First Citizens Bancshares faces headwinds despite strong buybacks. The bank maintains a hold rating as net interest margin pressure and weakening reserve coverage present medium-term credit risks. Q1 showed deposit and loan growth from legacy SVB operations, but deposit trends may reverse as tech companies burn through cash. Net interest margin is expected to bottom in Q3, while reserve coverage has deteriorated, raising concerns about credit quality. Shares trade at 11.5x earnings and 1.2x tangible book value with fair value estimated between $1925 and $1975. Capital returns will likely decelerate as the bank approaches its CET1 target ratio, limiting upside potential for investors in the near term.
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