First Citizens BancShares, Inc. (FCNCA): Business Model Canvas [11-2024 Updated]

Discover how First Citizens BancShares, Inc. (FCNCA) leverages its business model to thrive in the competitive banking landscape. From key partnerships with local businesses to a robust diversified loan portfolio, each element of their Business Model Canvas plays a crucial role in driving growth and community support. Dive deeper to explore their unique value propositions, customer segments, and revenue streams that make FCNCA a noteworthy player in the financial sector.

First Citizens BancShares, Inc. (FCNCA) - Business Model: Key Partnerships

Collaborations with local businesses and community organizations

First Citizens BancShares, Inc. actively engages with local businesses and community organizations to enhance its service offerings and strengthen community ties. These collaborations often involve providing financial education, sponsoring local events, and offering tailored financial products that meet the specific needs of local enterprises.

Partnerships with government agencies for loan programs

The bank has established partnerships with various government agencies to facilitate access to loan programs aimed at supporting small businesses and economic development initiatives. These partnerships include collaboration with the Small Business Administration (SBA) to offer guaranteed loans, which help mitigate risk and provide favorable terms for borrowers.

Government Agency	Loan Program	Loan Amount Range	Interest Rate	Term
Small Business Administration	SBA 7(a) Loan	$5,000 - $5 million	Starting at 5.75%	Up to 25 years
U.S. Department of Agriculture	Rural Development Loans	$5,000 - $25 million	3.00% - 5.00%	Up to 30 years
Federal Housing Administration	FHA Loans	$50,000 - $1 million	3.50% - 4.50%	Up to 30 years

Relationships with financial institutions for funding and liquidity

First Citizens BancShares maintains strong relationships with various financial institutions to ensure adequate funding and liquidity. These relationships are crucial for managing cash flow, funding loans, and meeting regulatory capital requirements.

Type of Institution	Partnership Purpose	Funding Amount (in billions)	Liquidity Support
Regional Banks	Loan syndication	$2.5 billion	Lines of credit
Investment Banks	Debt issuance	$1.2 billion	Market access
Credit Unions	Shared services	$0.3 billion	Liquidity pooling

First Citizens BancShares, Inc. (FCNCA) - Business Model: Key Activities

Offering a wide range of banking products and services

First Citizens BancShares, Inc. provides a comprehensive suite of banking products and services across various segments. As of September 30, 2024, total deposits reached $151.57 billion, reflecting a 4% increase from $145.85 billion at December 31, 2023.

The breakdown of deposits by segment is as follows:

Segment	Ending Balance (in millions)	Average Size (in thousands)	Uninsured %
General Bank	$72,169	$35	36%
Commercial Bank	$2,754	$232	84%
SVB Commercial	$35,945	$502	72%
Corporate and Rail	$40,706	$56	8%
Total	$151,574	$53	39%

Managing a diversified loan portfolio

First Citizens BancShares manages a diversified loan portfolio, with total loans and leases amounting to $137.6 billion as of September 30, 2024. The portfolio includes various categories such as commercial loans, mortgages, and consumer loans. As of the same date, the breakdown of loans by class is as follows:

Loan Class	Outstanding Balance (in millions)
Commercial	$66,092
Commercial Construction	$4,924
Owner Occupied Commercial Mortgage	$16,372
Total Loans	$137,602

Implementing risk management and compliance strategies

First Citizens BancShares has established robust risk management and compliance strategies to safeguard its operations. The total provision for credit losses for the nine months ended September 30, 2024, was $276 million, compared to $1,126 million for the same period in 2023, indicating improved credit quality.

The bank's capital ratios as of September 30, 2024, were as follows:

Capital Ratio	Value
Total Risk-Based Capital Ratio	15.36%
Tier 1 Risk-Based Capital Ratio	13.78%
Common Equity Tier 1 Ratio	13.24%
Tier 1 Leverage Ratio	10.17%

First Citizens BancShares, Inc. (FCNCA) - Business Model: Key Resources

Extensive branch network across multiple states

First Citizens BancShares operates an extensive branch network that spans multiple states, enhancing its accessibility and customer reach. As of September 30, 2024, the total number of branches was approximately 575. This network supports a diversified customer base across retail and commercial banking segments, contributing significantly to the bank's deposit growth and customer engagement strategies.

