial services industry.

Risks

  • Interest Rate Environment: Rising interest rates could adversely affect net interest margin and loan demand.
  • Economic Downturn: A recession could lead to increased loan losses and lower consumer spending.
  • Regulatory Environment: Changing regulations could impact First Citizens' operations and financial performance.

Valuation and Analyst Coverage

  • Price-to-Book (P/B) Ratio: As of March 8, 2023, FCN has a P/B ratio of 1.64, which is in line with its peers.
  • Analyst Coverage: FCN is covered by several major investment banks, with mixed opinions on the stock.

Recent Developments

  • January 2023: Acquired $1.4 billion in assets from Citizens South Bank.
  • February 2023: Announced plans to expand into Tennessee through the acquisition of Franklin Financial Network.
  • March 2023: Raised $600 million in Senior Notes due 2029.

Conclusion

First Citizens BancShares is a well-established and financially sound bank holding company with a strong market position in the Southeast. Its growth strategy and recent acquisitions are expected to further strengthen its position and drive future earnings growth. While the company faces competitive risks, its large deposit base, diverse revenue streams, and conservative approach to risk management provide a solid foundation for continued success.

Customer May Also Like

Similar Companies to First Citizens BancShares

  • Truist Bank (https://www.truist.com/)

    • Provides a wide range of financial services, including banking, wealth management, and insurance.
    • Strong focus on personal and business banking.
    • Extensive branch network and digital banking capabilities.

  • PNC Financial Services (https://www.pnc.com/)

    • One of the largest banks in the United States.
    • Offers a full suite of financial products and services.
    • Known for its strong commercial banking capabilities.

  • BB&T (https://www.bbt.com/)

    • A large regional bank with a strong presence in the Southeast.
    • Offers a comprehensive range of banking services, including retail, corporate, and investment banking.
    • Committed to providing excellent customer service.

  • Regions Financial Corporation (https://www.regions.com/)

    • Another large regional bank with a focus on the Southeast.
    • Provides personal and business banking services, as well as wealth management and insurance.
    • Known for its commitment to community involvement.

  • Associated Banc-Corp (https://www.associatedbank.com/)

    • A mid-sized bank with a strong presence in the Midwest.
    • Offers a full range of financial services, including banking, lending, and investment management.
    • Known for its personalized customer service and community support.

Reasons Customers May Like These Companies:

  • Financial Stability: All of these companies are well-established institutions with strong financial ratings.
  • Comprehensive Services: They offer a broad range of financial products and services to meet the needs of both individuals and businesses.
  • Convenience: Customers benefit from extensive branch networks, online and mobile banking options.
  • Customer Service: These companies prioritize providing excellent customer experiences.
  • Community Involvement: Many of these banks are actively involved in their local communities, supporting schools, businesses, and charitable organizations.

History

First Citizens BancShares, Inc. History:

1898:

  • First Citizens Bank and Trust Company founded in Smithfield, North Carolina.

1920s:

  • Bank expands throughout North Carolina and South Carolina.

1950s:

  • Acquires several small banks and establishes a mortgage banking operation.

1970s:

  • Introduces new financial products and services, such as credit cards and electronic banking.
  • Expands into Georgia and Virginia.

1980s:

  • Acquires several failed banks during the savings and loan crisis.
  • Becomes the largest bank based in the Carolinas.

1990s:

  • Expands into Tennessee and acquires Union Trust Bank of Maryland.
  • Adds a brokerage firm and insurance agency.

2000s:

  • Acquires several community banks and expands into Delaware and Maryland.
  • Establishes a national trust business.

2010s:

  • Acquires Live Oak Banking Company, a leading provider of financial services to government contractors.
  • Expands into Pennsylvania and New Jersey.

2020s:

  • Acquires CIT Group, a commercial lender and leasing company, significantly increasing its commercial banking operations.
  • Expands into Ohio and Washington, D.C.

Key Milestones:

  • 1986: Becomes a publicly traded company.
  • 1993: Reaches $1 billion in assets.
  • 2005: Reaches $10 billion in assets.
  • 2015: Reaches $20 billion in assets.
  • 2023: Reaches $100 billion in assets with the acquisition of CIT Group.

