First Citizens BancShares, Inc. (NASDAQ:FCNCA) is a large regional bank whose earnings were transformed when it acquired the failed Silicon Valley Bank. At about $24 billion, it is solidly and consistently profitable under standard accounting rules, which gives it a clean eligibility profile for inclusion in the illustrious S&P 500 index. The valuation is the cheapest here. First Citizens trades near 11 times both trailing and forward earnings, with reported earnings per share of roughly $186. Over the past six months, the stock posted a 3.16% gain. During the same period, the Insider Monkey Billionaire Index gained 11.6%. Where the software names agonize over whether a trailing price-to-earnings ratio even exists, First Citizens has a stable, low one, which is exactly what the profitability test rewards.
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Bull Case
The bull case is the transformed earnings base. The Silicon Valley Bank deal in 2023 added scale, deposits, and a national commercial-banking franchise. The bank is now screened as profitable, liquid enough, and appropriately sized. A healthy return on equity paired with a cheap multiple gives it a sturdy footing that does not depend on an AI narrative or a profitability turn still to come. For a committee looking to keep the index’s sector mix balanced, First Citizens is one of the names featured in our list of 9 New Contenders for the S&P 500 Index – a well-run and clearly profitable bank is a straightforward choice when a financial seat opens up.
Bear Case
The bear case is narrower but real. A UBS downgrade flagged pressure on net interest margin, the gap between what the bank earns on loans and pays on deposits, which can squeeze profit as rates shift. And its unusually high share price, above $2,000, means relatively few shares change hands each day. This keeps day-to-day trading thinner than a lower-priced stock of similar value. Thin share liquidity is a modest consideration for a committee that wants index funds to be able to buy without moving the price, even when the dollar value traded is adequate.
Bottom line
The bottom line is that First Citizens is arguably a ready-today candidate based on profitability, liquidity, and size, with a cheap multiple to boot. Its entry is less about clearing a bar and more about the committee choosing it when a financial-sector seat opens, since it already satisfies the tests that others are still chasing. Whether margin pressure dents the earnings story, and whether the very high share price matters to you, is your call.
Market Sentiment
On positioning, First Citizens BancShares, Inc. is the least-held name here, though interest is rising, with Insider Monkey’s database showing 38 hedge funds at the end of the second quarter of 2026, up from 35 the quarter before. The rise in numbers indicates a slight change in institutional confidence in favour of the stock.
To see how it compares to the other companies featured in 9 New Contenders for the S&P 500 Index, click HERE.
While FCNCA is the least-held name here, see which banks billionaires like in our list of the 10 best bank stocks to buy according to billionaires.
While we acknowledge the risk and potential of FCNCA as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than FCNCA and that has 10,000% upside potential, check out our report about this cheapest AI stock.
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This article is originally published at Insider Monkey.