Experienced management team and workforce

First Citizens BancShares boasts a seasoned management team with extensive experience in banking and finance. The bank's workforce is comprised of over 5,000 employees who are skilled in various banking functions. This human capital is pivotal in driving operational efficiency and customer service excellence, which are core to the bank's value proposition.

Strong capital base and liquidity position

As of September 30, 2024, First Citizens BancShares reported a total capital ratio of 15.36%, with a Tier 1 risk-based capital ratio of 13.78% and a common equity Tier 1 ratio of 13.24%. The bank's total deposits stood at $151.57 billion, reflecting a 4% increase from $145.85 billion at December 31, 2023. This strong capital base underpins the bank's lending capabilities and supports its growth initiatives. Additionally, the liquidity position is robust, with total borrowings amounting to $37.16 billion.

Metric	Value
Total Branches	575
Total Employees	5,000+
Total Deposits (as of September 30, 2024)	$151.57 billion
Total Capital Ratio	15.36%
Tier 1 Risk-Based Capital Ratio	13.78%
Common Equity Tier 1 Ratio	13.24%
Total Borrowings	$37.16 billion

First Citizens BancShares, Inc. (FCNCA) - Business Model: Value Propositions

Comprehensive banking services tailored for individuals and businesses

First Citizens BancShares offers a wide range of banking services designed to meet the diverse needs of both individual and business customers. The bank's services include personal banking, commercial banking, investment services, and wealth management. As of September 30, 2024, the total loans and leases stood at approximately $138.7 billion, reflecting a strategic focus on both retail and commercial lending.

Service Type	Loan Amounts (in billions)	Deposit Amounts (in billions)
General Bank	$66.1	$72.2
Commercial Bank	$32.7	$2.8
SVB Commercial	$39.9	$35.9
Rail	$0.1	$0.01
Total	$138.7	$151.6

Competitive interest rates on loans and deposits

First Citizens BancShares is committed to providing competitive interest rates on its loan and deposit products. As of September 30, 2024, the net interest income was reported at $5.43 billion, demonstrating effective management of interest rate spreads. The bank's interest rates are strategically positioned to attract both borrowers and savers, ensuring a strong inflow of deposits, which totaled approximately $151.6 billion.

Product Type	Current Interest Rate	Annual Percentage Yield (APY)
Personal Loans	5.25%	4.75%
Business Loans	6.00%	5.50%
Savings Account	0.50%	0.50%
Money Market Account	1.25%	1.25%

Commitment to community development and support

First Citizens BancShares emphasizes community development through various initiatives, including affordable housing partnerships and local business support. The bank has committed $390 million to affordable housing projects as of September 30, 2024. This commitment not only fulfills social responsibility but also enhances the bank's reputation and customer loyalty within the communities it serves.

Community Initiative	Investment Amount (in millions)	Description
Affordable Housing	$390	Investment in local housing projects to promote affordable living options.
Small Business Support	$150	Loans and grants provided to local small businesses for growth and development.
Community Development Programs	$100	Programs aimed at enhancing local infrastructure and community services.

First Citizens BancShares, Inc. (FCNCA) - Business Model: Customer Relationships

Personalized banking services and financial advisory

First Citizens BancShares, Inc. offers personalized banking services tailored to meet the diverse needs of its customers. The bank emphasizes relationship management, with clients receiving dedicated financial advisory services. In 2024, the total assets of First Citizens reached approximately $220.47 billion, reflecting its ability to cater to a broad customer base through customized financial solutions.

Digital banking solutions for convenience

The bank has invested significantly in digital banking solutions to enhance customer experience. As of September 30, 2024, digital banking customers accounted for roughly 70% of total retail banking clientele. This shift to digital platforms has resulted in an increase in online transactions, with over 1.5 billion digital transactions executed in the last year, facilitating convenience and accessibility for users.

Strong customer service focus through various channels

First Citizens maintains a robust customer service framework, integrating multiple contact channels including phone, online chat, and in-branch support. The bank's customer satisfaction rating stands at 85%, according to recent surveys. Additionally, the bank employs over 5,000 customer service representatives across its network, ensuring that assistance is readily available. The service efficiency improved with an average response time of less than 2 minutes for customer inquiries.