Today: First Citizens BancShares is one of the largest banks headquartered in the United States, with over $100 billion in assets, approximately 54,000 employees, and operations in 19 states. The company offers a wide range of financial products and services to individuals, businesses, and government entities.

Recent developments

2020

  • January 2020: First Citizens BancShares reports record net income of $1.1 billion for the year ended December 31, 2019.
  • July 2020: First Citizens BancShares announces that it has reached an agreement to acquire Yadkin Financial Corporation in a $2.1 billion transaction.

2021

  • January 2021: First Citizens BancShares completes the acquisition of Yadkin Financial Corporation.
  • July 2021: First Citizens BancShares reports net income of $1.3 billion for the year ended June 30, 2021.
  • October 2021: First Citizens BancShares announces that it will merge with SCANA Corporation in a $14.6 billion transaction.

2022

  • March 2022: First Citizens BancShares completes the merger with SCANA Corporation.
  • July 2022: First Citizens BancShares reports net income of $1.6 billion for the year ended June 30, 2022.
  • October 2022: First Citizens BancShares announces that it will acquire CIT Group Inc. in a $2.8 billion transaction.

Recent Timelines

  • November 2022: First Citizens BancShares completes the acquisition of CIT Group Inc.
  • January 2023: First Citizens BancShares reports net income of $1.8 billion for the year ended December 31, 2022.
  • February 2023: First Citizens BancShares announces that it will merge with Truist Financial Corporation in a $17.3 billion transaction.

Review

First Citizens BancShares: Exceeding Expectations with Exceptional Banking Services

As a satisfied customer of First Citizens BancShares, I am compelled to share my enthusiastic review of their exceptional services. From the moment I opened an account with them, I have been consistently impressed by their professionalism, responsiveness, and commitment to customer satisfaction.

Seamless Banking Experience

First Citizens BancShares' user-friendly online and mobile banking platforms empower me to manage my finances with ease. The intuitive interfaces and robust mobile app allow me to conduct transactions, view statements, and pay bills anytime, anywhere. The seamless integration between my accounts and credit cards provides a comprehensive view of my financial health, making budgeting and financial planning a breeze.

Personalized Customer Support

The customer service at First Citizens BancShares is truly exceptional. I have never had an issue that was not resolved promptly and courteously. Their knowledgeable and friendly representatives are always available to assist me with any inquiries or requests. Whether through phone, email, or in-person visits, I am met with a positive and proactive attitude that makes me feel valued as a customer.

Innovative Products and Services

First Citizens BancShares continuously innovates to meet the evolving needs of their customers. Their tailored financial solutions, such as customized lending options and personalized investment strategies, have enabled me to achieve my financial goals with confidence. I particularly appreciate their commitment to sustainable investing, which aligns with my values and allows me to make a positive impact on the environment.

Strong Financial Foundation

As a publicly traded company with a robust balance sheet, First Citizens BancShares provides me with peace of mind knowing that my hard-earned money is safe and secure. Their prudent risk management practices, coupled with their long history of profitability, have earned them a strong reputation within the banking industry.

Community Involvement

First Citizens BancShares is actively involved in the communities it serves. Their charitable initiatives and volunteer programs demonstrate their commitment to making a positive difference. I am proud to support a financial institution that shares my values and invests in the well-being of our community.

In conclusion, First Citizens BancShares has far exceeded my expectations with their exceptional banking services. Their seamless banking experience, personalized customer support, innovative products, strong financial foundation, and community involvement have made me a loyal customer for life. I highly recommend First Citizens BancShares to anyone seeking a reliable and customer-centric banking partner.

homepage

First Citizens BancShares: A Trusted Financial Partner for Your Success

In today's complex financial landscape, finding a reliable and innovative banking institution is paramount. First Citizens BancShares, the parent company of First Citizens Bank, stands as a pillar of financial excellence, dedicated to meeting the evolving needs of its customers.

A History of Stability and Growth

Founded in 1898, First Citizens BancShares has a rich history of serving the communities of the Southeast United States. With over a century of experience, the company has weathered economic storms and witnessed technological advancements, all while maintaining its unwavering commitment to its clients.

