UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ____________________________________________________ FORM 10-Q ____________________________________________________ ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended September 30, 2025 or ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Commission File Number: 001-16715 First Citizens BancShares, Inc. (Exact name of Registran ...

[Summary Financial Data & Key Metrics](index=1&type=section&id=Summary%20Financial%20Data%20%26%20Key%20Metrics) This section provides an overview of the company's financial performance, per share information, key ratios, balance sheet items, capital ratios, and asset quality metrics [Results of Operations](index=1&type=section&id=Results%20of%20Operations) The company experienced a decline in net interest income and net income for both the three and nine months ended September 30, 2025, compared to the prior year. Provision for credit losses significantly increased, impacting profitability. Noninterest income showed growth, while noninterest expense also rose | Metric | Three Months Ended Sep 30, 2025 (Millions of USD) | Three Months Ended Sep 30, 2024 (Millions of USD) | Nine Months Ended Sep 30, 2025 (Millions of USD) | Nine Months Ended Sep 30, 2024 (Millions of USD) | | :----------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Net interest income | $1,734 | $1,796 | $5,092 | $5,434 | | Provision for credit losses | $191 | $117 | $460 | $276 | | Net income | $568 | $639 | $1,626 | $2,077 | | Net income available to common stockholders | $554 | $624 | $1,583 | $2,031 | | Noninterest income | $699 | $650 | $2,012 | $1,916 | | Noninterest expense | $1,491 | $1,456 | $4,484 | $4,218 | - Net interest income decreased by **$62 million (3.45%)** for the three months ended September 30, 2025, and by **$342 million (6.29%)** for the nine months ended September 30, 2025, compared to the prior year periods[1](index=1&type=chunk) - Provision for credit losses increased significantly by **$74 million (63.25%)** for the three months and **$184 million (66.67%)** for the nine months ended September 30, 2025, year-over-year[1](index=1&type=chunk) [Per Share Information](index=1&type=section&id=Per%20Share%20Information) Diluted earnings per common share (EPS) and adjusted diluted EPS saw declines year-over-year for both the quarter and nine-month periods. Book value and tangible book value per common share increased sequentially and year-over-year | Metric | Three Months Ended Sep 30, 2025 | Three Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :----------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Diluted earnings per common share (EPS) | $43.08 | $43.42 | $119.70 | $140.26 | | Adjusted diluted EPS | $44.62 | $45.87 | $127.03 | $149.71 | | Book value per common share at period end | $1,672.54 | $1,547.81 | N/A | N/A | | Tangible book value per common share (TBV) at period end | $1,628.64 | $1,504.75 | N/A | N/A | - Diluted EPS decreased by **$0.34 (0.78%)** for the quarter and **$20.56 (14.66%)** for the nine months ended September 30, 2025, compared to the same periods in the prior year[1](index=1&type=chunk) - Book value per common share increased by **$124.73 (8.06%)** year-over-year to **$1,672.54** at September 30, 2025[1](index=1&type=chunk) [Key Performance Metrics](index=1&type=section&id=Key%20Performance%20Metrics) Key profitability ratios such as Return on Average Assets (ROA) and Return on Average Common Equity (ROE) declined year-over-year. The efficiency ratio worsened, indicating higher operating costs relative to revenue, while Net Interest Margin (NIM) also compressed | Metric | Three Months Ended Sep 30, 2025 | Three Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :----------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Return on average assets (ROA) | 0.98 % | 1.15 % | 0.95 % | 1.27 % | | Adjusted ROA | 1.01 % | 1.22 % | 1.01 % | 1.35 % | | Return on average common equity (ROE) | 10.26 % | 11.30 % | 9.82 % | 12.73 % | | Efficiency ratio | 61.27 % | 59.49 % | 63.12 % | 57.38 % | | Net interest margin (NIM) | 3.26 % | 3.53 % | 3.26 % | 3.62 % | - ROA decreased from **1.15% to 0.98%** year-over-year for the quarter, and from **1.27% to 0.95%** for the nine-month period[1](index=1&type=chunk) - The efficiency ratio worsened to **61.27%** in Q3 2025 from **59.49%** in Q3 2024, and to **63.12%** for the nine months from **57.38%** in the prior year, indicating higher costs relative to revenue[1](index=1&type=chunk) [Select Balance Sheet Items at Period End](index=1&type=section&id=Select%20Balance%20Sheet%20Items%20at%20Period%20End) Total loans and leases, investment securities, and deposits all increased year-over-year. The loan to deposit ratio slightly decreased, while noninterest-bearing deposits remained a significant portion of total deposits | Metric | Sep 30, 2025 (Millions of USD) | Jun 30, 2025 (Millions of USD) | Sep 30, 2024 (Millions of USD) | | :----------------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Total investment securities | $45,124 | $43,346 | $38,663 | | Total loans and leases | $144,758 | $141,269 | $138,695 | | Total deposits | $163,190 | $159,935 | $151,574 | | Total borrowings | $38,675 | $38,112 | $37,161 | | Loan to deposit ratio | 88.71 % | 88.33 % | 91.50 % | | Noninterest-bearing deposits to total deposits | 26.20 % | 25.56 % | 25.99 % | - Total loans and leases grew by **$6,063 million (4.37%)** year-over-year to **$144,758 million**[1](index=1&type=chunk) - Total deposits increased by **$11,616 million (7.66%)** year-over-year to **$163,190 million**[1](index=1&type=chunk) [Capital Ratios at Period End](index=1&type=section&id=Capital%20Ratios%20at%20Period%20End) Capital ratios, including Total risk-based capital, Tier 1 risk-based capital, and Common equity Tier 1, decreased year-over-year, though they remain above regulatory minimums. These ratios are preliminary pending regulatory filings | Metric | Sep 30, 2025 | Jun 30, 2025 | Sep 30, 2024 | | :----------------------------------- | :----------- | :----------- | :----------- | | Total risk-based capital ratio | 14.05 % | 14.25 % | 15.36 % | | Tier 1 risk-based capital ratio | 12.15 % | 12.63 % | 13.78 % | | Common equity Tier 1 ratio | 11.65 % | 12.12 % | 13.24 % | | Tier 1 leverage capital ratio | 9.34 % | 9.62 % | 10.17 % | - Common equity Tier 1 ratio decreased from **13.24%** in Q3 2024 to **11.65%** in Q3 2025[1](index=1&type=chunk) - Capital ratios for the current quarter-end are preliminary[1](index=1&type=chunk) [Asset Quality at Period End](index=1&type=section&id=Asset%20Quality%20at%20Period%20End) Asset quality metrics show a slight deterioration, with nonaccrual loans increasing and the net charge-off ratio rising significantly year-over-year. The Allowance for Loan and Lease Losses (ALLL) to loans ratio decreased | Metric | Sep 30, 2025 | Jun 30, 2025 | Sep 30, 2024 | | :----------------------------------- | :----------- | :----------- | :----------- | | Nonaccrual loans to total loans and leases | 0.97 % | 0.93 % | 0.90 % | | Allowance for loan and lease losses (ALLL) to loans and leases | 1.14 % | 1.18 % | 1.21 % | | Net charge-off ratio for the period | 0.65 % | 0.33 % | 0.42 % | - Nonaccrual loans to total loans and leases increased from **0.90%** in Q3 2024 to **0.97%** in Q3 2025[1](index=1&type=chunk) - The net charge-off ratio for the quarter more than doubled from **0.33%** in Q2 2025 to **0.65%** in Q3 2025, and increased from **0.42%** in Q3 2024[1](index=1&type=chunk) [Income Statement (unaudited)](index=2&type=section&id=Income%20Statement%20(unaudited)) This section details the company's revenues, expenses, and net income for the three and nine months ended September 30, 2025, highlighting changes in interest income, noninterest income, and expenses [Interest Income and Expense](index=2&type=section&id=Interest%20Income%20and%20Expense) Total interest income decreased year-over-year for both the three and nine-month periods, primarily driven by lower interest on loans and deposits at banks. Total interest expense also decreased, leading to a decline in net interest income | Metric | Three Months Ended Sep 30, 2025 (Millions of USD) | Three Months Ended Sep 30, 2024 (Millions of USD) | Nine Months Ended Sep 30, 2025 (Millions of USD) | Nine Months Ended Sep 30, 2024 (Millions of USD) | | :----------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Interest and fees on loans | $2,300 | $2,430 | $6,806 | $7,206 | | Interest on investment securities | $433 | $358 | $1,266 | $970 | | Interest on deposits at banks | $265 | $350 | $766 | $1,176 | | Total interest income | $2,998 | $3,138 | $8,838 | $9,352 | | Deposits interest expense | $911 | $1,004 | $2,698 | $2,907 | | Borrowings interest expense | $353 | $338 | $1,048 | $1,011 | | Total interest expense | $1,264 | $1,342 | $3,746 | $3,918 | | Net interest income | $1,734 | $1,796 | $5,092 | $5,434 | - Total interest income decreased by **$140 million (4.46%)** in Q3 2025 compared to Q3 2024, and by **$514 million (5.50%)** for the nine months ended September 30, 2025, year-over-year[2](index=2&type=chunk) - Net interest income declined by **$62 million (3.45%)** in Q3 2025 compared to Q3 2024, and by **$342 million (6.29%)** for the nine months ended September 30, 2025, year-over-year[2](index=2&type=chunk) [Noninterest Income](index=2&type=section&id=Noninterest%20Income) Noninterest income showed a positive trend, increasing year-over-year for both the quarter and nine-month periods, driven by growth in rental income on operating lease equipment, lending-related fees, and client investment fees | Metric | Three Months Ended Sep 30, 2025 (Millions of USD) | Three Months Ended Sep 30, 2024 (Millions of USD) | Nine Months Ended Sep 30, 2025 (Millions of USD) | Nine Months Ended Sep 30, 2024 (Millions of USD) | | :----------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Rental income on operating lease equipment | $273 | $262 | $815 | $776 | | Lending-related fees | $67 | $67 | $202 | $189 | | Deposit fees and service charges | $61 | $57 | $178 | $172 | | Client investment fees | $58 | $55 | $163 | $159 | | Total noninterest income | $699 | $650 | $2,012 | $1,916 | - Total noninterest income increased by **$49 million (7.54%)** in Q3 2025 compared to Q3 2024, and by **$96 million (5.01%)** for the nine months ended September 30, 2025, year-over-year[2](index=2&type=chunk) [Noninterest Expense](index=2&type=section&id=Noninterest%20Expense) Total noninterest expense increased year-over-year for both periods, primarily due to higher personnel costs, equipment expense, and marketing expense, partially offset by lower acquisition-related expenses | Metric | Three Months Ended Sep 30, 2025 (Millions of USD) | Three Months Ended Sep 30, 2024 (Millions of USD) | Nine Months Ended Sep 30, 2025 (Millions of USD) | Nine Months Ended Sep 30, 2024 (Millions of USD) | | :----------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Personnel cost | $817 | $788 | $2,445 | $2,277 | | Equipment expense | $137 | $128 | $404 | $368 | | Marketing expense | $33 | $20 | $97 | $52 | | Acquisition-related expenses | $28 | $46 | $108 | $148 | | Total noninterest expense | $1,491 | $1,456 | $4,484 | $4,218 | - Total noninterest expense increased by **$35 million (2.40%)** in Q3 2025 compared to Q3 2024, and by **$266 million (6.31%)** for the nine months ended September 30, 2025, year-over-year[2](index=2&type=chunk) - Personnel cost increased by **$29 million (3.68%)** in Q3 2025 compared to Q3 2024, and by **$168 million (7.38%)** for the nine months ended September 30, 2025, year-over-year[2](index=2&type=chunk) [Net Income and EPS](index=2&type=section&id=Net%20Income%20and%20EPS) Net income and diluted EPS declined year-over-year for both the three and nine-month periods, reflecting the combined impact of lower net interest income, higher provision for credit losses, and increased noninterest expenses | Metric | Three Months Ended Sep 30, 2025 (Millions of USD) | Three Months Ended Sep 30, 2024 (Millions of USD) | Nine Months Ended Sep 30, 2025 (Millions of USD) | Nine Months Ended Sep 30, 2024 (Millions of USD) | | :----------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Income before income taxes | $751 | $873 | $2,160 | $2,856 | | Income tax expense | $183 | $234 | $534 | $779 | | Net income | $568 | $639 | $1,626 | $2,077 | | Diluted earnings per common share | $43.08 | $43.42 | $119.70 | $140.26 | - Net income decreased by **$71 million (11.11%)** in Q3 2025 compared to Q3 2024, and by **$451 million (21.71%)** for the nine months ended September 30, 2025, year-over-year[2](index=2&type=chunk) - Diluted EPS decreased by **$0.34 (0.78%)** in Q3 2025 compared to Q3 2024, and by **$20.56 (14.66%)** for the nine months ended September 30, 2025, year-over-year[2](index=2&type=chunk) [Balance Sheet (unaudited)](index=3&type=section&id=Balance%20Sheet%20(unaudited)) This section presents the company's financial position at period end, detailing assets, liabilities, and stockholders' equity, highlighting year-over-year changes [Assets](index=3&type=section&id=Assets) Total assets increased year-over-year, primarily driven by growth in investment securities available for sale and loans and leases, net of allowance. Interest-earning deposits at banks saw a slight decrease | Metric | Sep 30, 2025 (Millions of USD) | Jun 30, 2025 (Millions of USD) | Sep 30, 2024 (Millions of USD) | | :----------------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Interest-earning deposits at banks | $24,798 | $26,184 | $25,640 | | Investment securities available for sale | $34,963 | $33,060 | $28,190 | | Investment securities held to maturity | $10,051 | $10,189 | $10,391 | | Loans and leases, net of allowance for loan and lease losses | $143,106 | $139,597 | $137,017 | | Total assets | $233,488 | $229,653 | $220,567 | - Total assets increased by **$12,921 million (5.86%)** from **$220,567 million** at September 30, 2024, to **$233,488 million** at September 30, 2025[3](index=3&type=chunk) - Investment securities available for sale increased by **$6,773 million (24.02%)** year-over-year[3](index=3&type=chunk) [Liabilities](index=3&type=section&id=Liabilities) Total liabilities increased year-over-year, primarily driven by growth in total deposits and total borrowings. Both noninterest-bearing and interest-bearing deposits contributed to the overall deposit growth | Metric | Sep 30, 2025 (Millions of USD) | Jun 30, 2025 (Millions of USD) | Sep 30, 2024 (Millions of USD) | | :----------------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Noninterest-bearing deposits | $42,752 | $40,879 | $39,396 | | Interest-bearing deposits | $120,438 | $119,056 | $112,178 | | Total deposits | $163,190 | $159,935 | $151,574 | | Total borrowings | $38,675 | $38,112 | $37,161 | | Total liabilities | $211,502 | $207,357 | $197,739 | - Total deposits increased by **$11,616 million (7.66%)** from **$151,574 million** at September 30, 2024, to **$163,190 million** at September 30, 2025[3](index=3&type=chunk) - Total borrowings increased by **$1,514 million (4.07%)** year-over-year[3](index=3&type=chunk) [Stockholders' Equity](index=3&type=section&id=Stockholders'%20Equity) Total stockholders' equity decreased year-over-year, primarily due to a reduction in additional paid-in capital, partially offset by an increase in retained earnings | Metric | Sep 30, 2025 (Millions of USD) | Jun 30, 2025 (Millions of USD) | Sep 30, 2024 (Millions of USD) | | :----------------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Preferred stock | $881 | $881 | $881 | | Additional paid in capital | $270 | $1,179 | $3,389 | | Retained earnings | $20,866 | $20,337 | $18,703 | | Total stockholders' equity | $21,986 | $22,296 | $22,828 | - Total stockholders' equity decreased by **$842 million (3.69%)** from **$22,828 million** at September 30, 2024, to **$21,986 million** at September 30, 2025[3](index=3&type=chunk) - Additional paid-in capital significantly decreased from **$3,389 million** in Q3 2024 to **$270 million** in Q3 2025[3](index=3&type=chunk) [Notable Items and Adjusted Income Statement](index=4&type=section&id=Notable%20Items%20and%20Adjusted%20Income%20Statement) This section analyzes the impact of notable items on financial performance, presenting adjusted income statements to provide a clearer view of core operational results [Impact of Notable Items](index=4&type=section&id=Impact%20of%20Notable%20Items) Notable items, which are infrequent transactions or certain recurring noncash items, had a positive impact on adjusted pre-tax income and adjusted net income for the periods presented. These adjustments primarily relate to rental income, depreciation, personnel costs, and acquisition-related expenses | Metric | Three Months Ended Sep 30, 2025 (Millions of USD) | Three Months Ended Sep 30, 2024 (Millions of USD) | Nine Months Ended Sep 30, 2025 (Millions of USD) | Nine Months Ended Sep 30, 2024 (Millions of USD) | | :----------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Impact of notable items on adjusted noninterest income | $(181) | $(176) | $(502) | $(485) | | Impact of notable items on adjusted noninterest expense | $(212) | $(227) | $(649) | $(667) | | Impact of notable items on adjusted pre-tax income | $31 | $51 | $147 | $182 | | Impact of notable items on adjusted net income | $19 | $36 | $96 | $137 | | Impact of notable items on adjusted diluted EPS | $1.54 | $2.45 | $7.33 | $9.45 | - Notable items include income and expense for infrequent transactions and certain recurring items that management believes should be excluded from adjusted measures to enhance understanding of operations and comparability[4](index=4&type=chunk) - Personnel cost notable items in Q3 2025 include impairment of internal use software under development[6](index=6&type=chunk) [Condensed Income Statements - Adjusted for Notable Items](index=5&type=section&id=Condensed%20Income%20Statements%20-%20Adjusted%20for%20Notable%20Items) The adjusted income statements, excluding notable items, show higher net income and EPS compared to GAAP figures, reflecting management's view of core operational performance. Despite adjustments, adjusted net income and EPS still declined year-over-year | Metric | Three Months Ended Sep 30, 2025 (Millions of USD) | Three Months Ended Sep 30, 2024 (Millions of USD) | Nine Months Ended Sep 30, 2025 (Millions of USD) | Nine Months Ended Sep 30, 2024 (Millions of USD) | | :----------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Adjusted net interest income | $1,734 | $1,796 | $5,092 | $5,434 | | Adjusted noninterest income | $518 | $474 | $1,510 | $1,431 | | Adjusted noninterest expense | $1,279 | $1,229 | $3,835 | $3,551 | | Adjusted net income | $587 | $675 | $1,722 | $2,214 | | Adjusted diluted earnings per common share | $44.62 | $45.87 | $127.03 | $149.71 | - Adjusted net income decreased by **$88 million (13.04%)** in Q3 2025 compared to Q3 2024, and by **$492 million (22.22%)** for the nine months ended September 30, 2025, year-over-year[9](index=9&type=chunk) - Adjusted diluted EPS decreased by **$1.25 (2.72%)** in Q3 2025 compared to Q3 2024, and by **$22.68 (15.15%)** for the nine months ended September 30, 2025, year-over-year[9](index=9&type=chunk) [Loan and Deposit Portfolio Details](index=6&type=section&id=Loan%20and%20Deposit%20Portfolio%20Details) This section provides a detailed breakdown of the company's loan and deposit portfolios, highlighting changes in composition and growth trends [Loans and Leases by Class](index=6&type=section&id=Loans%20and%20Leases%20by%20Class) The total loan and lease portfolio grew year-over-year, primarily driven by increases in commercial construction, owner-occupied commercial mortgages, and global fund banking loans. Certain loan classes were recast in Q2 2025 for reporting purposes | Loan Class | Sep 30, 2025 (Millions of USD) | Jun 30, 2025 (Millions of USD) | Sep 30, 2024 (Millions of USD) | | :----------------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Commercial construction | $5,926 | $5,714 | $4,924 | | Owner occupied commercial mortgages | $17,232 | $17,053 | $16,372 | | Commercial and industrial | $41,172 | $40,658 | $40,043 | | Global fund banking | $31,615 | $28,677 | $27,114 | | Total commercial | $116,428 | $113,007 | $110,113 | | Total consumer | $28,330 | $28,262 | $28,582 | | Total loans and leases | $144,758 | $141,269 | $138,695 | - Total loans and leases increased by **$6,063 million (4.37%)** year-over-year to **$144,758 million**[11](index=11&type=chunk) - Global fund banking loans showed significant growth, increasing by **$4,501 million (16.60%)** year-over-year[11](index=11&type=chunk) - During Q2 2025, loan classes were recast: Global fund banking is now under Commercial