First Citizens BancShares Issues $1.25 Billion in Notes

In a recent move to bolster its capital structure, First Citizens BancShares, Inc. (NASDAQ:FCNCA), a Delaware-incorporated bank holding company with a market capitalization of $23.79 billion, announced the sale of $1.25 billion in new debt securities. According to InvestingPro analysis, the company is currently trading below its Fair Value, making this debt offering particularly noteworthy for value investors. The offering, completed on Monday, consists of $500 million in 5.231% senior notes due 2031 and $750 million in 6.254% subordinated notes due 2040.

The securities were issued under a previously filed registration statement and sold via an underwriting agreement with Citigroup (NYSE:C) Global Markets Inc. and J.P. Morgan Securities LLC, acting as the representatives of the underwriters. The senior notes and subordinated notes are listed on the Nasdaq Global Select Market under the symbols FCNCA, FCNCP, and FCNCO, respectively. The company’s strong financial position is reflected in its impressive revenue growth of 22.69% over the last twelve months, as reported by InvestingPro.

The senior notes were issued according to a Senior Base Indenture and a First Supplemental Indenture, both dated Monday, with U.S. Bank Trust Company, National Association serving as the trustee. Similarly, the subordinated notes were issued in line with a Subordinated Base Indenture dated March 4, 2020, and a Second Supplemental Indenture also dated Monday.

The transaction is outlined in a Form 8-K filed with the Securities and Exchange Commission (SEC), which also includes the relevant indentures and forms of the notes. This filing is part of the company’s regulatory obligations and provides transparency to investors regarding the details of the offering.

First Citizens BancShares, with headquarters in Raleigh, North Carolina, operates through its banking subsidiary, First Citizens Bank. The bank offers a range of financial services to retail and commercial customers, maintaining a solid P/E ratio of 9.32 and an impressive track record of 40 consecutive years of dividend payments. This debt issuance represents a strategic step by the company to manage its financial operations and support future growth initiatives. For detailed analysis and additional insights, investors can access the comprehensive Pro Research Report available on InvestingPro, which covers over 1,400 US equities with expert analysis and actionable intelligence.

Investors and interested parties can find further details about the terms of the notes and the indentures in the exhibits attached to the SEC filing. The information is based on a press release statement and is intended to provide a factual report of the company’s financial activity without any subjective assessment or speculative commentary.

In other recent news, First Citizens BancShares has seen several notable developments. Piper Sandler upgraded the stock from Neutral to Overweight, setting a new price target of $2,250, citing potential strategic share repurchases and limited downside risk to future earnings. DA Davidson maintained a Neutral rating with a price target of $2,400, adjusting earnings per share projections to reflect increased net interest income and potential stock buybacks. Truist Securities raised the price target to $2,384 while keeping a Hold rating, based on expectations of higher net interest income and lower net charge-off rates.

Piper Sandler also adjusted its price target from $2,100 to $2,250 following better-than-expected fourth-quarter 2024 results. Keefe, Bruyette & Woods increased the price target to $2,600, maintaining an Outperform rating, and highlighted a strong fourth-quarter performance with significant loan and deposit growth, particularly from Silicon Valley Bank. The analysts noted the company’s accelerated share buyback program and positive net interest income revisions. These recent upgrades and target adjustments reflect analysts’ recognition of First Citizens’ performance and potential, amidst macroeconomic challenges and strategic considerations.

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