Deposit Type	September 30, 2024 (in millions)	June 30, 2024 (in millions)	December 31, 2023 (in millions)
Noninterest-bearing demand	$39,396	$40,016	$39,799
Checking with interest	$23,216	$23,907	$23,754
Money market	$34,567	$32,636	$30,611
Savings	$40,266	$39,361	$35,258
Time	$14,129	$15,159	$16,432
Total Deposits	$151,574	$151,079	$145,854

The bank's emphasis on customer retention is evident from the growth in total deposits, which increased by $5.72 billion or 4% from December 31, 2023, to September 30, 2024. This growth is attributed to enhanced customer relationships and the bank's strategic focus on providing value through personalized services and digital innovations.

First Citizens BancShares, Inc. (FCNCA) - Business Model: Channels

Physical branches for in-person banking

As of September 30, 2024, First Citizens BancShares, Inc. operates a network of physical branches contributing significantly to its customer engagement and service delivery. The General Bank segment reported deposits of $72.17 billion, mainly sourced from its branch network. This segment's net interest income for the third quarter of 2024 was $768 million, reflecting a growth from $681 million year-over-year.

Online banking platform for digital transactions

First Citizens BancShares has invested heavily in its online banking platform, facilitating seamless digital transactions for customers. The total deposits at September 30, 2024, amounted to $151.57 billion, with a substantial portion attributed to online banking services. The bank's commitment to enhancing its digital offerings is evident in its increasing noninterest income, which reached $650 million in the third quarter of 2024, compared to $615 million in the same quarter of the previous year.

Mobile app for customer accessibility and account management

The mobile application of First Citizens BancShares provides customers with easy access to account management and banking services. The bank has reported an increase in mobile transactions, contributing to its overall deposit growth. As of September 30, 2024, the bank's average deposits reached $151.57 billion, with the mobile banking segment playing a crucial role in this growth. The bank’s mobile platform features include fund transfers, bill payments, and account monitoring, enhancing customer engagement and satisfaction.

Channel	Total Deposits (in billions)	Net Interest Income (in millions)	Noninterest Income (in millions)
Physical Branches	$72.17	$768	N/A
Online Banking	$151.57	N/A	$650
Mobile App	Included in Total Deposits	N/A	N/A

First Citizens BancShares, Inc. (FCNCA) - Business Model: Customer Segments

Individual consumers seeking personal banking solutions

First Citizens BancShares serves individual consumers through a variety of personal banking solutions. As of September 30, 2024, the bank reported total deposits of $151.57 billion, with a significant portion attributed to individual consumer accounts. The breakdown of deposits includes:

Deposit Type	September 30, 2024 (in millions)
Noninterest-bearing demand	$39,396
Checking with interest	$23,216
Money market	$34,567
Savings	$40,266
Time	$14,129
Total Deposits	$151,574

These products cater to the diverse needs of individual consumers, including savings, checking, and investment opportunities.

Small to medium-sized enterprises (SMEs) needing business financing

First Citizens BancShares provides targeted financial solutions for small to medium-sized enterprises (SMEs). The bank’s net interest income from commercial loans was $823 million for the nine months ended September 30, 2024. The total loans and leases for the Commercial Bank segment amounted to $32.69 billion as of September 30, 2024.

Loan Type	September 30, 2024 (in millions)
Commercial Loans	$32,689
General Bank Loans	$66,092
Total Loans	$138,695

This segment emphasizes lending products that facilitate business growth and operational efficiency for SMEs.

Investors and capital markets participants

First Citizens BancShares also targets investors and participants in capital markets through its wealth management services and investment products. For the nine months ended September 30, 2024, the bank reported noninterest income from client investment fees of $159 million. This segment includes:

Service Type	September 30, 2024 (in millions)
Client Investment Fees	$159
Wealth Management Services	$157
Total Noninterest Income from Investment Services	$1,916

These services are designed to provide financial advisory and investment opportunities to high-net-worth individuals and institutional clients.