portfolio[11](index=11&type=chunk)[12](index=12&type=chunk) - Investor dependent–early stage and investor dependent–growth stage were combined into a single investor dependent loan class under Commercial portfolio[11](index=11&type=chunk)[12](index=12&type=chunk) - Cash flow dependent and innovation C&I were combined with the commercial and industrial loan class under Commercial portfolio[11](index=11&type=chunk)[12](index=12&type=chunk) [Deposits by Type](index=6&type=section&id=Deposits%20by%20Type) Total deposits increased year-over-year, with growth observed across noninterest-bearing demand, checking with interest, money market, and savings deposits. Time deposits, however, decreased | Deposit Type | Sep 30, 2025 (Millions of USD) | Jun 30, 2025 (Millions of USD) | Sep 30, 2024 (Millions of USD) | | :----------------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Noninterest-bearing demand | $42,752 | $40,879 | $39,396 | | Checking with interest | $23,731 | $23,283 | $23,216 | | Money market | $38,718 | $37,654 | $34,574 | | Savings | $46,915 | $46,877 | $40,259 | | Time | $11,074 | $11,242 | $14,129 | | Total deposits | $163,190 | $159,935 | $151,574 | - Total deposits increased by **$11,616 million (7.66%)** year-over-year to **$163,190 million**[13](index=13&type=chunk) - Savings deposits showed the largest absolute growth, increasing by **$6,656 million (16.53%)** year-over-year[13](index=13&type=chunk) - Time deposits decreased by **$3,055 million (21.62%)** year-over-year[13](index=13&type=chunk) [Credit Quality and Allowance for Loan and Lease Losses (ALLL)](index=7&type=section&id=Credit%20Quality%20and%20Allowance%20for%20Loan%20and%20Lease%20Losses%20(ALLL)) This section assesses the company's asset quality, focusing on nonaccrual loans, charge-offs, and the adequacy of the allowance for loan and lease losses [Nonaccrual Loans and Ratios](index=7&type=section&id=Nonaccrual%20Loans%20and%20Ratios) Nonaccrual loans continued to increase both sequentially and year-over-year, leading to a higher ratio of nonaccrual loans to total loans, indicating a deterioration in asset quality | Metric | Sep 30, 2025 (Millions of USD) | Jun 30, 2025 (Millions of USD) | Sep 30, 2024 (Millions of USD) | | :----------------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Nonaccrual loans at period end | $1,406 | $1,319 | $1,244 | | Ratio of nonaccrual loans to total loans at period end | 0.97 % | 0.93 % | 0.90 % | - Nonaccrual loans increased by **$162 million (13.02%)** year-over-year to **$1,406 million** at September 30, 2025[15](index=15&type=chunk) - The ratio of nonaccrual loans to total loans increased from **0.90%** in Q3 2024 to **0.97%** in Q3 2025[15](index=15&type=chunk) [Charge-offs and Recoveries](index=7&type=section&id=Charge-offs%20and%20Recoveries) Net charge-offs significantly increased both sequentially and year-over-year, with the net charge-off ratio rising sharply, indicating higher loan losses | Metric | Three Months Ended Sep 30, 2025 (Millions of USD) | Three Months Ended Sep 30, 2024 (Millions of USD) | Nine Months Ended Sep 30, 2025 (Millions of USD) | Nine Months Ended Sep 30, 2024 (Millions of USD) | | :----------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Charge-offs | $(256) | $(177) | $(567) | $(464) | | Recoveries | $22 | $32 | $70 | $84 | | Net charge-offs | $(234) | $(145) | $(497) | $(380) | | Net charge-off ratio | 0.65 % | 0.42 % | 0.47 % | 0.37 % | - Net charge-offs increased by **$89 million (61.38%)** in Q3 2025 compared to Q3 2024, and by **$117 million (30.79%)** for the nine months ended September 30, 2025, year-over-year[15](index=15&type=chunk) - The net charge-off ratio increased from **0.42%** in Q3 2024 to **0.65%** in Q3 2025[15](index=15&type=chunk) [Allowance for Loan and Lease Losses (ALLL)](index=7&type=section&id=Allowance%20for%20Loan%20and%20Lease%20Losses%20(ALLL)) The Allowance for Loan and Lease Losses (ALLL) decreased year-over-year, despite an increase in the provision for loan and lease losses, due to higher net charge-offs | Metric | Sep 30, 2025 (Millions of USD) | Jun 30, 2025 (Millions of USD) | Sep 30, 2024 (Millions of USD) | | :----------------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | ALLL to loans ratio at period end | 1.14 % | 1.18 % | 1.21 % | | ALLL at end of period | $1,652 | $1,672 | $1,678 | | Provision for loan and lease losses | $214 | $111 | $123 | - ALLL at the end of the period decreased by **$26 million (1.55%)** year-over-year to **$1,652 million**[15](index=15&type=chunk) - Provision for loan and lease losses increased by **$91 million (73.98%)** in Q3 2025 compared to Q3 2024[15](index=15&type=chunk) [Average Balance Sheets, Yields and Rates](index=8&type=section&id=Average%20Balance%20Sheets%2C%20Yields%20and%20Rates) This section presents average balances for interest-earning assets and interest-bearing liabilities, along with their corresponding yields and rates, and analyzes net interest income, spread, and margin [Average Interest-Earning Assets and Yields](index=8&type=section&id=Average%20Interest-Earning%20Assets%20and%20Yields) Average interest-earning assets increased year-over-year, primarily driven by growth in loans and investment securities. However, the overall yield on interest-earning assets decreased, contributing to lower net interest income | Metric | Q3 2025 Average Balance (Millions of USD) | Q3 2025 Yield/Rate | Q3 2024 Average Balance (Millions of USD) | Q3 2024 Yield/Rate | | :----------------------------------- | :---------------------------------------- | :----------------- | :---------------------------------------- | :----------------- | | Loans and leases | $141,785 | 6.44 % | $137,602 | 7.03 % | | Investment securities | $44,827 | 3.83 % | $38,189 | 3.70 % | | Interest-earning deposits at banks | $24,146 | 4.36 % | $26,167 | 5.33 % | | Total interest-earning assets | $211,042 | 5.64 % | $202,199 | 6.18 % | - Average total interest-earning assets increased by **$8,843 million (4.37%)** year-over-year in Q3 2025[16](index=16&type=chunk) - The yield on total interest-earning assets decreased from **6.18%** in Q3 2024 to **5.64%** in Q3 2025[16](index=16&type=chunk) [Average Interest-Bearing Liabilities and Rates](index=8&type=section&id=Average%20Interest-Bearing%20Liabilities%20and%20Rates) Average interest-bearing liabilities increased year-over-year, driven by growth in deposits and borrowings. The overall cost of interest-bearing liabilities decreased, but not enough to offset the decline in asset yields | Metric | Q3 2025 Average Balance (Millions of USD) | Q3 2025 Yield/Rate | Q3 2024 Average Balance (Millions of USD) | Q3 2024 Yield/Rate | | :----------------------------------- | :---------------------------------------- | :----------------- | :---------------------------------------- | :----------------- | | Total interest-bearing deposits | $120,575 | 3.00 % | $112,446 | 3.55 % | | Total borrowings | $38,258 | 3.70 % | $37,448 | 3.61 % | | Total interest-bearing liabilities | $158,833 | 3.16 % | $149,894 | 3.57 % | - Average total interest-bearing liabilities increased by **$8,939 million (5.96%)** year-over-year in Q3 2025[16](index=16&type=chunk) - The rate on total interest-bearing liabilities decreased from **3.57%** in Q3 2024 to **3.16%** in Q3 2025[16](index=16&type=chunk) [Net Interest Income, Spread, and Margin](index=8&type=section&id=Net%20Interest%20Income%2C%20Spread%2C%20and%20Margin) Net interest income, net interest spread, and net interest margin all decreased year-over-year for both the three and nine-month periods, reflecting the challenging interest rate environment and changes in asset/liability mix | Metric | Three Months Ended Sep 30, 2025 (Millions of USD) | Three Months Ended Sep 30, 2024 (Millions of USD) | Nine Months Ended Sep 30, 2025 (Millions of USD) | Nine Months Ended Sep 30, 2024 (Millions of USD) | | :----------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Net interest income | $1,734 | $1,796 | $5,092 | $5,434 | | Net interest spread | 2.48 % | 2.61 % | 2.47 % | 2.69 % | | Net interest margin | 3.26 % | 3.53 % | 3.26 % | 3.62 % | - Net interest income decreased by **$62 million (3.45%)** in Q3 2025 compared to Q3 2024, and by **$342 million (6.29%)** for the nine months ended September 30, 2025, year-over-year[16](index=16&type=chunk)[17](index=17&type=chunk) - Net interest margin decreased from **3.53%** in Q3 2024 to **3.26%** in Q3 2025, and from **3.62% to 3.26%** for the nine-month period[16](index=16&type=chunk)[17](index=17&type=chunk) [Non-GAAP Reconciliations](index=10&type=section&id=Non-GAAP%20Reconciliations) This section provides detailed reconciliations of GAAP financial measures to non-GAAP adjusted figures, offering insights into core operational performance by excluding notable items [Net Income and EPS Reconciliations](index=10&type=section&id=Net%20Income%20and%20EPS%20Reconciliations) This section reconciles GAAP net income and EPS to adjusted (non-GAAP) figures by adding back the after-tax impact of notable items. Adjusted metrics consistently show higher values than their GAAP counterparts, but still reflect year-over-year declines | Metric | Three Months Ended Sep 30, 2025 (Millions of USD) | Three Months Ended Sep 30, 2024 (Millions of USD) | Nine Months Ended Sep 30, 2025 (Millions of USD) | Nine Months Ended Sep 30, 2024 (Millions of USD) | | :----------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Net income (GAAP) | $568 | $639 | $1,626 | $2,077 | | Impact of notable items, after income tax | $19 | $36 | $96 | $137 | | Adjusted net income (non-GAAP) | $587 | $675 | $1,722 | $2,214 | | Diluted EPS (GAAP) | $43.08 | $43.42 | $119.70 | $140.26 | | Adjusted diluted EPS (non-GAAP) | $44.62 | $45.87 | $127.03 | $149.71 | - Adjusted net income for Q3 2025 was **$587 million**, **$19 million** higher than GAAP net income, due to notable items[18](index=18&type=chunk) - Adjusted diluted EPS for Q3 2025 was **$44.62**, **$1.54** higher than GAAP diluted EPS[18](index=18&type=chunk) [Noninterest Income and Expense Reconciliations](index=10&type=section&id=Noninterest%20Income%20and%20Expense%20Reconciliations) This section details the pre-tax impact of notable items on noninterest income and expense, leading to adjusted noninterest income and expense figures. The adjustments generally reduce both income and expense, with a net positive impact on pre-tax income | Metric | Three Months Ended Sep 30, 2025 (Millions of USD) | Three Months Ended Sep 30, 2024 (Millions of USD) | Nine Months Ended Sep 30, 2025 (Millions of USD) | Nine Months Ended Sep 30, 2024 (Millions of USD) | | :----------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Noninterest income (GAAP) | $699 | $650 | $2,012 | $1,916 | | Impact of notable items (pre-tax) | $(181) | $(176) | $(502) | $(485) | | Adjusted noninterest income (non-GAAP) | $518 | $474 | $1,510 | $1,431 | | Noninterest expense (GAAP) | $1,491 | $1,456 | $4,484 | $4,218 | | Impact of notable items (pre-tax) | $(212) | $(227) | $(649) | $(667) | | Adjusted noninterest expense (non-GAAP) | $1,279 | $1,229 | $3,835 | $3,551 | - Adjusted noninterest income for Q3 2025 was **$518 million**, after a **$(181) million** impact from notable items[18](index=18&type=chunk) - Adjusted noninterest expense for Q3 2025 was **$1,279 million**, after a **$(212) million** impact from notable items[18](index=18&type=chunk) [PPNR Reconciliations](index=10&type=section&id=PPNR%20Reconciliations) Pre-tax, pre-provision net revenue (PPNR) and adjusted PPNR are presented as non-GAAP measures. Both PPNR and adjusted PPNR declined year-over-year, indicating a reduction in core operating profitability before credit losses and taxes | Metric | Three Months Ended Sep 30, 2025 (Millions of USD) | Three Months Ended Sep 30, 2024 (Millions of USD) | Nine Months Ended Sep 30, 2025 (Millions of USD) | Nine Months Ended Sep 30, 2024 (Millions of USD) | | :----------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | PPNR (non-GAAP) | $942 | $990 | $2,620 | $3,132 | | Impact of notable items | $31 | $51 | $147 | $182 | | Adjusted PPNR (non-GAAP) | $973 | $1,041 | $2,767 | $3,314 | - PPNR decreased by **$48 million (4.85%)** in Q3 2025 compared to Q3 2024, and by **$512 million (16.35%)** for the nine months ended September 30, 2025, year-over-year[18](index=18&type=chunk) - Adjusted PPNR decreased by **$68 million (6.53%)** in Q3 2025 compared to Q3 2024, and by **$547 million (16.51%)** for the nine months ended September 30, 2025, year-over-year[18](index=18&type=chunk) [ROA Reconciliations](index=11&type=section&id=ROA%20Reconciliations) This section reconciles GAAP Return on Average Assets (ROA) to adjusted ROA and PPNR ROA to adjusted PPNR ROA. All ROA metrics showed a year-over-year decline, reflecting reduced profitability relative to assets | Metric | Three Months Ended Sep 30, 2025 | Three Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :----------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | ROA (GAAP) | 0.98 % | 1.15 % | 0.95 % | 1.27 % | | Adjusted ROA (non-GAAP) | 1.01 % | 1.22 % | 1.01 % | 1.35 % | | PPNR ROA (non-GAAP) | 1.62 % | 1.79 % | 1.54 % | 1.91 % | | Adjusted PPNR ROA (non-GAAP) | 1.67 % | 1.88 % | 1.62 % | 2.03 % | - Adjusted ROA decreased from **1.22%** in Q3 2024 to **1.01%** in Q3 2025[20](index=20&type=chunk) - Adjusted PPNR ROA decreased from **1.88%** in Q3 2024 to **1.67%** in Q3 2025[20](index=20&type=chunk) [ROE and ROTCE Reconciliations](index=11&type=section&id=ROE%20and%20ROTCE%20Reconciliations) This section reconciles GAAP Return on Average Common Equity (ROE) and Return on Average Tangible Common Equity (ROTCE) to their adjusted non-GAAP counterparts. All equity-based profitability metrics showed a year-over-year decline, reflecting reduced returns to common shareholders | Metric | Three Months Ended Sep 30, 2025 | Three Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :----------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | ROE (GAAP) | 10.26 % | 11.30 % | 9.82 % | 12.73 % | | Adjusted ROE (non-GAAP) | 10.62 % | 11.94 % | 10.43 % | 13.59 % | | ROTCE (non-GAAP) | 10.53 % | 11.63 % | 10.09 % | 13.12 % | | Adjusted ROTCE (non-GAAP) | 10.91 % | 12.29 % | 10.71 % | 14.00 % | - Adjusted ROE decreased from **11.94%** in Q3 2024 to **10.62%** in Q3 2025[20](index=20&type=chunk) - Adjusted ROTCE decreased from **12.29%** in Q3 2024 to **10.91%** in Q3 2025[20](index=20&type=chunk) [Tangible Common Equity to Tangible Assets](index=11&type=section&id=Tangible%20Common%20Equity%20to%20Tangible%20Assets) The ratio of tangible common equity to tangible assets, a non-GAAP measure of capital strength, decreased year-over-year, indicating a slight reduction in the company's tangible capital base relative to its tangible assets | Metric | Sep 30, 2025 (Millions of USD) | Jun 30, 2025 (Millions of USD) | Sep 30, 2024 (Millions of USD) | | :----------------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Tangible common equity (non-GAAP) | $20,551 | $20,848 | $21,336 | | Total assets (GAAP) | $233,488 | $229,653 | $220,567 | | Tangible assets (non-GAAP) | $232,934 | $229,086 | $219,956 | | Tangible common equity to tangible assets (non-GAAP) | 8.82 % | 9.10 % | 9.70 % | - Tangible common equity to tangible assets decreased from **9.70%** in Q3 2024 to **8.82%** in Q3 2025[20](index=20&type=chunk) [Book Value and Tangible Book Value Per Common Share](index=12&type=section&id=Book%20Value%20and%20Tangible%20Book%20Value%20Per%20Common%20Share) Both book value per share and tangible book value per common share increased year-over-year, reflecting growth in equity attributable to common shareholders despite the overall decline in total stockholders' equity | Metric | Sep 30, 2025 | Jun 30, 2025 | Sep 30, 2024 | | :----------------------------------- | :----------- | :----------- | :----------- | | Book value per share | $1,672.54 | $1,637.72 | $1,547.81 | | Tangible book value per common share (non-GAAP) | $1,628.64 | $1,594.38 | $1,504.75 | - Book value per share increased by **$124.73 (8.06%)** year-over-year to **$1,672.54**[21](index=21&type=chunk) - Tangible book value per common share increased by **$123.89 (8.23%)** year-over-year to **$1,628.64**[21](index=21&type=chunk) [Efficiency Ratio Reconciliations](index=12&type=section&id=Efficiency%20Ratio%20Reconciliations) The efficiency ratio and adjusted efficiency ratio both worsened year-over-year, indicating that the company is incurring more expenses relative to its revenue, even after accounting for notable items | Metric | Three Months Ended Sep 30, 2025 | Three Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :----------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Efficiency ratio (GAAP) | 61.27 % | 59.49 % | 63.12 % | 57.38 % | | Adjusted efficiency ratio (non-GAAP) | 56.78 % | 54.15 % | 58.08 % | 51.72 % | - The GAAP efficiency ratio increased from **59.49%** in Q3 2024 to **61.27%** in Q3 2025[21](index=21&type=chunk) - The adjusted efficiency ratio increased from **54.15%** in Q3 2024 to **56.78%** in Q3 2025[21](index=21&type=chunk) [Rental Income on Operating Lease Equipment Reconciliations](index=12&type=section&id=Rental%20Income%20on%20Operating%20Lease%20Equipment%20Reconciliations) This section reconciles GAAP rental income on operating lease equipment to an adjusted non-GAAP figure by deducting direct expenses like depreciation and maintenance. Adjusted rental income showed a slight increase year-over-year | Metric | Three Months Ended Sep 30, 2025 (Millions of USD) | Three Months Ended Sep 30, 2024 (Millions of USD) | Nine Months Ended Sep 30, 2025 (Millions of USD) | Nine Months Ended Sep 30, 2024 (Millions of USD) | | :----------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Rental income on operating lease equipment (GAAP) | $273 | $262 | $815 | $776 | | Less: depreciation on operating lease equipment | $98 | $99 | $296 | $293 | | Less: maintenance and other operating lease expenses | $67 | $59 | $180 | $164 | | Adjusted rental income on operating lease equipment (non-GAAP) | $108 | $104 | $339 | $319 | - Adjusted rental income on operating lease equipment increased by **$4 million (3.85%)** in Q3 2025 compared to Q3 2024[21](index=21&type=chunk) [Net Interest Income & Net Interest Margin Reconciliations](index=12&type=section&id=Net%20Interest%20Income%20%26%20Net%20Interest%20Margin%20Reconciliations) This section reconciles GAAP net interest income and net interest margin to figures excluding purchase accounting accretion (PAA). Both adjusted metrics showed a year-over-year decline, indicating a compression in core net interest profitability | Metric | Three Months Ended Sep 30, 2025 (Millions of USD) | Three Months Ended Sep 30, 2024 (Millions of USD) | Nine Months Ended Sep 30, 2025 (Millions of USD) | Nine Months Ended Sep 30, 2024 (Millions of USD) | | :----------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Net interest income (GAAP) | $1,734 | $1,796 | $5,092 | $5,434 | | PAA | $61 | $101 | $202 | $399 | | Net interest income, excluding PAA (non-GAAP) | $1,673 | $1,695 | $4,890 | $5,035 | | NIM (GAAP) | 3.26 % | 3.53 % | 3.26 % | 3.62 % | | NIM, excluding PAA (non-GAAP) | 3.15 % | 3.33 % | 3.13 % | 3.35 % | - Net interest income, excluding PAA, decreased by **$22 million (1.30%)** in Q3 2025 compared to Q3 2024[21](index=21&type=chunk) - NIM, excluding PAA, decreased from **3.33%** in Q3 2024 to **3.15%** in Q3 2025[21](index=21&type=chunk) [Income Tax Expense Reconciliations](index=12&type=section&id=Income%20Tax%20Expense%20Reconciliations) This section reconciles GAAP income tax expense to adjusted income tax expense by including the tax impact of notable items. Adjusted income tax expense is generally higher than GAAP due to the positive impact of notable items on pre-tax income | Metric | Three Months Ended Sep 30, 2025 (Millions of USD) | Three Months Ended Sep 30, 2024 (Millions of USD) | Nine Months Ended Sep 30, 2025 (Millions of USD) | Nine Months Ended Sep 30, 2024 (Millions of USD) | | :----------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Income tax expense (GAAP) | $183 | $234 | $534 | $779 | | Impact of notable items | $12 | $15 | $51 | $45 | | Adjusted income tax expense (non-GAAP) | $195 | $249 | $585 | $824 | - Adjusted income tax expense for Q3 2025 was **$195 million**, **$12 million** higher than GAAP income tax expense[21](index=21&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ____________________________________________________ FORM 10-Q ____________________________________________________ (I.R.S. Employer ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended June 30, 2025 Identification Number) or ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Commission File Number: 001-16715 First Citizens BancSh ...