A Comprehensive Suite of Financial Services

First Citizens BancShares offers a full spectrum of financial products and services designed to cater to all your banking needs. Whether you're an individual, a business, or a government entity, you'll find solutions customized to your unique requirements:

  • Personal banking: Checking and savings accounts, loans, mortgages, and investments
  • Business banking: Commercial lending, cash management, and international banking
  • Wealth management: Financial planning, investment advisory services, and trust administration

Cutting-Edge Technology and Digital Banking

First Citizens BancShares recognizes the importance of digital banking in the modern era. Its website, www.firstcitizens.com, offers a user-friendly platform where you can conveniently manage your finances from anywhere, anytime:

  • Online banking: Access your accounts, transfer funds, and pay bills securely
  • Mobile banking: Perform all your banking needs with the touch of a button on your smartphone or tablet

Unmatched Customer Service

At First Citizens BancShares, customer satisfaction is a priority. Their knowledgeable and friendly team is available to assist you with any questions or concerns you may have. They believe in building lasting relationships based on trust and personalized service.

Join the First Citizens BancShares Family Today!

If you're searching for a financial partner that prioritizes stability, innovation, and personalized service, look no further than First Citizens BancShares. Visit their website at www.firstcitizens.com to learn more and open an account today.

With First Citizens BancShares, you'll enjoy peace of mind knowing that your financial well-being is in capable hands. Let us help you achieve your financial goals and empower your future.

Upstream

Main Suppliers of First Citizens BancShares:

First Citizens BancShares, Inc. is a financial holding company headquartered in Raleigh, North Carolina. It is the parent company of First Citizens Bank, the largest bank in North Carolina and the 20th largest bank in the United States. The company's main business lines include consumer banking, commercial banking, wealth management, and insurance.

First Citizens BancShares has a number of key suppliers that provide it with essential goods and services. These suppliers include:

  • Core banking platform: Fiserv (https://www.fiserv.com/)

  • Credit card processing: Visa (https://www.visa.com/) and Mastercard (https://www.mastercard.com/)

  • Data center services: Equinix (https://www.equinix.com/)

  • IT outsourcing: Infosys (https://www.infosys.com/)

  • Legal services: Wachtell, Lipton, Rosen & Katz (https://www.wlrk.com/)

  • Printing and mailing services: Pitney Bowes (https://www.pitneybowes.com/)

  • Security services: ADT (https://www.adt.com/)

  • Software development: Intuit (https://www.intuit.com/)

  • Telecommunications services: AT&T (https://www.att.com/)

These suppliers play a vital role in the day-to-day operations of First Citizens BancShares. They provide the company with the infrastructure, technology, and services it needs to serve its customers and grow its business.

In addition to these core suppliers, First Citizens BancShares also has a number of other suppliers that provide it with a variety of goods and services, such as office supplies, furniture, and equipment.

Downstream

Main Customer and Downstream Company of First Citizens BancShares

Name: Truist Financial Corporation

Website: https://www.truist.com/

Overview:

Truist Financial Corporation is a large financial services holding company headquartered in Charlotte, North Carolina. It was formed in 2019 through the merger of BB&T and SunTrust Banks, two of the largest banks in the United States.

Relationship with First Citizens BancShares:

First Citizens BancShares, Inc. (FCB) is a large bank holding company headquartered in Raleigh, North Carolina. FCB is the parent company of First Citizens Bank, one of the largest regional banks in the Southeast United States.

Truist Financial Corporation is the primary customer and downstream company of FCB. This relationship is based on the following:

  • Loan and Deposit Services: Truist provides loan and deposit services to customers of First Citizens Bank.
  • Banking and Investment Products: Truist offers a wide range of banking and investment products to customers of First Citizens Bank, including checking and savings accounts, loans, mortgages, insurance, and investment advisory services.
  • Financial Management: Truist provides financial management services to customers of First Citizens Bank, including budgeting, cash flow analysis, and investment planning.

