FIRST CITIZENS(FCNCP) - 2025 Q3 - Quarterly Results

Summary Financial Data & Key Metrics 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 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] - 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] Per Share Information 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] - Book value per common share increased by $124.73 (8.06%) year-over-year to $1,672.54 at September 30, 2025[1] Key Performance Metrics 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] - 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] Select Balance Sheet Items at Period End 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] - Total deposits increased by $11,616 million (7.66%) year-over-year to $163,190 million[1] Capital Ratios at Period End 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] - Capital ratios for the current quarter-end are preliminary[1] Asset Quality at Period End 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] - 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] Income Statement (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 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] - 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] Noninterest Income 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] Noninterest Expense 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] - 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] Net Income and EPS 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] - 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] Balance Sheet (unaudited) This section presents the company's financial position at period end, detailing assets, liabilities, and stockholders' equity, highlighting year-over-year changes 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] - Investment securities available for sale increased by $6,773 million (24.02%) year-over-year[3] 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] - Total borrowings increased by $1,514 million (4.07%) year-over-year[3] Stockholders' Equity 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] - Additional paid-in capital significantly decreased from $3,389 million in Q3 2024 to $270 million in Q3 2025[3] Notable Items and Adjusted Income Statement 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 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] - Personnel cost notable items in Q3 2025 include impairment of internal use software under development[6] Condensed Income Statements - Adjusted for Notable Items 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] - 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] Loan and Deposit Portfolio Details 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 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] - Global fund banking loans showed significant growth, increasing by $4,501 million (16.60%) year-over-year[11] - During Q2 2025, loan classes were recast: Global fund banking is now under Commercial portfolio[11][12] - Investor dependent–early stage and investor dependent–growth stage were combined into a single investor dependent loan class under Commercial portfolio[11][12] - Cash flow dependent and innovation C&I were combined with the commercial and industrial loan class under Commercial portfolio[11][12] Deposits by Type 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] - Savings deposits showed the largest absolute growth, increasing by $6,656 million (16.53%) year-over-year[13] - Time deposits decreased by $3,055 million (21.62%) year-over-year[13] Credit Quality and Allowance for Loan and Lease Losses (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 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] - The ratio of nonaccrual loans to total loans increased from 0.90% in Q3 2024 to 0.97% in Q3 2025[15] Charge-offs and Recoveries 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] - The net charge-off ratio increased from 0.42% in Q3 2024 to 0.65% in Q3 2025[15] Allowance for Loan and Lease Losses (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] - Provision for loan and lease losses increased by $91 million (73.98%) in Q3 2025 compared to Q3 2024[15] Average Balance Sheets, Yields and Rates 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 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] - The yield on total interest-earning assets decreased from 6.18% in Q3 2024 to 5.64% in Q3 2025[16] Average Interest-Bearing Liabilities and Rates 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] - The rate on total interest-bearing liabilities decreased from 3.57% in Q3 2024 to 3.16% in Q3 2025[16] Net Interest Income, Spread, and Margin 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][17] - 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][17] Non-GAAP Reconciliations 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 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] - Adjusted diluted EPS for Q3 2025 was $44.62, $1.54 higher than GAAP diluted EPS[18] Noninterest Income and Expense Reconciliations 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] - Adjusted noninterest expense for Q3 2025 was $1,279 million, after a $(212) million impact from notable items[18] PPNR Reconciliations 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] - 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] ROA Reconciliations 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] - Adjusted PPNR ROA decreased from 1.88% in Q3 2024 to 1.67% in Q3 2025[20] ROE and ROTCE Reconciliations 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] - Adjusted ROTCE decreased from 12.29% in Q3 2024 to 10.91% in Q3 2025[20] Tangible Common Equity to Tangible Assets 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] Book Value and Tangible Book Value Per Common Share 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] - Tangible book value per common share increased by $123.89 (8.23%) year-over-year to $1,628.64[21] Efficiency Ratio Reconciliations 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] - The adjusted efficiency ratio increased from 54.15% in Q3 2024 to 56.78% in Q3 2025[21] Rental Income on Operating Lease Equipment Reconciliations 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] Net Interest Income & Net Interest Margin Reconciliations 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] - NIM, excluding PAA, decreased from 3.33% in Q3 2024 to 3.15% in Q3 2025[21] Income Tax Expense Reconciliations 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]