Over the last six months, First Citizens BancShares’s shares have sunk to $1,929, producing a disappointing 5.9% loss - a stark contrast to the S&P 500’s 6.4% gain. This might have investors contemplating their next move.

Following the pullback, is now a good time to buy FCNCA? Find out in our full research report, it’s free.

Why Does First Citizens BancShares Spark Debate?

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.

Two Things to Like:

1. Net Interest Income Skyrockets, Fueling Growth Opportunities

While bank generate revenue from multiple sources, investors view net interest income as a cornerstone - its predictable, recurring characteristics stand in sharp contrast to the volatility of one-time fees.

First Citizens BancShares’s net interest income has grown at a 37.8% annualized rate over the last five years, much better than the broader banking industry. Its growth was driven by both an increase in its outstanding loans and net interest margin, which represents how much a bank earns in relation to its outstanding loan book.

2. Outstanding Long-Term EPS Growth

We track the long-term change in earnings per share (EPS) because it highlights whether a company’s growth is profitable.

First Citizens BancShares’s full-year EPS grew at an astounding 30.9% compounded annual growth rate over the last four years, better than the broader banking sector.

One Reason to be Careful:

Net Interest Margin Dropping

Net interest margin (NIM) represents the unit economics of a bank by measuring the profitability of its interest-bearing assets relative to its interest-bearing liabilities. It's a fundamental metric that investors use to assess lending premiums and returns.

Over the past two years, First Citizens BancShares’s net interest margin averaged 3.6%. However, its margin contracted by 29.7 basis points (100 basis points = 1 percentage point) over that period.

This decline was a headwind for its net interest income. While prevailing rates are a major determinant of net interest margin changes over time, the decline could mean First Citizens BancShares either faced competition for loans and deposits or experienced a negative mix shift in its balance sheet composition. One caveat is that net interest margins can also decrease to reflect lower default risk if banks begin making more conservative loans.

Final Judgment

First Citizens BancShares’s positive characteristics outweigh the negatives. After the recent drawdown, the stock trades at 1.1× forward P/B (or $1,929 per share). Is now the right time to buy? See for yourself in our in-depth research report, it’s free.

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