[Summary Financial Data & Key Metrics](index=1&type=section&id=Summary%20Financial%20Data%20%26%20Key%20Metrics) This section summarizes key financial data, per share information, performance metrics, balance sheet items, capital ratios, and asset quality [Results of Operations](index=1&type=section&id=Results%20of%20Operations) The company's net interest income, net income, and pre-tax, pre-provision net revenue (PPNR) showed a decline in Q2 2025 compared to Q2 2024, both on a GAAP and adjusted basis, while provision for credit losses increased | Metric (Dollars in millions) | June 30, 2025 (3 Months) | March 31, 2025 (3 Months) | June 30, 2024 (3 Months) | June 30, 2025 (6 Months) | June 30, 2024 (6 Months) | | :--------------------------------- | :----------------------- | :------------------------ | :----------------------- | :----------------------- | :----------------------- | | Net interest income | $1,695 | $1,663 | $1,821 | $3,358 | $3,638 | | Provision for credit losses | $115 | $154 | $95 | $269 | $159 | | Net income | $575 | $483 | $707 | $1,058 | $1,438 | | Net income available to common stockholders | $561 | $468 | $691 | $1,029 | $1,407 | | Adjusted net income available to common stockholders | $593 | $513 | $739 | $1,106 | $1,508 | | Pre-tax, pre-provision net revenue (PPNR) | $873 | $805 | $1,074 | $1,678 | $2,142 | | Adjusted PPNR | $929 | $865 | $1,132 | $1,794 | $2,273 | [Per Share Information](index=1&type=section&id=Per%20Share%20Information) Diluted EPS and adjusted diluted EPS decreased significantly year-over-year for both the three and six-month periods ending June 30, 2025, while book value and tangible book value per common share showed an increase compared to June 30, 2024 | Metric | June 30, 2025 (3 Months) | March 31, 2025 (3 Months) | June 30, 2024 (3 Months) | June 30, 2025 (6 Months) | June 30, 2024 (6 Months) | | :--------------------------------- | :----------------------- | :------------------------ | :----------------------- | :----------------------- | :----------------------- | | Diluted earnings per common share (EPS) | $42.36 | $34.47 | $47.54 | $76.73 | $96.80 | | Adjusted diluted EPS | $44.78 | $37.79 | $50.87 | $82.48 | $103.79 | | Book value per common share at period end | $1,637.72 | $1,596.30 | $1,487.00 | | | | Tangible book value per common share (TBV) at period end | $1,594.38 | $1,553.06 | $1,443.92 | | | [Key Performance Metrics](index=1&type=section&id=Key%20Performance%20Metrics) Profitability ratios (ROA, ROE, ROTCE) and Net Interest Margin (NIM) declined year-over-year for Q2 2025, while the efficiency ratio worsened, indicating higher expenses relative to revenue | Metric | June 30, 2025 (3 Months) | March 31, 2025 (3 Months) | June 30, 2024 (3 Months) | June 30, 2025 (6 Months) | June 30, 2024 (6 Months) | | :--------------------------------- | :----------------------- | :------------------------ | :----------------------- | :----------------------- | :----------------------- | | Return on average assets (ROA) | 1.01 % | 0.87 % | 1.30 % | 0.94 % | 1.33 % | | Adjusted ROA | 1.07 % | 0.95 % | 1.39 % | 1.01 % | 1.42 % | | Return on average common equity (ROE) | 10.41 % | 8.79 % | 13.13 % | 9.61 % | 13.54 % | | Adjusted ROE | 11.00 % | 9.64 % | 14.05 % | 10.33 % | 14.52 % | | Efficiency ratio | 63.22 % | 64.97 % | 56.36 % | 64.08 % | 56.33 % | | Adjusted efficiency ratio | 57.92 % | 59.62 % | 50.77 % | 58.75 % | 50.53 % | | Net interest margin (NIM) | 3.26 % | 3.26 % | 3.64 % | 3.26 % | 3.66 % | [Select Balance Sheet Items](index=1&type=section&id=Select%20Balance%20Sheet%20Items) Total loans and leases remained relatively stable quarter-over-quarter but increased year-over-year, while total deposits grew. The loan to deposit ratio decreased, and noninterest-bearing deposits as a percentage of total deposits slightly declined | Metric (Dollars in millions) | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :--------------------------------- | :------------ | :------------- | :------------ | | Total investment securities | $43,346 | $44,319 | $37,666 | | Total loans and leases | $141,269 | $141,358 | $139,341 | | Total deposits | $159,935 | $159,325 | $151,079 | | Total borrowings | $38,112 | $38,406 | $37,458 | | Loan to deposit ratio | 88.33 % | 88.72 % | 92.23 % | | Noninterest-bearing deposits to total deposits | 25.56 % | 25.59 % | 26.49 % | [Capital Ratios](index=1&type=section&id=Capital%20Ratios) Capital ratios, including Total risk-based, Tier 1, Common equity Tier 1, and Tier 1 leverage, all decreased as of June 30, 2025, compared to both the previous quarter and the prior year | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :--------------------------------- | :------------ | :------------- | :------------ | | Total risk-based capital ratio | 14.25 % | 15.23 % | 15.45 % | | Tier 1 risk-based capital ratio | 12.63 % | 13.35 % | 13.87 % | | Common equity Tier 1 ratio | 12.12 % | 12.81 % | 13.33 % | | Tier 1 leverage capital ratio | 9.64 % | 9.75 % | 10.29 % | - Capital ratios as of the current quarter-end are preliminary pending completion of quarterly regulatory filings[1](index=1&type=chunk) [Asset Quality](index=1&type=section&id=Asset%20Quality) Asset quality metrics showed a slight deterioration, with nonaccrual loans to total loans and leases increasing, while the allowance for loan and lease losses (ALLL) to loans and leases decreased year-over-year | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :--------------------------------- | :------------ | :------------- | :------------ | | Nonaccrual loans to total loans and leases | 0.93 % | 0.85 % | 0.82 % | | Allowance for loan and lease losses (ALLL) to loans and leases | 1.18 % | 1.19 % | 1.22 % | | Net charge-off ratio for the period | 0.33 % | 0.41 % | 0.38 % | [GAAP Financial Statements](index=2&type=section&id=GAAP%20Financial%20Statements) This section presents the company's unaudited GAAP income statement and balance sheet, detailing financial performance and position for recent periods [Income Statement (Unaudited)](index=2&type=section&id=Income%20Statement%20(Unaudited)) The unaudited income statement for Q2 2025 shows a decrease in total interest income and net interest income compared to Q2 2024, alongside an increase in noninterest expense, leading to lower net income | Metric (Dollars in millions) | June 30, 2025 (3 Months) | March 31, 2025 (3 Months) | June 30, 2024 (3 Months) | June 30, 2025 (6 Months) | June 30, 2024 (6 Months) | | :--------------------------------- | :----------------------- | :------------------------ | :----------------------- | :----------------------- | :----------------------- | | Total interest income | $2,945 | $2,895 | $3,130 | $5,840 | $6,214 | | Total interest expense | $1,250 | $1,232 | $1,309 | $2,482 | $2,576 | | Net interest income | $1,695 | $1,663 | $1,821 | $3,358 | $3,638 | | Provision for credit losses | $115 | $154 | $95 | $269 | $159 | | Total noninterest income | $678 | $635 | $639 | $1,313 | $1,266 | | Total noninterest expense | $1,500 | $1,493 | $1,386 | $2,993 | $2,762 | | Net income | $575 | $483 | $707 | $1,058 | $1,438 | | Diluted earnings per common share | $42.36 | $34.47 | $47.54 | $76.73 | $96.80 | [Balance Sheet (Unaudited)](index=3&type=section&id=Balance%20Sheet%20(Unaudited)) The unaudited balance sheet as of June 30, 2025, shows an increase in total assets and total deposits compared to June 30, 2024, while total stockholders' equity slightly decreased | Metric (Dollars in millions) | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :--------------------------------- | :------------ | :------------- | :------------ | | Total assets | $229,653 | $228,822 | $219,827 | | Loans and leases, net of allowance for loan and lease losses | $139,597 | $139,678 | $137,641 | | Total deposits | $159,935 | $159,325 | $151,079 | | Total liabilities | $207,357 | $206,527 | $197,340 | | Total stockholders' equity | $22,296 | $22,295 | $22,487 | [Notable Items and Adjustments](index=4&type=section&id=Notable%20Items%20and%20Adjustments) This section defines notable items as non-GAAP adjustments and explains their specific impact on financial performance metrics [Definition and Impact of Notable Items](index=4&type=section&id=Definition%20and%20Impact%20of%20Notable%20Items) Notable items are non-GAAP adjustments for infrequent transactions and certain recurring noncash items, which management excludes to provide a clearer view of operational performance and comparability. These adjustments had a positive impact on adjusted net income and diluted EPS across all periods presented - Notable items include income and expense for infrequent transactions and certain recurring items (typically noncash) that management believes should be excluded from adjusted measures (non-GAAP) to enhance understanding of operations and comparability to historical periods[4](index=4&type=chunk) | Metric | June 30, 2025 (3 Months) | March 31, 2025 (3 Months) | June 30, 2024 (3 Months) | June 30, 2025 (6 Months) | June 30, 2024 (6 Months) | | :--------------------------------- | :----------------------- | :------------------------ | :----------------------- | :----------------------- | :----------------------- | | Impact of notable items on adjusted net income | $32 | $45 | $48 | $77 | $101 | | Impact of notable items on adjusted diluted EPS | $2.42 | $3.32 | $3.33 | $5.75 | $6.99 | [Specific Notable Item Explanations](index=4&type=section&id=Specific%20Notable%20Item%20Explanations) Specific notable items include adjustments for operating lease expenses, a litigation settlement gain, integration-related professional fees, and various accruals, impairments, and litigation reserve changes - Depreciation and maintenance and other operating lease expenses are deducted from rental income on operating lease equipment to calculate adjusted rental income (non-GAAP), with no net impact to earnings as adjusted noninterest income and expense are reduced by the same amount[5](index=5&type=chunk) - Other noninterest income for 1Q24 included a gain on settlement of litigation[5](index=5&type=chunk) - Professional fees included expenses related to integration activities in 1Q24 and 2Q24[6](index=6&type=chunk) - Other noninterest expense included an accrual from a vendor dispute and an increase in litigation reserve in 2Q25, impairment of capitalized software and related projects in 1Q25, as well as litigation reserve releases in 1Q24 and 2Q24[6](index=6&type=chunk) [Adjusted Financial Performance (Non-GAAP)](index=5&type=section&id=Adjusted%20Financial%20Performance%20(Non-GAAP)) This section presents the company's financial performance adjusted for notable items, providing a non-GAAP view of core operational results [Condensed Income Statements - Adjusted for Notable Items](index=5&type=section&id=Condensed%20Income%20Statements%20-%20Adjusted%20for%20Notable%20Items) The adjusted condensed income statements, excluding notable items, show higher net income and diluted EPS compared to GAAP figures, reflecting management's view of core operational performance. Adjusted net income for Q2 2025 was $607 million, down from $755 million in Q2 2024 | Metric (Dollars in millions) | June 30, 2025 (3 Months) | March 31, 2025 (3 Months) | June 30, 2024 (3 Months) | June 30, 2025 (6 Months) | June 30, 2024 (6 Months) | | :--------------------------------- | :----------------------- | :------------------------ | :----------------------- | :----------------------- | :----------------------- | | Net interest income | $1,695 | $1,663 | $1,821 | $3,358 | $3,638 | | Noninterest income | $513 | $479 | $479 | $992 | $957 | | Noninterest expense | $1,279 | $1,277 | $1,168 | $2,556 | $2,322 | | Net income | $607 | $528 | $755 | $1,135 | $1,539 | | Net income available to common stockholders | $593 | $513 | $739 | $1,106 | $1,508 | | Diluted earnings per common share | $44.78 | $37.79 | $50.87 | $82.48 | $103.79 | [Loan and Deposit Portfolio Analysis](index=6&type=section&id=Loan%20and%20Deposit%20Portfolio%20Analysis) This section analyzes the composition and trends of the company's loan and lease portfolio by class and deposits by type [Loans and Leases by Class](index=6&type=section&id=Loans%20and%20Leases%20by%20Class) The total loan and lease portfolio remained stable quarter-over-quarter but saw a slight increase year-over-year. Commercial loans constitute the majority, with significant growth in commercial construction, while investor dependent loans decreased. Loan classes were recast in Q2 2025 for improved reporting | Loan Class (Dollars in millions) | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :--------------------------------- | :------------ | :------------- | :------------ | | **Commercial** | | | | | Commercial construction | $5,714 | $5,529 | $4,484 | | Owner occupied commercial mortgages | $17,053 | $16,951 | $16,233 | | Non-owner occupied commercial mortgages | $16,100 | $16,139 | $15,580 | | Commercial and industrial | $40,658 | $41,040 | $39,931 | | Leases | $2,028 | $2,022 | $2,049 | | Global fund banking | $28,677 | $28,572 | $28,915 | | Investor dependent | $2,777 | $2,958 | $3,806 | | **Total commercial** | **$113,007** | **$113,211** | **$110,998** | | **Consumer** | | | | | Residential mortgage | $23,059 | $23,060 | $23,101 | | Revolving mortgage | $2,736 | $2,635 | $2,351 | | Consumer auto | $1,490 | $1,487 | $1,503 | | Consumer other | $977 | $965 | $1,388 | | **Total consumer** | **$28,262** | **$28,147** | **$28,343** | | **Total loans and leases** | **$141,269** | **$141,358** | **$139,341** | - During Q2 2025, loan classes were recast, with Global fund banking remaining separate but reported under the Commercial portfolio[9](index=9&type=chunk)[10](index=10&type=chunk) - Investor dependent–early stage and investor dependent–growth stage were combined into a single investor dependent loan class under Commercial[9](index=9&type=chunk)[10](index=10&type=chunk) - Cash flow dependent and innovation C&I were combined with the commercial and industrial loan class under Commercial[9](index=9&type=chunk)[10](index=10&type=chunk) [Deposits by Type](index=6&type=section&id=Deposits%20by%20Type) Total deposits increased to $159.9 billion as of June 30, 2025, from $151.1 billion a year prior. While noninterest-bearing demand deposits remained relatively stable, interest-bearing deposits, particularly money market and savings, saw significant growth, offsetting a decline in time deposits | Deposit Type (Dollars in millions) | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :--------------------------------- | :------------ | :------------- | :------------ | | Noninterest-bearing demand | $40,879 | $40,767 | $40,016 | | Checking with interest | $23,283 | $23,041 | $23,907 | | Money market | $37,654 | $37,705 | $32,641 | | Savings | $46,877 | $45,817 | $39,356 | | Time | $11,242 | $11,995 | $15,159 | | **Total deposits** | **$159,935** | **$159,325** | **$151,079** | [Credit Quality and Allowance for Loan and Lease Losses (ALLL)](index=7&type=section&id=Credit%20Quality%20and%20Allowance%20for%20Loan%20and%20Lease%20Losses%20(ALLL)) This section details the company's credit quality metrics, including nonaccrual loans, net charge-offs, and the allowance for loan and lease losses | Metric (Dollars in millions) | June 30, 2025 (3 Months) | March 31, 2025 (3 Months) | June 30, 2024 (3 Months) | June 30, 2025 (6 Months) | June 30, 2024 (6 Months) | | :--------------------------------- | :----------------------- | :------------------------ | :----------------------- | :----------------------- | :----------------------- | | Nonaccrual loans at period end | $1,319 | $1,206 | $1,141 | | | | Ratio of nonaccrual loans to total