First Citizens BancShares, Inc. (NASDAQ:FCNCA) Q3 2023 Results Conference Call October 26, 2023 9:00 AM ET

Company Participants

Deanna Hart - Senior Vice President of Investor Relations

Frank Holding - Chairman and Chief Executive Officer

Craig Nix - Chief Financial Officer

Andy Giangrave - EVP, Chief Credit Officer of the Commercial Bank

Randy Martin - SVP, Branch Development and Project Management

Tom Eklund - Treasurer

Conference Call Participants

Stephen Scouten - Piper Sandler

Brady Gailey - KBW

Steven Alexopoulos - JP Morgan

Christopher Marinac - I2BBA

Brian Foran - Autonomous

Brody Preston - UBS

Operator

Ladies and gentlemen, thank you for standing by. And welcome to the First Citizens Bancshares Third Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen only mode [Operator Instructions]. As a reminder, today's conference is being recorded.

I would now like to introduce the host of this call, Ms. Deanna Hart, Senior Vice President of Investor Relations. You may begin.

Deanna Hart

Good morning, everyone. Welcome to our third quarter earnings call. Our Chairman and Chief Executive Officer, Frank Holding; and Chief Financial Officer, Craig Nix, will provide third quarter business and financial updates today. During the call, we will reference our investor presentation, which you can find on our Web site. Our comments will include forward-looking statements, which are subject to risks and uncertainties that may cause our results to differ materially from expectations. We assume no obligation to update such statements. These risks are outlined for you on Page 3. We will also reference non-GAAP financial measures. Reconciliations of these measures against the most directly comparable GAAP measures are found in Section 5 of the presentation. Finally, First Citizens is not responsible for and does not edit nor guarantee the accuracy of earnings transcripts provided by third parties. I will now turn it over to Frank.

Frank Holding

Thank you, Deanna, and good morning, everyone. Starting on Page 5. Despite a volatile external market, we've delivered another solid quarter of financial results marked by strong revenue growth and disciplined expense management. Our focus continues to be on growing our core lines of business, maintaining our safety and stability through strong capital, credit and liquidity risk management and delivering long term tangible book value growth to our shareholders. This morning, we reported earnings per share of $55.92 excluding items noted in the presentation on Page 52. This exceeded our expectations and represented a 6% increase over the sequential quarter. Return metrics were also strong improving over the sequential quarter despite an increase in credit reserves and capital levels. These return metrics were supported by net interest margin that remained over 4% and an adjusted efficiency ratio of 46%. Deposits continued to be a huge focus for us during the quarter with period end deposits up 14% on an annualized basis or 3% sequentially. In addition to deposit growth, our commercial and general bank segments posted solid loan growth. Our liquidity and capital positions remain strong and stable, driven by our focus on core deposit gathering and a conservatively managed investment portfolio. We also remain focused on managing credit risk prudently. We did experience an increase in net charge offs this quarter with the majority of the charge offs related to investor dependent loans in the SVB portfolio. While we continue to monitor this portfolio closely, given some of the macroeconomic headwinds facing the innovation economy, we remain encouraged by the resiliency of our clients in the face of elevated inflation and rising interest rates.