New York, Jan 25, 2026, 13:16 EST — Market closed
- First Citizens’ recent decline puts regional bank margins back under the microscope as the new week begins.
- Investors are gauging the speed at which lower rates impact loan yields and deposit expenses.
- Investors are eyeing the Fed’s midweek decision and the U.S. inflation report due later in the week.
First Citizens BancShares (FCNCA) ended Friday’s session at $2,016.56, slipping 8.49% from the day before. As the market reopens Monday, investors remain focused on interest rates and how banks will deliver on earnings. (Investing)
That decline carries weight now since regional banks are still among the market’s clearest indicators for U.S. interest rate trends. Even minor changes in expectations can send the sector tumbling, regardless of quiet credit news.
Net interest income is under strain. It’s the difference between what banks earn on loans and what they shell out on deposits. That margin can shrink when rates drop and loan yields adjust faster than deposit costs do.
First Citizens triggered the selloff after forecasting 2026 net interest income between $6.5 billion and $6.9 billion, missing the $6.92 billion analysts had anticipated, per LSEG data. CFO Craig Nix cited “declining yield despite asset growth.” The bank expects net interest income to hit its low in Q1, assuming zero to four rate cuts of 25 basis points each in 2026 (a basis point equals 0.01 percentage point). Truist’s Brian Foran described it as a “difficult adjustment to lower rates,” while Gabelli Funds’ Macrae Sykes said there was “little good news” in financials. The KBW Nasdaq Regional Banking Index fell roughly 3% in afternoon trading. (Reuters)
In its earnings release, CEO Frank Holding described the bank’s performance as showing “solid return metrics” with credit quality remaining stable. The report also flagged $900 million in share buybacks during the quarter and a $2.5 billion partial prepayment on its Purchase Money Note. The bank reaffirmed its plans to acquire 138 branches from BMO Bank, expecting to take on roughly $5.7 billion in deposits and about $1.1 billion in loans. The deal is set to close in the second half of 2026, subject to regulatory approval. (First Citizens Newsroom)
Traders are weighing if First Citizens is a one-off on margin pressure or setting a trend for others. That’s often how guidance season plays out—one bank drops a figure, and the entire market shifts.
There’s a downside risk lurking beneath the stock. If deposit competition remains fierce or loan growth falters, the spread that drives interest income could shrink further—even if charge-offs don’t rise sharply.
Key macro events will likely shape the next market move. The Federal Reserve holds its two-day policy meeting from Jan. 27 to 28. The statement drops at 2:00 p.m. ET on Jan. 28, followed by a press conference at 2:30 p.m. ET. (Federal Reserve)
Investors will eye the Producer Price Index for December 2025, set for release at 8:30 a.m. ET on Friday, Jan. 30. (Bureau of Labor Statistics)
Monday’s focus is on whether FCNCA can steady itself following Friday’s drop, and if regional banks manage to halt their losses. The real turning point arrives on Jan. 28, when the Fed’s rate commentary will directly impact bank margin calculations.