First Citizens BancShares, Inc. (FCNCA) - Business Model: Cost Structure

Operational costs associated with branch maintenance

The operational costs for maintaining branches at First Citizens BancShares, Inc. are significant. As of September 30, 2024, the total noninterest expense was $4.22 billion, reflecting an increase of $375 million or 10% from the prior year's $3.84 billion. A substantial portion of this expense arises from branch maintenance and operational overhead, which includes utilities, property maintenance, and security services.

Employee salaries and benefits

Employee compensation is one of the largest components of First Citizens BancShares' cost structure. For the nine months ended September 30, 2024, salaries and benefits increased significantly, contributing to the overall noninterest expense. Specifically, salaries and benefits rose by $43 million in the third quarter of 2024 compared to the previous quarter. The total noninterest expense for employee-related costs was part of the $4.22 billion reported, which included:

Cost Component	Q3 2024 (in millions)	Q2 2024 (in millions)	Q3 2023 (in millions)
Salaries and benefits	$1,456	$1,386	$1,416
Professional fees	$470	$452	$622
Other operational costs	$1,534	$1,497	$1,349

Marketing and customer acquisition expenses

Marketing and customer acquisition expenses are also crucial to First Citizens BancShares' cost structure. In the third quarter of 2024, the company allocated approximately $150 million toward marketing initiatives aimed at customer retention and acquisition. This is part of the broader strategy to enhance brand visibility and drive growth in customer deposits and loans. The total marketing expenses have seen fluctuations based on strategic initiatives, with a notable focus on digital marketing channels to reach a wider audience.

Summary of Cost Structure Components

In summary, the cost structure of First Citizens BancShares, Inc. as of 2024 includes significant operational costs related to branch maintenance, employee salaries and benefits, and marketing expenses. This structure is designed to maximize efficiency while ensuring robust service delivery across its network of branches.

First Citizens BancShares, Inc. (FCNCA) - Business Model: Revenue Streams

Interest income from loans and mortgages

First Citizens BancShares derives a significant portion of its revenue from interest income generated through loans and mortgages. As of September 30, 2024, the company's net interest income was reported at $1.80 billion for the third quarter, reflecting a slight decrease from $1.82 billion in the previous quarter. The year-to-date net interest income stood at $5.43 billion, an increase from $4.80 billion in the prior year.

The total loans and leases as of September 30, 2024, were approximately $138.70 billion, which represents a 4% increase compared to $133.30 billion at December 31, 2023. The net interest margin (NIM) for the current year-to-date was 3.62%, a decrease from 3.95% in the prior year, influenced by higher interest expenses on deposits and borrowings.

Fees for banking services and advisory

First Citizens BancShares also generates revenue through various banking services and advisory fees. Noninterest income for the nine months ended September 30, 2024, was reported at $1.92 billion, a significant decrease from $11.53 billion in the prior year, mainly due to a one-time gain from an acquisition in the previous period. For the third quarter of 2024, noninterest income was $650 million, reflecting consistent performance in fees and advisory services despite the overall drop in year-to-date results.

Income from investment securities and capital markets activities

Investment securities play a crucial role in First Citizens BancShares' revenue model. As of September 30, 2024, the investment securities portfolio was valued at $38.66 billion, which is an increase of 29% from $30.00 billion at December 31, 2023. The company’s total interest income, which includes revenue from investment securities, was reported at $3.14 billion for the third quarter of 2024.

Additionally, rental income from operating leases in the Rail segment contributed to revenue, amounting to $604 million for the nine months ended September 30, 2024, up from $545 million in the prior year.

Revenue Stream	Q3 2024 (in millions)	YTD 2024 (in millions)	YTD 2023 (in millions)
Net Interest Income	$1,796	$5,434	$4,801
Noninterest Income	$650	$1,916	$11,532
Investment Securities	Included in Interest Income	$3,138	$3,110
Rental Income (Rail Segment)	—	$604	$545

Updated on 16 Nov 2024

Resources:

1. First Citizens BancShares, Inc. (FCNCA) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of First Citizens BancShares, Inc. (FCNCA)' financial performance, including balance sheets, income statements, and cash flow statements.
2. SEC Filings – View First Citizens BancShares, Inc. (FCNCA)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.