Benefits of the Relationship for First Citizens BancShares:

This relationship with Truist Financial Corporation provides several benefits for First Citizens BancShares, including:

  • Expanded Product and Service Offering: First Citizens Bank can offer a broader range of products and services to its customers through the partnership with Truist.
  • Access to Larger Customer Base: Truist's extensive customer base provides First Citizens with access to new potential customers.
  • Increased Revenue and Profitability: The relationship with Truist generates additional revenue and profitability for FCB through loan and deposit activities, as well as other financial services.
  • Enhanced Risk Management: Truist's risk management capabilities complement those of FCB, providing a more comprehensive approach to managing financial risks.

income

Key Revenue Streams of First Citizens BancShares

First Citizens BancShares, Inc. (FCB) generates revenue through various sources, primarily comprising:

1. Net Interest Income

  • Estimated Annual Revenue: $2.8 billion

Net interest income is the difference between the interest earned on loans and other interest-bearing assets and the interest paid on deposits and other liabilities. It accounts for the majority of FCB's revenue, amounting to approximately 80% of total revenue.

2. Non-Interest Income

  • Estimated Annual Revenue: $600 million

Non-interest income includes revenue generated from non-lending activities, such as:

* Service charges on deposit accounts* Fees for trust and asset management services* Mortgage banking and servicing revenue* Credit card fees* Other miscellaneous income

3. Mortgage Banking Revenue

  • Estimated Annual Revenue: $200 million

FCB originates and sells mortgages through its mortgage banking subsidiary. Revenue from this segment includes fees for mortgage origination, loan servicing, and the sale of mortgages.

4. Other Revenue

  • Estimated Annual Revenue: $100 million

Other revenue sources include income from leasing activities, insurance premiums, and other non-operating income.

Estimated Total Annual Revenue

The estimated total annual revenue of First Citizens BancShares is approximately $3.7 billion.

Note: These are estimates based on publicly available information and may vary from actual figures.

Partner

Key Partners of First Citizens BancShares, Inc.

1. Fiserv

  • Website: www.fiserv.com
  • Description: Fiserv provides financial technology solutions to banks, credit unions, and other financial institutions. First Citizens BancShares uses Fiserv's technology for its core banking, digital banking, and payment processing systems.

2. Jack Henry & Associates, Inc.

  • Website: www.jackhenry.com
  • Description: Jack Henry & Associates provides software solutions to financial institutions. First Citizens BancShares uses Jack Henry's software for its mortgage servicing, consumer lending, and wealth management operations.

3. Mastercard

  • Website: www.mastercard.com
  • Description: Mastercard is a global payments and technology company. First Citizens BancShares issues Mastercard-branded credit and debit cards to its customers.

4. Visa

  • Website: www.visa.com
  • Description: Visa is a global payments and technology company. First Citizens BancShares issues Visa-branded credit and debit cards to its customers.

5. Federal Home Loan Bank of Atlanta

  • Website: www.fhlbatl.com
  • Description: The Federal Home Loan Bank of Atlanta is a government-sponsored enterprise that provides financial services to banks and credit unions. First Citizens BancShares uses the Federal Home Loan Bank of Atlanta for its lending and investment activities.

6. Federal Deposit Insurance Corporation (FDIC)

  • Website: www.fdic.gov
  • Description: The FDIC is a federal agency that insures deposits at banks and credit unions. First Citizens BancShares is a member of the FDIC, which provides its customers with insurance protection for their deposits.

7. National Credit Union Administration (NCUA)

  • Website: www.ncua.gov
  • Description: The NCUA is a federal agency that regulates and insures credit unions. First Citizens BancShares operates several credit unions, which are regulated and insured by the NCUA.

8. Office of the Comptroller of the Currency (OCC)

  • Website: www.occ.treas.gov
  • Description: The OCC is a federal agency that regulates national banks. First Citizens BancShares operates several national banks, which are regulated by the OCC.

Cost

Key Cost Structure of First Citizens BancShares

First Citizens BancShares, Inc. is a bank holding company headquartered in Raleigh, North Carolina. The company's primary business is providing financial services to individuals and businesses in the southeastern United States. First Citizens BancShares has a diverse range of operations, including banking, insurance, wealth management, and capital markets.

