Is First Citizens BancShares ($FCNCA) Quietly Engineering a Banking Empire No One Saw Coming?
It basically shows how much you spend on things less related to lending. In a business that is very focus on lending, it allows you to see your cost control.
But also if you have improve your economies of scale.
FCNCA shows that they have integrated the acquisitions well, and have cut down on the non-interest expenses so that their efficiency improve over time.
ChatGPT gives the following range:
| Efficiency Ratio | Interpretation |
|---|---|
| ~40–50% | Very efficient (often large or tech-savvy banks) |
| ~50–60% | Average efficiency |
| >60% | Inefficient, may need cost control or revenue improvement |
This kind of shows us the struggles of smaller banks versus the larger banks.
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