loans at period end | 0.93 % | 0.85 % | 0.82 % | | | | Net charge-offs | $(119) | $(144) | $(132) | $(263) | $(235) | | Net charge-off ratio | 0.33 % | 0.41 % | 0.38 % | 0.37 % | 0.35 % | | ALLL to loans ratio at period end | 1.18 % | 1.19 % | 1.22 % | | | | ALLL at end of period | $1,672 | $1,680 | $1,700 | $1,672 | $1,700 | [Net Interest Income and Margin Analysis](index=8&type=section&id=Net%20Interest%20Income%20and%20Margin%20Analysis) This section analyzes the company's net interest income and net interest margin, including average balance sheets, yields, and rates for various periods [Average Balance Sheets, Yields and Rates (Three Months Ended)](index=8&type=section&id=Average%20Balance%20Sheets%2C%20Yields%20and%20Rates%20(Three%20Months%20Ended)) For the three months ended June 30, 2025, net interest income was $1,695 million, with a net interest margin of 3.26%. This represents a decrease in net interest income and margin compared to June 30, 2024, primarily due to lower yields on loans and interest-earning deposits, despite an increase in average interest-earning assets | Metric (Dollars in millions) | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :--------------------------------- | :------------ | :------------- | :------------ | | Average Loans and leases | $140,699 | $139,491 | $135,965 | | Yield on Loans and leases | 6.47 % | 6.49 % | 7.15 % | | Average Total interest-earning assets | $208,175 | $206,028 | $200,705 | | Yield on Total interest-earning assets | 5.67 % | 5.68 % | 6.26 % | | Average Total interest-bearing liabilities | $156,961 | $154,622 | $148,382 | | Rate on Total interest-bearing liabilities | 3.19 % | 3.22 % | 3.54 % | | Net interest income | $1,695 | $1,663 | $1,821 | | Net interest spread | 2.48 % | 2.46 % | 2.72 % | | Net interest margin | 3.26 % | 3.26 % | 3.64 % | [Average Balance Sheets, Yields and Rates (Six Months Ended)](index=9&type=section&id=Average%20Balance%20Sheets%2C%20Yields%20and%20Rates%20(Six%20Months%20Ended)) For the six months ended June 30, 2025, net interest income was $3,358 million, with a net interest margin of 3.26%. This indicates a decline in both net interest income and margin compared to the same period in 2024, driven by lower yields on interest-earning assets | Metric (Dollars in millions) | June 30, 2025 | June 30, 2024 | | :--------------------------------- | :------------ | :------------ | | Average Loans and leases | $140,099 | $134,139 | | Yield on Loans and leases | 6.48 % | 7.15 % | | Average Total interest-earning assets | $207,108 | $199,646 | | Yield on Total interest-earning assets | 5.67 % | 6.25 % | | Average Total interest-bearing liabilities | $155,798 | $147,012 | | Rate on Total interest-bearing liabilities | 3.20 % | 3.52 % | | Net interest income | $3,358 | $3,638 | | Net interest spread | 2.47 % | 2.73 % | | Net interest margin | 3.26 % | 3.66 % | [Non-GAAP Reconciliations](index=10&type=section&id=Non-GAAP%20Reconciliations) This section provides detailed reconciliations of GAAP financial measures to their corresponding non-GAAP adjusted counterparts [Net Income and EPS Reconciliation](index=10&type=section&id=Net%20Income%20and%20EPS%20Reconciliation) This section reconciles GAAP net income and EPS to their adjusted non-GAAP counterparts by adding back the after-tax impact of notable items. For Q2 2025, adjusted net income was $607 million, and adjusted diluted EPS was $44.78 | Metric (Dollars in millions) | June 30, 2025 (3 Months) | March 31, 2025 (3 Months) | June 30, 2024 (3 Months) | June 30, 2025 (6 Months) | June 30, 2024 (6 Months) | | :--------------------------------- | :----------------------- | :------------------------ | :----------------------- | :----------------------- | :----------------------- | | Net income (GAAP) | $575 | $483 | $707 | $1,058 | $1,438 | | Net income available to common stockholders (GAAP) | $561 | $468 | $691 | $1,029 | $1,407 | | Total notable items, after income tax | $32 | $45 | $48 | $77 | $101 | | Adjusted net income (non-GAAP) | $607 | $528 | $755 | $1,135 | $1,539 | | Adjusted net income available to common stockholders (non-GAAP) | $593 | $513 | $739 | $1,106 | $1,508 | | Diluted EPS (GAAP) | $42.36 | $34.47 | $47.54 | $76.73 | $96.80 | | Adjusted diluted EPS (non-GAAP) | $44.78 | $37.79 | $50.87 | $82.48 | $103.79 | [Noninterest Income and Expense Reconciliation](index=10&type=section&id=Noninterest%20Income%20and%20Expense%20Reconciliation) This reconciliation adjusts GAAP noninterest income and expense by removing the pre-tax impact of notable items. For Q2 2025, adjusted noninterest income was $513 million, and adjusted noninterest expense was $1,279 million | Metric (Dollars in millions) | June 30, 2025 (3 Months) | March 31, 2025 (3 Months) | June 30, 2024 (3 Months) | June 30, 2025 (6 Months) | June 30, 2024 (6 Months) | | :--------------------------------- | :----------------------- | :------------------------ | :----------------------- | :----------------------- | :----------------------- | | Noninterest income (GAAP) | $678 | $635 | $639 | $1,313 | $1,266 | | Impact of notable items, before income tax | $(165) | $(156) | $(160) | $(321) | $(309) | | Adjusted noninterest income (non-GAAP) | $513 | $479 | $479 | $992 | $957 | | Noninterest expense (GAAP) | $1,500 | $1,493 | $1,386 | $2,993 | $2,762 | | Impact of notable items, before income tax | $(221) | $(216) | $(218) | $(437) | $(440) | | Adjusted noninterest expense (non-GAAP) | $1,279 | $1,277 | $1,168 | $2,556 | $2,322 | [PPNR Reconciliation](index=10&type=section&id=PPNR%20Reconciliation) This section reconciles GAAP net income to Pre-Tax, Pre-Provision Net Revenue (PPNR) and Adjusted PPNR by adding back provision for credit losses and income tax expense, and then adjusting for notable items. For Q2 2025, PPNR was $873 million, and Adjusted PPNR was $929 million | Metric (Dollars in millions) | June 30, 2025 (3 Months) | March 31, 2025 (3 Months) | June 30, 2024 (3 Months) | June 30, 2025 (6 Months) | June 30, 2024 (6 Months) | | :--------------------------------- | :----------------------- | :------------------------ | :----------------------- | :----------------------- | :----------------------- | | Net income (GAAP) | $575 | $483 | $707 | $1,058 | $1,438 | | Plus: provision for credit losses | $115 | $154 | $95 | $269 | $159 | | Plus: income tax expense | $183 | $168 | $272 | $351 | $545 | | PPNR (non-GAAP) | $873 | $805 | $1,074 | $1,678 | $2,142 | | Impact of notable items | $56 | $60 | $58 | $116 | $131 | | Adjusted PPNR (non-GAAP) | $929 | $865 | $1,132 | $1,794 | $2,273 | [ROA Reconciliation](index=11&type=section&id=ROA%20Reconciliation) This section reconciles GAAP Return on Average Assets (ROA) to Adjusted ROA by incorporating the impact of notable items on net income. For Q2 2025, GAAP ROA was 1.01%, while Adjusted ROA was 1.07% | Metric | June 30, 2025 (3 Months) | March 31, 2025 (3 Months) | June 30, 2024 (3 Months) | June 30, 2025 (6 Months) | June 30, 2024 (6 Months) | | :--------------------------------- | :----------------------- | :------------------------ | :----------------------- | :----------------------- | :----------------------- | | ROA (GAAP) | 1.01 % | 0.87 % | 1.30 % | 0.94 % | 1.33 % | | Adjusted ROA (non-GAAP) | 1.07 % | 0.95 % | 1.39 % | 1.01 % | 1.42 % | [PPNR ROA Reconciliation](index=11&type=section&id=PPNR%20ROA%20Reconciliation) This section reconciles PPNR ROA to Adjusted PPNR ROA, reflecting the impact of notable items on PPNR. For Q2 2025, PPNR ROA was 1.54%, and Adjusted PPNR ROA was 1.64% | Metric | June 30, 2025 (3 Months) | March 31, 2025 (3 Months) | June 30, 2024 (3 Months) | June 30, 2025 (6 Months) | June 30, 2024 (6 Months) | | :--------------------------------- | :----------------------- | :------------------------ | :----------------------- | :----------------------- | :----------------------- | | PPNR ROA (non-GAAP) | 1.54 % | 1.45 % | 1.97 % | 1.49 % | 1.98 % | | Adjusted PPNR ROA (non-GAAP) | 1.64 % | 1.56 % | 2.08 % | 1.60 % | 2.10 % | [ROE and ROTCE Reconciliation](index=11&type=section&id=ROE%20and%20ROTCE%20Reconciliation) This section reconciles GAAP Return on Average Common Equity (ROE) to Adjusted ROE, and Return on Average Tangible Common Equity (ROTCE) to Adjusted ROTCE, by adjusting for notable items and intangible assets. For Q2 2025, GAAP ROE was 10.41%, Adjusted ROE was 11.00%, ROTCE was 10.69%, and Adjusted ROTCE was 11.30% | Metric | June 30, 2025 (3 Months) | March 31, 2025 (3 Months) | June 30, 2024 (3 Months) | June 30, 2025 (6 Months) | June 30, 2024 (6 Months) | | :--------------------------------- | :----------------------- | :------------------------ | :----------------------- | :----------------------- | :----------------------- | | ROE (GAAP) | 10.41 % | 8.79 % | 13.13 % | 9.61 % | 13.54 % | | Adjusted ROE (non-GAAP) | 11.00 % | 9.64 % | 14.05 % | 10.33 % | 14.52 % | | ROTCE (non-GAAP) | 10.69 % | 9.04 % | 13.53 % | 9.87 % | 13.97 % | | Adjusted ROTCE (non-GAAP) | 11.30 % | 9.91 % | 14.48 % | 10.61 % | 14.98 % | [Tangible Common Equity to Tangible Assets Reconciliation](index=11&type=section&id=Tangible%20Common%20Equity%20to%20Tangible%20Assets%20Reconciliation) This section reconciles GAAP total equity to total assets to the non-GAAP tangible common equity to tangible assets ratio by excluding preferred stock, goodwill, and other intangible assets. As of June 30, 2025, the tangible common equity to tangible assets ratio was 9.10% | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :--------------------------------- | :------------ | :------------- | :------------ | | Total equity to total assets (GAAP) | 9.71 % | 9.74 % | 10.23 % | | Tangible common equity to tangible assets (non-GAAP) | 9.10 % | 9.13 % | 9.57 % | [Book Value and Tangible Book Value Per Common Share Reconciliation](index=12&type=section&id=Book%20Value%20and%20Tangible%20Book%20Value%20Per%20Common%20Share%20Reconciliation) This section reconciles GAAP book value per common share to non-GAAP tangible book value per common share by excluding goodwill and other intangible assets. As of June 30, 2025, book value per share was $1,637.72, and tangible book value per common share was $1,594.38 | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :--------------------------------- | :------------ | :------------- | :------------ | | Book value per share | $1,637.72 | $1,596.30 | $1,487.00 | | Tangible book value per common share (non-GAAP) | $1,594.38 | $1,553.06 | $1,443.92 | [Efficiency Ratio Reconciliation](index=12&type=section&id=Efficiency%20Ratio%20Reconciliation) This section reconciles the GAAP efficiency ratio to the adjusted efficiency ratio by excluding the impact of notable items from noninterest expense and noninterest income. For Q2 2025, the GAAP efficiency ratio was 63.22%, while the adjusted efficiency ratio was 57.92% | Metric | June 30, 2025 (3 Months) | March 31, 2025 (3 Months) | June 30, 2024 (3 Months) | June 30, 2025 (6 Months) | June 30, 2024 (6 Months) | | :--------------------------------- | :----------------------- | :------------------------ | :----------------------- | :----------------------- | :----------------------- | | Efficiency ratio (GAAP) | 63.22 % | 64.97 % | 56.36 % | 64.08 % | 56.33 % | | Adjusted efficiency ratio (non-GAAP) | 57.92 % | 59.62 % | 50.77 % | 58.75 % | 50.53 % | [Rental Income on Operating Lease Equipment Reconciliation](index=12&type=section&id=Rental%20Income%20on%20Operating%20Lease%20Equipment%20Reconciliation) This section reconciles GAAP rental income on operating lease equipment to an adjusted non-GAAP measure by deducting direct expenses such as depreciation and maintenance. For Q2 2025, adjusted rental income on operating lease equipment was $117 million | Metric (Dollars in millions) | June 30, 2025 (3 Months) | March 31, 2025 (3 Months) | June 30, 2024 (3 Months) | June 30, 2025 (6 Months) | June 30, 2024 (6 Months) | | :--------------------------------- | :----------------------- | :------------------------ | :----------------------- | :----------------------- | :----------------------- | | Rental income on operating lease equipment (GAAP) | $272 | $270 | $259 | $542 | $514 | | Less: depreciation on operating lease equipment | $100 | $98 | $98 | $198 | $194 | | Less: maintenance and other operating lease expenses | $55 | $58 | $60 | $113 | $105 | | Adjusted rental income on operating lease equipment (non-GAAP) | $117 | $114 | $101 | $231 | $215 | [Net Interest Income & Net Interest Margin Reconciliation](index=12&type=section&id=Net%20Interest%20Income%20%26%20Net%20Interest%20Margin%20Reconciliation) This section reconciles GAAP net interest income and net interest margin to non-GAAP measures by excluding the impact of purchase accounting accretion (PAA). For Q2 2025, net interest income excluding PAA was $1,629 million, and NIM excluding PAA was 3.14% | Metric (Dollars in millions) | June 30, 2025 (3 Months) | March 31, 2025 (3 Months) | June 30, 2024 (3 Months) | June 30, 2025 (6 Months) | June 30, 2024 (6 Months) | | :--------------------------------- | :----------------------- | :------------------------ | :----------------------- | :----------------------- | :----------------------- | | Net interest income (GAAP) | $1,695 | $1,663 | $1,821 | $3,358 | $3,638 | | PAA | $66 | $75 | $140 | $142 | $298 | | Net interest income, excluding PAA (non-GAAP) | $1,629 | $1,588 | $1,681 | $3,216 | $3,340 | | NIM (GAAP) | 3.26 % | 3.26 % | 3.64 % | 3.26 % | 3.66 % | | NIM, excluding PAA (non-GAAP) | 3.14 % | 3.12 % | 3.36 % | 3.13 % | 3.36 % | [Interest Income on Loans Reconciliation](index=12&type=section&id=Interest%20Income%20on%20Loans%20Reconciliation) This section reconciles GAAP interest income on loans to a non-GAAP measure by excluding loan purchase accounting accretion (PAA). For Q2 2025, interest income on loans excluding loan PAA was $2,195 million | Metric (Dollars in millions) | June 30, 2025 (3 Months) | March 31, 2025 (3 Months) | June 30, 2024 (3 Months) | June 30, 2025 (6 Months) | June 30, 2024 (6 Months) | | :--------------------------------- | :----------------------- | :------------------------ | :----------------------- | :----------------------- | :----------------------- | | Interest income on loans (GAAP) | $2,270 | $2,236 | $2,422 | $4,506 | $4,776 | | Less: loan PAA | $75 | $84 | $145 | $159 | $308 | | Interest income on loans, excluding loan PAA (non-GAAP) | $2,195 | $2,152 | $2,277 | $4,347 | $4,468 | [Income Tax Expense Reconciliation](index=12&type=section&id=Income%20Tax%20Expense%20Reconciliation) This section reconciles GAAP income tax expense to adjusted income tax expense by accounting for the impact of notable items. For Q2 2025, GAAP income tax expense was $183 million, and adjusted income tax expense was $207 million | Metric (Dollars in millions) | June 30, 2025 (3 Months) | March 31, 2025 (3 Months) | June 30, 2024 (3 Months) | June 30, 2025 (6 Months) | June 30, 2024 (6 Months) | | :--------------------------------- | :----------------------- | :------------------------ | :----------------------- | :----------------------- | :----------------------- | | Income tax expense (GAAP) | $183 | $168 | $272 | $351 | $545 | | Impact of notable items | $24 | $15 | $10 | $39 | $30 | | Adjusted income tax expense (non-GAAP) | $207 | $183 | $282 | $390 | $575 |

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ____________________________________________________ FORM 10-Q ____________________________________________________ ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 31, 2025 or ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Commission File Number: 001-16715 First Citizens BancShares, Inc. (Exact name of Registrant as ...

