News Global First Citizens BancShares Shares Drop Over 9% on Weak 2026 Interest Income ForecastFirst Citizens BancShares Shares Drop Over 9% on Weak 2026 Interest Income Forecast
First Citizens BancShares shares declined over 9% after projecting 2026 net interest income of $6.5-6.9 billion, below analyst expectations of $6.92 billion. The bank cited Federal Reserve rate cuts pressuring loan yields and margins, with CFO Craig Nix expecting continued pressure despite asset growth. Despite reporting improved Q4 profit of $634 million versus $628 million year-over-year, the weak forward guidance overshadowed positive results and contributed to a 3% decline in the broader regional banking index.
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First Citizens BancShares shares tumbled more than 9% following the regional lender's disappointing full-year interest income projection that fell short of Wall Street expectations. The bank's weak forward guidance highlighted ongoing challenges facing regional banks amid the Federal Reserve's monetary policy adjustments.
2026 Interest Income Forecast Falls Short
The bank projects annual net interest income between $6.5 billion and $6.9 billion for 2026, significantly below analyst expectations. This forecast represents a notable gap from Wall Street's anticipated figure, creating investor concern about the bank's earnings trajectory.
| Metric | First Citizens Forecast | Analyst Expectations |
|---|---|---|
| 2026 Net Interest Income | $6.5-6.9 billion | $6.92 billion |
| Expected Rate Cuts | 0-4 cuts of 25 basis points | - |
| NII Trough Period | First Quarter 2026 | - |
Rate Cut Pressures on Regional Banking
Chief Financial Officer Craig Nix explained the challenging operating environment, stating that continued rate cuts are expected to pressure loan interest income through declining yields despite asset growth levels. The forecast assumes zero to four rate cuts of 25 basis points during 2026, with net interest income expected to reach its lowest point in the first quarter.
Federal Reserve rate cuts in the second half of 2025 are creating headwinds for regional banks as loan yields typically fall faster than deposit costs, compressing margins and constraining earnings growth potential.
Fourth Quarter Performance Highlights
Despite the weak forward guidance, First Citizens reported improved fourth-quarter results. The bank's adjusted profit available to common shareholders reached $634 million for the three months ended December 31, representing an increase from $628 million in the same period of the previous year.
| Performance Metric | Q4 Current Year | Q4 Previous Year |
|---|---|---|
| Adjusted Profit to Common Shareholders | $634 million | $628 million |
| Provisions Change | Declined over 65% | - |
| Net Interest Income | Marginally higher | - |
The quarterly improvement was supported by marginally higher net interest income in the final three months of 2025 and provisions that declined by more than 65% compared to the previous year.
Broader Market Impact
The disappointing forecast created ripple effects across the regional banking sector. The KBW Nasdaq Regional Banking Index declined approximately 3% in afternoon trading, reflecting investor concerns about similar pressures facing other regional lenders.
Truist analyst Brian Foran noted the difficult adjustment period to lower rates, questioning whether recent cuts represent the final monetary policy adjustments. Portfolio manager Macrae Sykes from Gabelli Funds characterized the day as offering "little good news from the financials," specifically citing First Citizens' weaker-than-expected 2026 net interest income forecast.
Stock Performance Context
First Citizens' stock performance in 2025 showed modest gains of just 1.6%, a significant deceleration from previous years' exceptional returns. This muted performance followed two consecutive strong years with growth of nearly 49% in 2024 and 87% in 2023, highlighting the current challenging operating environment for regional banking institutions.
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