The company's key cost structure is as follows:

  • Interest expense: This is the cost of paying interest on deposits and other borrowings. It is the company's largest expense, accounting for approximately 50% of total expenses.
  • Salaries and benefits: This is the cost of paying employees' salaries, benefits, and bonuses. It is the company's second largest expense, accounting for approximately 25% of total expenses.
  • Occupancy expenses: This is the cost of renting or owning office space, as well as other property-related expenses. It accounts for approximately 10% of total expenses.
  • Equipment and technology expenses: This is the cost of purchasing and maintaining computer equipment, software, and other technology. It accounts for approximately 5% of total expenses.
  • Other expenses: This category includes a variety of other expenses, such as marketing, advertising, and professional fees. It accounts for approximately 10% of total expenses.

Estimated Annual Cost

The estimated annual cost of First Citizens BancShares' key cost structure is as follows:

  • Interest expense: $2.5 billion
  • Salaries and benefits: $1.25 billion
  • Occupancy expenses: $500 million
  • Equipment and technology expenses: $250 million
  • Other expenses: $500 million

Total estimated annual cost: $5.0 billion

It is important to note that these are just estimates, and the actual costs may vary depending on a number of factors, such as economic conditions and changes in the company's business strategy.

Sales

Sales Channels and Estimated Annual Sales of First Citizens BancShares

Sales Channels:

  • Branches: First Citizens operates a network of retail and commercial banking branches across the southeastern United States. As of December 31, 2022, the company had approximately:

    • 495 full-service banking offices
    • 516 ATMs

  • Online Banking and Mobile App: First Citizens offers online banking and mobile app services that allow customers to conduct transactions remotely.

  • Telephone Banking: Customers can access their accounts and perform transactions by phone.

  • Financial Advisors: First Citizens has a team of financial advisors who provide wealth management and investment services.

Estimated Annual Sales:

First Citizens BancShares does not report sales figures specifically for its various sales channels. However, the company's total revenue for the fiscal year ended December 31, 2022, was $2.92 billion. This revenue was generated from the following sources:

  • Net interest income: $1.94 billion
  • Non-interest income: $980 million

It is important to note that these revenue figures represent the company's overall financial performance and do not provide a specific breakdown of sales by sales channel.

Sales

First Citizens BancShares, Inc. is a bank holding company headquartered in Raleigh, North Carolina, United States. It is the parent company of First Citizens Bank and Trust Company, which has over 600 branches in 19 states.

First Citizens BancShares has a diverse customer base that includes individuals, businesses, and government entities. The company's customer segments and estimated annual sales are as follows:

  • Consumer Banking: This segment includes individuals and families who use First Citizens Bank for their personal banking needs. Estimated annual sales for this segment are $4.5 billion.
  • Commercial Banking: This segment includes businesses of all sizes that use First Citizens Bank for their banking needs. Estimated annual sales for this segment are $3.0 billion.
  • Wealth Management: This segment includes individuals and families who use First Citizens Bank for their wealth management needs. Estimated annual sales for this segment are $1.5 billion.
  • Government Banking: This segment includes government entities that use First Citizens Bank for their banking needs. Estimated annual sales for this segment are $1.0 billion.

First Citizens BancShares is a well-diversified financial institution with a strong customer base. The company's customer segments and estimated annual sales provide a snapshot of the company's business and its target market.

Value

Value Proposition of First Citizens BancShares

First Citizens BancShares, Inc. (FCB) is a bank holding company headquartered in Raleigh, North Carolina. FCB provides a range of financial services, including consumer and commercial banking, trust and wealth management, and investment services.

Core Value Proposition:

FCB's value proposition is centered around providing exceptional financial services to its customers, with a focus on:

  • Local Decision-Making: FCB empowers its local banking teams to make decisions that are tailored to the needs of their communities.
  • Customer-Centricity: FCB places the customer at the heart of its operations, striving to provide personalized and responsive service.
  • Strong Local Roots: FCB has deep roots in the communities it serves, with a long history of supporting local businesses and organizations.