[Executive Summary & Key Financial Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Key%20Financial%20Highlights) [Summary Financial Data & Key Metrics](index=1&type=section&id=Summary%20Financial%20Data%20%26%20Key%20Metrics) This section provides a high-level overview of the company's financial performance and key metrics for the three months ended March 31, 2025, compared to prior periods, covering results of operations, per share data, key performance ratios, select balance sheet items, capital ratios, and asset quality Key Financial Results (Three Months Ended) | Metric | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :----------------------------------- | :------------- | :---------------- | :------------- | | Net interest income (Billions USD) | $1.663 | $1.709 | $1.817 | | Provision for credit losses (Millions USD) | $154 | $155 | $64 | | Net income available to common stockholders (Millions USD) | $468 | $685 | $716 | | Diluted earnings per common share (EPS) | $34.47 | $49.21 | $49.26 | | Return on average assets (ROA) | 0.87 % | 1.25 % | 1.36 % | | Net interest margin (NIM) | 3.26 % | 3.32 % | 3.67 % | Select Balance Sheet Items at Period End | Metric | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :-------------------------- | :------------- | :---------------- | :------------- | | Total loans and leases (Billions USD) | $141.358 | $140.221 | $135.370 | | Total deposits (Billions USD) | $159.325 | $155.229 | $149.609 | | Total risk-based capital ratio | 15.23 % | 15.04 % | 15.66 % | | Nonaccrual loans to total loans and leases | 0.85 % | 0.84 % | 0.79 % | [Detailed Financial Statements](index=2&type=section&id=Detailed%20Financial%20Statements) [Income Statement (Unaudited)](index=2&type=section&id=Income%20Statement%20(unaudited)) This section presents the unaudited income statement for the three months ended March 31, 2025, December 31, 2024, and March 31, 2024, detailing interest income and expense, noninterest income and expense, provision for credit losses, and net income Income Statement Highlights (Three Months Ended) | Metric | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :----------------------------------- | :------------- | :---------------- | :------------- | | Total interest income (Billions USD) | $2.895 | $3.001 | $3.084 | | Total interest expense (Billions USD) | $1.232 | $1.292 | $1.267 | | Net interest income (Billions USD) | $1.663 | $1.709 | $1.817 | | Provision for credit losses (Millions USD) | $154 | $155 | $64 | | Noninterest income (Millions USD) | $635 | $699 | $627 | | Noninterest expense (Billions USD) | $1.493 | $1.517 | $1.376 | | Net income available to common stockholders (Millions USD) | $468 | $685 | $716 | | Diluted earnings per common share | $34.47 | $49.21 | $49.26 | - Net interest income **decreased** by **$46 million** QoQ (**2.7%**) and **$154 million** YoY (**8.5%**)[2](index=2&type=chunk) - Provision for credit losses **remained stable** QoQ but significantly **increased** YoY from **$64 million** to **$154 million**[2](index=2&type=chunk) [Balance Sheet (Unaudited)](index=3&type=section&id=Balance%20Sheet%20(unaudited)) This section provides the unaudited balance sheet as of March 31, 2025, December 31, 2024, and March 31, 2024, outlining assets, liabilities, and stockholders' equity Balance Sheet Highlights (Period End) | Metric | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :----------------------------------- | :------------- | :---------------- | :------------- | | Total assets (Billions USD) | $228.822 | $223.720 | $217.836 | | Loans and leases, net of ALLL (Billions USD) | $139.678 | $138.545 | $133.633 | | Total deposits (Billions USD) | $159.325 | $155.229 | $149.609 | | Noninterest-bearing deposits (Billions USD) | $40.767 | $38.633 | $39.276 | | Total borrowings (Billions USD) | $38.406 | $37.051 | $37.540 | | Total stockholders' equity (Billions USD) | $22.295 | $22.228 | $21.848 | - Total assets **increased** by **$5.1 billion** QoQ (**2.3%**) and **$11 billion** YoY (**5.0%**)[3](index=3&type=chunk) - Total deposits **increased** by **$4.1 billion** QoQ (**2.6%**) and **$9.7 billion** YoY (**6.5%**). Noninterest-bearing deposits saw a QoQ **increase** of **$2.1 billion**[3](index=3&type=chunk) [Average Balance Sheets, Yields and Rates](index=7&type=section&id=Average%20Balance%20Sheets%2C%20Yields%20and%20Rates) This section details the average balance sheets, yields, and rates for interest-earning assets and interest-bearing liabilities for the three months ended March 31, 2025, December 31, 2024, and March 31, 2024, providing insights into net interest spread and net interest margin Average Balances, Yields, and Rates (Three Months Ended) | Metric | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :----------------------------------- | :------------- | :---------------- | :------------- | | Average Loans and leases (Billions USD) | $139.491 | $138.186 | $132.313 | | Yield on Loans and leases | 6.49 % | 6.69 % | 7.15 % | | Average Total interest-earning assets (Billions USD) | $206.028 | $204.779 | $198.587 | | Yield on Total interest-earning assets | 5.68 % | 5.83 % | 6.23 % | | Average Total interest-bearing liabilities (Billions USD) | $154.622 | $151.657 | $145.641 | | Rate on Total interest-bearing liabilities | 3.22 % | 3.39 % | 3.49 % | | Net interest spread | 2.46 % | 2.44 % | 2.74 % | | Net interest margin (NIM) | 3.26 % | 3.32 % | 3.67 % | - The yield on total interest-earning assets **decreased** by **15 basis points** QoQ, while the rate on total interest-bearing liabilities **decreased** by **17 basis points** QoQ[12](index=12&type=chunk) - Net interest margin (NIM) **declined** by **6 basis points** QoQ and **41 basis points** YoY[12](index=12&type=chunk) [Loan, Deposit, and Asset Quality Analysis](index=6&type=section&id=Loan%2C%20Deposit%2C%20and%20Asset%20Quality%20Analysis) [Loans and Leases by Class](index=6&type=section&id=Loans%20and%20Leases%20by%20Class) This section provides a breakdown of the loan and lease portfolio by commercial, consumer, and SVB segments at period end, highlighting changes in composition over time Loans and Leases by Class (End of Period) | Loan Class | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :----------------------------------- | :------------- | :---------------- | :------------- | | Total commercial (Billions USD) | $72.540 | $71.799 | $67.601 | | Total consumer (Billions USD) | $28.147 | $28.228 | $27.923 | | Total SVB (Billions USD) | $40.671 | $40.194 | $39.846 | | Total loans and leases (Billions USD) | $141.358 | $140.221 | $135.370 | - Total loans and leases **increased** by **$1.1 billion** QoQ (**0.8%**) and **$6 billion** YoY (**4.4%**)[11](index=11&type=chunk) - Commercial loans **grew** by **$741 million** QoQ, primarily driven by commercial construction and owner-occupied commercial mortgages. SVB loans also **increased** by **$477 million** QoQ, mainly in global fund banking[11](index=11&type=chunk) [Deposits by Type](index=6&type=section&id=Deposits%20by%20Type) This section details the composition of deposits by type (noninterest-bearing, checking with interest, money market, savings, and time deposits) at period end, showing shifts in funding mix Deposits by Type (End of Period) | Deposit Type | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :----------------------------------- | :------------- | :---------------- | :------------- | | Noninterest-bearing demand (Billions USD) | $40.767 | $38.633 | $39.276 | | Checking with interest (Billions USD) | $23.041 | $25.343 | $24.244 | | Money market (Billions USD) | $37.705 | $35.722 | $31.399 | | Savings (Billions USD) | $45.817 | $42.278 | $37.682 | | Time (Billions USD) | $11.995 | $13.253 | $17.008 | | Total deposits (Billions USD) | $159.325 | $155.229 | $149.609 | - Total deposits **increased** by **$4.1 billion** QoQ, with noninterest-bearing demand deposits **growing** by **$2.1 billion** and savings deposits **increasing** by **$3.5 billion**[11](index=11&type=chunk) - Time deposits continued their downward trend, **decreasing** by **$1.2 billion** QoQ[11](index=11&type=chunk) [Credit Quality and Allowance for Loan and Lease Losses (ALLL)](index=6&type=section&id=Credit%20Quality%20and%20Allowance%20for%20Loan%20and%20Lease%20Losses%20(ALLL)) This section provides key credit quality indicators, including nonaccrual loans, net charge-offs, and the allowance for loan and lease losses (ALLL) ratio, reflecting the health of the loan portfolio Credit Quality Metrics (Three Months Ended) | Metric | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :----------------------------------- | :------------- | :---------------- | :------------- | | Nonaccrual loans at period end (Billions USD) | $1.206 | $1.184 | $1.074 | | Ratio of nonaccrual loans to total loans | 0.85 % | 0.84 % | 0.79 % | | Net charge-offs (Millions USD) | ($144) | ($160) | ($103) | | Net charge-off ratio | 0.41 % | 0.46 % | 0.31 % | | ALLL to loans ratio at period end | 1.19 % | 1.20 % | 1.28 % | | Provision for loan and lease losses (Millions USD) | $148 | $158 | $93 | - Nonaccrual loans **increased** slightly by **$22 million** QoQ, with the ratio to total loans **remaining relatively stable** at **0.85%**[11](index=11&type=chunk) - Net charge-offs **decreased** by **$16 million** QoQ, leading to a **lower** net charge-off ratio of **0.41%**[11](index=11&type=chunk) [Non-GAAP Reconciliations and Adjusted Performance](index=4&type=section&id=Non-GAAP%20Reconciliations%20and%20Adjusted%20Performance) [Notable Items Impact](index=4&type=section&id=Notable%20Items%20Impact) This section explains and quantifies the impact of "Notable Items" on GAAP financial measures, which are excluded from adjusted (non-GAAP) measures to enhance understanding of operations and comparability, including certain recurring noncash items and infrequent transactions Impact of Notable Items on Adjusted Measures (Three Months Ended) | Metric | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :----------------------------------- | :------------- | :---------------- | :------------- | | Impact on adjusted noninterest income (Millions USD) | ($156) | ($183) | ($149) | | Impact on adjusted noninterest expense (Millions USD) | ($216) | ($249) | ($222) | | Impact on adjusted pre-tax income (Millions USD) | $60 | $66 | $73 | | Impact on adjusted net income (Millions USD) | $45 | ($57) | $53 | | Impact on adjusted diluted EPS | $3.32 | ($4.11) | $3.66 | - Notable items primarily include rental income and depreciation on operating lease equipment, acquisition-related expenses, and impairment of capitalized software[4](index=4&type=chunk)[5](index=5&type=chunk)[6](index=6&type=chunk) - The income tax impact for Q4 2024 includes a change in estimated state income tax rates after filing the first income tax returns that included the SVBB Acquisition[7](index=7&type=chunk) [Adjusted Income Statements](index=5&type=section&id=Adjusted%20Income%20Statements) This section presents condensed income statements adjusted for notable items, providing a non-GAAP view of the company's financial performance by excluding specific infrequent or non-cash transactions Adjusted Income Statement Highlights (Three Months Ended) | Metric | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :----------------------------------- | :------------- | :---------------- | :------------- | | Adjusted noninterest income (Millions USD) | $479 | $516 | $478 | | Adjusted noninterest expense (Billions USD) | $1.277 | $1.268 | $1.154 | | Adjusted net income (Millions USD) | $528 | $643 | $784 | | Adjusted net income available to common stockholders (Millions USD) | $513 | $628 | $769 | | Adjusted diluted EPS | $37.79 | $45.10 | $52.92 | - Adjusted net income available to common stockholders **decreased** by **$115 million** QoQ (**18.3%**) and **$256 million** YoY (**33.3%**)[10](index=10&type=chunk) - Adjusted diluted EPS **decreased** by **$7.31** QoQ (**16.2%**) and **$15.13** YoY (**28.6%**)[10](index=10&type=chunk) [Non-GAAP Reconciliations of Key Metrics](index=8&type=section&id=Non-GAAP%20Reconciliations%20of%20Key%20Metrics) This section provides detailed reconciliations of various GAAP financial measures to their corresponding non-GAAP adjusted measures, offering a clearer view of underlying operational performance by excluding the impact of notable items [Net Income and EPS Reconciliation](index=8&type=section&id=Net%20Income%20and%20EPS%20Reconciliation) This sub-section reconciles GAAP net income and EPS to adjusted net income and EPS, showing the impact of notable items on these core profitability metrics Net Income and EPS Reconciliation (Three Months Ended) | Metric | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :----------------------------------- | :------------- | :---------------- | :------------- | | Net income (GAAP) (Millions USD) | $483 | $700 | $731 | | Adjusted net income (non-GAAP) (Millions USD) | $528 | $643 | $784 | | Net income available to common stockholders (GAAP) (Millions USD) | $468 | $685 | $716 | | Adjusted net income available to common stockholders (non-GAAP) (Millions USD) | $513 | $628 | $769 | | Diluted EPS (GAAP) | $34.47 | $49.21 | $49.26 | | Adjusted diluted EPS (non-GAAP) | $37.79 | $45.10 | $52.92 | [Noninterest Income and Expense Reconciliation](index=8&type=section&id=Noninterest%20Income%20and%20Expense%20Reconciliation) This sub-section reconciles GAAP noninterest income and expense to adjusted noninterest income and expense, isolating the effects of notable items Noninterest Income and Expense Reconciliation (Three Months Ended) | Metric | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :----------------------------------- | :------------- | :---------------- | :------------- | | Noninterest income (GAAP) (Millions USD) | $635 | $699 | $627 | | Adjusted noninterest income (non-GAAP) (Millions USD) | $479 | $516 | $478 | | Noninterest expense (GAAP) (Billions USD) | $1.493 | $1.517 | $1.376 | | Adjusted noninterest expense (non-GAAP) (Billions USD) | $1.277 | $1.268 | $1.154 | [PPNR Reconciliation](index=8&type=section&id=PPNR%20Reconciliation) This sub-section reconciles GAAP net income to Pre-Tax, Pre-Provision Net Revenue (PPNR) and Adjusted PPNR, providing a measure of profitability before taxes and credit losses, and excluding notable items PPNR Reconciliation (Three Months Ended) | Metric | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :----------------------------------- | :------------- | :---------------- | :------------- | | PPNR (non-GAAP) (Millions USD) | $805 | $891 | $1.068 | | Adjusted PPNR (non-GAAP) (Millions USD) | $865 | $957 | $1.141 | [ROA Reconciliation](index=9&type=section&id=ROA%20Reconciliation) This sub-section reconciles GAAP Return on Average Assets (ROA) to Adjusted ROA and PPNR ROA, providing profitability metrics relative to assets, both on a GAAP and adjusted basis ROA Reconciliation (Three Months Ended) | Metric | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :----------------------------------- | :------------- | :---------------- | :------------- | | ROA (GAAP) | 0.87 % | 1.25 % | 1.36 % | | Adjusted ROA (non-GAAP) | 0.95 % | 1.14 % | 1.46 % | | PPNR ROA (non-GAAP) | 1.45 % | 1.58 % | 1.99 % | | Adjusted PPNR ROA (non-GAAP) | 1.56 % | 1.70 % | 2.12 % | [ROE and ROTCE Reconciliation](index=9&type=section&id=ROE%20and%20ROTCE%20Reconciliation) This sub-section reconciles GAAP Return on Average Common Equity (ROE) to Adjusted ROE and Return on Average Tangible Common Equity (ROTCE), providing insights into profitability relative to equity, including tangible equity ROE and ROTCE Reconciliation (Three Months Ended) | Metric | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :----------------------------------- | :------------- | :---------------- | :------------- | | ROE (GAAP) | 8.79 % | 12.56 % | 13.97 % | | Adjusted ROE (non-GAAP) | 9.64 % | 11.51 % | 15.01 % | | ROTCE (non-GAAP) | 9.04 % | 12.92 % | 14.42 % | | Adjusted ROTCE (non-GAAP) | 9.91 % | 11.84 % | 15.50 % | [Tangible Common Equity and Book Value Reconciliation](index=10&type=section&id=Tangible%20Common%20Equity%20and%20Book%20Value%20Reconciliation) This sub-section reconciles GAAP common equity and book value per share to tangible common equity and tangible book value per common share, providing a view of equity excluding goodwill and other intangible assets Tangible Common Equity and Book Value Reconciliation (Period End) | Metric | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :----------------------------------- | :------------- | :---------------- | :------------- | | Tangible common equity (non-GAAP) (Billions USD) | $20.834 | $20.752 | $20.326 | | Tangible book value per common share (non-GAAP) | $1553.06 | $1512.77 | $1398.88 | | Tangible common equity to tangible assets (non-GAAP) | 9.13 % | 9.30 % | 9.36 % | [Efficiency Ratio Reconciliation](index=10&type=section&id=Efficiency%20Ratio%20Reconciliation) This sub-section reconciles the GAAP efficiency ratio to the adjusted efficiency ratio, providing a measure of operational efficiency excluding the impact of notable items Efficiency Ratio Reconciliation (Three Months Ended) | Metric | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :----------------------------------- | :------------- | :---------------- | :------------- | | Efficiency ratio (GAAP) | 64.97 % | 63.01 % | 56.30 % | | Adjusted efficiency ratio (non-GAAP) | 59.62 % | 56.98 % | 50.29 % | [Rental Income on Operating Lease Equipment Reconciliation](index=10&type=section&id=Rental%20Income%20on%20Operating%20Lease%20Equipment%20Reconciliation) This sub-section reconciles GAAP rental income on operating lease equipment to adjusted rental income, by deducting direct expenses like depreciation and maintenance Rental Income on Operating Lease Equipment Reconciliation (Three Months Ended) | Metric | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :----------------------------------- | :------------- | :---------------- | :------------- | | Rental income on operating lease equipment (Millions USD) | $270 | $272 | $255 | | Adjusted rental income on operating lease equipment (Millions USD) | $114 | $120 | $114 | [Net Interest Income & Net Interest Margin Reconciliation](index=10&type=section&id=Net%20Interest%20Income%20%26%20Net%20Interest%20Margin%20Reconciliation) This sub-section reconciles GAAP net interest income and net interest margin to figures excluding purchase accounting accretion (PAA), providing a view of core net interest performance Net Interest Income & NIM Reconciliation (Three Months Ended) | Metric | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :----------------------------------- | :------------- | :---------------- | :------------- | | Net interest income (GAAP) (Billions USD) | $1.663 | $1.709 | $1.817 | | Net interest income, excluding PAA (non-GAAP) (Billions USD) | $1.588 | $1.627 | $1.658 | | NIM (GAAP) | 3.26 % | 3.32 % | 3.67 % | | NIM, excluding PAA (non-GAAP) | 3.12 % | 3.16 % | 3.35 % | | Loan PAA (Millions USD) | $84 | $90 | $163 | - Loan PAA **decreased** by **$6 million** QoQ and **$79 million** YoY, contributing to the changes in net interest income and NIM[18](index=18&type=chunk) [Income Tax Expense and Effective Tax Rate Reconciliation](index=10&type=section&id=Income%20Tax%20Expense%20and%20Effective%20Tax%20Rate%20Reconciliation) This sub-section reconciles GAAP income tax expense and effective tax rate to adjusted figures, accounting for the impact of notable items and discrete tax adjustments Income Tax Expense and Effective Tax Rate Reconciliation (Three Months Ended) | Metric | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :----------------------------------- | :------------- | :---------------- | :------------- | | Income tax expense (GAAP) (Millions USD) | $168 | $36 | $273 | | Adjusted income tax expense (non-GAAP) (Millions USD) | $183 | $159 | $293 | | Effective tax rate (GAAP) | 25.82 % | 4.88 % | 27.20 % | | Adjusted effective tax rate (non-GAAP) | 25.71 % | 19.89 % | 27.18 % | - The adjusted effective tax rate for Q4 2024 was significantly **lower** at **19.89%**, primarily due to the impact of a change in estimated state income tax rates after filing the first income tax returns that included the SVBB Acquisition[18](index=18&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION ☒ Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 2024 or ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Commission File Number: 001-16715 First Citizens BancShares, Inc. (Exact name of Registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) Washington, D.C. 20549 _______________________________ ...

Dollars in millions, except per share data | | | | | Three Months Ended | | | | | Year Ended December 31, | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Summary Financial Data & Key Metrics | | December 31, 2024 | | September 30, 2024 | | December 31, 2023 | | 2024 | | 2023 | | Results of Operations: | | | | | | | | | | | | Net interest income | $ | 1,709 | $ | 1,796 | $ | 1,911 | $ | 7,143 | $ | 6,712 | | Provision for credit losses | | 155 | | 117 | | 249 | | 431 | | 1,375 | | N ...

