First Citizens BancShares Navigates Challenges Amid Capital Strategy Shift

First Citizens BancShares concluded a volatile trading session yesterday, with its shares settling at $2,069.57. The financial institution is embarking on a new capital initiative as it works to counterbalance the impact of a disappointing quarterly report, prompting a cautious recalibration of price targets by market analysts.

The backdrop to recent share price fluctuations includes a significant 8.5% drop the prior Friday, triggered by the release of quarterly earnings. The figures revealed an efficiency ratio of 64.5%, a result that fell notably short of market expectations. Company executives acknowledged that rising operational expenses and the increasing cost of deposits are pressuring profitability in the current economic climate.

Adding a layer of complexity, the bank's financial communications are now under review. The Pomerantz Law Firm initiated an investigation last Thursday to examine whether disclosures concerning financial and efficiency metrics prior to the earnings release were adequate. Despite these headwinds, First Citizens reported a profitable full year for 2025, achieving a net income of $2.21 billion.

Should investors sell immediately? Or is it worth buying First Citizens BancShares?

New Preferred Share Issue and Analyst Perspective

In a move to bolster its financial position, the company announced the pricing of a new Series E preferred stock offering last Thursday. These securities carry a fixed dividend rate until March 2031, after which they will convert to a variable rate. Management stated the capital raised will be utilized for general corporate purposes. As of the end of 2025, the bank's total assets stood at approximately $229.7 billion.

Concurrently, the research firm Piper Sandler adjusted its outlook on the stock. Analysts raised their price target from $2,000 to $2,100 while maintaining a "Neutral" rating. They pointed to a mixed performance in the fourth quarter: while credit growth and the earnings picture showed strength, a decline in period-end deposits warrants a degree of caution. The central question remains whether this fresh capital measure can durably restore investor confidence under these circumstances.

Path Forward: Cost Control and Deposit Stability

The immediate focus for First Citizens is the execution of its new capital strategy and the stabilization of its deposit base. The forthcoming quarters will be critical, with the bank's ability to improve cost management and return its operational efficiency to target levels likely to be a decisive factor for its equity trajectory.