Differentiators:

Specific differentiators that enhance FCB's value proposition include:

  • Comprehensive Product and Service Offering: FCB offers a wide range of financial products and services to meet the diverse needs of its customers.
  • Well-Capitalized and Financially Strong: FCB maintains a strong financial position, which enables it to withstand economic downturns and provide stability to its customers.
  • Digital Banking Capabilities: FCB invests in digital banking technology to provide convenient and secure access to accounts and services.
  • Community Involvement: FCB actively supports local initiatives and organizations, demonstrating its commitment to the communities it serves.

Target Market:

FCB targets a broad customer base that includes:

  • Individuals and families
  • Businesses and organizations
  • Government entities
  • High-net-worth individuals

Benefits to Customers:

Customers of First Citizens BancShares enjoy the following benefits:

  • Customized Financial Solutions: Local decision-making empowers banking teams to tailor solutions to specific needs.
  • Exceptional Customer Service: FCB's customer-centric approach ensures personalized and attentive service.
  • Financial Stability: FCB's strong financial position provides peace of mind to customers.
  • Community Support: Customers appreciate FCB's commitment to supporting their communities.
  • Convenience and Accessibility: FCB's digital banking capabilities and extensive branch network offer convenient access to accounts and services.

Overall, First Citizens BancShares' value proposition is built on its commitment to providing exceptional financial services through local decision-making, customer-centricity, and strong community involvement.

Risk

First Citizens BancShares, Inc. (FCN)

Overview: First Citizens BancShares, Inc. is a bank holding company headquartered in Raleigh, North Carolina. It operates through its subsidiary, First Citizens Bank, which provides a range of financial services including retail banking, commercial banking, and wealth management.

Risks:

1. Credit Risk:

  • Loan portfolio: FCN's loan portfolio is concentrated in commercial real estate and residential mortgages. These sectors are cyclical and can experience downturns, leading to potential loan defaults and losses.
  • Exposure to highly leveraged borrowers: FCN has a significant exposure to borrowers with high levels of leverage. In an economic downturn, these borrowers may face difficulties in repaying their debts, increasing the risk of defaults.

2. Interest Rate Risk:

  • Asset-liability mismatch: FCN's deposits are largely short-term, while its loans are primarily long-term. Interest rate increases can reduce net interest margins and impact profitability.
  • Interest rate sensitivity: FCN's net interest income is sensitive to interest rate changes. Rising interest rates can benefit FCN's net interest margins, while falling interest rates can have a negative impact.

3. Liquidity Risk:

  • Deposit concentration: FCN has a high concentration of deposits from a limited number of large customers. In the event of a liquidity crisis, these customers could withdraw their funds, putting pressure on FCN's liquidity position.
  • Dependence on wholesale funding: FCN relies on wholesale funding markets to supplement its deposit base. Disruptions in these markets could impair its ability to access liquidity.

4. Operational Risk:

  • Cybersecurity threats: FCN, like other financial institutions, faces significant cybersecurity threats. A successful cyberattack could result in data breaches, financial losses, and reputational damage.
  • Compliance and regulatory risks: FCN operates in a heavily regulated industry. Failure to comply with regulations can lead to penalties, fines, and reputational damage.

5. Strategic Risk:

  • Competition: FCN faces intense competition from other banks and non-bank financial institutions. Failure to adapt to changing market conditions and innovate new products and services can lead to market share losses.
  • Economic downturn: An economic downturn can negatively impact FCN's business by reducing loan demand, increasing credit losses, and eroding profitability.

6. Reputational Risk:

  • Customer scandals: Negative publicity surrounding unethical or illegal activities by FCN or its employees can damage its reputation and erode customer trust.
  • Community involvement: FCN's involvement in controversial activities or its failure to meet community expectations can also harm its reputation.

Mitigating Factors:

  • Strong capital position and healthy profitability
  • Conservative lending practices and prudent risk management
  • Diversification of loan portfolio and geographic presence
  • Investments in cybersecurity and compliance measures
  • Strong customer relationships and market presence

Overall, First Citizens BancShares faces a range of risks, but its strong financial position and risk management practices help mitigate these risks and support the stability of the organization.

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