FORM 10-Q Cover Page This section presents the cover page details for First Citizens BancShares, Inc.'s Quarterly Report on Form 10-Q - First Citizens BancShares, Inc. filed its Quarterly Report on Form 10-Q for the period ended September 30, 2024[1](index=1&type=chunk) Securities Registered Pursuant to Section 12(b) | Title of each class | Trading Symbol(s) | Name of each exchange on which registered | | :------------------------------------------------------------------------------------------------- | :---------------- | :---------------------------------------- | | Class A Common Stock, Par Value $1 | FCNCA | Nasdaq Global Select Market | | Depositary Shares, Each Representing a a 1/40th Interest in a Share of 5.375% Non-Cumulative Perpetual Preferred Stock, Series A | FCNCP | Nasdaq Global Select Market | | 5.625% Non-Cumulative Perpetual Preferred Stock, Series C | FCNCO | Nasdaq Global Select Market | - The registrant is a large accelerated filer and has filed all required reports and interactive data files[3](index=3&type=chunk) Shares Outstanding as of October 31, 2024 | Class | Shares Outstanding | | :------------------- | :----------------- | | Class A Common Stock | 12,984,310 | | Class B Common Stock | 1,005,185 | Glossary of Abbreviations and Acronyms This section defines key abbreviations and acronyms used throughout the report for clarity - The report includes a glossary to define key abbreviations and acronyms used throughout the document, such as ALLL (Allowance for Loan and Lease Losses), MD&A (Management's Discussion and Analysis), NII (Net Interest Income), and SVBB (Silicon Valley Bridge Bank, N.A.)[8](index=8&type=chunk)[9](index=9&type=chunk) PART I—FINANCIAL INFORMATION This part presents the core financial data, including financial statements, management's discussion, and risk disclosures [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements.) This section presents the unaudited consolidated financial statements of First Citizens BancShares, Inc. and its subsidiaries, along with detailed notes [Consolidated Balance Sheets (Unaudited)](index=5&type=section&id=Consolidated%20Balance%20Sheets%20(Unaudited)) This section presents the unaudited consolidated balance sheets, detailing assets, liabilities, and equity at period-end Consolidated Balance Sheet Highlights (Unaudited) | Item | September 30, 2024 (millions) | December 31, 2023 (millions) | Change (millions) | Change (%) | | :---------------------------- | :---------------------------- | :--------------------------- | :---------------- | :--------- | | Total assets | $220,567 | $213,758 | $6,809 | 3.19% | | Loans and leases, net | $137,017 | $131,555 | $5,462 | 4.15% | | Total deposits | $151,574 | $145,854 | $5,720 | 3.92% | | Total borrowings | $37,161 | $37,654 | $(493) | -1.31% | | Total stockholders' equity | $22,828 | $21,255 | $1,573 | 7.40% | - Total assets increased by **$6.81 billion**, or **3.19%**, from December 31, 2023, to September 30, 2024, driven primarily by growth in net loans and investment securities[12](index=12&type=chunk) - Total deposits saw a notable increase of **$5.72 billion**, or **3.92%**, while total borrowings slightly decreased by **$493 million**, or **1.31%**[12](index=12&type=chunk) [Consolidated Statements of Income (Unaudited)](index=6&type=section&id=Consolidated%20Statements%20of%20Income%20(Unaudited)) This section presents the unaudited consolidated statements of income, highlighting revenue, expenses, and net income Consolidated Statements of Income Highlights (Unaudited) - Three Months Ended September 30 | Item (millions) | 2024 | 2023 | Change (millions) | Change (%) | | :------------------------------ | :------ | :------ | :---------------- | :--------- | | Total interest income | $3,138 | $3,110 | $28 | 0.90% | | Total interest expense | $1,342 | $1,120 | $222 | 19.82% | | Net interest income | $1,796 | $1,990 | $(194) | -9.75% | | Provision for credit losses | $117 | $192 | $(75) | -39.06% | | Total noninterest income | $650 | $615 | $35 | 5.69% | | Total noninterest expense | $1,456 | $1,416 | $40 | 2.82% | | Net income | $639 | $752 | $(113) | -15.03% | | Net income available to common stockholders | $624 | $737 | $(113) | -15.33% | | Diluted EPS | $43.42 | $50.67 | $(7.25) | -14.31% | Consolidated Statements of Income Highlights (Unaudited) - Nine Months Ended September 30 | Item (millions) | 2024 | 2023 | Change (millions) | Change (%) | | :------------------------------ | :------ | :------- | :---------------- | :--------- | | Total interest income | $9,352 | $7,274 | $2,078 | 28.57% | | Total interest expense | $3,918 | $2,473 | $1,445 | 58.43% | | Net interest income | $5,434 | $4,801 | $633 | 13.18% | | Provision for credit losses | $276 | $1,126 | $(850) | -75.49% | | Total noninterest income | $1,916 | $11,532 | $(9,616) | -83.39% | | Total noninterest expense | $4,218 | $3,843 | $375 | 9.76% | | Net income | $2,077 | $10,952 | $(8,875) | -81.04% | | Net income available to common stockholders | $2,031 | $10,908 | $(8,877) | -81.38% | | Diluted EPS | $140.26 | $750.19 | $(609.93) | -81.30% | - For the three months ended September 30, 2024, net interest income decreased by **9.75%** YoY due to a significant increase in interest expense, despite a slight rise in interest income. Net income decreased by **15.03%** YoY[14](index=14&type=chunk) - For the nine months ended September 30, 2024, net income saw a substantial decrease of **81.04%** YoY, primarily driven by a significant reduction in noninterest income (due to a large gain on acquisition in the prior year) and partially offset by a lower provision for credit losses[14](index=14&type=chunk) [Consolidated Statements of Comprehensive Income (Unaudited)](index=7&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(Unaudited)) This section presents the unaudited consolidated statements of comprehensive income, including net income and other comprehensive income Consolidated Statements of Comprehensive Income Highlights (Unaudited) - Three Months Ended September 30 | Item (millions) | 2024 | 2023 | Change (millions) | Change (%) | | :---------------------------------------------------------------------------- | :----- | :------ | :---------------- | :--------- | | Net income | $639 | $752 | $(113) | -15.03% | | Other comprehensive income (loss), net of tax | $451 | $(108) | $559 | -517.59% | | Net unrealized gain (loss) on securities available for sale | $438 | $(108) | $546 | -505.56% | | Net change in unrealized loss on securities available for sale transferred to securities held to maturity | $1 | — | $1 | N/A | | Net unrealized gain on cash flow hedge derivatives | $12 | — | $12 | N/A | | Total comprehensive income | $1,090 | $644 | $446 | 69.25% | Consolidated Statements of Comprehensive Income Highlights (Unaudited) - Nine Months Ended September 30 | Item (millions) | 2024 | 2023 | Change (millions) | Change (%) | | :---------------------------------------------------------------------------- | :----- | :------- | :---------------- | :--------- | | Net income | $2,077 | $10,952 | $(8,875) | -81.04% | | Other comprehensive income (loss), net of tax | $332 | $(145) | $477 | -328.97% | | Net unrealized gain (loss) on securities available for sale | $325 | $(150) | $475 | -316.67% | | Net change in unrealized loss on securities available for sale transferred to securities held to maturity | $1 | $1 | $0 | 0.00% | | Net change in defined benefit pension items | $(8) | $4 | $(12) | -300.00% | | Net unrealized gain on cash flow hedge derivatives | $14 | — | $14 | N/A | | Total comprehensive income | $2,409 | $10,807 | $(8,398) | -77.71% | - Total comprehensive income for the three months ended September 30, 2024, increased by **69.25%** YoY, primarily due to a significant shift from an unrealized loss to an unrealized gain on securities available for sale[16](index=16&type=chunk) - For the nine months ended September 30, 2024, total comprehensive income decreased by **77.71%** YoY, largely mirroring the decline in net income, despite a positive swing in other comprehensive income[16](index=16&type=chunk) [Consolidated Statements of Changes in Stockholders' Equity (Unaudited)](index=8&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity%20(Unaudited)) This section presents the unaudited consolidated statements of changes in stockholders' equity, detailing movements in capital accounts Consolidated Statements of Changes in Stockholders' Equity Highlights (Unaudited) - Three Months Ended September 30, 2024 | Item (millions) | Balance at June 30, 2024 | Net Income | Other Comprehensive Income | Stock Based Compensation | Repurchased Class A Common Stock | Cash Dividends Declared | Balance at September 30, 2024 | | :-------------------------------------------- | :----------------------- | :--------- | :------------------------- | :----------------------- | :------------------------------- | :---------------------- | :---------------------------- | | Total Stockholders' Equity | $22,487 | $639 | $451 | $(4) | $(707) | $(38) | $22,828 | Consolidated Statements of Changes in Stockholders' Equity Highlights (Unaudited) - Nine Months Ended September 30, 2024 | Item (millions) | Balance at December 31, 2023 | Net Income | Other Comprehensive Income | Stock Based Compensation | Repurchased Class A Common Stock | Cash Dividends Declared | Balance at September 30, 2024 | | :-------------------------------------------- | :--------------------------- | :--------- | :------------------------- | :----------------------- | :------------------------------- | :---------------------- | :---------------------------- | | Total Stockholders' Equity | $21,255 | $2,077 | $332 | $(13) | $(707) | $(116) | $22,828 | - Total stockholders' equity increased from **$21.26 billion** at December 31, 2023, to **$22.83 billion** at September 30, 2024, primarily driven by net income and other comprehensive income, partially offset by share repurchases and cash dividends[20](index=20&type=chunk) - During the nine months ended September 30, 2024, the company repurchased **353,058 shares** of Class A common stock for **$707 million**[20](index=20&type=chunk) [Consolidated Statements of Cash Flows (Unaudited)](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) This section presents the unaudited consolidated statements of cash flows, categorizing cash movements by activity Consolidated Statements of Cash Flows Highlights (Unaudited) - Nine Months Ended September 30 | Cash Flow Activity (millions) | 2024 | 2023 | Change (millions) | | :------------------------------------ | :------ | :------- | :---------------- | | Net cash provided by operating activities | $1,869 | $1,759 | $110 | | Net cash (used in) provided by investing activities | $(6,411) | $2,787 | $(9,198) | | Net cash provided by (used in) financing activities | $4,496 | $(4,273) | $8,769 | | Change in cash and due from banks | $(46) | $273 | $(319) | | Cash and due from banks at end of period | $862 | $791 | $71 | - Net cash provided by operating activities increased by **$110 million** YoY for the nine months ended September 30, 2024[23](index=23&type=chunk) - Investing activities shifted from providing **$2.79 billion** in cash in 2023 to using **$6.41 billion** in 2024, primarily due to increased purchases of investment securities available for sale and a net increase in loans[23](index=23&type=chunk) - Financing activities significantly improved, moving from using **$4.27 billion** in cash in 2023 to providing **$4.50 billion** in 2024, mainly driven by a net increase in demand and other interest-bearing deposits[23](index=23&type=chunk) [Notes to Unaudited Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) This section provides detailed disclosures on the company's financial statements, covering significant accounting policies and financial instruments [NOTE 1 — SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION](index=13&type=section&id=NOTE%201%20%E2%80%94%20SIGNIFICANT%20ACCOUNTING%20POLICIES%20AND%20BASIS%20OF%20PRESENTATION) This note outlines the nature of operations, accounting for business combinations, principles of consolidation, and significant accounting policies - First Citizens BancShares, Inc. is a financial holding company operating through its banking subsidiary, First-Citizens Bank & Trust Company (FCB), providing commercial and consumer banking, lending, leasing, and wealth management services[26](index=26&type=chunk) - FCB acquired substantially all loans and certain other assets and assumed all customer deposits and certain other liabilities of Silicon Valley Bridge Bank, N.A. (SVBB) on March 27, 2023, accounted for using the acquisition method[28](index=28&type=chunk) - Segment reporting was updated in Q1 2024: SVB's private banking and wealth management integrated into General Bank, SVB segment renamed SVB Commercial, and Direct Bank moved to Corporate[35](index=35&type=chunk)[41](index=41&type=chunk) - Loan classes were also recast in Q1 2024, moving certain private bank, CRE, and 'other' loans from the SVB portfolio to Commercial and Consumer portfolios[38](index=38&type=chunk)[39](index=39&type=chunk)[42](index=42&type=chunk) - During Q2 2024, BancShares entered into floating-rate loan portfolio cash flow hedges, with fair value changes reported in Accumulated Other Comprehensive Income (AOCI) and reclassified to earnings[45](index=45&type=chunk) - Newly adopted ASUs (2023-02 and 2022-03) related to tax credit structures and fair value measurement of equity securities did not have a material impact on financial statements or disclosures[47](index=47&type=chunk)[48](index=48&type=chunk) [NOTE 2 — BUSINESS COMBINATIONS](index=16&type=section&id=NOTE%202%20%E2%80%94%20BUSINESS%20COMBINATIONS) This note details the Silicon Valley Bridge Bank Acquisition, including purchase price allocation and related agreements - FCB completed the SVBB Acquisition on March 27, 2023, acquiring assets with a fair value of approximately **$107.54 billion** and assuming liabilities of **$61.42 billion**, resulting in a gain on acquisition of **$9.81 billion** (net of income taxes)[49](index=49&type=chunk)[52](index=52&type=chunk)[58](index=58&type=chunk) - The acquisition included **$68.47 billion** in loans (net of initial ALLL for PCD loans) and **$35.31 billion** in cash and interest-earning deposits, with **$56.01 billion** in customer deposits assumed[52](index=52&type=chunk) - FCB entered into a Shared-Loss Agreement with the FDIC covering an estimated **$60 billion** of commercial loans, with FDIC reimbursing **50%** of losses exceeding **$5 billion**[53](index=53&type=chunk) - As consideration, FCB issued a five-year **$36.07 billion** Purchase Money Note to the FDIC (fair value **$35.81 billion**) and a **$500 million** Cash Settled Value Appreciation Instrument[54](index=54&type=chunk)[55](index=55&type=chunk)[56](index=56&type=chunk)[58](index=58&type=chunk) Fair Value Purchase Price Allocation as of March 27, 2023 | Item (millions) | Fair Value | | :---------------------------------- | :--------- | | **Purchase price consideration** | | | Purchase Money Note | $35,808 | | Value Appreciation Instrument | $500 | | **Total purchase price consideration** | **$36,308** | | **Assets acquired** | | | Cash and due from banks | $1,310 | | Interest-earning deposits at banks | $34,001 | | Loans and leases, net of initial PCD ALLL | $68,468 | | Core deposit intangibles | $230 | | Total assets acquired | $107,539 | | **Liabilities assumed** | | | Deposits | $56,014 | | Deferred tax liabilities | $3,364 | | Total liabilities assumed | $61,423 | | **Fair value of net assets acquired** | **$46,116** | | **Gain on acquisition, after income taxes** | **$9,808** | [NOTE 3 — INVESTMENT SECURITIES](index=21&type=section&id=NOTE%203%20%E2%80%94%20INVESTMENT%20SECURITIES) This note provides details on the company's investment securities portfolio, including available-for-sale and held-to-maturity securities Investment Securities Summary (millions) | Category | September 30, 2024 (Fair Value) | December 31, 2023 (Fair Value) | Change (millions) | Change (%) | | :---------------------------------------- | :------------------------------ | :----------------------------- | :---------------- | :--------- | | Investment securities available for sale | $28,190 | $19,936 | $8,254 | 41.40% | | Investment securities held to maturity | $9,168 | $8,503 | $665 | 7.82% | | Total investment securities | $37,440 | $28,523 | $8,917 | 31.26% | - Total investment securities increased by **$8.92 billion** (**31.26%**) from December 31, 2023, to September 30, 2024, primarily driven by a significant increase in available-for-sale securities[79](index=79&type=chunk) Gross Unrealized Losses on Debt Securities Available For Sale (September 30, 2024) | Security Type | Fair Value (millions) | Unrealized Losses (millions) | | :-------------------------------- | :-------------------- | :--------------------------- | | U.S. Treasury | $1,674 | $(26) | | Government agency | $85 | $(2) | | Residential mortgage-backed securities | $4,076 | $(419) | | Commercial mortgage-backed securities | $1,405 | $(172) | | Corporate bonds | $460 | $(30) | | **Total** | **$7,700** | **$(649)** | - As of September 30, 2024, there were **495** available-for-sale securities with continuous unrealized losses for more than **12 months**, but no allowance for credit loss was required due to strong credit ratings and historical performance[88](index=88&type=chunk)[89](index=89&type=chunk) Interest and Dividends on Investment Securities (millions) | Item | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :------------------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Interest income - taxable investment securities | $357 | $178 | $967 | $402 | | Dividend income - marketable equity securities | $1 | — | $2 | $1 | | **Total Interest on investment securities** | **$358** | **$180** | **$970** | **$407** | [NOTE 4 — LOANS AND LEASES](index=25&type=section&id=NOTE%204%20%E2%80%94%20LOANS%20AND%20LEASES) This note details the composition of the loan and lease portfolio by class, including delinquency status and nonaccrual loans Loans by Class (millions) | Loan Class | September 30, 2024 | December 31, 2023 | Change (millions) | Change (%) | | :---------------- | :----------------- | :---------------- | :---------------- | :--------- | | Commercial | $70,261 | $66,232 | $4,029 | 6.08% | | Consumer | $28,582 | $27,559 | $1,023 | 3.71% | | SVB | $39,852 | $39,511 | $341 | 0.86% | | **Total loans and leases** | **$138,695** | **$133,302** | **$5,393** | **4.05%** | - Total loans and leases increased by **$5.39 billion** (**4.05%**) from December 31, 2023, to September 30, 2024, with Commercial loans showing the largest growth[93](index=93&type=chunk) Loans and Leases - Delinquency Status (September 30, 2024, millions) | Loan Class | Current | 30-59 Days Past Due | 60-89 Days Past Due | 90 Days or Greater | Total Past Due | Total | | :---------------- | :--------- | :------------------ | :------------------ | :----------------- | :------------- | :---- | | Commercial | $69,391 | $244 | $124 | $502 | $870 | $70,261 | | Consumer | $28,252 | $167 | $45 | $118 | $330 | $28,582 | | SVB | $39,817 | $16 | $9 | $10 | $35 | $39,852 | | **Total** | **$137,460** | **$427** | **$178** | **$630** | **$1,235** | **$138,695** | - Total loans and leases past due (**30 days** or greater) were **$1.24 billion** at September 30, 2024, an increase from **$1.13 billion** at December 31, 2023[99](index=99&type=chunk) Loans on Nonaccrual Status (millions) | Loan Class | September 30, 2024 | December 31, 2023 | Change (millions) | | :---------------- | :----------------- | :---------------- | :---------------- | | Commercial | $868 | $698 | $170 | | Consumer | $169 | $154 | $15 | | SVB | $207 | $117 | $90 | | **Total nonaccrual loans** | **$1,244** | **$969** | **$275** | - Nonaccrual loans increased by **$275 million** (**28.38%**) from December 31, 2023, to September 30, 2024, with Commercial loans contributing the most to this increase[101](index=101&type=chunk) - During the nine months ended September 30, 2024, **$660 million** in loans were modified for borrowers experiencing financial difficulties, with term extensions being the most common modification type[128](index=128&type=chunk) Loans Pledged as Collateral (September 30, 2024, millions) | Facility | Lendable Collateral Value | Available Borrowing Capacity | | :---------------- | :------------------------ | :--------------------------- | | FHLB of Atlanta | $17,245 | $15,795 | | FRB | $5,621 | $5,621 | | FDIC | $44,117 | $8,126 | [NOTE 5 — ALLOWANCE FOR LOAN AND LEASE LOSSES](index=41&type=section&id=NOTE%205%20%E2%80%94%20ALLOWANCE%20FOR%20LOAN%20AND%20LEASE%20LOSSES) This note details the activity and composition of the Allowance for Loan and Lease Losses by segment Allowance for Loan and Lease Losses Activity (millions) - Nine Months Ended September 30 | Item | 2024 | 2023 | Change (millions) | | :---------------------------------- | :------ | :------ | :---------------- | | Balance at beginning of period | $1,747 | $922 | $825 | | Initial PCD ALLL | — | $220 | $(220) | | Day 2 Provision for Loan and Lease Losses | — | $462 | $(462) | | Provision (benefit) for loan and lease losses | $311 | $452 | $(141) | | Charge-offs | $(464) | $(437) | $(27) | | Recoveries | $84 | $54 | $30 | | **Balance at end of period** | **$1,678** | **$1,673** | **$5** | - The ALLL at September 30, 2024, was **$1.68 billion**, a slight increase of **$5 million** from September 30, 2023. The prior year included significant initial provisions related to the SVBB Acquisition[145](index=145&type=chunk) Provision for Credit Losses (millions) - Nine Months Ended September 30 | Item | 2024 | 2023 | Change (millions) | | :---------------------------------------- | :----- | :------- | :---------------- | | Total provision for loan and lease losses | $311 | $914 | $(603) | | Total (benefit) provision for off-balance sheet credit exposure | $(35) | $212 | $(247) | | Provision for credit losses | $276 | $1,126 | $(850) | - The total provision for credit losses for the nine months ended September 30, 2024, decreased by **$850 million** (**75.49%**) YoY, primarily due to the absence of the Day 2 Provision for Credit Losses from the SVBB Acquisition in the current year[146](index=146&type=chunk) [NOTE 6 — LEASES](index=43&type=section&id=NOTE%206%20%E2%80%94%20LEASES) This note provides information on BancShares' lease activities as both a lessee and a lessor Supplemental Lease Information (millions) | Item | September 30, 2024 | December 31, 2023 | Change (millions) | | :---------------------------------- | :----------------- | :---------------- | :---------------- | | Operating lease ROU assets | $331 | $354 | $(23) | | Operating leases (liabilities) | $373 | $396 | $(23) | | Weighted-average remaining lease terms (Operating leases) | 7.5 years | 8.1 years | -0.6 years | | Weighted-average discount rate (Operating leases) | 2.80% | 2.70% | 0.10% | Lease Income (millions) - Nine Months Ended September 30 | Item | 2024 | 2023 | Change (millions) | | :---------------------------------------- | :----- | :----- | :---------------- | | Rental income on operating leases | $776 | $719 | $57 | | Interest income – Sales type and direct financing leases | $131 | $127 | $4 | | Variable lease income included in Other noninterest income | $46 | $44 | $2 | | Interest income – Leveraged leases | $3 | $11 | $(8) | | **Total lease income** | **$956** | **$901** | **$55** | - Total lease income increased by **$55 million** (**6.10%**) for the nine months ended September 30, 2024, primarily driven by higher rental income on operating leases[155](index=155&type=chunk) [NOTE 7 — GOODWILL AND CORE DEPOSIT INTANGIBLES](index=44&type=section&id=NOTE%207%20%E2%80%94%20GOODWILL%20AND%20CORE%20DEPOSIT%20INTANGIBLES) This note provides information on goodwill and core deposit intangibles, including amortization - Goodwill remained at **$346 million** at September 30, 2024, and December 31, 2023, with no impairment recorded during the nine months ended September 30, 2024 or 2023[156](index=156&type=chunk) Core Deposit Intangibles Activity (millions) - Nine Months Ended September 30, 2024 | Item | Amount | | :---------------------------------------- | :----- | | Balance at beginning of period, net of accumulated amortization | $312 | | Less: amortization for the period | $47 | | **Balance at end of period, net of accumulated amortization** | **$265** | - Core deposit intangibles, net of accumulated amortization, decreased by **$47 million** from **$312 million** at the beginning of the period to **$265 million** at September 30, 2024, due to amortization[157](index=157&type=chunk) Core Deposit Intangible Expected Amortization (millions) | Period | Expected Amortization | | :------------ | :-------------------- | | Remainder 2024 | $16 | | 2025 | $54 | | 2026 | $46 | | 2027 | $39 | | 2028 | $34 | | 2029 | $30 | | Thereafter | $46 | | **Total** | **$265** | [NOTE 8 — VARIABLE INTEREST ENTITIES](index=45&type=section&id=NOTE%208%20%E2%80%94%20VARIABLE%20INTEREST%20ENTITIES) This note discusses BancShares' involvement with Variable Interest Entities, primarily affordable housing tax credit investments - BancShares has no consolidated VIEs but holds unconsolidated VIEs, primarily in affordable housing tax credit investments, to fulfill CRA requirements and obtain tax credits[161](index=161&type=chunk)[162](index=162&type=chunk)[164](index=164&type=chunk) Unconsolidated VIEs Carrying Value (millions) | Item | September 30, 2024 | December 31, 2023 | Change (millions) | | :---------------------------------- | :----------------- | :---------------- | :---------------- | | Affordable housing tax credit investments | $2,066 | $1,887 | $179 | | Total assets (maximum loss exposure) | $2,217 | $2,052 | $165 | | Liabilities for commitments to tax credit investments | $1,033 | $947 | $86 | - Affordable housing tax credit investments increased by **$179 million** (**9.49%**) from December 31, 2023, to September 30, 2024[164](index=164&type=chunk) Net Income Tax Benefit from Affordable Housing Tax Credit Investments (millions) - Nine Months Ended September 30 | Item | 2024 | 2023 | Change (millions) | | :---------------------------------------- | :----- | :----- | :---------------- | | Amortization of affordable housing tax credit investments | $176 | $111 | $65 | | Tax credits from affordable housing tax credit investments | $(173) | $(79) | $(94) | | Other tax benefits from affordable housing tax credit investments | $(29) | $(45) | $16 | | **Net income tax benefit** | **$(26)** | **$(13)** | **$(13)** | [NOTE 9 — OTHER ASSETS](index=46&type=section&id=NOTE%209%20%E2%80%94%20OTHER%20ASSETS) This note provides a detailed breakdown of the components comprising 'Other Assets' on the consolidated balance sheets Other Assets (millions) | Item | September 30, 2024 | December 31, 2023 | Change (millions) | | :---------------------------------------- | :----------------- | :---------------- | :---------------- | | Affordable housing tax credit and other unconsolidated investments | $2,217 | $2,052 | $165 | | Accrued interest receivable | $904 | $832 | $72 | | Fair value of derivative financial instruments | $553 | $640 | $(87) | | Pension assets | $482 | $474 | $8 | | Right of use assets for operating leases, net | $331 | $354 | $(23) | | Income tax receivable | $342 | $209 | $133 | | Other | $796 | $871 | $(75) | | **Total other assets** | **$6,091** | **$5,857** | **$234** | - Total other assets increased by **$234 million** (**4.00%**) from December 31, 2023, to September 30, 2024, primarily due to increases in affordable housing tax credit investments and income tax receivable, partially offset by decreases in derivative financial instruments and other assets[167](index=167&type=chunk) [NOTE 10 — DEPOSITS](index=46&type=section&id=NOTE%2010%20%E2%80%94%20DEPOSITS) This note provides a detailed breakdown of deposit types, including noninterest-bearing and various interest-bearing accounts Deposit Types (millions) | Deposit Type | September 30, 2024 | December 31, 2023 | Change (millions) | Change (%) | | :-------------------- | :----------------- | :---------------- | :---------------- | :--------- | | Noninterest-bearing demand | $39,396 | $39,799 | $(403) | -1.01% | | Checking with interest | $23,216 | $23,754 | $(538) | -2.27% | | Money market | $34,567 | $30,611 | $3,956 | 12.92% | | Savings | $40,266 | $35,258 | $5,008 | 14.21% | | Time | $14,129 | $16,432 | $(2,303) | -14.02% | | **Total deposits** | **$151,574** | **$145,854** | **$5,720** | **3.92%** | - Total deposits increased by **$5.72 billion** (**3.92%**) from December 31, 2023, to September 30, 2024, primarily driven by significant growth in money market and savings accounts, partially offset by declines in time and noninterest-bearing deposits[168](index=168&type=chunk) Scheduled Maturities of Time Deposits (September 30, 2024, millions) | Period | Amount | | :-------------------- | :----- | | Twelve months ended September 30, 2025 | $13,400 | | 2026 | $641 | | 2027 | $47 | | 2028 | $20 | | 2029 | $21 | | Thereafter | — | | **Total time deposits** | **$14,129** | - Time deposits with a denomination of **$250,000** or more decreased from **$4.16 billion** at December 31, 2023, to **$3.84 billion** at September 30, 2024[169](index=169&type=chunk) [NOTE 11 — BORROWINGS](index=47&type=section&id=NOTE%2011%20%E2%80%94%20BORROWINGS) This note details the company's short-term and long-term borrowings, including the Purchase Money Note to the FDIC Total Borrowings (millions) | Borrowing Type | September 30, 2024 | December 31, 2023 | Change (millions) | Change (%) | | :-------------------- | :----------------- | :---------------- | :---------------- | :--------- | | Short-term borrowings | $391 | $485 | $(94) | -19.38% | | Long-term borrowings | $36,770 | $37,169 | $(399) | -1.07% | | **Total borrowings** | **$37,161** | **$37,654** | **$(493)** | **-1.31%** | - Total borrowings decreased by **$493 million** (**1.31%**) from December 31, 2023, to September 30, 2024, primarily due to a reduction in long-term borrowings and securities sold under agreements to repurchase[12](index=12&type=chunk) Long-term Borrowings (millions) | Item | September 30, 2024 | December 31, 2023 | Change (millions) | | :---------------------------------------- | :----------------- | :---------------- | :---------------- | | Purchase Money Note to FDIC fixed at 3.50% | $35,991 | $36,072 | $(81) | | Fixed-to-Floating subordinated notes at 3.375% | $351 | $350 | $1 | | Senior unsecured fixed-to-floating rate notes at 2.969% | — | $316 | $(316) | | Junior subordinated debentures (FCB/SC Capital Trust II) | — | $20 | $(20) | - The company redeemed **$316 million** of senior unsecured fixed-to-floating rate notes and **$20 million** of junior subordinated debentures during the period[174](index=174&type=chunk) - Investment securities with an aggregate carrying value of **$3.82 billion** were pledged as collateral at September 30, 2024[90](index=90&type=chunk) [NOTE 12 — DERIVATIVE FINANCIAL INSTRUMENTS](index=48&type=section&id=NOTE%2012%20%E2%80%94%20DERIVATIVE%20FINANCIAL%20INSTRUMENTS) This note describes BancShares' use of derivative financial instruments for hedging interest rate exposure and customer risk management - BancShares uses interest rate swap contracts for hedging (floating-rate loan portfolio cash flow hedges and fair value hedges of fixed-rate borrowings and deposits) and for customer risk management (non-qualifying hedges)[176](index=176&type=chunk)[177](index=177&type=chunk) Notional Amount and Fair Value of Derivative Financial Instruments (millions) | Item | September 30, 2024 (Notional) | September 30, 2024 (Asset Fair Value) | September 30, 2024 (Liability Fair Value) | December 31, 2023 (Asset Fair Value) | December 31, 2023 (Liability Fair Value) | | :---------------------------------------- | :---------------------------- | :------------------------------------ | :---------------------------------------- | :----------------------------------- | :--------------------------------------- | | Derivatives designated as hedging instruments | $3,584 | — | — | — | — | | Derivatives not designated as hedging instruments | $35,044 | $553 | $(507) | $640 | $(636) | | **Total derivative assets** | | **$553** | | **$640** | | | **Total derivative liabilities** | | | **$(507)** | | **$(636)** | - Total derivative assets decreased from **$640 million** at December 31, 2023, to **$553 million** at September 30, 2024, while total derivative liabilities decreased from **$636 million** to **$507 million**[179](index=179&type=chunk) Gains (Losses) on Non-Qualifying Hedges (millions) - Nine Months Ended September 30 | Item | 2024 | 2023 | Change (millions) | | :------------------------ | :----- | :----- | :---------------- | | Interest rate contracts | $6 | $37 | $(31) | | Foreign currency forward contracts | $3 | $10 | $(7) | | Other contracts | $1 | $1 | $0 | | **Total non-qualifying hedges - income statement impact** | **$10** | **$48** | **$(38)** | [NOTE 13 — OTHER LIABILITIES](index=51&type=section&id=NOTE%2013%20%E2%80%94%20OTHER%20LIABILITIES) This note provides a detailed breakdown of the components comprising 'Other Liabilities' on the consolidated balance sheets Other Liabilities (millions) | Item | September 30, 2024 | December 31, 2023 | Change (millions) | | :---------------------------------------- | :----------------- | :---------------- | :---------------- | | Deferred taxes | $3,561 | $3,579 | $(18) | | Commitments to fund tax credit investments | $1,033 | $947 | $86 | | Incentive plan liabilities | $570 | $689 | $(119) | | Fair value of derivative financial instruments | $507 | $636 | $(129) | | Lease liabilities | $373 | $396 | $(23) | | Reserve for off-balance sheet credit exposure | $281 | $316 | $(35) | | Other | $1,015 | $855 | $160 | | **Total other liabilities** | **$7,754** | **$7,906** | **$(152)** | - Total other liabilities decreased by **$152 million** (**1.92%**) from December 31, 2023, to September 30, 2024, primarily due to decreases in incentive plan liabilities, derivative financial instruments, and reserve for off-balance sheet credit exposure, partially offset by an increase in commitments to fund tax credit investments and other liabilities[185](index=185&type=chunk) - Deferred taxes primarily include those associated with the SVBB Acquisition[185](index=185&type=chunk) [NOTE 14 — FAIR VALUE](index=51&type=section&id=NOTE%2014%20%E2%80%94%20FAIR%20VALUE) This note details the fair value measurements of financial assets and liabilities, categorized into a three-level hierarchy - Fair value measurements are categorized into Level 1 (quoted prices in active markets), Level 2 (observable inputs other than Level 1), and Level 3 (unobservable inputs)[187](index=187&type=chunk) Assets and Liabilities Measured at Fair Value - Recurring Basis (September 30, 2024, millions) | Item | Total Fair Value | Level 1 | Level 2 | Level 3 | | :---------------------------------------- | :--------------- | :------ | :------ | :------ | | Investment securities available for sale | $28,190 | — | $28,026 | $164 | | Marketable equity securities | $82 | $31 | $51 | — | | Loans held for sale | $41 | — | $41 | — | | Total derivative assets | $553 | — | $538 | $15 | | Total derivative liabilities | $507 | — | $506 | $1 | - Most investment securities available for sale and derivatives are valued using Level 2 inputs, while a portion of corporate bonds and certain other derivative contracts utilize Level 3 unobservable inputs[189](index=189&type=chunk)[192](index=192&type=chunk)[193](index=193&type=chunk) Assets Measured at Fair Value - Non-recurring Basis (September 30, 2024, millions) | Item | Total Fair Value | Level 1 | Level 2 | Level 3 | | :---------------------------- | :--------------- | :------ | :------ | :------ | | Assets held for sale - loans | $3 | — | — | $3 | | Loans - collateral dependent loans | $314 | — | — | $314 | | Other real estate owned | $13 | — | — | $13 | | **Total** | **$331** | **—** | **—** | **$331** | - Non-recurring fair value measurements for assets like collateral-dependent loans and OREO primarily use Level 3 inputs, relying on appraisals or third-party value estimates with discounts for selling costs[202](index=202&type=chunk)[203](index=203&type=chunk) - Net loans are generally valued using discounted cash flow methodologies with market inputs and internal estimates, classifying them as Level 3 due to the significance of unobservable inputs[208](index=208&type=chunk) [NOTE 15 — STOCKHOLDERS' EQUITY](index=58&type=section&id=NOTE%2015%20%E2%80%94%20STOCKHOLDERS%27%20EQUITY) This note details the common stock activity, including shares outstanding and repurchases, and summarizes preferred stock Number of Shares of Common Stock Outstanding | Item | September 30, 2024 (Class A) | September 30, 2024 (Class B) | | :---------------------------------------- | :--------------------------- | :--------------------------- | | Common stock - June 30, 2024 | 13,524,550 | 1,005,185 | | Shares purchased under authorized repurchase plan | (353,058) | — | | Restricted stock units vested, net of shares held to cover taxes | 2,531 | — | | **Common stock - September 30, 2024** | **13,174,023** | **1,005,185** | - During the three months ended September 30, 2024, BancShares repurchased **353,058 shares** of Class A common stock[217](index=217&type=chunk) Preferred Stock Summary (millions, except per share data) | Preferred Stock | Issuance Date | Earliest Redemption Date | Liquidation Preference Per Share | Total Liquidation Preference | | :-------------- | :------------ | :----------------------- | :------------------------------- | :--------------------------- | | Series A | March 12, 2020 | March 15, 2025 | $1,000 | $345 | | Series B | January 3, 2022 | January 4, 2027 | $1,000 | $325 | | Series C | January 3, 2022 | January 4, 2027 | $25 | $200 | - Dividends on BancShares Preferred Stock are non-cumulative and payable quarterly, if declared by the Board of Directors[219](index=219&type=chunk) [NOTE 16 — ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME](index=58&type=section&id=NOTE%2016%20%E2%80%94%20ACCUMULATED%20OTHER%20COMPREHENSIVE%20(LOSS)%20INCOME) This note provides a detailed breakdown of the components of Accumulated Other Comprehensive Income, net of income taxes Components of Accumulated Other Comprehensive (Loss) Income (millions) | Item | September 30, 2024 (Net of Income Taxes) | December 31, 2023 (Net of Income Taxes) | Change (millions) | | :---------------------------------------- | :--------------------------------------- | :-------------------------------------- | :---------------- | | Unrealized loss on securities available for sale | $(252) | $(577) | $325 | | Defined benefit pension items | $83 | $91 | $(8) | | Unrealized gain on cash flow hedge derivatives | $14 | — | $14 | | **Total accumulated other comprehensive loss** | **$(159)** | **$(491)** | **$332** | - Total accumulated other comprehensive loss improved by **$332 million** from **$(491) million** at December 31, 2023, to **$(159) million** at September 30, 2024, primarily due to a reduction in unrealized losses on securities available for sale[220](index=220&type=chunk) Changes in Accumulated Other Comprehensive (Loss) Income by Component (millions) - Nine Months Ended September 30, 2024 | Item | Unrealized loss on securities available for sale | Unrealized loss on securities available for sale transferred to held to maturity | Defined benefit pension items | Unrealized gain on cash flow hedge derivatives | Total accumulated other comprehensive loss | | :---------------------------------------- | :----------------------------------------------- | :------------------------------------------------------------------------------- | :---------------------------- | :--------------------------------------------- | :----------------------------------------- | | Balance as of December 31, 2023 | $(577) | $(5) | $91 | — | $(491) | | Other comprehensive income (loss) for the period | $325 | $1 | $(8) | $14 | $332 | | **Balance as of September 30, 2024** | **$(252)** | **$(4)** | **$83** | **$14** | **$(159)** | [NOTE 17 — EARNINGS PER COMMON SHARE](index=60&type=section&id=NOTE%2017%20%E2%80%94%20EARNINGS%20PER%20COMMON%20SHARE) This note provides the computation of basic and diluted earnings per common share, including net income and weighted average shares Earnings per Common Share (millions, except per share data) - Nine Months Ended September 30 | Item | 2024 | 2023 | Change ($) | | :---------------------------------------- | :-------- | :-------- | :--------- | | Net income available to common stockholders | $2,031 | $10,908 | $(8,877) | | Weighted average common shares outstanding (Diluted) | 14,481,919 | 14,539,383 | (57,464) | | **Diluted Earnings per common share** | **$140.26** | **$750.19** | **$(609.93)** | - Diluted earnings per common share decreased significantly from **$750.19** in the prior year to **$140.26** for the nine months ended September 30, 2024, primarily due to the lower net income available to common stockholders[225](index=225&type=chunk) [NOTE 18 — INCOME TAXES](index=61&type=section&id=NOTE%2018%20%E2%80%94%20INCOME%20TAXES) This note discusses BancShares' effective income tax rates and the factors influencing them, including the SVBB Acquisition Effective Income Tax Rates (ETRs) | Period | 2024 | 2023 | Change (bps) | | :-------------------------------------- | :------ | :------ | :----------- | | Three months ended September 30 | 26.8% | 24.6% | 220 | | Nine months ended September 30 | 27.3% | 3.6% | 2370 | - The ETR for the nine months ended September 30, 2024, significantly increased to **27.3%** from **3.6%** in the prior year, primarily due to the non-taxable nature of the gain on the SVBB Acquisition in the prior year period[226](index=226&type=chunk) - BancShares evaluates its ability to recognize deferred tax assets (DTAs) quarterly and recognizes tax benefits when it is more likely than not that the position will prevail[228](index=228&type=chunk)[229](index=229&type=chunk) [NOTE 19 — EMPLOYEE BENEFIT PLANS](index=61&type=section&id=NOTE%2019%20%E2%80%94%20EMPLOYEE%20BENEFIT%20PLANS) This note outlines BancShares' sponsorship of non-contributory defined benefit pension plans and presents net periodic benefit cost - BancShares sponsors non-contributory defined benefit pension plans for qualifying employees[230](index=230&type=chunk) Components of Net Periodic