Release Date: January 24, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Could you walk us through the assumptions on the low and high end of the $6.6 billion to $7 billion range for net interest income in 2025? A: Our baseline forecast is anchored to two rate cuts, but the range contemplates anywhere between zero and four. The exact value for net interest income will depend on the magnitude and timing of those rate cuts. We expect headline net interest income to be up low single digits, with ex-accretion net interest income up low to mid-single digits, pegging towards two rate cuts in the last half of the year. - Craig Nix, CFO
Q: Are there any cost or revenue synergies from the SVB acquisition assumed in the 2025 guidance? A: We have achieved the cost synergies estimate laid out at the beginning of the acquisition and do not anticipate any material impact from further expense synergies on SVB in the guidance. - Craig Nix, CFO
Q: Can you provide more color on the total client fund growth in SVB during the fourth quarter? A: The $75 billion invested in the fourth quarter included large deals, with a third of the total from three very large financings. We are pleased with the growth, which signals continued execution. However, we remain cautious about growth expectations for SVB due to the mixed investment environment. - Unidentified Company Representative
Q: What are your latest thoughts on M&A, given First Citizens' historical acquisitiveness? A: We are not projecting any material M&A activity in 2025, but we remain opportunistic. - Frank Holding, CEO
Q: Where do you see the biggest upside potential and downside risk to the 2025 guidance? A: Upside potential includes higher rates for longer, which would benefit net interest income. Downside risks include a slowing economy that could negatively impact loan and deposit growth. - Craig Nix, CFO
Q: Will the expenses associated with Category 3 readiness be reflected in the 2025 expense run rate? A: Yes, the expenses for Category 3 readiness are reflected in our run rate for expenses. - Craig Nix, CFO
Q: Is the loss share agreement expected to work itself to zero this year? A: The spread between our capital ratios with and without loss share is expected to shrink to around 10 basis points, working out to a zero impact on capital throughout the remainder of the year. - Craig Nix, CFO
Q: How are you thinking about the sustainable ROE power of the bank over the medium term? A: Our goal is to improve operational efficiency over time, simplifying processes to meet regulatory expectations and improve customer experience. While rates impact our current efficiency ratio, our long-term goal is to operate in the mid-50s range. - Craig Nix, CFO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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