First Citizens Bancshares (FCNCA) risk factors, FY2024 10-K

Strategic Risks

1. 01We may be adversely affected by risks associated with previous and future acquisitions, and any future acquisitions may be subject to increased regulatory scrutiny
2. 02Certain provisions in our Certificate of Incorporation, Bylaws and certain statutes and regulations may make it more difficult for a third party to change our management or acquire control of us, even if stockholders might consider the change in management or change in control to be in their best interests
3. 03These choice of forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum of its choosing for disputes with us or our directors, officers or other employees or agents, which may discourage lawsuits against us and our directors, officers and other employees or agents
4. 04The Parent Company relies on dividends from FCB for returning capital to stockholders, paying dividends on its common and preferred stock and servicing its debt obligations, and FCB’s ability to pay the Parent Company dividends may be restricted
5. 05New technologies, and our ability to efficiently and effectively implement, market and deliver new products and services to our customers present competitive risks
6. 06We are subject to reputational risks that could harm our business and prospects. If we were subject to reputational harm, it could have a material adverse impact on our business, financial condition and results of operations

Operational Risks

1. 07We face significant operational risks in our businesses and may fail to maintain appropriate operational infrastructure and oversight
2. 08We depend on the effectiveness and integrity of employees, and the systems and controls for which they are responsible, to manage operational risks
3. 09We are subject to litigation and other legal liability risks, and our expenses related to such risks may adversely affect our results
4. 10We depend on qualified personnel for our success and may not be able to retain or attract such personnel
5. 11If we were unsuccessful in retaining our current executive officers or other key personnel or hiring additional key personnel to assist in executing our growth, expansion and acquisition strategies, those strategies could fail or be less successful than they would otherwise be
6. 12We are exposed to losses related to fraud
7. 13Our business and financial performance could be impacted by natural or man-made disasters, global pandemics, acts of war or terrorist activities, climate change or other adverse external events
8. 14We rely on third-party vendors to provide key components of our business infrastructure, and our vendors may be responsible for or contribute to failures that adversely affect our operations
9. 15The quality of our data could deteriorate and cause financial or reputational harm to FCB
10. 16Deposit insurance premiums levied against banks, including FCB, may increase if the number of bank failures increase or the cost of resolving failed banks increases
11. 17Changes being proposed and implemented by the Trump administration are expected to fundamentally alter the size and scope of the federal government through reduction of the federal work force and the potential reduction, change in direction or possible elimination of, various government agencies and programs
12. 18If we fail to effectively manage credit risk, our business and financial condition will suffer
13. 19Our allowance for credit losses may prove to be insufficient to absorb losses in our credit portfolios
14. 20Our concentration of loans and leases in certain industries increases the risk of losses and could impair our earnings if these industries experience economic difficulties
15. 21Deteriorating credit quality and our reliance on junior liens may adversely impact our business and our results of operations
16. 22The financial system is highly interrelated, and financial or systemic shocks or the failure of even a single financial institution or other participant in the financial system could expose us to credit risk through potential counterparty default and adversely impact our financial condition and results of operations
17. 23Changes in U.S. trade policies, including the imposition of tariffs and retaliatory tariffs, may adversely impact our business, financial condition, and results of operations

Market Risks

1. 24Failure to effectively manage our interest rate sensitivity within our defined risk appetite could adversely affect our earnings
2. 25Unfavorable economic conditions, as considered through a range of metrics, have and could continue to adversely affect our business
3. 26U.S. debt ceiling and budget deficit concerns have and could continue to adversely affect our business
4. 27The performance of equity securities and corporate bonds in our investment securities portfolio could be adversely impacted by the soundness and fluctuations in the market values of other financial institutions
5. 28The value of our goodwill may decline in the future
6. 29The market price of our common stock may be volatile
7. 30If our current level of balance sheet liquidity were to experience significant pressure, it could affect our ability to pay withdrawals by depositors, repay the Purchase Money Note and fund our operations
8. 31We are subject to enhanced liquidity risk management requirements as a Category IV banking organization, and failure to meet these requirements could result in regulatory and compliance risks, and possible restrictions on our activities
9. 32Our ability to grow is contingent upon access to capital, which may not be readily available to us
10. 33If we fail to meet regulatory guidelines, including enhanced capital adequacy, liquidity, stress testing, and capital planning requirements, or are subject to certain other legal limitations, our financial condition and ability to pay dividends or make other payments could be adversely affected
11. 34Increases to our level of indebtedness could adversely affect our ability to raise additional capital and to meet our obligations
12. 35We operate in a highly regulated industry, and the laws and regulations that impact our operations, taxes, corporate governance, executive compensation and financial accounting and reporting, including changes in them or our failure to comply with them, may adversely affect us
13. 36Information security and data privacy are areas of heightened legislative and regulatory focus
14. 37We face heightened compliance risks related to certain specialty commercial business lines
15. 38We are subject to enhanced prudential standards and will be subject to further requirements as we grow, and the federal banking agencies are considering further requirements
16. 39We may be adversely affected by changes in United States and foreign tax laws and other tax laws and regulations
17. 40We are subject to ESG risks such as climate risk, hiring practices, diversity, racial and social justice issues, including in relation to our counterparties, which may adversely affect our reputation and ability to retain employees and customers
18. 41Fee revenues from overdraft and NSF programs have been and may continue to be subject to increased supervisory scrutiny
19. 42We may not be able to realize our entire investment in the equipment that we lease to our customers
20. 43Accounting for acquired assets may result in earnings volatility

Financial Reporting Risks

1. 44Accounting standards may change and increase our operating costs or otherwise adversely affect our results
2. 45Our accounting policies and processes are critical to the reporting of our financial condition and results of operations. They require management to make estimates about matters that are uncertain, and such estimates may be materially different from actual results
3. 46Our business is highly quantitative and requires widespread use of financial models for day-to-day operations; these models may produce inaccurate predictions that significantly vary from actual results, and we may rely on these inaccurate predictions in making decisions that ultimately adversely affect our business
4. 47We may fail to maintain an effective system of internal control over financial reporting, which could hinder our ability to prevent fraud and provide reliable financial reports to key stakeholders
5. 48The SVBB Acquisition has been accounted for under the purchase method of accounting and is based upon a valuation that involves significant estimates