Benefit Cost (millions) - Nine Months Ended September 30 | Item | 2024 | 2023 | Change (millions) | | :-------------------- | :----- | :----- | :---------------- | | Service cost | $7 | $7 | $0 | | Interest cost | $45 | $45 | $0 | | Expected return on assets | $(69) | $(64) | $(5) | | **Net periodic benefit** | **$(17)** | **$(12)** | **$(5)** | - Net periodic benefit cost for the nine months ended September 30, 2024, was **$(17) million**, a decrease of **$5 million** from the prior year, primarily due to a higher expected return on assets[231](index=231&type=chunk) [NOTE 20 — BUSINESS SEGMENT INFORMATION](index=61&type=section&id=NOTE%2020%20%E2%80%94%20BUSINESS%20SEGMENT%20INFORMATION) This note details BancShares' business segments: General Bank, Commercial Bank, SVB Commercial, and Rail, along with Corporate - BancShares' segments include General Bank, Commercial Bank, SVB Commercial, and Rail, with a Corporate section for unallocated financial information. Segment reporting was recast in Q1 2024[233](index=233&type=chunk) - General Bank offers consumer and business banking, residential mortgages, wealth management, and community association banking[234](index=234&type=chunk) - Commercial Bank provides lending, leasing, capital markets, asset management, and factoring services to small and middle market companies[236](index=236&type=chunk)[237](index=237&type=chunk) - SVB Commercial serves commercial clients and investors in the innovation ecosystem, including private equity and venture capital firms, with capital call lines of credit and investor-dependent loans[239](index=239&type=chunk) - Rail segment offers customized leasing and financing solutions for railcars and locomotives to railroads and shippers[241](index=241&type=chunk) Segment Net Income (millions) - Nine Months Ended September 30 | Segment | 2024 | 2023 | Change (millions) | | :---------------- | :----- | :------- | :---------------- | | General Bank | $718 | $666 | $52 | | Commercial Bank | $355 | $141 | $214 | | SVB Commercial | $632 | $370 | $262 | | Rail | $75 | $68 | $7 | | Corporate | $297 | $9,707 | $(9,410) | | **Total BancShares** | **$2,077** | **$10,952** | **$(8,875)** | [NOTE 21 — COMMITMENTS AND CONTINGENCIES](index=65&type=section&id=NOTE%2021%20%E2%80%94%20COMMITMENTS%20AND%20CONTINGENCIES) This note outlines BancShares' financial instruments with off-balance sheet risk, legal proceedings, and other contingencies Credit-Related Commitments (millions) | Commitment Type | September 30, 2024 | December 31, 2023 | Change (millions) | | :---------------------------- | :----------------- | :---------------- | :---------------- | | Financing assets (excluding leases) | $56,147 | $57,567 | $(1,420) | | Standby letters of credit | $2,261 | $2,412 | $(151) | | Deferred Purchase Agreements | $1,902 | $2,076 | $(174) | | Purchase and Funding Commitments | $372 | $685 | $(313) | - Financing commitments, letters of credit, and deferred purchase agreements represent potential future cash outflows, but many are expected to expire unused or partially used[250](index=250&type=chunk)[252](index=252&type=chunk)[253](index=253&type=chunk) - BancShares is involved in various legal actions and estimates an aggregate range of reasonably possible losses of up to **$10 million** in excess of established reserves and insurance for certain litigation matters as of September 30, 2024[257](index=257&type=chunk)[258](index=258&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=68&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on First Citizens BancShares, Inc.'s financial condition and results of operations [EXECUTIVE OVERVIEW](index=68&type=section&id=EXECUTIVE%20OVERVIEW) This section provides an overview of BancShares' business, including its diverse financial services and the impact of the SVBB Acquisition - First Citizens BancShares, Inc. is a bank holding company providing diverse financial services, including retail and mortgage banking, wealth management, small and middle market banking, factoring, and leasing[266](index=266&type=chunk) - The SVBB Acquisition expanded the client base to include private equity and venture capital clients, diversified the loan portfolio across technology, life science, and healthcare industries, and enhanced digital capabilities[269](index=269&type=chunk) - On July 25, 2024, the Board authorized a share repurchase program of up to **$3.5 billion** through 2025, with approximately **$700 million** of Class A common stock repurchased in Q3 2024[272](index=272&type=chunk) - An estimated **$20 million** loan loss reserve was recorded related to Hurricane Helene as of September 30, 2024, with ongoing assessment for Hurricane Milton[274](index=274&type=chunk) - Segment reporting and loan classes were updated in Q1 2024, integrating SVB's private banking into General Bank and renaming the SVB segment to SVB Commercial[275](index=275&type=chunk)[276](index=276&type=chunk) [Recent Economic, Industry and Regulatory Developments](index=70&type=section&id=Recent%20Economic,%20Industry%20and%20Regulatory%20Developments) This section discusses recent changes in monetary policy, regulatory developments, and their potential impact on the company - The FOMC reduced the benchmark federal funds rate to **4.75%-5.00%** in September 2024 and further to **4.50%-4.75%** in November 2024, citing increased confidence in inflation moving towards **2%**[279](index=279&type=chunk) - An additional FDIC insurance special assessment charge of approximately **$11 million** was accrued in 2024 due to revised loss estimates from bank failures, payable in two quarterly installments starting in 2026[280](index=280&type=chunk) - Federal banking agencies issued NPRs in 2023 related to enhanced capital and long-term debt requirements for banking organizations with **$100 billion** or more in total assets, which BancShares is evaluating and expects to require raising additional long-term debt[281](index=281&type=chunk) - The FDIC adopted a final rule (CIDI Rule) effective October 1, 2024, requiring covered insured depository institutions like BancShares to submit full resolution plans every **three years**, with the first submission due in 2025[282](index=282&type=chunk) [Financial Performance Summary](index=70&type=section&id=Financial%20Performance%20Summary) This section summarizes BancShares' financial results for the current quarter, linked quarter, and year-to-date periods Selected Financial Data - Three Months Ended September 30 | Item (millions) | Sep 30, 2024 | Jun 30, 2024 | Sep 30, 2023 | Change QoQ (millions) | Change YoY (millions) | | :------------------------------ | :----------- | :----------- | :----------- | :-------------------- | :-------------------- | | Net income | $639 | $707 | $752 | $(68) | $(113) | | Diluted earnings per common share | $43.42 | $47.54 | $50.67 | $(4.12) | $(7.25) | | Net interest income | $1,796 | $1,821 | $1,990 | $(25) | $(194) | | Provision for credit losses | $117 | $95 | $192 | $22 | $(75) | | Total noninterest income | $650 | $639 | $615 | $11 | $35 | | Total noninterest expense | $1,456 | $1,386 | $1,416 | $70 | $40 | Selected Financial Data - Nine Months Ended September 30 | Item (millions) | Sep 30, 2024 | Sep 30, 2023 | Change YTD (millions) | | :------------------------------ | :----------- | :----------- | :-------------------- | | Net income | $2,077 | $10,952 | $(8,875) | | Diluted earnings per common share | $140.26 | $750.19 | $(609.93) | | Net interest income | $5,434 | $4,801 | $633 | | Provision for credit losses | $276 | $1,126 | $(850) | | Total noninterest income | $1,916 | $11,532 | $(9,616) | | Total noninterest expense | $4,218 | $3,843 | $375 | - Net income for Q3 2024 decreased by **$68 million** QoQ and **$113 million** YoY, mainly due to higher noninterest expense and lower net interest income[289](index=289&type=chunk) - Year-to-date net income decreased by **$8.88 billion** YoY, primarily due to the **$9.89 billion** gain on acquisition in the prior year related to the SVBB Acquisition[289](index=289&type=chunk) Select Ending Balances (millions) | Item | Sep 30, 2024 | Jun 30, 2024 | Dec 31, 2023 | Change from Dec 31, 2023 (millions) | | :---------------------------- | :----------- | :----------- | :----------- | :---------------------------------- | | Total loans and leases | $138,695 | $139,341 | $133,302 | $5,393 | | Investment securities | $38,663 | $37,666 | $30,000 | $8,663 | | Total deposits | $151,574 | $151,079 | $145,854 | $5,720 | | Total borrowings | $37,161 | $37,458 | $37,654 | $(493) | - Loans and leases increased by **$5.39 billion** (**4%**) from December 31, 2023, to September 30, 2024, driven by growth in commercial and consumer loans, but decreased by **$646 million** (**1%**) QoQ[290](index=290&type=chunk) - Deposits increased by **$5.72 billion** (**4%**) from December 31, 2023, to September 30, 2024, reflecting growth in the Branch Network, Direct Bank, and SVB Commercial segment[291](index=291&type=chunk) [Funding, Liquidity and Capital Overview](index=74&type=section&id=Funding,%20Liquidity%20and%20Capital%20Overview) This section provides an overview of BancShares' funding sources, liquidity position, investment securities duration, and capital position - Deposits represented approximately **80%** of total funding at September 30, 2024[292](index=292&type=chunk) Select Deposit Data (September 30, 2024) | Segment | Ending Balance (millions) | Average Size (thousands) | Uninsured % | | :------------------------ | :------------------------ | :----------------------- | :---------- | | General Bank segment | $72,169 | $35 | 36% | | Commercial Bank segment | $2,754 | $232 | 84% | | SVB Commercial segment | $35,945 | $502 | 72% | | Corporate and Rail segment | $40,706 | $56 | 8% | | **Total** | **$151,574** | **$53** | **39%** | - Total uninsured deposits were approximately **$58.59 billion**, or **39%** of total deposits, at September 30, 2024, up from **37%** at December 31, 2023[293](index=293&type=chunk) - At September 30, 2024, BancShares had **$58.36 billion** in high-quality liquid assets and **$29.64 billion** in unused borrowing capacity (FHLB and FRB), with an immediate available capacity of **$8.13 billion** from the FDIC Advance Facility Agreement[295](index=295&type=chunk)[297](index=297&type=chunk) - The investment securities portfolio had an average duration of approximately **2.8 years** at September 30, 2024[298](index=298&type=chunk) - BancShares and FCB's regulatory capital ratios significantly exceed prompt corrective action well-capitalized thresholds and Basel III requirements[300](index=300&type=chunk) [RESULTS OF OPERATIONS](index=75&type=section&id=RESULTS%20OF%20OPERATIONS) This section provides a detailed analysis of BancShares' financial performance, focusing on key income statement metrics [Net Interest Income and Net Interest Margin](index=75&type=section&id=Net%20Interest%20Income%20and%20Net%20Interest%20Margin) Net interest income and net interest margin are analyzed based on changes in interest rates, volume, and composition of assets and liabilities - NII for Q3 2024 was **$1.80 billion**, a decrease of **$25 million** QoQ, primarily due to a **$33 million** increase in interest expense partially offset by an **$8 million** increase in interest income[304](index=304&type=chunk) - NIM for Q3 2024 was **3.53%**, a decrease of **11 basis points** (bps) QoQ, mainly related to lower Purchase Accounting Accretion (PAA) and changes in NII[304](index=304&type=chunk) - NII for the current YTD was **$5.43 billion**, an increase of **$633 million** (**13%**) YoY, reflecting the inclusion of acquired SVBB operations and higher interest income on loans and investment securities[309](index=309&type=chunk) - NIM for the current YTD was **3.62%**, a decrease of **33 bps** YoY, primarily due to higher average balances and rates paid on interest-bearing deposits and the Purchase Money Note, partially offset by higher yields on loans and investment securities[309](index=309&type=chunk) Average Balances and Yields/Rates - Three Months Ended September 30, 2024 vs. June 30, 2024 (millions) | Item | Sep 30, 2024 (Avg Balance) | Sep 30, 2024 (Yield/Rate) | Jun 30, 2024 (Avg Balance) | Jun 30, 2024 (Yield/Rate) | Change in NII Due to Volume | Change in NII Due to Yield/Rate | Total Change in NII | | :---------------------------------- | :------------------------- | :------------------------ | :------------------------- | :------------------------ | :-------------------------- | :------------------------------ | :------------------ | | Loans and leases | $137,602 | 7.03% | $135,965 | 7.15% | $38 | $(30) | $8 | | Investment securities | $38,189 | 3.70% | $36,445 | 3.60% | $16 | $11 | $27 | | Interest-earning deposits at banks | $26,167 | 5.33% | $28,059 | 5.42% | $(22) | $(6) | $(28) | | **Total interest-earning assets** | **$202,199** | **6.18%** | **$200,705** | **6.26%** | **$33** | **$(25)** | **$8** | | Interest-bearing deposits | $112,446 | 3.55% | $110,902 | 3.54% | $23 | $6 | $29 | | Borrowings | $37,448 | 3.61% | $37,480 | 3.56% | $(1) | $5 | $4 | | **Total interest-bearing liabilities** | **$149,894** | **3.57%** | **$148,382** | **3.54%** | **$22** | **$11** | **$33** | | **Net interest income** | | **3.53%** | | **3.64%** | | | **$(25)** | [Provision for Credit Losses](index=81&type=section&id=Provision%20for%20Credit%20Losses) This section analyzes the provision for credit losses, highlighting the impact of specific events and prior year acquisitions - Provision for credit losses was **$117 million** in Q3 2024, an increase of **$22 million** QoQ, mainly due to a **$20 million** estimate related to Hurricane Helene and increases in net charge-offs and specific reserves[311](index=311&type=chunk) - Provision for credit losses for the current YTD was **$276 million**, a decrease of **$850 million** (**76%**) YoY, primarily because the prior YTD included the **$716 million** Day 2 Provision for Credit Losses from the SVBB Acquisition[312](index=312&type=chunk) Provision for Credit Losses (millions) - Nine Months Ended September 30 | Item | 2024 | 2023 | Change (millions) | | :---------------------------------------- | :----- | :------- | :---------------- | | Total provision for loan and lease losses | $311 | $914 | $(603) | | Total (benefit) provision for off-balance sheet credit exposure | $(35) | $212 | $(247) | | (Benefit) provision for investment securities available for sale credit losses | — | $(3) | $3 | | **Provision for credit losses** | **$276** | **$1,126** | **$(850)** | [Noninterest Income](index=82&type=section&id=Noninterest%20Income) This section analyzes the components of noninterest income, including rental income and other fee-based revenues - Noninterest income for Q3 2024 was **$650 million**, an increase of **$11 million** (**2%**) QoQ, driven by favorable fair value adjustments on marketable equity securities and higher capital market fees[318](index=318&type=chunk)[319](index=319&type=chunk) - Noninterest income for the current YTD was **$1.92 billion**, a decrease of **$9.62 billion** YoY, primarily due to the **$9.89 billion** gain on acquisition in the prior YTD related to the SVBB Acquisition[318](index=318&type=chunk) Noninterest Income (millions) - Nine Months Ended September 30 | Item | 2024 | 2023 | Change (millions) | | :---------------------------------------- | :----- | :------- | :---------------- | | Rental income on operating lease equipment | $776 | $719 | $57 | | Fee income and other service charges | $233 | $188 | $45 | | Client investment fees | $159 | $106 | $53 | | Wealth management services | $157 | $140 | $17 | | Gain on acquisition | — | $9,891 | $(9,891) | | Other noninterest income | $92 | $102 | $(10) | | **Total noninterest income** | **$1,916** | **$11,532** | **$(9,616)** | - Rental income on operating lease equipment increased by **$57 million** (**8%**) for the current YTD, benefiting from growth in operating lease equipment and strong re-pricing in the rail portfolio[317](index=317&type=chunk) [Noninterest Expense](index=83&type=section&id=Noninterest%20Expense) This section analyzes the components of noninterest expense, including salaries, benefits, and acquisition-related costs - Noninterest expense for Q3 2024 was **$1.46 billion**, an increase of **$70 million** (**5%**) QoQ, primarily due to increases of **$43 million** in salaries and benefits and **$18 million** in professional fees[324](index=324&type=chunk) - The increase in salaries and benefits was mainly attributable to an additional working day, net staff additions, and higher incentive accruals and temporary labor costs associated with technology projects[324](index=324&type=chunk) - Noninterest expense for the current YTD was **$4.22 billion**, an increase of **$375 million** (**10%**) YoY, mostly due to the inclusion of acquired SVBB operations, leading to higher salaries and benefits and equipment expense[325](index=325&type=chunk) Noninterest Expense (millions) - Nine Months Ended September 30 | Item | 2024 | 2023 | Change (millions) | | :---------------------------------------- | :----- | :----- | :---------------- | | Depreciation on operating lease equipment | $293 | $275 | $18 | | Maintenance and other operating lease expenses | $164 | $163 | $1 | | Salaries and benefits | $2,277 | $1,922 | $355 | | Professional fees | $91 | $43 | $48 | | FDIC insurance expense | $105 | $76 | $29 | | Acquisition-related expenses | $148 | $354 | $(206) | | **Total noninterest expense** | **$4,218** | **$3,843** | **$375** | - Acquisition-related expenses decreased by **$206 million** YoY for the current YTD, from **$354 million** to **$148 million**[321](index=321&type=chunk) [Income Taxes](index=84&type=section&id=Income%20Taxes) This section analyzes BancShares' effective tax rates for both quarterly and year-to-date periods, explaining influencing factors Income Tax Data (millions, except ETR) | Item | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Income before income taxes | $873 | $997 | $2,856 | $11,364 | | Income tax expense | $234 | $245 | $779 | $412 | | **Effective tax rate** | **26.8%** | **24.6%** | **27.3%** | **3.6%** | - The effective tax rate (ETR) for Q3 2024 was **26.8%**, a decrease from **27.8%** in the linked quarter due to state tax law changes[328](index=328&type=chunk) - The ETR for the current YTD was **27.3%**, a significant increase from **3.6%** in the prior YTD, primarily due to the non-taxable nature of the **$9.89 billion** gain on the SVBB Acquisition in the prior year[328](index=328&type=chunk) [RESULTS BY BUSINESS SEGMENT](index=85&type=section&id=RESULTS%20BY%20BUSINESS%20SEGMENT) This section provides a detailed analysis of the financial performance of BancShares' four business segments and Corporate [General Bank](index=85&type=section&id=General%20Bank) The General Bank segment's net income increased QoQ and YoY, driven by higher net interest income from loan growth General Bank: Financial Data (millions) - Three Months Ended September 30 | Item | 2024 | 2023 | Change (millions) | | :------------------------ | :----- | :----- | :---------------- | | Net interest income | $768 | $681 | $87 | | Provision for credit losses | $38 | $24 | $14 | | Net income | $263 | $225 | $38 | | Loans and leases | $66,092 | $61,035 | $5,057 | | Deposits | $72,169 | $69,108 | $3,061 | - General Bank segment net income for Q3 2024 increased by **$18 million** QoQ and **$38 million** YoY, benefiting from higher NII due to loan growth and a lower provision for credit losses QoQ[333](index=333&type=chunk) - Loans and leases in the General Bank segment increased by **$897 million** QoQ, mainly from growth in commercial and business loans in the Branch Network[335](index=335&type=chunk) - Deposits in the General Bank segment increased by **$690 million** QoQ, primarily in money market deposits in the Branch Network[336](index=336&type=chunk) [Commercial Bank](index=86&type=section&id=Commercial%20Bank) The Commercial Bank segment experienced a decrease in net income QoQ due to higher provision for credit losses and increased noninterest expense Commercial Bank: Financial Data (millions) - Three Months Ended September 30 | Item | 2024 | 2023 | Change (millions) | | :------------------------ | :----- | :----- | :---------------- | | Net interest income | $274 | $249 | $25 | | Provision for credit losses | $29 | $132 | $(103) | | Net income | $110 | $37 | $73 | | Loans and leases | $32,689 | $30,220 | $2,469 | | Deposits | $2,754 | $3,370 | $(616) | - Commercial Bank segment net income for Q3 2024 decreased by **$13 million** QoQ, primarily due to a **$7 million** increase in provision for credit losses (driven by higher net charge-offs in CRE and Equipment Finance) and higher noninterest expense[338](index=338&type=chunk) - Commercial Bank segment n

Dollars in millions, except per share data | | | | | Three Months Ended | | | | | Nine Months Ended | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Summary Financial Data & Key Metrics | | September 30, 2024 | | June 30, 2024 | | September 30, 2023 | | September 30, 2024 | | September 30, 2023 | | Results of Operations: | | | | | | | | | | | | Net interest income | $ | 1,796 | $ | 1,821 | $ | 1,990 | $ | 5,434 | $ | 4,801 | | Provision for credit losses | | 117 | | 95 | | 192 | | 2 ...